Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Interpretation and Policy .13 (Temporary Extension of the Limited Period for Registered Persons To Function as Principals) to Exchange Rule 1900, Registration Requirements, To Extend the Expiration Date of the Temporary Amendment Set Forth in SR-EMERALD-2020-21 From April 30, 2021 to June 30, 2021, 24072-24076 [2021-09432]
Download as PDF
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Federal Register / Vol. 86, No. 85 / Wednesday, May 5, 2021 / Notices
proposed Credit Facility would enable
NSCC, which has been designated a
systemically important financial market
utility,52 to continue to maintain an
additional liquidity resource that NSCC
may access to help manage a member
default. In addition, because the
proposed Evergreen Provisions would
ensure that any annual renewals entered
into without filing an advance notice
would be on substantially similar terms
to the currently proposed Credit
Facility, such future renewals also
would enable NSCC to maintain an
additional liquidity resource that NSCC
may access to help manage a member
default. Moreover, allowing the annual
renewal of the Credit Facility under the
proposed Evergreen Provisions without
filing an additional advance notice
would reduce the risk of disruption in
availability of this liquidity resource.
Further, allowing renewal without an
advance notice in these specific
circumstances would also provide
heightened certainty and stability for
NSCC and market participants regarding
the availability of this liquidity resource
on an ongoing basis. Accordingly, the
Commission believes that the proposal
would help reduce the systemic risk of
NSCC, which in turn would help
support the stability of the broader
financial system, consistent with
Section 805(b) of the Act.53
B. Consistency With Rule 17Ad–
22(e)(7)(i) and (ii)
The Commission believes the changes
proposed in the Advance Notice are
consistent with Rules 17Ad–22(e)(7)(i)
and (ii), each promulgated under the
Exchange Act,54 for the reasons
described below.
Rule 17Ad–22(e)(7)(i) under the
Exchange Act requires that a covered
clearing agency establish, implement,
maintain and enforce written policies
and procedures reasonably designed to
maintain sufficient liquid resources at
the minimum in all relevant currencies
to effect same-day and, where
appropriate, intraday and multiday
settlement of payment obligations with
a high degree of confidence under a
wide range of foreseeable stress
scenarios that includes, but is not
limited to, the default of the participant
family that would generate the largest
aggregate payment obligation for the
covered clearing agency in extreme but
plausible market conditions.55 Rule
17Ad–22(e)(7)(ii) under the Act requires
that a cover clearing agency establish,
52 See
supra note 28.
U.S.C. 5464(b).
54 17 CFR 240.17Ad–22(e)(7)(i) and (ii).
55 17 CFR 240.17Ad–22(e)(7)(i).
53 12
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implement, maintain and enforce
written policies and procedures
reasonably designed to hold qualifying
liquid resources sufficient to meet the
minimum liquidity resource
requirement under Rule 17Ad–
22(e)(7)(i) in each relevant currency for
which the covered clearing agency has
payment obligations owed to its clearing
members.56
As described above, the currently
proposed Credit Facility renewal would
provide NSCC with a readily available
liquidity resource that would enable
NSCC to continue to meet its obligations
in a timely fashion in the event of a
member default, thereby helping to
contain losses and liquidity pressures
from that default. Additionally, because
the proposed Evergreen Provisions
would ensure that any annual renewals
would be substantially similar to the
currently proposed Credit Facility, such
future renewals would also continue to
provide NSCC with a readily available
liquidity resource that would enable it
to continue to meet its respective
obligations in a timely fashion in the
event of a member default, thereby
helping to contain losses and liquidity
pressures from that default. Moreover,
allowing NSCC annually to renew the
Credit Facility pursuant to the proposed
Evergreen Provisions without filing an
additional advance notice would reduce
the risk of gaps in liquidity coverage
and better allow NSCC to continually
maintain sufficient liquidity resources.
In addition, the currently proposed
renewal of the Credit Facility would
permit NSCC to maintain a single Credit
Facility designed to help ensure that
NSCC has sufficient, readily-available
qualifying liquid resources to meet the
cash settlement obligations of its largest
family of affiliated members. Similarly,
because the proposed Evergreen
Provisions would ensure that any
annual renewals would be substantially
similar to the currently proposed
renewal of the Credit Facility, such
renewals also would permit NSCC to
maintain a single Credit Facility
designed to help ensure that NSCC has
sufficient, readily-available qualifying
liquid resources to meet the cash
settlement obligations of their largest
family of affiliated members. Therefore,
the Commission believes that NSCC’s
proposal would support its ability to
hold qualifying liquid resources
sufficient to meet the minimum
liquidity resource requirement under
Rule 17Ad–22(e)(7)(i),57 as required by
Rule 17Ad–22(e)(7)(ii).58
Accordingly, the Commission believes
that the current renewal would be
consistent with Rule 17Ad–22(e)(7)(i)
and (ii) under the Exchange Act.59
VI. Conclusion
It is therefore noticed, pursuant to
Section 806(e)(1)(I) of the Clearing
Supervision Act,60 that the Commission
does not object to Advance Notice SR–
NSCC–2021–802 and that NSCC be and
hereby is authorized to implement the
change as of the date of this notice.
By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–09428 Filed 5–4–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91702; File No. SR–
EMERALD–2021–15]
Self-Regulatory Organizations; MIAX
Emerald, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Interpretation
and Policy .13 (Temporary Extension
of the Limited Period for Registered
Persons To Function as Principals) to
Exchange Rule 1900, Registration
Requirements, To Extend the
Expiration Date of the Temporary
Amendment Set Forth in SR–
EMERALD–2020–21 From April 30,
2021 to June 30, 2021
April 29, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (‘‘Act’’
or ‘‘Exchange Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on April 21, 2021, MIAX Emerald, LLC
(‘‘MIAX Emerald’’ or ‘‘Exchange’’) 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 substantially prepared by the
self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
57 17
56 17
CFR 240.17Ad–22(e)(7)(ii). For purposes of
Rule 17Ad–22(e)(7)(ii), ‘‘qualifying liquid
resources’’ are defined in Rule 17Ad–22(a)(14) as
including, in part, cash held either at the central
bank of issue or at creditworthy commercial banks.
17 CFR 240.17Ad–22(a)(14).
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CFR 240.17Ad–22(e)(7)(i).
CFR 240.17Ad–22(e)(7)(ii).
59 17 CFR 240.17Ad–22(e)(7).
60 12 U.S.C. 5465(e)(1)(I).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
58 17
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Federal Register / Vol. 86, No. 85 / Wednesday, May 5, 2021 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Interpretation and Policy .13
(Temporary Extension of the Limited
Period for Registered Persons to
Function as Principals) to Exchange
Rule 1900, Registration Requirements,
to extend the expiration date of the
temporary amendment set forth in SR–
EMERALD–2020–21 from April 30,
2021 to June 30, 2021. The Exchange
does not anticipate providing any
further extensions to the temporary
amendment identified in this proposed
rule change beyond June 30, 2021.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/emerald, at MIAX Emerald’s
principal office, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Interpretation and Policy .13
(Temporary Extension of the Limited
Period for Registered Persons to
Function as Principals) to Exchange
Rule 1900, Registration Requirements,
to extend the expiration date of the
temporary amendment set forth in SR–
EMERALD–2020–21 from April 30,
2021 to June 30, 2021. The proposed
rule change would extend the 120-day
period that certain individuals can
function as principals without having
successfully passed an appropriate
qualification examination through June
30, 2021,3 and would apply only to
3 See Exchange Act Release No. 91506 (April 8,
2021) 86 FR 19671 (April 14, 2021) (SR–FINRA–
2021–005) (the ‘‘FINRA Filing’’). The Exchange
notes that the FINRA Filing also provides
temporarily relief to individuals registered with
FINRA as Operations Professionals under FINRA
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those individuals who were designated
to function as principals prior to March
3, 2021. This proposed rule change is
based on a filing recently submitted by
the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) 4 and is
intended to harmonize the Exchange’s
registration rules with those of FINRA
so as to promote uniform standards
across the securities industry.
In response to the COVID–19 global
pandemic, last year FINRA began
providing temporary relief by way of
frequently asked questions (‘‘FAQs’’) 5
to address disruptions to the
administration of FINRA qualification
examinations caused by the pandemic
that have significantly limited the
ability of individuals to sit for
examinations due to Prometric test
center capacity issues.6
FINRA published the first FAQ on
March 20, 2020, providing that
individuals who were designated to
function as principals under FINRA
Rule 1210.04 7 prior to February 2, 2020,
would be given until May 31, 2020, to
pass the appropriate principal
qualification examination.8 On May 19,
2020, FINRA extended the relief to pass
the appropriate examination until June
30, 2020. On June 29, 2020, FINRA
again extended the temporary relief
providing that individuals who were
designated to function as principals
under FINRA Rule 1210.04 prior to May
4, 2020, would be given until August 31,
2020, to pass the appropriate principal
qualification examination. On August
Rule 1220. The Exchange does not have a
registration category for Operations Professionals
and therefore, the Exchange is not proposing to
adopt that aspect of the FINRA Filing. If the
Exchange seeks to provide additional temporary
relief from the rule requirement identified in this
proposal beyond June 30, 2021, it will submit a
separate rule filing to further extend the temporary
extension of time.
4 See id.
5 See https://www.finra.org/rules-guidance/keytopics/covid-19/faq#qe.
6 At the outset of the COVID–19 pandemic, all
FINRA qualification examinations were
administered at test centers operated by Prometric.
Based on the health and welfare concerns resulting
from COVID–19, in March 2020 Prometric closed all
of its test centers in the United States and Canada
and began to slowly reopen some of them at limited
capacity in May. Currently, Prometric has resumed
testing in many of its United States and Canada test
centers, at either full or limited occupancy, based
on local and government mandates.
7 Exchange Rule 1900, Interpretation and Policy
.04, is the corresponding rule to FINRA Rule
1210.04.
8 FINRA Rule 1210.04 (Requirements for
Registered Persons Functioning as Principals for a
Limited Period) allows a FINRA-member firm to
designate certain individuals to function in a
principal capacity for 120 calendar days before
having to pass an appropriate principal
qualification examination. Exchange Rule 1900,
Interpretation and Policy .04, provides the same
allowance to Exchange Members.
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24073
28, 2020, FINRA filed with the
Commission a proposed rule change for
immediate effectiveness to extend the
temporary relief provided via the two
FAQs by adopting: (1) Temporary
Supplementary Material .12 (Temporary
Extension of the Limited Period for
Registered Persons to Function as
Principals) under FINRA Rule 1210
(Registration Requirements), and (2)
temporary Supplementary Material .07
(Temporary Extension of the Limited
Period for Persons to Function as
Operations Professionals) under FINRA
Rule 1220 (Registration Categories).9
Pursuant to this rule filing, individuals
who were designated prior to September
3, 2020, to function as a principal under
FINRA Rule 1210.04 would have until
December 31, 2020, to pass the
appropriate qualification examination.
Thereafter, on December 9, 2020,
FINRA filed with the Commission a
proposed rule change for immediate
effectiveness to extend the limited
period for registered persons to function
as a principal through April 30, 2021.10
Pursuant to this rule filing, individuals
who were designated prior to January 1,
2021 to function as a principal would
have until April 30, 2021 to pass the
appropriate qualifying examination. On
December 28, 2020, the Exchange filed
with the Commission a proposed rule
change for immediate effectiveness to
extend the limited period for registered
persons to function as a principal
through April 30, 2021.11
The Exchange continues to closely
monitor the impact of the COVID–19
pandemic on Members,12 investors, and
other stakeholders. The Exchange
initially provided temporary relief to
address the interruptions in the
administration of FINRA qualification
examinations at Prometric test centers
and the limited ability of individuals to
sit for the examinations caused by the
COVID–19 pandemic.13 As mentioned
in the FINRA Filing (SR–FINRA–2021–
005), FINRA noted that the pandemic
could result in firms potentially
9 See Exchange Act Release No. 89732 (September
1, 2020), 85 FR 55535 (September 8, 2020) (Notice
of Filing and Immediate Effectiveness of File No.
SR–FINRA–2020–026).
10 See Exchange Act Release No. 90617
(December 9, 2020), 85 FR 81258 (December 15,
2020) (SR–FINRA–2020–043).
11 See Exchange Act Release No. 90829
(December 28, 2020), 86 FR 636 (December 30,
2020) (SR–EMERALD–2020–21).
12 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
associated with a Trading Permit. Members are
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
13 Information about the continued impact of
COVID–19 on FINRA-administered examinations is
available at https://www.finra.org/rules-guidance/
key-topics/covid-19/exams.
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experiencing significant disruptions to
their normal business operations that
may be exacerbated by being unable to
keep principal positions filled.
Specifically, FINRA noted that the
limitation of in-person activities and
staff absenteeism as a result of the
health and welfare concerns stemming
from COVID–19 could result in firms
having difficulty finding other qualified
individuals to transition into those roles
or requiring them to reallocate employee
time and resources away from other
critical responsibilities at the firm’s
organization.
While there are signs of improvement,
the COVID–19 conditions necessitating
the temporary relief persist and the
Exchange has determined that there is a
continued need for this temporary relief
beyond April 30, 2021. Although
Prometric has resumed testing in many
of its U.S. test centers, Prometric’s safety
practices mean that currently not all test
centers are open, some of the open test
centers are at limited capacity, and
some open test centers are delivering
only certain examinations that have
been deemed essential by the local
government.14 In addition, while certain
states have started to ease COVID–19
restrictions on businesses and social
activities, public health officials
continue to emphasize the importance
for individuals to keep taking numerous
steps to protect themselves and help
slow the spread of the disease.15
Although the COVID–19 conditions
necessitating the temporary relief
persist, the Exchange believes that an
extension of the relief is necessary only
until June 30, 2021, because FINRA
recently expanded the availability of
online examinations. Prior to this
expansion, the ongoing effects of the
pandemic made it impracticable for
Members to ensure that the individuals
who they had designated to function in
a principal capacity, as set forth in
Exchange Rule 1900, Interpretation and
Policy .04, could successfully sit for and
pass an appropriate qualification
examination within the 120-calendar
day period required under the rules.16
Specifically, if the individual wanted to
take a qualifying examination, they were
required to accept the health risks
associated with taking an in-person
examination because those
14 Information from Prometric about its safety
practices and the impact of COVID–19 on its
operations is available at https://
www.prometric.com/corona-virusupdate. See also
supra note 13.
15 See, e.g., Centers for Disease Control and
Prevention, How to Protect Yourself & Others,
https://www.cdc.gov/coronavirus/2019-ncov/
prevent-gettingsick/prevention.html.
16 See supra note 13.
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23:06 May 04, 2021
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examinations were not available online.
On February 24, 2021, however, FINRA
adopted an interim accommodation
request process to allow candidates to
take additional FINRA examinations
online, including the General Securities
Principal (‘‘Series 24’’) and Operations
Professional (‘‘Series 99’’)
examinations.17 Because the Series 24
qualifying examination has been made
available online only recently, the
Exchange is concerned that individuals
who have been designated to function in
a principal capacity may not have
sufficient time to schedule, study for,
and take the applicable examination
before April 30, 2021, the date the
temporary amendment is set to expire.
Therefore, the Exchange proposes to
extend the expiration date of the
temporary amendment set forth in
Exchange Rule 1900, Interpretation and
Policy .13, from April 30, 2021 until
June 30, 2021. The proposed rule
change would apply only to those
individuals who have been designated
to function as a principal prior to March
3, 2021. As noted above, the Exchange
does not anticipate providing any
further extensions to the temporary
amendment and any individuals
designated to function as a principal on
or after March 3, 2021, will need to
successfully pass an appropriate
qualification examination within 120
days.
The Exchange believes that this
proposed continued extension of time is
tailored to address the needs and
constraints on a Member’s operations
during the COVID–19 pandemic,
without significantly compromising
critical investor protection. The
proposed extension of time will help to
minimize the impact of COVID–19 on
Members by providing continued
flexibility so that Members can ensure
that principal positions remain filled.
The potential risks from the proposed
extension of the 120-day period are
mitigated by a Member’s continued
requirement to supervise the activities
of these designated individuals and
ensure compliance with federal
securities laws and regulations, as well
as Exchange and FINRA rules.
The Exchange 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, so the
Exchange can implement the proposed
rule change immediately.
2. Statutory Basis
The Exchange believes that its
proposed rule change is consistent with
Section 6(b) of the Act 18 in general, and
furthers the objectives of Section 6(b)(5)
of the Act 19 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities, to
remove impediments to and perfect the
mechanisms of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
The proposed rule change is intended
to minimize the impact of COVID–19 on
Member operations by further extending
the 120-day period certain individuals
may function as a principal without
having successfully passed an
appropriate qualification examination
under Exchange Rule 1900,
Interpretation and Policy .04, until June
30, 2021. The proposed rule change
does not relieve Members from
maintaining, under the circumstances, a
reasonably designed system to supervise
the activities of their associated persons
to achieve compliance with applicable
securities laws and regulations, and
with applicable Exchange and FINRA
rules that directly serve investor
protection. In a time when faced with
unique challenges resulting from the
COVID–19 pandemic, the Exchange
believes that the proposed rule change
is a sensible accommodation that will
continue to afford Members the ability
to ensure that critical positions are filled
and client services maintained, while
continuing to serve and promote the
protection of investors and the public
interest in this unique environment.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change is intended to
provide temporary relief given the
impacts of the COVID–19 pandemic
crisis and to also maintain consistency
with the rules of other self-regulatory
organizations (‘‘SROs’’) with respect to
the registration requirements applicable
to Members and their registered
personnel. In that regard, the Exchange
believes that any burden on competition
would be clearly outweighed by
providing Members with temporary
18 15
17 Id.
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U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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Federal Register / Vol. 86, No. 85 / Wednesday, May 5, 2021 / Notices
relief in this unique environment while
also ensuring clear and consistent
requirements applicable across SROs
and mitigating any risk of SROs
implementing different standards in
these important areas. In its filings,
FINRA provides an abbreviated
economic impact assessment
maintaining that the changes are
necessary to temporarily rebalance the
attendant benefits and costs of the
obligations under FINRA Rule 1210 in
response to the impacts of the COVID–
19 pandemic that is equally applicable
to the changes the Exchange proposes.20
The Exchange accordingly incorporates
FINRA’s abbreviated economic impact
assessment by reference.
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 21 and Rule 19b–
4(f)(6) thereunder.22
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. However, pursuant to
Rule 19b–4(f)(6)(iii), the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposed rule change may become
operative immediately upon filing. As
noted above, the Exchange stated that
the conditions necessitating the
temporary relief continue to exist and
the proposed extension of time will help
minimize the impact of the COVID–19
20 See
supra notes 3 and 10; see also Exchange
Act Release No. 89732 (September 1, 2020), 85 FR
55535 (September 8, 2020) (SR–FINRA–2020–26).
21 15 U.S.C. 78s(b)(3)(A).
22 17 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 satisfied this requirement.
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23:06 May 04, 2021
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outbreak on Members’ operations by
allowing them to keep principal
positions filled and minimizing
disruptions to client services and other
critical responsibilities. Despite signs of
improvement, the Exchange further
stated that the ongoing extenuating
circumstances of the COVID–19
pandemic make it impractical to ensure
that individuals designated to act in a
principal capacity are able to take and
pass the appropriate qualification
examination during the 120-calendar
day period required under the rules.
The Exchange observed that,
following a nationwide closure of all
test centers earlier in the year, some test
centers have re-opened, but are
operating at limited capacity or are only
delivering certain examinations that
have been deemed essential by the local
government.23 However, on February
24, 2021, FINRA began providing the
General Securities Principal (Series 24)
Examination online through an interim
accommodation request process.24 Prior
to this change, if individuals wanted to
take these qualifying examinations, they
were required to accept the health risks
associated with taking an in-person
examination. Even with the expansion
of online qualifications examinations,
the Exchange stated that extending the
expiration date of the relief set forth in
SR–EMERALD–2020–21 until June 30,
2021 is still needed. The Exchange
stated that this temporary relief will
provide flexibility to allow individuals
who have been designated to function as
a principal sufficient time to schedule,
study for and take the applicable
examination before the temporary relief
expires. Notably, the Exchange stated
that it does not anticipate providing any
further extensions to the temporary
amendment and that any individuals
designated to function as a principal on
or after March 3, 2021 will need to
successfully pass an appropriate
qualification examination within 120
days.
For these reasons, the Commission
believes that waiver of the 30-day
operative delay is consistent with the
protection of investors and the public
interest.25 Accordingly, the Commission
23 See supra notes 13 and 14. The Exchange notes
that Prometric has also had to close some reopened
test centers due to incidents of COVID–19 cases.
24 See supra note 13 (including the February 24,
2021 announcement of the interim accommodation
process for candidates to take certain examinations,
including the General Securities Principal (Series
24) Examination, online.)
25 As noted above by the Exchange, this proposal
is an extension of temporary relief provided in SR–
EMERALD–2020–21 where the Exchange also
requested and the Commission granted a waiver of
the 30-day operative delay. See SR–EMERALD–
2020–21, 86 FR at 639.
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24075
hereby waives the 30-day operative
delay and designates the proposal
operative upon filing.26
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 rule-comments@
sec.gov. Please include File Number SREMERALD–2021–15 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–EMERALD–2021–15. 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
26 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule change’s impact on efficiency,
competition, and capital formation. See 15 U.S.C.
78c(f).
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Federal Register / Vol. 86, No. 85 / Wednesday, May 5, 2021 / Notices
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of 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–EMERALD–2021–15 and
should be submitted on or before May
26, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–09432 Filed 5–4–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91725; File No. SR–
CboeEDGA–2021–009]
Self-Regulatory Organizations; Cboe
EDGA Exchange, Inc.; Notice of Filing
of a Proposed Rule Change To Amend
the Sixth Amended and Restated
Bylaws of Cboe EDGA Exchange,
Inc.’s Parent Corporation, Cboe Global
Markets, Inc. To Implement Proxy
Access
April 29, 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 April 16,
2021, Cboe EDGA Exchange, Inc.
(‘‘Exchange’’ or ‘‘EDGA’’) 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 the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe EDGA Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGA’’) is filing with
the Securities and Exchange
Commission (the ‘‘Commission’’) a
proposed rule change with respect to
amendments to the Sixth Amended and
Restated Bylaws (the ‘‘CGM Bylaws’’) of
27 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
23:06 May 04, 2021
Jkt 253001
its parent corporation, Cboe Global
Markets, Inc. (‘‘Cboe’’ or ‘‘Corporation’’).
The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
equities/regulation/rule_filings/edga/),
at the Exchange’s Office of the
Secretary, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Cboe has received a stockholder
proposal submitted pursuant to Rule
14a–8 under the Act 3 which requested
that the CGM Board take steps to
implement a ‘‘proxy access’’ bylaw
provision. In general, proxy access
bylaws allow a stockholder, or group of
stockholders, who comply with certain
requirements, to nominate candidates
for service on a board and have those
candidates included in a company’s
proxy materials. Such provisions have
become common among S&P 500
companies.4 Cboe has determined to
take the stockholder’s requested steps to
implement proxy access. Accordingly,
the Exchange now proposes to make
these changes by adopting new Section
2.16 of the CGM Bylaws and making
certain conforming changes to current
Sections 2.10 and 2.11 of the CGM
Bylaws, all of which are described
further below.
In developing its proposal, Cboe
generally tried to balance the relative
weight of arguments for and against
proxy access provisions. On the one
hand, Cboe recognizes the significance
3 See 17 CFR 240.14a–8, which requires
companies that are subject to the federal proxy rules
to include shareholder proposals in companies’
proxy statements to shareholders, subject to certain
procedural and substantive requirements.
4 More than 75% of S&P 500 companies have
adopted proxy access bylaw provisions.
PO 00000
Frm 00163
Fmt 4703
Sfmt 4703
of this issue to some investors, who see
proxy access as an important
accountability mechanism that allows
them to participate in board elections
through the nomination of stockholder
candidates that are presented in a
company’s proxy statement. On the
other hand, Cboe’s proposed proxy
access provision includes certain
procedural requirements that are
designed to help ensure, among other
things, that Cboe and its stockholders
will have full and accurate information
about nominating stockholders and their
nominees and that such stockholders
and nominees will comply with
applicable laws, regulations and other
requirements. Additionally, the
Exchange notes the proposed terms are
common among companies that have
adopted proxy access. The Exchange
also notes that the parent companies of
other exchanges have adopted
substantively similar proxy access
provisions and the Exchange does not
believe such provisions are materially
different than the Exchange’s proposal.5
The proposed rule change would add
new Section 2.16 to the CGM Bylaws.
Section 2.16 would permit a
stockholder, or group of up to 20
stockholders, to nominate director
nominees for the Cboe Board, so long as
the stockholder(s) have owned at least
three percent of Cboe’s outstanding
shares of capital stock continuously for
at least three years. The director
nominees would be included in Cboe’s
annual meeting proxy materials. The
proposed provision would limit the
number of proposed director nominees
to the greater of (i) two or (ii) 20% of
the number of Cboe directors in office
(rounded down to the nearest whole
number, but no less than two) provided
that the stockholder(s) and nominee(s)
satisfy the other conditions specified in
the CGM Bylaws as described further
below.
Proposed Section 2.16(a)
The Exchange first proposes to amend
the CGM Bylaws to, as set forth in the
first sentence of proposed Section
2.16(a), require the Corporation to
include in its proxy statement, its form
proxy and any ballot distributed at the
stockholder meeting, the name of, and
5 See Securities Exchange Release No. 79357
(November 18, 2016) 81 FR 85283 (November 25,
2016) (SR–NASDAQ–2016–127; SR–BX–2016–051;
SR–ISE–2016–22; SR–ISEGemini–2016–10; SR–
ISEMercury–2016–16; SR–PHLX–2016–93; SR–
BSECC–2016–001; SR–SCCP–2016–01). See also
Securities Exchange Release No. 77782 (May 6,
2016) 81 FR 29600 (May 12, 2016) (SR–NYSE–
2016–14; SR–NYSEArca–2016–25; SR–NYSEMKT–
2016–20).
E:\FR\FM\05MYN1.SGM
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Agencies
[Federal Register Volume 86, Number 85 (Wednesday, May 5, 2021)]
[Notices]
[Pages 24072-24076]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-09432]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91702; File No. SR-EMERALD-2021-15]
Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Interpretation and Policy .13 (Temporary Extension of the Limited
Period for Registered Persons To Function as Principals) to Exchange
Rule 1900, Registration Requirements, To Extend the Expiration Date of
the Temporary Amendment Set Forth in SR-EMERALD-2020-21 From April 30,
2021 to June 30, 2021
April 29, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on April 21, 2021, MIAX Emerald, LLC (``MIAX
Emerald'' or ``Exchange'') 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 substantially
prepared by the self-regulatory organization. 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.
---------------------------------------------------------------------------
[[Page 24073]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Interpretation and Policy .13
(Temporary Extension of the Limited Period for Registered Persons to
Function as Principals) to Exchange Rule 1900, Registration
Requirements, to extend the expiration date of the temporary amendment
set forth in SR-EMERALD-2020-21 from April 30, 2021 to June 30, 2021.
The Exchange does not anticipate providing any further extensions to
the temporary amendment identified in this proposed rule change beyond
June 30, 2021.
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxoptions.com/rule-filings/emerald, at MIAX
Emerald's principal office, and at the Commission's Public Reference
Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Interpretation and Policy .13
(Temporary Extension of the Limited Period for Registered Persons to
Function as Principals) to Exchange Rule 1900, Registration
Requirements, to extend the expiration date of the temporary amendment
set forth in SR-EMERALD-2020-21 from April 30, 2021 to June 30, 2021.
The proposed rule change would extend the 120-day period that certain
individuals can function as principals without having successfully
passed an appropriate qualification examination through June 30,
2021,\3\ and would apply only to those individuals who were designated
to function as principals prior to March 3, 2021. This proposed rule
change is based on a filing recently submitted by the Financial
Industry Regulatory Authority, Inc. (``FINRA'') \4\ and is intended to
harmonize the Exchange's registration rules with those of FINRA so as
to promote uniform standards across the securities industry.
---------------------------------------------------------------------------
\3\ See Exchange Act Release No. 91506 (April 8, 2021) 86 FR
19671 (April 14, 2021) (SR-FINRA-2021-005) (the ``FINRA Filing'').
The Exchange notes that the FINRA Filing also provides temporarily
relief to individuals registered with FINRA as Operations
Professionals under FINRA Rule 1220. The Exchange does not have a
registration category for Operations Professionals and therefore,
the Exchange is not proposing to adopt that aspect of the FINRA
Filing. If the Exchange seeks to provide additional temporary relief
from the rule requirement identified in this proposal beyond June
30, 2021, it will submit a separate rule filing to further extend
the temporary extension of time.
\4\ See id.
---------------------------------------------------------------------------
In response to the COVID-19 global pandemic, last year FINRA began
providing temporary relief by way of frequently asked questions
(``FAQs'') \5\ to address disruptions to the administration of FINRA
qualification examinations caused by the pandemic that have
significantly limited the ability of individuals to sit for
examinations due to Prometric test center capacity issues.\6\
---------------------------------------------------------------------------
\5\ See https://www.finra.org/rules-guidance/key-topics/covid-19/faq#qe.
\6\ At the outset of the COVID-19 pandemic, all FINRA
qualification examinations were administered at test centers
operated by Prometric. Based on the health and welfare concerns
resulting from COVID-19, in March 2020 Prometric closed all of its
test centers in the United States and Canada and began to slowly
reopen some of them at limited capacity in May. Currently, Prometric
has resumed testing in many of its United States and Canada test
centers, at either full or limited occupancy, based on local and
government mandates.
---------------------------------------------------------------------------
FINRA published the first FAQ on March 20, 2020, providing that
individuals who were designated to function as principals under FINRA
Rule 1210.04 \7\ prior to February 2, 2020, would be given until May
31, 2020, to pass the appropriate principal qualification
examination.\8\ On May 19, 2020, FINRA extended the relief to pass the
appropriate examination until June 30, 2020. On June 29, 2020, FINRA
again extended the temporary relief providing that individuals who were
designated to function as principals under FINRA Rule 1210.04 prior to
May 4, 2020, would be given until August 31, 2020, to pass the
appropriate principal qualification examination. On August 28, 2020,
FINRA filed with the Commission a proposed rule change for immediate
effectiveness to extend the temporary relief provided via the two FAQs
by adopting: (1) Temporary Supplementary Material .12 (Temporary
Extension of the Limited Period for Registered Persons to Function as
Principals) under FINRA Rule 1210 (Registration Requirements), and (2)
temporary Supplementary Material .07 (Temporary Extension of the
Limited Period for Persons to Function as Operations Professionals)
under FINRA Rule 1220 (Registration Categories).\9\ Pursuant to this
rule filing, individuals who were designated prior to September 3,
2020, to function as a principal under FINRA Rule 1210.04 would have
until December 31, 2020, to pass the appropriate qualification
examination.
---------------------------------------------------------------------------
\7\ Exchange Rule 1900, Interpretation and Policy .04, is the
corresponding rule to FINRA Rule 1210.04.
\8\ FINRA Rule 1210.04 (Requirements for Registered Persons
Functioning as Principals for a Limited Period) allows a FINRA-
member firm to designate certain individuals to function in a
principal capacity for 120 calendar days before having to pass an
appropriate principal qualification examination. Exchange Rule 1900,
Interpretation and Policy .04, provides the same allowance to
Exchange Members.
\9\ See Exchange Act Release No. 89732 (September 1, 2020), 85
FR 55535 (September 8, 2020) (Notice of Filing and Immediate
Effectiveness of File No. SR-FINRA-2020-026).
---------------------------------------------------------------------------
Thereafter, on December 9, 2020, FINRA filed with the Commission a
proposed rule change for immediate effectiveness to extend the limited
period for registered persons to function as a principal through April
30, 2021.\10\ Pursuant to this rule filing, individuals who were
designated prior to January 1, 2021 to function as a principal would
have until April 30, 2021 to pass the appropriate qualifying
examination. On December 28, 2020, the Exchange filed with the
Commission a proposed rule change for immediate effectiveness to extend
the limited period for registered persons to function as a principal
through April 30, 2021.\11\
---------------------------------------------------------------------------
\10\ See Exchange Act Release No. 90617 (December 9, 2020), 85
FR 81258 (December 15, 2020) (SR-FINRA-2020-043).
\11\ See Exchange Act Release No. 90829 (December 28, 2020), 86
FR 636 (December 30, 2020) (SR-EMERALD-2020-21).
---------------------------------------------------------------------------
The Exchange continues to closely monitor the impact of the COVID-
19 pandemic on Members,\12\ investors, and other stakeholders. The
Exchange initially provided temporary relief to address the
interruptions in the administration of FINRA qualification examinations
at Prometric test centers and the limited ability of individuals to sit
for the examinations caused by the COVID-19 pandemic.\13\ As mentioned
in the FINRA Filing (SR-FINRA-2021-005), FINRA noted that the pandemic
could result in firms potentially
[[Page 24074]]
experiencing significant disruptions to their normal business
operations that may be exacerbated by being unable to keep principal
positions filled. Specifically, FINRA noted that the limitation of in-
person activities and staff absenteeism as a result of the health and
welfare concerns stemming from COVID-19 could result in firms having
difficulty finding other qualified individuals to transition into those
roles or requiring them to reallocate employee time and resources away
from other critical responsibilities at the firm's organization.
---------------------------------------------------------------------------
\12\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
\13\ Information about the continued impact of COVID-19 on
FINRA-administered examinations is available at https://www.finra.org/rules-guidance/key-topics/covid-19/exams.
---------------------------------------------------------------------------
While there are signs of improvement, the COVID-19 conditions
necessitating the temporary relief persist and the Exchange has
determined that there is a continued need for this temporary relief
beyond April 30, 2021. Although Prometric has resumed testing in many
of its U.S. test centers, Prometric's safety practices mean that
currently not all test centers are open, some of the open test centers
are at limited capacity, and some open test centers are delivering only
certain examinations that have been deemed essential by the local
government.\14\ In addition, while certain states have started to ease
COVID-19 restrictions on businesses and social activities, public
health officials continue to emphasize the importance for individuals
to keep taking numerous steps to protect themselves and help slow the
spread of the disease.\15\
---------------------------------------------------------------------------
\14\ Information from Prometric about its safety practices and
the impact of COVID-19 on its operations is available at https://www.prometric.com/corona-virusupdate. See also supra note 13.
\15\ See, e.g., Centers for Disease Control and Prevention, How
to Protect Yourself & Others, https://www.cdc.gov/coronavirus/2019-ncov/prevent-gettingsick/prevention.html.
---------------------------------------------------------------------------
Although the COVID-19 conditions necessitating the temporary relief
persist, the Exchange believes that an extension of the relief is
necessary only until June 30, 2021, because FINRA recently expanded the
availability of online examinations. Prior to this expansion, the
ongoing effects of the pandemic made it impracticable for Members to
ensure that the individuals who they had designated to function in a
principal capacity, as set forth in Exchange Rule 1900, Interpretation
and Policy .04, could successfully sit for and pass an appropriate
qualification examination within the 120-calendar day period required
under the rules.\16\ Specifically, if the individual wanted to take a
qualifying examination, they were required to accept the health risks
associated with taking an in-person examination because those
examinations were not available online. On February 24, 2021, however,
FINRA adopted an interim accommodation request process to allow
candidates to take additional FINRA examinations online, including the
General Securities Principal (``Series 24'') and Operations
Professional (``Series 99'') examinations.\17\ Because the Series 24
qualifying examination has been made available online only recently,
the Exchange is concerned that individuals who have been designated to
function in a principal capacity may not have sufficient time to
schedule, study for, and take the applicable examination before April
30, 2021, the date the temporary amendment is set to expire. Therefore,
the Exchange proposes to extend the expiration date of the temporary
amendment set forth in Exchange Rule 1900, Interpretation and Policy
.13, from April 30, 2021 until June 30, 2021. The proposed rule change
would apply only to those individuals who have been designated to
function as a principal prior to March 3, 2021. As noted above, the
Exchange does not anticipate providing any further extensions to the
temporary amendment and any individuals designated to function as a
principal on or after March 3, 2021, will need to successfully pass an
appropriate qualification examination within 120 days.
---------------------------------------------------------------------------
\16\ See supra note 13.
\17\ Id.
---------------------------------------------------------------------------
The Exchange believes that this proposed continued extension of
time is tailored to address the needs and constraints on a Member's
operations during the COVID-19 pandemic, without significantly
compromising critical investor protection. The proposed extension of
time will help to minimize the impact of COVID-19 on Members by
providing continued flexibility so that Members can ensure that
principal positions remain filled. The potential risks from the
proposed extension of the 120-day period are mitigated by a Member's
continued requirement to supervise the activities of these designated
individuals and ensure compliance with federal securities laws and
regulations, as well as Exchange and FINRA rules.
The Exchange 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, so the Exchange can implement the
proposed rule change immediately.
2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) of the Act \18\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \19\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments to and perfect the
mechanisms of a free and open market and a national market system and,
in general, to protect investors and the public interest.
---------------------------------------------------------------------------
\18\ 15 U.S.C. 78f(b).
\19\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The proposed rule change is intended to minimize the impact of
COVID-19 on Member operations by further extending the 120-day period
certain individuals may function as a principal without having
successfully passed an appropriate qualification examination under
Exchange Rule 1900, Interpretation and Policy .04, until June 30, 2021.
The proposed rule change does not relieve Members from maintaining,
under the circumstances, a reasonably designed system to supervise the
activities of their associated persons to achieve compliance with
applicable securities laws and regulations, and with applicable
Exchange and FINRA rules that directly serve investor protection. In a
time when faced with unique challenges resulting from the COVID-19
pandemic, the Exchange believes that the proposed rule change is a
sensible accommodation that will continue to afford Members the ability
to ensure that critical positions are filled and client services
maintained, while continuing to serve and promote the protection of
investors and the public interest in this unique environment.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
intended to provide temporary relief given the impacts of the COVID-19
pandemic crisis and to also maintain consistency with the rules of
other self-regulatory organizations (``SROs'') with respect to the
registration requirements applicable to Members and their registered
personnel. In that regard, the Exchange believes that any burden on
competition would be clearly outweighed by providing Members with
temporary
[[Page 24075]]
relief in this unique environment while also ensuring clear and
consistent requirements applicable across SROs and mitigating any risk
of SROs implementing different standards in these important areas. In
its filings, FINRA provides an abbreviated economic impact assessment
maintaining that the changes are necessary to temporarily rebalance the
attendant benefits and costs of the obligations under FINRA Rule 1210
in response to the impacts of the COVID-19 pandemic that is equally
applicable to the changes the Exchange proposes.\20\ The Exchange
accordingly incorporates FINRA's abbreviated economic impact assessment
by reference.
---------------------------------------------------------------------------
\20\ See supra notes 3 and 10; see also Exchange Act Release No.
89732 (September 1, 2020), 85 FR 55535 (September 8, 2020) (SR-
FINRA-2020-26).
---------------------------------------------------------------------------
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 \21\ and Rule 19b-
4(f)(6) thereunder.\22\
---------------------------------------------------------------------------
\21\ 15 U.S.C. 78s(b)(3)(A).
\22\ 17 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 satisfied this requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
pursuant to Rule 19b-4(f)(6)(iii), the Commission may designate a
shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has asked the
Commission to waive the 30-day operative delay so that the proposed
rule change may become operative immediately upon filing. As noted
above, the Exchange stated that the conditions necessitating the
temporary relief continue to exist and the proposed extension of time
will help minimize the impact of the COVID-19 outbreak on Members'
operations by allowing them to keep principal positions filled and
minimizing disruptions to client services and other critical
responsibilities. Despite signs of improvement, the Exchange further
stated that the ongoing extenuating circumstances of the COVID-19
pandemic make it impractical to ensure that individuals designated to
act in a principal capacity are able to take and pass the appropriate
qualification examination during the 120-calendar day period required
under the rules.
The Exchange observed that, following a nationwide closure of all
test centers earlier in the year, some test centers have re-opened, but
are operating at limited capacity or are only delivering certain
examinations that have been deemed essential by the local
government.\23\ However, on February 24, 2021, FINRA began providing
the General Securities Principal (Series 24) Examination online through
an interim accommodation request process.\24\ Prior to this change, if
individuals wanted to take these qualifying examinations, they were
required to accept the health risks associated with taking an in-person
examination. Even with the expansion of online qualifications
examinations, the Exchange stated that extending the expiration date of
the relief set forth in SR-EMERALD-2020-21 until June 30, 2021 is still
needed. The Exchange stated that this temporary relief will provide
flexibility to allow individuals who have been designated to function
as a principal sufficient time to schedule, study for and take the
applicable examination before the temporary relief expires. Notably,
the Exchange stated that it does not anticipate providing any further
extensions to the temporary amendment and that any individuals
designated to function as a principal on or after March 3, 2021 will
need to successfully pass an appropriate qualification examination
within 120 days.
---------------------------------------------------------------------------
\23\ See supra notes 13 and 14. The Exchange notes that
Prometric has also had to close some reopened test centers due to
incidents of COVID-19 cases.
\24\ See supra note 13 (including the February 24, 2021
announcement of the interim accommodation process for candidates to
take certain examinations, including the General Securities
Principal (Series 24) Examination, online.)
---------------------------------------------------------------------------
For these reasons, the Commission believes that waiver of the 30-
day operative delay is consistent with the protection of investors and
the public interest.\25\ Accordingly, the Commission hereby waives the
30-day operative delay and designates the proposal operative upon
filing.\26\
---------------------------------------------------------------------------
\25\ As noted above by the Exchange, this proposal is an
extension of temporary relief provided in SR-EMERALD-2020-21 where
the Exchange also requested and the Commission granted a waiver of
the 30-day operative delay. See SR-EMERALD-2020-21, 86 FR at 639.
\26\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule change'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- EMERALD-2021-15 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-EMERALD-2021-15. 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
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business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
such filing also will be available for inspection and copying at the
principal office of 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-
EMERALD-2021-15 and should be submitted on or before May 26, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-09432 Filed 5-4-21; 8:45 am]
BILLING CODE 8011-01-P