650 Federal Register / Vol. 86, No. 3 / Wednesday, January 6, 2021 / Notices 

26 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. 

4See Securities Exchange Act Release No. 90085 

(October 2, 2020), 85 FR 63603 (October 8, 2020) 

(SR–NYSEAMER–2020–69) (‘‘SR–NYSEAMER– 

2020–69’’). 

5The Exchange may submit a separate rule filing 

to extend the expiration date of the proposed 

extension beyond April 30, 2021 if the Exchange 

requires additional temporary relief from the rule 

requirements identified in SR–NYSEAMER–2020– 

69. The amended NYSE American rules will revert 

back to their original state at the conclusion of the 

temporary relief period and any extension thereof. 

6See Securities Exchange Act Release Nos. 77241 

(February 26, 2016), 81 FR 11311 (March 3, 2016) 

(SR–NYSEMKT–2016–30) (‘‘2016 Notice’’). 

7See NYSE MKT Information Memorandum 16– 

02 (March 14, 2016). 

8See 2016 Notice, 81 FR at 11327 & 11332. 

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–NYSEArca–2020–116. 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–NYSEArca–2020–116 and 

should be submitted on or before 

February 22, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–29211 Filed 1–5–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90823; File No. SR– 

NYSEAMER–2020–88] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Extending the Expiration 

Date of the Temporary Amendments to 

Rules 9261 and 9830 as Set Forth in 

SR–NYSEAMER–2020–69 From 

December 31, 2020, to April 30, 2021 

December 30, 2020. 

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

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’) 2 and Rule 19b–4 

thereunder,3 notice is hereby given that 

on December 22, 2020, NYSE American 

LLC (‘‘NYSE American’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

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 extending the 

expiration date of the temporary 

amendments to Rules 9261 and 9830 as 

set forth in SR–NYSEAMER–2020–69 

from December 31, 2020, to April 30, 

2021, in conformity with recent changes 

by the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’). The 

proposed rule change would not make 

any changes to the text of NYSE 

American Rules 9261 and 9830. The 

proposed rule change is available on the 

Exchange’s website at www.nyse.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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes extending the 

expiration date of the temporary 

amendments as set forth in SR– 

NYSEAMER–2020–69 4 to Rules 9261 

(Evidence and Procedure in Hearing) 

and 9830 (Hearing) from December 31, 

2020, to April 30, 2021 to harmonize 

with recent changes by FINRA to extend 

the expiration date of the temporary 

amendments to its Rules 9261 and 9830. 

SR–NYSEAMER–2020–69 temporarily 

granted to the Chief or Deputy Chief 

Hearing Officer the authority to order 

that hearings be conducted by video 

conference if warranted by public health 

risks posed by in-person hearings 

during the ongoing COVID–19 

pandemic. The proposed rule change 

would not make any changes to the text 

of Exchange Rules 9261 and 9830.5

Background 

In 2016, NYSE American (then known 

as NYSE MKT LLC) adopted 

disciplinary rules that are, with certain 

exceptions, substantially the same as the 

Rule 8000 Series and Rule 9000 Series 

of FINRA and its affiliate the New York 

Stock Exchange LLC (‘‘NYSE’’), and 

which set forth rules for conducting 

investigations and enforcement actions.6

The NYSE American disciplinary rules 

were implemented on April 15, 2016.7

In adopting disciplinary rules 

modeled on FINRA’s rules, NYSE 

American adopted the hearing and 

evidentiary processes set forth in Rule 

9261 and in Rule 9830 for hearings in 

matters involving temporary and 

permanent cease and desist orders 

under the Rule 9800 Series. As adopted, 

the text of Rule 9261 and Rule 9830 are 

substantially the same as the FINRA 

rules with certain modifications.8


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 3 / Wednesday, January 6, 2021 / Notices 651 

9See Securities Exchange Act Release No. 83289 

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

2020) (SR–FINRA–2020–027) (the ‘‘August 31 

FINRA Filing’’). 

10See supra note 4. 

11See Securities Exchange Act Release No. 90619 

(December 9, 2020), 85 FR 81250 (December 15, 

2020) (SR–FINRA–2020–042) (‘‘SR–FINRA–2020– 

042’’). 

12See id. 

13See SR–FINRA–2020–042, 85 FR at 81251–52; 

August 31 FINRA Filing, 85 FR at 55713. 

14 15 U.S.C. 78f(b). 

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

16 15 U.S.C. 78f(b)(7) and 78f(d). 

17 15 U.S.C. 78f(b)(7) and 78f(d). 

In response to the spread of COVID– 

19, on August 31, 2020, FINRA filed 

with the Commission a proposed rule 

change for immediate effectiveness, SR– 

FINRA–2020–027, to temporarily grant 

FINRA’s Office of Hearing Officers 

(‘‘OHO’’) and 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. Among the 

rules FINRA amended were Rules 9261 

and 9830.9

Given that FINRA and OHO 

administers disciplinary hearings on the 

Exchange’s behalf, and that the public 

health concerns addressed by FINRA’s 

amendments apply equally to Exchange 

disciplinary hearings, on September 15, 

2020, the Exchange filed to temporarily 

amend Rule 9261 and Rule 9830 to 

permit FINRA to conduct virtual 

hearings on its behalf.10 The temporary 

amendments to Rule 9261 and Rule 

9830, as originally proposed, will expire 

on December 31, 2020, absent another 

proposed rule change filing by the 

Exchange. 

The COVID–19 conditions 

necessitating these temporary 

amendments persist, with cases rapidly 

escalating nationwide. Based on its 

assessment of current COVID–19 

conditions and the lack of certainty as 

to when COVID–19-related health 

concerns will subside, on December 1, 

2020, FINRA filed to extend the 

expiration date of the temporary rule 

amendments to, among other rules, 

FINRA Rule 9261 and 9830 from 

December 31, 2020, to April 30, 2021.11

Proposed Rule Change 

Consistent with FINRA’s recent 

proposal, the Exchange proposes to 

extend the expiration date of the 

temporary rule amendments to NYSE 

American Rules 9261 and 9830 as set 

forth in SR–NYSEAMER–2020–69 from 

December 31, 2020, to April 30, 2021. 

As set forth in SR–FINRA–2020–042, 

based on its assessment of current 

COVID–19 conditions, including the 

recent escalation in COVID–19 cases 

nationwide, FINRA does not believe 

that the COVID–19-related health 

concerns necessitating this relief will 

subside by December 31, 2020, and has 

determined that there will be a 

continued need for this temporary relief 

for several months beyond December 31, 

2020.12 FINRA accordingly proposed to 

extend the expiration date of the 

temporary rule amendments in the 

August 31 FINRA Filing from December 

31, 2020, to April 30, 2021. 

The Exchange proposes to similarly 

extend the expiration date of the 

temporary rule amendments to NYSE 

American Rules 9261 and 9830 as set 

forth in SR–NYSEAMER–2020–69 from 

December 31, 2020, to April 30, 2021. 

With COVID–19 cases surging 

nationwide, the Exchange agrees with 

FINRA that the COVID–19-related 

public health risks necessitating this 

temporary relief have not yet abated and 

are unlikely to abate by December 31, 

2020. The proposed change will permit 

OHO to continue to assess, based on 

critical COVID–19 data and criteria and 

the guidance of health and security 

consultants, whether an in-person 

hearing would compromise the health 

and safety of the hearing participants 

such that the hearing should proceed by 

video conference. FINRA has adopted a 

detailed and thorough protocol to 

ensure that hearings conducted by video 

conference will maintain fair process for 

the parties.13 The Exchange believes 

that this is a reasonable procedure to 

continue to follow for hearings under 

Rules 9261 and 9830 chaired by a 

FINRA employee. 

As noted below, the Exchange has 

filed the proposed rule change for 

immediate effectiveness and has 

requested that the SEC waive the 

requirement that the proposed rule 

change not become operative for 30 days 

after the date of the filing, so the 

Exchange can implement the proposed 

rule change immediately. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Act,14 in general, and furthers the 

objectives of Section 6(b)(5),15 in 

particular, because it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, to remove 

impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. Additionally, the 

Exchange believes the proposed rule 

change is designed to provide a fair 

procedure for the disciplining of 

members and persons associated with 

members, consistent with Sections 

6(b)(7) and 6(d) of the Act.16

The Exchange believes that the 

proposed rule change supports the 

objectives of the Act by providing 

greater harmonization between 

Exchange rules and FINRA rules of 

similar purpose, resulting in less 

burdensome and more efficient 

regulatory compliance. 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 proposed rule change, which 

extends the expiration date of the 

temporary amendments to Exchange 

rules consistent with FINRA’s extension 

to its Rules 9261 and 9830 for four 

months as set forth in SR–FINRA–2020– 

042, will permit the Exchange to 

continue 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 permit the adjudicatory 

functions of the Exchange’s disciplinary 

rules to continue unabated, thereby 

avoiding protracted delays. The 

Exchange believes that this is especially 

important in matters where temporary 

and permanent cease and desist orders 

are sought because the proposed rule 

change would enable those hearings to 

continue to proceed without delay, 

thereby enabling the Exchange to 

continue to take immediate action to 

stop significant, ongoing customer 

harm, to the benefit of the investing 

public. 

As set forth in detail in SR– 

NYSEAMER–2020–69, the temporary 

relief to permit hearings to be conducted 

via video conference maintains fair 

process and will continue to provide 

fair process consistent with Sections 

6(b)(7) and 6(d) of the Act 17 while 

striking 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. The Exchange notes that this 

proposal, like SR–NYSEAMER–2020– 

69, provides only temporary relief. As 


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652 Federal Register / Vol. 86, No. 3 / Wednesday, January 6, 2021 / Notices 

18 15 U.S.C. 78s(b)(3)(A). 

19 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. 

20See SR–FINRA–2020–042. 

21See id. 

22See supra note 11 (referencing FINRA’s 

proposal to extend the expiration date of temporary 

rule amendments allowing hearings to be 

conducted on a temporary basis by video 

conference if warranted by COVID–19 related 

health risks). 

23See supra note 5 and accompanying text. 

24See supra notes 9 and 11 and accompanying 

text. 

25For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

competition, and capital formation. See 15 U.S.C. 

78c(f). 

proposed, the changes would be in 

place through April 30, 2021. As noted 

in SR–NYSEAMER–2020–69 and above, 

the amended rules will revert back to 

their original state at the conclusion of 

the temporary relief period and, if 

applicable, any extension thereof. 

Accordingly, the proposed rule change 

extending this temporary relief is in the 

public interest and consistent with the 

Act’s purpose. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed temporary rule change 

will impose any burden on competition 

that is 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 

continued temporary relief given the 

impacts of the COVID–19 pandemic and 

the related health and safety risks of 

conducting in-person activities. The 

Exchange believes that the proposed 

rule change will prevent unnecessary 

disruptions that would otherwise result 

if the temporary amendments were to 

expire on December 31, 2020. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

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) 18 of the Act and Rule 19b– 

4(f)(6) thereunder.19

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing. However, pursuant to 

Rule 19b–4(f)(6)(iii), the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day operative 

delay so that the proposed rule change 

may become operative immediately 

upon filing. As noted above, the 

Exchange states that the COVID-related 

health and safety risks of conducting inperson activities, which necessitated 

these temporary amendments, persist 

and that cases are escalating 

nationwide. Based on FINRA’s 

assessment of the current COVID–19 

conditions and FINRA’s determination 

that there is a continued need for this 

temporary relief for several months 

beyond December 31, 2020, the 

Exchange states that it agrees with 

FINRA that the COVID–19-related 

public health risks necessitating this 

temporary relief have not yet abated and 

are unlikely to abate by December 31, 

2020.20 Moreover, the Exchange states 

that FINRA has adopted a detailed and 

thorough protocol to ensure that 

hearings conducted by video conference 

will provide a fair process for all parties 

and enable the Exchange to fulfill its 

statutory obligations to protect investors 

and maintain fair and orderly markets.21

The Exchange believes that this is a 

reasonable procedure to continue to 

follow for hearings under Rules 9261 

and 9830 chaired by a FINRA employee. 

Accordingly, the Exchange states that 

waiver of the operative delay would 

prevent unnecessary disruptions that 

would otherwise result if the temporary 

amendments were to expire on 

December 31, 2020. 

The Exchange also indicates that this 

filing is eligible to become operative 

immediately because the proposal 

would continue to provide greater 

harmonization between the Exchange 

rules and FINRA rules that serve a 

similar purpose, resulting in less 

burdensome and more efficient 

regulatory compliance. This proposal 

would serve to extend the expiration 

date of the temporary amendments to 

the Exchange rules set forth in SR– 

NYSEAMER–2020–69, which is 

consistent with FINRA’s extension to its 

comparable rules, where FINRA 

requested and the Commission granted 

a waiver of the 30-day operative delay.22

The Exchange also indicates that this 

temporary relief is necessary in order for 

the continued performance of its 

adjudicatory functions necessary to 

meet its statutory obligations in light of 

COVID–19 related health and safety 

risks associated with in-person hearings 

and will only be temporary relief, with 

the rules reverting back to their original 

state at the conclusion of the relief 

period and any extension thereof.23

The Commission observes that this 

proposal, like SR–NYSEAMER–2020–69 

and FINRA’s comparable filing,24

provides only temporary relief during 

the period in which the Exchange’s 

operations are impacted by COVID–19. 

As proposed, the changes would be in 

place through April 30, 2021. For these 

reasons, the Commission believes that 

waiver of the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposal operative upon 

filing.25

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– 

NYSEAMER–2020–88 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. 


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26 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Exchange Act Release No. 90067 (October 1, 

2020), 85 FR 63314 (‘‘Notice’’). Comments on the 

proposed rule change can be found at: https://

www.sec.gov/comments/sr-finra-2020-031/ 

srfinra2020031.htm. 

4 15 U.S.C. 78s(b)(2). 

5See Exchange Act Release No. 90335 (November 

4, 2020). The Commission designated January 5, 

2021 as the date by which the Commission shall 

approve or disapprove, or institute proceedings to 

determine whether to approve or disapprove, the 

proposed rule change. 

6Amendment No. 1 is a partial amendment in 

which FINRA included a representation that it will 

not cease operation of the OTCBB until the 

enhanced regulatory requirements under Rule 6439 

(except for certain provisions related to order-level 

information reports that also relate to information 

required for the Consolidated Audit Trail) become 

effective. See infra note 41. Amendment No. 1 may 

be found at: https://www.sec.gov/comments/srfinra-2020-031/srfinra2020031.htm. 

7 15 U.S.C. 78s(b)(2)(B). 

8FINRA Rule 6420(c) defines ‘‘inter-dealer 

quotation system’’ as ‘‘any system of general 

circulation to brokers or dealers which regularly 

disseminates quotations of identified brokers or 

dealers.’’ This definition tracks the Commission’s 

definition of the same term in Exchange Act Rule 

15c2–11, 17 CFR 240.15c2–11. 

9The term ‘‘OTC Equity Security’’ is defined in 

FINRA Rule 6420(f) as any equity security that is 

not an ‘‘NMS stock’’ as that term is defined in Rule 

600(b)(47) of Regulation NMS; provided, however, 

that the term ‘‘OTC Equity Security’’ shall not 

include any Restricted Equity Security. The term 

‘‘Restricted Equity Security’’ is further defined in 

FINRA Rule 6420(k) to mean any equity security 

that meets the definition of ‘‘restricted security’’ as 

contained in Rule 144(a)(3) under the Securities Act 

of 1933. 

10See Notice, supra note 3, at 63315. 

11See id. 

12See id. 

13See id. 

All submissions should refer to File 

Number SR–NYSEAMER–2020–88. 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–NYSEAMER–2020–88 and 

should be submitted on or before 

February 22, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–29214 Filed 1–5–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90824; File No. SR–FINRA– 

2020–031] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Amendment No. 1 and Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Adopt Proposed 

Rule 6439 (Requirements for Member 

Inter-Dealer Quotation Systems) and 

Rescind the Rules Related to the OTC 

Bulletin Board Service 

December 30, 2020. 

I. Introduction 

On September 24, 2020, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

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

Securities Exchange Act of 1934 (‘‘Act’’ 

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

thereunder,2 a proposed rule change to 

rescind the rules related to the OTC 

Bulletin Board Service and cease its 

operation and to adopt new 

requirements for member inter-dealer 

quotation systems that disseminate 

quotations in equity securities traded 

over-the-counter (‘‘OTC’’). The proposed 

rule change was published for comment 

in the Federal Register on October 7, 

2020.3 On November 4, 2020, pursuant 

to Section 19(b)(2) of the Act,4 the 

Commission designated a longer period 

within which to approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to disapprove the 

proposed rule change.5 On December 

21, 2020, FINRA filed Amendment No. 

1 to the proposed rule change.6 The 

Commission is publishing this notice 

and order to solicit comments on the 

proposed rule change, as modified by 

Amendment No. 1, from interested 

persons and to institute proceedings 

pursuant to Section 19(b)(2)(B) of the 

Act 7 to determine whether to approve 

or disapprove the proposed rule change, 

as modified by Amendment No. 1. 

II. Summary of the Proposal, as 

Modified by Amendment No. 1 

As further described below, FINRA 

proposes to (i) rescind FINRA’s rules 

governing the OTC Bulletin Board 

Service (‘‘OTCBB’’) and cease its 

operation; and (ii) adopt new Rule 6439 

(Requirements for Member Inter-Dealer 

Quotation Systems) to expand the 

obligations of member interdealer 

quotation systems (‘‘IDQSs’’) 8 that 

disseminate quotation updates on a realtime basis in OTC Equity Securities.9

A. Rescission of Rules Governing the 

OTCBB 

The OTCBB is a FINRA-operated 

IDQS available for use by broker-dealers 

to publish quotations in eligible OTC 

Equity Securities.10 FINRA has operated 

the OTCBB since 1990.11 FINRA states 

that, due to technological advancements 

since 1990 and the increase in 

alternative electronic venues with more 

extensive functionality than the OTCBB, 

the level of quotation activity occurring 

on the OTCBB has continued to decline 

over the past several years and is now 

nonexistent.12 FINRA represents that, as 

of the date that it filed the proposed rule 

change, the OTCBB does not display or 

widely disseminate quotation 

information on any OTC Equity 

Security.13

FINRA states that it does not believe 

that continued operation of the OTCBB 

serves any benefit to investors or the 

marketplace and that ceasing operation 

of the OTCBB would eliminate potential 


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