9546 Federal Register / Vol. 86, No. 29 / Tuesday, February 16, 2021 / Notices 

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

2 17 CFR 240.19b–4. 

3See Press Release, dated March 18, 2020, 

available here: https://ir.theice.com/press/pressreleases/allcategories/2020/03-18-2020-204202110 

[sic]. 

4See Securities Exchange Act Release No. 88602 

(April 8, 2020), 85 FR 20730 (April 14, 2020) (SR– 

NYSE–2020–27); Securities Exchange Act Release 

No. 88874 (May 14, 2020), 85 FR 30743 (May 20, 

2020) (SR–NYSE–2020–29 [sic]). See footnote 11 of 

the Price List. 

5See Trader Update, dated May 14, 2020, 

available here: https://www.nyse.com/traderupdate/ 

history#110000251588 [sic]. 

6See Trader Update, dated June 15, 2020, 

available here: https://www.nyse.com/traderupdate/history#110000272018. 

7See Securities Exchange Act Release No. 89050 

(June 11, 2020), 85 FR 36637 (June 17, 2020) (SR– 

NYSE–2020–49); Securities Exchange Act Release 

No. 89324 (July 15, 2020), 85 FR 44129 (July 21, 

2020) (SR–NYSE–2020–59); Securities Exchange 

Act Release No. 89754 (September 2, 2020), 85 FR 

55550 (September 8, 2020) (SR–NYSE–2020–71); 

Securities Exchange Act Release No. 89798 

(September 9, 2020), 85 FR 57263 (September 15, 

2020) (SR–NYSE–2020–72); Securities Exchange 

Act Release No. 90161 (October 13, 2020), 85 FR 

66370 (October 19, 2020) (SR–NYSE–2020–81); 

Securities Exchange Act Release No. 90391 

(November 10, 2020), 85 FR 73326 (November 17, 

2020) (SR–NYSE–2020–92); Securities Exchange 

Act Release No. 90744 (December 21, 2020), 85 FR 

85712 (December 29, 2020) (SR–NYSE–2020–102). 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) 

and (10) and 17 CFR 200.402(a)(3), 

(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and 

(a)(10), permit consideration of the 

scheduled matters at the closed meeting. 

The subject matter of the closed 

meeting will consist of the following 

topics: 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings; 

Resolution of litigation claims; and 

Other matters relating to examinations 

and enforcement proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting agenda items that 

may consist of adjudicatory, 

examination, litigation, or regulatory 

matters. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information; please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

Dated: February 11, 2021. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2021–03161 Filed 2–11–21; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91082; File No. SR–NYSE– 

2021–10] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend its 

Price List To Extend the Waiver of 

Equipment and Related Service 

Charges and Trading License Fees 

February 9, 2021. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on January 

29, 2021, New York Stock Exchange 

LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) a 

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 

The Exchange proposes to amend its 

Price List to extend the waiver of 

equipment and related service charges 

and trading license fees for NYSE 

Trading Floor-based member 

organizations commencing January 1, 

2021 through the earlier of the first full 

month of a full reopening of the Trading 

Floor facilities to Floor personnel or 

March 2021. The Exchange proposes to 

implement the fee changes effective 

February 1, 2021. The proposed rule 

change is available on the Exchange’s 

website at www.nys e.com, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

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

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Price List to extend the waiver of 

equipment and related service charges 

and trading license fees for NYSE 

Trading Floor-based member 

organizations that have been unable to 

resume their Floor operations to a 

certain capacity level, as discussed 

below. The Exchange proposes to 

implement the fee change effective 

February 1, 2021. 

As proposed, the Exchange would 

continue to waive 50% of the Telephone 

System charges and Service Charges 

(except for the internet Equipment 

Monthly Hosting Fee) and trading 

license fees for member organizations 

that meet the waiver criteria set forth in 

footnotes 11 and 15 of the Price List, 

respectively, commencing January 1, 

2021 through the earlier of the first full 

month of a full reopening of the Trading 

Floor facilities to Floor personnel or 

March 2021. 

Background 

Beginning on March 16, 2020, in 

order to slow the spread of the novel 

coronavirus (‘‘COVID–19’’) through 

social distancing measures, significant 

limitations were placed on large 

gatherings throughout the country. As a 

result, on March 18, 2020, the Exchange 

determined that beginning March 23, 

2020, the physical Trading Floor 

facilities located at 11 Wall Street in 

New York City would close and that the 

Exchange would move, on a temporary 

basis, to fully electronic trading.3

Following the temporary closure of the 

Trading Floor, the Exchange waived 

certain equipment fees for the booth 

telephone system on the Trading Floor 

and associated service charges for the 

months of April and May.4

On May 14, 2020, the Exchange 

announced that on May 26, 2020 trading 

operations on the Trading Floor would 

resume on a limited basis to a subset of 

Floor brokers, subject to health and 

safety measures designed to prevent the 

spread of COVID–19.5 On June 15, 2020, 

the Exchange announced that on June 

17, 2020, the Trading Floor would 

reintroduce a subset of DMMs, also 

subject to health and safety measures 

designed to prevent the spread of 

COVID–19.6 Following this partial 

reopening of the Trading Floor, the 

Exchange extended the equipment fee 

waiver for the months of June 2020 

through January 2021.7 The Trading 

Floor continues to operate with reduced 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 29 / Tuesday, February 16, 2021 / Notices 9547 

8See Trader Update, dated June 15, 2020, 

available here: https://www.nyse.com/traderupdate/history#110000272018. DMMs continue to 

support a subset of NYSE-listed securities remotely. 

9See Securities Exchange Act Release No. 90744 

(December 21, 2020), 85 FR 85712 (December 29, 

2020) (SR–NYSE–2020–102). 

10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(4) & (5). 12See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37495, 37499 (June 29, 2005) 

(S7–10–04) (Final Rule) (‘‘Regulation NMS’’). 13See Securities Exchange Act Release No. 61358, 

75 FR 3594, 3597 (January 21, 2010) (File No. S7– 

02–10) (Concept Release on Equity Market 

Structure). 14See Cboe Global Markets, U.S. Equities Market 

Volume Summary, available at http://

markets.cboe.com/us/equities/market_share/. See 

generally https://www.sec.gov/fast-answers/ 

divisionsmarketregmrexchangesshtml.html. 

15See FINRA ATS Transparency Data, available 

at https://otctransparency.finra.org/ 

otctransparency/AtsIssueData. A list of alternative 

trading systems registered with the Commission is 

available at https://www.sec.gov/foia/docs/ 

atslist.htm. 

16See Cboe Global Markets U.S. Equities Market 

Volume Summary, available at http://

markets.cboe.com/us/equities/market_share/. 

headcount and additional health and 

safety precautions.8

Proposed Rule Change 

In response to the unprecedented 

events surrounding the spread of 

COVID–19 in 2020, the Exchange 

waived certain equipment and related 

service charges and trading license fees 

for NYSE Trading Floor-based member 

organizations through January 2021. 

Specifically, the Exchange extended the 

waiver of 50% of the Annual Telephone 

Line Charge of $400 per phone number; 

the $129 fee for a single line phone, 

jack, and data jack; the related service 

charges ($161.25 to install single jack 

(voice or data); $107.50 to relocate a 

jack; $53.75 to remove a jack; $107.50 to 

install voice or data line; $53.75 to 

disconnect data line; $53.75 to change a 

phone line subscriber; and 

miscellaneous telephone charges billed 

at $106 per hour in 15 minute 

increments); and the monthly portion of 

all applicable annual fees through 

January 2021 for member organizations 

that 

• meet the current requirements of 

having at least one trading license, a 

physical trading Floor presence and 

Floor broker executions accounting for 

40% or more of the member 

organization’s combined adding, taking, 

and auction volumes during March 1 to 

March 20, 2020 or, if not a member 

organization during March 1 to March 

20, 2020, based on the member 

organization’s combined adding, taking, 

and auction volumes during its first 

month as a member organization on or 

after May 26, 2020, and 

• are unable to operate at more than 

50% of their March 2020 on-Floor 

staffing levels or, for member 

organizations that began Floor 

operations after March 2020, are unable 

to operate at more than 50% of their 

Exchange-approved on-Floor staffing 

levels, both excluding part-time Floor 

brokers known as ‘‘flex brokers’’ 

(hereinafter, ‘‘Qualifying Firms’’).9

Because the Trading Floor continues 

to operate with reduced capacity, and in 

order to further reduce costs for member 

organizations with a Trading Floor 

presence, the Exchange proposes to 

extend the fee waiver for Qualifying 

Firms commencing January 1, 2021 

through the earlier of the first full 

month of a full reopening of the Trading 

Floor facilities to Floor personnel or 

March 2021. The proposed fee change is 

designed to reduce monthly costs for all 

Qualifying Firms whose operations 

continue to be disrupted even though 

the Trading Floor has partially 

reopened. The Exchange does not 

propose any substantive changes to the 

current waivers set forth in footnotes 11 

and 15 of the Price List. The Exchange 

believes that all Qualifying Firms would 

benefit from the proposed fee change. 

The proposed changes are not 

otherwise intended to address other 

issues, and the Exchange is not aware of 

any significant problems that market 

participants would have in complying 

with the proposed changes. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,10 in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act,11 in particular, 

because it provides for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members, 

issuers and other persons using its 

facilities and does not unfairly 

discriminate between customers, 

issuers, brokers or dealers. 

The Exchange operates in a highly 

competitive market. The Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, the 

Commission highlighted the importance 

of market forces in determining prices 

and SRO revenues and, also, recognized 

that current regulation of the market 

system ‘‘has been remarkably successful 

in promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 12

While Regulation NMS has enhanced 

competition, it has also fostered a 

‘‘fragmented’’ market structure where 

trading in a single stock can occur 

across multiple trading centers. When 

multiple trading centers compete for 

order flow in the same stock, the 

Commission has recognized that ‘‘such 

competition can lead to the 

fragmentation of order flow in that 

stock.’’ 13 Indeed, equity trading is 

currently dispersed across 16 

exchanges,14 31 alternative trading 

systems,15 and numerous broker-dealer 

internalizers and wholesalers, all 

competing for order flow. Based on 

publicly-available information, no 

single exchange has more than 16% 

market share.16 Therefore, no exchange 

possesses significant pricing power in 

the execution of equity order flow. More 

specifically, the Exchange’s market 

share of trading in Tape A, B and C 

securities combined is less than 12%. 

The Proposed Change Is Reasonable 

The proposed extension of the waiver 

of equipment and related service fees 

and the applicable monthly trading 

license fee for Qualified Firms 

commencing January 1, 2021 through 

the earlier of the first full month of a full 

reopening of the Trading Floor facilities 

to Floor personnel or March 2021 is 

reasonable in light of the continued 

partial closure of the NYSE Trading 

Floor as a result of spread of COVID–19. 

The proposed change is reasonable 

because it would extend reduction of 

monthly costs for all Qualifying Firms 

whose operations have been disrupted 

despite the fact that the Trading Floor 

has partially reopened because of the 

social distancing requirements and/or 

other health concerns related to 

resuming operation on the Trading 

Floor. In reducing this monthly 

financial burden, the proposed change 

would allow Qualifying Firms that that 

are unable to operate at more than 50% 

of their March 2020 or Exchangeapproved on-Floor staffing levels to 

reallocate funds to assist with the cost 

of shifting and maintaining their prior 

fully-staffed on-Floor operations to offFloor and recoup losses resulting from 

the partial reopening of the Trading 

Floor. 

The Proposal Is an Equitable Allocation 

of Fees 

The Exchange believes the proposed 

extension of the waiver of equipment 

and related service fees and the 

applicable monthly trading license fee 

for Qualified Members for the proposed 

time period is an equitable allocation of 

fees. The proposed waivers apply to all 

Trading Floor-based firms meeting 

specific requirements during the 

specified period that the Trading Floor 


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9548 Federal Register / Vol. 86, No. 29 / Tuesday, February 16, 2021 / Notices 

17 15 U.S.C. 78f(b)(8). 

18Regulation NMS, 70 FR at 37498–99. 

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f)(2). 

21 15 U.S.C. 78s(b)(2)(B). 

remains partially open. The Exchange 

believes the proposed rule change is an 

equitable allocation of its fees and 

credits as it continues the previous fee 

waiver for Qualifying Firms, which 

affects fees charged only to Floor 

participants and does not apply to 

participants that conduct business offFloor. The Exchange believes it is an 

equitable allocation of fees and credits 

to extend the fee waiver for Qualifying 

Firms because such firms have no more 

than half of their Floor staff (as 

measured by either the March 2020 or 

Exchange-approved) levels, and this 

reduction in staffing levels on the 

Trading Floor impacts the speed, 

volume and efficiency with which these 

firms can operate, to their financial 

detriment. 

The Proposal Is Not Unfairly 

Discriminatory 

The Exchange believes that the 

proposal is not unfairly discriminatory 

because the proposed continuation of 

the fee waiver would affect all similarlysituated market participants on an equal 

and non-discriminatory basis. The 

Exchange is not proposing to waive the 

Trading Floor-related fees indefinitely, 

but rather during the specified period 

during which the Trading Floor is not 

fully open. As noted, the proposed fee 

change is designed to ease the financial 

burden on Trading Floor-based member 

organizations that cannot fully conduct 

Floor operations. 

For the foregoing reasons, the 

Exchange believes that the proposal is 

consistent with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,17 the Exchange believes that the 

proposed rule change would not impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Instead, as 

discussed above, the Exchange believes 

that the proposed changes would 

encourage the continued participation 

of member organizations on the 

Exchange by providing certainty and fee 

relief during the ongoing pandemic. As 

a result, the Exchange believes that the 

proposed change furthers the 

Commission’s goal in adopting 

Regulation NMS of fostering integrated 

competition among orders, which 

promotes ‘‘more efficient pricing of 

individual stocks for all types of orders, 

large and small.’’ 18

Intramarket Competition. The 

proposed continued waiver of 

equipment and related service fees and 

the applicable monthly trading license 

fee for Qualified Firms is designed to 

reduce monthly costs for those Floor 

participants whose operations continue 

to be impacted by the COVID–19 

pandemic despite the fact that the 

Trading Floor has partially reopened. In 

reducing this monthly financial burden, 

the proposed change would allow 

Qualifying Firms that had Floor 

operations in March 2020 to reallocate 

funds to assist with the cost of shifting 

and maintaining their previously onFloor operations to off-Floor. Absent 

this change, all Qualifying Firms may 

experience an unintended increase in 

the cost of doing business on the 

Exchange, given that the Trading Floor 

has only reopened in a limited capacity. 

The Exchange believes that the 

proposed waiver of fees for Qualifying 

Firms would not impose a disparate 

burden on competition among market 

participants on the Exchange because 

off-Floor market participants are not 

subject to these Floor-based fixed fees. 

In addition, Floor-based firms that are 

not subject to the extent of staffing 

shortfalls as are Qualifying Firms, i.e., 

firms that have more than 50% of their 

March 2020, or Exchange-approved 

staffing levels on the Trading Floor, do 

not face the same operational level of 

disruption and potential financial 

impact during the partial reopening of 

the Trading Floor. As noted, the 

proposal would apply to all similarly 

situated member organizations on the 

same and equal terms, who would 

benefit from the changes on the same 

basis. Accordingly, the proposed change 

would not impose a disparate burden on 

competition among market participants 

on the Exchange. 

Intermarket Competition. As 

described above, the Exchange operates 

in a highly competitive market in which 

market participants can readily choose 

to send their orders to other exchange 

and off-exchange venues if they deem 

fee levels at those other venues to be 

more favorable. The Exchange believes 

that the proposed rule change reflects 

this competitive environment because it 

permits impacted member organizations 

to continue to conduct market-making 

operations on the Exchange and avoid 

unintended costs of doing business on 

the Exchange while the Trading Floor is 

not fully open, which could make the 

Exchange a less competitive venue on 

which to trade as compared to other 

equities markets. In reducing this 

monthly financial burden, the proposed 

change would allow affected 

participants to reallocate funds to assist 

with the cost of shifting and 

maintaining their prior fully-staffed onFloor operations to off-Floor. Absent 

this change, Qualifying Firms may 

experience an unintended increase in 

the cost of doing business on the 

Exchange, which would make the 

Exchange a less competitive venue on 

which to trade as compared to other 

options exchanges. 

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 

The foregoing rule change is effective 

upon filing pursuant to Section 

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

subparagraph (f)(2) of Rule 19b–4 20

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such 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 

under Section 19(b)(2)(B) 21 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSE–2021–10 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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Federal Register / Vol. 86, No. 29 / Tuesday, February 16, 2021 / Notices 9549 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Nasdaq proposed a similar rule change in May 

2020, which was withdrawn by Nasdaq on 

February, 1, 2021. Securities Exchange Act Release 

No. 89027 (June 8, 2020), 85 FR 35962 (June 12, 

2020) (SR–Nasdaq–2020–027). The Commission 

issued an Order Instituting Proceedings to 

Determine Whether to Approve or Disapprove this 

proposal. Securities Exchange Act Release No. 

89799 (September 9, 2020), 85 FR 57282 (September 

15, 2020). This revised proposal addresses the 

concerns raised by the Commission in its Order. 

4See Rule 5210(b) (‘‘Each Company applying for 

initial listing must be audited by an independent 

public accountant that is registered as a public 

accounting firm with the Public Company 

Accounting Oversight Board, as provided for in 

Section 102 of the Sarbanes-Oxley Act of 2002 [15 

U.S.C. 7212].’’) and Rule 5250(c)(3) (‘‘Each listed 

Company shall be audited by an independent 

public accountant that is registered as a public 

accounting firm with the Public Company 

Accounting Oversight Board, as provided for in 

Section 102 of the Sarbanes-Oxley Act of 2002 [15 

U.S.C. 7212].’’). 

5See Section 4100—Qualifications of 

Accountants, SEC Financial Reporting Manual 

(June 30, 2009), available at https://www.sec.gov/ 

corpfin/cf-manual/topic-4/. 

6See PCAOB Auditing Standard 1101.03—Audit 

Risk, available at https://pcaobus.org/Standards/ 

Auditing/Pages/AS1101.aspx. 

All submissions should refer to File 

Number SR–NYSE–2021–10. 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–NYSE–2021–10, and 

should be submitted on or before March 

9, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02991 Filed 2–12–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91089; File No. SR– 

NASDAQ–2021–007] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

Adopt Additional Initial Listing Criteria 

for Companies Primarily Operating in 

Jurisdictions That Do Not Provide the 

PCAOB With the Ability To Inspect 

Public Accounting Firms 

February 9, 2021. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on February 

1, 2021, The Nasdaq Stock Market LLC 

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

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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 to adopt 

additional initial listing criteria for 

companies primarily operating in 

jurisdictions that do not currently 

provide the PCAOB with the ability to 

inspect public accounting firms. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

As described below, Nasdaq proposes 

to adopt additional initial listing criteria 

for companies primarily operating in 

jurisdictions that do not currently 

provide the Public Company 

Accounting Oversight Board (‘‘PCAOB’’) 

with the ability to inspect public 

accounting firms.3

Nasdaq rules 4 and federal securities 

laws 5 require a company’s financial 

statements included in its initial 

registration statement or annual report 

to be audited by an independent public 

accountant that is registered with the 

PCAOB. Company management is 

responsible for preparing the company’s 

financial statements and for establishing 

and maintaining disclosure controls and 

procedures and internal control over 

financial reporting. The company’s 

auditor, based on its independent audit 

of the evidence supporting the amounts 

and disclosures in the financial 

statements, expresses an opinion on 

whether the financial statements present 

fairly, in all material respects, the 

company’s financial position, results of 

operations and cash flows. ‘‘To form an 

appropriate basis for expressing an 

opinion on the financial statements, the 

auditor must plan and perform the audit 

to obtain reasonable assurance about 

whether the financial statements are free 

of material misstatement due to error or 

fraud.’’ 6

The auditor, in turn, is normally 

subject to inspection by the PCAOB, 


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