Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Expiration Date of the Temporary Amendments Concerning Video Conference Hearings, 25014-25016 [2021-09773]
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25014
Federal Register / Vol. 86, No. 88 / Monday, May 10, 2021 / Notices
should be submitted on or before June
1, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.58
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–09786 Filed 5–7–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91766; File No. SR–Phlx–
2021–27]
Self-Regulatory Organizations; Nasdaq
PHLX LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the Expiration
Date of the Temporary Amendments
Concerning Video Conference
Hearings
May 4, 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 28,
2021, Nasdaq PHLX LLC (‘‘Phlx’’ 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 Exchange.
The Exchange has designated the
proposed rule change as constituting a
‘‘non-controversial’’ rule change under
paragraph (f)(6) of Rule 19b–4 under the
Act,3 which renders the proposal
effective upon receipt of this filing by
the Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to extend the
expiration date of the temporary
amendments in SR–Phlx–2020–53 from
April 30, 2021, to August 31, 2021.4 The
proposed rule change would not make
58 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
4 See Securities Exchange Act Release No. 90758
(Dec. 21, 2020), 85 FR 85782 (Dec. 29, 2020) (SR–
Phlx–2020–53). If the Exchange seeks to provide
additional temporary relief from the rule
requirements identified in this proposed rule
change beyond August 31, 2021, the Exchange will
submit a separate rule filing to further extend the
temporary extension of time. The amended
Exchange rules will revert to their original form at
the conclusion of the temporary relief period and
any extension thereof.
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any changes to the text of the Exchange
rules.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/phlx/rules, 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
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 continue to
harmonize Exchange Rule General 3,
Section 16 with recent changes by the
Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) to its Rule
1015 in response to the COVID–19
global health crisis and the
corresponding need to restrict in-person
activities.5 The Exchange originally
filed proposed rule change SR–Phlx–
2020–53, which allows the Exchange
Review Council (‘‘ERC’’) to conduct
hearings in connection with appeals of
Membership Application Program
decisions, on a temporary basis, by
video conference, if warranted by the
current COVID–19-related public health
risks posed by an in-person hearing.
While there are signs of improvement,
the COVID–19 conditions necessitating
the temporary amendments persist and,
based on its assessment of current
COVID–19 conditions and the lack of
certainty as to when COVID–19-related
health concerns and corresponding
5 See Securities Exchange Act Release No. 91495
(April 7, 2021), 86 FR 19306 (April 13, 2021) (SR–
FINRA–2021–006) (‘‘FINRA Filing’’). The Exchange
notes that the FINRA Filing also proposed to
temporarily amend FINRA Rules 9261, 9524, and
9830, which govern hearings in connection with
appeals of disciplinary actions, eligibility
proceedings, and temporary and permanent cease
and desist orders. The Exchange’s Rules 9261, 9524,
and 9830 incorporate by reference The Nasdaq
Stock Market LLC rules, which are the subject of a
separate filing. See SR–NASDAQ–2021–033 (April
28, 2021). Therefore, the Exchange is not proposing
to adopt that aspect of the FINRA Filing.
PO 00000
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restrictions will meaningfully subside,
the Exchange has determined that there
is a continued need for this temporary
relief for several months beyond April
30, 2021. Accordingly, the Exchange
proposes to extend the expiration date
of the temporary rule amendments in
SR–Phlx–2020–53 from April 30, 2021,
to August 31, 2021.
As set forth in SR–Phlx–2020–53, the
Exchange also relies on COVID–19 data
and criteria to determine whether the
current public health risks presented by
an in-person hearing may warrant a
hearing by video conference. Based on
that data and criteria, the Exchange does
not believe the COVID–19- related
health concerns necessitating this relief
will meaningfully subside by April 30,
2021, and has determined that there will
be a continued need for this temporary
relief for several months beyond that
date. Accordingly, the Exchange
proposes to extend the expiration date
of the temporary rule amendments
originally set forth in SR–Phlx–2020–53
from April 30, 2021, to August 31, 2021.
The extension of the temporary
amendments allowing for specified ERC
hearings to proceed by video conference
will allow the Exchange’s critical
adjudicatory functions to continue to
operate effectively in these
extraordinary circumstances—enabling
the Exchange to fulfill its statutory
obligations to protect investors and
maintain fair and orderly markets—
while also protecting the health and
safety of hearing participants.
The Exchange has filed the proposed
rule change for immediate effectiveness
and has requested that the SEC 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
proposal is consistent with Section 6(b)
of the Act,6 in general, and furthers the
objectives of Section 6(b)(5) of the Act,7
in particular, in that it is designed to
promote just and equitable principles of
trade, 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, by
providing greater harmonization
between the Exchange rules and FINRA
rules of similar purpose, resulting in
less burdensome and more efficient
regulatory compliance.8
6 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
8 See supra note 5.
7 15
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Federal Register / Vol. 86, No. 88 / Monday, May 10, 2021 / Notices
The proposed rule change, which
extends the expiration date of the
temporary amendments to the Exchange
rules set forth in SR–Phlx–2020–53, will
continue to aid the Exchange’s efforts to
timely conduct hearings in connection
with its core adjudicatory functions.
Given current COVID–19 conditions and
the uncertainty around when those
conditions will meaningfully improve,
without this relief allowing ERC
hearings to continue to proceed by
video conference, such hearings may
need to be postponed indefinitely. The
Exchange must be able to perform its
critical adjudicatory functions in order
to fulfill its statutory obligations to
protect investors and maintain fair and
orderly markets. As such, this relief is
essential to the Exchange’s ability to
fulfill its statutory obligations and
allows hearing participants to avoid the
serious COVID–19-related health and
safety risks associated with in-person
hearings.
Among other things, this relief will
allow the ERC to timely provide
members, disqualified individuals and
other applicants an approval or denial
of their applications. As set forth in
detail in SR–Phlx–2020–53, this
temporary relief allowing ERC hearings
to proceed by video conference accounts
for fair process considerations and will
continue to provide fair process while
avoiding the COVID–19-related public
health risks for hearing participants.
Accordingly, the proposed rule change
extending this temporary relief is in the
public interest and consistent with the
Act’s purpose.
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B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the temporary proposed rule change
will impose any burden on competition
not necessary or appropriate in
furtherance of the purposes of the Act.
As set forth in SR–Phlx–2020–53, the
proposed rule change is intended solely
to extend temporary relief necessitated
by the continued impacts of the COVID–
19 outbreak and the related health and
safety risks of conducting in-person
activities. The Exchange believes that
the proposed rule change will prevent
unnecessary impediments to its
operations, including its critical
adjudicatory processes, and its ability to
fulfill its statutory obligations to protect
investors and maintain fair and orderly
markets that would otherwise result if
the temporary amendments were to
expire on April 30, 2021.
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C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or 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)(iii) of the Act 9 and
subparagraph (f)(6) of Rule 19b–4
thereunder.10
A proposed rule change filed under
Rule 19b–4(f)(6) 11 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),12 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 proposal may
become operative immediately upon
filing. The Exchange has indicated that
the proposed rule change to extend the
expiration date will continue to prevent
unnecessary impediments to its
operations, including its critical
adjudicatory processes, and its ability to
fulfill its statutory obligations to protect
investors and maintain fair and orderly
markets that would otherwise result if
the temporary amendments were to
expire on April 30, 2021.13 Importantly,
extending the relief provided in Phlx–
2020–53 immediately upon filing and
without a 30-day operative delay will
allow the Exchange to continue critical
adjudicatory and review processes in a
reasonable and fair manner and meet its
critical investor protection goals, while
also following best practices with
respect to the health and safety of its
employees.14 The Commission also
9 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change 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.
11 17 CFR 240.19b–4(f)(6).
12 17 CFR 240.19b–4(f)(6)(iii).
13 See supra Item II.
14 See FINRA Filing, 86 FR at 19308 (noting the
same in granting FINRA’s request to waive the 3010 17
PO 00000
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Fmt 4703
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25015
notes that this proposal extends without
change the temporary relief previously
provided by Phlx–2020–53,15 and only
during the period in which the
Exchange’s operations are impacted by
COVID–19. As proposed, the changes
would be in place through August 31,
2021 and the amended rules will revert
back to their original state at the
conclusion of the temporary relief
period and, if applicable, any extension
thereof.16 For these reasons, the
Commission believes that waiver of the
30-day operative delay for this proposal
is consistent with the protection of
investors and the public interest.
Accordingly, the Commission hereby
waives the 30-day operative delay and
designates the proposal operative upon
filing.17
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–
Phlx–2021–27 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.
day operative delay so that SR–FINRA–2021–006
would become operative immediately upon filing).
15 See supra note 4.
16 See id. As noted above, the Exchange states that
if it requires temporary relief from the rule
requirements identified in this proposal beyond
August 31, 2021, it may submit a separate rule filing
to extend the effectiveness of the temporary relief
under these rules.
17 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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25016
Federal Register / Vol. 86, No. 88 / Monday, May 10, 2021 / Notices
All submissions should refer to File
Number SR–Phlx–2021–27. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–Phlx–
2021–27 and should be submitted on or
before June 1, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–09773 Filed 5–7–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
khammond on DSKJM1Z7X2PROD with NOTICES
Self-Regulatory Organizations; Cboe
BYX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Adopt a Fee
Schedule to Establish Fees for
Industry Members Related to the
National Market System Plan
Governing the Consolidated Audit Trail
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
18 17
CFR 200.30–3(a)(12).
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19:05 May 07, 2021
Jkt 253001
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe BYX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘Cboe BYX’’) proposes to
adopt a fee schedule to establish fees for
Industry Members related to the
National Market System Plan Governing
the Consolidated Audit Trail (the ‘‘CAT
NMS Plan’’ or ‘‘Plan’’).3 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/byx/), 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
[Release No. 34–91761; File No. SR–
CboeBYX–2021–011]
May 4, 2021.
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 21,
2021, Cboe BYX Exchange, Inc.
(‘‘Exchange’’ or ‘‘BYX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III 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.
1. Purpose
Under the CAT NMS Plan, the
Operating Committee of the
Consolidated Audit Trail, LLC
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Unless otherwise specified, capitalized terms
used in this rule filing are defined as set forth in
the CAT Compliance Rule. See Rules 4.5 through
4.17 of the Exchange’s Rulebook. The Exchange and
each of its affiliated exchanges (Cboe BZX
Exchange, Inc., Cboe C2 Exchange, Inc., Cboe
Exchange, Inc., Cboe EDGA Exchange, Inc., and
Cboe EDGX Exchange, Inc.) are filing to adopt the
CAT fee schedule.
2 17
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(‘‘Company’’) (‘‘Operating Committee’’)
has discretion to establish funding for
the Company to operate the CAT,
including establishing fees that the
Participants will pay, and establishing
fees for Industry Members that will be
implemented by the Participants.4 The
Operating Committee has filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) a proposal to
amend the CAT NMS Plan to implement
a revised funding model for the CAT
(‘‘CAT Funding Model’’) and to
establish a fee schedule for Participant
CAT fees (‘‘Proposed CAT Fee Plan
Amendment’’).5 The Proposed CAT Fee
Plan Amendment describes the CAT
Funding Model in detail, including the
proposal to charge Industry Members
CAT fees. The Participants are required
to file with the SEC under Section 19(b)
of the Exchange Act any CAT fees
applicable to Industry Members that the
Operating Committee approves.6
Accordingly, the purpose of this
proposed rule change is to implement
the required fee schedule provisions for
CAT fees applicable to Industry
Members that are Members in
accordance with the CAT Funding
Model. The fee schedule provisions will
become operative upon the SEC’s
approval of the Proposed CAT Fee Plan
Amendment.
(1) CAT Funding Model
Under the CAT Funding Model set
out in the Proposed CAT Fee Plan
Amendment, the CAT fees applicable to
Participants and Industry Members for
the relevant quarter would be designed
to cover the total CAT costs associated
with developing, implementing and
operating the CAT for the relevant
quarter (‘‘Total CAT Costs’’).7 The CAT
Funding Model would implement a
bifurcated funding model, where these
costs would be borne by both
Participants and Industry Members.
Industry Members as a group would pay
75% of the Total CAT Costs (the
‘‘Industry Member Allocation’’), and
Participants as a group would pay 25%
of the Total CAT Costs (the ‘‘Participant
Allocation’’).8
4 Section
11.1(b) of the CAT NMS Plan.
Securities Exchange Act Rel. No. 91555
(Apr. 14, 2021), 86 FR 21050 (April 21, 2021).
6 Section 11.1(b) of the CAT NMS Plan.
7 Note that certain costs would be excluded from
the Historical CAT Assessment Costs, as discussed
in more detail below. See Proposed CAT Fee Plan
Amendment at 4, 56–57.
8 Each Industry Member and Participant CAT
Reporter would be required to pay CAT fees
established via the CAT Funding Model. CAT
Reporting Agents acting in their role as such would
not have an obligation to pay CAT fees. See
Proposed CAT Fee Plan Amendment at 4.
5 See
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]]>Agencies
[Federal Register Volume 86, Number 88 (Monday, May 10, 2021)]
[Notices]
[Pages 25014-25016]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-09773]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91766; File No. SR-Phlx-2021-27]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Extend the
Expiration Date of the Temporary Amendments Concerning Video Conference
Hearings
May 4, 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 28, 2021, Nasdaq PHLX LLC (``Phlx'' 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 Exchange. The Exchange
has designated the proposed rule change as constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under
the Act,\3\ which renders the proposal effective upon receipt of this
filing by the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to extend the expiration date of the
temporary amendments in SR-Phlx-2020-53 from April 30, 2021, to August
31, 2021.\4\ The proposed rule change would not make any changes to the
text of the Exchange rules.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 90758 (Dec. 21,
2020), 85 FR 85782 (Dec. 29, 2020) (SR-Phlx-2020-53). If the
Exchange seeks to provide additional temporary relief from the rule
requirements identified in this proposed rule change beyond August
31, 2021, the Exchange will submit a separate rule filing to further
extend the temporary extension of time. The amended Exchange rules
will revert to their original form at the conclusion of the
temporary relief period and any extension thereof.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/phlx/rules, 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 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 continue to harmonize Exchange Rule
General 3, Section 16 with recent changes by the Financial Industry
Regulatory Authority, Inc. (``FINRA'') to its Rule 1015 in response to
the COVID-19 global health crisis and the corresponding need to
restrict in-person activities.\5\ The Exchange originally filed
proposed rule change SR-Phlx-2020-53, which allows the Exchange Review
Council (``ERC'') to conduct hearings in connection with appeals of
Membership Application Program decisions, on a temporary basis, by
video conference, if warranted by the current COVID-19-related public
health risks posed by an in-person hearing. While there are signs of
improvement, the COVID-19 conditions necessitating the temporary
amendments persist and, based on its assessment of current COVID-19
conditions and the lack of certainty as to when COVID-19-related health
concerns and corresponding restrictions will meaningfully subside, the
Exchange has determined that there is a continued need for this
temporary relief for several months beyond April 30, 2021. Accordingly,
the Exchange proposes to extend the expiration date of the temporary
rule amendments in SR-Phlx-2020-53 from April 30, 2021, to August 31,
2021.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 91495 (April 7,
2021), 86 FR 19306 (April 13, 2021) (SR-FINRA-2021-006) (``FINRA
Filing''). The Exchange notes that the FINRA Filing also proposed to
temporarily amend FINRA Rules 9261, 9524, and 9830, which govern
hearings in connection with appeals of disciplinary actions,
eligibility proceedings, and temporary and permanent cease and
desist orders. The Exchange's Rules 9261, 9524, and 9830 incorporate
by reference The Nasdaq Stock Market LLC rules, which are the
subject of a separate filing. See SR-NASDAQ-2021-033 (April 28,
2021). Therefore, the Exchange is not proposing to adopt that aspect
of the FINRA Filing.
---------------------------------------------------------------------------
As set forth in SR-Phlx-2020-53, the Exchange also relies on COVID-
19 data and criteria to determine whether the current public health
risks presented by an in-person hearing may warrant a hearing by video
conference. Based on that data and criteria, the Exchange does not
believe the COVID-19- related health concerns necessitating this relief
will meaningfully subside by April 30, 2021, and has determined that
there will be a continued need for this temporary relief for several
months beyond that date. Accordingly, the Exchange proposes to extend
the expiration date of the temporary rule amendments originally set
forth in SR-Phlx-2020-53 from April 30, 2021, to August 31, 2021. The
extension of the temporary amendments allowing for specified ERC
hearings to proceed by video conference will allow the Exchange's
critical adjudicatory functions to continue to operate effectively in
these extraordinary circumstances--enabling the Exchange to fulfill its
statutory obligations to protect investors and maintain fair and
orderly markets--while also protecting the health and safety of hearing
participants.
The Exchange has filed the proposed rule change for immediate
effectiveness and has requested that the SEC 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 proposal is consistent with Section
6(b) of the Act,\6\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\7\ in particular, in that it is designed to promote
just and equitable principles of trade, 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,
by providing greater harmonization between the Exchange rules and FINRA
rules of similar purpose, resulting in less burdensome and more
efficient regulatory compliance.\8\
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ See supra note 5.
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[[Page 25015]]
The proposed rule change, which extends the expiration date of the
temporary amendments to the Exchange rules set forth in SR-Phlx-2020-
53, will continue to aid the Exchange's efforts to timely conduct
hearings in connection with its core adjudicatory functions. Given
current COVID-19 conditions and the uncertainty around when those
conditions will meaningfully improve, without this relief allowing ERC
hearings to continue to proceed by video conference, such hearings may
need to be postponed indefinitely. The Exchange must be able to perform
its critical adjudicatory functions in order to fulfill its statutory
obligations to protect investors and maintain fair and orderly markets.
As such, this relief is essential to the Exchange's ability to fulfill
its statutory obligations and allows hearing participants to avoid the
serious COVID-19-related health and safety risks associated with in-
person hearings.
Among other things, this relief will allow the ERC to timely
provide members, disqualified individuals and other applicants an
approval or denial of their applications. As set forth in detail in SR-
Phlx-2020-53, this temporary relief allowing ERC hearings to proceed by
video conference accounts for fair process considerations and will
continue to provide fair process while avoiding the COVID-19-related
public health risks for hearing participants. Accordingly, the proposed
rule change extending this temporary relief is in the public interest
and consistent with the Act's purpose.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the temporary proposed rule
change will impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act. As set forth in
SR-Phlx-2020-53, the proposed rule change is intended solely to extend
temporary relief necessitated by the continued impacts of the COVID-19
outbreak and the related health and safety risks of conducting in-
person activities. The Exchange believes that the proposed rule change
will prevent unnecessary impediments to its operations, including its
critical adjudicatory processes, and its ability to fulfill its
statutory obligations to protect investors and maintain fair and
orderly markets that would otherwise result if the temporary amendments
were to expire on April 30, 2021.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or 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)(iii) of the Act \9\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change 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) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ 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 proposal
may become operative immediately upon filing. The Exchange has
indicated that the proposed rule change to extend the expiration date
will continue to prevent unnecessary impediments to its operations,
including its critical adjudicatory processes, and its ability to
fulfill its statutory obligations to protect investors and maintain
fair and orderly markets that would otherwise result if the temporary
amendments were to expire on April 30, 2021.\13\ Importantly, extending
the relief provided in Phlx-2020-53 immediately upon filing and without
a 30-day operative delay will allow the Exchange to continue critical
adjudicatory and review processes in a reasonable and fair manner and
meet its critical investor protection goals, while also following best
practices with respect to the health and safety of its employees.\14\
The Commission also notes that this proposal extends without change the
temporary relief previously provided by Phlx-2020-53,\15\ and only
during the period in which the Exchange's operations are impacted by
COVID-19. As proposed, the changes would be in place through August 31,
2021 and the amended rules will revert back to their original state at
the conclusion of the temporary relief period and, if applicable, any
extension thereof.\16\ For these reasons, the Commission believes that
waiver of the 30-day operative delay for this proposal is consistent
with the protection of investors and the public interest. Accordingly,
the Commission hereby waives the 30-day operative delay and designates
the proposal operative upon filing.\17\
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ See supra Item II.
\14\ See FINRA Filing, 86 FR at 19308 (noting the same in
granting FINRA's request to waive the 30-day operative delay so that
SR-FINRA-2021-006 would become operative immediately upon filing).
\15\ See supra note 4.
\16\ See id. As noted above, the Exchange states that if it
requires temporary relief from the rule requirements identified in
this proposal beyond August 31, 2021, it may submit a separate rule
filing to extend the effectiveness of the temporary relief under
these rules.
\17\ 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-Phlx-2021-27 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.
[[Page 25016]]
All submissions should refer to File Number SR-Phlx-2021-27. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-Phlx-2021-27 and should be
submitted on or before June 1, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-09773 Filed 5-7-21; 8:45 am]
BILLING CODE 8011-01-P
