Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 85817 

114While the Commission acknowledges the 

possibility that some companies may pursue a 

Primary Direct Floor Listing instead of a traditional 

IPO, these two listing methods may not be 

substitutable in a wide variety of instances. For 

example, some issuers may require the assistance of 

underwriters to develop a broad investor base 

sufficient to support a liquid trading market; others 

may believe a traditional firm commitment IPO is 

preferable given the benefits to brand recognition 

that can result from roadshows and other marketing 

efforts that often accompany such offerings. Thus, 

we do not anticipate that all companies that are 

eligible to go public through a Primary Direct Floor 

Listing will choose to do so; the method chosen will 

depend on each issuer’s unique characteristics. 

115See 15 U.S.C. 78f(b)(5). See also 15 U.S.C. 

78k–1(a)(1)(C)(i). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3For ERC hearings under Exchange Rule General 

3, Section 2(g), this temporary authority is granted 

to the ERC or relevant Subcommittee. 

4 If the Exchange requires temporary relief from 

the rule requirements identified in this proposal 

beyond April 30, 2021, the Exchange may submit 

a separate rule filing to extend the expiration date 

of the temporary amendments under these rules. 

The amended Exchange rules will revert back to 

their original state at the conclusion of the 

temporary relief period and any extension thereof. 

5See Exchange Act Release No. 89737 (September 

2, 2020), 85 FR 55712 (September 9, 2020) (SR– 

FINRA–2020–027) (‘‘FINRA Filing’’). See also 

Exchange Act Release No. 90619 (December 9, 

2020), 85 FR 81250 (December 15, 2020) (SR– 

FINRA–2020–042) (extending the relief in the 

FINRA Filing through April 30, 2021). The 

Exchange notes that the FINRA Filing also proposed 

to temporarily amend FINRA Rules 9261, 9524, and 

9830, which govern hearings in connection with 

appeals of disciplinary actions, eligibility 

proceedings, and temporary and permanent cease 

and desist orders. The Exchange’s Rules 9261, 9524, 

and 9830 incorporate by reference The Nasdaq 

Stock Market LLC rules, which are the subject of a 

separate filing. See SR–NASDAQ–2020–076 

(November 5, 2020). Therefore, the Exchange is not 

proposing to adopt that aspect of the FINRA Filing. 

for a different price discovery method 

for IPOs which may reduce the spread 

between the IPO price and subsequent 

market trades, a potential benefit to 

existing and potential investors. In this 

way, the proposed rule change may 

result in additional investment 

opportunities while providing 

companies more options for becoming 

publicly traded.114

The Commission finds that the 

Exchange’s proposal will facilitate the 

orderly distribution and trading of 

shares, as well as foster competition, 

which is clearly consistent with the 

purposes of the Exchange Act. The 

orderly distribution of, and trading of 

shares, promotes fair and orderly 

markets, and is one of the important 

roles of a national securities exchange in 

ensuring that its rules prevent 

fraudulent and manipulative acts and 

practices, promote just and equitable 

principles of trade and protect investors 

and the public interest.115 The proposal 

also fosters competition by providing an 

alternate method for companies of 

sufficient size that decide they would 

rather not conduct a firm commitment 

underwritten offering to list on the 

Exchange, thereby removing potential 

impediments to free and open markets 

consistent with Section 6(b)(5) of the 

Exchange Act while also supporting 

capital formation. For the reasons 

discussed above, the Commission finds 

that, on balance, the proposed rule 

change to permit Primary Direct Floor 

Listings is designed to, among other 

things, prevent fraudulent and 

manipulative acts and practices and to 

protect investors and the public interest. 

IV. Conclusion 

For foregoing reasons, the 

Commission finds that the proposed 

rule change, as modified by Amendment 

No. 2, is consistent with the Exchange 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange. 

It is therefore ordered, pursuant to 

Rule 431 of the Commission’s Rules of 

Practice, that the earlier action taken by 

delegated authority, Exchange Act 

Release No. 89684 (August 26, 2020), 85 

FR 54454 (September 1, 2020), is set 

aside and, pursuant to Section 19(b)(2) 

of the Exchange Act, the proposed rule 

change (SR–NYSE–2019–67), as 

modified by Amendment No. 2, hereby 

is approved. 

By the Commission. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2020–28709 Filed 12–28–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90756; File No. SR–ISE– 

2020–42] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Harmonize Exchange 

Rule General 3, Section 2 With Recent 

Changes by the Financial Industry 

Regulatory Authority, Inc. 

December 21, 2020. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’),1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on December 11, 2020, Nasdaq ISE, LLC 

(‘‘ISE’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

II below, which Items have been 

prepared substantially 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 

The Exchange proposes to harmonize 

Exchange Rule General 3, Section 2 with 

recent changes by the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’). 

This amendment would temporarily 

grant the Exchange Review Council 

(‘‘ERC’’) authority 3 to conduct hearings 

in connection with appeals of 

Membership Application Program 

decisions by video conference, if 

warranted by the current COVID–19- 

related public health risks posed by an 

in-person hearing. As proposed, the 

temporary amendment would be in 

effect through April 30, 2021.4

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/ise/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to harmonize 

Exchange Rule General 3, Section 2 with 

recent changes to FINRA Rule 1015 in 

order to temporarily grant the ERC 

authority to conduct hearings in 

connection with appeals of Membership 

Application Program decisions by video 

conference, if warranted by the current 

COVID–19-related public health risks 

posed by an in-person hearing.5 As 

proposed, these temporary amendments 

would be in effect through April 30, 

2021. 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES
85818 Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 

6See FINRA Filing, 85 FR at 55712. 

7See id. at 55712. 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

10See FINRA Filing, 85 FR at 55716. 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

Background 

The Exchange’s rule regarding the 

hearing and evidentiary process for 

appeals of Membership Application 

Program decisions as set forth in Rule 

General 3, Section 2(g) is based on 

FINRA’s Rule 1015. As adopted, the text 

of Exchange Rule General 3, Section 2(g) 

is substantially the same as FINRA Rule 

1015, with the exception of conforming 

and technical differences. 

In view of the ongoing spread of 

COVID–19 and its effect on FINRA’s 

adjudicatory functions nationwide, 

FINRA recently filed a temporary rule 

change to grant the National 

Adjudicatory Council (‘‘NAC’’) the 

authority to conduct certain hearings by 

video conference, if warranted by the 

current COVID–19-related public health 

risks posed by in-person hearings.6

Accordingly, the Exchange proposes to 

file this temporary rule change to align 

with the temporary rule change filed by 

FINRA. 

Mirroring FINRA’s NAC, the ERC is 

the Exchange’s appellate body, which 

reviews initial decisions issued by 

FINRA’s Office of Hearing Officers 

(‘‘OHO’’) and—through 

Subcommittees—holds evidentiary 

hearings for Membership Application 

Program decision appeals and eligibility 

proceedings under Exchange Rule 

General 3, Section 2(g). This temporary 

proposed rule change will allow the 

ERC or relevant Subcommittee to make 

an assessment as to whether an inperson hearing would compromise the 

health and safety of the hearing 

participants such that the hearing 

should proceed by video conference. 

Proposed Rule Change 

Consistent with FINRA’s temporary 

amendment to FINRA Rule 1015, the 

Exchange proposes to temporarily grant 

the ERC authority to conduct hearings 

in connection with appeals of 

Membership Application Program 

decisions by video conference, if 

warranted by the current COVID–19- 

related public health risks posed by an 

in-person hearing. The proposed change 

will permit the ERC to make an 

assessment, based on critical COVID–19 

data and criteria, as to whether an inperson hearing would compromise the 

health and safety of the hearing 

participants such that the hearing 

should proceed by video conference. 

The Exchange believes that this is a 

reasonable procedure to follow in 

hearings under Rule General 3, Section 

2(g). 

To effectuate these changes, the 

Exchange proposes to add the following 

sentence to General 3, Section 2(g)(6): 

Upon consideration of the current public 

health risks presented by an in-person 

hearing, the Exchange Review Council or 

Subcommittee may, on a temporary basis, 

determine that the hearing shall be 

conducted, in whole or in part, by video 

conference. 

The proposed text is substantially the 

same as the language adopted by 

FINRA, excepting conforming and 

technical differences.7

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,8 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,9

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest, by 

providing greater harmonization 

between the Exchange rules and FINRA 

rules of similar purpose, resulting in 

less burdensome and more efficient 

regulatory compliance. 

As previously noted, the text of 

Exchange Rule General 3, Section 2(g) is 

substantially the same as FINRA’s rule. 

As such, the proposed rule change will 

foster cooperation and coordination 

with persons engaged in facilitating 

transactions in securities and will 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system. 

The Exchange believes that the 

proposed temporary rule change will 

permit the Exchange to effectively 

conduct hearings during the COVID–19 

pandemic in situations where in-person 

hearings present likely public health 

risks. The ability to conduct hearings by 

video conference will thereby permit 

the Exchange’s adjudicatory functions to 

continue unabated, thereby avoiding 

protracted delays. Conducting hearings 

via video conference will give the 

parties and adjudicators simultaneous 

visual and oral communication without 

the risks inherent in physical proximity 

during a pandemic. 

The Exchange believes that the 

temporary proposed rule change strikes 

an appropriate balance between 

providing fair process and enabling the 

Exchange to fulfill its statutory 

obligations to protect investors and 

maintain fair and orderly markets while 

accounting for the significant health and 

safety risks of in-person hearings 

stemming from the outbreak of COVID– 

19. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the temporary proposed rule change 

will impose any burden on competition 

not necessary or appropriate in 

furtherance of the purposes of the Act. 

The proposed rule change is not 

intended to address competitive issues 

but is rather intended solely to provide 

temporary relief given the impacts of the 

COVID–19 pandemic. In its filing, 

FINRA provides an abbreviated 

economic impact assessment 

maintaining that the changes are 

necessary to temporarily rebalance the 

attendant benefits and costs of the 

obligations under FINRA Rule 1015 in 

response to the impacts of the COVID– 

19 pandemic that is equally applicable 

to the changes the Exchange proposes.10

The Exchange accordingly incorporates 

FINRA’s abbreviated economic impact 

assessment by reference. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 11 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.12

The Exchange believes that this filing 

is non-controversial and eligible to 

become effective immediately because 

the proposal promotes uniformity in 

rules across self-regulatory 

organizations thereby enabling the 

Exchange to conduct hearings during 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 85819 

13 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3For ERC hearings under Exchange Rule General 

3, Section 2(g), this temporary authority is granted 

to the ERC or relevant Subcommittee. 

4 If the Exchange requires temporary relief from 

the rule requirements identified in this proposal 

beyond April 30, 2021, the Exchange may submit 

a separate rule filing to extend the expiration date 

of the temporary amendments under these rules. 

The amended Exchange rules will revert back to 

their original state at the conclusion of the 

temporary relief period and any extension thereof. 

the COVID–19 pandemic by video 

conference where the health risks of inperson hearings are significant. The 

proposed rule change is based on, and 

similar to, recent changes made to 

FINRA Rule 1015 that addressed the 

issue of balancing public health risks 

with conducting hearings during the 

COVID–19 pandemic. The Exchange 

proposes to adopt the rule change in 

substantially the same form as it was 

adopted by FINRA. The Exchange 

further believes that the proposed rule 

change would not significantly affect 

the protection of investors or the public 

interest or impose any significant 

burden on competition because the 

changes are based on the rules of 

FINRA. Moreover, the proposed rule 

change is not intended to address 

competitive issues but rather is 

concerned solely with providing 

temporary relief given the impacts of the 

COVID–19 pandemic. 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

ISE–2020–42 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–ISE–2020–42. 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 (http://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, on business days 

between the hours of 10:00 a.m. and 

3:00 p.m., located at 100 F Street NE, 

Washington, DC 20549. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–ISE–2020–42 and should be 

submitted on or before January 19, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28682 Filed 12–28–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90755; File No. SR–GEMX– 

2020–21] 

Self-Regulatory Organizations; Nasdaq 

GEMX, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Harmonize Exchange 

Rule General 3, Section 2 With Recent 

Changes by the Financial Industry 

Regulatory Authority, Inc. 

December 21, 2020. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’),1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on December 11, 2020, Nasdaq GEMX, 

LLC (‘‘GEMX’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the proposed rule change as described 

in Items I, II, and III below, which Items 

have been prepared substantially 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 

The Exchange proposes to harmonize 

Exchange Rule General 3, Section 2 with 

recent changes by the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’). 

This amendment would temporarily 

grant the Exchange Review Council 

(‘‘ERC’’) authority 3 to conduct hearings 

in connection with appeals of 

Membership Application Program 

decisions by video conference, if 

warranted by the current COVID–19- 

related public health risks posed by an 

in-person hearing. As proposed, the 

temporary amendment would be in 

effect through April 30, 2021.4

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/gemx/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to harmonize 

Exchange Rule General 3, Section 2 with 

recent changes to FINRA Rule 1015 in 

order to temporarily grant the ERC 

authority to conduct hearings in 

connection with appeals of Membership 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES