Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Implementation Date of Certain Amendments to FINRA Rule 4210 Approved Pursuant to SR-FINRA-2015-036, 67557-67559 [2021-25756]
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Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices
component options and provide a clear
alternate process to allow the Exchange
to calculate a Closing VWAP.
In addition, the Exchange states it will
monitor for any potential manipulation
of the Volatility Index settlement value
in the normal course of its surveillance
and will monitor the integrity the
Volatility Index by analyzing trades,
quotations, and orders that affect any of
the 300 calculated reference prices for
any of the NDX option series used for
the Closing VWAP for potential
manipulation on the Exchange.32
Consistent with the original approval of
the listing and trading of VOLQ
options,33 the Commission believes that
the Exchange’s surveillance of options
on the Volatility Index and the
component option series will allow it to
adequately surveil for any potential
manipulation in the trading of VOLQ
and will help to ensure that the
settlement value is not readily
susceptible to manipulation.
Accordingly, the Commission finds
that the proposed rule change is
consistent with Section 6(b)(5) of the
Act 34 and the rules and regulations
thereunder applicable to a national
securities exchange.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,35 that the
proposed rule change (SR–Phlx–2021–
56) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.36
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–25754 Filed 11–24–21; 8:45 am]
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BILLING CODE 8011–01–P
32 See Approval Order at supra note 5 for a more
detailed description of the Exchange’s planned
surveillances.
33 See Approval Order, supra note 5.
34 15 U.S.C. 78f(b)(5).
35 Id.
36 17 CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93630; File No. SR–FINRA–
2021–028]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Extend the
Implementation Date of Certain
Amendments to FINRA Rule 4210
Approved Pursuant to SR–FINRA–
2015–036
November 19, 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 November
12, 2021, the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I and II below, which Items
have been prepared by FINRA. FINRA
has designated the proposed rule change
as constituting a ‘‘non-controversial’’
rule change under paragraph (f)(6) of
Rule 19b–4 under the Act,3 which
renders the proposal effective upon
receipt of this filing by the Commission.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to extend, to
April 26, 2022, the implementation date
of the amendments to FINRA Rule 4210
(Margin Requirements) pursuant to SR–
FINRA–2015–036, other than the
amendments pursuant to SR–FINRA–
2015–036 that were implemented on
December 15, 2016. The proposed rule
change would not make any changes to
the text of FINRA rules.
The text of the proposed rule change
is available on FINRA’s website at
https://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
2 17
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67557
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. FINRA has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
On October 6, 2015, FINRA filed with
the Commission proposed rule change
SR–FINRA–2015–036, which proposed
to amend FINRA Rule 4210 to establish
margin requirements for (1) To Be
Announced (‘‘TBA’’) transactions,
inclusive of adjustable rate mortgage
(‘‘ARM’’) transactions; (2) Specified
Pool Transactions; and (3) transactions
in Collateralized Mortgage Obligations
(‘‘CMOs’’), issued in conformity with a
program of an agency or GovernmentSponsored Enterprise (‘‘GSE’’), with
forward settlement dates, as defined
more fully in the filing (collectively,
‘‘Covered Agency Transactions’’). The
Commission approved SR–FINRA–
2015–036 on June 15, 2016 (the
‘‘Approval Date’’).4
Pursuant to Partial Amendment No. 3
to SR–FINRA–2015–036, FINRA
announced in Regulatory Notice 16–31
that the rule change would become
effective on December 15, 2017, 18
months from the Approval Date, except
that the risk limit determination
requirements as set forth in paragraphs
(e)(2)(F), (e)(2)(G) and (e)(2)(H) of Rule
4210 and in new Supplementary
Material .05, each as respectively
amended or established by SR–FINRA–
2015–036 (collectively, the ‘‘risk limit
determination requirements’’), would
become effective on December 15, 2016,
six months from the Approval Date.5
Industry participants sought
clarification regarding the
implementation of the requirements
pursuant to SR–FINRA–2015–036.
Industry participants also requested
additional time to make system changes
necessary to comply with the
requirements, including time to test the
system changes, and requested
additional time to update or amend
4 See Securities Exchange Act Release No. 78081
(June 15, 2016), 81 FR 40364 (June 21, 2016) (Notice
of Filing of Amendment No. 3 and Order Granting
Accelerated Approval to a Proposed Rule Change to
Amend FINRA Rule 4210 (Margin Requirements) to
Establish Margin Requirements for the TBA Market,
as Modified by Amendment Nos. 1, 2, and 3; File
No. SR–FINRA–2015–036).
5 See Partial Amendment No. 3 to SR–FINRA–
2015–036 and Regulatory Notice 16–31 (August
2016), both available at: www.finra.org.
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margining agreements and related
documentation. In response, FINRA
made available a set of Frequently
Asked Questions & Guidance 6 and,
pursuant to SR–FINRA–2017–029,7
extended the implementation date of the
requirements of SR–FINRA–2015–036 to
June 25, 2018, except for the risk limit
determination requirements, which, as
announced in Regulatory Notice 16–31,
became effective on December 15, 2016.
Industry participants requested that
FINRA reconsider the potential impact
of certain requirements pursuant to SR–
FINRA–2015–036 on smaller and midsized firms. Industry participants also
requested that FINRA extend the
implementation date pending such
reconsideration to reduce potential
uncertainty in the Covered Agency
Transaction market. In response to these
concerns, FINRA further extended the
implementation date of the
requirements of SR–FINRA–2015–036,
other than the risk limit determination
requirements, most recently to January
26, 2022 (the ‘‘January 26, 2022
implementation date’’).8 FINRA noted
that, as FINRA stated in Partial
Amendment No. 3 to SR–FINRA–2015–
036, FINRA would monitor the impact
of the requirements pursuant to that
rulemaking and, if the requirements
prove overly onerous or otherwise are
shown to negatively impact the market,
FINRA would consider revisiting such
requirements as may be necessary to
mitigate the rule’s impact.9
Informed by extensive dialogue, both
with industry participants and other
regulators, including the staff of the SEC
and the Federal Reserve System, FINRA
has proposed amendments to the
requirements of SR–FINRA–2015–036
(the ‘‘Proposed Amendments’’).10 This
6 Available at: www.finra.org/rules-guidance/
guidance/faqs. Further, staff of the SEC’s Division
of Trading and Markets made available a set of
Frequently Asked Questions regarding Exchange
Act Rule 15c3–1 and Rule 15c3–3 in connection
with Covered Agency Transactions under FINRA
Rule 4210, also available at: www.finra.org/rulesguidance/guidance/faqs.
7 See Securities Exchange Act Release No. 81722
(September 26, 2017), 82 FR 45915 (October 2,
2017) (Notice of Filing and Immediate Effectiveness
of a Proposed Rule Change to Delay the
Implementation Date of Certain Amendments to
FINRA Rule 4210 Approved Pursuant to SR–
FINRA–2015–036; File No. SR–FINRA–2017–029);
see also Regulatory Notice 17–28 (September 2017).
8 See Securities Exchange Act Release No. 92897
(September 8, 2021), 86 FR 51207 (September 14,
2021) (Notice of Filing and Immediate Effectiveness
of a Proposed Rule Change to Extend the
Implementation Date of Certain Amendments to
FINRA Rule 4210 Approved Pursuant to SR–
FINRA–2015–036; File No. SR–FINRA–2021–022).
9 See Partial Amendment No. 3 to SR–FINRA–
2015–036, available at: www.finra.org.
10 See Securities Exchange Act Release No. 91937
(May 19, 2021), 86 FR 28161 (May 25, 2021) (Notice
of Filing of a Proposed Rule Change to Amend the
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20:16 Nov 24, 2021
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rulemaking is ongoing. FINRA believes
it is appropriate, in the interest of
regulatory clarity, to adjust the
implementation of the requirements
pursuant to SR–FINRA–2015–036 so as
to permit time for the Commission to
take action on the Proposed
Amendments.11 As such, FINRA is
proposing to extend the January 26,
2022 implementation date to April 26,
2022, which date FINRA may propose to
further adjust as appropriate in a
separate rule filing pending any
Commission action on the Proposed
Amendments. FINRA notes that the risk
limit determination requirements
pursuant to SR–FINRA–2015–036
became effective on December 15, 2016
and, as such, the implementation of
such requirements is not affected by the
proposed rule change.
FINRA has filed the proposed rule
change for immediate effectiveness and
has requested that the Commission
waive the requirement that the proposed
rule change not become operative for 30
days after the date of the filing. The
operative date will be the date of filing
of the proposed rule change.
2. Statutory Basis
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,12 which
requires, among other things, that
FINRA rules must be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest. FINRA believes that the
proposed rule change will help to
reduce potential uncertainty in the
Covered Agency Transaction market
because, pending any Commission
action on the Proposed Amendments,
the proposed rule change will permit
adjustment and alignment, as
appropriate, of the implementation of
the requirements pursuant to SR–
FINRA–2015–036 with the effective date
of the Proposed Amendments. FINRA
believes that this will thereby protect
investors and the public interest by
Requirements for Covered Agency Transactions
under FINRA Rule 4210 (Margin Requirements) as
Approved Pursuant to SR–FINRA–2015–036; File
No. SR–FINRA–2021–010). See also Partial
Amendment No. 1 to SR–FINRA–2021–010,
available at www.finra.org.
11 See Securities Exchange Act Release No. 92713
(August 20, 2021) (Notice of Filing of Amendment
No. 1 and Order Instituting Proceedings to
Determine Whether to Approve or Disapprove a
Proposed Rule Change, as Modified by Amendment
No. 1, to Amend the Requirements for Covered
Agency Transactions under FINRA Rule 4210
(Margin Requirements) as Approved Pursuant to
SR–FINRA–2015–036; File No. SR–FINRA–2021–
010).
12 15 U.S.C. 78o–3(b)(6).
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helping to promote stability in the
Covered Agency Transaction market.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
FINRA does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. FINRA
believes that extending the January 26,
2022 implementation date to April 26,
2022, pending any Commission action
on the Proposed Amendments, so as to
permit adjustment and alignment of the
implementation of the requirements
pursuant to SR–FINRA–2015–036, as
appropriate, with the effective date of
the Proposed Amendments, will help to
provide clarity to industry participants
and to reduce any potential uncertainty
in the Covered Agency Transaction
market, thereby benefiting all parties.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 13 and Rule 19b–
4(f)(6) thereunder.14
A proposed rule change filed under
Rule 19b–4(f)(6) 15 normally does not
become operative for 30 days after the
date of filing. However, pursuant to
Rule 19b–(f)(6)(iii),16 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest.
FINRA has requested that the
Commission waive the 30-day operative
delay so that the proposal may become
operative upon filing. FINRA has stated
that the purpose of the proposed rule
13 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
15 17 CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6)(iii). 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.
FINRA has satisfied this requirement.
14 17
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Federal Register / Vol. 86, No. 225 / Friday, November 26, 2021 / Notices
change is to help to avoid unnecessary
disruption in the Covered Agency
Transaction market pending any
Commission action on the amendments
that FINRA has proposed to the Covered
Agency Transaction margin
requirements. The Commission believes
that waiving the 30-day operative delay
is consistent with the protection of
investors and the public interest
because the proposal to extend the
implementation date of the
requirements of Rule 4210 does not
raise any new or novel issues and will
reduce any potential uncertainty in the
Covered Agency Transaction market.
Therefore, the Commission hereby
waives the 30-day operative delay
requirement and designates the
proposed rule change as 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–
FINRA–2021–028 on the subject line.
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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–FINRA–2021–028. 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
17 For purposes of waiving the 30-day operative
delay, the Commission has also considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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67559
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of
FINRA. All comments received will be
posted without change. Persons
submitting comments are cautioned that
we do not redact or edit personal
identifying information from comment
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–FINRA–
2021–028 and should be submitted on
or before December 17, 2021.
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Matthew DeLesDernier,
Assistant Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2021–25756 Filed 11–24–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93631; File No. SR–
PEARL–2021–56]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fee
Schedule
November 19, 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 November
8, 2021, MIAX PEARL, LLC (‘‘MIAX
Pearl’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Fmt 4703
Sfmt 4703
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the MIAX Pearl Options Fee
Schedule (the ‘‘Fee Schedule’’).
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/pearl at MIAX Pearl’s principal
office, and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
1. Purpose
The Exchange proposes to amend the
Fee Schedule to amend the exchange
groupings of options exchanges within
the routing fee table in Section 1)b) of
the Fee Schedule, Fees for Customer
Orders Routed to Another Options
Exchange. The Exchange initially filed
this proposal on October 27, 2021 (SR–
PEARL–2021–51) and withdrew such
filing on November 8, 2021. The
Exchange proposes to implement the fee
change effective November 8, 2021.
Currently, the Exchange assesses
routing fees based upon (i) the origin
type of the order, (ii) whether or not it
is an order for standard option classes
in the Penny Interval Program 3 (‘‘Penny
classes’’) or an order for standard option
classes which are not in the Penny
Interval Program (‘‘Non-Penny classes’’)
3 See Securities Exchange Act Release No. 88992
(June 2, 2020), 85 FR 35142 (June 8, 2020) (SR–
PEARL–2020–06) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 404, Series of Option Contracts
Open for Trading, and Rule 510, Minimum Price
Variations and Minimum Trading Increments, To
Conform the Rules to Section 3.1 of the Plan for the
Purpose of Developing and Implementing
Procedures Designed To Facilitate the Listing and
Trading of Standardized Options).
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]]>Agencies
[Federal Register Volume 86, Number 225 (Friday, November 26, 2021)]
[Notices]
[Pages 67557-67559]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25756]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93630; File No. SR-FINRA-2021-028]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Extend the Implementation Date of Certain
Amendments to FINRA Rule 4210 Approved Pursuant to SR-FINRA-2015-036
November 19, 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 November 12, 2021, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by FINRA. FINRA has designated
the proposed rule change as constituting a ``non-controversial'' rule
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which
renders the proposal effective upon receipt of this filing by the
Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to extend, to April 26, 2022, the implementation
date of the amendments to FINRA Rule 4210 (Margin Requirements)
pursuant to SR-FINRA-2015-036, other than the amendments pursuant to
SR-FINRA-2015-036 that were implemented on December 15, 2016. The
proposed rule change would not make any changes to the text of FINRA
rules.
The text of the proposed rule change is available on FINRA's
website at https://www.finra.org, at the principal office of FINRA and
at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, FINRA included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. FINRA has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
On October 6, 2015, FINRA filed with the Commission proposed rule
change SR-FINRA-2015-036, which proposed to amend FINRA Rule 4210 to
establish margin requirements for (1) To Be Announced (``TBA'')
transactions, inclusive of adjustable rate mortgage (``ARM'')
transactions; (2) Specified Pool Transactions; and (3) transactions in
Collateralized Mortgage Obligations (``CMOs''), issued in conformity
with a program of an agency or Government-Sponsored Enterprise
(``GSE''), with forward settlement dates, as defined more fully in the
filing (collectively, ``Covered Agency Transactions''). The Commission
approved SR-FINRA-2015-036 on June 15, 2016 (the ``Approval Date'').\4\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 78081 (June 15,
2016), 81 FR 40364 (June 21, 2016) (Notice of Filing of Amendment
No. 3 and Order Granting Accelerated Approval to a Proposed Rule
Change to Amend FINRA Rule 4210 (Margin Requirements) to Establish
Margin Requirements for the TBA Market, as Modified by Amendment
Nos. 1, 2, and 3; File No. SR-FINRA-2015-036).
---------------------------------------------------------------------------
Pursuant to Partial Amendment No. 3 to SR-FINRA-2015-036, FINRA
announced in Regulatory Notice 16-31 that the rule change would become
effective on December 15, 2017, 18 months from the Approval Date,
except that the risk limit determination requirements as set forth in
paragraphs (e)(2)(F), (e)(2)(G) and (e)(2)(H) of Rule 4210 and in new
Supplementary Material .05, each as respectively amended or established
by SR-FINRA-2015-036 (collectively, the ``risk limit determination
requirements''), would become effective on December 15, 2016, six
months from the Approval Date.\5\
---------------------------------------------------------------------------
\5\ See Partial Amendment No. 3 to SR-FINRA-2015-036 and
Regulatory Notice 16-31 (August 2016), both available at:
www.finra.org.
---------------------------------------------------------------------------
Industry participants sought clarification regarding the
implementation of the requirements pursuant to SR-FINRA-2015-036.
Industry participants also requested additional time to make system
changes necessary to comply with the requirements, including time to
test the system changes, and requested additional time to update or
amend
[[Page 67558]]
margining agreements and related documentation. In response, FINRA made
available a set of Frequently Asked Questions & Guidance \6\ and,
pursuant to SR-FINRA-2017-029,\7\ extended the implementation date of
the requirements of SR-FINRA-2015-036 to June 25, 2018, except for the
risk limit determination requirements, which, as announced in
Regulatory Notice 16-31, became effective on December 15, 2016.
---------------------------------------------------------------------------
\6\ Available at: www.finra.org/rules-guidance/guidance/faqs.
Further, staff of the SEC's Division of Trading and Markets made
available a set of Frequently Asked Questions regarding Exchange Act
Rule 15c3-1 and Rule 15c3-3 in connection with Covered Agency
Transactions under FINRA Rule 4210, also available at:
www.finra.org/rules-guidance/guidance/faqs.
\7\ See Securities Exchange Act Release No. 81722 (September 26,
2017), 82 FR 45915 (October 2, 2017) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change to Delay the Implementation
Date of Certain Amendments to FINRA Rule 4210 Approved Pursuant to
SR-FINRA-2015-036; File No. SR-FINRA-2017-029); see also Regulatory
Notice 17-28 (September 2017).
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Industry participants requested that FINRA reconsider the potential
impact of certain requirements pursuant to SR-FINRA-2015-036 on smaller
and mid-sized firms. Industry participants also requested that FINRA
extend the implementation date pending such reconsideration to reduce
potential uncertainty in the Covered Agency Transaction market. In
response to these concerns, FINRA further extended the implementation
date of the requirements of SR-FINRA-2015-036, other than the risk
limit determination requirements, most recently to January 26, 2022
(the ``January 26, 2022 implementation date'').\8\ FINRA noted that, as
FINRA stated in Partial Amendment No. 3 to SR-FINRA-2015-036, FINRA
would monitor the impact of the requirements pursuant to that
rulemaking and, if the requirements prove overly onerous or otherwise
are shown to negatively impact the market, FINRA would consider
revisiting such requirements as may be necessary to mitigate the rule's
impact.\9\
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\8\ See Securities Exchange Act Release No. 92897 (September 8,
2021), 86 FR 51207 (September 14, 2021) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change to Extend the
Implementation Date of Certain Amendments to FINRA Rule 4210
Approved Pursuant to SR-FINRA-2015-036; File No. SR-FINRA-2021-022).
\9\ See Partial Amendment No. 3 to SR-FINRA-2015-036, available
at: www.finra.org.
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Informed by extensive dialogue, both with industry participants and
other regulators, including the staff of the SEC and the Federal
Reserve System, FINRA has proposed amendments to the requirements of
SR-FINRA-2015-036 (the ``Proposed Amendments'').\10\ This rulemaking is
ongoing. FINRA believes it is appropriate, in the interest of
regulatory clarity, to adjust the implementation of the requirements
pursuant to SR-FINRA-2015-036 so as to permit time for the Commission
to take action on the Proposed Amendments.\11\ As such, FINRA is
proposing to extend the January 26, 2022 implementation date to April
26, 2022, which date FINRA may propose to further adjust as appropriate
in a separate rule filing pending any Commission action on the Proposed
Amendments. FINRA notes that the risk limit determination requirements
pursuant to SR-FINRA-2015-036 became effective on December 15, 2016
and, as such, the implementation of such requirements is not affected
by the proposed rule change.
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\10\ See Securities Exchange Act Release No. 91937 (May 19,
2021), 86 FR 28161 (May 25, 2021) (Notice of Filing of a Proposed
Rule Change to Amend the Requirements for Covered Agency
Transactions under FINRA Rule 4210 (Margin Requirements) as Approved
Pursuant to SR-FINRA-2015-036; File No. SR-FINRA-2021-010). See also
Partial Amendment No. 1 to SR-FINRA-2021-010, available at
www.finra.org.
\11\ See Securities Exchange Act Release No. 92713 (August 20,
2021) (Notice of Filing of Amendment No. 1 and Order Instituting
Proceedings to Determine Whether to Approve or Disapprove a Proposed
Rule Change, as Modified by Amendment No. 1, to Amend the
Requirements for Covered Agency Transactions under FINRA Rule 4210
(Margin Requirements) as Approved Pursuant to SR-FINRA-2015-036;
File No. SR-FINRA-2021-010).
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FINRA has filed the proposed rule change for immediate
effectiveness and has requested that the Commission waive the
requirement that the proposed rule change not become operative for 30
days after the date of the filing. The operative date will be the date
of filing of the proposed rule change.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\12\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. FINRA believes that the proposed rule change will help
to reduce potential uncertainty in the Covered Agency Transaction
market because, pending any Commission action on the Proposed
Amendments, the proposed rule change will permit adjustment and
alignment, as appropriate, of the implementation of the requirements
pursuant to SR-FINRA-2015-036 with the effective date of the Proposed
Amendments. FINRA believes that this will thereby protect investors and
the public interest by helping to promote stability in the Covered
Agency Transaction market.
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\12\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. FINRA believes that extending
the January 26, 2022 implementation date to April 26, 2022, pending any
Commission action on the Proposed Amendments, so as to permit
adjustment and alignment of the implementation of the requirements
pursuant to SR-FINRA-2015-036, as appropriate, with the effective date
of the Proposed Amendments, will help to provide clarity to industry
participants and to reduce any potential uncertainty in the Covered
Agency Transaction market, thereby benefiting all parties.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-(f)(6)(iii),\16\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. FINRA has requested
that the Commission waive the 30-day operative delay so that the
proposal may become operative upon filing. FINRA has stated that the
purpose of the proposed rule
[[Page 67559]]
change is to help to avoid unnecessary disruption in the Covered Agency
Transaction market pending any Commission action on the amendments that
FINRA has proposed to the Covered Agency Transaction margin
requirements. The Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest because the proposal to extend the implementation date of the
requirements of Rule 4210 does not raise any new or novel issues and
will reduce any potential uncertainty in the Covered Agency Transaction
market. Therefore, the Commission hereby waives the 30-day operative
delay requirement and designates the proposed rule change as operative
upon filing.\17\
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii). 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. FINRA has satisfied this requirement.
\17\ For purposes of waiving the 30-day operative delay, the
Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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-FINRA-2021-028 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2021-028. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10 a.m. and 3
p.m. Copies of such filing also will be available for inspection and
copying at the principal office of FINRA. All comments received will be
posted without change. Persons submitting comments are cautioned that
we do not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
FINRA-2021-028 and should be submitted on or before December 17, 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. 2021-25756 Filed 11-24-21; 8:45 am]
BILLING CODE 8011-01-P
