Justia Agencies And Commissions Securities And Exchange Commission [Release No. 34-89788; File No. 4-678] HEADProgram for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing and Order Approving and Declaring Effective an Amended Proposed Plan for the Allocation of Regulatory Responsibilities Among the Financial Industry Regulatory Authority, Inc., Miami International Securities Exchange, LLC, MIAX PEARL, LLC, and MIAX Emerald, LLC, 56645-56653 [2020-20132]

[Release No. 34-89788; File No. 4-678] HEADProgram for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing and Order Approving and Declaring Effective an Amended Proposed Plan for the Allocation of Regulatory Responsibilities Among the Financial Industry Regulatory Authority, Inc., Miami International Securities Exchange, LLC, MIAX PEARL, LLC, and MIAX Emerald, LLC, 56645-56653 [2020-20132]

Download as PDF Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Notices Electronic Comments B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes its proposed rule change would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes the proposal would enhance competition because including all of the exchanges enhances transparency and enables investors to better assess the quality of the Exchange’s execution and routing services. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from Members or other interested parties. 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) of the Act 8 and Rule 19b–4(f)(6) thereunder.9 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 khammond on DSKJM1Z7X2PROD with NOTICES 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: 8 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) 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 Exchange has fulfilled this requirement. 9 17 VerDate Sep<11>2014 17:51 Sep 11, 2020 Jkt 250001 • 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– CboeBYX–2020–025 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–CboeBYX–2020–025. 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–CboeBYX–2020–025 and should be submitted on or before October 5, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–20124 Filed 9–11–20; 8:45 am] BILLING CODE 8011–01–P 10 17 PO 00000 CFR 200.30–3(a)(12). Frm 00074 Fmt 4703 Sfmt 4703 56645 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89788; File No. 4–678] Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d– 2; Notice of Filing and Order Approving and Declaring Effective an Amended Proposed Plan for the Allocation of Regulatory Responsibilities Among the Financial Industry Regulatory Authority, Inc., Miami International Securities Exchange, LLC, MIAX PEARL, LLC, and MIAX Emerald, LLC September 8, 2020. Notice is hereby given that the Securities and Exchange Commission (‘‘Commission’’) has issued an Order, pursuant to Section 17(d) of the Securities Exchange Act of 1934 (‘‘Act’’),1 approving and declaring effective an amendment to the plan for allocating regulatory responsibility (‘‘Plan’’) filed on September 2, 2020, pursuant to Rule 17d–2 of the Act,2 by the Miami International Securities Exchange, LLC (‘‘MIAX’’), MIAX PEARL, LLC (‘‘MIAX PEARL’’), MIAX Emerald, LLC (‘‘MIAX Emerald’’) and the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) (together, the ‘‘Parties’’). The Plan replaces and supersedes the agreement entered into between FINRA, MIAX and MIAX PEARL on December 19, 2018, entitled ‘‘Agreement between Financial Industry Regulatory Authority, Inc., Miami International Securities Exchange, LLC and MIAX PEARL, LLC Pursuant to Rule 17d–2 under the Securities Exchange Act of 1934.’’ 3 I. Introduction Section 19(g)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),4 among other things, requires every selfregulatory organization (‘‘SRO’’) registered as either a national securities exchange or national securities association to examine for, and enforce compliance by, its members and persons associated with its members with the Act, the rules and regulations thereunder, and the SRO’s own rules, unless the SRO is relieved of this responsibility pursuant to Section 17(d) or Section 19(g)(2) of the Act.5 Without this relief, the statutory obligation of each individual SRO could result in a 1 15 U.S.C. 78q(d). CFR 240.17d–2. 3 See Securities Exchange Act Release No. 85189 (February 25, 2019), 84 FR 7153 (March 1, 2019). 4 15 U.S.C. 78s(g)(1). 5 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively. 2 17 E:\FR\FM\14SEN1.SGM 14SEN1 56646 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Notices pattern of multiple examinations of broker-dealers that maintain memberships in more than one SRO (‘‘common members’’). Such regulatory duplication would add unnecessary expenses for common members and their SROs. Section 17(d)(1) of the Act 6 was intended, in part, to eliminate unnecessary multiple examinations and regulatory duplication.7 With respect to a common member, Section 17(d)(1) authorizes the Commission, by rule or order, to relieve an SRO of the responsibility to receive regulatory reports, to examine for and enforce compliance with applicable statutes, rules, and regulations, or to perform other specified regulatory functions. To implement Section 17(d)(1), the Commission adopted two rules: Rule 17d–1 and Rule 17d–2 under the Act.8 Rule 17d–1 authorizes the Commission to name a single SRO as the designated examining authority (‘‘DEA’’) to examine common members for compliance with the financial responsibility requirements imposed by the Act, or by Commission or SRO rules.9 When an SRO has been named as a common member’s DEA, all other SROs to which the common member belongs are relieved of the responsibility to examine the firm for compliance with the applicable financial responsibility rules. On its face, Rule 17d–1 deals only with an SRO’s obligations to enforce member compliance with financial responsibility requirements. Rule 17d–1 does not relieve an SRO from its obligation to examine a common member for compliance with its own rules and provisions of the federal securities laws governing matters other than financial responsibility, including sales practices and trading activities and practices. To address regulatory duplication in these and other areas, the Commission adopted Rule 17d–2 under the Act.10 Rule 17d–2 permits SROs to propose joint plans for the allocation of regulatory responsibilities with respect to their common members. Under paragraph (c) of Rule 17d–2, the Commission may declare such a plan effective if, after providing for appropriate notice and comment, it U.S.C. 78q(d)(1). Securities Act Amendments of 1975, Report of the Senate Committee on Banking, Housing, and Urban Affairs to Accompany S. 249, S. Rep. No. 94– 75, 94th Cong., 1st Session 32 (1975). 8 17 CFR 240.17d–1 and 17 CFR 240.17d–2, respectively. 9 See Securities Exchange Act Release No. 12352 (April 20, 1976), 41 FR 18808 (May 7, 1976). 10 See Securities Exchange Act Release No. 12935 (October 28, 1976), 41 FR 49091 (November 8, 1976). determines that the plan is necessary or appropriate in the public interest and for the protection of investors; to foster cooperation and coordination among the SROs; to remove impediments to, and foster the development of, a national market system and a national clearance and settlement system; and is in conformity with the factors set forth in Section 17(d) of the Act. Commission approval of a plan filed pursuant to Rule 17d–2 relieves an SRO of those regulatory responsibilities allocated by the plan to another SRO. II. The Plan On November 19, 2014, the Commission declared effective the Plan entered into between FINRA and MIAX for allocating regulatory responsibility pursuant to Rule 17d–2.11 The Plan is intended to reduce regulatory duplication for firms that are common members of both MIAX and FINRA. The plan reduces regulatory duplication for firms that are members of MIAX and FINRA by allocating regulatory responsibility with respect to certain applicable laws, rules, and regulations. Included in the Plan is an exhibit that lists every MIAX rule for which FINRA bears responsibility under the Plan for overseeing and enforcing with respect to MIAX members that are also members of FINRA and the associated persons therewith. On January 12, 2017, the parties submitted a proposed amendment to the Plan to add MIAX PEARL as a Participant to the Plan.12 On June 28, 2018, the parties submitted a proposed amendment to the Plan to allocate surveillance, investigation, and enforcement responsibilities for Rule 14e–4 under the Act, as well as certain provisions of Regulation SHO.13 On December 20, 2018, the parties submitted a proposed amendment to the Plan to add MIAX EMERALD as a Participant to the Plan.14 III. Proposed Amendment to the Plan On September 2, 2020, the parties submitted a proposed amendment to the Plan (‘‘Amended Plan’’). The primary purpose of the Amended Plan is to add MIAX PEARL equities rules and certain federal securities laws to the Certification. The text of the proposed 6 15 khammond on DSKJM1Z7X2PROD with NOTICES 7 See VerDate Sep<11>2014 17:51 Sep 11, 2020 Jkt 250001 11 See Securities Exchange Act Release No. 73641 (November 19, 2014), 79 FR 70230 (November 25, 2014). 12 See Securities Exchange Act Release Nos. 79779 (January 12, 2017), 82 FR 6674 (January 19, 2017) (notice) and 79974 (February 6, 2017), 82 FR 10417 (February 10, 2017) (order). 13 See Securities Exchange Act Release No. 83696 (July 24, 2018), 83 FR 35682 (July 27, 2018). 14 See Securities Exchange Act Release No. 85189 (February 25, 2019), 84 FR 7153 (March 1, 2019). PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 Amended Plan is as follows (additions are italicized; deletions are [bracketed]): Agreement Among Financial Industry Regulatory Authority, Inc., Miami International Securities Exchange, LLC, MIAX Pearl, LLC and MIAX Emerald, LLC Pursuant to Rule 17d–2 Under the Securities Exchange Act of 1934 This Agreement, by and among the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’), Miami International Securities Exchange, LLC (‘‘MIAX’’), MIAX PEARL, LLC (‘‘MIAX PEARL’’), and MIAX Emerald, LLC (‘‘MIAX Emerald’’) is made this 2nd day of September, 2020 (the ‘‘Agreement’’), pursuant to Section 17(d) of the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’) and Rule 17d–2 thereunder, which permits agreements between self-regulatory organizations to allocate regulatory responsibility to eliminate regulatory duplication. FINRA, MIAX, MIAX PEARL and MIAX Emerald may be referred to individually as a ‘‘party’’ and together as the ‘‘parties.’’ This Agreement amends and restates the agreement entered into between FINRA, MIAX and MIAX PEARL on December 19, 2018, entitled ‘‘Agreement between Financial Industry Regulatory Authority, Inc., Miami International Securities Exchange, LLC and MIAX PEARL, LLC Pursuant to Rule 17d–2 under the Securities Exchange Act of 1934,’’ and any subsequent amendments thereafter. Whereas, the parties desire to reduce duplication in the examination and surveillance of their Common Members (as defined herein) and in the filing and processing of certain registration and membership records; and Whereas, the parties desire to execute an agreement covering such subjects pursuant to the provisions of Rule 17d– 2 under the Exchange Act and to file such agreement with the Securities and Exchange Commission (the ‘‘SEC’’ or ‘‘Commission’’) for its approval. Now, therefore, in consideration of the mutual covenants contained hereinafter, the parties hereby agree as follows: 1. Definitions. Unless otherwise defined in this Agreement or the context otherwise requires, the terms used in this Agreement shall have the same meaning as they have under the Exchange Act and the rules and regulations thereunder. As used in this Agreement, the following terms shall have the following meanings: (a) ‘‘MIAX Rules,’’ ‘‘MIAX PEARL Rules’’, ‘‘MIAX Emerald Rules’’ or ‘‘FINRA Rules’’ shall mean: (i) The rules of MIAX, MIAX PEARL or MIAX E:\FR\FM\14SEN1.SGM 14SEN1 khammond on DSKJM1Z7X2PROD with NOTICES Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Notices Emerald, respectively, or (ii) the rules of FINRA, respectively, as the rules of an exchange or association are defined in Exchange Act Section 3(a)(27). (b) ‘‘Common Rules’’ shall mean MIAX Rules, MIAX PEARL Rules and MIAX Emerald Rules that are substantially similar to the applicable FINRA Rules and certain provisions of the Exchange Act and SEC rules set forth on Exhibit 1 in that examination or surveillance for compliance with such provisions and rules would not require FINRA to develop one or more new examination or surveillance standards, modules, procedures, or criteria in order to analyze the application of the provision or rule, or a Common Member’s activity, conduct, or output in relation to such provision or rule; provided, however, Common Rules shall not include the application of the SEC, MIAX PEARL or FINRA rules as they pertain to violations of insider trading activities, which is covered by a separate 17d–2 Agreement by and among Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., Chicago Stock Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., MEMX, LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, The Nasdaq Stock Market LLC, NYSE National, Inc., New York Stock Exchange LLC, NYSE American LLC, NYSE Arca Inc., Investors’ Exchange LLC and Long-Term Stock Exchange, Inc. effective May 26, 2020, as may be amended from time to time. Common Rules shall not include any provisions regarding (i) notice, reporting or any other filings made directly to or from MIAX, MIAX PEARL or MIAX Emerald, (ii) incorporation by reference of other MIAX, MIAX PEARL Rules or MIAX Emerald Rules that are not Common Rules, (iii) exercise of discretion in a manner that differs from FINRA’s exercise of discretion including, but not limited to exercise of exemptive authority, by MIAX, MIAX PEARL or MIAX Emerald, (iv) prior written approval of MIAX, MIAX PEARL or MIAX Emerald and (v) payment of fees or fines to MIAX, MIAX PEARL or MIAX Emerald. (c) ‘‘Common Members’’ shall mean members of FINRA and at least one of MIAX, MIAX PEARL or MIAX Emerald. (d) ‘‘Effective Date’’ shall be the date this Agreement is approved by the Commission. (e) ‘‘Enforcement Responsibilities’’ shall mean the conduct of appropriate proceedings, in accordance with FINRA’s Code of Procedure (the Rule 9000 Series) and other applicable FINRA procedural rules, to determine VerDate Sep<11>2014 17:51 Sep 11, 2020 Jkt 250001 whether violations of Common Rules have occurred, and if such violations are deemed to have occurred, the imposition of appropriate sanctions as specified under FINRA’s Code of Procedure and sanctions guidelines. (f) ‘‘Regulatory Responsibilities’’ shall mean the examination responsibilities, surveillance responsibilities and Enforcement Responsibilities relating to compliance by the Common Members with the Common Rules and the provisions of the Exchange Act and the rules and regulations thereunder, and other applicable laws, rules and regulations, each as set forth on Exhibit 1 attached hereto. 2. Regulatory and Enforcement Responsibilities. FINRA shall assume Regulatory Responsibilities and Enforcement Responsibilities for Common Members. Attached as Exhibit 1 to this Agreement and made part hereof, MIAX, MIAX PEARL and MIAX Emerald furnished FINRA with a current list of Common Rules and certified to FINRA that such rules that are MIAX Rules, MIAX PEARL Rules and MIAX Emerald Rules are substantially similar to the corresponding FINRA Rules (the ‘‘Certification’’). FINRA hereby agrees that the rules listed in the Certification are Common Rules as defined in this Agreement. Each year following the Effective Date of this Agreement, or more frequently if required by changes in the rules of the parties, MIAX, MIAX PEARL and MIAX Emerald shall submit an updated list of Common Rules to FINRA for review which shall add MIAX Rules, MIAX PEARL Rules or MIAX Emerald Rules not included in the current list of Common Rules that qualify as Common Rules as defined in this Agreement; delete MIAX Rules, MIAX PEARL Rules or MIAX Emerald Rules included in the current list of Common Rules that no longer qualify as Common Rules as defined in this Agreement; and confirm that the remaining rules on the current list of Common Rules continue to be MIAX Rules, MIAX PEARL Rules or MIAX Emerald Rules that qualify as Common Rules as defined in this Agreement. Within 30 days of receipt of such updated list, FINRA shall confirm in writing whether the rules listed in any updated list are Common Rules as defined in this Agreement. Notwithstanding anything herein to the contrary, it is explicitly understood that the term ‘‘Regulatory Responsibilities’’ does not include, and MIAX, MIAX PEARL and MIAX Emerald shall retain full responsibility for (unless otherwise addressed by separate agreement or PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 56647 rule) (collectively, the ‘‘Retained Responsibilities’’) the following: (a) Surveillance, examination, investigation and enforcement with respect to trading activities or practices involving MIAX’s, MIAX PEARL’s and MIAX Emerald’s own marketplace; (b) registration pursuant to their applicable rules of associated persons (i.e., registration rules that are not Common Rules); (c) discharge of their duties and obligations as a Designated Examining Authority pursuant to Rule 17d–1 under the Exchange Act; and (d) any MIAX Rules, MIAX PEARL Rules or MIAX Emerald Rules that are not Common Rules as provided in paragraph 6. 3. Common Members. Prior to the Effective Date, MIAX, MIAX PEARL and MIAX Emerald shall furnish FINRA with a current list of Common Members, which shall be updated no less frequently than once each quarter. 4. No Charge. There shall be no charge to MIAX, MIAX PEARL and MIAX Emerald by FINRA for performing the Regulatory Responsibilities and Enforcement Responsibilities under this Agreement except as hereinafter provided. FINRA shall provide MIAX, MIAX PEARL and MIAX Emerald with ninety (90) days advance written notice in the event FINRA decides to impose any charges to MIAX, MIAX PEARL and MIAX Emerald for performing the Regulatory Responsibilities under this Agreement. If FINRA determines to impose a charge, MIAX, MIAX PEARL and MIAX Emerald shall have the right at the time of the imposition of such charge to terminate this Agreement; provided, however, that FINRA’s Regulatory Responsibilities under this Agreement shall continue until the Commission approves the termination of this Agreement. 5. Applicability of Certain Laws, Rules, Regulations or Orders. Notwithstanding any provision hereof, this Agreement shall be subject to any statute, or any rule or order of the SEC. To the extent such statute, rule or order is inconsistent with one or more provisions of this Agreement, the statute, rule or order shall supersede the provision(s) hereof to the extent necessary to be properly effectuated and the provision(s) hereof in that respect shall be null and void. 6. Notification of Violations. In the event that FINRA becomes aware of apparent violations of any MIAX Rules, MIAX PEARL Rules or MIAX Emerald Rules, which are not listed as Common Rules, discovered pursuant to the performance of the Regulatory Responsibilities assumed hereunder, E:\FR\FM\14SEN1.SGM 14SEN1 khammond on DSKJM1Z7X2PROD with NOTICES 56648 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Notices FINRA shall notify MIAX, MIAX PEARL and MIAX Emerald of those apparent violations for such response as MIAX, MIAX PEARL and MIAX Emerald deem appropriate. In the event that MIAX, MIAX PEARL or MIAX Emerald becomes aware of apparent violations of any Common Rules, discovered pursuant to the performance of the Retained Responsibilities, MIAX, MIAX PEARL and MIAX Emerald shall notify FINRA of those apparent violations and such matters shall be handled by FINRA as provided in this Agreement. Apparent violations of Common Rules shall be processed by, and enforcement proceedings in respect thereto shall be conducted by FINRA as provided hereinbefore; provided, however, that in the event a Common Member is the subject of an investigation relating to a transaction on MIAX, MIAX PEARL or MIAX Emerald, MIAX, MIAX PEARL and MIAX Emerald may in their discretion assume concurrent jurisdiction and responsibility. Each party agrees to make available promptly all files, records and witnesses necessary to assist the other in its investigation or proceedings. 7. Continued Assistance. (a) FINRA shall make available to MIAX, MIAX PEARL and MIAX Emerald all information obtained by FINRA in the performance by it of the Regulatory Responsibilities hereunder with respect to the Common Members subject to this Agreement. In particular, and not in limitation of the foregoing, FINRA shall furnish MIAX, MIAX PEARL and MIAX Emerald any information it obtains about Common Members which reflects adversely on their financial condition. MIAX, MIAX PEARL and MIAX Emerald shall make available to FINRA any information coming to its attention that reflects adversely on the financial condition of Common Members or indicates possible violations of applicable laws, rules or regulations by such firms. (b) The parties agree that documents or information shared shall be held in confidence, and used only for the purposes of carrying out their respective regulatory obligations. No party shall assert regulatory or other privileges as against any other with respect to documents or information that is required to be shared pursuant to this Agreement. (c) The sharing of documents or information among the parties pursuant to this Agreement shall not be deemed a waiver as against third parties of regulatory or other privileges relating to the discovery of documents or information. VerDate Sep<11>2014 17:51 Sep 11, 2020 Jkt 250001 8. Statutory Disqualifications. When FINRA becomes aware of a statutory disqualification as defined in the Exchange Act with respect to a Common Member, FINRA shall determine pursuant to Sections 15A(g) and/or Section 6(c) of the Exchange Act the acceptability or continued applicability of the person to whom such disqualification applies and keep MIAX, MIAX PEARL and MIAX Emerald advised of its actions in this regard for such subsequent proceedings as MIAX, MIAX PEARL and MIAX Emerald may initiate. 9. Customer Complaints. MIAX, MIAX PEARL and MIAX Emerald shall forward to FINRA copies of all customer complaints involving Common Members received by MIAX, MIAX PEARL and MIAX Emerald relating to FINRA’s Regulatory Responsibilities under this Agreement. It shall be FINRA’s responsibility to review and take appropriate action in respect to such complaints. 10. Advertising. FINRA shall assume responsibility to review the advertising of Common Members subject to the Agreement, provided that such material is filed with FINRA in accordance with FINRA’s filing procedures and is accompanied with any applicable filing fees set forth in FINRA Rules. 11. No Restrictions on Regulatory Action. Nothing contained in this Agreement shall restrict or in any way encumber the right of any party to conduct its own independent or concurrent investigation, examination or enforcement proceeding of or against Common Members, as any party, in its sole discretion, shall deem appropriate or necessary. 12. Termination. This Agreement may be terminated by any party at any time upon the approval of the Commission after one (1) year’s written notice to the other parties (or such shorter time as agreed by the parties), except as provided in paragraph 4. 13. Arbitration. In the event of a dispute among the parties as to the operation of this Agreement, the parties hereby agree that any such dispute shall be settled by arbitration in Washington, DC in accordance with the rules of the American Arbitration Association then in effect, or such other procedures as the parties may mutually agree upon. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction. Each party acknowledges that the timely and complete performance of its obligations pursuant to this Agreement is critical to the business and operations of the other parties. In the event of a dispute among the parties, the parties shall continue to PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 perform their respective obligations under this Agreement in good faith during the resolution of such dispute unless and until this Agreement is terminated in accordance with its provisions. Nothing in this Section 13 shall interfere with a party’s right to terminate this Agreement as set forth herein. 14. Separate Agreement. This Agreement is wholly separate from the following agreement: (1) The multiparty Agreement made pursuant to Rule 17d– 2 of the Exchange Act among Cboe BZX Exchange, Inc., BOX Options Exchange, LLC, Cboe Exchange, Inc., Cboe C2 Exchange, Inc., Nasdaq ISE, LLC, FINRA, MIAX, NYSE American LLC, NYSE Arca, Inc., The Nasdaq Stock Market LLC, Nasdaq BX, Inc., the Nasdaq PHLX LLC, Nasdaq GEMX, LLC, Cboe EDGX Exchange, Inc., Nasdaq MRX, LLC, MIAX PEARL, LLC and MIAX Emerald, LLC involving the allocation of regulatory responsibilities with respect to common members for compliance with common rules relating to the conduct by broker-dealers of accounts for listed options or index warrants entered as approved by the SEC on February 12, 2019, and as may be amended from time to time; and (2) the multiparty Agreement made pursuant to Rule 17d–2 of the Exchange Act among Cboe BZX Exchange, Inc., BOX Options Exchange, LLC, Cboe Exchange, Inc., Cboe C2 Exchange, Inc., Nasdaq ISE, LLC, FINRA, MIAX, NYSE American LLC, NYSE Arca, Inc., The Nasdaq Stock Market LLC, Nasdaq BX, Inc., the Nasdaq PHLX LLC, Nasdaq GEMX, LLC, Cboe EDGX Exchange, Inc., Nasdaq MRX, LLC, MIAX PEARL, LLC and MIAX Emerald, LLC involving the allocation of regulatory responsibilities with respect to SRO market surveillance of common members activities with regard to certain common rules relating to listed options approved by the SEC on February 11, 2019, and as may be amended from time to time. 15. Notification of Members. The parties shall notify Common Members of this Agreement after the Effective Date by means of a uniform joint notice. 16. Amendment. This Agreement may be amended in writing provided that the changes are approved by each party. All such amendments must be filed with and approved by the Commission before they become effective. 17. Limitation of Liability. None of the parties nor any of their respective directors, governors, officers or employees shall be liable to any other party to this Agreement for any liability, loss or damage resulting from or claimed to have resulted from any delays, inaccuracies, errors or omissions E:\FR\FM\14SEN1.SGM 14SEN1 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Notices khammond on DSKJM1Z7X2PROD with NOTICES with respect to the provision of Regulatory Responsibilities as provided hereby or for the failure to provide any such responsibility, except with respect to such liability, loss or damages as shall have been suffered by any party and caused by the willful misconduct of another party or their respective directors, governors, officers or employees. No warranties, express or implied, are made by any party hereto with respect to any of the responsibilities to be performed by them hereunder. 18. Relief from Responsibility. Pursuant to Sections 17(d)(1)(A) and 19(g) of the Exchange Act and Rule 17d– 2 thereunder, FINRA, MIAX, MIAX PEARL and MIAX Emerald join in requesting the Commission, upon its approval of this Agreement or any part thereof, to relieve MIAX, MIAX PEARL and MIAX Emerald of any and all responsibilities with respect to matters allocated to FINRA pursuant to this Agreement; provided, however, that this Agreement shall not be effective until the Effective Date. 19. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. 20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and such counterparts together shall constitute one and the same instrument. Exhibit 1 Miami International Securities Exchange, LLC, MIAX PEARL, LLC and MIAX Emerald, LLC Rules Certification for 17d–2 Agreement With FINRA Miami International Securities Exchange, LLC (‘‘MIAX’’), MIAX PEARL, LLC (‘‘MIAX PEARL’’) and MIAX Emerald, LLC (‘‘MIAX Emerald’’) hereby certify that the requirements contained in the rules listed below are identical to, or substantially similar to, the comparable FINRA (NASD) Rule, Exchange Act provision or SEC rule identified (‘‘Common Rules’’). FINRA (NASD) rules, Exchange Act provision or SEC rule MIAX rules MIAX PEARL rules MIAX Emerald rules Rule 301 Just and Equitable Principles of Trade 1. Rule 301 Just and Equitable Principles of Trade 1. Rule 301 Just and Equitable Principles of Trade 1. Rule 303 Prevention of the Misuse of Material Nonpublic Information 1 #. Rule 315 Anti-Money Laundering Compliance Program #. Rule 303 Prevention of the Misuse of Material Nonpublic Information 1 #. Rule 315 Anti-Money Laundering Compliance Program #. Rule 303 Prevention of the Misuse of Material Nonpublic Information 1 #. Rule 315 Anti-Money Laundering Compliance Program #. Rule 318(a) Manipulation ............... Rule 318(a) Manipulation ............. Rule 318(a) Manipulation ............. Rule 318(b) Manipulation ............... Rule 318(b) Manipulation ............. Rule 318(b) Manipulation ............. Rule 319 Forwarding of Proxy and Other Issuer-Related Materials. Rule 320 Trading Ahead of Research Reports. Rule 800(a), (b) and (d) Maintenance, Retention and Furnishing of Books, Records and Other Information 1 #. Rule 1900 Registration Requirements #. Rule 319 Forwarding of Proxy and Other Issuer-Related Materials. Rule 320 Trading Ahead of Research Reports. Rule 800(a), (b) and (d) Maintenance, Retention and Furnishing of Books, Records and Other Information 1 #. Rule 3100 Registration Requirements #. Rule 319 Forwarding of Proxy and Other Issuer-Related Materials. Rule 320 Trading Ahead of Research Reports. Rule 800(a), (b) and (d) Maintenance, Retention and Furnishing of Books, Records and Other Information 1 #. Rule 1900 Registration Requirements #. Rule 1901 Registration Categories #. Rule 1902(a), (b)(1)–(4) and Interpretations and Policies .01 Associated Persons Exempt from Registration. Rule 1903 Continuing Education Requirements #. Rule 1321 Transfer of Accounts .... Rule 3101 Registration Categories #. Rule 3102(a), (b)(1)–(4) and Interpretations and Policies .01 Associated Persons Exempt from Registration. Rule 3103 Continuing Education Requirements #. Rule 1321 Transfer of Accounts .. Rule 1901 Registration Categories #. Rule 1902(a), (b)(1)–(4) and Interpretations and Policies .01 Associated Persons Exempt from Registration. Rule 1903 Continuing Education Requirements #. Rule 1321 Transfer of Accounts .. Rule 1325 Telemarketing ............... Rule 1325 Telemarketing ............. Rule 2100 Business Conduct of Members *. Rule 1325 Telemarketing ............. ....................................................... VerDate Sep<11>2014 17:51 Sep 11, 2020 Jkt 250001 PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 56649 E:\FR\FM\14SEN1.SGM FINRA Rule 2010 Standards of Commercial Honor and Principles of Trade Section 15(g) of the Exchange Act and FINRA Rule 3110(b)(1) Supervision FINRA Rule 3310 Anti-Money Laundering Compliance Program FINRA Rule 2020 Use of Manipulative, Deceptive or other Fraudulent Devices FINRA Rule 6140(d) Other Trading Practices FINRA Rule 2251 Processing and Forwarding of Proxy and Other Issuer-Related Materials FINRA Rule 5280 Trading Ahead of Research Reports FINRA Rule 4511 General Requirements * and Section 17 of the Exchange Act and the rules thereunder # FINRA Rule 1210 Registration Requirements; FINRA By-Laws Article V, Sec. 2 Application for Registration; and FINRA ByLaws Article V, Sec. 3 Notification by Member to the Corporation and Association Person of Termination; Amendments to Notification Rule 1220 Registration Categories 2 FINRA Rule 1230 Associated Persons Exempt from Registration FINRA Rule 1240 Continuing Education Requirements FINRA Rule 11870 Customer Account Transfer Contracts FINRA Rule 3230 Telemarketing FINRA Rule 2010 Standards of Commercial Honor and Principles of Trade * 14SEN1 56650 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Notices MIAX rules khammond on DSKJM1Z7X2PROD with NOTICES l VerDate Sep<11>2014 17:51 Sep 11, 2020 FINRA (NASD) rules, Exchange Act provision or SEC rule MIAX PEARL rules MIAX Emerald rules Rule 2101 Violations Prohibited * # ....................................................... Rule 2102 Use of Fraudulent Devices *. ....................................................... Rule 2104 Communications with the Public. Rule 2105 Know Your Customer ....................................................... Rule 2106 Fair Dealing with Customers. ....................................................... Rule 2107 Suitability ..................... Rule 2108(a) The Prompt Receipt and Delivery of Securities. Rule 2108(b) The Prompt Receipt and Delivery of Securities. Rule 2109 Charges for Services Performed. Rule 2110 Use of Information ...... ....................................................... ....................................................... FINRA Rule 2010 Standards of Commercial Honor * and Principles of Trade and FINRA Rule 3110 Supervision * FINRA Rule 2020 Use of Manipulative, Deceptive or Other Fraudulent Devices * FINRA Rule 2210 Communications with the Public FINRA Rule 2090 Know Your Customer FINRA Rule 2020 Use of Manipulative, Deceptive or Other Fraudulent Device *, FINRA Rule 2010 Standards of Commercial Honor and Principles of Trade *, FINRA Rule 2111(a) and SM .06 Suitability, FINRA Rule 2150(a) Improper Use of Customers’ Securities or Funds; Prohibition Against Guarantees and Sharing in Accounts, and FINRA Rule 3240(a) Borrowing From or Lending to Customers FINRA Rule 2111 FINRA Rule 11860 COD Orders ....................................................... SEC Regulation SHO ....................................................... Rule 2111 Publication of Transactions and Quotations #. Rule 2112 Offers at Stated Prices ....................................................... FINRA Rule 2122 Charges for Services Performed FINRA Rule 2060 Use of Information Obtained in Fiduciary Capacity FINRA Rule 5210 Publication of Transactions and Quotations FINRA Rule 5220 Offers at Stated Prices FINRA Rule 5230 Payments Involving Publications that Influence the Market Price of a Security FINRA Rule 2232(a) Customer Confirmations and SEC Rule 10b–10 Confirmation of Transactions FINRA Rule 2262 Disclosure of Control Relationship With Issuer FINRA Rule 3260 Discretionary Accounts FINRA Rule 2150 Improper Use of Customers’ Securities or Funds; Prohibition Against Guarantees and Sharing in Accounts FINRA Rule 3220 Influencing or Rewarding Employees of Others FINRA Rule 3230 Telemarketing Section 17 of the Exchange Act and rules thereunder and FINRA Rule 4511(a) and (c) General Requirements 3 Rule 4512 Customer Account Information FINRA Rule 4513 Records of Written Customer Complaints FINRA Rule 2261 Disclosure of Financial Condition FINRA Rule 3110 Supervision * ....................................................... ....................................................... ....................................................... Rule 2113 Payments Involving Publications that Influence the Market Price of a Security. ....................................................... Rule 2114 Customer Confirmations. ....................................................... Rule 2115 Disclosure of Control Relationship with Issuer. ....................................................... Rule 2116 Discretionary Accounts ....................................................... Rule 2117 Improper Use of Customers’ Securities or Funds; Prohibition Against Guarantees and Sharing in Accounts. ....................................................... Rule 2118 Influencing or Rewarding Employees of Others. ....................................................... Rule 2119 Telemarketing ............. Rule 2200 General Requirements #. ....................................................... ....................................................... Rule 2201 Customer Account Information. Rule 2203 Record of Written Complaints. Rule 2204 Disclosure of Financial Condition. Rule 2300 Supervision # ............... ....................................................... Jkt 250001 PO 00000 Frm 00079 Fmt 4703 ....................................................... ....................................................... ....................................................... Sfmt 4703 E:\FR\FM\14SEN1.SGM 14SEN1 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Notices MIAX rules FINRA (NASD) rules, Exchange Act provision or SEC rule MIAX PEARL rules MIAX Emerald rules Rule 2301 Supervisory Control System. Rule 2303 Prevention of the Misuse of Material Non-Public Information * #. Rule 2304 Anti-Money Laundering Compliance Program 4 #. ....................................................... ....................................................... ....................................................... Rule 2262(e)(3) & (4) Limit UpLimit Down Plan and Trading Halts. ....................................................... Rule 2623 Short Sales # ............... ....................................................... Rule 2700 Market Manipulation ... ....................................................... Rule 2701 Fictitious Transactions ....................................................... Rule 2702 Excessive Sales By an Equity Member. Rule 2703 Manipulative Transactions. Rule 2704 Dissemination of False Information. Rule 2705 Prohibition Against Trading Ahead of Customer Orders # **. Rule 2708 Trade Shredding ......... ....................................................... Rule 2710 Best Execution and Interpositioning **. Rule 2712 Trading Ahead of Research Reports **. Rule 2714 Front Running of Block Transactions **. Rule 2802 Forwarding of Proxy and Other Issuer-Related Materials. 56651 ....................................................... ....................................................... ....................................................... ....................................................... ....................................................... ....................................................... ....................................................... ....................................................... FINRA Rule 3120 Supervisory Control System * Section 15(g) of the Exchange Act * and FINRA Rule 3110(b)(1) Supervision * FINRA Rule 3310 Anti-Money Laundering Compliance Program FINRA Rule 6190(a) & (b) Compliance with Regulation NMS Plan to Address Extraordinary Market Volatility FINRA Rule 6182 Trade Reporting of Short Sales FINRA Rule 5210 Publication of Transactions and Quotations, FINRA Rule 2020 Use of Manipulative, Deceptive or Other Fraudulent Devices *, FINRA Rule 2010 Standards of Commercial Honor and Principles of Trade *, and FINRA Rule 6140(a) Other Trading Practices FINRA Rule 6140 Other Trading Practices and FINRA Rule 5210 Supplementary Material .02 Self-Trades FINRA Rule 6140(c) Other Trading Practices FINRA Rule 6140 Other Trading Practices FINRA Rule 6140(e) Other Trading Practices FINRA Rule 5320 Prohibition Against Trading Ahead of Customer Orders ** FINRA Rule 5290 Order Entry and Execution Practices FINRA Rule 5310 Best Execution and Interpositioning ** FINRA Rule 5280 Trading Ahead of Research Reports ** FINRA Rule 5270 Front Running of Block Transactions ** FINRA Rule 2251 Processing and Forwarding of Proxy and Other Issuer-Related Materials 1 FINRA shall only have Regulatory Responsibilities regarding the rule and not the interpretations and policies. Rules shall not include any provisions regarding (i) notice, reporting or any other filings made directly to or from MIAX, MIAX PEARL or MIAX Emerald, (ii) incorporation by reference of other MIAX, MIAX PEARL or MIAX Emerald Rules that are not Common Rules, (iii) exercise of discretion in a manner that differs from FINRA’s exercise of discretion including, but not limited to exercise of exemptive authority by MIAX, MIAX PEARL or MIAX Emerald, (iv) prior written approval of MIAX, MIAX PEARL or MIAX Emerald and (v) payment of fees or fines to MIAX, MIAX PEARL or MIAX Emerald. * FINRA shall not have any Regulatory Responsibilities for these rules as they pertain to violations of insider trading activities, which is covered by a separate 17d–2 Agreement by and among Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., Chicago Stock Exchange, Inc., Cboe EDGA Exchange Inc., Cboe EDGX Exchange Inc., Financial Industry Regulatory Authority, Inc., MEMX, LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, The Nasdaq Stock Market LLC, NYSE National, Inc., New York Stock Exchange, LLC, NYSE American LLC, NYSE Arca Inc., and Investors’ Exchange LLC and the Long-Term Stock Exchange, Inc. effective May 26, 2020, as may be amended from time to time. 2 FINRA shall only have Regulatory Responsibilities regarding MIAX and MIAX Emerald Rules 1901 or MIAX Pearl Rule 3101 to the extent that MIAX, MIAX Pearl or MIAX Emerald recognize the same categories of principal and representative registration. 3 FINRA shall not have Regulatory Responsibilities regarding requirements to keep records ‘‘in conformity with . . . Exchange Rules;’’ responsibility for such requirement remains with MIAX PEARL. 4 FINRA shall only have Regulatory Responsibilities regarding the rule and not the interpretations and policies. ** FINRA shall perform the surveillance responsibilities for the double star rules for MIAX PEARL Equities. These rules may be cited by FINRA in both the context of this Agreement and the Regulatory Services Agreement. khammond on DSKJM1Z7X2PROD with NOTICES # Common In addition, the following provisions shall be part of this 17d–2 Agreement: VerDate Sep<11>2014 17:51 Sep 11, 2020 Jkt 250001 • SEA Rule 200 of Regulation SHO— Definition of Short Sales and Marking Requirements ** PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 • SEA Rule 201 of Regulation SHO— Circuit Breaker ** E:\FR\FM\14SEN1.SGM 14SEN1 khammond on DSKJM1Z7X2PROD with NOTICES 56652 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Notices IV. Solicitation of Comments • SEA Rule 203 of Regulation SHO— Borrowing and Delivery Interested persons are invited to Requirements ** submit written data, views, and • SEA Rule 204 of Regulation SHO— arguments concerning the foregoing. Close-Out Requirement ** Comments may be submitted by any of • SEA Rule 101 of Regulation M— the following methods: Activities by Distribution Electronic Comments Participants ** • SEA Rule 102 of Regulation M— • Use the Commission’s internet Activities by Issuers and Selling comment form (https://www.sec.gov/ Security Holders During a rules/sro.shtml); or Distribution ** • Send an email to rule-comments@ • SEA Rule 103 of Regulation M— sec.gov. Please include File Number 4– Nasdaq Passive Market Making ** 678 on the subject line. • SEA Rule 104 of Regulation M— Paper Comments Stabilizing and Other Activities in Connection with an Offering ** • Send paper comments in triplicate • SEA Rule 105 of Regulation M—Short to Secretary, Securities and Exchange Selling in Connection With a Public Commission, 100 F Street NE, Offering ** Washington, DC 20549–1090. • SEA Rule 604 of Regulation NMS— All submissions should refer to File Display of Customer Limit Orders ** Number 4–678. This file number should • SEA Rule 606 of Regulation NMS— be included on the subject line if email Disclosure of Routing Information ** is used. To help the Commission • SEA Rule 610(d) of Regulation NMS— process and review your comments Locking or Crossing Quotations ** more efficiently, please use only one • SEA Rule 611 of Regulation NMS— method. The Commission will post all Order Protection Rule ** comments on the Commission’s internet • SEA Rule 10b–5 Employment of website (https://www.sec.gov/rules/ Manipulative and Deceptive Devices * sro.shtml). Copies of the submission, all • SEA Rule 17a–3/17a–4—Records to subsequent amendments, all written Be Made by Certain Exchange statements with respect to the proposed Members, Brokers, and Dealers/ plan that are filed with the Commission, Records to Be Preserved by Certain and all written communications relating Exchange Members, Brokers, and to the proposed plan between the Dealers * Commission and any person, other than • SEA Rule 14e–4—Prohibited those that may be withheld from the Transactions in Connection with public in accordance with the Partial Tender Offers ∧ provisions of 5 U.S.C. 552, will be ∧ FINRA shall perform surveillance[, available for website viewing and investigation, and Enforcement printing in the Commission’s Public Responsibilities] for SEA Rule 14e– Reference Room, 100 F Street NE, 4(a)(1)(ii)(D). Washington, DC 20549, on official * FINRA shall not have any business days between the hours of Regulatory Responsibilities for these 10:00 a.m. and 3:00 p.m. Copies of the rules as they pertain to violations of plan also will be available for inspection insider trading activities, which is and copying at the principal offices of covered by a separate 17d–2 Agreement FINRA, MIAX, MIAX PEARL, and by and among Cboe BZX Exchange, Inc., MIAX Emerald. All comments received Cboe BYX Exchange, Inc., Chicago will be posted without change. Persons Stock Exchange, Inc., Cboe EDGA submitting comments are cautioned that Exchange Inc., Cboe EDGX Exchange we do not redact or edit personal Inc., Financial Industry Regulatory identifying information from comment Authority, Inc., MEMX, LLC, Nasdaq BX, submissions. You should submit only Inc., Nasdaq PHLX LLC, The Nasdaq information that you wish to make Stock Market LLC, NYSE National, Inc., available publicly. All submissions New York Stock Exchange, LLC, NYSE should refer to File Number 4–678 and American LLC, NYSE Arca Inc., and should be submitted on or before Investors’ Exchange LLC and the LongOctober 5, 2020. Term Stock Exchange, Inc. effective May 26, 2020, as may be amended from time V. Discussion to time. The Commission finds that the ** FINRA shall perform the proposed Amended Plan is consistent surveillance responsibilities for the with the factors set forth in Section double star rules for MIAX PEARL 17(d) of the Act 15 and Rule 17d–2(c) Equities. These rules may be cited by thereunder 16 in that the proposed FINRA in both the context of this 15 15 U.S.C. 78q(d). Agreement and the Regulatory Services 16 17 CFR 240.17d–2(c). Agreement. VerDate Sep<11>2014 17:51 Sep 11, 2020 Jkt 250001 PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 Amended Plan is necessary or appropriate in the public interest and for the protection of investors, fosters cooperation and coordination among SROs, and removes impediments to and fosters the development of the national market system. In particular, the Commission believes that the proposed Amended Plan should reduce unnecessary regulatory duplication by allocating to FINRA certain examination and enforcement responsibilities for Common Members that would otherwise be performed by FINRA and at least one of MIAX, MIAX PEARL, or MIAX Emerald. Accordingly, the proposed Amended Plan promotes efficiency by reducing costs to common members. Furthermore, because MIAX, MIAX PEARL, MIAX Emerald and FINRA will coordinate their regulatory functions in accordance with the Amended Plan, the Amended Plan should promote investor protection. The Commission notes that, under the Amended Plan, MIAX, MIAX PEARL, MIAX Emerald, and FINRA have allocated regulatory responsibility for those MIAX, MIAX PEARL, and MIAX Emerald rules, set forth in the Certification, that are substantially similar to the applicable FINRA rules in that examination for compliance with such provisions and rules would not require FINRA to develop one or more new examination standards, modules, procedures, or criteria in order to analyze the application of the rule, or a common member’s activity, conduct, or output in relation to such rule. In addition, under the Amended Plan, FINRA would assume regulatory responsibility for certain provisions of the federal securities laws and the rules and regulations thereunder that are set forth in the Certification. The common rules covered by the Amended Plan are specifically listed in the Certification, as may be amended by the parties from time to time. According to the Amended Plan, MIAX, MIAX PEARL, and MIAX Emerald will review the Certification at least annually, or more frequently if required by changes in either the rules of MIAX, MIAX PEARL, MIAX Emerald, or FINRA, and, if necessary, submit to FINRA an updated list of common rules to add MIAX, MIAX PEARL, or MIAX Emerald rules not included on the thencurrent list of common rules that are substantially similar to FINRA rules; delete MIAX, MIAX PEARL, or MIAX Emerald rules included in the thencurrent list of common rules that no longer qualify as common rules; and confirm that the remaining rules on the list of common rules continue to be MIAX, MIAX PEARL, or MIAX Emerald E:\FR\FM\14SEN1.SGM 14SEN1 Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Notices khammond on DSKJM1Z7X2PROD with NOTICES rules that qualify as common rules.17 FINRA will then confirm in writing whether the rules listed in any updated list are common rules as defined in the Amended Plan. Under the Amended Plan, MIAX, MIAX PEARL, and MIAX Emerald also will provide FINRA with a current list of common members and shall update the list no less frequently than once each quarter.18 The Commission believes that these provisions are designed to provide for continuing communication between the parties to ensure the continued accuracy of the scope of the proposed allocation of regulatory responsibility. The Commission is hereby declaring effective an Amended Plan that, among other things, allocates regulatory responsibility to FINRA for the oversight and enforcement of all MIAX, MIAX PEARL, and MIAX Emerald rules that are substantially similar to the rules of FINRA for common members of FINRA and MIAX, FINRA and MIAX PEARL, and FINRA and MIAX Emerald. Therefore, modifications to the Certification need not be filed with the Commission as an amendment to the Amended Plan, provided that the parties are only adding to, deleting from, or confirming changes to MIAX, MIAX PEARL, or MIAX Emerald rules in the Certification in conformance with the definition of common rules provided in the Amended Plan. However, should the parties decide to add a MIAX, MIAX PEARL, or MIAX Emerald rule to the Certification that is not substantially similar to a FINRA rule; delete a MIAX, MIAX PEARL, or MIAX Emerald rule from the Certification that is substantially similar to a FINRA rule; or leave on the Certification a MIAX, MIAX PEARL, or MIAX Emerald rule that is no longer substantially similar to a FINRA rule, then such a change would constitute an amendment to the Amended Plan, which must be filed with the Commission pursuant to Rule 17d–2 under the Act.19 Under paragraph (c) of Rule 17d–2, the Commission may, after appropriate notice and comment, declare a plan, or any part of a plan, effective. In this instance, the Commission believes that appropriate notice and comment can take place after the proposed amendment is effective. In particular, 17 See paragraph 2 of the Amended Plan. paragraph 3 of the Amended Plan. 19 The addition to or deletion from the Certification of any federal securities laws, rules, and regulations for which FINRA would bear responsibility under the Amended Plan for examining, and enforcing compliance by, common members, also would constitute an amendment to the Amended Plan. 18 See VerDate Sep<11>2014 17:51 Sep 11, 2020 Jkt 250001 the purpose of the amendment is to add MIAX PEARL equities rules and certain federal securities laws to the Certification. The Commission notes that the most recent prior amendment to the Plan was published for comment and the Commission did not receive any comments thereon.20 The Commission believes that the current amendment to the Plan does not raise any new regulatory issues that the Commission has not previously considered, and therefore believes that the amended Plan should become effective without any undue delay. VI. Conclusion This order gives effect to the Amended Plan filed with the Commission in File No. 4–678. The parties shall notify all members affected by the Amended Plan of their rights and obligations under the Amended Plan. It is therefore ordered, pursuant to Section 17(d) of the Act, that the Amended Plan in File No. 4–678, between the FINRA, MIAX, MIAX PEARL, and MIAX Emerald, filed pursuant to Rule 17d–2 under the Act, hereby is approved and declared effective. It is further ordered that MIAX, MIAX PEARL, and MIAX Emerald are each relieved of those responsibilities allocated to FINRA under the Amended Plan in File No. 4–678. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–20132 Filed 9–11–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89787; File No. SR– NYSEArca–2020–78] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the NYSE Arca Options Fee Schedule September 8, 2020. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on September 1, 2020, NYSE Arca, Inc. 20 See Securities Exchange Act Release No. 85189 (February 25, 2019), 84 FR 7153 (March 1, 2019). 21 17 CFR 200.30–3(a)(34). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 56653 (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘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 modify the NYSE Arca Options Fee Schedule (‘‘Fee Schedule’’) regarding pricing incentives for certain posted volume. The Exchange proposes to implement the fee change effective September 1, 2020. 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, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to amend the Fee Schedule regarding pricing incentives for certain posted volume. In particular, the Exchange proposes to adopt a new Customer Posting Tier for non-Penny Issues and to implement a cap on the maximum per contract credit for Professional Customer executions. The Exchange proposes to implement the fee change effective September 1, 2020. The Exchange has established various pricing incentives—or posting credit tiers—designed to encourage OTP Holders and OTP Firms (collectively, ‘‘OTP Holders’’) to direct additional order flow to the Exchange to achieve more favorable pricing and higher credits. Currently, the Fee Schedule provides separate pricing programs for E:\FR\FM\14SEN1.SGM 14SEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 85, Number 178 (Monday, September 14, 2020)]
[Notices]
[Pages 56645-56653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20132]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89788; File No. 4-678]

Program for Allocation of Regulatory Responsibilities Pursuant to
Rule 17d-2; Notice of Filing and Order Approving and Declaring
Effective an Amended Proposed Plan for the Allocation of Regulatory
Responsibilities Among the Financial Industry Regulatory Authority,
Inc., Miami International Securities Exchange, LLC, MIAX PEARL, LLC,
and MIAX Emerald, LLC

September 8, 2020.
Notice is hereby given that the Securities and Exchange Commission
(``Commission'') has issued an Order, pursuant to Section 17(d) of the
Securities Exchange Act of 1934 (``Act''),\1\ approving and declaring
effective an amendment to the plan for allocating regulatory
responsibility (``Plan'') filed on September 2, 2020, pursuant to Rule
17d-2 of the Act,\2\ by the Miami International Securities Exchange,
LLC (``MIAX''), MIAX PEARL, LLC (``MIAX PEARL''), MIAX Emerald, LLC
(``MIAX Emerald'') and the Financial Industry Regulatory Authority,
Inc. (``FINRA'') (together, the ``Parties''). The Plan replaces and
supersedes the agreement entered into between FINRA, MIAX and MIAX
PEARL on December 19, 2018, entitled ``Agreement between Financial
Industry Regulatory Authority, Inc., Miami International Securities
Exchange, LLC and MIAX PEARL, LLC Pursuant to Rule 17d-2 under the
Securities Exchange Act of 1934.'' \3\
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\1\ 15 U.S.C. 78q(d).
\2\ 17 CFR 240.17d-2.
\3\ See Securities Exchange Act Release No. 85189 (February 25,
2019), 84 FR 7153 (March 1, 2019).
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I. Introduction

Section 19(g)(1) of the Securities Exchange Act of 1934
(``Act''),\4\ among other things, requires every self-regulatory
organization (``SRO'') registered as either a national securities
exchange or national securities association to examine for, and enforce
compliance by, its members and persons associated with its members with
the Act, the rules and regulations thereunder, and the SRO's own rules,
unless the SRO is relieved of this responsibility pursuant to Section
17(d) or Section 19(g)(2) of the Act.\5\ Without this relief, the
statutory obligation of each individual SRO could result in a

[[Page 56646]]

pattern of multiple examinations of broker-dealers that maintain
memberships in more than one SRO (``common members''). Such regulatory
duplication would add unnecessary expenses for common members and their
SROs.
---------------------------------------------------------------------------

\4\ 15 U.S.C. 78s(g)(1).
\5\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively.
---------------------------------------------------------------------------

Section 17(d)(1) of the Act \6\ was intended, in part, to eliminate
unnecessary multiple examinations and regulatory duplication.\7\ With
respect to a common member, Section 17(d)(1) authorizes the Commission,
by rule or order, to relieve an SRO of the responsibility to receive
regulatory reports, to examine for and enforce compliance with
applicable statutes, rules, and regulations, or to perform other
specified regulatory functions.
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\6\ 15 U.S.C. 78q(d)(1).
\7\ See Securities Act Amendments of 1975, Report of the Senate
Committee on Banking, Housing, and Urban Affairs to Accompany S.
249, S. Rep. No. 94-75, 94th Cong., 1st Session 32 (1975).
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To implement Section 17(d)(1), the Commission adopted two rules:
Rule 17d-1 and Rule 17d-2 under the Act.\8\ Rule 17d-1 authorizes the
Commission to name a single SRO as the designated examining authority
(``DEA'') to examine common members for compliance with the financial
responsibility requirements imposed by the Act, or by Commission or SRO
rules.\9\ When an SRO has been named as a common member's DEA, all
other SROs to which the common member belongs are relieved of the
responsibility to examine the firm for compliance with the applicable
financial responsibility rules. On its face, Rule 17d-1 deals only with
an SRO's obligations to enforce member compliance with financial
responsibility requirements. Rule 17d-1 does not relieve an SRO from
its obligation to examine a common member for compliance with its own
rules and provisions of the federal securities laws governing matters
other than financial responsibility, including sales practices and
trading activities and practices.
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\8\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
\9\ See Securities Exchange Act Release No. 12352 (April 20,
1976), 41 FR 18808 (May 7, 1976).
---------------------------------------------------------------------------

To address regulatory duplication in these and other areas, the
Commission adopted Rule 17d-2 under the Act.\10\ Rule 17d-2 permits
SROs to propose joint plans for the allocation of regulatory
responsibilities with respect to their common members. Under paragraph
(c) of Rule 17d-2, the Commission may declare such a plan effective if,
after providing for appropriate notice and comment, it determines that
the plan is necessary or appropriate in the public interest and for the
protection of investors; to foster cooperation and coordination among
the SROs; to remove impediments to, and foster the development of, a
national market system and a national clearance and settlement system;
and is in conformity with the factors set forth in Section 17(d) of the
Act. Commission approval of a plan filed pursuant to Rule 17d-2
relieves an SRO of those regulatory responsibilities allocated by the
plan to another SRO.
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\10\ See Securities Exchange Act Release No. 12935 (October 28,
1976), 41 FR 49091 (November 8, 1976).
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II. The Plan

On November 19, 2014, the Commission declared effective the Plan
entered into between FINRA and MIAX for allocating regulatory
responsibility pursuant to Rule 17d-2.\11\ The Plan is intended to
reduce regulatory duplication for firms that are common members of both
MIAX and FINRA. The plan reduces regulatory duplication for firms that
are members of MIAX and FINRA by allocating regulatory responsibility
with respect to certain applicable laws, rules, and regulations.
Included in the Plan is an exhibit that lists every MIAX rule for which
FINRA bears responsibility under the Plan for overseeing and enforcing
with respect to MIAX members that are also members of FINRA and the
associated persons therewith. On January 12, 2017, the parties
submitted a proposed amendment to the Plan to add MIAX PEARL as a
Participant to the Plan.\12\ On June 28, 2018, the parties submitted a
proposed amendment to the Plan to allocate surveillance, investigation,
and enforcement responsibilities for Rule 14e-4 under the Act, as well
as certain provisions of Regulation SHO.\13\ On December 20, 2018, the
parties submitted a proposed amendment to the Plan to add MIAX EMERALD
as a Participant to the Plan.\14\
---------------------------------------------------------------------------

\11\ See Securities Exchange Act Release No. 73641 (November 19,
2014), 79 FR 70230 (November 25, 2014).
\12\ See Securities Exchange Act Release Nos. 79779 (January 12,
2017), 82 FR 6674 (January 19, 2017) (notice) and 79974 (February 6,
2017), 82 FR 10417 (February 10, 2017) (order).
\13\ See Securities Exchange Act Release No. 83696 (July 24,
2018), 83 FR 35682 (July 27, 2018).
\14\ See Securities Exchange Act Release No. 85189 (February 25,
2019), 84 FR 7153 (March 1, 2019).
---------------------------------------------------------------------------

III. Proposed Amendment to the Plan

On September 2, 2020, the parties submitted a proposed amendment to
the Plan (``Amended Plan''). The primary purpose of the Amended Plan is
to add MIAX PEARL equities rules and certain federal securities laws to
the Certification. The text of the proposed Amended Plan is as follows
(additions are italicized; deletions are [bracketed]):

Agreement Among Financial Industry Regulatory Authority, Inc., Miami
International Securities Exchange, LLC, MIAX Pearl, LLC and MIAX
Emerald, LLC Pursuant to Rule 17d-2 Under the Securities Exchange Act
of 1934

This Agreement, by and among the Financial Industry Regulatory
Authority, Inc. (``FINRA''), Miami International Securities Exchange,
LLC (``MIAX''), MIAX PEARL, LLC (``MIAX PEARL''), and MIAX Emerald, LLC
(``MIAX Emerald'') is made this 2nd day of September, 2020 (the
``Agreement''), pursuant to Section 17(d) of the Securities Exchange
Act of 1934 (the ``Exchange Act'') and Rule 17d-2 thereunder, which
permits agreements between self-regulatory organizations to allocate
regulatory responsibility to eliminate regulatory duplication. FINRA,
MIAX, MIAX PEARL and MIAX Emerald may be referred to individually as a
``party'' and together as the ``parties.''
This Agreement amends and restates the agreement entered into
between FINRA, MIAX and MIAX PEARL on December 19, 2018, entitled
``Agreement between Financial Industry Regulatory Authority, Inc.,
Miami International Securities Exchange, LLC and MIAX PEARL, LLC
Pursuant to Rule 17d-2 under the Securities Exchange Act of 1934,'' and
any subsequent amendments thereafter.
Whereas, the parties desire to reduce duplication in the
examination and surveillance of their Common Members (as defined
herein) and in the filing and processing of certain registration and
membership records; and

Whereas, the parties desire to execute an agreement covering such
subjects pursuant to the provisions of Rule 17d-2 under the Exchange
Act and to file such agreement with the Securities and Exchange
Commission (the ``SEC'' or ``Commission'') for its approval.
Now, therefore, in consideration of the mutual covenants contained
hereinafter, the parties hereby agree as follows:
1. Definitions. Unless otherwise defined in this Agreement or the
context otherwise requires, the terms used in this Agreement shall have
the same meaning as they have under the Exchange Act and the rules and
regulations thereunder. As used in this Agreement, the following terms
shall have the following meanings:
(a) ``MIAX Rules,'' ``MIAX PEARL Rules'', ``MIAX Emerald Rules'' or
``FINRA Rules'' shall mean: (i) The rules of MIAX, MIAX PEARL or MIAX

[[Page 56647]]

Emerald, respectively, or (ii) the rules of FINRA, respectively, as the
rules of an exchange or association are defined in Exchange Act Section
3(a)(27).
(b) ``Common Rules'' shall mean MIAX Rules, MIAX PEARL Rules and
MIAX Emerald Rules that are substantially similar to the applicable
FINRA Rules and certain provisions of the Exchange Act and SEC rules
set forth on Exhibit 1 in that examination or surveillance for
compliance with such provisions and rules would not require FINRA to
develop one or more new examination or surveillance standards, modules,
procedures, or criteria in order to analyze the application of the
provision or rule, or a Common Member's activity, conduct, or output in
relation to such provision or rule; provided, however, Common Rules
shall not include the application of the SEC, MIAX PEARL or FINRA rules
as they pertain to violations of insider trading activities, which is
covered by a separate 17d-2 Agreement by and among Cboe BZX Exchange,
Inc., Cboe BYX Exchange, Inc., Chicago Stock Exchange, Inc., Cboe EDGA
Exchange, Inc., Cboe EDGX Exchange, Inc., Financial Industry Regulatory
Authority, Inc., MEMX, LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, The
Nasdaq Stock Market LLC, NYSE National, Inc., New York Stock Exchange
LLC, NYSE American LLC, NYSE Arca Inc., Investors' Exchange LLC and
Long-Term Stock Exchange, Inc. effective May 26, 2020, as may be
amended from time to time. Common Rules shall not include any
provisions regarding (i) notice, reporting or any other filings made
directly to or from MIAX, MIAX PEARL or MIAX Emerald, (ii)
incorporation by reference of other MIAX, MIAX PEARL Rules or MIAX
Emerald Rules that are not Common Rules, (iii) exercise of discretion
in a manner that differs from FINRA's exercise of discretion including,
but not limited to exercise of exemptive authority, by MIAX, MIAX PEARL
or MIAX Emerald, (iv) prior written approval of MIAX, MIAX PEARL or
MIAX Emerald and (v) payment of fees or fines to MIAX, MIAX PEARL or
MIAX Emerald.
(c) ``Common Members'' shall mean members of FINRA and at least one
of MIAX, MIAX PEARL or MIAX Emerald.
(d) ``Effective Date'' shall be the date this Agreement is approved
by the Commission.
(e) ``Enforcement Responsibilities'' shall mean the conduct of
appropriate proceedings, in accordance with FINRA's Code of Procedure
(the Rule 9000 Series) and other applicable FINRA procedural rules, to
determine whether violations of Common Rules have occurred, and if such
violations are deemed to have occurred, the imposition of appropriate
sanctions as specified under FINRA's Code of Procedure and sanctions
guidelines.
(f) ``Regulatory Responsibilities'' shall mean the examination
responsibilities, surveillance responsibilities and Enforcement
Responsibilities relating to compliance by the Common Members with the
Common Rules and the provisions of the Exchange Act and the rules and
regulations thereunder, and other applicable laws, rules and
regulations, each as set forth on Exhibit 1 attached hereto.
2. Regulatory and Enforcement Responsibilities. FINRA shall assume
Regulatory Responsibilities and Enforcement Responsibilities for Common
Members. Attached as Exhibit 1 to this Agreement and made part hereof,
MIAX, MIAX PEARL and MIAX Emerald furnished FINRA with a current list
of Common Rules and certified to FINRA that such rules that are MIAX
Rules, MIAX PEARL Rules and MIAX Emerald Rules are substantially
similar to the corresponding FINRA Rules (the ``Certification''). FINRA
hereby agrees that the rules listed in the Certification are Common
Rules as defined in this Agreement. Each year following the Effective
Date of this Agreement, or more frequently if required by changes in
the rules of the parties, MIAX, MIAX PEARL and MIAX Emerald shall
submit an updated list of Common Rules to FINRA for review which shall
add MIAX Rules, MIAX PEARL Rules or MIAX Emerald Rules not included in
the current list of Common Rules that qualify as Common Rules as
defined in this Agreement; delete MIAX Rules, MIAX PEARL Rules or MIAX
Emerald Rules included in the current list of Common Rules that no
longer qualify as Common Rules as defined in this Agreement; and
confirm that the remaining rules on the current list of Common Rules
continue to be MIAX Rules, MIAX PEARL Rules or MIAX Emerald Rules that
qualify as Common Rules as defined in this Agreement. Within 30 days of
receipt of such updated list, FINRA shall confirm in writing whether
the rules listed in any updated list are Common Rules as defined in
this Agreement. Notwithstanding anything herein to the contrary, it is
explicitly understood that the term ``Regulatory Responsibilities''
does not include, and MIAX, MIAX PEARL and MIAX Emerald shall retain
full responsibility for (unless otherwise addressed by separate
agreement or rule) (collectively, the ``Retained Responsibilities'')
the following:
(a) Surveillance, examination, investigation and enforcement with
respect to trading activities or practices involving MIAX's, MIAX
PEARL's and MIAX Emerald's own marketplace;
(b) registration pursuant to their applicable rules of associated
persons (i.e., registration rules that are not Common Rules);
(c) discharge of their duties and obligations as a Designated
Examining Authority pursuant to Rule 17d-1 under the Exchange Act; and
(d) any MIAX Rules, MIAX PEARL Rules or MIAX Emerald Rules that are
not Common Rules as provided in paragraph 6.
3. Common Members. Prior to the Effective Date, MIAX, MIAX PEARL
and MIAX Emerald shall furnish FINRA with a current list of Common
Members, which shall be updated no less frequently than once each
quarter.
4. No Charge. There shall be no charge to MIAX, MIAX PEARL and MIAX
Emerald by FINRA for performing the Regulatory Responsibilities and
Enforcement Responsibilities under this Agreement except as hereinafter
provided. FINRA shall provide MIAX, MIAX PEARL and MIAX Emerald with
ninety (90) days advance written notice in the event FINRA decides to
impose any charges to MIAX, MIAX PEARL and MIAX Emerald for performing
the Regulatory Responsibilities under this Agreement. If FINRA
determines to impose a charge, MIAX, MIAX PEARL and MIAX Emerald shall
have the right at the time of the imposition of such charge to
terminate this Agreement; provided, however, that FINRA's Regulatory
Responsibilities under this Agreement shall continue until the
Commission approves the termination of this Agreement.
5. Applicability of Certain Laws, Rules, Regulations or Orders.
Notwithstanding any provision hereof, this Agreement shall be subject
to any statute, or any rule or order of the SEC. To the extent such
statute, rule or order is inconsistent with one or more provisions of
this Agreement, the statute, rule or order shall supersede the
provision(s) hereof to the extent necessary to be properly effectuated
and the provision(s) hereof in that respect shall be null and void.
6. Notification of Violations. In the event that FINRA becomes
aware of apparent violations of any MIAX Rules, MIAX PEARL Rules or
MIAX Emerald Rules, which are not listed as Common Rules, discovered
pursuant to the performance of the Regulatory Responsibilities assumed
hereunder,

[[Page 56648]]

FINRA shall notify MIAX, MIAX PEARL and MIAX Emerald of those apparent
violations for such response as MIAX, MIAX PEARL and MIAX Emerald deem
appropriate. In the event that MIAX, MIAX PEARL or MIAX Emerald becomes
aware of apparent violations of any Common Rules, discovered pursuant
to the performance of the Retained Responsibilities, MIAX, MIAX PEARL
and MIAX Emerald shall notify FINRA of those apparent violations and
such matters shall be handled by FINRA as provided in this Agreement.
Apparent violations of Common Rules shall be processed by, and
enforcement proceedings in respect thereto shall be conducted by FINRA
as provided hereinbefore; provided, however, that in the event a Common
Member is the subject of an investigation relating to a transaction on
MIAX, MIAX PEARL or MIAX Emerald, MIAX, MIAX PEARL and MIAX Emerald may
in their discretion assume concurrent jurisdiction and responsibility.
Each party agrees to make available promptly all files, records and
witnesses necessary to assist the other in its investigation or
proceedings.
7. Continued Assistance.
(a) FINRA shall make available to MIAX, MIAX PEARL and MIAX Emerald
all information obtained by FINRA in the performance by it of the
Regulatory Responsibilities hereunder with respect to the Common
Members subject to this Agreement. In particular, and not in limitation
of the foregoing, FINRA shall furnish MIAX, MIAX PEARL and MIAX Emerald
any information it obtains about Common Members which reflects
adversely on their financial condition. MIAX, MIAX PEARL and MIAX
Emerald shall make available to FINRA any information coming to its
attention that reflects adversely on the financial condition of Common
Members or indicates possible violations of applicable laws, rules or
regulations by such firms.
(b) The parties agree that documents or information shared shall be
held in confidence, and used only for the purposes of carrying out
their respective regulatory obligations. No party shall assert
regulatory or other privileges as against any other with respect to
documents or information that is required to be shared pursuant to this
Agreement.
(c) The sharing of documents or information among the parties
pursuant to this Agreement shall not be deemed a waiver as against
third parties of regulatory or other privileges relating to the
discovery of documents or information.
8. Statutory Disqualifications. When FINRA becomes aware of a
statutory disqualification as defined in the Exchange Act with respect
to a Common Member, FINRA shall determine pursuant to Sections 15A(g)
and/or Section 6(c) of the Exchange Act the acceptability or continued
applicability of the person to whom such disqualification applies and
keep MIAX, MIAX PEARL and MIAX Emerald advised of its actions in this
regard for such subsequent proceedings as MIAX, MIAX PEARL and MIAX
Emerald may initiate.
9. Customer Complaints. MIAX, MIAX PEARL and MIAX Emerald shall
forward to FINRA copies of all customer complaints involving Common
Members received by MIAX, MIAX PEARL and MIAX Emerald relating to
FINRA's Regulatory Responsibilities under this Agreement. It shall be
FINRA's responsibility to review and take appropriate action in respect
to such complaints.
10. Advertising. FINRA shall assume responsibility to review the
advertising of Common Members subject to the Agreement, provided that
such material is filed with FINRA in accordance with FINRA's filing
procedures and is accompanied with any applicable filing fees set forth
in FINRA Rules.
11. No Restrictions on Regulatory Action. Nothing contained in this
Agreement shall restrict or in any way encumber the right of any party
to conduct its own independent or concurrent investigation, examination
or enforcement proceeding of or against Common Members, as any party,
in its sole discretion, shall deem appropriate or necessary.
12. Termination. This Agreement may be terminated by any party at
any time upon the approval of the Commission after one (1) year's
written notice to the other parties (or such shorter time as agreed by
the parties), except as provided in paragraph 4.
13. Arbitration. In the event of a dispute among the parties as to
the operation of this Agreement, the parties hereby agree that any such
dispute shall be settled by arbitration in Washington, DC in accordance
with the rules of the American Arbitration Association then in effect,
or such other procedures as the parties may mutually agree upon.
Judgment on the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction. Each party acknowledges that the timely
and complete performance of its obligations pursuant to this Agreement
is critical to the business and operations of the other parties. In the
event of a dispute among the parties, the parties shall continue to
perform their respective obligations under this Agreement in good faith
during the resolution of such dispute unless and until this Agreement
is terminated in accordance with its provisions. Nothing in this
Section 13 shall interfere with a party's right to terminate this
Agreement as set forth herein.
14. Separate Agreement. This Agreement is wholly separate from the
following agreement: (1) The multiparty Agreement made pursuant to Rule
17d-2 of the Exchange Act among Cboe BZX Exchange, Inc., BOX Options
Exchange, LLC, Cboe Exchange, Inc., Cboe C2 Exchange, Inc., Nasdaq ISE,
LLC, FINRA, MIAX, NYSE American LLC, NYSE Arca, Inc., The Nasdaq Stock
Market LLC, Nasdaq BX, Inc., the Nasdaq PHLX LLC, Nasdaq GEMX, LLC,
Cboe EDGX Exchange, Inc., Nasdaq MRX, LLC, MIAX PEARL, LLC and MIAX
Emerald, LLC involving the allocation of regulatory responsibilities
with respect to common members for compliance with common rules
relating to the conduct by broker-dealers of accounts for listed
options or index warrants entered as approved by the SEC on February
12, 2019, and as may be amended from time to time; and (2) the
multiparty Agreement made pursuant to Rule 17d-2 of the Exchange Act
among Cboe BZX Exchange, Inc., BOX Options Exchange, LLC, Cboe
Exchange, Inc., Cboe C2 Exchange, Inc., Nasdaq ISE, LLC, FINRA, MIAX,
NYSE American LLC, NYSE Arca, Inc., The Nasdaq Stock Market LLC, Nasdaq
BX, Inc., the Nasdaq PHLX LLC, Nasdaq GEMX, LLC, Cboe EDGX Exchange,
Inc., Nasdaq MRX, LLC, MIAX PEARL, LLC and MIAX Emerald, LLC involving
the allocation of regulatory responsibilities with respect to SRO
market surveillance of common members activities with regard to certain
common rules relating to listed options approved by the SEC on February
11, 2019, and as may be amended from time to time.
15. Notification of Members. The parties shall notify Common
Members of this Agreement after the Effective Date by means of a
uniform joint notice.
16. Amendment. This Agreement may be amended in writing provided
that the changes are approved by each party. All such amendments must
be filed with and approved by the Commission before they become
effective.
17. Limitation of Liability. None of the parties nor any of their
respective directors, governors, officers or employees shall be liable
to any other party to this Agreement for any liability, loss or damage
resulting from or claimed to have resulted from any delays,
inaccuracies, errors or omissions

[[Page 56649]]

with respect to the provision of Regulatory Responsibilities as
provided hereby or for the failure to provide any such responsibility,
except with respect to such liability, loss or damages as shall have
been suffered by any party and caused by the willful misconduct of
another party or their respective directors, governors, officers or
employees. No warranties, express or implied, are made by any party
hereto with respect to any of the responsibilities to be performed by
them hereunder.
18. Relief from Responsibility. Pursuant to Sections 17(d)(1)(A)
and 19(g) of the Exchange Act and Rule 17d-2 thereunder, FINRA, MIAX,
MIAX PEARL and MIAX Emerald join in requesting the Commission, upon its
approval of this Agreement or any part thereof, to relieve MIAX, MIAX
PEARL and MIAX Emerald of any and all responsibilities with respect to
matters allocated to FINRA pursuant to this Agreement; provided,
however, that this Agreement shall not be effective until the Effective
Date.
19. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and such
counterparts together shall constitute one and the same instrument.

Exhibit 1

Miami International Securities Exchange, LLC, MIAX PEARL, LLC and MIAX
Emerald, LLC Rules Certification for 17d-2 Agreement With FINRA
Miami International Securities Exchange, LLC (``MIAX''), MIAX
PEARL, LLC (``MIAX PEARL'') and MIAX Emerald, LLC (``MIAX Emerald'')
hereby certify that the requirements contained in the rules listed
below are identical to, or substantially similar to, the comparable
FINRA (NASD) Rule, Exchange Act provision or SEC rule identified
(``Common Rules'').

----------------------------------------------------------------------------------------------------------------
FINRA (NASD) rules,
MIAX rules MIAX PEARL rules MIAX Emerald rules Exchange Act provision
or SEC rule
----------------------------------------------------------------------------------------------------------------
Rule 301 Just and Equitable Rule 301 Just and Rule 301 Just and FINRA Rule 2010
Principles of Trade 1. Equitable Principles Equitable Principles Standards of
of Trade 1. of Trade 1. Commercial Honor and
Principles of Trade
Rule 303 Prevention of the Misuse of Rule 303 Prevention of Rule 303 Prevention of Section 15(g) of the
Material Nonpublic Information 1 . the Misuse of Material the Misuse of Material Exchange Act and FINRA
Nonpublic Information Nonpublic Information Rule 3110(b)(1)
1 . 1 . Supervision
Rule 315 Anti-Money Laundering Rule 315 Anti-Money Rule 315 Anti-Money FINRA Rule 3310 Anti-
Compliance Program . Laundering Compliance Laundering Compliance Money Laundering
Program . Program . Compliance Program
Rule 318(a) Manipulation............. Rule 318(a) Rule 318(a) FINRA Rule 2020 Use of
Manipulation. Manipulation. Manipulative,
Deceptive or other
Fraudulent Devices
Rule 318(b) Manipulation............. Rule 318(b) Rule 318(b) FINRA Rule 6140(d)
Manipulation. Manipulation. Other Trading
Practices
Rule 319 Forwarding of Proxy and Rule 319 Forwarding of Rule 319 Forwarding of FINRA Rule 2251
Other Issuer-Related Materials. Proxy and Other Issuer- Proxy and Other Issuer- Processing and
Related Materials. Related Materials. Forwarding of Proxy
and Other Issuer-
Related Materials
Rule 320 Trading Ahead of Research Rule 320 Trading Ahead Rule 320 Trading Ahead FINRA Rule 5280 Trading
Reports. of Research Reports. of Research Reports. Ahead of Research
Reports
Rule 800(a), (b) and (d) Maintenance, Rule 800(a), (b) and Rule 800(a), (b) and FINRA Rule 4511 General
Retention and Furnishing of Books, (d) Maintenance, (d) Maintenance, Requirements * and
Records and Other Information 1 . Retention and Retention and Section 17 of the
Furnishing of Books, Furnishing of Books, Exchange Act and the
Records and Other Records and Other rules thereunder
Information 1 . Information 1 .
Rule 1900 Registration Requirements Rule 3100 Registration Rule 1900 Registration FINRA Rule 1210
Requirements . Requirements . Registration
Requirements; FINRA By-
Laws Article V, Sec. 2
Application for
Registration; and
FINRA By-Laws Article
V, Sec. 3 Notification
by Member to the
Corporation and
Association Person of
Termination;
Amendments to
Notification
Rule 1901 Registration Categories .. Rule 3101 Registration Rule 1901 Registration Rule 1220 Registration
Categories . Categories . Categories 2
Rule 1902(a), (b)(1)-(4) and Rule 3102(a), (b)(1)- Rule 1902(a), (b)(1)- FINRA Rule 1230
Interpretations and Policies .01 (4) and (4) and Associated Persons
Associated Persons Exempt from Interpretations and Interpretations and Exempt from
Registration. Policies .01 Policies .01 Registration
Associated Persons Associated Persons
Exempt from Exempt from
Registration. Registration.
Rule 1903 Continuing Education Rule 3103 Continuing Rule 1903 Continuing FINRA Rule 1240
Requirements . Education Requirements Education Requirements Continuing Education
. . Requirements
Rule 1321 Transfer of Accounts....... Rule 1321 Transfer of Rule 1321 Transfer of FINRA Rule 11870
Accounts. Accounts. Customer Account
Transfer Contracts
Rule 1325 Telemarketing.............. Rule 1325 Telemarketing Rule 1325 Telemarketing FINRA Rule 3230
Telemarketing
Rule 2100 Business ....................... FINRA Rule 2010
Conduct of Members *. Standards of
Commercial Honor and
Principles of Trade *

[[Page 56650]]

Rule 2101 Violations ....................... FINRA Rule 2010
Prohibited * . Standards of
Commercial Honor * and
Principles of Trade
and FINRA Rule 3110
Supervision *
Rule 2102 Use of ....................... FINRA Rule 2020 Use of
Fraudulent Devices *. Manipulative,
Deceptive or Other
Fraudulent Devices *
Rule 2104 ....................... FINRA Rule 2210
Communications with Communications with
the Public. the Public
Rule 2105 Know Your ....................... FINRA Rule 2090 Know
Customer. Your Customer
Rule 2106 Fair Dealing ....................... FINRA Rule 2020 Use of
with Customers. Manipulative,
Deceptive or Other
Fraudulent Device *,
FINRA Rule 2010
Standards of
Commercial Honor and
Principles of Trade *,
FINRA Rule 2111(a) and
SM .06 Suitability,
FINRA Rule 2150(a)
Improper Use of
Customers' Securities
or Funds; Prohibition
Against Guarantees and
Sharing in Accounts,
and FINRA Rule 3240(a)
Borrowing From or
Lending to Customers
Rule 2107 Suitability.. ....................... FINRA Rule 2111
Rule 2108(a) The Prompt ....................... FINRA Rule 11860 COD
Receipt and Delivery Orders
of Securities.
Rule 2108(b) The Prompt ....................... SEC Regulation SHO
Receipt and Delivery
of Securities.
Rule 2109 Charges for ....................... FINRA Rule 2122 Charges
Services Performed. for Services Performed
Rule 2110 Use of ....................... FINRA Rule 2060 Use of
Information. Information Obtained
in Fiduciary Capacity
Rule 2111 Publication ....................... FINRA Rule 5210
of Transactions and Publication of
Quotations . Transactions and
Quotations
_ Rule 2112 Offers at ....................... FINRA Rule 5220 Offers
Stated Prices. at Stated Prices
Rule 2113 Payments ....................... FINRA Rule 5230
Involving Publications Payments Involving
that Influence the Publications that
Market Price of a Influence the Market
Security. Price of a Security
Rule 2114 Customer ....................... FINRA Rule 2232(a)
Confirmations. Customer Confirmations
and SEC Rule 10b-10
Confirmation of
Transactions
Rule 2115 Disclosure of ....................... FINRA Rule 2262
Control Relationship Disclosure of Control
with Issuer. Relationship With
Issuer
Rule 2116 Discretionary ....................... FINRA Rule 3260
Accounts. Discretionary Accounts
Rule 2117 Improper Use ....................... FINRA Rule 2150
of Customers' Improper Use of
Securities or Funds; Customers' Securities
Prohibition Against or Funds; Prohibition
Guarantees and Sharing Against Guarantees and
in Accounts. Sharing in Accounts
Rule 2118 Influencing ....................... FINRA Rule 3220
or Rewarding Employees Influencing or
of Others. Rewarding Employees of
Others
Rule 2119 Telemarketing ....................... FINRA Rule 3230
Telemarketing
Rule 2200 General ....................... Section 17 of the
Requirements . Exchange Act and rules
thereunder and FINRA
Rule 4511(a) and (c)
General Requirements 3
Rule 2201 Customer ....................... Rule 4512 Customer
Account Information. Account Information
Rule 2203 Record of ....................... FINRA Rule 4513 Records
Written Complaints. of Written Customer
Complaints
Rule 2204 Disclosure of ....................... FINRA Rule 2261
Financial Condition. Disclosure of
Financial Condition
Rule 2300 Supervision ....................... FINRA Rule 3110
Supervision *

[[Page 56651]]

Rule 2301 Supervisory ....................... FINRA Rule 3120
Control System. Supervisory Control
System *
Rule 2303 Prevention of ....................... Section 15(g) of the
the Misuse of Material Exchange Act * and
Non-Public Information FINRA Rule 3110(b)(1)
* . Supervision *
Rule 2304 Anti-Money ....................... FINRA Rule 3310 Anti-
Laundering Compliance Money Laundering
Program 4 . Compliance Program
Rule 2262(e)(3) & (4) ....................... FINRA Rule 6190(a) &
Limit Up-Limit Down (b) Compliance with
Plan and Trading Halts. Regulation NMS Plan to
Address Extraordinary
Market Volatility
Rule 2623 Short Sales ....................... FINRA Rule 6182 Trade
Reporting of Short
Sales
Rule 2700 Market ....................... FINRA Rule 5210
Manipulation. Publication of
Transactions and
Quotations, FINRA Rule
2020 Use of
Manipulative,
Deceptive or Other
Fraudulent Devices *,
FINRA Rule 2010
Standards of
Commercial Honor and
Principles of Trade *,
and FINRA Rule 6140(a)
Other Trading
Practices
Rule 2701 Fictitious ....................... FINRA Rule 6140 Other
Transactions. Trading Practices and
FINRA Rule 5210
Supplementary Material
.02 Self-Trades
Rule 2702 Excessive ....................... FINRA Rule 6140(c)
Sales By an Equity Other Trading
Member. Practices
Rule 2703 Manipulative ....................... FINRA Rule 6140 Other
Transactions. Trading Practices
Rule 2704 Dissemination ....................... FINRA Rule 6140(e)
of False Information. Other Trading
Practices
Rule 2705 Prohibition ....................... FINRA Rule 5320
Against Trading Ahead Prohibition Against
of Customer Orders Trading Ahead of
**. Customer Orders **
Rule 2708 Trade ....................... FINRA Rule 5290 Order
Shredding. Entry and Execution
Practices
Rule 2710 Best ....................... FINRA Rule 5310 Best
Execution and Execution and
Interpositioning **. Interpositioning **
Rule 2712 Trading Ahead ....................... FINRA Rule 5280 Trading
of Research Reports **. Ahead of Research
Reports **
Rule 2714 Front Running ....................... FINRA Rule 5270 Front
of Block Transactions Running of Block
**. Transactions **
Rule 2802 Forwarding of ....................... FINRA Rule 2251
Proxy and Other Issuer- Processing and
Related Materials. Forwarding of Proxy
and Other Issuer-
Related Materials
----------------------------------------------------------------------------------------------------------------
1 FINRA shall only have Regulatory Responsibilities regarding the rule and not the interpretations and policies.
Common Rules shall not include any provisions regarding (i) notice, reporting or any other filings made
directly to or from MIAX, MIAX PEARL or MIAX Emerald, (ii) incorporation by reference of other MIAX, MIAX
PEARL or MIAX Emerald Rules that are not Common Rules, (iii) exercise of discretion in a manner that differs
from FINRA's exercise of discretion including, but not limited to exercise of exemptive authority by MIAX,
MIAX PEARL or MIAX Emerald, (iv) prior written approval of MIAX, MIAX PEARL or MIAX Emerald and (v) payment of
fees or fines to MIAX, MIAX PEARL or MIAX Emerald.
* FINRA shall not have any Regulatory Responsibilities for these rules as they pertain to violations of insider
trading activities, which is covered by a separate 17d-2 Agreement by and among Cboe BZX Exchange, Inc., Cboe
BYX Exchange, Inc., Chicago Stock Exchange, Inc., Cboe EDGA Exchange Inc., Cboe EDGX Exchange Inc., Financial
Industry Regulatory Authority, Inc., MEMX, LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, The Nasdaq Stock Market LLC,
NYSE National, Inc., New York Stock Exchange, LLC, NYSE American LLC, NYSE Arca Inc., and Investors' Exchange
LLC and the Long-Term Stock Exchange, Inc. effective May 26, 2020, as may be amended from time to time.
2 FINRA shall only have Regulatory Responsibilities regarding MIAX and MIAX Emerald Rules 1901 or MIAX Pearl
Rule 3101 to the extent that MIAX, MIAX Pearl or MIAX Emerald recognize the same categories of principal and
representative registration.
3 FINRA shall not have Regulatory Responsibilities regarding requirements to keep records ``in conformity with .
. . Exchange Rules;'' responsibility for such requirement remains with MIAX PEARL.
4 FINRA shall only have Regulatory Responsibilities regarding the rule and not the interpretations and policies.
** FINRA shall perform the surveillance responsibilities for the double star rules for MIAX PEARL Equities.
These rules may be cited by FINRA in both the context of this Agreement and the Regulatory Services Agreement.

In addition, the following provisions shall be part of this 17d-2
Agreement:
SEA Rule 200 of Regulation SHO--Definition of Short Sales and
Marking Requirements **
SEA Rule 201 of Regulation SHO--Circuit Breaker **

[[Page 56652]]

SEA Rule 203 of Regulation SHO--Borrowing and Delivery
Requirements **
SEA Rule 204 of Regulation SHO--Close-Out Requirement **
SEA Rule 101 of Regulation M--Activities by Distribution
Participants **
SEA Rule 102 of Regulation M--Activities by Issuers and
Selling Security Holders During a Distribution **
SEA Rule 103 of Regulation M--Nasdaq Passive Market Making **
SEA Rule 104 of Regulation M--Stabilizing and Other Activities
in Connection with an Offering **
SEA Rule 105 of Regulation M--Short Selling in Connection With
a Public Offering **
SEA Rule 604 of Regulation NMS--Display of Customer Limit
Orders **
SEA Rule 606 of Regulation NMS--Disclosure of Routing
Information **
SEA Rule 610(d) of Regulation NMS--Locking or Crossing
Quotations **
SEA Rule 611 of Regulation NMS--Order Protection Rule **
SEA Rule 10b-5 Employment of Manipulative and Deceptive
Devices *
SEA Rule 17a-3/17a-4--Records to Be Made by Certain Exchange
Members, Brokers, and Dealers/Records to Be Preserved by Certain
Exchange Members, Brokers, and Dealers *
SEA Rule 14e-4--Prohibited Transactions in Connection with
Partial Tender Offers [supcaret]

[supcaret] FINRA shall perform surveillance[, investigation, and
Enforcement Responsibilities] for SEA Rule 14e-4(a)(1)(ii)(D).
* FINRA shall not have any Regulatory Responsibilities for these
rules as they pertain to violations of insider trading activities,
which is covered by a separate 17d-2 Agreement by and among Cboe BZX
Exchange, Inc., Cboe BYX Exchange, Inc., Chicago Stock Exchange, Inc.,
Cboe EDGA Exchange Inc., Cboe EDGX Exchange Inc., Financial Industry
Regulatory Authority, Inc., MEMX, LLC, Nasdaq BX, Inc., Nasdaq PHLX
LLC, The Nasdaq Stock Market LLC, NYSE National, Inc., New York Stock
Exchange, LLC, NYSE American LLC, NYSE Arca Inc., and Investors'
Exchange LLC and the Long-Term Stock Exchange, Inc. effective May 26,
2020, as may be amended from time to time.
** FINRA shall perform the surveillance responsibilities for the
double star rules for MIAX PEARL Equities. These rules may be cited by
FINRA in both the context of this Agreement and the Regulatory Services
Agreement.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Comments may be submitted by any of
the following methods:

Electronic Comments

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 4-678 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 4-678. 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 plan that are filed with the
Commission, and all written communications relating to the proposed
plan between the Commission and any person, other than those that may
be withheld from the public in accordance with the provisions of 5
U.S.C. 552, will be available for website viewing and printing in the
Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the plan also will be available for inspection and
copying at the principal offices of FINRA, MIAX, MIAX PEARL, and MIAX
Emerald. All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number 4-678 and should be submitted
on or before October 5, 2020.

V. Discussion

The Commission finds that the proposed Amended Plan is consistent
with the factors set forth in Section 17(d) of the Act \15\ and Rule
17d-2(c) thereunder \16\ in that the proposed Amended Plan is necessary
or appropriate in the public interest and for the protection of
investors, fosters cooperation and coordination among SROs, and removes
impediments to and fosters the development of the national market
system. In particular, the Commission believes that the proposed
Amended Plan should reduce unnecessary regulatory duplication by
allocating to FINRA certain examination and enforcement
responsibilities for Common Members that would otherwise be performed
by FINRA and at least one of MIAX, MIAX PEARL, or MIAX Emerald.
Accordingly, the proposed Amended Plan promotes efficiency by reducing
costs to common members. Furthermore, because MIAX, MIAX PEARL, MIAX
Emerald and FINRA will coordinate their regulatory functions in
accordance with the Amended Plan, the Amended Plan should promote
investor protection.
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\15\ 15 U.S.C. 78q(d).
\16\ 17 CFR 240.17d-2(c).
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The Commission notes that, under the Amended Plan, MIAX, MIAX
PEARL, MIAX Emerald, and FINRA have allocated regulatory responsibility
for those MIAX, MIAX PEARL, and MIAX Emerald rules, set forth in the
Certification, that are substantially similar to the applicable FINRA
rules in that examination for compliance with such provisions and rules
would not require FINRA to develop one or more new examination
standards, modules, procedures, or criteria in order to analyze the
application of the rule, or a common member's activity, conduct, or
output in relation to such rule. In addition, under the Amended Plan,
FINRA would assume regulatory responsibility for certain provisions of
the federal securities laws and the rules and regulations thereunder
that are set forth in the Certification. The common rules covered by
the Amended Plan are specifically listed in the Certification, as may
be amended by the parties from time to time.
According to the Amended Plan, MIAX, MIAX PEARL, and MIAX Emerald
will review the Certification at least annually, or more frequently if
required by changes in either the rules of MIAX, MIAX PEARL, MIAX
Emerald, or FINRA, and, if necessary, submit to FINRA an updated list
of common rules to add MIAX, MIAX PEARL, or MIAX Emerald rules not
included on the then-current list of common rules that are
substantially similar to FINRA rules; delete MIAX, MIAX PEARL, or MIAX
Emerald rules included in the then-current list of common rules that no
longer qualify as common rules; and confirm that the remaining rules on
the list of common rules continue to be MIAX, MIAX PEARL, or MIAX
Emerald

[[Page 56653]]

rules that qualify as common rules.\17\ FINRA will then confirm in
writing whether the rules listed in any updated list are common rules
as defined in the Amended Plan. Under the Amended Plan, MIAX, MIAX
PEARL, and MIAX Emerald also will provide FINRA with a current list of
common members and shall update the list no less frequently than once
each quarter.\18\ The Commission believes that these provisions are
designed to provide for continuing communication between the parties to
ensure the continued accuracy of the scope of the proposed allocation
of regulatory responsibility.
---------------------------------------------------------------------------

\17\ See paragraph 2 of the Amended Plan.
\18\ See paragraph 3 of the Amended Plan.
---------------------------------------------------------------------------

The Commission is hereby declaring effective an Amended Plan that,
among other things, allocates regulatory responsibility to FINRA for
the oversight and enforcement of all MIAX, MIAX PEARL, and MIAX Emerald
rules that are substantially similar to the rules of FINRA for common
members of FINRA and MIAX, FINRA and MIAX PEARL, and FINRA and MIAX
Emerald. Therefore, modifications to the Certification need not be
filed with the Commission as an amendment to the Amended Plan, provided
that the parties are only adding to, deleting from, or confirming
changes to MIAX, MIAX PEARL, or MIAX Emerald rules in the Certification
in conformance with the definition of common rules provided in the
Amended Plan. However, should the parties decide to add a MIAX, MIAX
PEARL, or MIAX Emerald rule to the Certification that is not
substantially similar to a FINRA rule; delete a MIAX, MIAX PEARL, or
MIAX Emerald rule from the Certification that is substantially similar
to a FINRA rule; or leave on the Certification a MIAX, MIAX PEARL, or
MIAX Emerald rule that is no longer substantially similar to a FINRA
rule, then such a change would constitute an amendment to the Amended
Plan, which must be filed with the Commission pursuant to Rule 17d-2
under the Act.\19\
---------------------------------------------------------------------------

\19\ The addition to or deletion from the Certification of any
federal securities laws, rules, and regulations for which FINRA
would bear responsibility under the Amended Plan for examining, and
enforcing compliance by, common members, also would constitute an
amendment to the Amended Plan.
---------------------------------------------------------------------------

Under paragraph (c) of Rule 17d-2, the Commission may, after
appropriate notice and comment, declare a plan, or any part of a plan,
effective. In this instance, the Commission believes that appropriate
notice and comment can take place after the proposed amendment is
effective. In particular, the purpose of the amendment is to add MIAX
PEARL equities rules and certain federal securities laws to the
Certification. The Commission notes that the most recent prior
amendment to the Plan was published for comment and the Commission did
not receive any comments thereon.\20\ The Commission believes that the
current amendment to the Plan does not raise any new regulatory issues
that the Commission has not previously considered, and therefore
believes that the amended Plan should become effective without any
undue delay.
---------------------------------------------------------------------------

\20\ See Securities Exchange Act Release No. 85189 (February 25,
2019), 84 FR 7153 (March 1, 2019).
---------------------------------------------------------------------------

VI. Conclusion

This order gives effect to the Amended Plan filed with the
Commission in File No. 4-678. The parties shall notify all members
affected by the Amended Plan of their rights and obligations under the
Amended Plan.
It is therefore ordered, pursuant to Section 17(d) of the Act, that
the Amended Plan in File No. 4-678, between the FINRA, MIAX, MIAX
PEARL, and MIAX Emerald, filed pursuant to Rule 17d-2 under the Act,
hereby is approved and declared effective.
It is further ordered that MIAX, MIAX PEARL, and MIAX Emerald are
each relieved of those responsibilities allocated to FINRA under the
Amended Plan in File No. 4-678.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(34).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-20132 Filed 9-11-20; 8:45 am]
BILLING CODE 8011-01-P

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