12250 Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Notices 

32 Id. 

33 Id. 

34 Id. at 85815. 

35See NYSE Approval, above footnote 30. 36 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78mm(a)(1). 

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

3See letter from Brett M. Kitt, Principal Associate 

General Counsel, Nasdaq Inc., to J. Matthew 

DeLesDernier, Assistant Secretary, Commission, 

dated December 30, 2020 (‘‘Exemptive Request’’). 

4 15 U.S.C. 78mm(a)(1). 

5See Securities Exchange Act Release No. 90903 

(January 12, 2021), 86 FR 5284 (January 19, 2021) 

(SR–ISE–2020–43). Although the proposed rule 

change was filed pursuant to Section 19(b)(3)(A)(iii) 

of the Exchange Act, and thereby became effective 

upon filing with the Commission, the Exchange 

stipulated in its proposal that the incorporation by 

reference would not be operative until such time as 

the Commission grants this Exemptive Request. 

6See note 5, supra. 

commitment underwritten offerings’’ 32

because the structure ‘‘has the potential 

to broaden the scope of investors that 

are able to purchase securities in an 

initial public offering, at the initial 

public offering price, rather than in 

aftermarket trading’’ and ‘‘may allow for 

efficiencies in IPO pricing and 

allocation.’’ 33 Similarly, while the 

commenter expressed concern that that 

the expansion of direct listings may lead 

to a decline in effective governance at 

U.S. public companies, presumably 

because of the lack of an underwriter in 

the offering, Nasdaq believes that this 

concern is unsubstantiated and 

challenges in this context are not of 

such magnitude as to render the 

proposal inconsistent with the Act. 

Moreover, in approving the Primary 

Direct Floor Listing proposal the 

Commission concluded that it ‘‘does not 

view a firm commitment underwriting 

as necessary to provide adequate 

investor protection in the context of a 

registered offering.’’ 34 As a result, 

consistent with the purposes of the Act, 

the proposed rule change may provide 

investors with additional investment 

opportunities and companies with more 

options for becoming publicly traded. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed amendments would not 

impose any burden on competition, but 

would rather increase competition. In 

that regard, the Commission recently 

approved a similar proposal to allow a 

Primary Direct Floor Listing on the New 

York Stock Exchange.35 Allowing 

Nasdaq to have similar rules will give 

issuers interested in this pathway to 

access the capital markets a choice of 

listing venues, which will enhance 

competition among exchanges. 

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. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, as modified by Amendment No. 

1, 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– 

NASDAQ–2020–057 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–NASDAQ–2020–057. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of 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–NASDAQ–2020–057, and 

should be submitted on or before March 

23, 2021 . 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–04222 Filed 3–1–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91202] 

Order Granting Application by Nasdaq 

ISE, LLC for Exemption Pursuant to 

Section 36(a) of the Exchange Act 

From the Rule Filing Requirements of 

Section 19(b) of the Exchange Act With 

Respect to the Nasdaq Rule 1000 

Series Incorporated by Reference 

February 24, 2021. 

Nasdaq ISE, LLC (the ‘‘Exchange’’) has 

filed with the Securities and Exchange 

Commission (the ‘‘Commission’’) an 

application for an exemption under 

Section 36(a)(1) of the Securities 

Exchange Act of 1934 (‘‘Exchange 

Act’’) 1 from the rule filing requirements 

of Section 19(b) of the Exchange Act 2

with respect to certain rules of The 

Nasdaq Stock Market LLC (‘‘Nasdaq’’) 

that the Exchange seeks to incorporate 

by reference (‘‘Nasdaq Rule 1000 

Series’’).3 Section 36(a)(1) of the 

Exchange Act,4 subject to certain 

limitations, authorizes the Commission 

to conditionally or unconditionally 

exempt any person, security, or 

transaction, or any class thereof, from 

any provision of the Exchange Act or 

rule thereunder, if necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors. 

The Exchange filed a proposed rule 

change 5 under Section 19(b) of the 

Exchange Act to replace its existing 

membership rules, as set forth in 

General 3 of its rulebook, with the Rule 

1000 Series of the Nasdaq rulebook, as 

such rules may be in effect from time to 

time. Namely, in the proposed rule 

change, the Exchange proposed to 

incorporate by reference the Nasdaq 

Rule 1000 Series such that Nasdaq Rule 

1000 Series would be applicable to the 

Exchange’s applicants, members, 

associated persons, and other persons 

subject to the Exchange’s jurisdiction as 

though such rules were fully set forth 

within the Exchange’s rulebook.6


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Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Notices 12251 

7 17 CFR 240.0–12. 

8See Exemptive Request, supra note 3. 

9 Id. 

10 Id. at 2 n.7. 

11 Id. at 3. The Exchange states that it will provide 

such notice via a posting on the same website 

location where the Exchange posts its own rule 

filings pursuant to Rule 19b–4(l) within the 

timeframe required by such Rule. In addition, the 

Exchange states that the website posting will 

include a link to the location on Nasdaq’s website 

where the applicable proposed rule change is 

posted. Id. at 3 n.8. 

12See id. at 2. 

13See id. 

14See, e.g., Securities Exchange Act Release Nos. 

86896 (September 6, 2019), 84 FR 48186 (September 

12, 2019) (order granting application by Nasdaq BX, 

Inc. for exemption pursuant to section 36(a) of the 

Exchange Act from the rule filing requirements of 

section 19(b) of the Exchange Act with respect to 

the Nasdaq Rule 1000 Series incorporated by 

reference); 80338 (March 29, 2017), 82 FR 16464 

(April 4, 2017) (order granting exemptive request 

from MIAX PEARL, LLC relating to rules of Miami 

International Securities Exchange, LLC 

incorporated by reference); 72650 (July 22, 2014), 

79 FR 44075 (July 29, 2014) (order granting 

exemptive requests from NASDAQ OMX BX, Inc. 

and the NASDAQ Stock Market LLC relating to 

rules of NASDAQ OMX PHLX LLC incorporated by 

reference); 67256 (June 26, 2012), 77 FR 39277, 

39286 (July 2, 2012) (order approving SR–BX–2012– 

030 and granting exemptive request relating to rules 

incorporated by reference by the BX Options rules); 

61534 (February 18, 2010), 75 FR 8760 (February 

25, 2010) (order granting BATS Exchange, Inc.’s 

exemptive request relating to rules incorporated by 

reference by the BATS Exchange Options Market 

rules) (‘‘BATS Options Market Order’’); and 57478 

(March 12, 2008), 73 FR 14521, 14539–40 (March 

18, 2008) (order approving SR–NASDAQ–2007–004 

and SR–NASDAQ–2007–080, and granting 

exemptive request relating to rules incorporated by 

reference by The NASDAQ Options Market). 

15See 17 CFR 240.0–12 and Securities Exchange 

Act Release No. 39624 (February 5, 1998), 63 FR 

8101 (February 18, 1998) (‘‘Commission Procedures 

for Filing Applications for Orders for Exemptive 

Relief Pursuant to Section 36 of the Exchange Act; 

Final Rule’’). 

16See BATS Options Market Order, supra note 14 

(citing Securities Exchange Act Release No. 49260 

(February 17, 2004), 69 FR 8500 (February 24, 2004) 

(order granting exemptive request relating to rules 

incorporated by reference by several SROs) (‘‘2004 

Order’’)). 

17See BATS Options Market Order, supra note 

14, 75 FR at 8761; see also 2004 Order, supra note 

16, 69 FR at 8502. 

18 15 U.S.C. 78mm. 

19 17 CFR 200.30–3(a)(76). 

1 15 U.S.C. 78mm(a)(1). 

The Exchange has requested, pursuant 

to Rule 0–12 under the Exchange Act,7

that the Commission grant the Exchange 

an exemption from the rule filing 

requirements of Section 19(b) of the 

Exchange Act for changes to the 

Exchange’s rules that are effected solely 

by virtue of a change to the Nasdaq Rule 

1000 Series that are incorporated by 

reference. Specifically, the Exchange 

requests that it be permitted to 

incorporate by reference changes made 

to the Nasdaq Rule 1000 Series that are 

cross-referenced in the Exchange’s rules 

without the need for the Exchange to 

file separately the same proposed rule 

change pursuant to Section 19(b) of the 

Exchange Act.8

The Exchange represents that the 

Nasdaq Rule 1000 Series are not trading 

rules.9 Moreover, the Exchange states 

that it proposes to incorporate by 

reference a category of rules (rather than 

individual rules within a category).10

The Exchange also represents that, as a 

condition of this exemption, the 

Exchange will provide written notice to 

its applicants and members whenever 

Nasdaq proposes a change to Nasdaq 

Rule 1000 Series.11

According to the Exchange, this 

exemption is necessary and appropriate 

because it will result in the Exchange’s 

membership rules and processes being 

consistent with the relevant crossreferenced Nasdaq membership rules 

and processes at all times.12 The 

Exchange states that harmonization of 

the membership rules and processes 

between the Exchange and Nasdaq will 

ease compliance burdens for those 

seeking membership on both exchanges 

and increase internal efficiencies 

associated with administering the 

membership rules and processes of each 

exchange.13

The Commission has issued 

exemptions similar to the Exchange’s 

request.14 In granting similar 

exemptions, the Commission stated that 

it would consider future exemption 

requests, provided that: 

• A self-regulatory organization 

(‘‘SRO’’) wishing to incorporate rules of 

another SRO by reference has submitted 

a written request for an order exempting 

it from the requirement in Section 19(b) 

of the Exchange Act to file proposed 

rule changes relating to the rules 

incorporated by reference, has identified 

the applicable originating SRO(s), 

together with the rules it wants to 

incorporate by reference, and otherwise 

has complied with the procedural 

requirements set forth in the 

Commission’s release governing 

procedures for requesting exemptive 

orders pursuant to Rule 0–12 under the 

Exchange Act; 15

• The incorporating SRO has 

requested incorporation of categories of 

rules (rather than individual rules 

within a category) that are not trading 

rules (e.g., the SRO has requested 

incorporation of rules such as margin, 

suitability, or arbitration); and 

• The incorporating SRO has 

reasonable procedures in place to 

provide written notice to its members 

each time a change is proposed to the 

incorporated rules of another SRO.16

The Commission believes that the 

Exchange has satisfied each of these 

conditions. Further, the Commission 

also believes that granting the Exchange 

an exemption from the rule filing 

requirements under Section 19(b) of the 

Exchange Act will promote efficient use 

of the Commission’s and the Exchange’s 

resources by avoiding duplicative rule 

filings based on simultaneous changes 

to identical rule text sought by more 

than one SRO.17 The Commission 

therefore finds it appropriate in the 

public interest and consistent with the 

protection of investors to exempt the 

Exchange from the rule filing 

requirements under Section 19(b) of the 

Exchange Act with respect to the abovedescribed rules it incorporates by 

reference. This exemption is 

conditioned upon the Exchange 

promptly providing written notice to its 

applicants and members whenever 

Nasdaq changes a rule that the Exchange 

incorporates by reference. 

Accordingly, it is ordered, pursuant to 

Section 36 of the Exchange Act,18 that 

the Exchange is exempt from the rule 

filing requirements of Section 19(b) of 

the Exchange Act solely with respect to 

changes to the rules identified in the 

Exemptive Request, provided that the 

Exchange promptly provides written 

notice to its applicants and members 

whenever Nasdaq proposes to change a 

rule that the Exchange has incorporated 

by reference. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–04219 Filed 3–1–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91203] 

Order Granting Application by Cboe C2 

Exchange, Inc. for Exemption Pursuant 

to Section 36(a) of the Exchange Act 

From the Rule Filing Requirements of 

Section 19(b) of the Exchange Act With 

Respect to Certain Rules Incorporated 

by Reference 

February 24, 2021. 

Cboe C2 Exchange, Inc. (‘‘C2’’ or the 

‘‘Exchange’’) has filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) an application for 

an exemption under Section 36(a)(1) of 

the Securities Exchange Act of 1934 

(‘‘Exchange Act’’) 1 from the rule filing 

requirements of Section 19(b) of the 


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