Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 6705 

24 15 U.S.C. 78s(b)(3)(A)(ii). 

25 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The platform also permits users to submit orders 

for commodity futures, commodity options and 

other non-security products to be sent to designated 

contract markets, futures commission merchants, 

introducing brokers or other applicable destinations 

of the users’ choice. 

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 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.24

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) 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– 

BX–2021–001 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–BX–2021–001. 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 

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–BX–2021–001 and should 

be submitted on or before February 12, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01403 Filed 1–21–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90929; File No. SR–CBOE– 

2021–002] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating To Amend the 

Silexx Trading Platform Fees Schedule 

January 14, 2021. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 4, 

2021, Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

the Silexx trading platform (‘‘Silexx’’ or 

the ‘‘platform’’) Fees Schedule. The text 

of the proposed rule change is provided 

in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/ 

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

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 adopt 

‘‘drop copy’’ and order routing fees for 

a recently adopted Silexx platform 

(‘‘Cboe Silexx’’), effective January 4, 

2021. 

By way of background, the Silexx 

platform consists of a ‘‘front-end’’ order 

entry and management trading platform 

(also referred to as the ‘‘Silexx 

terminal’’) for listed stocks and options 

that supports both simple and complex 

orders,3 and a ‘‘back-end’’ platform 

which provides a connection to the 

infrastructure network. From the Silexx 

platform (i.e., the collective front-end 

and back-end platform), a Silexx user 

has the capability to send option orders 

to U.S. options exchanges, send stock 

orders to U.S. stock exchanges (and 

other trading centers), input parameters 

to control the size, timing, and other 

variables of their trades, and also 

includes access to real-time options and 

stock market data, as well as access to 

certain historical data. The Silexx 

platform is designed so that a user may 

enter orders into the platform to send to 


jbell on DSKJLSW7X2PROD with NOTICES
6706 Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 

4See Securities Exchange Act Release No. 87028 

(September 19, 2019) 84 FR 50529 (September 25, 

2019) (SR–CBOE–2019–061). 

5See Securities Exchange Act Release No. 88741 

(April 24, 2020) 85 FR 24045 (April 30, 2020) (SR– 

CBOE–2020–040). 

6These fill messages allow customers to update 

positions, risk calculations, and streamline backoffice functions. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9 Id. 

10 15 U.S.C. 78f(b)(4). 

an executing broker (including Trading 

Permit Holders (‘‘TPHs’’)) of its choice 

with connectivity to the platform, which 

broker will then send the orders to Cboe 

Options (if the broker is a TPH) or other 

U.S. exchanges (and trading centers) in 

accordance with the user’s instructions. 

Historically, users could not directly 

route orders through any of the thencurrent versions of Silexx to an 

exchange or trading center nor was the 

platform integrated into or directly 

connected to Cboe Option’s System. In 

2019, the Exchange made available an 

additional version of the Silexx 

platform, Silexx FLEX, which supports 

the trading of FLEX Options and allows 

authorized Users with direct access to 

the Exchange.4 Most recently, the 

Exchange made a new version of the 

Silexx platform available, Cboe Silexx, 

which supports the trading of non-FLEX 

Options and allows authorized Users 

with direct access to the Exchange.5 The 

Silexx front-end and back-end platforms 

are a software application that is 

installed locally on a user’s desktop. 

Silexx grants users licenses to use the 

platform, and a firm or individual does 

not need to be a TPH to license the 

platform. Use of any version of the 

Silexx platform is completely optional. 

Currently, TPH or non-TPH market 

participants may receive order fill 

messages 6 (i.e., drop copies) from their 

Silexx Brokers via the PULSe drop copy 

network. However, on January 4, 2021, 

the Exchange plans to migrate such 

functionality to Cboe Silexx in 

conjunction with the planned 

decommission of the PULSe Trader 

Workstation. At that time, TPH or nonTPH market participants may instead 

receive drop copies via the Cboe Silexx 

Platform. As a result, the Exchange 

proposes to adopt certain drop copy fees 

from the Cboe Options Fees Schedule to 

the Silexx Fees Schedule with certain 

modifications. Additionally, the 

Exchange is proposing to adopt a fee for 

order routing via Financial Information 

eXchange (‘‘FIX’’) into Cboe Silexx, and 

to replace the PULSe Routing Network 

via Silexx fee with a Cboe Silexx 

Routing Network fee. 

The Exchange proposes to eliminate 

the PULSe Routing Network via Silexx 

fee from the Silexx Fees Schedule, 

which sets forth a fee for trading firms 

accessing the PULSe drop copy network 

from a non-PULSe, non-Silexx 

workstation for its customers’ drop 

copies. Instead, the Exchange is 

proposing to adopt a fee for accessing 

the Silexx routing network to or from a 

non-Cboe Silexx workstation for order 

routing or drop copies. The proposed 

fee is $500 per month payable by the 

customer accessing the Silexx routing 

network on a per connection basis, and 

is similar to the existing PULSe Routing 

Network via Silexx fee that the 

Exchange is proposing to eliminate, 

with the exception that the proposed fee 

references the Silexx routing network 

rather than the PULSe Drop Copy 

Network and eliminates the reference to 

a non-PULSe workstation for order 

routing or drop copies. Further, the 

proposed fee is equal to the existing 

PULSe Routing Network via Silexx fee 

(i.e., $500 per month per customer 

connection). 

Second, the Exchange proposes to 

adopt a fee for drop copies received by 

a TPH customer via Cboe Silexx. The 

proposed fee is $425 per month payable 

by the TPH customer receiving the drop 

copies, unless otherwise directed by the 

TPH broker. Specifically, for each Cboe 

Silexx-using TPH broker that provides a 

TPH customer drop copies, such 

receiving TPH customer incurs a fee of 

$425 per month. The proposed fee is 

substantially similar to a fee charged to 

a PULSe-using TPH broker that provides 

a TPH customer drop copies via a 

PULSe workstation. The only difference 

between the proposed fee and the 

existing fee pertaining to PULSe users is 

that the TPH broker may direct that the 

fee be assessed to itself rather than the 

TPH customer receiving the drop 

copies. However, the TPH customer will 

be ultimately responsible for the fee. 

Third, the Exchange proposes to 

adopt a drop copy payable by the TPH 

broker sending the drop copies to its 

non-TPH customers, unless otherwise 

directed by the TPH broker. 

Specifically, for each non-TPH Cboe 

Silexx-using customer for which a TPH 

broker provides drop copies, the TPH 

broker will incur a fee of $0.02/contract 

with a fee cap of $400 per month for 

each non-TPH customer to which the 

TPH broker sends drop copies. The 

proposed fee is substantially similar to 

the fee applied to drop copies received 

by a non-TPH customer via a PULSe 

workstation with one difference. Like 

the proposed fee for drop copies 

received by a TPH customer, the TPH 

broker may direct that the applicable fee 

be assessed to its customer rather than 

itself. However, the TPH broker will be 

ultimately responsible for the fee. 

Lastly, the Exchange proposes to 

adopt a fee for orders routed via FIX 

into Cboe Silexx. Particularly, the 

Exchange proposes to adopt a fee for 

each TPH broker to whom a TPH 

customer using a non-Cboe Silexx 

workstation sends orders electronically 

to a TPH broker’s Silexx workstation. 

The proposed fee is $500 per month for 

each TPH broker with a Silexx 

workstation to which the TPH customer 

sends orders. The proposed fee is 

substantially similar to the existing 

Non-PULSe-to-PULSe Routing (sent by 

TPH customers) fee set forth in the Cboe 

Fees Schedule with two differences. 

First, like the proposed fees discussed 

above, the TPH broker may direct the 

applicable fee be assessed to its 

customer rather than itself. However, 

the TPH broker will be ultimately 

responsible for the fee. Second, the 

Exchange is not proposing to adopt the 

provision that TPH customers who 

request FIX order routing into Cboe 

Silexx will also receive drop copies 

from its TPH brokers and must pay the 

monthly drop copy fee in addition to 

the in-bound addition fee. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.7 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 8 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 9 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

Additionally, the Exchange also believes 

the proposed rule change is consistent 

with Section 6(b)(4) of the Act,10 which 

requires that Exchange rules provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 6707 

11See Cboe Options Fees Schedule, which 

provides for a PULSe workstation drop copy 

(received by TPH customer) fee of $425 per month, 

a drop copy (received by non-TPH customer) fee of 

$0.02 per contract capped at $400 per month, and 

a Non-PULSe-to-PULSe Routing (sent by TPH 

customers) fee of $500 per month. 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f). 

TPHs and other persons using its 

facilities. 

The Exchange believes that its 

proposed fees are reasonable and 

appropriate as they are substantially 

similar with fees set forth in the Cboe 

Exchange Fees Schedule applicable to 

the PULSe workstation, which is a 

substantially similar order entry and 

management system to Silexx.11 Despite 

certain differences in the proposed fees 

from the existing fees applicable to 

PULSe workstations, the Exchange 

believes that the proposed fees are 

reasonable for the following reasons. 

First, the proposed Cboe Silexx Routing 

Network fee would provide trading 

firms the ability to access the Cboe 

Silexx Routing Network to or from a 

non-Cboe Silexx workstation for not 

only drop copies, but also for order 

routing. Further, the proposed fee is 

equal to the existing PULSe Routing 

Network via Silexx fee despite that it 

provides order routing functionality in 

addition to drop copies. Second, while 

the proposed Drop Copy (received by 

TPH customer from Cboe Silexx) and 

Drop Copy (received by non-TPH 

customer) from Cboe Silexx fees provide 

that the TPH broker may direct the 

applicable fee be payable by itself or its 

customer, as applicable, the proposal 

may simplify and streamline billing for 

TPH brokers and their customers. 

Lastly, the proposed FIX order routing 

into Cboe Silexx fee differs from the 

Non-PULSe-to-PULSe Routing (sent by 

TPH customers) fee currently provided 

in the Cboe Options Fee Schedule as it 

does not provide that TPH customers 

requesting such order routing 

functionality will receive drop copies 

from its TPH brokers and must pay the 

monthly drop copy fee in addition to 

the in-bound addition fee. The 

Exchange believes it is reasonable not to 

include such language as it is no longer 

applicable. 

Additionally, as discussed, use of 

drop copy functionality and FIX order 

routing into Cboe Silexx is discretionary 

and not compulsory. Indeed, Users can 

choose to route orders, including to 

Cboe Options, and receive drop copies 

without the use of the platform. The 

Exchange is making the platform 

available as a convenience to market 

participants, who will continue to have 

the option to use any order entry and 

management system available in the 

marketplace to send orders to the 

Exchange and other exchanges; the 

platform is merely an alternative that 

will be offered by the Exchange. The 

Exchange believes the proposed fees are 

equitable and not unfairly 

discriminatory because they apply to all 

market participants uniformly. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed change will not impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act 

because it relates to optional services on 

an optional platform. The proposed fees 

will apply to similarly situated 

participants uniformly. Also as 

discussed, the use of the platform and 

the drop copy services will be 

completely voluntary and market 

participants will continue to have the 

flexibility to use any order entry and 

management tool that is proprietary or 

from third-party vendors, and/or market 

participants may choose any executing 

brokers to enter their orders and receive 

drop copies. Cboe Silexx is not an 

exclusive means of order routing or to 

receive drop copies, and if market 

participants believe that other products, 

vendors, front-end builds, etc. available 

in the marketplace are more beneficial 

than the Cboe Silexx platform, they may 

simply use those products instead. Use 

of such functionality is completely 

voluntary. 

The Exchange does not believe that 

the proposed rule changes will impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act 

because the proposed changes are 

substantially similar to fees applicable 

to the PULSe workstation, which is a 

substantially similar order entry and 

management system and which is 

migrating to Cboe Silexx in conjunction 

with the planned decommission of the 

PULSe Trader Workstation on January 4, 

2021. To the extent that the proposed 

changes make Cboe Options a more 

attractive marketplace for market 

participants at other exchanges, such 

market participants are welcome to 

become Cboe Options market 

participants. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 12 and paragraph (f) of Rule 

19b–4 13 thereunder. 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 will institute proceedings 

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– 

CBOE–2021–002 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–CBOE–2021–002. 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 


jbell on DSKJLSW7X2PROD with NOTICES
6708 Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 

14 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 7217(b). 

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

3See Qualifications of Accountants, Release No. 

33–10876 (Oct. 16, 2020) (‘‘2020 Adopting 

Release’’). 

4See Amendments to PCAOB Interim 

Independence Standards and Board Rules to Align 

with Amendments to Rule 2–01of Regulation S–X, 

PCAOB Release No. 2020–03 (Nov. 19, 2020) 

(‘‘PCAOB Adopting Release’’), available at https:// 

pcaobus.org/Rulemaking/Docket047/2020-003- 

Independence-final-rule.pdf. 

5See Public Company Accounting Oversight 

Board; Notice of Filing of Proposed Rules on 

Amendments to PCAOB Interim Independence 

Standards and PCAOB Rules to Align with 

Amendments to Rule 2–01 of Regulation S–X, 

Release No. 34–90473 (Nov. 20, 2020) [85 FR 76131 

(Nov. 27, 2020)]. 

6See, e.g., comment letters from the Council of 

Institutional Investors, December 3, 2020 (‘‘CII 

Letter’’); Right Advisory LLC, December 7, 2020 

(‘‘RA Letter’’); Deloitte LLP, December 11, 2020 

(‘‘Deloitte Letter’’); PricewaterhouseCoopers LLP, 

December 16, 2020 (‘‘PwC Letter’’); Colorado PERA, 

December 16, 2020 (‘‘COPERA’’); International 

Corporate Governance Network, December 16, 2020 

(‘‘ICGN Letter’’); Consumer Federation of America 

and Certain Other Groups and Individuals, 

December 17, 2020 (‘‘CFA, et al. Letter’’); Ernst & 

Young LLP, December 18, 2020 (‘‘EY Letter’’); and 

the California Public Employees’ Retirement 

System, December 18, 2020 (‘‘CalPERS Letter’’). 

Copies of the comment letters received on the 

Commission order noticing the Proposed Rules are 

available on the Commission’s website at https://

www.sec.gov/comments/pcaob-2020-01/ 

pcaob202001.htm. 

7See supra note 4. 

8See 2020 Adopting Release at 81. 

9The term ‘‘emerging growth company’’ is 

defined in Section 3(a)(80) of the Exchange Act (15 

U.S.C. 78c(a)(80)). See also Release No. 33–10332 

Inflation Adjustments and Other Technical 

Amendments Under Titles I and III of the JOBS Act 

(Mar. 31, 2017), 82 FR 17545 (Apr. 12, 2017). 

10See RA Letter; Deloitte Letter; PwC Letter; and 

EY Letter. 

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 

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–CBOE–2021–002 and 

should be submitted on or before 

February 12, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01285 Filed 1–21–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90930; File No. PCAOB– 

2020–01] 

Public Company Accounting Oversight 

Board; Order Granting Approval of 

Amendments to PCAOB Interim 

Independence Standards and PCAOB 

Rules to Align with Amendments to 

Rule 2–01 of Regulation S–X 

January 14, 2021. 

I. Introduction 

On November 20, 2020, the Public 

Company Accounting Oversight Board 

(the ‘‘Board’’ or the ‘‘PCAOB’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’), 

pursuant to Section 107(b) 1 of the 

Sarbanes-Oxley Act of 2002 (the 

‘‘Sarbanes-Oxley Act’’) and Section 

19(b) 2 of the Securities Exchange Act of 

1934 (the ‘‘Exchange Act’’), a proposal 

to adopt amendments to the PCAOB’s 

interim independence standards and 

PCAOB rules to align with the 

Commission’s recent adoption of 

amendments 17 CFR 210.2–01 (‘‘Rule 2– 

01’’) of 17 CFR 210.01 et seq. 

(‘‘Regulation S–X’’) 3 (collectively, the 

‘‘Proposed Rules’’).4 The Proposed 

Rules were published for comment in 

the Federal Register on November 27, 

2020.5 We received several comment 

letters in response to the notice.6 This 

order approves the Proposed Rules, 

which we find to be consistent with the 

requirements of the Sarbanes-Oxley Act 

and the securities laws and necessary or 

appropriate in the public interest or for 

the protection of investors. 

II. Description of the Proposed Rules 

On November 19, 2020, the Board 

adopted amendments to the PCAOB’s 

interim independence standards and 

PCAOB rules to align with amendments 

by the SEC to Rule 2–01 of Regulation 

S–X.7 The Proposed Rules are intended 

to avoid differences and duplicative 

requirements. To that end, the Board 

adopted targeted amendments to its 

interim independence standards 

applicable to lending arrangements 

between auditors and audit clients. In 

addition, the Board adopted targeted 

amendments to align certain terms 

defined in PCAOB Rule 3501 with the 

Commission’s recent amendments to its 

definitions of those terms in 17 CFR 

210.2–01(f) (‘‘Rule 2–01(f)’’). 

A. Changes to PCAOB Standards 

The Proposed Rules will make the 

following changes: 

• Amend ET § 101.02 of the American 

Institute of Certified Public Accountants 

(‘‘AICPA’’) Code of Professional 

Conduct, Interpretation of Rule 101, as 

in existence on April 16, 2003 and 

incorporated in the Board’s auditing and 

related professional practice. 

• Delete ET § 101.07 of the AICPA’s 

Code of Professional Conduct, Loans 

from financial institution clients and 

related terminology, as in existence on 

April 16, 2003 and incorporated in the 

Board’s auditing and related 

professional practice standards by 

PCAOB Rule 3500T. 

• Delete ET §§ 191.150–.151, ET 

§§ 191.182–.183, ET §§ 191.196–.197, 

and ET §§ 191.220–.222, of the AICPA’s 

Code of Professional Conduct, as in 

existence on April 16, 2003 and 

incorporated in the Board’s auditing and 

related professional practice standards 

by PCAOB Rule 3500T, which are four 

Ethics Rulings under Rule 101 that also 

address lending arrangements and are 

part of the Board’s interim 

independence standards. 

• Amend PCAOB Rules 3501(a)(ii), 

(a)(iii), and (i)(ii). 

B. Applicability and Effective Date 

The Proposed Rules will be effective 

June 9, 2021, 180 days after the date of 

the publication of the Commission’s 

October 16, 2020 amendments to Rule 

2–01 in the Federal Register. The June 

9, 2021 effective date is aligned with the 

effective date of the Commission’s 

amendments to Rule 2–01.8 Auditors 

may elect to comply before the effective 

date at any point after SEC approval of 

the Board’s amendments, provided that 

the final amendments are applied in 

their entirety. The PCAOB has 

recommended that the Proposed Rules 

to apply to audits of emerging growth 

companies (‘‘EGCs’’),9 as discussed in 

Section IV below, and audits of brokers 

and dealers under 17 CFR 240.17a–5 

(‘‘Exchange Act Rule 17a–5’’). 

III. Comment Letters 

The comment period on the Proposed 

Rules ended on December 18, 2020. We 

received several comment letters 

representing investor organizations, 

advisory firms, accounting firms, trade 

organizations, and other interested 

parties. Some commenters were 

supportive 10 of the Proposed Rules 


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