Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Proposed Rules 2311 

■ 5. Revise § 304.1 to read as follows: 

§ 304.1 Purpose. 

This subpart informs the public where 

it may obtain forms and instructions for 

reports, applications, and other 

submittals used by the FDIC, and 

describes certain forms that are not 

described elsewhere in FDIC 

regulations. 

§ § 304.15–304.20 [Reserved] 

■ 6. Reserve §§ 304.15 through 304.20. 

■ 7. Add subpart C to read as follows: 

Subpart C—Computer-Security Incident 

Notification 

Sec. 

304.21 Authority, purpose, and scope. 

304.22 Definitions. 

304.23 Notification. 

304.24 Bank service provider notification. 

Subpart C—Computer-Security 

Incident Notification 

§ 304.21 Authority, purpose, and scope. 

(a) Authority. This subpart is issued 

under the authority of 12 U.S.C. 1463, 

1811, 1813, 1817, 1819, and 1861–1867. 

(b) Purpose. This subpart promotes 

the timely notification of significant 

computer-security incidents that affect 

FDIC-supervised institutions and their 

service providers. 

(c) Scope. This subpart applies to all 

insured state nonmember banks, insured 

state licensed branches of foreign banks, 

and State savings associations. This 

subpart also applies to bank service 

providers, as defined in § 304.22(b)(2). 

§ 304.22 Definitions. 

(a) Except as modified in this subpart, 

or unless the context otherwise requires, 

the terms used in this subpart have the 

same meanings as set forth in 12 U.S.C. 

1813. 

(b) For purposes of this subpart, the 

following definitions apply: 

(1) Banking organization means an 

FDIC-supervised insured depository 

institution, including all insured state 

nonmember banks, insured statelicensed branches of foreign banks, and 

State savings associations. 

(2) Bank service provider means a 

bank service company or other person 

providing services to a banking 

organization that is subject to the Bank 

Service Company Act (12 U.S.C. 1861– 

1867). 

(3) Business line means products or 

services offered by a banking 

organization to serve its customers or 

support other business needs. 

(4) Computer-security incident is an 

occurrence that: 

(i) Results in actual or potential harm 

to the confidentiality, integrity, or 

availability of an information system or 

the information that the system 

processes, stores, or transmits; or 

(ii) Constitutes a violation or 

imminent threat of violation of security 

policies, security procedures, or 

acceptable use policies. 

(5) Notification incident is a 

computer-security incident that a 

banking organization believes in good 

faith could materially disrupt, degrade, 

or impair— 

(i) The ability of the banking 

organization to carry out banking 

operations, activities, or processes, or 

deliver banking products and services to 

a material portion of its customer base, 

in the ordinary course of business; 

(ii) Any business line of a banking 

organization, including associated 

operations, services, functions and 

support, and would result in a material 

loss of revenue, profit, or franchise 

value; or 

(iii) Those operations of a banking 

organization, including associated 

services, functions and support, as 

applicable, the failure or discontinuance 

of which would pose a threat to the 

financial stability of the United States. 

(6) Person has the same meaning as 

set forth at 12 U.S.C. 1817(j)(8)(A). 

§ 304.23 Notification. 

A banking organization must notify 

the FDIC of a notification incident 

through any form of written or oral 

communication, including through any 

technological means, to a designated 

point of contact identified by the FDIC. 

The FDIC must receive this notification 

from the banking organization as soon 

as possible and no later than 36 hours 

after the banking organization believes 

in good faith that a notification incident 

has occurred. 

§ 304.24 Bank service provider 

notification. 

A bank service provider is required to 

notify at least two individuals at each 

affected banking organization customer 

immediately after the bank service 

provider experiences a computersecurity incident that it believes in good 

faith could disrupt, degrade, or impair 

services provided subject to the Bank 

Service Company Act (12 U.S.C. 1861– 

1867) for four or more hours. 

§ § 304.25–304.30 [Reserved] 

■ 8. Reserve §§ 304.25 through 304.30. 

Brian P. Brooks, 

Acting Comptroller of the Currency. 

By order of the Board of Governors of the 

Federal Reserve System. 

Ann Misback, 

Secretary of the Board. 

Federal Deposit Insurance Corporation. 

By order of the Board of Directors. 

Dated at Washington, DC, on or about 

December 15, 2020. 

James P. Sheesley, 

Assistant Executive Secretary. 

[FR Doc. 2020–28498 Filed 1–11–21; 8:45 am] 

BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Part 240 

[Release No. 34–90769; File No. S7–23–20] 

Notice of Proposed Conditional 

Exemptive Order Granting a 

Conditional Exemption From the 

Information Review Requirement and 

the Recordkeeping Requirement Under 

the Securities Exchange Act of 1934 

for Certain Publications or 

Submissions of Broker-Dealer 

Quotations on an Expert Market 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Notice of proposed conditional 

exemptive order; request for comment. 

SUMMARY: Pursuant to Section 36(a)(1) of 

the Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’) and Rule 15c2–11 

under the Exchange Act (as published in 

the Federal Register on October 27, 

2020, ‘‘Amended Rule 15c2–11’’ or the 

‘‘Amended Rule’’), the Securities and 

Exchange Commission (the ‘‘SEC’’ or the 

‘‘Commission’’) is proposing to grant 

exemptive relief, subject to certain 

conditions, to permit broker-dealers to 

publish or submit proprietary 

quotations for securities, on a 

continuous basis, in a market where the 

distribution of such quotations is 

restricted to sophisticated or 

professional investors, without 

complying with the information review 

and recordkeeping requirements of 

Amended Rule 15c2–11(a)(1)(i) and 

(d)(1)(i)(A), respectively. 

DATES: Comments should be received on 

or before February 11, 2021. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/exorders.shtml); or 

• Send an email to rule-comments@

sec.gov. 

Paper Comments 

• Send paper comments to Secretary, 

Securities and Exchange Commission, 

100 F Street NE, Washington, DC 

20549–1090. 


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1The ‘‘information review requirement’’ refers to 

the Amended Rule’s requirement to obtain and 

review specified issuer information, and to have a 

reasonable basis under the circumstances for 

believing, based on a review of such information, 

together with any applicable supplemental 

information also specified under the Amended 

Rule, that the issuer information is accurate in all 

material respects and is from reliable sources, 

before a broker-dealer may publish or submit a 

quotation to initiate or resume a quoted market in 

the issuer’s security. 

2See Publication or Submission of Quotations 

Without Specified Information, Exchange Act 

Release No. 89891 (Sept. 16, 2020), 85 FR 68124, 

68172 (Oct. 27, 2020) (‘‘Adopting Release’’). The 

compliance date that is nine months after the 

effective date of the Rule is referred to herein as the 

‘‘Compliance Date.’’ Between the effective date and 

the Compliance Date, broker-dealers must comply 

with the provisions of Rule 15c2–11 prior to 

amendment. The compliance date for paragraph 

(b)(5)(i)(M) of the Amended Rule is two years after 

the effective date of the Amended Rule. 

3See Amended Rule 15c2–11(e)(2) (defining the 

term ‘‘current’’), (e)(5) (defining the term ‘‘publicly 

available’’). 

4See Amended Rule 15c2–11(a)(1)(i)(B). The 

Rule’s recordkeeping requirement is unchanged 

under the amendments, except broker-dealers no 

longer have to preserve documents that are 

available on the Commission’s Electronic Data 

Gathering, Analysis and Retrieval System 

(‘‘EDGAR’’). See Amended Rule 15c2–11(d)(1)(i)(A). 

5See Amended Rule 15c2–11(f)(3)(i)(C) (requiring 

an issuer’s specified information to be, depending 

on the regulatory status of the issuer, one of the 

following: (1) Current and publicly available; (2) 

timely filed (i.e., filed by the prescribed due date 

for a report or statement as required by an Exchange 

Act or Securities Act of 1933 (the ‘‘Securities Act’’) 

reporting obligation); or (3) filed within 180 

calendar days from a specified period); see also 

Amended Rule 15c2–11(e)(3) (defining the term 

‘‘interdealer quotation system’’). For purposes of 

this proposed exemptive order, these requirements 

with respect to the piggyback exception are referred 

to as the requirement to be ‘‘current and publicly 

available.’’ The amendments also (1) modify the 

piggyback exception’s frequency-of-quotation 

requirement by eliminating both the 12-businessday requirement and the 30-calendar-day window 

while still requiring that no more than four business 

days in succession elapse without a quotation, see 

Amended Rule 15c2–11(f)(3)(i)(A), and (2) limit the 

amount of time during which broker-dealers may 

rely on the exception to quote securities of issuers 

that they have a reasonable basis under the 

circumstances for believing are shell companies, see 

Amended Rule 15c2–11(f)(3)(B)(2). 

6Comments are available on the Commission’s 

website at https://www.sec.gov/comments/s7/14/ 

19/s71419.htm. 7 Grey market securities are securities that trade 

over-the-counter but for which no quoted prices are 

published or submitted in a quotation medium for 

buyers and sellers to access. 8See Adopting Release at 68145. 9 Id. 

10The exemptive authority provision of Rule 

15c2–11 has been re-lettered from paragraph (h) to 

paragraph (g) under the Amended Rule. In addition, 

the standard for exemptive authority under the 

Amended Rule conforms to the provision for 

exemptive authority in Section 36 of the Exchange 

Act. See id. at 68167. 

11See id. at 68145. 

All submissions should refer to File 

Number S7–23–20. This file number 

should be included on the subject line 

if email is used. To help us 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/ 

exorders.shtml). Comments are also 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549–1090 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that the Commission does not 

redact or edit personal identifying 

information from comment submissions. 

Commenters should submit only 

information that they wish to make 

available publicly. 

FOR FURTHER INFORMATION CONTACT: John 

Guidroz, Branch Chief, James Curley, 

Laura Gold, Theresa Hajost, Patrice 

Pitts, Special Counsels, Elizabeth 

Sandoe, Senior Special Counsel, 

Josephine Tao, Assistant Director, or 

Mark Wolfe, Associate Director, at (202) 

551–5777, in the Division of Trading 

and Markets, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Adoption of Amendments to Rule 

15c2–11 

Rule 15c2–11 specifies key, basic 

issuer information that must be obtained 

and reviewed before a broker-dealer 

may initiate (or resume) quotations for 

a security in a market other than a 

national securities exchange, subject to 

certain exceptions.1 The Amended Rule 

becomes effective on December 28, 

2020. Except for paragraph (b)(5)(i)(M) 

of the Amended Rule, compliance is 

required nine months following the 

effective date, on September 28, 2021 

(the ‘‘Compliance Date’’).2

Under the Amended Rule, certain 

applicable issuer information must be 

‘‘current’’ and ‘‘publicly available,’’ as 

those terms are defined in the Amended 

Rule,3 for a broker-dealer to initiate (or 

resume) a quoted market in the issuer’s 

security after complying with the 

information review requirement.4

Further, with respect to the ‘‘piggyback’’ 

exception, which allows a broker-dealer 

to rely on the quotations of the brokerdealer that initially complied with the 

information review requirement to 

maintain continuous quotations for the 

security in an interdealer quotation 

system (an ‘‘IDQS’’), the amendments 

require that applicable issuer 

information also must be current and 

publicly available, timely filed, or filed 

within 180 calendar days from the end 

of the issuer’s most recent fiscal year or 

any quarterly reporting period that is 

covered by a report required by Section 

13 or 15(d) of the Exchange Act, as 

applicable.5 As a result, on the 

Compliance Date, broker-dealers may 

not rely on the piggyback exception to 

maintain a quoted market in the 

securities of issuers for which 

information is not current and publicly 

available. 

The Commission received comments 

on the proposed amendments to Rule 

15c2–11 that expressed interest in the 

formation of an ‘‘expert market’’ for 

certain securities that become ineligible 

for quotation after the Compliance Date 

because the information required by the 

Rule is not current and publicly 

available for the issuers of those 

securities.6 In response to comments, 

the Commission stated that, under 

certain conditions and circumstances, 

an ‘‘expert market’’ could enhance 

liquidity for sophisticated or 

professional investors in grey market 

securities,7 as well as for small 

companies seeking growth opportunities 

that might prefer to be quoted in a 

market that is limited to such persons.8

The Commission stated that it 

‘‘preliminarily believes that any such 

expert market must not have the 

potential to develop into a parallel 

market for which quotations are 

accessible by retail investors and the 

general public.’’ 9

The Commission stated that it has the 

authority to issue exemptive relief by 

order, under Section 36 of the Exchange 

Act and under the Amended Rule,10 to 

facilitate the formation and 

implementation of such an expert 

market. The Commission also stated 

that, in doing so, it may consider certain 

safeguards to protect retail investors, 

such as (1) the types of investors who 

may access quotations in this market 

(e.g., sophisticated investors that have 

the ability to assess an investment 

opportunity, including the ability to 

analyze its risks and rewards), and (2) 

the types of securities that may be 

quoted in such a market (e.g., those that 

were quoted in reliance on the 

piggyback exception on the business 

day preceding the initial quotation that 

is published or submitted in any such 

market).11

B. Request for Exemptive Relief by OTC 

Link LLC 

In response to the Commission’s 

discussion, OTC Link® LLC (‘‘OTC Link 

LLC’’), a wholly owned subsidiary of 

OTC Markets Group Inc. (‘‘OTC Markets 

Group’’), has submitted a request on 


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12All Subscribers to OTC Link ATS are required 

to be broker-dealer members of the Financial 

Industry Regulatory Authority (‘‘FINRA’’) and must 

enter into a subscription agreement with OTC Link 

LLC that outlines the terms and conditions of their 

use of OTC Link ATS. All OTC Link ATS 

Subscribers can access all market tiers, including 

the Expert Market. Under the proposed conditional 

exemptive order, all quotations published or 

submitted on the Expert Market would be 

attributable to Subscribers at prices at which such 

Subscribers are prepared to trade. See, e.g., FINRA 

Rule 5220. 

13Although OTC Link LLC is requesting relief on 

behalf of its Subscribers using the Expert Market on 

OTC Link ATS, OTC Link LLC is not requesting the 

same relief for OTC Link ATS, as a quotation 

medium, because OTC Link ATS does not publish 

or submit quotations on the Expert Market and, 

thus, does not engage in activity that is subject to 

the provisions of Amended Rule 15c2–11. 

14 ‘‘Delayed’’ quotations, for the purpose of this 

proposal, do not include ‘‘end-of-day’’ quotation 

information, which is defined in the MDDA, and is 

generally understood to mean information 

consisting of a snapshot of the best bid price and 

size and the best ask price and size for a security, 

taken at the close of regular trading hours. End-ofday quotation information does not include the 

identity of the broker-dealer(s) that published or 

submitted the quotation(s) that make up the ‘‘endof-day’’ quotation. End-of-day information is used 

by broker-dealers, custodian banks, clearing firms, 

prime brokers and service bureaus for valuation, 

settlement, accounting, clearing and custody 

purposes because it can be more accurate, than last 

transaction information. Thus, end-of-day quotation 

information that is used by broker-dealers in 

providing valuation, settlement, accounting, 

clearing, and custody information to its customers 

may be viewed by retail investors and the general 

public; however, it is not actionable for the 

purposes of effecting transactions. 

15The term ‘‘accredited investor’’ includes, 

among other things, any bank as defined in Section 

3(a)(2) of the Securities Act, broker or dealer 

Continued 

behalf of certain broker-dealers for an 

exemption from the Amended Rule’s 

information review requirement and 

recordkeeping requirement to permit 

such broker-dealers to publish or 

submit, on a continuous basis, 

proprietary quotations for certain 

securities of issuers for which there is 

no current and publicly available 

information, and in other specified 

circumstances, on one of its electronic 

platforms where the distribution of such 

quotations is limited to sophisticated or 

professional investors. 

OTC Link LLC operates trading 

platforms on which broker-dealers 

provide liquidity and execution services 

for over 11,000 U.S. and global 

securities. One such platform is OTC 

Link ATS, an alternative trading system 

(‘‘ATS’’) that meets the definition of a 

‘‘qualified interdealer quotation system’’ 

under paragraph (e)(6) of the Amended 

Rule. The securities that are quoted on 

OTC Link ATS are organized into 

market tiers based on several factors, 

including the public availability of 

current issuer information and whether 

an issuer meets minimum financial 

thresholds. These market tiers include 

the OTCQX® Best Market, the OTCQB®

Venture Market, the Pink Open Market, 

and the Expert Market. The Expert 

Market is a distinct market tier on 

which OTC Link LLC’s broker-dealer 

subscribers (each, a ‘‘Subscriber’’ and 

collectively, the ‘‘Subscribers’’) 12 can, 

among other things, find price 

transparency in certain securities that 

may not be eligible or suitable for retail 

investors. Currently, the distribution of 

quotations for securities that are 

published or submitted on the Expert 

Market is limited to broker-dealers, and 

OTC Link ATS does not make such 

quotations available to the general 

public. In requesting exemptive relief on 

behalf of the Subscribers, OTC Link LLC 

plans to modify the Expert Market to 

include the safeguards described 

below.13

The Commission is proposing to grant 

OTC Link LLC’s request for exemptive 

relief and issue a conditional exemptive 

order as outlined below. 

1. Distribution of Expert Market Quotes 

and Data 

Quotations published or submitted on 

the Expert Market are clearly identified 

in a data feed to which OTC Markets 

Group controls which Subscribers, 

market data distributors, and users have 

access. OTC Markets Group currently 

limits the distribution of quotations 

published or submitted on the Expert 

Market solely to broker-dealers. Under 

the proposed conditional exemptive 

order, OTC Markets Group would 

authorize market data distributors, 

including Subscribers, to be eligible to 

receive quotations published or 

submitted on the Expert Market and to 

distribute such data to Subscribers who 

comply with certain obligations and 

restrictions on data access. As Expert 

Market quotations are clearly identified 

in the data feed, recipients would be 

able to control their distribution and 

display. 

Under the proposed exemptive relief, 

all entities that distribute OTC Markets 

Group’s market data, including 

Subscribers, would be required to enter 

into a Market Data Distribution 

Agreement (‘‘MDDA’’) directly with 

OTC Markets Group. OTC Markets 

Group would control which market data 

distributors are permitted to receive 

market data, and the MDDA would 

require each such market data 

distributor to report all end-users to 

OTC Markets Group. OTC Markets 

Group would distribute quotations 

published or submitted on the Expert 

Market to market data distributors that 

agree to the MDDA’s contractual and 

data access restrictions that limit the 

distribution and display of quotations to 

certain eligible investors, as described 

below. Accordingly, real-time and 

delayed quotations 14 published or 

submitted on the Expert Market would 

not be permitted to be distributed or 

displayed to the general public. Further, 

pursuant to the MDDA, market data 

distributors must require any person to 

whom they distribute quotations 

published or submitted on the Expert 

Market that is not party to the MDDA to 

agree, by contract, not to distribute such 

quotations to any person that is not a 

permitted recipient as described herein. 

In operating the Expert Market under 

the proposed exemptive relief, OTC 

Link LLC would establish, maintain, 

and enforce written policies and 

procedures that are reasonably designed 

to allow only permitted recipients to 

view, and to prevent the general public 

from viewing, quotations published or 

submitted on the Expert Market. OTC 

Link LLC also would establish, 

maintain, and enforce policies and 

procedures to regularly surveil the use 

of the Expert Market data feed. Further, 

under its written policies and 

procedures, OTC Link LLC would 

determine whether market data 

distributors, including Subscribers, are 

complying with the terms of the MDDA. 

OTC Link LLC would regularly review 

activity on the Expert Market and would 

establish, maintain, and enforce policies 

and procedures that provide for further 

review and escalation of issues, 

including irregular quotation activities 

that may indicate fraudulent behavior 

(e.g., unusually high volumes) and noncompliance with the MDDA. Escalation 

of issues may include a determination of 

whether any market data distributor or 

Subscriber should be denied further 

access to the Expert Market or whether 

a detailed referral should be made to 

FINRA or Commission staff, or both. 

2. Permitted Recipients of Quotations 

Published or Submitted on the Expert 

Market 

As described above, the distribution 

of real-time and delayed quotations 

published or submitted on the Expert 

Market would be limited exclusively to 

market data distributors, including 

Subscribers, and certain types of 

sophisticated or professional investors, 

specifically, the following categories of 

market participants (each, a ‘‘Qualified 

Expert’’ and collectively, the ‘‘Qualified 

Experts’’): (1) Any qualified institutional 

buyer, as defined in Rule 144(A)(a)(1) 

under the Securities Act; and (2) any 

accredited investor, as defined in Rule 

501(a) of Regulation D; 15 and (3) any 


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registered pursuant to Section 15 of the Exchange 

Act, investment adviser registered pursuant to 

Section 203 of the Investment Advisers Act of 1940, 

and investment company registered under the 

Investment Company Act of 1940. See Rule 

501(a)(1) of Regulation D. The term ‘‘accredited 

investor’’ also includes any entity of a type not 

listed in Rule 501(a)(1), that is not formed for the 

specific purpose of acquiring the securities offered, 

that own investments in excess of $5,000,000, 

which could include a foreign bank or other nonU.S. financial institution. See Rule 501(a)(9) of 

Regulation D. 

16OTC Link LLC has requested that foreign 

broker-dealers, as defined in Exchange Act Rule 

15a–6(b)(3), be included in the list of Qualified 

Experts. The Commission is seeking comment, 

below, regarding whether foreign broker-dealers, as 

defined in Exchange Act Rule 15a–6(b)(3), should 

be included in the list of Qualified Experts. 

17Qualified Experts that receive Expert Market 

data directly from OTC Markets Group would be 

subject to a subscriber agreement that contractually 

limits any further distribution. 

18As described above in Part I.B.1, market data 

distributors, including Subscribers, would be 

contractually required to ensure that the recipients 

of quotations published or submitted on the Expert 

Market meet the definition of a Qualified Expert. 

19A quoted market on the Expert Market for such 

security would have to commence within the first 

four business days from the date on which it loses 

eligibility to be quoted in reliance on the piggyback 

exception. 

20A quoted market on the Expert Market for such 

security would have to commence within the first 

four business days from the date on which it loses 

eligibility to be quoted in reliance on the piggyback 

exception. 

21The issuers of such securities would be subject 

to oversight of the bankruptcy court. After 

confirmation of the bankruptcy plan, the 

bankruptcy courts may direct the company and 

others to carry out the plan. See 28 U.S.C. 1142. 

22A quoted market on the Expert Market for such 

security must commence within 90 calendar days 

from the date on which it is issued. 

23See supra notes 19 and 20. 

24OTC Link LLC would remove any such flag if 

it becomes aware of a Commission or court order 

finding for the successful challenge of the 

applicable trading suspension. 

25See Adopting Release at 68145, 68198. 

26 Id. at 68145. 

qualified purchaser, as defined in 

Section 2(a)(51)(A) of the Investment 

Company Act of 1940 (the ‘‘Investment 

Company Act’’) and the rules 

thereunder.16 Qualified Experts may 

receive quotations published or 

submitted on the Expert Market directly 

from OTC Markets Group, from any 

market data distributor or Subscriber 

that has entered into the MDDA with 

OTC Markets Group, or from both.17

OTC Markets Group would also 

distribute quotations for an issuer’s 

security published or submitted on the 

Expert Market to the issuer of any such 

security if the issuer contractually 

agrees not to distribute such quotations, 

directly or indirectly, to any person that 

is not a current officer, director, or 

employee of the issuer.18

3. Categories of Expert Market Securities 

The subject of Subscribers’ 

proprietary quotations that can be 

published or submitted on the Expert 

Market would be restricted to the 

following categories of securities: (1) 

Any security that is quoted in reliance 

on the piggyback exception prior to the 

Compliance Date and loses such 

eligibility upon the Compliance Date 

due to a lack of current and publicly 

available information about the issuer of 

the security; 19 (2) any security that is 

quoted in reliance on the piggyback 

exception following the Compliance 

Date and subsequently loses such 

eligibility due to a lack of current and 

publicly available information about the 

issuer of the security, the issuer’s status 

as a shell company, or a failure to meet 

the frequency-of-quotation 

requirement; 20 and (3) any security that 

is issued in conjunction with a Chapter 

11 bankruptcy plan confirmed pursuant 

to Section 1129 of the U.S. Bankruptcy 

Code (the ‘‘Code’’) 21 and is exempt from 

registration in accordance with Section 

1145 of the Code.22

In addition, OTC Link LLC would 

remove from the Expert Market 

quotations for any security that fits 

within the following two categories: (1) 

Any security of an issuer that is the 

subject of a registration revocation or 

trading suspension order issued by the 

Commission pursuant to Section 12(j) or 

12(k) of the Exchange Act, respectively; 

and (2) any security of an issuer that 

OTC Link LLC has identified as 

‘‘defunct’’ (i.e., it has ceased operations, 

ceased to exist, or has failed to respond 

to inquiries by OTC Link LLC). Once the 

applicable Section 12(k) trading 

suspension order terminates or the 

subject security is re-registered with the 

Commission following an applicable 

Section 12(j) revocation order, in order 

to be quoted on the Expert Market, the 

subject security must either (1) gain and 

then lose eligibility to be quoted in 

reliance on the piggyback exception or 

(2) be issued in conjunction with a 

Chapter 11 bankruptcy plan and be 

quoted on the Expert Market in 

accordance with the timing 

requirements discussed above.23

In addition, OTC Link LLC would flag 

on its website any ‘‘formerly’’ 

suspended security for such period of 

time as set forth in OTC Link LLC’s 

policies and procedures, which OTC 

Link LLC represents would be for two 

years following the applicable trading 

suspension.24

II. Discussion of Proposed Relief 

As a result of the amendments to Rule 

15c2–11, after the Compliance Date, 

broker-dealers must withdraw from 

publishing or submitting quotations in a 

quotation medium for securities of 

issuers for which information is not 

current and publicly available, and such 

securities may migrate to the grey 

market, where no quoted prices are 

published in a quotation medium for 

buyers and sellers to access and 

transact. As the Commission stated in 

the Adopting Release, this may impose 

costs on potential and existing investors 

by reducing liquidity for these securities 

and potentially resulting in less efficient 

pricing. Further, the loss of a quoted 

market and the information embedded 

in share prices may adversely impact an 

issuer’s ability to raise capital through 

stock issuances or through other 

channels of finance, such as debt. The 

Commission also noted that investors in 

securities in the grey market may be 

more susceptible to fraud.25

As described above, the Commission 

also stated in the Adopting Release that 

it could be beneficial to establish an 

‘‘expert market’’ that would enhance 

liquidity for sophisticated or 

professional investors and promote 

growth opportunities for certain small 

companies, although the comments 

received on the proposal provided 

insufficient detail as to how that market 

would function, safeguard retail 

investors from fraud and manipulation, 

and facilitate regulatory oversight.26 In 

its December 21, 2020 request, OTC 

Link LLC made certain representations 

regarding how the Expert Market would 

function with safeguards to reduce the 

potential for certain retail investors to 

be harmed by fraud and manipulation, 

as well as representations regarding how 

OTC Link LLC would establish, 

maintain, and enforce written policies 

and procedures reasonably designed to 

facilitate the integrity and Commission 

oversight of the Expert Market. Based on 

these and other facts and 

representations made in OTC Link 

LLC’s December 21, 2020 request, the 

Commission preliminarily believes that 

it is necessary or appropriate in the 

public interest, and is consistent with 

the protection of investors, to grant, 

subject to the conditions described 

below, exemptive relief pursuant to 

Section 36(a)(1) of the Exchange Act and 

Rule 15c2–11 to permit Subscribers to 

publish or submit proprietary 

quotations on the Expert Market, on a 

continuous basis, without complying 

with the requirements of Amended Rule 

15c2–11(a)(1)(i) and (d)(1)(i)(A). The 

Commission notes that OTC Link LLC 

may implement additional conditions, 

criteria, or noticing mechanisms for 

certain quotations on its platform by 

Subscribers as it may find appropriate, 

including as to whether additional 


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27As discussed above in Part I.B, quotations 

published or submitted on the Expert Market would 

be accessible to market data distributors, including 

Subscribers, that have contractually agreed to not 

distribute quotations published or submitted on the 

Expert Market to persons who are ineligible to 

access such information (i.e., non-Qualified 

Experts), including to the general public. 

28See, e.g., Adopting Release at 68145. 

29See, e.g., Amending the ‘‘Accredited Investor’’ 

Definition, Securities Act Release No. 10824 (Aug. 

26, 2020), 85 FR 64234 (Oct. 9, 2020) (‘‘Accredited 

Investor Release’’). 

30Any Subscriber that distributes quotations 

published or submitted on the Expert Market to any 

person that is not a Qualified Expert would not be 

eligible for the relief proposed herein and may 

violate Rule 15c2–11. 

31This four-business-day window mirrors the 

time frame provided in the piggyback exception 

that quotations occur with no more than four 

business days in succession without a priced 

quotation. See Amended Rule 15c2–11(f)(3)(i). As 

an example, if eligibility to be quoted in reliance 

on the piggyback exception were lost on Monday, 

January 4, 2021, a Subscriber’s quotations on the 

Expert Market must commence no later than Friday, 

January 8, 2021 to be eligible for this proposed 

exemption. 

32Adopting Release at 68141. 

33See, e.g., Accredited Investor Release at 64269– 

70. 

quotations for securities of certain 

issuers should be transferred to the 

Expert Market because they may present 

more risk to certain retail investors. 

The proposed conditional exemptive 

relief would allow the Expert Market to 

serve as a centralized location for 

published quotations in certain 

securities—that otherwise would 

migrate to the grey market following the 

Compliance Date—to be viewed 

exclusively by specified categories of 

sophisticated or professional investors. 

Such relief, therefore, could help to 

advance opportunities for more efficient 

pricing in such securities, enhance 

liquidity for sophisticated or 

professional investors in such securities, 

and promote capital formation for 

companies seeking growth opportunities 

that might prefer to be quoted in a 

market limited to such persons. 

A. Permitted Recipients of Quotations 

Published or Submitted on the Expert 

Market 

The Commission is proposing to limit 

the universe of market participants to 

whom real-time and delayed quotations 

published or submitted on the Expert 

Market are distributed. Accordingly, 

with one exception discussed below, 

real-time or delayed quotations 

published or submitted on the Expert 

Market may not be distributed, whether 

directly or indirectly from another 

source,27 to any person that is not a 

Qualified Expert. The Commission 

preliminarily believes that the inability 

of the general public to view real-time 

and delayed quotations published or 

submitted on the Expert Market should 

help protect investors from incidents of 

fraud and manipulation in OTC 

securities for which no or limited 

publicly available information about the 

issuers exists to help counteract 

misinformation, while also allowing 

Subscribers to maintain a market in 

certain securities for certain qualified 

investors to interact.28

The Commission preliminarily 

believes that including in the list of 

Qualified Experts (1) any qualified 

institutional buyer, as defined in Rule 

144(A)(a)(1) under the Securities Act, 

and (2) any accredited investor, as 

defined in Rule 501(a) of Regulation D, 

would appropriately capture the types 

of investors who have, among other 

things, demonstrated the ability to 

assess an investment opportunity 

(including the ability to analyze risks 

and rewards), or the ability to gain 

access to information about an issuer or 

about an investment opportunity.29

Such persons should be able to view 

quotations published or submitted on 

the Expert Market because they may not 

need the same investor protections that 

are afforded, in part, by current and 

publicly available issuer information in 

the same way that the general public 

may need it to analyze an investment 

opportunity or to counteract 

misinformation. In addition, the 

Commission preliminarily believes that 

it is appropriate to include qualified 

purchasers, as defined in Section 

2(a)(51)(A) of the Investment Company 

Act and the rules thereunder, in the list 

of Qualified Experts because qualified 

purchasers are investors that have a 

high degree of financial sophistication 

who are in a position to appreciate the 

risks associated with investing in 

securities that would be quoted on the 

Expert Market without the protections 

afforded by the Amended Rule. 

Notably, this list of Qualified Experts 

would exclude customers of brokerdealers and investment advisers (that do 

not fit into any of the three categories of 

Qualified Experts) because this market 

is not available to the general public.30

In addition, as an exception to the 

Qualified Expert requirement, the 

Commission preliminarily believes that 

it is appropriate for an issuer to be able 

to view quotations published or 

submitted on the Expert Market for its 

own security, if the issuer agrees not to 

distribute such quotations, directly or 

indirectly, to any person that is not a 

current officer, director, or employee of 

the issuer, as described above. This is 

because such information could inform 

the issuer about the liquidity and 

market price of the security and allow 

the issuer to make informed decisions 

regarding future offerings to raise 

capital. In order for an issuer to view 

these quotations, the issuer would need 

to contractually agree not to distribute 

such quotations, directly or indirectly, 

to any person that is not a current 

officer, director, or employee of the 

issuer. 

B. Expert Market Securities 

The Commission preliminarily 

believes that it is appropriate for the 

following categories of securities to be 

eligible to be the subject of Subscribers’ 

proprietary quotations on the Expert 

Market. 

The first category is securities that 

lose eligibility to be quoted in reliance 

on the piggyback exception—either (1) 

upon the Compliance Date due to a lack 

of current and publicly available 

information about an issuer, or (2) 

following the Compliance Date due to (i) 

a lack of current and publicly available 

information about the issuer, (ii) the 

issuer’s status as a shell company, or 

(iii) a failure to meet the frequency-ofquotation requirement—so long as 

quotations on the Expert Market 

commence within four business days of 

such loss of eligibility.31 As stated in the 

Adopting Release, the Commission 

recognizes that holders of such 

securities may incur costs related to a 

loss of liquidity when broker-dealers 

cannot rely on the piggyback 

exception.32 The ability of brokerdealers (i.e., Subscribers) to publish or 

submit proprietary quotations for those 

securities on the Expert Market could 

help to facilitate liquidity for such 

securities because the availability of 

quotations could reduce trading costs 

and facilitate pricing efficiency. This is 

because investors that are Qualified 

Experts would be able to view those 

quotations and use such information in 

the mix of information (e.g., in addition 

to their own due diligence or issuer 

disclosures that might not be publicly 

available but to which they otherwise 

have access) that they take into account 

as part of a meaningful investment 

analysis when making investment 

decisions.33 Without the proposed 

exemption, as discussed above, these 

securities may migrate to the grey 

market, to which retail investors and the 

general public have access, without 

access to information embedded in 

prices published in a quotation 

medium. The ability of Subscribers to 

publish or submit quotations in a 

quotation medium for such securities 

could help protect retail investors and 


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2316 Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Proposed Rules 

34This 90-calendar-day window is consistent 

with the Amended Rule’s requirement for the 

information of prospectus issuers (i.e., issuers that 

filed a registration statement under the Securities 

Act) to be ‘‘current’’ for broker-dealers to commence 

a quoted market in these issuers’ securities in a 

quotation medium. See Amended Rule 15c2– 

11(b)(1). The Commission preliminarily believes 

that it is appropriate to use a measurement of time 

that is consistent with the Amended Rule’s 

requirement for prospectus issuers’ information 

because both requirements pertain to the 

commencement of a quoted market in securities of 

an issuer with which the market is unfamiliar and 

are designed to ensure that the Amended Rule’s 

specified information about the issuers of these 

securities is not stale or outdated with respect to 

such issuance. 

35See Adopting Release at 68171. 

36See Exchange Act Section 12(j) (‘‘The 

Commission is authorized, by order, as it deems 

necessary or appropriate for the protection of 

investors to . . . revoke the registration of a 

security, if the Commission finds . . . that the 

issuer of such security has failed to comply with 

any provision of this chapter or the rules and 

regulations thereunder.’’); Exchange Act Section 

12(k)(1)(A) (‘‘If in its opinion the public interest and 

the protection of investors so require, the 

Commission is authorized by order—summarily to 

suspend trading in any security . . . for a period 

not exceeding 10 business days . . . .’’). 

37As discussed above in Part I.B.3, this period of 

time would be for two years following the 

applicable trading suspension, unless the trading 

suspension is successfully challenged. 

38See, e.g., Adopting Release at 68151. 39See id. at 68144. 

the general public from potential 

incidents of fraud and manipulation in 

the grey market and facilitate liquidity 

for such securities. 

The second category captures 

securities issued in conjunction with a 

Chapter 11 bankruptcy plan that is 

confirmed pursuant to Section 1129 of 

the Code and are exempt from 

registration in accordance with Section 

1145 of the Code, so long as quotations 

on the Expert Market commence within 

90 calendar days from the date on 

which any such security is issued.34 A 

bankruptcy proceeding is a significant 

event involving an issuer that a brokerdealer should carefully consider before 

it publishes or submits a quotation for 

the issuer’s security in a quotation 

medium.35 But, the Commission 

preliminarily believes that the inclusion 

of this category of securities as eligible 

to be the subject of Subscribers’ 

quotations published or submitted on 

the Expert Market is appropriate given 

that Qualified Experts are more likely 

than the general public to possess the 

ability to evaluate the merits and risks 

of a prospective investment opportunity 

and, therefore, it would provide an 

efficient means to liquidate positions 

acquired through a bankruptcy 

proceeding. The inclusion of this 

second category could help promote 

capital formation opportunities for 

certain companies in limited 

circumstances while ensuring, for 

investor protection, that the distribution 

of quotations for the securities of such 

companies is limited to investors that 

have a demonstrated ability to assess 

such an investment opportunity. 

The Commission believes that it 

would be appropriate for OTC Link LLC 

to remove from the Expert Market 

quotations published or submitted for 

any security of an issuer that is the 

subject of a registration revocation or 

trading suspension order issued by the 

Commission pursuant to Section 12(j) or 

12(k) of the Exchange Act, respectively. 

Pursuant to any such registration 

revocation or trading suspension order 

and the Commission’s finding that it is 

in the public interest and for the 

protection of investors,36 Subscribers 

would not be able to effect transactions 

in such securities. Therefore, such 

quotations must be removed. 

In addition, the Commission 

preliminarily believes that it is 

appropriate for OTC Link LLC to remove 

from the Expert Market quotations 

published or submitted for any security 

of an issuer that OTC Link LLC has 

identified as ‘‘defunct,’’ to prevent the 

publication or submission of quotations 

for securities of issuers that have ceased 

operations, ceased to exist, or have 

failed to respond to inquiries by OTC 

Link LLC. Furthermore, the issuer of 

such security may not have a transfer 

agent to allow investors to receive or 

transfer their stock certificates. Thus, 

the quotations for such securities should 

be removed from the Expert Market to 

help prevent such securities from 

becoming vehicles for fraud and 

manipulation. 

Further, the Commission 

preliminarily believes that requiring 

OTC Link LLC to flag on its website any 

‘‘formerly suspended’’ security for such 

period of time as set forth in OTC Link 

LLC’s policies and procedures (which 

would be for two years following the 

applicable trading suspension) would 

help to promote investor protection.37

Such a flag would serve as a notice to 

market participants that there was, in 

the recent past, the presence of any 

number of factors (such as uncertainty 

about the accuracy of publicly available 

issuer information or questions about 

trading in the issuer’s security) that led 

the Commission to conclude that it was 

in the public interest and for the 

protection of investors to suspend 

trading in the security.38 Accordingly, 

the Commission preliminarily believes 

that this flag requirement would 

improve the overall mix of information 

about issuers and their securities and 

would help investors make betterinformed investment decisions.39

C. Policies and Procedures 

The Commission is proposing to 

condition the exemptive relief upon 

OTC Link LLC establishing, 

maintaining, and enforcing reasonably 

designed written policies and 

procedures to operate the Expert Market 

in a manner that is consistent with how 

the Expert Market is described herein. 

Such policies and procedures would 

account for the following: (1) The 

manner in which the distribution of 

real-time and delayed quotations on the 

Expert Market is limited, directly and 

indirectly, only to Qualified Experts 

and, as applicable, issuers of securities 

for which quotations are published or 

submitted on the Expert Market with 

respect to their own securities; (2) 

specific actions that will be taken if 

OTC Link LLC becomes aware that any 

Subscriber or market data distributor or 

user has violated the contractual 

obligations described above, and 

specific actions that will be taken if 

OTC Link LLC becomes aware that an 

issuer has violated its contractual 

obligation not to distribute, directly or 

indirectly, quotations published or 

submitted on the Expert Market for its 

security to any person that is not a 

current officer, director, or employee of 

the issuer; and (3) the regular 

surveillance of the Expert Market data 

feed and quotation activity on the 

Expert Market to determine whether a 

Subscriber or market data distributor or 

user has facilitated access, directly or 

indirectly, to quotations published or 

submitted on the Expert Market to any 

person that is not a Qualified Expert or, 

as applicable, an issuer of a security for 

which quotations are published or 

submitted on the Expert Market with 

respect to its own security. 

The Commission preliminarily 

believes that the obligation to establish, 

maintain, and enforce such written 

policies and procedures as part of the 

proposed exemptive relief would help 

to prevent the general public from 

accessing quote information, promote 

the integrity of the Expert Market, and 

facilitate Commission oversight of the 

Expert Market. In particular, OTC Link 

LLC’s reasonably designed written 

policies and procedures would provide 

transparency of, and set expectations 

for, the manner in which OTC Link LLC 

operates the Expert Market; would 

encompass compliance considerations 

relevant to the operations of the Expert 

Market; and would assist Commission 

staff in examining the Expert Market. 


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D. Recordkeeping Requirement 

Finally, the Commission is proposing 

to require as part of the exemptive relief 

that OTC Link LLC preserve, for a 

period of not less than three years, the 

first two years in an easily accessible 

place, the following records: 

1. Documents and information 

regarding OTC Link LLC’s written 

policies and procedures related to the 

Expert Market, including records related 

to the implementation of such written 

policies and procedures; 

2. Documents and information 

regarding any processes undertaken by 

OTC Link LLC that analyze information 

over time to identify whether the 

distribution of quotations published or 

submitted on the Expert Market is 

limited only to Qualified Experts and, as 

applicable, issuers of securities for 

which quotations are published or 

submitted on the Expert Market with 

respect to their own securities; and 

3. Documents and information 

regarding OTC Link LLC’s ongoing 

surveillance of the quoting activity and 

distribution of quotations published or 

submitted on the Expert Market, 

including any reports that identify 

exceptions to compliance with the 

written policies and procedures and the 

resolution of such exceptions. 

The Commission preliminarily 

believes that this recordkeeping 

condition will help facilitate the 

Commission’s oversight of the Expert 

Market, including of Subscribers that 

publish or submit quotations on the 

Expert Market and the distribution of 

such quotations. In particular, the 

documents and information that would 

be required to be maintained will 

provide the Commission with a record 

of how OTC Link LLC has (1) 

implemented its reasonably designed 

written policies and procedures 

described above; (2) conducted its 

ongoing maintenance of such written 

policies and procedures in response to 

analysis of whether quotations 

published or submitted on the Expert 

Market are distributed only to market 

data distributors (including 

Subscribers), Qualified Experts, and, as 

applicable, issuers of securities for 

which quotations are published or 

submitted on the Expert Market with 

respect to their own securities; and (3) 

enforced such written policies and 

procedures as part of its ongoing 

surveillance of exceptions to 

compliance with those written policies 

and procedures. The Commission also 

preliminarily believes that these 

proposed recordkeeping conditions 

would aid the Commission’s oversight 

of OTC Link LLC’s limitation on the 

distribution of quotations published or 

submitted on the Expert Market only to 

Qualified Experts (and, as applicable, 

issuers of securities for which 

quotations are published or submitted 

on the Expert Market with respect to 

their own securities). 

E. Additional Considerations for Market 

Participants Relying on the Proposed 

Exemption 

In addition, Subscribers that publish 

or submit quotations in compliance 

with this proposed exemption remain 

subject to liability under the antifraud 

provisions of the federal securities laws. 

Further, the proposed exemption would 

not create an exemption or change 

existing exemptions from the 

registration requirements or any other 

requirements under the federal 

securities laws, including the Securities 

Act, for any party. Accordingly, for 

example, if a Subscriber were to publish 

or submit a quotation on the Expert 

Market in reliance on the proposed 

exemption, the Subscriber would need 

to determine whether the security, or 

any offer or sale of such security, is 

registered in accordance with any 

applicable requirement under federal 

securities laws or whether an exemption 

from any such registration requirement 

exists. 

III. Request for Comments 

The Commission is seeking comment 

on all aspects of the proposed 

exemption. In particular, the 

Commission requests comment on the 

following questions about the proposed 

exemption. When responding to the 

request for comment, please explain 

your reasoning. Additionally, the 

Commission requests that commenters 

identify sources of data and information 

as well as provide data and information 

to assist the Commission in analyzing 

the impact of the proposed relief. 

1. Are there any other categories of 

securities that should be eligible for 

Subscribers’ proprietary quotations on 

the Expert Market? Are there any other 

categories of securities that should be 

excluded from Subscribers’ proprietary 

quotations on the Expert Market? For 

example, should only those securities 

that meet certain reported trade 

thresholds be eligible for quoting? 

Please explain, including how this 

suggestion would be necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors. 

2. Are there categories of investors 

included in the proposed list of 

Qualified Experts who should be 

excluded? For example, should all 

accredited investors, as defined in Rule 

501(a) of Regulation D, be considered 

Qualified Experts, or should the list be 

limited to a narrower set of 

sophisticated investors? What steps 

should broker-dealers and investment 

advisers be required to take, if any, to 

verify the accredited investor status of 

customers before providing them access 

to quotations published or submitted on 

the Expert Market? Should all 

employees of an issuer, including those 

who would not otherwise qualify as 

Qualified Experts, be allowed to view 

quotations published or submitted on 

the Expert Market? Please explain, 

including how this suggestion would be 

necessary or appropriate in the public 

interest and consistent with the 

protection of investors. 

3. Are there any other categories of 

persons or entities that should be 

eligible to view real-time or delayed 

quotations published or submitted on 

the Expert Market? The Commission 

understands that foreign broker-dealers, 

as defined in Exchange Act Rule 15a– 

6(b)(3), similar to broker-dealers 

registered under Section 15 of the 

Exchange Act—an entity included in the 

definition of ‘‘accredited investor’’— 

may demonstrate the ability to assess an 

investment opportunity, the capacity to 

allocate investments in such a way as to 

mitigate or avoid risks of unsustainable 

loss, the ability to gain access to 

information about an issuer or about an 

investment opportunity, or the ability to 

bear the risk of a loss. OTC Link LLC 

has requested that such foreign brokerdealers be included in the list of 

Qualified Experts. Should foreign 

broker-dealers, as defined in Exchange 

Act Rule 15a–6(b)(3), be added to the 

list of Qualified Experts? Please explain 

why or why not, including how this 

suggestion would be necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors. 

4. What costs would be associated 

with the proposed Expert Market 

exemption? Please specify the market 

participant(s) that would incur such 

costs (e.g., issuers, broker-dealers, etc.), 

if any. Would the cost of the proposed 

policies and procedures and 

recordkeeping conditions prevent the 

formation of an ‘‘expert market’’ for any 

eligible securities? Would the ability for 

issuers’ securities to be quoted on the 

Expert Market reduce incentives for 

relevant issuers to provide public 

information? 

5. How active would quotations in 

these securities likely be if the proposed 

exemptive relief were granted? What 

degree of liquidity and price discovery 

would likely be facilitated by the ability 

of Subscribers to publish or submit 


khammond on DSKJM1Z7X2PROD with PROPOSALS
2318 Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Proposed Rules 

quotations on the Expert Market? Where 

possible, please provide data or identify 

sources of information the Commission 

could use to analyze the impact of the 

relief on liquidity and price discovery. 

6. Does the proposed policies and 

procedures condition provide 

appropriate assurance that real-time and 

delayed quotations published or 

submitted on the Expert Market would 

not be accessible to the general public, 

including retail investors, other than the 

Qualified Experts? Please explain why 

or why not. If not, please explain how 

the condition should be modified, 

including the minimum requirements 

that should be included in OTC Link’s 

policies and procedures to (1) ensure 

that only Qualified Experts can view 

quotations published or submitted on 

the Expert Market and (2) address 

concerns about fraud and manipulation? 

7. Does the proposed recordkeeping 

condition for OTC Link LLC provide 

appropriate means to facilitate the 

Commission’s oversight of the Expert 

Market, including of Subscribers that 

publish or submit quotations on the 

Expert Market and the distribution of 

such quotations? Please explain why or 

why not. If not, please explain how the 

condition should be modified. 

8. Are the proposed safeguards 

appropriate to ensure that only investors 

who are able to assess the risks and 

merits of investment in the categories of 

securities proposed to be included in 

the Expert Market are able to access 

quotations? Are the proposed conditions 

of this exemptive order (in conjunction 

with FINRA rules that govern this 

market) sufficient to prevent the general 

public from accessing quotations 

published or submitted in the Expert 

Market, or should the Commission 

impose additional conditions? Are there 

any other safeguards that should be 

implemented in the Expert Market to 

protect investors? 

9. Are there additional conditions that 

the exemptive order providing the relief 

proposed herein should include to help 

prevent persons who are not Qualified 

Experts from accessing quotations 

published or submitted on the Expert 

Market? If yes, please specify such 

condition and explain how this 

suggestion would be necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors. 

10. Should the exemptive order 

providing the relief proposed herein 

include a sunset provision so that the 

relief would expire on a particular date? 

If yes, what would be an appropriate 

date on which the relief should expire 

(e.g., one year after the issuance of the 

exemptive order, etc.) and why? Please 

discuss the costs and benefits of 

including such a sunset provision in the 

exemptive order. Additionally, please 

explain why such a sunset provision 

would be necessary or appropriate in 

the public interest and consistent with 

the protection of investors. 

Alternatively, please explain why the 

exemptive order should omit a sunset 

provision, including a discussion of the 

benefits and costs of such omission or 

any distortive effects on the market. 

Lastly, please discuss whether there are 

alternative means of achieving any 

benefits of a sunset provision. 

By the Commission. 

Dated: December 22, 2020. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2020–28700 Filed 1–11–21; 8:45 am] 

BILLING CODE 8011–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R09–OAR–2019–0440; FRL–10018– 

44–Region 9] 

Clean Air Plans; 2008 8-Hour Ozone 

Nonattainment Area Requirements; 

Western Nevada County, California 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is proposing to approve, 

or conditionally approve, all or portions 

of a state implementation plan (SIP) 

revision submitted by the State of 

California to meet Clean Air Act (CAA 

or ‘‘Act’’) requirements for the 2008 8- 

hour ozone national ambient air quality 

standards (NAAQS or ‘‘standards’’) in 

the Nevada County (Western part), 

California ozone nonattainment area 

(‘‘Western Nevada County’’). The SIP 

revision is the ‘‘Ozone Attainment Plan, 

Western Nevada County, State 

Implementation Plan for the 2008 

Primary Federal 8-Hour Ozone Standard 

of .075 ppm’’ (‘‘2018 Western Nevada 

County Ozone Plan’’ or ‘‘Plan’’). The 

2018 Western Nevada County Ozone 

Plan addresses the Serious 

nonattainment area requirements for the 

2008 ozone NAAQS, including the 

requirements for emissions inventories, 

attainment demonstration, reasonable 

further progress, reasonably available 

control measures, and contingency 

measures, among others; and establishes 

motor vehicle emissions budgets. The 

EPA is proposing to approve the 2018 

Western Nevada County Ozone Plan as 

meeting all the applicable ozone 

nonattainment area requirements except 

for the contingency measures 

requirement, for which the EPA is 

proposing conditional approval. In 

addition, the EPA is beginning the 

adequacy process for the 2020 motor 

vehicle emissions budgets in the 2018 

Western Nevada County Ozone Plan 

through this proposed rulemaking. 

DATES: Written comments must arrive 

on or before February 11, 2021. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–R09– 

OAR–2019–0440 at https://

www.regulations.gov. For comments 

submitted at Regulations.gov, follow the 

online instructions for submitting 

comments. Once submitted, comments 

cannot be edited or removed from 

Regulations.gov. The EPA may publish 

any comment received to its public 

docket. Do not submit electronically any 

information you consider to be 

Confidential Business Information (CBI) 

or other information whose disclosure is 

restricted by statute. Multimedia 

submissions (audio, video, etc.) must be 

accompanied by a written comment. 

The written comment is considered the 

official comment and should include 

discussion of all points you wish to 

make. The EPA will generally not 

consider comments or comment 

contents located outside of the primary 

submission (i.e., on the web, cloud, or 

other file sharing system). For 

additional submission methods, please 

contact the person identified in the FOR

FURTHER INFORMATION CONTACT section. 

For the full EPA public comment policy, 

information about CBI or multimedia 

submissions, and general guidance on 

making effective comments, please visit 

https://www.epa.gov/dockets/ 

commenting-epa-dockets. If you need 

assistance in a language other than 

English or if you are a person with 

disabilities who needs a reasonable 

accommodation at no cost to you, please 

contact the person identified in the FOR

FURTHER INFORMATION CONTACT section. 

FOR FURTHER INFORMATION CONTACT: T. 

Khoi Nguyen, Air Planning Office (AIR– 

2), EPA Region IX, 75 Hawthorne Street, 

San Francisco, CA 94105, (415) 947– 

4120, or by email at nguyen.thien@

epa.gov. 

SUPPLEMENTARY INFORMATION: 

Throughout this document, ‘‘we,’’ 

‘‘us,’’ and ‘‘our’’ refer to the EPA. 

Table of Contents 

I. Regulatory Context 

A. Ozone Standards, Area Designations, 

and SIPs 

B. The Western Nevada County Ozone 

Nonattainment Area 


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