7590 Federal Register / Vol. 86, No. 18 / Friday, January 29, 2021 / Notices 

19 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78q(d). 

2 17 CFR 240.17d–2. 

3 15 U.S.C. 78s(g)(1). 

4 15 U.S.C. 78q(d). 

5 15 U.S.C. 78s(g)(2). 

6 15 U.S.C. 78q(d)(1). 

7See Securities Act Amendments of 1975, Report 

of the Senate Committee on Banking, Housing, and 

Urban Affairs to Accompany S. 249, S. Rep. No. 94– 

75, 94th Cong., 1st Session 32 (1975). 

8 17 CFR 240.17d–1 and 17 CFR 240.17d–2, 

respectively. 

9See Securities Exchange Act Release No. 12352 

(April 20, 1976), 41 FR 18808 (May 7, 1976). 

10See Securities Exchange Act Release No. 12935 

(October 28, 1976), 41 FR 49091 (November 8, 

1976). 

11See Securities Exchange Act Release No. 54394 

(August 31, 2006), 71 FR 52827 (September 7, 

2006). 

12See Securities Exchange Act Release No. 55505 

(March 22, 2007), 72 FR 14628 (March 28, 2007). 

should be submitted on or before 

February 19, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01940 Filed 1–28–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90985; File No. 4–523] 

Program for Allocation of Regulatory 

Responsibilities Pursuant To Rule 

17d–2; Notice of Filing and Order 

Approving and Declaring Effective an 

Amended Plan for the Allocation of 

Regulatory Responsibilities Between 

the Financial Industry Regulatory 

Authority, Inc. and NYSE Arca, Inc. 

January 25, 2021. 

Notice is hereby given that the 

Securities and Exchange Commission 

(‘‘Commission’’) has issued an Order, 

pursuant to Section 17(d) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 approving and declaring 

effective an amendment to the plan for 

allocating regulatory responsibility 

(‘‘Plan’’) filed on December 18, 2020, 

pursuant to Rule 17d–2 of the Act,2 by 

the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) and NYSE 

Arca, Inc. (‘‘NYSE Arca’’) (collectively, 

‘‘Participating Organizations’’ or 

‘‘parties’’). This agreement amends and 

restates the agreement entered into 

between the parties on February 9, 2007, 

entitled ‘‘Agreement Between the 

National Association of Securities 

Dealers, Inc. and NYSE Arca, Inc. 

Pursuant to SEA Rule 17d–2 Under the 

Securities Exchange Act of 1934,’’ and 

any subsequent amendments thereafter. 

I. Introduction 

Section 19(g)(1) of the Act,3 among 

other things, requires every selfregulatory organization (‘‘SRO’’) 

registered as either a national securities 

exchange or national securities 

association to examine for, and enforce 

compliance by, its members and persons 

associated with its members with the 

Act, the rules and regulations 

thereunder, and the SRO’s own rules, 

unless the SRO is relieved of this 

responsibility pursuant to Section 

17(d) 4 or Section 19(g)(2) 5 of the Act. 

Without this relief, the statutory 

obligation of each individual SRO could 

result in a pattern of multiple 

examinations of broker-dealers that 

maintain memberships in more than one 

SRO (‘‘common members’’). Such 

regulatory duplication would add 

unnecessary expenses for common 

members and their SROs. 

Section 17(d)(1) of the Act 6 was 

intended, in part, to eliminate 

unnecessary multiple examinations and 

regulatory duplication.7 With respect to 

a common member, Section 17(d)(1) 

authorizes the Commission, by rule or 

order, to relieve an SRO of the 

responsibility to receive regulatory 

reports, to examine for and enforce 

compliance with applicable statutes, 

rules, and regulations, or to perform 

other specified regulatory functions. 

To implement Section 17(d)(1), the 

Commission adopted two rules: Rule 

17d–1 and Rule 17d–2 under the Act.8

Rule 17d–1 authorizes the Commission 

to name a single SRO as the designated 

examining authority (‘‘DEA’’) to 

examine common members for 

compliance with the financial 

responsibility requirements imposed by 

the Act, or by Commission or SRO 

rules.9 When an SRO has been named as 

a common member’s DEA, all other 

SROs to which the common member 

belongs are relieved of the responsibility 

to examine the firm for compliance with 

the applicable financial responsibility 

rules. On its face, Rule 17d–1 deals only 

with an SRO’s obligations to enforce 

member compliance with financial 

responsibility requirements. Rule 17d–1 

does not relieve an SRO from its 

obligation to examine a common 

member for compliance with its own 

rules and provisions of the federal 

securities laws governing matters other 

than financial responsibility, including 

sales practices and trading activities and 

practices. 

To address regulatory duplication in 

these and other areas, the Commission 

adopted Rule 17d–2 under the Act.10

Rule 17d–2 permits SROs to propose 

joint plans for the allocation of 

regulatory responsibilities with respect 

to their common members. Under 

paragraph (c) of Rule 17d–2, the 

Commission may declare such a plan 

effective if, after providing for 

appropriate notice and opportunity for 

comment, it determines that the plan is 

necessary or appropriate in the public 

interest and for the protection of 

investors, to foster cooperation and 

coordination among the SROs, to 

remove impediments to, and foster the 

development of, a national market 

system and a national clearance and 

settlement system, and is in conformity 

with the factors set forth in Section 

17(d) of the Act. Commission approval 

of a plan filed pursuant to Rule 17d–2 

relieves an SRO of those regulatory 

responsibilities allocated by the plan to 

another SRO. 

II. The Plan 

On August 31, 2006, the Commission 

declared effective the Plan entered into 

between FINRA and NYSE Arca for 

allocating regulatory responsibility 

pursuant to Rule 17d–2.11 On March 22, 

2007, the Commission approved an 

amendment to the Plan that (1) 

eliminated paragraph 11 of the Plan that 

allocated to FINRA the responsibility to 

receive and act upon requests for 

extension of time pursuant to Federal 

Reserve Regulation T and Rule 15c3–3 

under the Act, and (2) changed from 

‘‘monthly’’ to ‘‘upon request’’ the 

obligation of FINRA to share 

information with NYSE Arca regarding 

notice of changes in allied members, 

partners, officers, registered personnel 

and other persons, and the opening, 

address change, and termination of 

main and branch offices and the names 

of branch office managers.12

The Plan is intended to reduce 

regulatory duplication for firms that are 

common members of FINRA and NYSE 

Arca by allocating regulatory 

responsibility with respect to certain 

applicable laws, rules, and regulations 

that are common among them. Included 

in the Plan is an exhibit that lists every 

NYSE Arca rule for which FINRA bears 

responsibility under the Plan for 

overseeing and enforcing with respect to 

NYSE Arca members that are also 

members of FINRA and the associated 

persons therewith (‘‘Certification’’). 

III. Proposed Amendment to the Plan 

On December 18, 2020, the parties 

submitted a proposed amendment to the 

Plan (‘‘Amended Plan’’). The primary 

purpose of the Amended Plan is to 


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remove Regulation SHO from the 

Certification. The text of the proposed 

Amended Plan, which replaces and 

supersedes the current Plan in its 

entirety, is as follows: 

* * * * * 

AGREEMENT BETWEEN FINANCIAL 

INDUSTRY REGULATORY 

AUTHORITY, INC. AND NYSE ARCA, 

INC. PURSUANT TO RULE 17d–2 

UNDER THE SECURITIES EXCHANGE 

ACT OF 1934 

This Agreement, by and between 

Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) and the 

NYSE Arca, Inc. (‘‘NYSE Arca’’), is 

made this 17th day of December, 2020 

(the ‘‘Agreement’’), pursuant to Section 

17(d) of the Securities Exchange Act of 

1934 (the ‘‘Exchange Act’’ or ‘‘SEA’’) 

and Rule 17d–2 thereunder which 

permits agreements between self– 

regulatory organizations to allocate 

regulatory responsibility to eliminate 

regulatory duplication. FINRA and 

NYSE Arca may be referred to 

individually as a ‘‘party’’ and together 

as the ‘‘parties.’’ 

This Agreement amends and restates 

the agreement entered into between the 

parties on February 9, 2007, entitled 

‘‘Agreement Between the National 

Association of Securities Dealers, Inc. 

and NYSE Arca, Inc. Pursuant to SEA 

Rule 17d–2 Under the Securities 

Exchange Act of 1934,’’ and any 

subsequent amendments thereafter. 

Whereas, FINRA and NYSE Arca 

desire to reduce duplication in the 

examination of their Dual Members (as 

defined herein) and in the filing and 

processing of certain registration and 

membership records; and 

Whereas, FINRA and NYSE Arca 

desire to execute an agreement covering 

such subjects pursuant to the provisions 

of Rule 17d–2 under the Exchange Act 

and to file such agreement with the 

Securities and Exchange Commission 

(the ‘‘SEC’’ or ‘‘Commission’’) for its 

approval. 

Now, therefore, in consideration of 

the mutual covenants contained 

hereinafter, FINRA and NYSE Arca 

hereby agree as follows: 

1. Definitions. Unless otherwise 

defined in this Agreement or the context 

otherwise requires, the terms used in 

this Agreement shall have the same 

meaning as they have under the 

Exchange Act and the rules and 

regulations thereunder. As used in this 

Agreement, the following terms shall 

have the following meanings: 

(a) ‘‘NYSE Arca Rules’’ or ‘‘FINRA 

Rules’’ shall mean: (i) The rules of the 

NYSE Arca, or (ii) the rules of FINRA, 

respectively, as the rules of an exchange 

or association are defined in Exchange 

Act Section 3(a)(27). 

(b) ‘‘Common Rules’’ shall mean the 

NYSE Arca Rules that are substantially 

similar to the applicable FINRA Rules 

and certain provisions of the Exchange 

Act and SEA rules set forth on Exhibit 

1 in that examination for compliance 

with such rules would not require 

FINRA to develop one or more new 

examination standards, modules, 

procedures, or criteria in order to 

analyze the application of such 

provisions or rule, or a Dual Member’s 

activity, conduct, or output in relation 

to such rule; provided, however, 

Common Rules shall not include the 

application of SEA, NYSE Arca or 

FINRA rules as they pertain to 

violations of insider trading activities, 

which is covered by a separate 17d–2 

Agreement by and among the Cboe BZX 

Exchange, Inc., Cboe BYX Exchange, 

Inc., NYSE Chicago, Inc., Cboe EDGA 

Exchange, Inc., Bats Cboe EDGX 

Exchange, Inc., Financial Industry 

Regulatory Authority, Inc., MEMX, LLC, 

MIAX Pearl, LLC, Nasdaq BX, Inc., 

Nasdaq PHLX LLC, The Nasdaq Stock 

Market LLC, NYSE National, Inc., New 

York Stock Exchange LLC, NYSE 

American LLC, NYSE Arca, Inc., 

Investors Exchange LLC and Long-Term 

Stock Exchange, Inc., approved by the 

SEC on September 23, 2020, as may be 

amended from time to time. Common 

Rules shall not include provisions 

regarding (i) notice, reporting or any 

other filings made directly to or from 

NYSE Arca, (ii) incorporation by 

reference of other NYSE Arca Rules that 

are not Common Rules, (iii) exercise of 

discretion in a manner that differs from 

FINRA’s exercise of discretion, 

including, but not limited to exercise of 

exemptive authority, by NYSE Arca, (iv) 

prior written approval of NYSE Arca, 

and (v) payment of fees or fines to NYSE 

Arca. 

(c) ‘‘Dual Members’’ shall mean those 

NYSE Arca members that are also 

members of FINRA and the associated 

persons therewith. 

(d) ‘‘Effective Date’’ shall be the date 

this Agreement is approved by the 

Commission. 

(e) ‘‘Enforcement Responsibilities’’ 

shall mean the conduct of appropriate 

proceedings, in accordance with the 

FINRA Code of Procedure (the Rule 

9000 Series) and other applicable 

FINRA procedural rules, to determine 

whether violations of Common Rules 

have occurred, and if such violations are 

deemed to have occurred, the 

imposition of appropriate sanctions as 

specified under the FINRA Code of 

Procedure and sanctions guidelines. 

(f) ‘‘Regulatory Responsibilities’’ shall 

mean the examination responsibilities 

and Enforcement Responsibilities 

relating to compliance by the Dual 

Members with the Common Rules and 

the provisions of the Exchange Act and 

the rules and regulations thereunder, 

and other applicable laws, rules and 

regulations, each as set forth on Exhibit 

1 attached hereto. 

2. Regulatory and Enforcement 

Responsibilities. FINRA shall assume 

Regulatory Responsibilities and 

Enforcement Responsibilities for Dual 

Members. Attached as Exhibit 1 to this 

Agreement and made part hereof, NYSE 

Arca furnished FINRA with a current 

list of Common Rules and certified to 

FINRA that such rules are substantially 

similar to the corresponding FINRA 

Rule (the ‘‘Certification’’). FINRA 

hereby agrees that the rules listed in the 

Certification are Common Rules as 

defined in this Agreement. Each year 

following the Effective Date of this 

Agreement, or more frequently if 

required by changes in either the rules 

of NYSE Arca or FINRA, NYSE Arca 

shall submit an updated list of Common 

Rules to FINRA for review which shall 

add NYSE Arca Rules not included in 

the current list of Common Rules that 

qualify as Common Rules as defined in 

this Agreement; delete NYSE Arca Rules 

included in the current list of Common 

Rules that no longer qualify as Common 

Rules as defined in this Agreement; and 

confirm that the remaining rules on the 

current list of Common Rules continue 

to be NYSE Arca Rules that qualify as 

Common Rules as defined in this 

Agreement. Within 30 days of receipt of 

such updated list, FINRA shall confirm 

in writing whether the rules listed in 

any updated list are Common Rules as 

defined in this Agreement. 

Notwithstanding anything herein to the 

contrary, it is explicitly understood that 

the term ‘‘Regulatory Responsibilities’’ 

does not include, and NYSE Arca shall 

retain full responsibility for (unless 

otherwise addressed by separate 

agreement or rule) the following 

(collectively, the ‘‘Retained 

Responsibilities’’): 

(a) Surveillance, examination, 

investigation and enforcement with 

respect to trading activities or practices 

involving NYSE Arca’s own 

marketplace; 

(b) registration pursuant to its 

applicable rules of associated persons 

(i.e., registration rules that are not 

Common Rules); 

(c) discharge of its duties and 

obligations as a Designated Examining 

Authority pursuant to Rule 17d–1 under 

the Exchange Act, if applicable; and 


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(d) any NYSE Arca Rules that are not 

Common Rules except for NYSE Arca 

Rules for any NYSE Arca affiliate that is 

a member that operates as a facility (as 

defined in Section 3(a)(2) of the 

Exchange Act), acts as a router for NYSE 

Arca and is a member of FINRA 

(‘‘Router Member’’) as provided in 

paragraph 6. As of the date of this 

Agreement, Archipelago Securities LLC 

is the only Router Member. 

3. Dual Members. Prior to the 

Effective Date, NYSE Arca shall furnish 

FINRA with a current list of Dual 

Members, which shall be updated no 

less frequently than once each quarter. 

4. No Charge. There shall be no 

charge to NYSE Arca by FINRA for 

performing the Regulatory 

Responsibilities and Enforcement 

Responsibilities under this Agreement 

except as hereinafter provided. FINRA 

shall provide NYSE Arca with ninety 

(90) days advance written notice in the 

event FINRA decides to impose any 

charges to NYSE Arca for performing 

the Regulatory Responsibilities under 

this Agreement. If FINRA determines to 

impose a charge, NYSE Arca shall have 

the right at the time of the imposition 

of such charge to terminate this 

Agreement; provided, however, that 

FINRA’s Regulatory Responsibilities 

under this Agreement shall continue 

until the Commission approves the 

termination of this Agreement. 

5. Applicability of Certain Laws, 

Rules, Regulations or Orders. 

Notwithstanding any provision hereof, 

this Agreement shall be subject to any 

statute, or any rule or order of the 

Commission. To the extent such statute, 

rule or order is inconsistent with one or 

more provisions of this Agreement, the 

statute, rule or order shall supersede the 

provision(s) hereof to the extent 

necessary to be properly effectuated and 

the provision(s) hereof in that respect 

shall be null and void. 

6. Notification of Violations. 

(a) In the event that FINRA becomes 

aware of apparent violations of any 

NYSE Arca Rules, which are not listed 

as Common Rules, discovered pursuant 

to the performance of the Regulatory 

Responsibilities assumed hereunder, 

FINRA shall notify NYSE Arca of those 

apparent violations for such response as 

NYSE Arca deems appropriate. With 

respect to apparent violations of any 

NYSE Arca Rules by any Router 

Member, FINRA shall not make referrals 

to NYSE Arca pursuant to this 

paragraph 6. Such apparent violations 

shall be processed by, and enforcement 

proceedings in respect thereto will be 

conducted by, FINRA as provided in 

this agreement. 

(b) In the event that NYSE Arca 

becomes aware of apparent violations of 

any Common Rules, discovered 

pursuant to the performance of the 

Retained Responsibilities, NYSE Arca 

shall notify FINRA of those apparent 

violations and such matters shall be 

handled by FINRA as provided in this 

Agreement. 

(c) Apparent violations of Common 

Rules shall be processed by, and 

enforcement proceedings in respect 

thereto shall be conducted by FINRA as 

provided hereinbefore; provided, 

however, that in the event a Dual 

Member is the subject of an 

investigation relating to a transaction on 

the NYSE Arca, NYSE Arca may in its 

discretion assume concurrent 

jurisdiction and responsibility. 

(d) Each party agrees to make 

available promptly all files, records and 

witnesses necessary to assist the other 

in its investigation or proceedings. 

7. Continued Assistance. 

(a) FINRA shall make available to 

NYSE Arca all information obtained by 

FINRA in the performance by it of the 

Regulatory Responsibilities hereunder 

with respect to the Dual Members 

subject to this Agreement. In particular, 

and not in limitation of the foregoing, 

FINRA shall furnish NYSE Arca any 

information it obtains about Dual 

Members which reflects adversely on 

their financial condition. NYSE Arca 

shall make available to FINRA any 

information coming to its attention that 

reflects adversely on the financial 

condition of Dual Members or indicates 

possible violations of applicable laws, 

rules or regulations by such firms. 

(b) The parties agree that documents 

or information shared shall be held in 

confidence, and used only for the 

purposes of carrying out their respective 

regulatory obligations. Neither party 

shall assert regulatory or other 

privileges as against the other with 

respect to documents or information 

that is required to be shared pursuant to 

this Agreement. 

(c) The sharing of documents or 

information between the parties 

pursuant to this Agreement shall not be 

deemed a waiver as against third parties 

of regulatory or other privileges relating 

to the discovery of documents or 

information. 

8. Statutory Disqualifications. When 

FINRA becomes aware of a statutory 

disqualification as defined in the 

Exchange Act with respect to a Dual 

Member, FINRA shall determine 

pursuant to Sections 15A(g) and/or 

Section 6(c) of the Exchange Act the 

acceptability or continued applicability 

of the person to whom such 

disqualification applies and keep NYSE 

Arca advised of its actions in this regard 

for such subsequent proceedings as 

NYSE Arca may initiate. 

9. Customer Complaints. NYSE Arca 

shall forward to FINRA copies of all 

customer complaints involving Dual 

Members received by NYSE Arca 

relating to FINRA’s Regulatory 

Responsibilities under this Agreement. 

It shall be FINRA’s responsibility to 

review and take appropriate action in 

respect to such complaints. 

10. Advertising. FINRA shall assume 

responsibility to review the advertising 

of Dual Members subject to the 

Agreement, provided that such material 

is filed with FINRA in accordance with 

FINRA’s filing procedures and is 

accompanied with any applicable filing 

fees set forth in FINRA Rules. 

11. No Restrictions on Regulatory 

Action. Nothing contained in this 

Agreement shall restrict or in any way 

encumber the right of either party to 

conduct its own independent or 

concurrent investigation, examination 

or enforcement proceeding of or against 

Dual Members, as either party, in its 

sole discretion, shall deem appropriate 

or necessary. 

12. Termination. This Agreement may 

be terminated by NYSE Arca or FINRA 

at any time upon the approval of the 

Commission after one (1) year’s written 

notice to the other party, except as 

provided in paragraph 4. 

13. Arbitration. In the event of a 

dispute between the parties as to the 

operation of this Agreement, NYSE Arca 

and FINRA hereby agree that any such 

dispute shall be settled by arbitration in 

Washington, DC in accordance with the 

rules of the American Arbitration 

Association then in effect, or such other 

procedures as the parties may mutually 

agree upon. Judgment on the award 

rendered by the arbitrator(s) may be 

entered in any court having jurisdiction. 

Each party acknowledges that the timely 

and complete performance of its 

obligations pursuant to this Agreement 

is critical to the business and operations 

of the other party. In the event of a 

dispute between the parties, the parties 

shall continue to perform their 

respective obligations under this 

Agreement in good faith during the 

resolution of such dispute unless and 

until this Agreement is terminated in 

accordance with its provisions. Nothing 

in this Section 13 shall interfere with a 

party’s right to terminate this Agreement 

as set forth herein. 

14. Notification of Members. NYSE 

Arca and FINRA shall notify Dual 

Members of this Agreement after the 

Effective Date by means of a uniform 

joint notice. 


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15. Amendment. This Agreement may 

be amended in writing duly approved 

by each party. All such amendments 

must be filed with and approved by the 

Commission before they become 

effective. 

16. Limitation of Liability. Neither 

FINRA nor NYSE Arca nor any of their 

respective directors, governors, officers 

or employees shall be liable to the other 

party to this Agreement for any liability, 

loss or damage resulting from or 

claimed to have resulted from any 

delays, inaccuracies, errors or omissions 

with respect to the provision of 

Regulatory Responsibilities as provided 

hereby or for the failure to provide any 

such responsibility, except with respect 

to such liability, loss or damages as 

shall have been suffered by one or the 

other of FINRA or NYSE Arca and 

caused by the willful misconduct of the 

other party or their respective directors, 

governors, officers or employees. No 

warranties, express or implied, are made 

by FINRA or NYSE Arca with respect to 

any of the responsibilities to be 

performed by each of them hereunder. 

17. Relief from Responsibility. 

Pursuant to Sections 17(d)(1)(A) and 

19(g) of the Exchange Act and Rule 17d– 

2 thereunder, FINRA and NYSE Arca 

join in requesting the Commission, 

upon its approval of this Agreement or 

any part thereof, to relieve NYSE Arca 

of any and all responsibilities with 

respect to matters allocated to FINRA 

pursuant to this Agreement; provided, 

however, that this Agreement shall not 

be effective until the Effective Date. 

18. Severability. Any term or 

provision of this Agreement that is 

invalid or unenforceable in any 

jurisdiction shall, as to such 

jurisdiction, be ineffective to the extent 

of such invalidity or unenforceability 

without rendering invalid or 

unenforceable the remaining terms and 

provisions of this Agreement or 

affecting the validity or enforceability of 

any of the terms or provisions of this 

Agreement in any other jurisdiction. 

19. Counterparts. This Agreement 

may be executed in one or more 

counterparts, each of which shall be 

deemed an original, and such 

counterparts together shall constitute 

one and the same instrument. 

20. Separate Agreement. This 

Agreement is wholly separate from (1) 

the multiparty Agreement made 

pursuant to Rule 17d–2 of the Securities 

Exchange Act of 1934 between the 

NYSE American LLC, Cboe BZX 

Exchange, Inc., the Cboe EDGX 

Exchange, Inc., Cboe C2 Exchange, Inc., 

Cboe Exchange, Inc., Nasdaq ISE, LLC, 

Financial Industry Regulatory 

Authority, Inc., NYSE Arca, Inc., The 

NASDAQ Stock Market LLC, BOX 

Exchange LLC, NASDAQ BX, Inc., 

NASDAQ PHLX LLC, Miami 

International Securities Exchange, LLC, 

Nasdaq GEMX, LLC, Nasdaq MRX, LLC, 

MIAX PEARL, LLC, and MIAX Emerald, 

LLC involving the allocation of 

regulatory responsibilities with respect 

to common members for compliance 

with common rules relating to the 

conduct by broker-dealers of accounts 

for listed options or index warrants 

entered into on February 12, 2019, and 

as may be amended from time to time 

or (2) the multiparty Agreement made 

pursuant to Rule 17d–2 of the Exchange 

Act among NYSE American LLC, Cboe 

BZX Exchange, Inc., the Cboe EDGX 

Exchange, Inc., Cboe C2 Exchange, Inc., 

Cboe Exchange, Inc., Nasdaq ISE, LLC, 

Financial Industry Regulatory 

Authority, Inc., NYSE Arca, Inc., The 

NASDAQ Stock Market LLC, BOX 

Exchange LLC, NASDAQ BX, Inc., 

NASDAQ PHLX LLC, Miami 

International Securities Exchange, LLC, 

Nasdaq GEMX, LLC, Nasdaq MRX, LLC, 

MIAX PEARL, LLC, and MIAX Emerald, 

LLC approved by the Commission on 

February 11, 2019 involving options– 

related market surveillance matters and 

such agreements as may be amended 

from time to time. 

* * * * * 

Exhibit 1 

NYSE ARCA Certification 

NYSE Arca Rules Certification for 17d– 

2 Agreement With FINRA 

NYSE Arca, Inc. hereby certifies that 

the requirements contained in the rules 

listed below are identical to, or 

substantially similar to the comparable 

FINRA Rules and bylaws identified 

(‘‘Common Rules’’). 

# Common Rules shall not include 

provisions regarding (i) notice, reporting 

or any other filings made directly to or 

from NYSE Arca, (ii) incorporation by 

reference of other NYSE Arca Rules that 

are not Common Rules (iii) exercise of 

discretion in a manner than differs from 

FINRA’s exercise of discretion 

including, but not limited to exercise of 

exemptive authority, by NYSE Arca, (iv) 

prior written approval of NYSE Arca, 

and (v) payment of fees or fines to NYSE 

Arca. 

NYSE Arca Rule(s) 1 FINRA Rule(s) 

2.16 Responsibilities of Non-Resident Firms # ............................. FINRA Rule 1021 Foreign Members. 

2.1210 Registration Requirements # ............................................ FINRA Rule 1210 Registration Requirements. 

2.1220 Registration Categories 2 # ............................................... FINRA Rule 1220(a)(1)–(4), (7), (8), (10), and (b)(1), (2) and (4), SM. 01–.06 

Registration Categories. 

2.1230 Associated Persons Exempt from Registration ................ FINRA Rule 1230(a) and SM. 01, Associated Persons Exempt from Registration. 

2.28 Books and Records # ........................................................... FINRA Rule 4511 General Requirements.* 

11.1(b) Adherence to Law and Good Business Practice ............. FINRA Rule 2010 Standards of Commercial Honor and Principals of Trade.* 

11.2 Prohibited Acts # ................................................................... FINRA Rule 2010 Standards of Commercial Honor and Principals of Trade,* 

FINRA Rule 1122 Filing of Misleading Information as to Membership or Registration, and FINRA By-Laws Article XIII, Section 1. 

11.10 Excessive Trading .............................................................. FINRA Rule 6140(c) Other Trading Practices. 

11.13 Disciplinary Action By Other Organizations # ..................... FINRA Rule 4530(a)(1)(A), (a)(1)(C), (a)(1)(D) & (2) Reporting Requirements 

and FINRA By-Laws Article V, Section 2. 

11.18 Supervision # 3 .................................................................... FINRA Rule 3110(a), (b)(1) and (f) Supervision,* and FINRA Rule 1220(a)(1)– 

(4), (7), (8), (10) Registration Categories. 

11.19 Anti-Money Laundering Compliance Program # ................. FINRA Rule 3310 Anti-Money Laundering Compliance Program. 

11.20 Miscellaneous Provisions(a)(1) and (3) .............................. FINRA Rule 6140 Other Trading Practices. 

NYSE Arca Equities Rule(s) 4 FINRA Rule(s) 

2.24 Registration-Employees of ETP Holders and Commentary 

.02 # 5.

FINRA Rule 1210 Registration Requirements, FINRA Rule 1010(a) and (c) 

Electronic Filing Requirements for Uniform Forms, and FINRA By-Laws Article V, Sec. 2 Application for Registration. 


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NYSE Arca Equities Rule(s) 4 FINRA Rule(s) 

2.24(b), (c), and Commentary .03 and .05 Registration-Employees of ETP Holders #.FINRA Rule 1210 and SM .03, .07 and .08 Registration Requirements, and 

FINRA Rule 1240 Continuing Education Requirements, and FINRA Rule 

1230(a) Associated Persons Exempt from Registration. 

2.24(d) and Commentary .04 Continuing Education and 9.27– 

E(c) Continuing Education Requirements.

FINRA Rule 1240 Continuing Education Requirements. 

2.24(i) Registration-Employees of ETP Holders .......................... FINRA Rule 1010(e) Electronic Filing Requirements for Uniform Forms and 

FINRA By-Laws Article V, Section 3 Notification by Member to the Corporation and Associated Person of Termination; Amendments to Notification. 

2.24(j) Registration-Employees of ETP Holders .......................... FINRA By-Laws Article V, Section 2 Application for Registration. 

5.2–E(h) Unit Investment Trusts (‘‘UITs’’) Commentary .03 # ...... FINRA Rule 3260(c) Discretionary Accounts. 

7.3–E(b) and (c) Commissions ..................................................... FINRA Rule 2232 Customer Confirmations and SEA 10b–10. 

9.1–E(a) Register with the Exchange # ........................................ FINRA Rule 3110(a)(3) Supervisory System, SM .01 Registration of Main Office, and SM .02 Designation of Additional OSJs, and FINRA By-Laws Article IV, Sec. 1(c) Application for Membership. 

9.1–E(c) Office Supervision # ....................................................... FINRA Rule 3110(a) Supervision.* 

9.1–E(d) ETP Holder shall at all times # ...................................... FINRA Rule 3110(a) Supervison.* 

9.1–E(e)(2) and (3) Guarantees ................................................... FINRA Rule 2150(b) Improper use of Customers’ Securities or Funds; Prohibitions Against Guarantees and Sharing in Accounts. 

9.2–E(a) Diligence As To Accounts ............................................. FINRA Rule 2090 Know Your Customer.6

9.2–E(a)(2) and (3) Diligence As To Accounts ............................ FINRA Rule 2111 Suitability. 

9.2–E(b)(1) and (4) Account Supervision ..................................... FINRA Rule 3110 Supervision and FINRA Rule 4511.* 

9.2–E(c) Customer Records ......................................................... FINRA Rule 4512 Customer Account Information.* 7

9.3–E(a) Employee Accounts ....................................................... FINRA Rule 3210 Accounts at Other Broker-Dealers and Financial Institutions.8

9.3–E(b) ETP Holder Accounts .................................................... FINRA Rule 3210 Accounts at Other Broker-Dealers and Financial Institutions. 

9.4–E Proxies Voting .................................................................... FINRA Rule 2251(b) Processing and Forwarding of Proxies and Other IssuerRelated Materials. 

9.5–E Solicitation Expense ........................................................... FINRA Rule 2251(c) Processing and Forwarding of Proxies and Other IssuerRelated Materials. 

9.6–E(a) Discretion as to Customers’ Accounts and 9.6–E(b) 

Records of Discretionary Accounts.

FINRA Rule 3260 Discretionary Accounts and FINRA Rule 4512(a)(3) Customer Account Information.* 

9.6–E(c) Marking Discretionary Orders ........................................ FINRA Rule 3260 Discretionary Accounts. 

9.7–E(b) Use of Customer Securities ........................................... FINRA Rule 2150(a) Improper use of Customers’ Securities or Funds; Prohibition Against Guarantees and Sharing in Accounts, and FINRA Rule 2010 

Standards of Commercial Honor and Principles of Trade. 

9.7–E(c) Customer Protection—Reserves and Custody of Securities.FINRA 4330(b)(1)(A) Customer Protection—Permissible Use of Customers’ 

Securities and SM .01 Definitions. 

9.7–E(d) Agreements for Use of Customer Securities ................. FINRA 4330(a)Customer Protection—Permissible Use of Customers’ Securities. 

9.11–E Confirmations ................................................................... Temporary Dual FINRA NYSE Member Rule 409T(b) Statements of Accounts 

to Customer.9

9.12–E COD Orders—Partial Delivery ......................................... FINRA Rule 11860 COD Orders. 

9.14–E Account Designation ........................................................ FINRA Rule 4515 Approval and Documentation of Changes in Account Name 

or Designation. 

9.15–E Statements of Account to Customers .............................. FINRA Rule 2231 Customer Account Statements. 

9.16–O Statement or Notice on Interest ...................................... FINRA Rule 2360(b)(15) Options, FINRA Rule 2231(a) Customer Account 

Statements. 

9.18–E(h) Doing a Public Business in Options ............................ FINRA Rule 2360(b)(13) Options. 

9.19–E Transfer of Accounts ........................................................ FINRA Rule 11870 Customer Account Transfer Contracts. 

9.20–E(b) Telemarketing .............................................................. FINRA Rule 3230 Telemarketing. 

9.27–E(a) and (b) Registration of Representatives # ................... FINRA Rule 1220 Registration Categories, FINRA Rule 1240 Continuing Education Requirements, FINRA Rule 1010(d) Electronic Filing Requirements 

for Uniform Forms, and FINRA By-Laws Article V Registered Representatives and Associated Persons. 

9.29–E Borrowing From or Lending to Customers ...................... FINRA Rule 3240 Borrowing From or Lending to Customers. 

11.22 Trading Ahead of Research Reports ................................. FINRA Rule 5280 Trading Ahead of Research Reports. 

9.2010–E Standards of Commercial Honor and Principles of 

Trade.

FINRA Rule 2010 Standards of Commercial Honor and Principles of Trade.* 

9.2020–E Use of Manipulative, Deceptive or Other Fraudulent 

Devices.

FINRA Rule 2020 Use of Manipulative, Deceptive or Other Fraudulent Devices.* 

9.2150–E Improper Use of Customers’ Securities or Funds’ Prohibition Against Guarantees and Sharing in Accounts.FINRA Rule 2150 Improper Use of Customers’ Securities or Funds; Prohibition 

Against Guarantees and Sharing in Accounts. 

9.2262–E Disclosure of Control Relationship with Issuer ............ FINRA Rule 2262 Disclosure of Control Relationship with Issuer. 

9.2269–E Disclosure of Participation or Interest in Primary or 

Secondary Distribution.

FINRA Rule 2269 Disclosure of Participation or Interest in Primary or Secondary Distribution. 

9.3220–E Influencing or Rewarding Employees of Others .......... FINRA Rule 3220 Influencing or Rewarding Employees of Others. 

9.3270–E Outside Business Activities of Registered Persons ..... FINRA Rule 3270 Outside Business Activities of Registered Persons. 

9.5320–E Prohibition Against trading Ahead of Customer Orders.FINRA Rule 5320 Prohibition Against Trading Ahead of Customer Orders. 

9.5190–E Notification Requirements for Offering Participants # .. FINRA Rule 5190 Notification Requirements for Offering Participants.10

9.5210–E Publication of Transactions and Quotations ................ FINRA Rule 5210 Publication of Transactions and Quotations. 

6.7410–E Definitions ..................................................................... FINRA Rule 7410 Definitions. 

6.7420–E Applicability .................................................................. FINRA Rule 7420 Applicability. 

6.7430–E Synchronization of ETP Holder Business Clock # ....... FINRA Rule 4590 Synchronization of Member Business Clocks. 


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Federal Register / Vol. 86, No. 18 / Friday, January 29, 2021 / Notices 7595 

NYSE Arca Equities Rule(s) 4 FINRA Rule(s) 

6.7440–E Recording of Order Information ................................... FINRA Rule 7440 Recording of Order Information. 

6.7450–E Order Data Transmission Requirements ..................... FINRA Rule 7450 Order Data Transmission Requirements. 

6.7460–E Violation of Order Audit Trail System Rules ................ FINRA Rule 7460 Violation of Order Audit Trail System Rules. 

6.7470–E Exemption to the Order Recording and Data Transmission Requirements #.FINRA Rule 7470 Exemption to the Order Recording and Data Transmission 

Requirements. 

NYSE Arca Options Rule(s) 11 FINRA Rule(s) 

2.23(a) Registration—OTPs # ....................................................... FINRA Rule 1210 Registration Requirements, FINRA Rule 1010(a) and (c) 

Electronic Filing Requirements for Uniform Forms, and FINRA By-Laws Article V, Sec. 2 Application for Registration. 

2.23(b)(1) and (3) Registration # .................................................. FINRA Rule 1210 and SM .03 and .07 Registration Requirements, and FINRA 

Rule 1220(a)(2), (7) and (b)(2) Registration Categories. 

2.23(c) and .04 Registration ......................................................... FINRA Rule 1210 SM .03 and .08 Registration Requirements. 

2.23(d) and .03 Registration and 9.27–O(c) Continuing Education Requirements.FINRA Rule 1240 Continuing Education Requirements. 

2.23(j) Registration ....................................................................... FINRA By-Laws Article V, Section 2 Application for Registration. 

9.1–O(c) Office Supervision # ....................................................... FINRA Rule 3110(a) Supervision.* 

9.1–O(d) OTP Holders # ............................................................... FINRA Rule 3110(a) Supervision.* 

9.2–O(c) Customer Records ......................................................... FINRA Rule 4512 Customer Account Information.12

9.3–O(a) Employee Accounts ....................................................... FINRA Rule 3210 Accounts at Other Broker-Dealers and Financial Institutions.10

9.3–O(b) OTP Firms, OTP Holder Accounts ................................ FINRA Rule 3210 Accounts at Other Broker-Dealers and Financial Institutions. 

9.4–O Proxies Voting .................................................................... FINRA Rule 2251(b) Forward of Proxies and Other Issuer-Related Materials. 

9.5–O Solicitation Expense .......................................................... FINRA Rule 2251(c)(1)(b) Forward of Proxies and Other Issuer-Related Materials. 

9.6–O(a) Discretion as to Customers’ Accounts and 9.6–O(b) 

Records of Discretionary Accounts.

FINRA Rule 3260 Discretionary Accounts and FINRA Rule 4512(a)(3) Customer Account Information.* 

9.6–O(c) Marking Discretionary Orders ........................................ FINRA Rule 3260 Discretionary Accounts. 

9.7–O(b) Use Customer Securities .............................................. FINRA Rule 2150(a) Improper Use of Customers’ Securities or Funds Prohibition and FINRA Rule 2010 Standards of Commercial Honor and Principles 

of Trade. 

9.7–O(c) Customer Protection—Reserves and Customer’s Securities.FINRA Rule 4330(b)(1)(A) Customer Protection—Permissible Use of Customers’ Securities and SM .01 Definitions. 

9.7–O(d) Agreements for Use of Customer Securities ................ FINRA Rule 4330(a) Customer Protection—Permissible Use of Customers’ 

Securities. 

9.11–O Confirmations ................................................................... Temporary Dual FINRA NYSE Member Rule 409T(b) Statements of Accounts 

to Customers.11

9.12–O COD Orders—Partial Delivery ......................................... FINRA Rule 11860 COD Orders. 

9.14–O Account Designation ........................................................ FINRA Rule 4515 Approval and Documentation of Changes in Account Name 

or Designation. 

9.15–O Statements of Accounts to Customers # ......................... FINRA Rule 2231 Customer Account Statements. 

9.16–O Statement or Notice on Interest ...................................... FINRA Rule 2360(b)(15) Options, FINRA Rule 2231(a) Customer Account 

Statements. 

9.18–O(h) Doing a Public Business in Options ............................ FINRA Rule 2360(b)(13) Options. 

9.19–O Transfer of Accounts ....................................................... FINRA Rule 11870 Customer Account Transfer Contracts. 

9.20–O(b) Telemarketing .............................................................. FINRA Rule 3230 Telemarketing. 

9.29–O Borrowing From or Lending to Customers ...................... FINRA Rule 3240 Borrowing From or Lending to Customers. 

1The rules in this section apply to ETP Holders, OTP Holders and OTP Firms, where applicable. 

2FINRA shall not have Regulatory Responsibilities for Rule 2.1220(a)(4)(B) to the extent FINRA exempts a member from the requirement to 

have a Financial and Operations Principal. 3FINRA shall not have Regulatory Responsibilities regarding NYSE Arca Rule 11.18(d). 

4The rules in this section apply specifically to ETP Holders. 

5This Certification only applies to the first two sentences of Rule 2.24, which are not enumerated, and Commentary .02. Certifications to other 

parts of Rule 2.24 appear elsewhere in this Exhibit. 6FINRA’s requirements do not include an exercise of due diligence as to every order. 

7FINRA shall not have Regulatory Responsibilities for NYSE Arca Rule 9.2–E(c) Commentary .01–.03 as it relates to institutional accounts and 

responsibility for such rule shall remain with NYSE Arca. 8FINRA shall not have any Regulatory Responsibilities with respect to employees of NYSE Arca. 

9FINRA shall only have Regulatory Responsibilities to the extent the Common Member is subject to FINRA’s Temporary Dual FINRA–NYSE 

Member Rule. 10FINRA shall not have Regulatory Responsibilities for NYSE Arca Rule 5190–E(e). 11The rules in this section apply specifically to OTP Holders. 12FINRA shall not have Regulatory Responsibilities for NYSE Arca Rule 9.2–O(c) Commentary .01–.03 as it relates to institutional accounts 

and responsibility for such rule shall remain with NYSE Arca. 

* FINRA shall not have any Regulatory Responsibilities for these rules as they pertain to violations insider trading activities, which is covered 

by a separate 17d–2 Agreement by and among Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., NYSE Chicago, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., MEMX LLC, MIAX Pearl, LLC, Nasdaq BX, Inc., Nasdaq 

PHLX LLC, The Nasdaq Stock Market LLC, NYSE National, Inc., New York Stock Exchange LLC, NYSE American LLC, NYSE Arca Inc., Investors’ Exchange LLC and Long-Term Stock Exchange, Inc. effective September 23, 2020, as may be amended from time to time. 


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7596 Federal Register / Vol. 86, No. 18 / Friday, January 29, 2021 / Notices 

13 15 U.S.C. 78q(d). 

14 17 CFR 240.17d–2(c). 15See paragraph 2 of the Amended Plan. 

16See paragraph 3 of the Amended Plan. 

17The addition to or deletion from the 

Certification of any federal securities laws, rules, 

and regulations for which FINRA would bear 

responsibility under the Amended Plan for 

examining, and enforcing compliance by, Common 

Members, also would constitute an amendment to 

the Amended Plan. 

18See supra note 12 (citing to Securities 

Exchange Act Release No. 55505). 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing. 

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 4– 

523 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 4–523. 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 

plan that are filed with the Commission, 

and all written communications relating 

to the proposed plan 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 

plan also will be available for inspection 

and copying at the principal offices of 

FINRA and NYSE Arca. 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 4–523 and should be submitted 

on or before February 19, 2021. 

V. Discussion 

The Commission finds that the 

proposed Amended Plan is consistent 

with the factors set forth in Section 

17(d) of the Act 13 and Rule 17d–2(c) 

thereunder 14 in that the proposed 

Amended Plan is necessary or 

appropriate in the public interest and 

for the protection of investors, fosters 

cooperation and coordination among 

SROs, and removes impediments to and 

fosters the development of the national 

market system. In particular, the 

Commission believes that the proposed 

Amended Plan should reduce 

unnecessary regulatory duplication by 

allocating to FINRA certain examination 

and enforcement responsibilities for 

Common Members that would 

otherwise be performed by both FINRA 

and NYSE Arca. Accordingly, the 

proposed Amended Plan promotes 

efficiency by reducing costs to Common 

Members. Furthermore, because NYSE 

Arca and FINRA will coordinate their 

regulatory functions in accordance with 

the Amended Plan, the Amended Plan 

should promote investor protection. 

The Commission notes that, under the 

Amended Plan, NYSE Arca and FINRA 

have allocated regulatory responsibility 

for those NYSE Arca rules, set forth in 

the Certification, that are substantially 

similar to the applicable FINRA rules in 

that examination for compliance with 

such provisions and rules would not 

require FINRA to develop one or more 

new examination standards, modules, 

procedures, or criteria in order to 

analyze the application of the rule, or a 

Common Member’s activity, conduct, or 

output in relation to such rule. In 

addition, under the Amended Plan, 

FINRA would assume regulatory 

responsibility for certain provisions of 

the federal securities laws and the rules 

and regulations thereunder that are set 

forth in the Certification. The Common 

Rules covered by the Amended Plan are 

specifically listed in the Certification, as 

may be amended by the Parties from 

time to time. 

According to the Amended Plan, 

NYSE Arca will review the Certification 

at least annually, or more frequently if 

required by changes in either the rules 

of NYSE Arca or FINRA, and, if 

necessary, submit to FINRA an updated 

list of Common Rules to add NYSE Arca 

rules not included on the then-current 

list of Common Rules that are 

substantially similar to FINRA rules; 

delete NYSE Arca rules included in the 

then-current list of Common Rules that 

no longer qualify as common rules; and 

confirm that the remaining rules on the 

list of Common Rules continue to be 

NYSE Arca rules that qualify as 

common rules.15 FINRA will then 

confirm in writing whether the rules 

listed in any updated list are Common 

Rules as defined in the Amended Plan. 

Under the Amended Plan, NYSE Arca 

also will provide FINRA with a current 

list of Common Members and will 

update the list no less frequently than 

once each quarter.16 The Commission 

believes that these provisions are 

designed to provide for continuing 

communication between the Parties to 

ensure the continued accuracy of the 

scope of the proposed allocation of 

regulatory responsibility. 

The Commission is hereby declaring 

effective an Amended Plan that, among 

other things, allocates regulatory 

responsibility to FINRA for the 

oversight and enforcement of all NYSE 

Arca rules that are substantially similar 

to the rules of FINRA for Common 

Members of NYSE Arca and FINRA. 

Therefore, modifications to the 

Certification need not be filed with the 

Commission as an amendment to the 

Amended Plan, provided that the 

Parties are only adding to, deleting 

from, or confirming changes to NYSE 

Arca rules in the Certification in 

conformance with the definition of 

Common Rules provided in the 

Amended Plan. However, should the 

Parties decide to add a NYSE Arca rule 

to the Certification that is not 

substantially similar to a FINRA rule; 

delete a NYSE Arca rule from the 

Certification that is substantially similar 

to a FINRA rule; or leave on the 

Certification a NYSE Arca rule that is no 

longer substantially similar to a FINRA 

rule, then such a change would 

constitute an amendment to the 

Amended Plan, which must be filed 

with the Commission pursuant to Rule 

17d–2 under the Act.17

Under paragraph (c) of Rule 17d–2, 

the Commission may, after appropriate 

notice and comment, declare a plan, or 

any part of a plan, effective. In this 

instance, the Commission believes that 

appropriate notice and comment can 

take place after the proposed 

amendment is effective. The primary 

purpose of the amendment is to remove 

Regulation SHO from the Certification. 

The Commission notes that the prior 

version of this plan immediately prior to 

this proposed amendment was 

published for comment and the 

Commission did not receive any 

comments thereon.18 Furthermore, the 

Commission does not believe that the 

amendment to the plan raises any new 


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Federal Register / Vol. 86, No. 18 / Friday, January 29, 2021 / Notices 7597 

19 17 CFR 200.30–3(a)(34). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 88949 

(May 26, 2020), 85 FR 33258 (June 1, 2020) 

(‘‘Notice’’). 

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

5See Securities Exchange Act Release No. 89329 

(July 16, 2020), 85 FR 44333 (July 22, 2020). The 

Commission designated August 30, 2020, as the 

date by which the Commission shall approve or 

disapprove, or institute proceedings to determine 

whether to disapprove, the proposed rule change. 6 In Amendment No. 1 the Exchange revised the 

proposal to: (1) Modify its description of the market 

that BSTX would operate, including what would be 

traded on that market; (2) clarify that it is proposing 

to establish BSTX as a facility of the Exchange, but 

that the Exchange would not commence operations 

of the ‘‘BSTX Market’’ (as defined below) absent 

trading rules approved by the Commission that are 

the subject of a separate filing, and that the 

Exchange’s regulatory oversight responsibilities 

with respect to BSTX would not be triggered unless 

SR–BOX–2020–16 is approved by the Commission; 

(3) update a citation to a proposed rule change filed 

by the Exchange to provide flexibility for the 

Exchange to regulate multiple facilities; and (4) 

include a citation to a separate proposed rule 

change filed by the Exchange to provide trading 

rules for the BSTX Market. Amendment No. 1 was 

filed as a partial amendment. See Form 19b–4 for 

Amendment No. 1 to SR–BOX–2020–16 

(‘‘Amendment No. 1 Form 19b–4’’). When the 

Exchange filed Amendment No. 1 to SR–BOX– 

2020–16, it also submitted a redline, which the 

Exchange states reflects the text of the partial 

amendment compared to the original filing, as a 

comment letter to the filing, and which the 

Commission made publicly available at https://

www.sec.gov/comments/sr-box-2020-16/ 

srbox202016-7525322-222100.pdf. 

7See Securities Exchange Act Release No. 89537 

(August 12, 2020), 85 FR 50850 (August 18, 2020) 

(Notice of Filing of Amendment No. 1 and Order 

Instituting Proceedings). 

8 15 U.S.C. 78s(b)(2). 

9See Securities Exchange Act Release No. 90513 

(November 24, 2020), 85 FR 77334 (December 1, 

2020). The Commission designated January 27, 

2021, as the date by which the Commission shall 

approve or disapprove, or institute proceedings to 

determine whether to disapprove, the proposed rule 

change. 

10See Securities Exchange Act Release No. 87868 

(December 30, 2019), 85 FR 345 (January 3, 2020) 

(Notice of Filing of Proposed Rule Change). 

11See id. See also Securities Exchange Act 

Release No. 88536 (April 1, 2020), 85 FR 19537 

(April 7, 2020) (Order Instituting Proceedings) 

(instituting proceedings to determine whether to 

disapprove the proposed rule change). The only 

differences between SR–BOX–2019–37 and SR– 

BOX–2020–16 relate to: (1) Reclassifying ownership 

interests in BSTX from a single class with voting 

rights into two classes—one with voting rights and 

one without voting rights, and related changes; (2) 

providing an updated Second Amended and 

Restated LLC Agreement, dated as of December 24, 

2019; (3) removing the list of BSTX LLC Members 

and their initial capital contributions; and (4) 

modifying the Second Amended and Restated LLC 

Agreement to reflect that a ‘‘Membership Record’’ 

would be maintained by the Secretary of BSTX and 

updated from time to time as necessary and as 

provided in the Second Amended and Restated LLC 

Agreement, which shall include the name, address, 

and number of units of each class of ownership 

interests held by each BSTX LLC Member; (5) 

updating certain upstream ownership information; 

(6) updating references to other proposed rule 

changes of the Exchange; and (7) the modifications 

made by Amendment No. 1. 

12Comments on SR–BOX–2019–37 can be found 

at: https://www.sec.gov/comments/sr-box-2019-37/ 

srbox201937.htm. While the Commission 

considered the comments received on SR–BOX– 

2019–37, they are not germane to the basis for 

disapproval and are not discussed herein. 

13See Securities Exchange Act Release No. 89017 

(June 4, 2020), 85 FR 35473 (June 10, 2020) (Notice 

of Withdrawal of a Proposed Rule Change). 

14The proposed BSTX LLC Agreement is attached 

as Exhibit 5A to the Form 19b–4 for SR–BOX–2020– 

16 (available on the Commission’s website at 

Continued 

regulatory issues that the Commission 

has not previously considered. 

VI. Conclusion 

This order gives effect to the 

Amended Plan filed with the 

Commission in File No. 4–523. The 

Parties shall notify all members affected 

by the Amended Plan of their rights and 

obligations under the Amended Plan. 

It is therefore ordered, pursuant to 

Section 17(d) of the Act, that the 

Amended Plan in File No. 4–523, 

between the FINRA and NYSE Arca, 

filed pursuant to Rule 17d–2 under the 

Act, hereby is approved and declared 

effective. 

It is further ordered that NYSE Arca 

is relieved of those responsibilities 

allocated to FINRA under the Amended 

Plan in File No. 4–523. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01941 Filed 1–28–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90987; File No. SR–BOX– 

2020–16] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Order Disapproving 

Proposed Rule Change, as Modified by 

Amendment No. 1, in Connection With 

the Proposed Establishment of the 

Boston Security Token Exchange LLC 

as a Facility of the Exchange 

January 25, 2021. 

I. Introduction 

On May 12, 2020, BOX Exchange LLC 

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

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Exchange Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change in connection with the proposed 

commencement of operations of the 

Boston Security Token Exchange LLC 

(‘‘BSTX’’) as a facility of the Exchange. 

The proposed rule change was 

published for comment in the Federal 

Register on June 1, 2020.3 On July 16, 

2020, pursuant to Section 19(b)(2) of the 

Exchange 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 August 3, 2020, the 

Exchange filed Amendment No. 1 to the 

proposed rule change (‘‘Amendment No. 

1’’).6 On August 12, 2020, the 

Commission published notice of filing 

of Amendment No. 1, for notice and 

comment, and instituted proceedings to 

determine whether to approve or 

disapprove the proposed rule change, as 

modified by Amendment No. 1.7 On 

November 24, 2020, pursuant to Section 

19(b)(2) of the Exchange Act,8 the 

Commission designated a longer period 

within which to approve the proposed 

rule change, as modified by Amendment 

No. 1, disapprove the proposed rule 

change, as modified by Amendment No. 

1, or institute proceedings to determine 

whether to disapprove the proposed 

rule change, as modified by Amendment 

No. 1.9

The proposed rule change is 

substantially similar to a proposed rule 

change previously filed with the 

Commission by the Exchange as SR– 

BOX–2019–37.10 SR–BOX–2019–37 was 

published for comment in the Federal 

Register on January 3, 2020.11 The 

Commission received comments on the 

substance of SR–BOX–2019–37.12 BOX 

withdrew proposed rule change SR– 

BOX–2019–37 on May 12, 2020.13

This order disapproves the proposed 

rule change, as modified by Amendment 

No. 1 (‘‘BSTX Governance Proposal’’). 

The Exchange proposes to establish 

BSTX as a facility of the Exchange, as 

that term is defined in Section 3(a)(2) of 

the Exchange Act, that would operate a 

market for the trading of securities 

(‘‘BSTX Market’’) and be jointly owned 

and controlled by BOX Digital Markets 

LLC (‘‘BOX Digital’’), a Delaware limited 

liability company and a subsidiary of 

BOX Holdings Group LLC (‘‘BOX 

Holdings,’’ which is also the parent 

company of the Exchange’s existing 

facility BOX Options Market LLC, ‘‘BOX 

Options’’) and tZERO Group, Inc. 

(‘‘tZERO’’), a Delaware limited liability 

company and a subsidiary of 

Overstock.com Inc. (‘‘Overstock’’). 

According to the Exchange, it is 

proposing the Boston Security Token 

Exchange LLC, Second Amended and 

Restated Limited Liability Company 

Agreement, dated as of December 24, 

2019 (‘‘BSTX LLC Agreement’’) 14 as the 


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