Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Implementation Date of Certain Amendments to FINRA Rule 4210 Approved Pursuant to SR-FINRA-2015-036, 2021-2023 [2021-00198]
Download as PDF
<![CDATA[
Federal Register / Vol. 86, No. 6 / Monday, January 11, 2021 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–90852; File No. SR–FINRA–
2020–046]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change to Extend the
Implementation Date of Certain
Amendments to FINRA Rule 4210
Approved Pursuant to SR–FINRA–
2015–036
January 5, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
22, 2020, the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I and II below, which Items
have been prepared by FINRA. FINRA
has designated the proposed rule change
as constituting a ‘‘non-controversial’’
rule change under paragraph (f)(6) of
Rule 19b–4 under the Act,3 which
renders the proposal effective upon
receipt of this filing by the Commission.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
jbell on DSKJLSW7X2PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to extend, to
October 26, 2021, the implementation
date of the amendments to FINRA Rule
4210 (Margin Requirements) pursuant to
SR–FINRA–2015–036, other than the
amendments pursuant to SR–FINRA–
2015–036 that were implemented on
December 15, 2016. The proposed rule
change would not make any changes to
the text of FINRA rules.
The text of the proposed rule change
is available on FINRA’s website at
https://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
2 17
VerDate Sep<11>2014
22:36 Jan 08, 2021
Jkt 253001
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. FINRA has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
On October 6, 2015, FINRA filed with
the Commission proposed rule change
SR–FINRA–2015–036, which proposed
to amend FINRA Rule 4210 to establish
margin requirements for (1) To Be
Announced (‘‘TBA’’) transactions,
inclusive of adjustable rate mortgage
(‘‘ARM’’) transactions; (2) Specified
Pool Transactions; and (3) transactions
in Collateralized Mortgage Obligations
(‘‘CMOs’’), issued in conformity with a
program of an agency or GovernmentSponsored Enterprise (‘‘GSE’’), with
forward settlement dates, as defined
more fully in the filing (collectively,
‘‘Covered Agency Transactions’’). The
Commission approved SR–FINRA–
2015–036 on June 15, 2016 (the
‘‘Approval Date’’).4
Pursuant to Partial Amendment No. 3
to SR–FINRA–2015–036, FINRA
announced in Regulatory Notice 16–31
that the rule change would become
effective on December 15, 2017, 18
months from the Approval Date, except
that the risk limit determination
requirements as set forth in paragraphs
(e)(2)(F), (e)(2)(G) and (e)(2)(H) of Rule
4210 and in new Supplementary
Material .05, each as respectively
amended or established by SR–FINRA–
2015–036 (collectively, the ‘‘risk limit
determination requirements’’), would
become effective on December 15, 2016,
six months from the Approval Date.5
Industry participants sought
clarification regarding the
implementation of the requirements
pursuant to SR–FINRA–2015–036.
Industry participants also requested
additional time to make system changes
necessary to comply with the
requirements, including time to test the
system changes, and requested
additional time to update or amend
4 See Securities Exchange Act Release No. 78081
(June 15, 2016), 81 FR 40364 (June 21, 2016) (Notice
of Filing of Amendment No. 3 and Order Granting
Accelerated Approval to a Proposed Rule Change to
Amend FINRA Rule 4210 (Margin Requirements) to
Establish Margin Requirements for the TBA Market,
as Modified by Amendment Nos. 1, 2, and 3; File
No. SR–FINRA–2015–036).
5 See Partial Amendment No. 3 to SR–FINRA–
2015–036 and Regulatory Notice 16–31 (August
2016), both available at: www.finra.org.
PO 00000
Frm 00105
Fmt 4703
Sfmt 4703
2021
margining agreements and related
documentation. In response, FINRA
made available a set of Frequently
Asked Questions & Guidance 6 and,
pursuant to SR–FINRA–2017–029,7
extended the implementation date of the
requirements of SR–FINRA–2015–036 to
June 25, 2018, except for the risk limit
determination requirements, which, as
announced in Regulatory Notice 16–31,
became effective on December 15, 2016.
Industry participants requested that
FINRA reconsider the potential impact
of certain requirements pursuant to SR–
FINRA–2015–036 on smaller and
medium-sized firms. Industry
participants also requested that FINRA
extend the implementation date
pending such reconsideration to reduce
potential uncertainty in the Covered
Agency Transaction market. In response
to these concerns, FINRA further
extended the implementation date of the
requirements of SR–FINRA–2015–036,
other than the risk limit determination
requirements, to March 25, 2021 (the
‘‘March 25, 2021 implementation
date’’).8 FINRA noted that, as FINRA
stated in Partial Amendment No. 3 to
SR–FINRA–2015–036, FINRA would
monitor the impact of the requirements
pursuant to that rulemaking and, if the
requirements prove overly onerous or
otherwise are shown to negatively
impact the market, FINRA would
consider revisiting such requirements as
may be necessary to mitigate the rule’s
impact.9
FINRA is considering, in consultation
with industry participants and other
regulators, potential amendments to the
requirements of SR–FINRA–2015–036,
and anticipates submitting a proposed
rule change to the SEC. FINRA believes
that this is appropriate in the interest of
avoiding unnecessary disruption to the
Covered Agency Transaction market. As
6 Available at: www.finra.org/rules-guidance/
guidance/faqs. Further, staff of the SEC’s Division
of Trading and Markets made available a set of
Frequently Asked Questions regarding Exchange
Act Rule 15c3–1 and Rule 15c3–3 in connection
with Covered Agency Transactions under FINRA
Rule 4210, also available at: www.finra.org/rulesguidance/guidance/faqs.
7 See Securities Exchange Act Release No. 81722
(September 26, 2017), 82 FR 45915 (October 2,
2017) (Notice of Filing and Immediate Effectiveness
of a Proposed Rule Change to Delay the
Implementation Date of Certain Amendments to
FINRA Rule 4210 Approved Pursuant to SR–
FINRA–2015–036; File No. SR–FINRA–2017–029);
see also Regulatory Notice 17–28 (September 2017).
8 See Securities Exchange Act Release No. 87441
(November 1, 2019), 84 FR 60132 (November 7,
2019) (Notice of Filing and Immediate Effectiveness
of a Proposed Rule Change to Extend the
Implementation Date of Certain Amendments to
FINRA Rule 4210 Approved Pursuant to SR–
FINRA–2015–036; File No. SR–FINRA–2019–026).
9 See Partial Amendment No. 3 to SR–FINRA–
2015–036, available at: www.finra.org.
E:\FR\FM\11JAN1.SGM
11JAN1
2022
Federal Register / Vol. 86, No. 6 / Monday, January 11, 2021 / Notices
such, FINRA is proposing to extend the
March 25, 2021 implementation date to
October 26, 2021 while FINRA
considers potential amendments. FINRA
notes that the risk limit determination
requirements pursuant to SR–FINRA–
2015–036 became effective on December
15, 2016 and, as such, the
implementation of such requirements is
not affected by the proposed rule
change.
FINRA has filed the proposed rule
change for immediate effectiveness and
has requested that the Commission
waive the requirement that the proposed
rule change not become operative for 30
days after the date of the filing. The
operative date will be the date of filing
of the proposed rule change.
jbell on DSKJLSW7X2PROD with NOTICES
2. Statutory Basis
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,10 which
requires, among other things, that
FINRA rules must be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest. FINRA believes that the
proposed rule change provides FINRA
additional time to consider potential
amendments to the requirements
pursuant to SR–FINRA–2015–036 and
helps to reduce potential uncertainty in
the Covered Agency Transaction market
while FINRA considers such
amendments. FINRA believes that
providing additional time is consistent
with the Act because this provides
FINRA, in consultation with industry
participants and other regulators,
additional opportunity to consider
whether amendments to the
requirements would improve their
effectiveness and thereby protect
investors and the public interest by
helping to promote stability in the
Covered Agency Transaction market.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
FINRA does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. FINRA
believes that extending the March 25,
2021 implementation date to October
26, 2021, so as to provide additional
time for FINRA to consider, in
consultation with industry participants
and other regulators, whether any
amendments to the requirements
pursuant to SR–FINRA–2015–036 are
appropriate will benefit all parties.
10 15
U.S.C. 78o–3(b)(6).
VerDate Sep<11>2014
22:36 Jan 08, 2021
Jkt 253001
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days 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 11 and Rule 19b–
4(f)(6) thereunder.12
A proposed rule change filed under
Rule 19b–4(f)(6) 13 normally does not
become operative for 30 days after the
date of filing. However, pursuant to
Rule 19b–4(f)(6)(iii),14 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest.
FINRA has requested that the
Commission waive the 30-day operative
delay so that the proposal may become
operative upon filing. FINRA has stated
that the purpose of the proposed rule
change is to allow FINRA additional
time to consider potential revisions to
the requirements of SR–FINRA–2015–
036, and to consult with industry
participants and other regulators
whether any revisions are appropriate,
in the interest of avoiding unnecessary
disruption to the Covered Agency
Transaction market. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest because the proposal to extend
the implementation date of the
requirements of Rule 4210 does not
raise any new or novel issues and will
help to facilitate the implementation of
the margin requirements for Covered
Agency Transactions. Therefore, the
Commission hereby waives the 30-day
operative delay requirement and
designates the proposed rule change as
operative upon filing.15
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
11 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
13 17 CFR 240.19b–4(f)(6).
14 17 CFR 240.19b–4(f)(6)(iii).
15 For purposes of waiving the 30-day operative
delay, the Commission has also considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
12 17
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
FINRA–2020–046 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–FINRA–2020–046. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of
FINRA. All comments received will be
posted without change. Persons
submitting comments are cautioned that
we do not redact or edit personal
identifying information from comment
submissions. You should submit only
information that you wish to make
E:\FR\FM\11JAN1.SGM
11JAN1
Federal Register / Vol. 86, No. 6 / Monday, January 11, 2021 / Notices
available publicly. All submissions
should refer to File Number SR–FINRA–
2020–046 and should be submitted on
or before February 1, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
J. Matthew DeLesDernier,
Assistant Secretary.
(Catalog of Federal Domestic Assistance
Number 59008)
Cynthia Pitts,
Acting Associate Administrator for Disaster
Assistance.
[FR Doc. 2021–00228 Filed 1–8–21; 8:45 am]
BILLING CODE 8026–03–P
BILLING CODE 8011–01–P
[Disaster Declaration #16547 and #16548;
NORTH DAKOTA Disaster Number ND–
00081]
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #16706 and #16707;
LOUISIANA Disaster Number LA–00105]
Presidential Declaration Amendment of
a Major Disaster for the State of
Louisiana
AGENCY:
ACTION:
Small Business Administration.
Amendment 2.
This is an amendment of the
Presidential declaration of a major
disaster for the State of Louisiana
(FEMA–4570–DR), dated 10/16/2020.
Incident: Hurricane Delta.
Incident Period: 10/06/2020 through
10/10/2020.
SUMMARY:
Issued on 12/23/2020.
Physical Loan Application Deadline
Date: 12/15/2020.
Economic Injury (EIDL) Loan
Application Deadline Date: 07/16/2021.
DATES:
Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
ADDRESSES:
A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW, Suite 6050,
Washington, DC 20416, (202) 205–6734.
FOR FURTHER INFORMATION CONTACT:
The notice
of the President’s major disaster
declaration for the State of Louisiana,
dated 10/16/2020, is hereby amended to
include the following areas as adversely
affected by the disaster:
jbell on DSKJLSW7X2PROD with NOTICES
SUPPLEMENTARY INFORMATION:
Primary Parishes (Physical Damage and
Economic Injury Loans): Allen,
Iberia.
Contiguous Parishes (Economic Injury
Loans Only): None
All other information in the original
declaration remains unchanged.
Presidential Declaration Amendment of
a Major Disaster for Public Assistance
Only for the State of North Dakota
U.S. Small Business
Administration.
AGENCY:
ACTION:
Amendment 1.
This is an amendment of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of North Dakota (FEMA–4553–
DR), dated 07/09/2020.
Incident: Flooding.
Incident Period: 04/01/2020 through
04/25/2020.
SUMMARY:
Issued on 07/09/2020.
Physical Loan Application Deadline
Date: 09/08/2020.
Economic Injury (EIDL) Loan
Application Deadline Date: 04/09/2021.
DATES:
Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
ADDRESSES:
A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW, Suite 6050,
Washington, DC 20416, (202) 205–6734.
FOR FURTHER INFORMATION CONTACT:
The notice
of the President’s major disaster
declaration for Private Non-Profit
organizations in the State of North
Dakota, dated 07/09/2020, is hereby
amended to include the following areas
as adversely affected by the disaster.
SUPPLEMENTARY INFORMATION:
Primary Counties: Kidder, Wells
All other information in the original
declaration remains unchanged.
(Catalog of Federal Domestic Assistance
Number 59008)
Cynthia Pitts,
Acting Associate Administrator for Disaster
Assistance.
[FR Doc. 2021–00224 Filed 1–8–21; 8:45 am]
16 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
22:36 Jan 08, 2021
BILLING CODE 8026–03–P
Jkt 253001
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #16826 and #16827;
OKLAHOMA Disaster Number OK–00144]
Presidential Declaration of a Major
Disaster for Public Assistance Only for
the State of Oklahoma
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
SMALL BUSINESS ADMINISTRATION
[FR Doc. 2021–00198 Filed 1–8–21; 8:45 am]
2023
PO 00000
Frm 00107
Fmt 4703
Sfmt 4703
This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of OKLAHOMA (FEMA–4575–
DR), dated 12/21/2020.
Incident: Severe Winter Storm.
Incident Period: 10/26/2020 through
10/29/2020.
DATES: Issued on 12/21/2020.
Physical Loan Application Deadline
Date: 02/19/2021.
Economic Injury (EIDL) Loan
Application Deadline Date: 09/21/2021.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW, Suite 6050,
Washington, DC 20416, (202) 205–6734.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
12/21/2020, Private Non-Profit
organizations that provide essential
services of a governmental nature may
file disaster loan applications at the
address listed above or other locally
announced locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Caddo, Canadian,
Cleveland, Dewey, Grady,
Kingfisher, Kiowa, Logan, Noble,
Oklahoma, Payne, Pottawatomie,
Roger Mills
The Interest Rates are:
SUMMARY:
Percent
For Physical Damage:
Non-Profit Organizations with
Credit Available Elsewhere ...
Non-Profit Organizations Without Credit Available Elsewhere .....................................
For Economic Injury:
Non-Profit Organizations Without Credit Available Elsewhere .....................................
2.750
2.750
2.750
The number assigned to this disaster
for physical damage is 16826B and for
economic injury is 168270.
E:\FR\FM\11JAN1.SGM
11JAN1
]]>Agencies
[Federal Register Volume 86, Number 6 (Monday, January 11, 2021)]
[Notices]
[Pages 2021-2023]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00198]
[[Page 2021]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-90852; File No. SR-FINRA-2020-046]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change to Extend the Implementation Date of Certain
Amendments to FINRA Rule 4210 Approved Pursuant to SR-FINRA-2015-036
January 5, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 22, 2020, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by FINRA. FINRA has designated
the proposed rule change as constituting a ``non-controversial'' rule
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which
renders the proposal effective upon receipt of this filing by the
Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to extend, to October 26, 2021, the
implementation date of the amendments to FINRA Rule 4210 (Margin
Requirements) pursuant to SR-FINRA-2015-036, other than the amendments
pursuant to SR-FINRA-2015-036 that were implemented on December 15,
2016. The proposed rule change would not make any changes to the text
of FINRA rules.
The text of the proposed rule change is available on FINRA's
website at https://www.finra.org, at the principal office of FINRA and
at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, FINRA included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. FINRA has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
On October 6, 2015, FINRA filed with the Commission proposed rule
change SR-FINRA-2015-036, which proposed to amend FINRA Rule 4210 to
establish margin requirements for (1) To Be Announced (``TBA'')
transactions, inclusive of adjustable rate mortgage (``ARM'')
transactions; (2) Specified Pool Transactions; and (3) transactions in
Collateralized Mortgage Obligations (``CMOs''), issued in conformity
with a program of an agency or Government-Sponsored Enterprise
(``GSE''), with forward settlement dates, as defined more fully in the
filing (collectively, ``Covered Agency Transactions''). The Commission
approved SR-FINRA-2015-036 on June 15, 2016 (the ``Approval Date'').\4\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 78081 (June 15,
2016), 81 FR 40364 (June 21, 2016) (Notice of Filing of Amendment
No. 3 and Order Granting Accelerated Approval to a Proposed Rule
Change to Amend FINRA Rule 4210 (Margin Requirements) to Establish
Margin Requirements for the TBA Market, as Modified by Amendment
Nos. 1, 2, and 3; File No. SR-FINRA-2015-036).
---------------------------------------------------------------------------
Pursuant to Partial Amendment No. 3 to SR-FINRA-2015-036, FINRA
announced in Regulatory Notice 16-31 that the rule change would become
effective on December 15, 2017, 18 months from the Approval Date,
except that the risk limit determination requirements as set forth in
paragraphs (e)(2)(F), (e)(2)(G) and (e)(2)(H) of Rule 4210 and in new
Supplementary Material .05, each as respectively amended or established
by SR-FINRA-2015-036 (collectively, the ``risk limit determination
requirements''), would become effective on December 15, 2016, six
months from the Approval Date.\5\
---------------------------------------------------------------------------
\5\ See Partial Amendment No. 3 to SR-FINRA-2015-036 and
Regulatory Notice 16-31 (August 2016), both available at:
www.finra.org.
---------------------------------------------------------------------------
Industry participants sought clarification regarding the
implementation of the requirements pursuant to SR-FINRA-2015-036.
Industry participants also requested additional time to make system
changes necessary to comply with the requirements, including time to
test the system changes, and requested additional time to update or
amend margining agreements and related documentation. In response,
FINRA made available a set of Frequently Asked Questions & Guidance \6\
and, pursuant to SR-FINRA-2017-029,\7\ extended the implementation date
of the requirements of SR-FINRA-2015-036 to June 25, 2018, except for
the risk limit determination requirements, which, as announced in
Regulatory Notice 16-31, became effective on December 15, 2016.
---------------------------------------------------------------------------
\6\ Available at: www.finra.org/rules-guidance/guidance/faqs.
Further, staff of the SEC's Division of Trading and Markets made
available a set of Frequently Asked Questions regarding Exchange Act
Rule 15c3-1 and Rule 15c3-3 in connection with Covered Agency
Transactions under FINRA Rule 4210, also available at:
www.finra.org/rules-guidance/guidance/faqs.
\7\ See Securities Exchange Act Release No. 81722 (September 26,
2017), 82 FR 45915 (October 2, 2017) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change to Delay the Implementation
Date of Certain Amendments to FINRA Rule 4210 Approved Pursuant to
SR-FINRA-2015-036; File No. SR-FINRA-2017-029); see also Regulatory
Notice 17-28 (September 2017).
---------------------------------------------------------------------------
Industry participants requested that FINRA reconsider the potential
impact of certain requirements pursuant to SR-FINRA-2015-036 on smaller
and medium-sized firms. Industry participants also requested that FINRA
extend the implementation date pending such reconsideration to reduce
potential uncertainty in the Covered Agency Transaction market. In
response to these concerns, FINRA further extended the implementation
date of the requirements of SR-FINRA-2015-036, other than the risk
limit determination requirements, to March 25, 2021 (the ``March 25,
2021 implementation date'').\8\ FINRA noted that, as FINRA stated in
Partial Amendment No. 3 to SR-FINRA-2015-036, FINRA would monitor the
impact of the requirements pursuant to that rulemaking and, if the
requirements prove overly onerous or otherwise are shown to negatively
impact the market, FINRA would consider revisiting such requirements as
may be necessary to mitigate the rule's impact.\9\
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 87441 (November 1,
2019), 84 FR 60132 (November 7, 2019) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change to Extend the
Implementation Date of Certain Amendments to FINRA Rule 4210
Approved Pursuant to SR-FINRA-2015-036; File No. SR-FINRA-2019-026).
\9\ See Partial Amendment No. 3 to SR-FINRA-2015-036, available
at: www.finra.org.
---------------------------------------------------------------------------
FINRA is considering, in consultation with industry participants
and other regulators, potential amendments to the requirements of SR-
FINRA-2015-036, and anticipates submitting a proposed rule change to
the SEC. FINRA believes that this is appropriate in the interest of
avoiding unnecessary disruption to the Covered Agency Transaction
market. As
[[Page 2022]]
such, FINRA is proposing to extend the March 25, 2021 implementation
date to October 26, 2021 while FINRA considers potential amendments.
FINRA notes that the risk limit determination requirements pursuant to
SR-FINRA-2015-036 became effective on December 15, 2016 and, as such,
the implementation of such requirements is not affected by the proposed
rule change.
FINRA has filed the proposed rule change for immediate
effectiveness and has requested that the Commission waive the
requirement that the proposed rule change not become operative for 30
days after the date of the filing. The operative date will be the date
of filing of the proposed rule change.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\10\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. FINRA believes that the proposed rule change provides
FINRA additional time to consider potential amendments to the
requirements pursuant to SR-FINRA-2015-036 and helps to reduce
potential uncertainty in the Covered Agency Transaction market while
FINRA considers such amendments. FINRA believes that providing
additional time is consistent with the Act because this provides FINRA,
in consultation with industry participants and other regulators,
additional opportunity to consider whether amendments to the
requirements would improve their effectiveness and thereby protect
investors and the public interest by helping to promote stability in
the Covered Agency Transaction market.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. FINRA believes that extending
the March 25, 2021 implementation date to October 26, 2021, so as to
provide additional time for FINRA to consider, in consultation with
industry participants and other regulators, whether any amendments to
the requirements pursuant to SR-FINRA-2015-036 are appropriate will
benefit all parties.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days 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 \11\ and Rule 19b-
4(f)(6) thereunder.\12\
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. FINRA has requested
that the Commission waive the 30-day operative delay so that the
proposal may become operative upon filing. FINRA has stated that the
purpose of the proposed rule change is to allow FINRA additional time
to consider potential revisions to the requirements of SR-FINRA-2015-
036, and to consult with industry participants and other regulators
whether any revisions are appropriate, in the interest of avoiding
unnecessary disruption to the Covered Agency Transaction market. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because the proposal to extend the implementation date of the
requirements of Rule 4210 does not raise any new or novel issues and
will help to facilitate the implementation of the margin requirements
for Covered Agency Transactions. Therefore, the Commission hereby
waives the 30-day operative delay requirement and designates the
proposed rule change as operative upon filing.\15\
---------------------------------------------------------------------------
\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ For purposes of waiving the 30-day operative delay, the
Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-FINRA-2020-046 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2020-046. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10 a.m. and 3
p.m. Copies of such filing also will be available for inspection and
copying at the principal office of FINRA. All comments received will be
posted without change. Persons submitting comments are cautioned that
we do not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
[[Page 2023]]
available publicly. All submissions should refer to File Number SR-
FINRA-2020-046 and should be submitted on or before February 1, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-00198 Filed 1-8-21; 8:45 am]
BILLING CODE 8011-01-P
