Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Effective Date in Commentary .10 under NYSE Arca Rule 2.1210, 24093-24096 [2021-09436]
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Federal Register / Vol. 86, No. 85 / Wednesday, May 5, 2021 / Notices
expiration date of the relief set forth in
SR–NYSENAT–2020–38 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 in
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
amendments 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.24 Accordingly, the Commission
hereby waives the 30-day operative
delay and designates the proposal
operative upon filing.25
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 SR–
NYSENAT–2021–12 on the subject line.
24 As noted above by the Exchange, this proposal
is an extension of temporary relief provided in SR–
NYSENAT–2020–30 and SR–NYSENAT–2020–38
where the Exchange also requested and the
Commission granted a waiver of the 30-day
operative delay. See SR–NYSENAT–2020–30, 85 FR
at 65118 and SR–NYSENAT–2020–38, 85 FR at
86631–32.
25 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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23:06 May 04, 2021
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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–NYSENAT–2021–12. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of 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–NYSENAT–2021–12 and
should be submitted on or before May
26, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.26
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–09438 Filed 5–4–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91707; File No. SR–
NYSEArca–2021–30]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the Effective
Date in Commentary .10 under NYSE
Arca Rule 2.1210
April 29, 2021.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Exchange Act’’) 2 and Rule 19b–4
thereunder,3 notice is hereby given that
on April 19, 2021, NYSE Arca, Inc.
(‘‘NYSE Arca’’ or the ‘‘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 prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes a rule change
to extend the effective date in
Commentary .10 (Temporary Extension
of the Limited Period for Registered
Persons to Function as Principals) under
NYSE Arca Rule 2.1210 (Registration
Requirements) applicable to Equity
Trading Permit (‘‘ETP’’) Holders,
Options Trading Permit (‘‘OTP’’)
Holders and OTP Firms, from April 30,
2021 to June 30, 2021. The Exchange
does not anticipate providing any
further extensions to the temporary
relief identified in this proposed rule
change beyond June 30, 2021.4 The
proposed rule change is available on the
Exchange’s website at www.nyse.com, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 If due to unforeseen circumstances a further
extension is necessary, the Exchange will submit a
separate rule filing to further extend the temporary
relief.
2 15
26 17
PO 00000
CFR 200.30–3(a)(12).
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Federal Register / Vol. 86, No. 85 / Wednesday, May 5, 2021 / Notices
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 extend the
effective date in Commentary .10
(Temporary Extension of the Limited
Period for Registered Persons to
Function as Principals) under NYSE
Arca Rule 2.1210 (Registration
Requirements) applicable to ETP
Holders, OTP Holders and OTP Firms
(collectively, ‘‘Members’’),5 from April
30, 2021 to June 30, 2021. The proposed
rule change would extend the 120-day
period that certain individuals can
function as a principal without having
successfully passed an appropriate
qualification examination through June
30, 2021, and would apply only to those
individuals who were designated to
function as a principal prior to March 3,
2021. This proposed rule change is
based on a filing recently submitted by
the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) 6 and is
5 The term ‘‘ETP Holder’’ refers to a sole
proprietorship, partnership, corporation, limited
liability company or other organization in good
standing that has been issued an ETP. An ETP
Holder must be a registered broker or dealer
pursuant to Section 15 of the Exchange Act. See
NYSE Arca Rule 1.1(o). The term ‘‘ETP’’ refers to
an Equity Trading Permit issued by the Exchange
for effecting approved securities transactions on the
Exchange’s Trading Facilities. See NYSE Arca Rule
1.1(n). The term ‘‘OTP Holder’’ refers to a natural
person, in good standing, who has been issued an
OTP. An OTP Holder must be a registered broker
or dealer pursuant to Section 15 of the Exchange
Act. Under the Exchange’s rules, an OTP Holder has
the status as a ‘‘member’’ of the Exchange as that
term is defined in Section 3 of the Exchange Act.
See NYSE Arca Rule 1.1(nn). The term ‘‘OTP’’ refers
to an Options Trading Permit issued by the
Exchange for effecting approved securities
transactions on the Exchange’s Trading Facilities.
See NYSE Arca Rule 1.1(mm). The term ‘‘OTP
Firm’’ refers to a sole proprietorship, partnership,
corporation, limited liability company or other
organization in good standing who holds an OTP
or upon whom an individual OTP Holder has
conferred trading privileges on the Exchange’s
Trading Facilities pursuant to and in compliance
with Exchange rules. An OTP Firm must be a
registered broker or dealer pursuant to Section 15
of the Exchange Act. See NYSE Arca Rule 1.1(oo).
6 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
temporary 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.
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23:06 May 04, 2021
Jkt 253001
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 COVID–19 global
pandemic, last year FINRA began
providing temporary relief by way of
frequently asked questions (‘‘FAQs’’) 7
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.8
FINRA published the first FAQ on
March 20, 2020, providing that
individuals who were designated to
function as principals under FINRA
Rule 1210.04 9 prior to February 2, 2020,
would be given until May 31, 2020, to
pass the appropriate principal
qualification examination.10 FINRA
revised the FAQ to extend the
expiration of the temporary relief to
pass the appropriate principal
examination until June 30, 2020, and
then until August 31, 2020.
On September 25, 2020, NYSE Arca
filed with the Commission a proposed
rule change for immediate effectiveness
to extend the temporary relief provided
via the FAQ by adopting temporary
Commentary .10 (Temporary Extension
of the Limited Period for Registered
Persons to Function as Principals) under
NYSE Arca Rule 2.1210 (Registration
Requirements).11 Pursuant to this rule
filing, individuals who were designated
prior to September 3, 2020, to function
as a principal under NYSE Arca Rule
2.1210.10 had until December 31, 2020,
to pass the appropriate qualification
examination. The Exchange thereafter
filed a proposed rule change to extend
the expiration date of the temporary
7 See https://www.finra.org/rules-guidance/keytopics/covid-19/faq#qe.
8 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.
9 NYSE Arca Rule 2.1210.03 is the corresponding
rule to FINRA Rule 1210.04.
10 FINRA Rule 1210.04 (Requirements for
Registered Persons Functioning as Principals for a
Limited Period) allows a 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.
NYSE Arca Rule 2.1210.03 provides the same
allowance to Members.
11 See Exchange Act Release No. 90113 (October
7, 2020), 85 FR 65110 (October 14, 2020) (Notice
of Filing and Immediate Effectiveness of SR–
NYSEArca–2020–87).
PO 00000
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relief from December 31, 2020, to April
30, 2021.12
As mentioned in the prior filings,
FINRA began providing, and then
extended, 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 The prior filings also noted
that the pandemic could result in firms
potentially experiencing significant
disruptions to their normal business
operations that may be exacerbated by
being unable to keep principal positions
filled. Specifically, the limitation of inperson 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 that role or requiring
them to reallocate employee time and
resources away from other critical
responsibilities at the firm.
While there are signs of improvement,
the COVID–19 conditions necessitating
the temporary relief persist and FINRA
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, in the FINRA Filing, FINRA
stated that an extension of the relief is
necessary only until June 30, 2021,
because FINRA recently expanded the
12 See Exchange Act Release No. 90760
(December 21, 2020), 85 FR 85828 (December 29,
2020) (Notice of Filing and Immediate Effectiveness
of SR–NYSEArca–2020–112).
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.
14 Information from Prometric about its safety
practices and the impact of COVID–19 on its
operations is available at https://www.prometric.
com/covid-19-update/corona-virus-update. 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-getting-sick/prevention.html.
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Federal Register / Vol. 86, No. 85 / Wednesday, May 5, 2021 / Notices
availability of online examinations.
Prior to this expansion, the ongoing
effects of the pandemic made it
impracticable for FINRA members to
ensure that the individuals who they
had designated to function in a
principal capacity, as set forth in FINRA
Rule 1210.04, could successfully sit for
and pass an appropriate qualification
examination within the 120-calendar
day period required under the rule.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’’) examination.17
Because the qualifying examination has
been made available online only
recently, FINRA 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 relief is set to expire.
These ongoing circumstances make it
impracticable for Members to ensure
that the individuals whom they have
designated to function in a principal
capacity, as set forth in NYSE Arca Rule
2.1210.03, are able to successfully sit for
and pass an appropriate qualification
examination within the 120-calendar
day period required under the rule, or
to find other qualified staff to fill this
position. Therefore, NYSE Arca is
proposing to extend the effective date of
the temporary relief provided through
SR–NYSEArca–2020–112 until June 30,
2021. The proposed rule change would
apply only to those individuals who
were designated to function as a
principal prior to March 3, 2021. Any
individuals designated to function as a
principal on or after March 3, 2021,
would need to successfully pass an
appropriate qualification examination
within 120 days.
NYSE Arca 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
16 See
supra note 13.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the
Exchange Act,18 in general, and furthers
the objectives of Section 6(b)(5),19 in
particular, because 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
mechanism 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 extending the
120-day period certain individuals may
function as a principal without having
successfully passed an appropriate
qualification examination under NYSE
Arca Rule 2.1210.03 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 NYSE Arca rules that
directly serve investor protection. In a
time when faced with unique challenges
resulting from the COVID–19 pandemic,
NYSE Arca 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.
18 15
17 Id.
VerDate Sep<11>2014
that principal positions remain filled.
The potential risks from the proposed
extension of the 120-day period are
mitigated by the Member’s continued
requirement to supervise the activities
of these designated individuals and
ensure compliance with federal
securities laws and regulations, as well
as NYSE Arca rules. NYSE Arca 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 NYSE Arca
can implement the proposed rule
change immediately.
19 15
23:06 May 04, 2021
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PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00182
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24095
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 Exchange Act. As
set forth in the prior filings, the
proposed rule change is intended solely
to extend temporary relief necessitated
by the continued impacts of the COVID–
19 pandemic and the related health and
safety risks of conducting in-person
activities. In its filing, FINRA noted that
the proposed rule change is 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 would otherwise result if the
temporary relief was to expire on April
30, 2021. 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
No written comments were solicited
or received with respect to the proposed
rule change.
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 20 and Rule 19b–
4(f)(6) thereunder.21
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
20 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
21 17
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Federal Register / Vol. 86, No. 85 / Wednesday, May 5, 2021 / Notices
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 NYSE Arca 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
these capacities 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.22 However, on February
24, 2021, FINRA began providing the
General Securities Principal (Series 24)
Examination online through an interim
accommodation request process.23 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–NYSEArca–2020–112 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 in
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
amendments 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
22 See supra notes 13 and 14. The Exchange states
that Prometric has also had to close some reopened
test centers due to incidents of COVID–19 cases.
23 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.)
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23:06 May 04, 2021
Jkt 253001
protection of investors and the public
interest.24 Accordingly, the Commission
hereby waives the 30-day operative
delay and designates the proposal
operative upon filing.25
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 SR–
NYSEArca–2021–30 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–NYSEArca–2021–30. 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
24 As noted above by the Exchange, this proposal
is an extension of temporary relief provided in SR–
NYSEArca–2020–87 and SR–NYSEArca–2020–112
where the Exchange also requested and the
Commission granted a waiver of the 30-day
operative delay. See SR–NYSEArca–2020–87, 85 FR
at 65112 and SR–NYSEArca–2020–112, 85 FR at
85830.
25 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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proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of 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–NYSEArca–2021–30 and
should be submitted on or before May
26, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.26
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–09436 Filed 5–4–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91731; File No. SR–
NYSECHX–2021–08]
Self-Regulatory Organizations; NYSE
Chicago, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending the Fee
Schedule of NYSE Chicago, Inc.
April 29, 2021.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on April 16,
2021, the NYSE Chicago, Inc. (‘‘NYSE
Chicago’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
26 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
E:\FR\FM\05MYN1.SGM
05MYN1
]]>Agencies
[Federal Register Volume 86, Number 85 (Wednesday, May 5, 2021)]
[Notices]
[Pages 24093-24096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-09436]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91707; File No. SR-NYSEArca-2021-30]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Extend the
Effective Date in Commentary .10 under NYSE Arca Rule 2.1210
April 29, 2021.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Exchange Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is
hereby given that on April 19, 2021, NYSE Arca, Inc. (``NYSE Arca'' or
the ``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 prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes a rule change to extend the effective date in
Commentary .10 (Temporary Extension of the Limited Period for
Registered Persons to Function as Principals) under NYSE Arca Rule
2.1210 (Registration Requirements) applicable to Equity Trading Permit
(``ETP'') Holders, Options Trading Permit (``OTP'') Holders and OTP
Firms, from April 30, 2021 to June 30, 2021. The Exchange does not
anticipate providing any further extensions to the temporary relief
identified in this proposed rule change beyond June 30, 2021.\4\ The
proposed rule change is available on the Exchange's website at
www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.
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\4\ If due to unforeseen circumstances a further extension is
necessary, the Exchange will submit a separate rule filing to
further extend the temporary relief.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received
[[Page 24094]]
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 extend the effective date in Commentary
.10 (Temporary Extension of the Limited Period for Registered Persons
to Function as Principals) under NYSE Arca Rule 2.1210 (Registration
Requirements) applicable to ETP Holders, OTP Holders and OTP Firms
(collectively, ``Members''),\5\ from April 30, 2021 to June 30, 2021.
The proposed rule change would extend the 120-day period that certain
individuals can function as a principal without having successfully
passed an appropriate qualification examination through June 30, 2021,
and would apply only to those individuals who were designated to
function as a principal prior to March 3, 2021. This proposed rule
change is based on a filing recently submitted by the Financial
Industry Regulatory Authority, Inc. (``FINRA'') \6\ and is intended to
harmonize the Exchange's registration rules with those of FINRA so as
to promote uniform standards across the securities industry.
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\5\ The term ``ETP Holder'' refers to a sole proprietorship,
partnership, corporation, limited liability company or other
organization in good standing that has been issued an ETP. An ETP
Holder must be a registered broker or dealer pursuant to Section 15
of the Exchange Act. See NYSE Arca Rule 1.1(o). The term ``ETP''
refers to an Equity Trading Permit issued by the Exchange for
effecting approved securities transactions on the Exchange's Trading
Facilities. See NYSE Arca Rule 1.1(n). The term ``OTP Holder''
refers to a natural person, in good standing, who has been issued an
OTP. An OTP Holder must be a registered broker or dealer pursuant to
Section 15 of the Exchange Act. Under the Exchange's rules, an OTP
Holder has the status as a ``member'' of the Exchange as that term
is defined in Section 3 of the Exchange Act. See NYSE Arca Rule
1.1(nn). The term ``OTP'' refers to an Options Trading Permit issued
by the Exchange for effecting approved securities transactions on
the Exchange's Trading Facilities. See NYSE Arca Rule 1.1(mm). The
term ``OTP Firm'' refers to a sole proprietorship, partnership,
corporation, limited liability company or other organization in good
standing who holds an OTP or upon whom an individual OTP Holder has
conferred trading privileges on the Exchange's Trading Facilities
pursuant to and in compliance with Exchange rules. An OTP Firm must
be a registered broker or dealer pursuant to Section 15 of the
Exchange Act. See NYSE Arca Rule 1.1(oo).
\6\ 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 temporary
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.
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In response to COVID-19 global pandemic, last year FINRA began
providing temporary relief by way of frequently asked questions
(``FAQs'') \7\ 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.\8\
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\7\ See https://www.finra.org/rules-guidance/key-topics/covid-19/faq#qe.
\8\ 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.
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FINRA published the first FAQ on March 20, 2020, providing that
individuals who were designated to function as principals under FINRA
Rule 1210.04 \9\ prior to February 2, 2020, would be given until May
31, 2020, to pass the appropriate principal qualification
examination.\10\ FINRA revised the FAQ to extend the expiration of the
temporary relief to pass the appropriate principal examination until
June 30, 2020, and then until August 31, 2020.
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\9\ NYSE Arca Rule 2.1210.03 is the corresponding rule to FINRA
Rule 1210.04.
\10\ FINRA Rule 1210.04 (Requirements for Registered Persons
Functioning as Principals for a Limited Period) allows a 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. NYSE Arca Rule 2.1210.03 provides the
same allowance to Members.
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On September 25, 2020, NYSE Arca filed with the Commission a
proposed rule change for immediate effectiveness to extend the
temporary relief provided via the FAQ by adopting temporary Commentary
.10 (Temporary Extension of the Limited Period for Registered Persons
to Function as Principals) under NYSE Arca Rule 2.1210 (Registration
Requirements).\11\ Pursuant to this rule filing, individuals who were
designated prior to September 3, 2020, to function as a principal under
NYSE Arca Rule 2.1210.10 had until December 31, 2020, to pass the
appropriate qualification examination. The Exchange thereafter filed a
proposed rule change to extend the expiration date of the temporary
relief from December 31, 2020, to April 30, 2021.\12\
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\11\ See Exchange Act Release No. 90113 (October 7, 2020), 85 FR
65110 (October 14, 2020) (Notice of Filing and Immediate
Effectiveness of SR-NYSEArca-2020-87).
\12\ See Exchange Act Release No. 90760 (December 21, 2020), 85
FR 85828 (December 29, 2020) (Notice of Filing and Immediate
Effectiveness of SR-NYSEArca-2020-112).
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As mentioned in the prior filings, FINRA began providing, and then
extended, 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\ The prior filings
also noted that the pandemic could result in firms potentially
experiencing significant disruptions to their normal business
operations that may be exacerbated by being unable to keep principal
positions filled. Specifically, 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 that role or requiring
them to reallocate employee time and resources away from other critical
responsibilities at the firm.
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\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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While there are signs of improvement, the COVID-19 conditions
necessitating the temporary relief persist and FINRA 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\
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\14\ Information from Prometric about its safety practices and
the impact of COVID-19 on its operations is available at https://www.prometric.com/covid-19-update/corona-virus-update. 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-getting-sick/prevention.html.
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Although the COVID-19 conditions necessitating the temporary relief
persist, in the FINRA Filing, FINRA stated that an extension of the
relief is necessary only until June 30, 2021, because FINRA recently
expanded the
[[Page 24095]]
availability of online examinations. Prior to this expansion, the
ongoing effects of the pandemic made it impracticable for FINRA members
to ensure that the individuals who they had designated to function in a
principal capacity, as set forth in FINRA Rule 1210.04, could
successfully sit for and pass an appropriate qualification examination
within the 120-calendar day period required under the rule.\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'') examination.\17\ Because the qualifying
examination has been made available online only recently, FINRA 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 relief is set to expire.
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\16\ See supra note 13.
\17\ Id.
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These ongoing circumstances make it impracticable for Members to
ensure that the individuals whom they have designated to function in a
principal capacity, as set forth in NYSE Arca Rule 2.1210.03, are able
to successfully sit for and pass an appropriate qualification
examination within the 120-calendar day period required under the rule,
or to find other qualified staff to fill this position. Therefore, NYSE
Arca is proposing to extend the effective date of the temporary relief
provided through SR-NYSEArca-2020-112 until June 30, 2021. The proposed
rule change would apply only to those individuals who were designated
to function as a principal prior to March 3, 2021. Any individuals
designated to function as a principal on or after March 3, 2021, would
need to successfully pass an appropriate qualification examination
within 120 days.
NYSE Arca 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 the Member's
continued requirement to supervise the activities of these designated
individuals and ensure compliance with federal securities laws and
regulations, as well as NYSE Arca rules. NYSE Arca 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 NYSE Arca
can implement the proposed rule change immediately.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Exchange Act,\18\ in general, and furthers the objectives of Section
6(b)(5),\19\ in particular, because 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 mechanism of, a free and open
market and a national market system and, in general, to protect
investors and the public interest.
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\18\ 15 U.S.C. 78f(b).
\19\ 15 U.S.C. 78f(b)(5).
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The proposed rule change is intended to minimize the impact of
COVID-19 on Member operations by extending the 120-day period certain
individuals may function as a principal without having successfully
passed an appropriate qualification examination under NYSE Arca Rule
2.1210.03 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 NYSE Arca rules that directly serve investor
protection. In a time when faced with unique challenges resulting from
the COVID-19 pandemic, NYSE Arca 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 Exchange Act. As set forth in the
prior filings, the proposed rule change is intended solely to extend
temporary relief necessitated by the continued impacts of the COVID-19
pandemic and the related health and safety risks of conducting in-
person activities. In its filing, FINRA noted that the proposed rule
change is 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 would otherwise result if the
temporary relief was to expire on April 30, 2021. 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
No written comments were solicited or received with respect to the
proposed rule change.
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 \20\ and Rule 19b-
4(f)(6) thereunder.\21\
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\20\ 15 U.S.C. 78s(b)(3)(A).
\21\ 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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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
[[Page 24096]]
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 NYSE Arca 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 these capacities 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.\22\ However, on February 24, 2021, FINRA began providing
the General Securities Principal (Series 24) Examination online through
an interim accommodation request process.\23\ 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-NYSEArca-2020-112 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 in 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 amendments 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.
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\22\ See supra notes 13 and 14. The Exchange states that
Prometric has also had to close some reopened test centers due to
incidents of COVID-19 cases.
\23\ 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.)
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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.\24\ Accordingly, the Commission hereby waives the
30-day operative delay and designates the proposal operative upon
filing.\25\
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\24\ As noted above by the Exchange, this proposal is an
extension of temporary relief provided in SR-NYSEArca-2020-87 and
SR-NYSEArca-2020-112 where the Exchange also requested and the
Commission granted a waiver of the 30-day operative delay. See SR-
NYSEArca-2020-87, 85 FR at 65112 and SR-NYSEArca-2020-112, 85 FR at
85830.
\25\ 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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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-NYSEArca-2021-30 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-NYSEArca-2021-30. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal office of 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-NYSEArca-2021-30 and should be submitted
on or before May 26, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
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\26\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-09436 Filed 5-4-21; 8:45 am]
BILLING CODE 8011-01-P
