85678 Federal Register / Vol. 88, No. 235 / Friday, December 8, 2023 / Notices 

8 This estimate is based on the following 

calculation: 3.36 (estimated total hours utilizing inhouse counsel) × $484 (hourly rate for an in-house 

counsel) = $1,626.24. 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4See Securities Exchange Act Release No. 96930 

(February 15, 2023), 88 FR 13872 (March 6, 2023) 

(File No. S7–05–22) (Shortening the Securities 

Transaction Settlement Cycle) (‘‘SEC T+1 Adopting 

Release’’). The effective date of final Exchange Act 

Rules changes is May 5, 2023, and the compliance 

date is May 28, 2024. 

5See Securities Exchange Act Release No. 33023 

(October 6, 1993), 58 FR 52891 (October 13, 1993) 

(File No. S7–5–93). The implementation date of 

Exchange Act Rule 15c6–1 was June 7, 1995. See 

Securities Exchange Act Release No. 34592 

(November 9, 1994), 59 FR 59137 (November 16, 

1994) (File No. S7–5–93). When adopted, Exchange 

Act Rule 15c6–1 prohibited broker-dealers from 

effecting or entering into a contract for the purchase 

or sale of a security (other than an exempted 

security, government security, municipal security, 

commercial paper, bankers’ acceptances, or 

commercial bills) that provides for payment of 

funds and delivery of securities later than the third 

business day after the date of the contract unless 

otherwise expressly agreed to by the parties at the 

time of the transaction. Although not covered by 

Exchange Act Rule 15c6–1, in 1995, the 

Commission approved the Municipal Securities 

Rulemaking Board’s (‘‘MSRB’’) rule change 

requiring transactions in municipal securities to 

settle by T+3. See Securities Exchange Act Release 

No. 35427 (February 28, 1995), 60 FR 12798 (March 

8, 1995) (Order Approving File No. SR–MSRB–94– 

10). 

6See Securities Exchange Act Release No. 80295 

(March 22, 2017), 82 FR 15564 (March 29, 2017) 

(File No. S7–22–16). The compliance date for the 

T+2 settlement cycle was September 5, 2017. In 

April 2016, the Commission approved the MSRB’s 

rule change requiring transactions in municipal 

securities to settle by T+2. See Securities Exchange 

Act Release No. 77744 (April 29, 2016), 81 FR 

26851 (May 4, 2016) (Order Approving File No. SR– 

MSRB–2016–04). 

7See Securities Exchange Act Release No. 35507 

(March 17, 1995), 60 FR 15616 (March 24, 1995) 

annual cost burden utilizing in-house 

counsel is $1,626.24.8

Written comments are invited on: (a) 

whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

estimate of the burden of the collection 

of information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

by February 6, 2024. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

Please direct your written comments 

to: David Bottom, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o John 

Pezzullo, 100 F Street NE, Washington, 

DC 20549 or send an email to: PRA_

Mailbox@sec.gov. 

Dated: December 5, 2023. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–26990 Filed 12–7–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99075; File No. SR–FINRA– 

2023–017] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend FINRA Rules 

To Conform to Exchange Act Rules 

15c6–1 and 15c6–2 To Shorten the 

Standard Settlement Cycle for Most 

Broker-Dealer Transactions From Two 

Business Days After the Trade Date to 

One Business Day After the Trade Date 

December 4, 2023. 

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

Securities Exchange Act of 1934 (‘‘Act’’) 

and Rule 19b–4 thereunder,2 notice is 

hereby given that on November 28, 

2023, the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) 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 FINRA. FINRA has 

designated the proposed rule change as 

constituting a ‘‘non-controversial’’ rule 

change under paragraph (f)(6) of Rule 

19b–4 under the Act,3 which renders 

the proposal effective upon receipt of 

this filing by the Commission. 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 

FINRA is proposing to amend FINRA 

Rules 2341 (Investment Company 

Securities), 4515 (Approval and 

Documentation of Changes in Account 

Name or Designation), 6282 

(Transactions Reported by Members to 

the ADF), 6380A (Transaction 

Reporting), 6380B (Transaction 

Reporting), 6622 (Transaction 

Reporting), 7140 (Trade Report 

Processing), 7240A (Trade Report 

Processing), 7340 (Trade Report 

Processing), 11140 (Transactions in 

Securities ‘‘Ex-Dividend,’’ ‘‘Ex-Rights’’ 

or ‘‘Ex-Warrants’’), 11150 (Transactions 

‘‘Ex-Interest’’ in Bonds Which Are Dealt 

in ‘‘Flat’’), 11210 (Sent by Each Party), 

11320 (Dates of Delivery), 11620 

(Computation of Interest), 11860 (COD 

Orders), 11893 (Clearly Erroneous 

Transactions in OTC Equity Securities), 

and 11894 (Review by the Uniform 

Practice Code (‘‘UPC’’) Committee) to 

conform to the Commission’s final 

amendments to Exchange Act Rule 

15c6–1 and adoption of Exchange Act 

Rule 15c6–2 to shorten the standard 

settlement cycle for most broker-dealer 

transactions from two business days 

after the trade date (‘‘T+2’’) to one 

business day after the trade date 

(‘‘T+1’’).4

The text of the proposed rule change 

is available on FINRA’s website at 

http://www.finra.org, at the principal 

office of FINRA 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, 

FINRA 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. FINRA 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Background 

In October 1993, the Commission 

adopted Exchange Act Rule 15c6–1 to 

shorten the standard U.S. trade 

settlement cycle for most securities 

transactions from five business days 

after the trade date (‘‘T+5’’) to three 

business days after the trade date 

(‘‘T+3’’).5 In March 2017, the 

Commission amended Exchange Act 

Rule 15c6–1 to further shorten the trade 

settlement cycle from T+3 to T+2.6 On 

both occasions, FINRA amended its 

settlement-related rules to conform to 

the Commission’s changes to the trade 

settlement cycle.7


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Federal Register / Vol. 88, No. 235 / Friday, December 8, 2023 / Notices 85679 

(Order Approving File No. SR–NASD–94–56); 

Securities Exchange Act Release No. 80004 

(February 9, 2017), 82 FR 10835 (February 15, 2017) 

(Order Approving File No. SR–FINRA–2016–047) 

and Securities Exchange Act Release No. 80004A 

(March 6, 2017), 82 FR 13517 (March 13, 2017) 

(Correction to Order Approving File No. SR– 

FINRA–2016–047). Other self-regulatory 

organizations (‘‘SROs’’), including, as previously 

noted, the MSRB, also amended their rules to 

conform to the shortening of the settlement cycle 

to T+3 and then T+2. 

8See, e.g., Deloitte & Touche LLP (‘‘Deloitte’’), 

T+2 Industry Implementation Playbook (12/18/ 

2015), https://www.ust2.com/pdfs/T2-Playbook-12- 

21-15.pdf; Investor Advisory Committee, U.S. 

Securities and Exchange Commission 

Recommendation of the Investor Advisory 

Committee: Shortening the Settlement Cycle in U.S. 

Financial Markets (February 12, 2015), https://

www.sec.gov/spotlight/investor-advisorycommittee-2012/settlement-cycle-recommendationfinal.pdf. 

9See DTCC, Advancing Together: Leading the 

Industry to Accelerated Settlement (February 2021) 

(‘‘DTCC White Paper’’), https://www.dtcc.com/-/ 

media/Files/PDFs/White%20Paper/DTCCAccelerated-Settle-WP-2021.pdf. 

10Participants in the ISC include, among others, 

DTCC, the Securities Industry and Financial 

Markets Association (‘‘SIFMA’’), and the 

Investment Company Institute (‘‘ICI’’). See https:// 

www.dtcc.com/ust1. 

11The IWG included over 800 subject matter 

advisors representing over 160 firms from buy- and 

sell-side firms, custodians, vendors, and 

clearinghouses. See infra note 12. 

12See SIFMA, ICI, DTCC & Deloitte, Accelerating 

the U.S. Securities Settlement Cycle to T+1 

(December 1, 2021), https://www.sifma.org/wpcontent/uploads/2021/12/Accelerating-the-U.S.- 

Securities-Settlement-Cycle-to-T1-December-1- 

2021.pdf. 

13See SIFMA, ICI & Deloitte, T+1 Securities 

Settlement Industry Implementation Playbook 

(August 2022), https://www.sifma.org/wp-content/ 

uploads/2022/08/T1_Industry_Implementation_

Playbook.pdf. 

14See Securities Exchange Act Release No. 94196 

(February 9, 2022), 87 FR 10436 (February 24, 2022) 

(File No. S7–05–22) (‘‘SEC T+1 Proposing 

Release’’). 

15See SEC T+1 Adopting Release, supra note 4, 

88 FR 13872, 13873. 

16Copies of all comment letters received by the 

Commission are available at https://www.sec.gov/ 

comments/s7-05-22/s70522.htm. 

17See supra note 4. 

Even before the adoption of the T+2 

settlement cycle, the concept of a T+1 

settlement cycle already was being 

considered.8 In this regard, the 

Depository Trust & Clearing Corporation 

(‘‘DTCC’’) published a white paper in 

February 2021 highlighting the benefits 

of moving to a T+1 settlement cycle, 

particularly in light of the 

unprecedented market activity and 

volatility that had occurred in 2020 and 

early 2021.9 Following the publication 

of the DTCC White Paper, the industry 

formed an Industry Steering Committee 

(‘‘ISC’’) 10 and an Industry Working 

Group (‘‘IWG’’) 11 to develop an 

industry consensus for the transition to 

a T+1 settlement cycle. In December 

2021, SIFMA, ICI, DTCC, and Deloitte 

published a report summarizing the 

work conducted by the ISC and IWG 

and setting forth the ISC’s 

recommendations for transitioning to a 

T+1 settlement cycle.12 Thereafter, in 

August 2022, SIFMA, ICI, and Deloitte 

published a T+1 implementation 

playbook to help market participants 

prepare for the implementation of T+1 

settlement.13

On February 9, 2022, the Commission 

published a proposal to shorten the 

standard settlement cycle for most U.S. 

securities transactions from T+2 to 

T+1.14 In the SEC T+1 Proposing 

Release, the Commission noted its belief 

that shortening the settlement cycle 

from T+2 to T+1 can promote investor 

protection, reduce risk, and increase 

operational and capital efficiency. 

Moreover, the Commission noted that 

two episodes involving increased 

market volatility–the outbreak of the 

COVID–19 pandemic in March 2020 and 

the ‘‘meme’’ stock phenomenon in 

January 2021–refocused attention on a 

T+1 standard settlement cycle. In the 

SEC T+1 Proposing Release, the 

Commission further noted that 

substantial progress has been made 

toward identifying the technological 

and operational changes that are 

necessary to establish a T+1 settlement 

cycle, including the industry-level 

changes that would be necessary to 

transition from a T+2 standard to a T+1 

standard settlement cycle. In proposing 

new Exchange Act Rule 15c6–2, the 

Commission stated that additional 

regulatory steps were ‘‘necessary to 

improve the processing of institutional 

transactions, advancing two other 

longstanding objectives shared by the 

Commission and the securities industry: 

the completion of trade allocations, 

confirmations, and affirmations on trade 

date (an objective often referred to as 

‘‘same-day affirmation’’) and the 

straight-through processing of securities 

transactions.’’ 15 The Commission 

received numerous comment letters on 

the proposal, specifically regarding the 

proposed amendments to Exchange Act 

Rule 15c6–1 and proposed new 

Exchange Act Rule 15c6–2.16

Following consideration of the 

comments, on February 15, 2023, the 

Commission adopted final rules to 

shorten the standard settlement cycle 

for most U.S. securities transactions 

from T+2 to T+1.17 In addition to the 

amendments to Exchange Act Rule 

15c6–1 to shorten the settlement cycle, 

the Commission adopted new Exchange 

Act Rule 15c6–2 regarding same-day 

allocations and affirmations. 

Final Exchange Act Rule 15c6–1 

requires most broker-dealer transactions 

to settle by T+1, subject to certain 

exceptions. Final Exchange Act Rule 

15c6–2 addresses same day allocations, 

confirmations and affirmations to 

improve institutional trades and 

straight-through processing. Certain 

transactions, primarily involving 

institutional trades, require post-trade 

exchange of confirmations and 

affirmations, in order for the parties to 

compare trade details and facilitate 

settlement with third-party custodians. 

In addition, investment managers that 

effect block trades for the accounts of 

several customers simultaneously need 

to provide post-trade underlying 

account allocation instructions to the 

broker or custodian before these 

transactions can settle. Final Exchange 

Act Rule 15c6–2 requires a brokerdealer to either enter into a written 

agreement or establish, maintain, and 

enforce written policies and procedures 

reasonably designed to ensure the 

completion of allocations, 

confirmations, and affirmations (or any 

combination thereof) as soon as 

technologically practicable and no later 

than the end of trade date in order to 

complete settlement by T+1. 

Proposed Rule Change 

Given the Commission’s recent 

changes to shorten the standard 

settlement cycle for most U.S. securities 

transactions from T+2 to T+1, FINRA is 

proposing amendments to its rules to 

align them with the changes set forth in 

the T+1 Adopting Release. As such, 

FINRA is proposing to amend FINRA 

Rules 2341 (Investment Company 

Securities), 4515 (Approval and 

Documentation of Changes in Account 

Name or Designation), 6282 

(Transactions Reported by Members to 

the ADF), 6380A (Transaction 

Reporting), 6380B (Transaction 

Reporting), 6622 (Transaction 

Reporting), 7140 (Trade Report 

Processing), 7240A (Trade Report 

Processing), 7340 (Trade Report 

Processing), 11140 (Transactions in 

Securities ‘‘Ex-Dividend,’’ ‘‘Ex-Rights’’ 

or ‘‘Ex-Warrants’’), 11150 (Transactions 

‘‘Ex-Interest’’ in Bonds Which Are Dealt 

in ‘‘Flat’’), 11210 (Sent by Each Party), 

11320 (Dates of Delivery), 11620 

(Computation of Interest), 11860 (COD 

Orders), 11893 (Clearly Erroneous 

Transactions in OTC Equity Securities), 

and 11894 (Review by the Uniform 

Practice Code (‘‘UPC’’) Committee). 

The details of the proposed rule 

change are described below. 

FINRA Rule 2341 (Investment Company 

Securities) 

Rule 2341(m)(1) requires members, 

including underwriters, that engage in 

direct retail transactions for investment 


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18Rule 4515.01 applies only where there is more 

than one customer for any particular order and it 

extends to investment advisers that are registered 

under the Investment Advisers Act or that, but for 

Investment Advisers Act Section 203(b) or 203A, 

would be required to register under the Investment 

Advisers Act. In addition, Rule 4515.01 clarifies 

that member firms may not knowingly facilitate the 

allocation of orders from investment advisers in a 

manner other than in compliance with both (i) the 

investment adviser’s intent at the time of trade 

execution to allocate shares on a percentage basis 

to the participating accounts and (ii) the investment 

adviser’s fiduciary duty with respect to allocations 

for such participating accounts, including but not 

limited to allocations based on the performance of 

a transaction between the time of execution and the 

time of allocation. 

company shares to transmit payments 

received from customers for the 

purchase of investment company shares 

to the payee by the end of the second 

business day after receipt of a 

customer’s order to purchase such 

shares, or by the end of one business 

day after receipt of a customer’s 

payment for such shares, whichever is 

later. FINRA is proposing to amend Rule 

2341(m)(1) to change the two-business 

day transmittal requirement to one 

business day. FINRA is not proposing 

any changes to the one-business day 

alternative. 

4515 (Approval and Documentation of 

Changes in Account Name or 

Designation) 

Rule 4515 requires that, before a 

customer order is executed, the account 

name or designation must be placed 

upon the order form or other similar 

record for the transaction, and addresses 

the approval and documentation 

procedures for changes in such account 

name or designation. Additionally, Rule 

4515.01 provides that when accepting 

orders from investment advisers, the 

member firm may allow such 

investment advisers to make allocations 

on their orders for customers on whose 

behalf the investment advisers submit 

the orders, as long as the firm receives 

specific account designations or 

customer names from such investment 

advisers by noon of the next business 

day following the trading session.18

FINRA is proposing to amend Rule 

4515.01 to provide that when accepting 

orders from investment advisers, a 

member firm may allow such 

investment advisers to make allocations 

on their orders for customers on whose 

behalf the investment advisers submit 

the orders, as long as the member firm 

receives specific account designations 

or customer names from such 

investment advisers by no later than the 

end of the day on the trade date. FINRA 

is proposing to amend the timeframe by 

which a member firm must receive the 

specific account designations or 

customer names from the investment 

adviser to conform Rule 4515.01 with 

the same-day confirmation, allocation, 

and affirmation requirements of new 

Exchange Act Rule 15c6–2. 

FINRA Rules 6282 (Transactions 

Reported by Members to the ADF), 

6380A (Transaction Reporting), 6380B 

(Transaction Reporting), 6622 

(Transaction Reporting) 

Rules 6282(a)(4)(D), 6380A(a)(5)(D), 

6380B(a)(5)(D), and 6622(a)(5)(D) 

address transaction reporting with 

respect to the Alternative Display 

Facility (‘‘ADF’’), the FINRA/Nasdaq 

Trade Reporting Facility (‘‘NQTRF’’), 

the FINRA/NYSE Trade Reporting 

Facility, and the Over-the-Counter 

Reporting Facility (‘‘ORF’’), 

respectively. Specifically, these rules 

require a reporting firm to identify a 

Next Day Trade by appending the 

appropriate modifier to a last sale 

report. FINRA is proposing to delete 

Rules 6282(a)(4)(D), 6380A(a)(5)(D), 

6380B(a)(5)(D), and 6622(a)(5)(D) 

because, upon implementation of a T+1 

trade settlement cycle, a Next Day Trade 

will become a Regular Way Trade, 

which is the default settlement type for 

transaction reporting and does not 

require a modifier. 

FINRA Rules 7140 (Trade Report 

Processing), 7240A (Trade Report 

Processing), and 7340 (Trade Report 

Processing) 

Rules 7140(a)(3), 7240A(a)(3), and 

7340(a)(3) address the automatic lock-in 

of trades in the ADF, the NQTRF, and 

the ORF, respectively. These rules 

provide that any trade that remains 

open at the end of its entry day will be 

carried over and automatically locked-in 

by the corresponding system. The trade 

is then submitted to the National 

Securities Clearing Corporation 

(‘‘NSCC’’) at 2:30 p.m. Eastern Time 

(‘‘ET’’) on the next business day. FINRA 

is proposing to amend Rules 7140(a)(3), 

7240A(a)(3), and 7340(a)(3) to change 

the time a trade is submitted to the 

NSCC from 2:30 p.m. ET to noon ET to 

allow for sufficient time for NSCC to 

process the trade. 

FINRA Rule 11140 (Transactions in 

Securities ‘‘Ex-Dividend,’’ ‘‘Ex-Rights’’ 

or ‘‘Ex-Warrants’’) 

Rule 11140(b)(1) provides that for 

dividends or distributions, and the 

issuance or distribution of warrants, that 

are less than 25 percent of the value of 

the subject security, if definitive 

information is received sufficiently in 

advance of the record date, the date 

designated as the ‘‘ex-dividend date’’ 

shall be the first business day preceding 

the record date if the record date falls 

on a business day, or the second 

business day preceding the record date 

if the record date falls on a day 

designated by FINRA’s Uniform Practice 

Code Committee (‘‘Committee’’) as a 

non-delivery date. FINRA is proposing 

to shorten the timeframes in Rule 

11140(b)(1) by one business day. As 

such, the date designated as the ‘‘exdividend date’’ would be the record date 

if the record date falls on a business 

day, or the first business day preceding 

the record date if the record date falls 

on a day designated by the Committee 

as a non-delivery date. In addition, the 

proposed rule change would make a 

non-substantive technical change to the 

rule. 

FINRA Rule 11150 (Transactions ‘‘ExInterest’’ in Bonds Which Are Dealt in 

‘‘Flat’’) 

Rule 11150(a) prescribes the manner 

for establishing ‘‘ex-interest dates’’ for 

transactions in bonds or other similar 

evidences of indebtedness which are 

traded ‘‘flat.’’ Such transactions are ‘‘exinterest’’ on (1) the first business day 

preceding the record date if the record 

date falls on a business day, (2) the 

second business day preceding the 

record date if the record date falls on a 

day other than a business day, or (3) the 

second business day preceding the date 

on which an interest payment is to be 

made if no record date has been fixed. 

FINRA is proposing to shorten the 

timeframes in Rule 11150(a) by one 

business day. Therefore, the 

transactions would be ‘‘ex-interest’’ on 

(1) the record date if the record date 

falls on a business day, (2) the first 

business day preceding the record date 

if the record date falls on a day other 

than a business day, or (3) the first 

business day preceding the date on 

which an interest payment is to be made 

if no record date has been fixed. 

FINRA Rule 11210 (Sent by Each Party) 

Rule 11210(a) requires each party to a 

transaction, other than a cash 

transaction, to send a Uniform 

Comparison or Confirmation of the 

transaction on or before the first 

business day following the date of the 

transaction. FINRA is proposing to 

shorten the timeframe in Rule 11210(a) 

and require the sending of the Uniform 

Comparison or Confirmation of a 

transaction by the end of the day on the 

trade date. In addition, the proposed 

rule change would clarify that, as a 

result of this change, the timeframe for 

the exchange of comparisons or 

confirmations for all transactions (cash 

and non-cash) would be the same. 


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19A COD order is a purchase by the customer 

where the agent is to receive the securities against 

payment for the purchase and a POD order is a sale 

by the customer where the agent is to deliver the 

securities against payment of the sale proceeds. 

Alternative industry terms for COD and POD orders 

are delivery vs. payment (‘‘DVP’’) and receipt vs. 

payment (‘‘RVP’’). 

Paragraphs (c) and (d) of Rule 11210 

set forth the ‘‘Don’t Know’’ (‘‘DK’’) 

voluntary procedures for using ‘‘DK 

Notices’’ (FINRA Form No. 101) or other 

forms of notices, respectively. 

Depending upon the notice used, a 

confirming member may follow the 

‘‘DK’’ procedures when it sends a 

comparison or confirmation of a trade 

(other than one that clears through the 

National Securities Clearing Corporation 

or other registered clearing agency), but 

does not receive a comparison or 

confirmation or a signed ‘‘DK’’ from the 

contra-member by the close of one 

business day following the trade date of 

the transaction. The procedures 

generally provide that after this time 

period, the confirming member shall 

send a ‘‘DK Notice’’ (or similar notice) 

to the contra-member. The contramember then has two business days 

after receipt of the confirming member’s 

notice to either confirm or ‘‘DK’’ the 

transaction. 

FINRA is proposing to amend 

paragraphs (c) and (d) of Rule 11210 to 

provide that the ‘‘DK’’ procedures may 

be used by the confirming member if it 

does not receive a comparison or 

confirmation or signed ‘‘DK’’ from the 

contra-member by the end of the day on 

the trade date of the transaction, rather 

than by the current close of one 

business day following the trade date of 

the transaction. In addition, FINRA is 

proposing amendments to paragraphs 

(c)(2)(A), (c)(3), and (d)(5) of Rule 11210 

to adjust the time in which a contramember has to respond to a ‘‘DK 

Notice’’ (or similar notice) from two 

business days after the contra-member’s 

receipt of the notice to one business day 

after the contra-member’s receipt of the 

notice. 

FINRA Rule 11320 (Dates of Delivery) 

Rule 11320 prescribes delivery dates 

for various transactions. Paragraph (b) 

states that for a ‘‘regular way’’ 

transaction, delivery must be made on, 

but not before, the second business day 

after the date of the transaction. FINRA 

is proposing to amend Rule 11320(b) to 

change the reference to the second 

business day following the date of the 

transaction to the first business day 

following the date of the transaction. 

Rule 11320(c) provides that in a 

‘‘seller’s option’’ transaction, delivery 

may be made by the seller on any 

business day after the second business 

day following the date of the transaction 

and prior to the expiration of the option. 

FINRA is proposing to amend Rule 

11320(c) to change the reference to the 

second business day following the date 

of the transaction to the first business 

day following the date of the 

transaction. 

FINRA Rule 11620 (Computation of 

Interest) 

In the settlement of contracts in 

interest-paying securities other than for 

cash, Rule 11620(a) requires the 

calculation of interest at the rate 

specified in the security up to, but not 

including, the second business day after 

the date of the transaction. FINRA is 

proposing to amend Rule 11620(a) to 

shorten the timeframe to the first 

business day following the date of the 

transaction. 

FINRA Rule 11860 (COD Orders) 

Rule 11860(a) directs members to 

follow various procedures before 

accepting collect on delivery (‘‘COD’’) or 

payment on delivery (‘‘POD’’) orders.19

Rule 11860(a)(3) provides that the 

member must deliver to the customer a 

confirmation, or all relevant data 

customarily contained in a confirmation 

with respect to the execution of the 

order, not later than the close of 

business on the next business day after 

any such execution. FINRA is proposing 

to amend Rule 11860(a)(3) to shorten 

the timeframe for delivery in the rule to 

no later than the end of the day on the 

trade date. In addition, the proposed 

rule change would make a nonsubstantive technical change to the rule. 

Rule 11860(a)(4) requires that the 

member have obtained an agreement 

from the customer that the customer 

will furnish its agent instructions with 

respect to the receipt or delivery of the 

securities involved in the transaction 

promptly upon receipt by the customer 

of each confirmation, or the relevant 

data as to each execution, relating to 

such order, and that in any event the 

customer will assure that such 

instructions are delivered to its agent no 

later than the close of business on the 

first business day after the date of 

execution of a COD or POD order. 

In light of the Commission’s recent 

adoption of final Exchange Act Rule 

15c6–2, FINRA is proposing to amend 

Rule 11860(a)(4) to provide that prior to 

accepting a COD or POD order, the 

member shall have entered into the 

written agreement, or established the 

written policies and procedures, 

required by SEA Rule 15c6–2 with 

respect to any resulting transaction. 

FINRA Rule 11893. Clearly Erroneous 

Transactions in OTC Equity Securities 

Rule 11893 governs clearly erroneous 

determinations involving transactions in 

OTC Equity Securities. Pursuant to Rule 

11893(a), a FINRA officer may declare 

any transaction involving an OTC 

Equity Security arising out of or 

reported through a trade reporting 

system owned or operated by FINRA or 

FINRA Regulation and authorized by 

the Commission null and void if the 

officer determines that (1) the 

transaction is clearly erroneous, or (2) 

such actions are necessary for the 

maintenance of a fair and orderly 

market or the protection of investors 

and the public interest; provided, 

however, that the officer shall take 

action pursuant to this paragraph as 

soon as possible after becoming aware of 

the transaction, but in all cases by 3:00 

p.m., Eastern Time, on the next trading 

day following the date of the 

transaction(s) at issue. FINRA is 

proposing to amend Rule 11893(a) to 

require a FINRA officer to take action as 

soon as possible after becoming aware of 

the transaction, but in all cases no later 

than the start of trading on the day 

following the date of the transaction(s) 

at issue. FINRA is proposing this change 

to the rule so that, in the new T+1 

environment, a determination regarding 

whether a transaction is null and void 

is made before the trade settles. The 

proposed change also closely aligns the 

timeframe for a FINRA officer to take 

action with respect to the review of a 

clearly erroneous transaction in OTC 

Equity Securities with the timeframe for 

such action in exchange-listed securities 

provided in FINRA Rule 11892 (Clearly 

Erroneous Transactions in ExchangeListed Securities). 

FINRA Rule 11894. Review by the 

Uniform Practice Code (‘‘UPC’’) 

Committee 

Rule 11894 governs the appeal to the 

UPC Committee of a FINRA officer’s 

determination to declare an execution 

null and void. Under the rule, an appeal 

must be made in writing and must be 

received by FINRA within 30 minutes 

after the person making the appeal is 

given the notification of the 

determination being appealed. If the 

appeal pertains to OTC Equity 

Securities, Rule 11894(b)(2) requires the 

UPC committee to render a 

determination as soon as practicable, 

but in no case later than two trading 

days following the date of the 

execution(s) under review. In 

connection with the shortening of the 

settlement cycle to T+1, FINRA is 

proposing to amend Rule 11894(b)(2) to 


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85682 Federal Register / Vol. 88, No. 235 / Friday, December 8, 2023 / Notices 

20 15 U.S.C. 78o–3(b)(6). 

21The proposed rule changes are also largely 

consistent with recommendations by industry trade 

groups. See supra note 13. 

22 15 U.S.C. 78s(b)(3)(A). 

23 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the self-regulatory organization 

to give the Commission written notice of the selfregulatory organization’s intent to file the proposed 

rule change, along with a brief description and text 

of the proposed rule change, at least five business 

days prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. FINRA has satisfied this requirement. 

require the UPC Committee to render a 

determination as soon as practicable, 

but in no case later than the trading day 

following the date of the execution(s) 

under review. This proposed rule 

change also more closely aligns the 

timeframe for UPC Committee 

determinations with respect to OTC 

Equity Securities with those for 

exchange-listed securities set forth in 

Rule 11894(b)(1). 

Effective Date of Proposed Rule Change 

FINRA has filed the proposed rule 

change for immediate effectiveness. The 

operative date of the proposed rule 

change will be May 28, 2024, or such 

later date as may be announced by the 

Commission for compliance for 

Exchange Act Rules 15c6–1 and 15c6– 

2. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,20 which 

requires, among other things, that 

FINRA rules must be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in securities, and, in general, to protect 

investors and the public interest. FINRA 

believes that the proposed rule change 

will minimize potential confusion and 

help industry participants comply with 

the T+1 settlement cycle by 

harmonizing FINRA rules with final 

Exchange Act Rules 15c6–1 and 15c6– 

2. FINRA further believes that by 

defining ‘‘regular way’’ settlement as 

occurring on T+1, the proposed rule 

change will result in a reduction of the 

overall level of systemic risk in the 

financial system and an increase in 

operational and capital efficiency of the 

clearance and settlement process. In 

addition, FINRA believes that the 

shortening of the settlement cycle will 

benefit investors by more quickly 

providing them access to the proceeds 

of their securities transactions. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Economic Impact Assessment 

FINRA has undertaken an economic 

impact assessment, as set forth below, to 

analyze the potential economic impacts 

of the proposed rule change, including 

anticipated costs, benefits, and 

distributional and competitive effects, 

relative to current baseline, and the 

alternatives FINRA considered in 

assessing how best to meet FINRA’s 

regulatory objectives. 

1. Regulatory Need 

The proposed rule change will 

harmonize FINRA rules with final 

Exchange Act Rules 15c6–1 and 15c6– 

2, minimizing potential confusion and 

helping industry participants comply 

with the T+1 settlement cycle. 

2. Economic Baseline 

The economic baseline for the 

proposed rule change consists of current 

FINRA Rules 2341, 4515, 6282, 6380A, 

6380B, 6622, 7140, 7240A, 7340, 11140, 

11150, 11210, 11320, 11620, 11860, 

11893, and 11894 as well as the 

amendments adopted by the SEC in 

final Rules 15c6–1 and 15c6–2. 

3. Economic Impacts 

The proposed changes to FINRA rules 

conform trade processing and asset 

servicing activities to the shortened 

settlement cycle and do not impose any 

burdens on industry beyond those that 

industry must incur to implement the 

SEC’s final rules pertaining to a T+1 

settlement cycle.21

4. Alternatives Considered 

An alternative to the proposed 

changes to FINRA Rule 11860 to shorten 

the relevant timeframes to facilitate the 

transition to T+1 consistent with final 

Exchange Act Rule 15c6–2 (no later than 

the end of the day on trade date) is to 

specify the exact hours on the trade date 

by which a member must deliver a 

confirmation and a customer must 

deliver instructions on the receipt or 

delivery of the securities. While this 

alternative would create more uniform 

practices, we [sic] believe that the 

proposed changes to FINRA Rule 11860 

would provide greater flexibility and 

allow members and customers to 

establish the timelines that are more 

suitable for their operational capacities 

and constraints. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 22 and Rule 19b– 

4(f)(6) thereunder.23

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

FINRA–2023–017 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–FINRA–2023–017. This file 


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Federal Register / Vol. 88, No. 235 / Friday, December 8, 2023 / Notices 85683 

24 17 CFR 200.30–3(a)(12). 

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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of 

FINRA. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–FINRA–2023–017 and should be 

submitted on or before December 29, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–26928 Filed 12–7–23; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice: 12267] 

Notice of Department of State 

Sanctions Actions 

SUMMARY: The Department of State is 

publishing the names of one or more 

persons that have been placed on the 

Department of Treasury’s List of 

Specially Designated Nationals and 

Blocked Persons (SDN List) 

administered by the Office of Foreign 

Asset Control (OFAC) based on the 

Department of State’s determination, in 

consultation with other departments, as 

appropriate, that one or more applicable 

legal criteria were satisfied. All property 

and interests in property subject to U.S. 

jurisdiction of these persons are 

blocked, and U.S. persons are generally 

prohibited from engaging in transactions 

with them. 

DATES: See SUPPLEMENTARY INFORMATION

section for applicable date(s). 

FOR FURTHER INFORMATION CONTACT: 

Aaron P. Forsberg, Director, Office of 

Economic Sanctions Policy and 

Implementation, Bureau of Economic 

and Business Affairs, Department of 

State, Washington, DC 20520, tel.: (202) 

647 7677, email: ForsbergAP@state.gov. 

SUPPLEMENTARY INFORMATION: 

Electronic Availability 

The SDN List and additional 

information concerning sanctions 

programs are available on OFAC’s 

website, https://ofac.treasury.gov/ 

sanctions-programs-and-countryinformation/russian-harmful-foreignactivities-sanctions. 

Notice Of Department of State Actions 

On November 2, 2023, the Department 

of State, in consultation with other 

departments, as appropriate, determined 

that the property and interests in 

property subject to U.S. jurisdiction of 

the following persons are blocked under 

the relevant sanctions authority listed 

below. 

BILLING CODE 4710–AE–P 


khammond on DSKJM1Z7X2PROD with NOTICES