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, 50130-50133 [2022-17431]

Download as PDF khammond on DSKJM1Z7X2PROD with NOTICES 50130 Federal Register / Vol. 87, No. 156 / Monday, August 15, 2022 / Notices (the ‘‘Act’’) and rule 17d–1 under the Act to permit certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d–1 under the Act. SUMMARY OF APPLICATION: Applicants request an order to amend a previous order granted by the Commission that permits certain business development companies (‘‘BDCs’’) and closed-end management investment companies to co-invest in portfolio companies with each other and with certain affiliated investment entities. APPLICANTS: Rand Capital Corporation, Rand Capital Management, LLC, Rand Capital Sub LLC, Callodine Capital Management, LP, Callodine Credit Management, LLC, Callodine Strategic Credit, LLC, Bluearc Mezzanine Partners I, L.P., Callodine Asset Based Loan Fund II, LP, Callodine Perpetual ABL Fund, LP, Callodine Capital Fund, LP, Callodine Capital Offshore Fund, Ltd., Callodine Capital Master Fund, LP, Callodine BDC Income Fund, LP, Callodine Equity Income Fund, LP, Callodine Strategic Credit Fund II, LP, Thorofare, LLC, Thorofare Asset Based Lending Fund IV, L.P., Thorofare Asset Based Lending REIT Fund IV, LLC, Thorofare Asset Based Lending Fund V, L.P. and Thorofare Asset Based Lending REIT Fund V, LLC. FILING DATES: The application was filed on June 13, 2022, and amended on August 4, 2022. HEARING OR NOTIFICATION OF HEARING: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing on any application by emailing the SEC’s Secretary at Secretarys-Office@sec.gov and serving the Applicants with a copy of the request by email, if an email address is listed for the relevant Applicant below, or personally or by mail, if a physical address is listed for the relevant Applicant below. Hearing requests should be received by the Commission by 5:30 p.m. on September 2, 2022, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0–5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by emailing the Commission’s Secretary at Secretarys-Office@sec.gov. ADDRESSES: The Commission: Secretarys-Office@sec.gov. Applicants: James Morrow at jmorrow@ VerDate Sep<11>2014 17:24 Aug 12, 2022 Jkt 256001 callodine.com or Daniel Penberthy at dpenberthy@randcapital.com. Anne G. Oberndorf, Esq., Eversheds Sutherland (US) LLP, at anneoberndorf@evershedssutherland.us. FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, or Kaitlin C. Bottock, Branch Chief, at (202) 551–6825 (Division of Investment Management, Chief Counsel’s Office). SUPPLEMENTARY INFORMATION: For Applicants’ representations, legal analysis, and conditions, please refer to Applicants’ first amended and restated application, dated August 4, 2022, which may be obtained via the Commission’s website by searching for the file number at the top of this document, or for an Applicant using the Company name search field, on the SEC’s EDGAR system. The SEC’s EDGAR system may be searched at, at https://www.sec.gov/edgar/searchedgar/ legacy/companysearch.html. You may also call the SEC’s Public Reference Room at (202) 551–8090. For the Commission, by the Division of Investment Management, under delegated authority. J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–17425 Filed 8–12–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meetings 2:00 p.m. on Thursday, August 18, 2022. PLACE: The meeting will be held via remote means and/or at the Commission’s headquarters, 100 F Street NE, Washington, DC 20549. STATUS: This meeting will be closed to the public. MATTERS TO BE CONSIDERED: Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present. In the event that the time, date, or location of this meeting changes, an announcement of the change, along with the new time, date, and/or place of the meeting will be posted on the Commission’s website at https:// www.sec.gov. The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) and (10) and 17 CFR 200.402(a)(3), TIME AND DATE: PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matters at the closed meeting. The subject matter of the closed meeting will consist of the following topics: Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings; Resolution of litigation claims; and Other matters relating to examinations and enforcement proceedings. At times, changes in Commission priorities require alterations in the scheduling of meeting agenda items that may consist of adjudicatory, examination, litigation, or regulatory matters. CONTACT PERSON FOR MORE INFORMATION: For further information; please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551–5400. Authority: 5 U.S.C. 552b. Dated: August 11, 2022. Vanessa A. Countryman, Secretary. [FR Doc. 2022–17571 Filed 8–11–22; 11:15 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–95456; File No. SR–FINRA– 2022–023] 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 August 9, 2022. 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 July 29, 2022, 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 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 2 17 E:\FR\FM\15AUN1.SGM 15AUN1 Federal Register / Vol. 87, No. 156 / Monday, August 15, 2022 / Notices 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 24, 2023, 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 khammond on DSKJM1Z7X2PROD with NOTICES 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 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 VerDate Sep<11>2014 17:24 Aug 12, 2022 Jkt 256001 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 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 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>. 6 See Responses to Frequently Asked Questions Regarding Covered Agency Transactions Under FINRA Rule 4210, at: <https://www.finra.org/rulesguidance/guidance/faqs/responses-frequentlyasked-questions-regarding-covered-agencytransactions-under-finra-rule>. 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: <https://www.finra.org/rules-guidance/ guidance/faqs/responses-frequently-askedquestions-regarding-covered-agency-transactionsunder-finra-rule>. 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). PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 50131 reconsideration. 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 October 26, 2022 (the ‘‘October 26, 2022 implementation date’’),8 and, informed by extensive dialogue, both with industry participants and other regulators, including the staff of the SEC and the Federal Reserve System, FINRA proposed amendments to the requirements of SR–FINRA–2015–036 (the ‘‘Proposed Amendments’’).9 The SEC, pursuant to delegated authority, approved the Proposed Amendments on January 20, 2022; 10 however, the Commission has stated that, in accordance with Rule 431(e) of the Commission’s Rules of Practice, the delegated action approving the Proposed Amendments is stayed until the Commission orders otherwise (the ‘‘stay’’).11 FINRA believes it is appropriate, in the interest of regulatory clarity pending the stay, to adjust the implementation of the requirements pursuant to SR–FINRA–2015–036. As such, FINRA is proposing to extend the October 26, 2022 implementation date to April 24, 2023. FINRA notes that the stay on the delegated action approving the Proposed Amendments applies only 8 See Securities Exchange Act Release No. 94356 (March 3, 2022), 87 FR 13337 (March 9, 2022) (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–2022–003). 9 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, and Letter from Adam Arkel, Associate General Counsel, Office of General Counsel, FINRA, to Vanessa Countryman, Secretary, SEC, dated September 16, 2021, both available at: <www.finra.org>. 10 See Securities Exchange Act Release No. 94013 (January 20, 2022), 87 FR 4076 (January 26, 2022) (Order Granting Approval of 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). 11 See Letter from J. Matthew DeLesDernier, Assistant Secretary, SEC, to Adam Arkel, Associate General Counsel, FINRA, dated January 27, 2022, available at: <sec.gov>. See also Securities Exchange Act Release No. 94724 (April 14, 2022), 87 FR 23287 (April 19, 2022) (Order Granting Petition for Review and Scheduling Filing of Statements; In the Matter of Financial Industry Regulatory Authority, Inc. Regarding an Order Granting the Approval of 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). E:\FR\FM\15AUN1.SGM 15AUN1 50132 Federal Register / Vol. 87, No. 156 / Monday, August 15, 2022 / Notices to the Proposed Amendments and does not affect the amendments approved pursuant to SR–FINRA–2015–036. FINRA further notes that the risk limit determination requirements pursuant to SR–FINRA–2015–036 became effective on December 15, 2016, and, as such, are 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 serves the interest of regulatory clarity in the Covered Agency Transaction market pending the stay. FINRA believes that this will thereby protect investors and the public interest by helping to promote stability in the Covered Agency Transaction market. B. Self-Regulatory Organization’s Statement on Burden on Competition FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. FINRA believes that extending the October 26, 2022 implementation date to April 24, 2023, pending the stay, will help to provide clarity to industry participants and to promote stability in the Covered Agency Transaction market, thereby benefiting all parties. khammond on DSKJM1Z7X2PROD with NOTICES 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. 13 15 U.S.C. 78o–3(b)(6). VerDate Sep<11>2014 17:24 Aug 12, 2022 Jkt 256001 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. 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). 14 17 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 12 15 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 proposed rule change will help to provide clarity to industry participants and to promote stability in the Covered Agency Transaction market pending further Commission Action on the Proposed Amendments. 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 amendments to Rule 4210 pursuant to SR–FINRA– 2015–036 (other than the amendments pursuant to SR–FINRA–2015–036 that were implemented on December 15, 2016) 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 PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 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–2022–023 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–2022–023. 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–2022–023 and should be submitted on or before September 6, 2022. E:\FR\FM\15AUN1.SGM 15AUN1 Federal Register / Vol. 87, No. 156 / Monday, August 15, 2022 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 J. Matthew DeLesDernier, Deputy Director. [FR Doc. 2022–17431 Filed 8–12–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–95457; File No. SR– CboeBZX–2022–041] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule August 9, 2022. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on August 1, 2022, Cboe BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (the ‘‘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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) proposes to amend its fee schedule. 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/bzx/), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. khammond on DSKJM1Z7X2PROD with NOTICES 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 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 17:24 Aug 12, 2022 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its Fee Schedule applicable to its equities trading platform (‘‘BZX Equities’’) by eliminating the Supplemental Incentive Program under Footnote 1 (Add/Remove Volume Tiers). The Exchange proposes to implement these changes effective August 1, 2022. The Exchange first notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More specifically, the Exchange is only one of 16 registered equities exchanges, as well as a number of alternative trading systems and other off-exchange venues that do not have similar self-regulatory responsibilities under the Securities Exchange Act of 1934 (the ‘‘Act’’), to which market participants may direct their order flow. Based on publicly available information,3 no single registered equities exchange has more than 16% of the market share. Thus, in such a low-concentrated and highly competitive market, no single equities exchange possesses significant pricing power in the execution of order flow. The Exchange in particular operates a ‘‘Maker-Taker’’ model whereby it pays rebates to members that add liquidity and assesses fees to those that remove liquidity. The Exchange’s Fee Schedule sets forth the standard rebates and rates applied per share for orders that provide and remove liquidity, respectively. Currently, for orders in securities priced at or above $1.00, the Exchange provides a standard rebate of $0.00160 per share for orders that add liquidity and assesses a fee of $0.0030 per share for orders that remove liquidity. For orders in securities priced below $1.00, the Exchange does not provide a rebate or assess a fee for orders that add liquidity and assesses a fee of 0.30% of total dollar value for orders that remove liquidity. Additionally, in response to the competitive environment, the Exchange also offers tiered pricing, which provides Members with 3 See Cboe Global Markets, U.S. Equities Market Volume Summary, Month-to-Date (June 27, 2022), available at https://markets.cboe.com/us/equities/ market_statistics/. 18 17 VerDate Sep<11>2014 forth in sections A, B, and C below, of the most significant aspects of such statements. Jkt 256001 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 50133 opportunities to qualify for higher rebates or lower fees where certain volume criteria and thresholds are met. Tiered pricing provides an incremental incentive for Members to strive for higher tier levels, which provides increasingly higher benefits or discounts for satisfying more stringent criteria. Supplemental Incentive Program Pursuant to footnote 1 of the Fee Schedule, the Exchange currently offers three Supplemental Incentive Program tiers—one tier each for Fee Codes B 4, V,5 and Y.6 Each tier provides an additional enhanced rebate for Members that add a certain Tape ADAV 7 as a percentage of that Tape’s TCV.8 The Exchange no longer desires to maintain such tiers and therefore proposes to eliminate the Supplemental Program Incentive tiers for Tapes A, B, and C from the fee schedule. The Exchange would rather redirect future resources and funding into other programs and tiers intended to incentivize increased order flow. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.9 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 10 requirements that the rules of an exchange be 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 regulating, clearing, settling, processing information with respect to, and 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. Additionally, the Exchange believes the proposed rule change is consistent with 4 Orders yielding Fee Code ‘‘B’’ are displayed orders adding liquidity to BZX (Tape B). 5 Orders yielding Fee Code ‘‘V’’ are displayed orders adding liquidity to BZX (Tape A). 6 Orders yielding Fee Cody ‘‘Y’’ are displayed orders adding liquidity to BZX (Tape C). 7 ‘‘ADAV’’ means average daily added volume calculated as the number of shares added per day and is calculated on a monthly basis. 8 ‘‘TCV’’ means total consolidated volume calculated as the volume reported by all exchanges and trade reporting facilities to a consolidated transaction reporting plan for the month for which the fees apply. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). E:\FR\FM\15AUN1.SGM 15AUN1

Agencies

[Federal Register Volume 87, Number 156 (Monday, August 15, 2022)]
[Notices]
[Pages 50130-50133]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17431]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95456; File No. SR-FINRA-2022-023]


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

August 9, 2022.
    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 July 29, 2022, 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

[[Page 50131]]

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 24, 2023, 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\
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    \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).
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    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\
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    \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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    Industry participants sought clarification regarding the 
implementation of the requirements pursuant to SR-FINRA-2015-036. 
Industry participants also requested additional time to make system 
changes necessary to comply with the requirements, including time to 
test the system changes, and requested additional time to update or 
amend margining agreements and related documentation. In response, 
FINRA made available a set of Frequently Asked Questions & Guidance \6\ 
and, pursuant to SR-FINRA-2017-029,\7\ extended the implementation date 
of the requirements of SR-FINRA-2015-036 to June 25, 2018, except for 
the risk limit determination requirements, which, as announced in 
Regulatory Notice 16-31, became effective on December 15, 2016.
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    \6\ See Responses to Frequently Asked Questions Regarding 
Covered Agency Transactions Under FINRA Rule 4210, at: <https://www.finra.org/rules-guidance/guidance/faqs/responses-frequently-asked-questions-regarding-covered-agency-transactions-under-finra-rule>. 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: 
<https://www.finra.org/rules-guidance/guidance/faqs/responses-frequently-asked-questions-regarding-covered-agency-transactions-under-finra-rule>.
    \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. 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 October 26, 2022 
(the ``October 26, 2022 implementation date''),\8\ and, informed by 
extensive dialogue, both with industry participants and other 
regulators, including the staff of the SEC and the Federal Reserve 
System, FINRA proposed amendments to the requirements of SR-FINRA-2015-
036 (the ``Proposed Amendments'').\9\
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    \8\ See Securities Exchange Act Release No. 94356 (March 3, 
2022), 87 FR 13337 (March 9, 2022) (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-2022-003).
    \9\ 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, and Letter from Adam 
Arkel, Associate General Counsel, Office of General Counsel, FINRA, 
to Vanessa Countryman, Secretary, SEC, dated September 16, 2021, 
both available at: <www.finra.org>.
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    The SEC, pursuant to delegated authority, approved the Proposed 
Amendments on January 20, 2022; \10\ however, the Commission has stated 
that, in accordance with Rule 431(e) of the Commission's Rules of 
Practice, the delegated action approving the Proposed Amendments is 
stayed until the Commission orders otherwise (the ``stay'').\11\ FINRA 
believes it is appropriate, in the interest of regulatory clarity 
pending the stay, to adjust the implementation of the requirements 
pursuant to SR-FINRA-2015-036. As such, FINRA is proposing to extend 
the October 26, 2022 implementation date to April 24, 2023. FINRA notes 
that the stay on the delegated action approving the Proposed Amendments 
applies only

[[Page 50132]]

to the Proposed Amendments and does not affect the amendments approved 
pursuant to SR-FINRA-2015-036. FINRA further notes that the risk limit 
determination requirements pursuant to SR-FINRA-2015-036 became 
effective on December 15, 2016, and, as such, are not affected by the 
proposed rule change.
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    \10\ See Securities Exchange Act Release No. 94013 (January 20, 
2022), 87 FR 4076 (January 26, 2022) (Order Granting Approval of 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).
    \11\ See Letter from J. Matthew DeLesDernier, Assistant 
Secretary, SEC, to Adam Arkel, Associate General Counsel, FINRA, 
dated January 27, 2022, available at: <sec.gov>. See also Securities 
Exchange Act Release No. 94724 (April 14, 2022), 87 FR 23287 (April 
19, 2022) (Order Granting Petition for Review and Scheduling Filing 
of Statements; In the Matter of Financial Industry Regulatory 
Authority, Inc. Regarding an Order Granting the Approval of 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).
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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 serves 
the interest of regulatory clarity in the Covered Agency Transaction 
market pending the stay. 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 October 26, 2022 implementation date to April 24, 2023, pending the 
stay, will help to provide clarity to industry participants and to 
promote stability 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 
proposed rule change will help to provide clarity to industry 
participants and to promote stability in the Covered Agency Transaction 
market pending further Commission Action on the Proposed Amendments.
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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.
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    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 
amendments to Rule 4210 pursuant to SR-FINRA-2015-036 (other than the 
amendments pursuant to SR-FINRA-2015-036 that were implemented on 
December 15, 2016) 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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    \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 sec.gov">[email protected]sec.gov. Please include 
File Number SR-FINRA-2022-023 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-2022-023. 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-2022-023 and should be 
submitted on or before September 6, 2022.


[[Page 50133]]


    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,
Deputy Director.
[FR Doc. 2022-17431 Filed 8-12-22; 8:45 am]
BILLING CODE 8011-01-P
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