Federal Register / Vol. 85, No. 250 / Wednesday, December 30, 2020 / Notices 86619 

19 15 U.S.C. 78s(b)(2)(B). 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Congress in 1990 amended Exchange Act 

Section 15A to require FINRA to establish and 

maintain a toll-free telephone listing to receive 

inquiries regarding disciplinary actions involving 

its member firms and their associated persons, and 

promptly respond to such inquiries in writing. See 

Securities Enforcement Remedies and Penny Stock 

Reform Act of 1990, Public Law 101–429, 104 Stat. 

931 (1990). See also Notice to Members 00–16 

(March 2000). 

4 In 2006, Congress again amended Exchange Act 

Section 15A to, among other things, expand the 

methods by which BrokerCheck information is 

made available. See Military Personnel Financial 

Services Protection Act, Public Law 109–290, 120 

Stat. 1317 (2006). 

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 

under Section 19(b)(2)(B) 19 of the Act to 

determine whether the proposed rule 

change 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– 

IEX–2020–19 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–IEX–2020–19. 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, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

offices 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–IEX–2020–19, and should 

be submitted on or before January 20, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2020–28811 Filed 12–29–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90778; File No. SR–FINRA– 

2020–045] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of a 

Proposed Rule Change To Amend 

FINRA Rule 8312 (FINRA BrokerCheck 

Disclosure) 

December 22, 2020. 

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 December 

16, 2020, 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, II, and III below, which Items 

have been prepared by FINRA. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to amend to 

amend FINRA Rule 8312 (FINRA 

BrokerCheck Disclosure). The proposed 

rule change would (1) make information 

about formerly registered individuals 

subject to a final regulatory action 

available through BrokerCheck® on a 

permanent basis only for those 

individuals who have been registered on 

or after August 16, 1999; and (2) exclude 

information from BrokerCheck about 

deceased individuals. The proposed 

rule change also would make nonsubstantive, technical changes to FINRA 

Rule 8312. 

The text of the proposed rule change 

is available on FINRA’s website at 

http://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 

BrokerCheck Program 

FINRA established the BrokerCheck 

program (then known as the Public 

Disclosure Program) in 1988 to provide 

investors and the general public with 

information on the professional 

background, business practices, and 

conduct of member firms and their 

associated persons. Since establishing 

BrokerCheck, FINRA has regularly 

assessed the scope and utility of the 

information it provides to the public 

and, as a result, has made numerous 

changes to improve the program. These 

changes have made BrokerCheck easier 

to access by expanding the available 

methods of requesting information 

through the program. For instance, 

initially the public could request 

information only via U.S. mail or 

facsimile. FINRA subsequently added 

the ability to submit requests via a tollfree telephone number in 1991 and then 

through email in 1997.3 Now 

BrokerCheck reports are available 

instantly online at https://

brokercheck.finra.org/.4 FINRA also has 

increased the amount of information 

available through the program. At first, 

86620 Federal Register / Vol. 85, No. 250 / Wednesday, December 30, 2020 / Notices 

5The concept for the CRD system was developed 

by FINRA jointly with the North American 

Securities Administrators Association (‘‘NASAA’’). 

The CRD system fulfills FINRA’s statutory 

obligation to establish and maintain a system to 

collect and retain registration information. NASAA 

and state regulators play a critical role in the 

ongoing development and implementation of the 

CRD system. 

6The uniform registration forms are Form BD 

(Uniform Application for Broker-Dealer 

Registration), Form BDW (Uniform Request for 

Broker-Dealer Withdrawal), Form BR (Uniform 

Branch Office Registration Form), Form U4 

(Uniform Application for Securities Industry 

Registration or Transfer), Form U5 (Uniform 

Termination Notice for Securities Industry 

Registration), and Form U6 (Uniform Disciplinary 

Action Reporting Form). 

7FINRA and NASAA jointly drafted the Forms 

U4 and U5, and both organizations collaborate in 

the development of any proposed amendments to 

these Forms. Form BD is the SEC’s registration form 

for broker-dealer firms. 

8Section 15A of the Exchange Act requires 

FINRA to provide registration information to the 

public. BrokerCheck is one of the tools through 

which FINRA disseminates this information to the 

public. There is a limited amount of information in 

the CRD system that FINRA does not display 

through BrokerCheck, including personal or 

confidential information. A detailed description of 

the information made available through 

BrokerCheck is available at https://www.finra.org/ 

investors/learn-to-invest/choosing-investmentprofessional/about-brokercheck. 

9Formerly registered brokers, although no longer 

in the securities industry in a registered capacity, 

may work in other investment-related industries or 

may seek to attain other positions of trust with 

potential investors. BrokerCheck provides 

information on more than 17,120 formerly 

registered broker-dealer firms and 554,170 formerly 

registered brokers. Reports are available through 

BrokerCheck for 10 years after a broker leaves the 

industry, and brokers who are the subject of 

disciplinary actions and certain other events remain 

on BrokerCheck permanently. 

10FINRA notes that the proposed rule change 

would impact members that have elected to be 

treated as capital acquisition brokers (‘‘CABs’’), 

given that the CAB rule set incorporates the 

impacted FINRA rule by reference. 

11On this date, FINRA moved from the paperbased Legacy CRD system to the internet-based Web 

CRD system. 

12See Securities Exchange Act Release No. 61002 

(November 13, 2009), 74 FR 61193 (November 23, 

2009) (Order Approving File No. SR–FINRA–2009– 

050). 

limited employment history, final 

disciplinary actions and criminal 

convictions were available through 

BrokerCheck. The information currently 

available to investors through 

BrokerCheck includes registrations 

brokers hold and the examinations they 

have passed, and disclosure information 

regarding various criminal, regulatory, 

customer dispute, termination and 

financial matters on current and former 

FINRA-registered brokerage firms and 

brokers. 

The information displayed through 

BrokerCheck generally is derived from 

the Central Registration Depository 

(‘‘CRD®’’).5 The CRD system is the 

central licensing and registration system 

used by the U.S. securities industry and 

its regulators. In general, information in 

the CRD system is obtained through the 

uniform registration forms that firms 

and regulatory authorities complete as 

part of the securities industry 

registration and licensing process.6

These forms, particularly Forms U4 and 

U5, collect administrative, regulatory, 

criminal history, financial and other 

information about brokers, while Form 

BD collects similar information about 

broker-dealer firms.7 FINRA, state and 

other regulatory authorities use this 

information in connection with their 

licensing and regulatory activities, and 

member firms use this information to 

help them make informed employment 

decisions. As of November 30, 2020, 

FINRA had processed over 57 million 

registration approvals for brokers and 

investment adviser representatives in 

the CRD system over a period spanning 

more than 20 years. 

Pursuant to rules approved by the 

SEC, FINRA makes specific information 

in the CRD system publicly available 

through BrokerCheck.8 BrokerCheck is 

part of FINRA’s ongoing effort to help 

investors make informed choices about 

the brokers and broker-dealer firms with 

which they may conduct business. 

BrokerCheck maintains information on 

the approximately 3,550 registered 

broker-dealer firms and 624,600 

registered brokers. BrokerCheck also 

provides the public with access to 

information about formerly registered 

broker-dealer firms and brokers.9 In the 

first 11 months of 2020, BrokerCheck 

helped users conduct more than 35 

million searches of firms and brokers. 

FINRA believes that there are changes 

it can make to BrokerCheck to make the 

information more useful and relevant 

for investors and other users of the 

system. Accordingly, FINRA is 

proposing to amend FINRA Rule 8312 to 

(1) make information about final 

regulatory actions available through 

BrokerCheck on a permanent basis only 

for those individuals who have been 

registered on or after August 16, 1999; 

and (2) exclude information from 

BrokerCheck about deceased 

individuals.10

Proposed Rule Change 

(A) Permanent Inclusion of Individuals 

Subject to Aged Final Regulatory 

Actions 

Under FINRA Rule 8312(c)(1), 

information is made available through 

BrokerCheck on a permanent basis for 

those formerly registered individuals 

who: 

• Are the subject of a final regulatory 

action; 

• have been convicted of or pled 

guilty or nolo contendere to a crime; 

• were the subject of a civil 

injunction in connection with 

investment-related activity, a civil court 

finding of involvement in the violation 

of any investment-related statute or 

regulation, or an investment-related 

civil action brought by a state or foreign 

financial regulatory authority that was 

dismissed pursuant to a settlement 

agreement; or 

• were named as a respondent or 

defendant in an investment-related, 

consumer-initiated arbitration or civil 

litigation that alleged the person was 

involved in a sales practice violation 

and which resulted in an arbitration 

award or civil judgment against the 

individual. 

Information about individuals 

formerly registered with FINRA (or a 

registered national securities exchange 

that uses the CRD system for registration 

purposes) who have been involved in 

the above disclosure events 

(‘‘Permanent Disclosure Events’’), 

except final regulatory actions, is made 

available on a permanent basis through 

BrokerCheck only if the individual has 

been registered on or after August 16, 

1999.11 There is no such registration 

date limitation with respect to formerly 

registered individuals subject to a final 

regulatory action, so information about 

these individuals is made available on 

a permanent basis through BrokerCheck 

even if their most recent registration 

terminated prior to August 16, 1999. 

This discrepancy between the 

availability of information for 

individuals subject to final regulatory 

actions and for individuals involved in 

the other Permanent Disclosure Events 

developed because FINRA expanded the 

scope of information made permanently 

available through BrokerCheck in two 

phases. 

Information about formerly registered 

individuals subject to a final regulatory 

action was first made available through 

BrokerCheck on a permanent basis in 

2009.12 As mentioned above, this 

increase in the time frame that 

information about formerly registered 

individuals subject to a final regulatory 

action is provided through BrokerCheck 

applies regardless of when the 

individual was registered. Data 

limitations, however, affect the 

BrokerCheck reports of a number of the 

individuals subject to final regulatory 

actions who were no longer registered at 

the time the Web CRD system was 

implemented on August 16, 1999. The 

BrokerCheck reports of many such 

individuals contain minimal 

Federal Register / Vol. 85, No. 250 / Wednesday, December 30, 2020 / Notices 86621 

13Some of the unavailable information for 

individuals subject to a final regulatory action 

whose most recent registration terminated before 

August 16, 1999, includes registration history, 

industry examinations the individual has passed, 

employment history, and other business activities. 

The lack of information is due in part to the 

changes in the uniform registration forms. 

Specifically, Forms U4 and U5 have been revised 

on a number of occasions since 1999 and now elicit 

information that previously was not elicited by 

those Forms. 

14BrokerCheck is able to automatically generate 

reports for those individuals whose information is 

in the Web CRD system because the information in 

the system is in a web-based format. The automatic 

generation of BrokerCheck reports is not possible 

for individuals whose information is in the paperbased Legacy CRD system. 

15See Securities Exchange Act Release No. 62476 

(July 8, 2010), 75 FR 41254 (July 15, 2010) (Order 

Approving File No. SR–FINRA–2010–012). 

16See supra note 15. 

17See supra note 15. 

18The proposal would affect the availability of 

information in BrokerCheck for approximately 

14,750 formerly registered individuals whose last 

registration ended before August 16, 1999, and 

whose report is available through BrokerCheck 

solely because they are the subject of a final 

regulatory action. 

19Although no BrokerCheck report will be 

available for those formerly registered individuals 

who subsequently register only as an investment 

adviser representative after August 16, 1999, 

BrokerCheck will note that information about the 

individual is available on IAPD. Such an 

individual’s IAPD report will include information 

about the final regulatory action. 

20See supra note 13. 

21Although information about these aged final 

regulatory actions would be removed from 

BrokerCheck, the information would remain in the 

CRD system and available to securities regulators 

and member firms. 

22Last year, FINRA issued an Investor Alert about 

an unregistered individual using an altered 

BrokerCheck report to impersonate a registered 

investment professional. 

23 Information about an individual would be 

removed from BrokerCheck only upon documentary 

evidence that the individual is deceased, such as a 

Form U5 with a reason for termination of 

‘‘deceased’’ or a newspaper obituary or death 

certificate provided by an executor, family member 

or other party. 

24FINRA would provide information on a 

deceased individual in response to a written request 

for up to 10 years after the individual’s last 

registration date unless any of the events set forth 

in proposed FINRA Rules 8312(c)(1)(A)–(D) applies 

to the individual, in which case the 10-year 

limitation would not apply. 

25 15 U.S.C. 78o–3(b)(6). 

information about the final regulatory 

action and no administrative or 

qualification information.13 In addition 

to the data limitations, FINRA staff also 

must manually create BrokerCheck 

reports for these individuals due to the 

fact that their information is not 

available in the Web CRD system.14

In 2010, FINRA again expanded 

BrokerCheck to permanently make 

publicly available information about 

formerly registered individuals who had 

been involved in any of the Permanent 

Disclosure Events, other than final 

regulatory actions.15 At that time, 

FINRA proposed applying the 

expansion only to those individuals 

who have been registered on or after 

August 16, 1999, due to the limitations 

applicable to the information available 

for some individuals who were no 

longer registered prior to that date.16

FINRA also noted that the registration 

date limitation was warranted because, 

since the implementation of the Web 

CRD system, FINRA had used the 

information in that database to generate 

BrokerCheck reports.17

Therefore, FINRA proposes an 

amendment to FINRA Rule 8312(c)(1) to 

harmonize the Permanent Disclosure 

Events categories to make information 

about formerly registered individuals 

subject to a final regulatory action 

available in BrokerCheck on a 

permanent basis only for those 

individuals who have been registered on 

or after August 16, 1999.18 While the 

proposal would affect the availability of 

information displayed through 

BrokerCheck for certain formerly 

registered individuals, these individuals 

will not have been registered (and 

therefore not engaged in the securities 

business) for more than 21 years.19 In 

addition, the limited information 

available about the final regulatory 

actions for a number of these 

individuals, as well as the lack of 

administrative and qualification 

information,20 may make the 

information of minimal use or relevance 

to BrokerCheck users.21

(B) Exclusion of Information Pertaining 

to Deceased Individuals 

Information is available through 

BrokerCheck for individuals who are 

currently registered, whose registration 

was terminated within the preceding 10 

years, and on a permanent basis as 

described in the preceding section. In 

most circumstances, these time frames 

for inclusion in BrokerCheck are 

applied to all individuals and result in 

information about deceased individuals 

being displayed in BrokerCheck. 

There is very little investor protection 

value to the inclusion of information 

about deceased individuals in 

BrokerCheck. In addition, maintaining 

information about a deceased individual 

in BrokerCheck may result in 

unnecessary distress for the individual’s 

family and possibly make it easier for 

someone to steal the deceased person’s 

identity in an attempt to defraud 

investors.22 Therefore, FINRA proposes 

to amend FINRA Rule 8312(g) to specify 

that information about a deceased 

individual would be removed from 

BrokerCheck 180 days after the 

individual’s last registration date.23

FINRA further proposes that, after the 

180 days, FINRA would provide 

BrokerCheck information on a deceased 

individual in response to a written 

request where the information is 

requested for a legal, regulatory or 

compliance purpose.24

(C) Technical Changes 

FINRA is also proposing nonsubstantive, technical changes to FINRA 

Rule 8312 that would (1) delete, with 

respect to BrokerCheck Firms, the 

phrase ‘‘current or former’’ from FINRA 

Rules 8312(b)(1) and (b)(2)(H) as this 

phrase is redundant; (2) delete the 

unnecessary numeral 2 pertaining to the 

age of customer complaints from FINRA 

Rule 8312(b)(2)(G); and (3) clarify in 

FINRA Rule 8312(c) that the term ‘‘final 

regulatory action’’ is used (rather than 

defined) in Form U4. 

If the Commission approves the 

proposed rule change, FINRA will 

announce the effective date of the 

proposed rule change in a Regulatory 

Notice to be published no later than 60 

days following Commission approval. 

The effective date will be no later than 

90 days following publication of the 

Regulatory Notice announcing 

Commission approval. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,25 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. 

The proposed rule change will 

harmonize the information available 

through BrokerCheck, that is available 

to investors and other users of the 

system, about formerly registered 

individuals who have been involved in 

Permanent Disclosure Events, including 

final regulatory actions. Moreover, 

making information about final 

regulatory actions available in 

BrokerCheck on a permanent basis only 

for those individuals who are registered 

on or after August 16, 1999, will remove 

information that is limited with respect 

to the regulatory action, lacks 

administrative and qualification 

information, and involves individuals 

who have not been in the securities 

industry for decades. Thus, the 

proposed rule change will make 

information presented in BrokerCheck 

86622 Federal Register / Vol. 85, No. 250 / Wednesday, December 30, 2020 / Notices 

26See supra note 8 for a further discussion of the 

information that is available through BrokerCheck. 

27See Hammad Qureshi & Jonathan Sokobin, Do 

Investors Have Valuable Information About 

Brokers? (2015), https://www.finra.org/sites/default/ 

files/OCE-Working-Paper.pdf. See also Mark Egan, 

Gregor Matvos & Amit Seru, The Market for 

Financial Adviser Misconduct, 127(1) Journal of 

Political Economy 233–295 (2019); and Stephen G. 

Dimmock, & William C. Gerken, Predicting Fraud 

by Investment Managers, 105(1) Journal of Financial 

Economics 153–173 (2012). 

28As noted above, approximately 14,750 

individuals whose last registration ended before 

August 16, 1999 have a record in BrokerCheck 

solely because they are the subject of a final 

regulatory action that occurred before that date. See 

supra note 18. In general, FINRA is not able to 

identify those individuals in BrokerCheck who are 

deceased, unless it receives documentary evidence 

that the individual is deceased. 

29 In July 2017, FINRA revised the BrokerCheck 

Terms of Use to allow ‘‘scraping’’ for academic use. 

Academic and other users are obligated to comply 

with the other applicable provisions of the Terms 

of Use. Academics have collected, in bulk, data 

from the BrokerCheck website. See, e.g., Mark Egan, 

Gregor Matvos & Amit Seru, The Market for 

Financial Adviser Misconduct, 127(1) Journal of 

Political Economy 233–295 (2019). 

more useful and relevant for investors 

and other users of the system. 

In addition, excluding information 

from BrokerCheck about deceased 

individuals will reduce potential 

distress for a deceased individual’s 

family and possibly make it more 

difficult for someone to steal the 

deceased person’s identity in an attempt 

to defraud investors. Although the 

information on deceased individuals 

will no longer be in BrokerCheck, the 

information will continue to be 

available for legal, regulatory or 

compliance purposes upon written 

request. 

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. 

Economic Impact Assessment 

FINRA has undertaken an economic 

impact assessment, as set forth below, to 

further analyze the regulatory need for 

the proposed rule change, its potential 

economic impacts, including 

anticipated costs, benefits, and 

distributional and competitive effects, 

relative to the current baseline, and the 

alternatives FINRA considered in 

assessing how best to meet its regulatory 

objective. 

Regulatory Need 

BrokerCheck provides the public with 

information on the professional 

background, business practices, and 

conduct of FINRA member firms and 

their associated persons. FINRA 

believes, however, that some 

information presented in BrokerCheck is 

of minimal use or relevance for 

investors and other users of the system. 

Accordingly, FINRA is proposing to 

remove some information that is 

displayed or can be accessed through 

BrokerCheck. 

Economic Baseline 

The economic baseline for the 

proposed rule change is the current rule 

that addresses the types of information 

displayed in BrokerCheck. In general, 

the proposed rule change may affect 

those users of BrokerCheck for whom 

the removed information may have been 

relevant. The proposed rule change also 

may affect individuals who may be 

adversely impacted by the maintenance 

of information about a deceased 

individual in BrokerCheck. 

The information displayed in 

BrokerCheck is derived from the CRD 

system. In general, the information 

enables users to make informed 

decisions regarding the firms currently 

registered as broker-dealers and the 

individuals currently registered as 

brokers. BrokerCheck maintains 

information on approximately 3,550 

firms currently registered as brokerdealers and 624,600 individuals 

currently registered as brokers. As noted 

above, BrokerCheck also maintains 

information on more than 17,120 

formerly registered broker-dealer firms 

and 554,170 formerly registered 

brokers.26

Decisions include the choice of firms 

or individuals with whom to do 

business or employ, and the choice of 

firms with which to seek employment. 

The review and consideration of this 

information before the selection of an 

individual or firm with which to do 

business or to employ may improve 

investor protections by increasing the 

ability of users to understand the 

potential risk of misconduct. Disclosure 

events reported to the CRD system have 

been found to be predictive of future 

misconduct.27

Economic Impacts 

The proposed rule change would 

remove some information currently 

available through BrokerCheck. This 

information relates to the final 

regulatory actions of individuals who 

have not been registered since August 

16, 1999, and deceased individuals.28

We discuss the costs and benefits of the 

proposed rule change below. To the 

extent that the information remains 

available online (i.e., discoverable 

through routine internet searches), 

however, then the potential benefits and 

costs of the proposed rule change may 

be mitigated. 

The proposed amendments relating to 

deceased individuals would reduce the 

ability for someone to steal the deceased 

individual’s identity in an attempt to 

defraud investors. This may increase 

investor protections to the extent 

someone would use the information to 

defraud investors, and decrease the 

potential costs to the families of the 

deceased individuals (e.g., time and 

distress) to resolve matters relating to 

identity theft. 

Although the information may be of 

minimal use or relevance to investors 

and other users of BrokerCheck, the 

proposed rule change may impose costs 

on certain users of BrokerCheck who 

would otherwise utilize the information 

that would be removed. For example, 

the former customers of a deceased 

broker may use BrokerCheck as a 

resource to evaluate the potential for 

previous misconduct in their own 

account. Instead of obtaining the 

information through BrokerCheck, these 

investors would incur the costs 

associated with submitting a written 

request to obtain the information. 

The information available through 

BrokerCheck may change over time as a 

result of the exclusion of information 

relating to the final regulatory actions of 

individuals who have not been 

registered since August 16, 1999, and 

deceased individuals, which may result 

in different collections of BrokerCheck 

data.29 The changes to data collections 

is dependent, in part, on the number of 

deceased individuals who would have 

their information excluded. As the 

number of deceased individuals for 

whom information is available through 

BrokerCheck is uncertain, so is the 

effect of the proposed rule change on 

future data collections. 

Alternatives Considered 

An alternative to the proposed rule 

change would be to propose a different 

number of days for removing a deceased 

individual’s information from 

BrokerCheck. A period longer (shorter) 

than the proposed 180 days after the 

individual’s last registration may 

increase (decrease) the ability of 

investors to readily obtain information 

about a deceased broker with which 

they did business prior to the broker’s 

death or examine the misconduct of 

individual brokers at the firm level. A 

period longer (shorter) than the 

proposed 180 days, however, may 

increase (decrease) the potential for 

identity theft. 

Federal Register / Vol. 85, No. 250 / Wednesday, December 30, 2020 / Notices 86623 

30 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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– 

FINRA–2020–045 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–2020–045. 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, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of 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– 

2020–045 and should be submitted on 

or before January 20, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2020–28807 Filed 12–29–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90777; File No. SR–LTSE– 

2020–23] 

Self-Regulatory Organizations; LongTerm Stock Exchange, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Rule 

11.380 To Expand the Exchange’s 

Optional Risk Controls Mechanism To 

Include a Net Notional Exposure Risk 

Check in Addition to the Gross 

Notional Exposure Risk Check 

December 22, 2020. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on December 

17, 2020, Long-Term Stock Exchange, 

Inc. (‘‘LTSE’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. 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 

LTSE proposes a rule change to 

amend LTSE Rule 11.380 to offer an 

optional net notional exposure risk 

check to Members and their clearing 

firms as part of the Exchange’s Risk 

Controls mechanism. 

The text of the proposed rule change 

is available at the Exchange’s website at 

https://longtermstockexchange.com/, 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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

LTSE Rule 11.380 to offer an optional 

net notional exposure risk check to 

Members and their clearing firms as part 

of the Exchange’s Risk Controls 

mechanism. 

Existing LTSE Rule 11.380 describes 

the Exchange’s current optional Risk 

Controls mechanism that is designed to 

assist LTSE Members and their clearing 

firms in their risk management efforts. 

LTSE does not charge a fee for use of the 

Risk Controls mechanism. As described 

in the rule, the Risk Controls 

mechanism currently can be configured 

to provide trading limits based on the 

gross notional exposure for matched 

trades for a Member or clearing firm’s 

broker correspondent across market 

participant identifiers (‘‘MPIDs’’), by 

MPID, by session or in combination, per 

clearing firm relationship or Member, as 

applicable (‘‘Gross Notional Exposure’’). 

Once the Gross Notional Exposure, as 

elected and configured by a Member or 

its clearing firm, has exceeded the predetermined limit, LTSE will 

automatically reject new orders and 

cancel all open orders for the applicable