2976 Federal Register / Vol. 87, No. 12 / Wednesday, January 19, 2022 / Notices 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 93651 

(November 23, 2021), 86 FR 67996 (November 30, 

2021) (‘‘Notice’’). 

4See FINRA Rule 6710(a) (defining ‘‘TRACEEligible Security’’). 

5See Regulatory Notice 14–53 (November 2014). 

6See Notice, 86 FR at 67997. FINRA explained 

that members’ back-end systems are often 

programmed to clear against the counterparty 

identified on TRACE trade reports, and when the 

ATS is not involved in clearance and settlement, 

member subscribers often prefer to TRACE-report 

against the party with which they clear and settle 

the trade (i.e., another subscriber, rather than the 

ATS). See id. 

7See id. 

8See FINRA Rule 6732(a). 

9See FINRA Rule 6732(b). 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CBOE–2021–076 and 

should be submitted on or before 

February 9, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00871 Filed 1–18–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

FEDERAL REGISTER CITATION OF PREVIOUS

ANNOUNCEMENT: To be published. 

PREVIOUSLY ANNOUNCED TIME AND DATE OF

THE MEETING: Thursday, January 20, 

2022 at 2 p.m. 

CHANGES IN THE MEETING: The Closed 

Meeting scheduled for Thursday, 

January 20, 2022 at 2 p.m. has been 

changed to Thursday, January 20, 2022 

at 2:15 p.m. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information and to ascertain 

what, if any, matters have been added, 

deleted or postponed, please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

Authority: 5 U.S.C. 552b. 

Dated: January 13, 2022. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2022–01000 Filed 1–14–22; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93966; File No. SR–FINRA– 

2021–029] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving 

Proposed Rule Change To Amend 

FINRA Rule 6732 and Expand the 

Scope of Exemptions That FINRA May 

Grant ATSs From the TRACE 

Reporting Requirements 

January 12, 2022. 

I. Introduction 

On November 15, 2021, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

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

Securities Exchange Act of 1934 

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

proposed rule change to amend FINRA 

Rule 6732 (Exemption from Trade 

Reporting Obligation for Certain 

Transactions on an Alternative Trading 

System) to expand the scope of 

exemptions from the transaction 

reporting obligations of FINRA Rule 

6730 (Transaction Reporting) that 

FINRA may grant to a member 

alternative trading system (‘‘ATS’’). The 

proposed rule change was published for 

comment in the Federal Register on 

November 30, 2021.3 The Commission 

received no comments on the proposed 

rule change. This order approves the 

proposed rule change. 

II. Description of the Proposal 

FINRA Rule 6730(a) requires each 

FINRA member that is a Party to a 

Transaction in a TRACE-Eligible 

Security 4 to report the transaction to the 

Trade Reporting and Compliance Engine 

(‘‘TRACE’’). FINRA Rule 6710(e) defines 

‘‘Party to a Transaction’’ as an 

introducing broker-dealer (if any), an 

executing broker-dealer, or a customer. 

An alternative trading system (‘‘ATS’’) 

is a Party to a Transaction occurring 

through its system and has a TRACE 

transaction reporting obligation, unless 

an exception or exemption applies.5

FINRA Rule 6732 provides FINRA 

with the authority to exempt a member 

ATS from TRACE reporting obligations 

under FINRA Rule 6730. FINRA has 

stated that it adopted Rule 6732 in 

response to concerns raised by members 

regarding operational difficulties arising 

from the reporting of certain 

transactions on an ATS, particularly 

when the ATS does not have a role in 

the clearance and settlement for trades 

on its system.6 If FINRA grants an ATS 

an exemption under Rule 6732, a 

member subscriber of the ATS, when 

engaging in a trade on the ATS covered 

by the Rule 6732 exemption, must 

report against its counterparty (rather 

than the ATS), which mitigates these 

operational difficulties and facilitates 

clearance and settlement.7

Currently, under Rule 6732, FINRA 

may grant an ATS an exemption if the 

following criteria are satisfied: (1) A 

trade is between two FINRA members; 

(2) the trade does not pass through any 

ATS account, and the ATS seeking the 

exemption does not exchange TRACEEligible Securities or funds on behalf of 

the subscribers or take either side of the 

trade for clearing or settlement 

purposes, or in any other way insert 

itself into the trade; (3) the ATS seeking 

the exemption agrees to provide data 

relating to each exempted trade to 

FINRA on either a monthly basis or as 

otherwise proscribed by FINRA, and 

acknowledges that failure to meet this 

requirement would result in its 

exemption being revoked; (4) the ATS 

seeking the exemption pays the 

applicable reporting fee to FINRA; and 

(5) the ATS seeking the exemption has 

entered into a written agreement with 

each member that is a Party to a 

Transaction to ensure that each 

exempted trade is properly reported.8

Where these criteria are satisfied, an 

exempted trade occurring on the ATS 

must be reported by a member (other 

than the ATS) that meets the definition 

of ‘‘Party to a Transaction’’ identifying 

a counterparty other than the ATS with 

respect to each side of the trade.9

FINRA is now proposing to amend 

Rule 6732 to expand the scope of 

transactions that may be exempted 

under Rule 6732 to include trades that 

involve only one FINRA member (other 

than the ATS). Specifically, FINRA 

proposes to delete the current language 

in subparagraph (a)(1) of Rule 6732 that 

requires an exempted transaction to be 

between two FINRA members, and 


jspears on DSK121TN23PROD with NOTICES1
Federal Register / Vol. 87, No. 12 / Wednesday, January 19, 2022 / Notices 2977 

10See Notice, 86 FR at 67997. 

11See id. 

12See FINRA Rule 6730.07 (defining ‘‘covered 

ATS’’ as an ATS ‘‘that executed transactions in U.S. 

Treasury Securities against non-FINRA member 

subscribers of $10 billion or more in monthly par 

value, computed by aggregating buy and sell 

transactions, for any two months in the preceding 

calendar quarter’’). 

13See Notice, 86 FR at 67998, n. 12. 

14See Notice, 86 FR at 67998. 

15 In approving this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

16 15 U.S.C. 78o–3(b)(6). 

17See FINRA Rule 6732(a)(5). 

18See FINRA Rule 6732(b). 

19See FINRA Rule 6732(a)(3). 

20See FINRA Rule 6732(a)(2). 

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

22 17 CFR 200.30–3(a)(12). 

replace it with the following: ‘‘The trade 

involves at least one member (other than 

the ATS) that meets the definition of 

‘Party to a Transaction.’ ’’ 

FINRA has stated that, in many cases, 

transactions on an ATS that involve 

only one member are otherwise similar 

to the transactions between two 

members that are currently eligible for 

exemptive relief under existing Rule 

6732.10 FINRA believes that expanding 

the scope of the current exemption to 

permit its use for transactions between 

a member (other than the ATS) and a 

non-member subscriber would extend 

the benefits of the rule—including 

simplifying compliance with TRACE 

trade reporting obligations—for 

additional ATS models and member 

subscribers, while capturing 

substantially the same regulatory 

information and enabling public 

dissemination of the transaction in a 

more streamlined manner.11

FINRA also has proposed to add new 

paragraph (c) to Rule 6732, which 

provides that, with respect to a 

transaction between a member and a 

non-member on an ATS that is a 

‘‘covered ATS,’’ 12 the ATS must 

provide to the member subscriber, and 

the member subscriber must report to 

TRACE using, the FINRA-assigned 

identifier for each non-FINRA member 

subscriber. FINRA also has stated that 

an ATS that has received an exemption 

under Rule 6732 and that is a ‘‘covered 

ATS’’ must use the FINRA-assigned 

identifier to identify each non-FINRA 

member subscriber in the monthly 

transaction files that are required to be 

submitted to FINRA.13

FINRA has represented that it will 

announce the effective date of the rule 

change in a Regulatory Notice, and the 

effective date will be no later than 365 

days following Commission approval of 

the proposed rule change.14

III. Discussion and Commission 

Findings 

After careful consideration, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities association.15 In 

particular, the Commission finds that 

the proposed rule change is consistent 

with Section 15A(b)(6) of the Act,16

which requires, among other things, that 

the rules of a national securities 

association be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, and, in general, to 

protect investors and the public interest. 

The proposed rule change appears 

reasonably designed to reduce reporting 

burdens on member ATSs and to 

mitigate operational burdens of ATS 

member subscribers with respect to 

clearance and settlement, without 

negatively impacting the regulatory 

audit trail or post-trade transparency for 

ATS transactions in TRACE-Eligible 

Securities. The proposed rule change 

will expand the scope of existing Rule 

6732 by allowing FINRA to grant 

exemptions from the TRACE reporting 

requirements to ATSs regarding 

member-to-non-member trades in 

addition to, as currently, member-tomember trades. The proposal does not 

change any of the other criteria for 

granting an exemption under Rule 6732. 

Thus, although an ATS receiving an 

exemption pursuant to FINRA’s 

expanded authority under Rule 6732 

would no longer be submitting TRACE 

reports regarding exempted trades, the 

proposal appears reasonably designed to 

prevent any relevant information 

regarding such trades from being lost 

from the regulatory audit trail. An ATS 

granted an exemption under FINRA’s 

expanded authority would have to enter 

into a written agreement with each 

member subscriber that is a Party to a 

Transaction that is exempted, specifying 

that the member must report that 

transaction to TRACE and identify the 

transaction as having occurred on the 

ATS using the ATS’s MPID.17 The sole 

member subscriber involved in the 

transaction would have to identify a 

counterparty other than the ATS with 

respect to each side of the transaction.18

In addition, an ATS granted an 

exemption would have to agree to 

provide FINRA on a monthly basis (or 

such other basis as prescribed by 

FINRA) data relating to exempted trades 

occurring on the ATS’s system, and to 

acknowledge that failure to report such 

data to FINRA, in addition to 

constituting a violation of FINRA rules, 

would result in revocation of any 

exemption granted pursuant to Rule 

6732.19 Furthermore, under new Rule 

6732(c), for an exempted trade between 

a member and a non-member on an ATS 

that is a ‘‘covered ATS’’ under FINRA 

Rule 6730.07, the ATS would have to 

provide to the member subscriber (and 

the member subscriber would have to 

report to TRACE using) the FINRAassigned identifier for each non-FINRA 

member subscriber. 

The proposal also appears reasonably 

designed to prevent any negative impact 

on post-trade transparency. Although 

trade reports for exempt trades will no 

longer be submitted by the ATS and 

publicly disseminated, market observers 

will still have relevant information 

about the ATS trade between the 

member subscriber and the non-member 

because FINRA will continue to 

publicly disseminate the trade report 

submitted by the member subscriber 

that is the Party to the Transaction. This 

approach aligns public dissemination 

more closely with the legal and 

economic effects of the transaction, 

because an exemption under Rule 6732 

can apply to a trade on the ATS only if 

the broker-dealer operator of the ATS is 

not a legal counterparty to the trade.20

For the reasons noted above, the 

Commission finds that the proposed 

rule change is consistent with the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,21 that the 

proposed rule change (SR–FINRA– 

2021–029) is approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00879 Filed 1–18–22; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #17305 and #17306; 

MISSOURI Disaster Number MO–00112] 

Presidential Declaration of a Major 

Disaster for Public Assistance Only for 

the State of Missouri 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 


jspears on DSK121TN23PROD with NOTICES1