Federal Register / Vol. 87, No. 19 / Friday, January 28, 2022 / Notices 4691 

15 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 Angela S. Dunn, Principal 

Associate General Counsel, BX, to J. Matthew 

DeLesDernier, Assistant Secretary, Commission, 

dated August 26, 2021 (‘‘Exemptive Request’’). 

4 17 CFR 240.0–12. 

5See Exemptive Request, supra note 3, at 6. 

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–NASDAQ–2022–003 and 

should be submitted on or before 

February 18, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01713 Filed 1–27–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94034] 

Order Granting Application by Nasdaq 

BX, Inc. for an 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 

January 24, 2022. 

Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) has filed with the 

Securities and Exchange Commission 

(‘‘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 Financial Industry 

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

that the Exchange seeks to incorporate 

by reference.3 Section 36 of the 

Exchange Act, 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 has requested, pursuant 

to Rule 0–12 under the Exchange Act,4

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 a crossreferenced FINRA rule. Specifically, the 

Exchange requests that it be permitted 

to incorporate by reference changes 

made to the FINRA rules that are crossreferenced in the Exchange’s rules 

identified below, without the need for 

the Exchange to file separately similar 

proposed rule changes pursuant to 

Section 19(b) of the Exchange Act: 5

• General 9, Section 1(b) (Prohibition 

Against Trading Ahead of Customer 

Orders) cross-references FINRA Rule 

5320 (except for FINRA Rule 5320.02(b) 

and the reference to FINRA Rule 6420 

in FINRA Rule 5320). 

• General 9, Section 1(c) (Front 

Running Policy) cross-references FINRA 

Rule 5270. 

• General 9, Section 1(f) 

(Confirmation of Callable Common 

Stock) cross-references FINRA Rule 

2232. 

• General 9, Section 1(g) (Interfering 

With the Transfer of Customer Accounts 

in the Context of Employment Disputes) 

cross-references FINRA Rule 2140. 

• General 9, Section 2 (Customers’ 

Securities or Funds) cross-references 

FINRA Rule 2150. 

• General 9, Section 3 

(Communications with the Public) 

cross-references FINRA Rule 2210 

(except for FINRA Rule 2210(c)). 

• General 9, Section 5 

(Telemarketing) cross-references FINRA 

Rule 3230. 

• General 9, Section 6 (Forwarding of 

Proxy and Other Issuer-Related 

Materials) cross-references FINRA Rule 

2251. 

• General 9, Section 7 (Disclosure of 

Financial Condition, Control 

Relationship with Issuer and 

Participation or Interest in Primary or 

Secondary Distribution) cross-references 

FINRA Rules 2261, 2262, and 2269. 

• General 9, Section 8 (SIPC 

Information) cross-references FINRA 

Rule 2266. 

• General 9, Section 9 (Fairness 

Opinions) cross-references FINRA Rule 

5150. 

• General 9, Section 10(a) 

(Recommendations to Customers 

(Suitability)) cross-references FINRA 

Rule 2111 (except for the references to 

FINRA Rule 2214 in FINRA Rule 2111). 

• General 9, Section 10(c) (Know 

Your Customer) cross-references FINRA 

Rule 2090. 

• General 9, Section 12 (Customer 

Account Statements) cross-references 

FINRA Rule 2231. 

• General 9, Section 13 (Margin 

Disclosure Statement) cross-references 

FINRA Rule 2264. 

• General 9, Section 14 (Approval 

Procedures for Day-Trading Accounts) 

cross-references FINRA Rules 2130 and 

2270. 

• General 9, Section 15 (Borrowing 

From or Lending to Customers) crossreferences FINRA Rule 3240. 

• General 9, Section 16 (Charges for 

Services Performed) cross-references 

FINRA Rule 2122. 

• General 9, Section 17 (Net 

Transactions with Customers) crossreferences FINRA Rule 2124. 

• General 9, Section 19 (Discretionary 

Accounts) cross-references FINRA Rule 

3260. 

• General 9, Section 20 (Supervision) 

cross-references FINRA Rules 3110 and 

3170. 

• General 9, Section 21 (Supervisory 

Control System, Annual Certification of 

Compliance and Supervisory Processes) 

cross-references FINRA Rules 3120 and 

3130 (except for the references to MSRB 

rules in FINRA Rule 3130). 

• General 9, Section 23 (Outside 

Business Activities of an Associated 

Person) cross-references FINRA Rule 

3270. 

• General 9, Section 24 (Private 

Securities Transactions of an Associated 

Person) cross-references FINRA Rule 

3280. 

• General 9, Section 25 (Transactions 

for or by Associated Persons) crossreferences FINRA Rule 3210. 

• General 9, Section 26 (Influencing 

or Rewarding Employees of Others) 

cross-references FINRA Rule 3220. 

• General 9, Section 27 (Reporting 

Requirements) cross-references FINRA 

Rule 4530 (except for FINRA Rule 

4530(h)). 

• General 9, Section 28 (Disclosure to 

Associated Persons When Signing Form 

U4) cross-references FINRA Rule 2263 

(except for subsection (2) of FINRA Rule 

2263). 

• General 9, Section 30 (Books and 

Records) cross-references FINRA Rule 

4511. 

• General 9, Section 31 (Use of 

Information Obtained in Fiduciary 


jspears on DSK121TN23PROD with NOTICES1
4692 Federal Register / Vol. 87, No. 19 / Friday, January 28, 2022 / Notices 

6See id. at 6, n.14. The Exchange also states that 

it is not ‘‘cherry picking’’ because the Exchange 

would be incorporating categories of rules. See id. 

7See id. at 6. The Exchange represents 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 

time frame required by such rule. See id. at 6–7, 

n.15. The website posting will include a link to the 

location on FINRA’s website where the applicable 

proposed rule change is posted. See id. 

8See id. at 6–7. 

9See id. at 7. 

10See id. at 6. 

11See id. 

12See, e.g., Securities Exchange Act Release Nos. 

83296 (May 21, 2018), 83 FR 24362 (May 25, 2018) 

(order granting NYSE National, Inc.’s exemptive 

request relating to rules of FINRA incorporated by 

reference); 83040 (April 12, 2018), 83 FR 17198 

(April 18, 2018) (order granting MIAX PEARL, 

LLC’s exemptive request relating to rules of the 

Miami International Securities Exchange, LLC 

incorporated by reference); 76998 (January 29, 

2016), 81 FR 6066, 6083–84 (February 4, 2016) 

(order granting application for registration as a 

national securities exchange of ISE Mercury, LLC 

and exemptive request relating to rules of certain 

self-regulatory organizations (‘‘SROs’’) (including 

FINRA) incorporated by reference); 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’’); 61152 (December 10, 

2009), 74 FR 66699, 66709–10 (December 16, 2009) 

(order granting application for registration as a 

national securities exchange of C2 Options 

Exchange, Incorporated and exemptive request 

relating to rules of the Chicago Board Options 

Exchange, Incorporated, incorporated by reference). 

13See 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). 

14See BATS Options Market Order, supra note 12 

(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’’)). 

Capacity) cross-references FINRA Rule 

2060. 

• General 9, Section 33 (Reporting 

Requirements for Clearing Firms) crossreferences FINRA Rule 4540. 

• General 9, Section 34 (Extensions of 

Time Under Regulation T and SEC Rule 

15c3–3) cross-references FINRA Rule 

4230. 

• General 9, Section 37 (Anti-Money 

Laundering Compliance Program) crossreferences FINRA Rule 3310. 

• General 9, Section 38(b) (Margin 

Requirements) cross-references FINRA 

Rule 4210. 

• General 9, Section 39(b) (Fidelity 

Bonds) cross-references FINRA Rule 

4360. 

• General 9, Section 40 (Capital 

Compliance) cross-references FINRA 

Rule 4110. 

• General 9, Section 41 (Regulatory 

Notification and Business Curtailment) 

cross-references FINRA Rule 4120. 

• General 9, Section 42 (Audit) crossreferences FINRA Rule 4140. 

• General 9, Section 43 (General 

Requirements) cross-references FINRA 

Rule 4511. 

• General 9, Section 44 (Records of 

Written Customer Complaints) crossreferences FINRA Rule 4513. 

• General 9, Section 45 (Customer 

Account Information) cross-references 

FINRA Rule 4512. 

• General 9, Section 46 

(Authorization Records for Negotiable 

Instruments Drawn From a Customer’s 

Account) cross-references FINRA Rule 

4514. 

• General 9, Section 47 (Approval 

and Documentation of Changes in 

Account Name or Designation) crossreferences FINRA Rule 4515. 

• General 9, Section 48 (Notifications, 

Questionnaires and Reports) crossreferences FINRA Rule 4521. 

• General 9, Section 64 (Account 

Approval) cross-references FINRA Rule 

2360(b)(16). 

• Equity 9, Section 15 (Suitability) 

cross-references FINRA Rule 

2360(b)(19). 

• Equity 9, Section 16 (Discretionary 

Accounts) cross-references FINRA Rule 

2360(b)(18). 

• Equity 9, Section 17 (Supervision of 

Accounts) cross-references FINRA Rule 

2360(b)(20). 

• Equity 9, Section 18 (Customer 

Complaints) cross-references FINRA 

Rule 2360(b)(17)(A). 

• Equity 9, Section 19 

(Communications with the Public and 

Customers Concerning Index Warrants, 

Currency Index Warrants, and Currency 

Warrants) cross-references FINRA Rule 

2220 (except for FINRA Rule 2220(c)). 

• Equity 9, Section 20 (Maintenance 

of Records) cross-references FINRA Rule 

2360(b)(17)(B). 

• Equity 10, Section 2 (Investment 

Company Securities) cross-references 

FINRA Rule 2341 (except for the 

reference to FINRA Rule 2320 in FINRA 

Rule 2341). 

• Equity 11, Rule 11860 (Acceptance 

and Settlement of COD Orders) crossreferences FINRA Rule 11860. 

• Equity 11, Rule 11870 (Customer 

Account Transfer Contracts) crossreferences FINRA Rule 11870. 

The Exchange represents that the 

FINRA rules listed above are regulatory 

rules and not trading rules.6 The 

Exchange represents that, as a condition 

to the requested exemption from Section 

19(b) of the Exchange Act, the Exchange 

will provide written notice to its 

members whenever FINRA proposes a 

change to a cross-referenced rule.7 The 

Exchange states that such notice will 

alert its members and persons 

associated with a member to the 

proposed FINRA rule change and give 

them an opportunity to comment on the 

proposal.8 The Exchange further 

represents that it will inform members 

in writing when the Commission 

approves any such proposed rule 

changes.9

According to the Exchange, this 

exemption is appropriate because it 

would result in the Exchange’s rulebook 

being consistent with the relevant crossreferenced FINRA rules at all times, 

thus ensuring consistent regulation of 

joint members of BX and FINRA.10 The 

Exchange further states that, even if 

members are not joint members of BX 

and FINRA, the exemption is 

appropriate because it will permit its 

rules to remain consistent with FINRA’s 

rules and ensure consistent treatment of 

industry members with respect to the 

aforementioned rules.11

The Commission has issued 

exemptions similar to the Exchange’s 

request.12 In granting similar 

exemptions, the Commission stated that 

it would consider similar future 

exemption requests, provided that: 

• An 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; 13

• 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.14

The Commission believes that the 

Exchange has satisfied each of these 

conditions. 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 


jspears on DSK121TN23PROD with NOTICES1
Federal Register / Vol. 87, No. 19 / Friday, January 28, 2022 / Notices 4693 

15See BATS Options Market Order, supra note 

12, 75 FR at 8761; see also 2004 Order, supra note 

14, 69 FR at 8502. 

16 15 U.S.C. 78mm. 

17 17 CFR 200.30–3(a)(76). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 93928 

(January 7, 2022) (SR–FINRA–2021–034). 

4FINRA operates Web CRD, the central licensing 

and registration system for the U.S. securities 

industry. FINRA uses Web CRD to maintain the 

qualification, employment and disciplinary 

histories of registered associated persons of brokerdealers. 

5See note 3 above. On September 21, 2021, the 

SEC approved amendments to FINRA Rules 1210 

(Registration Requirements) and 1240 (Continuing 

Education Requirements) to, among other things, 

require registered persons to complete the 

Regulatory Element of CE annually by December 31 

of each year, rather than every three years, and to 

complete Regulatory Element content for each 

representative or principal registration category that 

they hold. See Securities Exchange Act Release No. 

93097 (September 21, 2021), 86 FR 53358 

(September 27, 2021) (Order Approving File No. 

SR–FINRA–2021–015). The Regulatory Element is 

administered by FINRA and focuses on regulatory 

requirements and industry standards. The proposed 

rule change also included amendments to the Firm 

Element training, which is provided by each firm 

annually to its registered persons and focuses on 

securities products, services and strategies the firm 

offers, firm policies and industry trends. 

6FINRA notes that the proposed $18 annual fee 

is comparable to the current $55 fee over a threeyear period. Moreover, the proposed fee for the 

annual Regulatory Element would be the same for 

all registered persons, regardless of the amount of 

annual content that they would be required to 

complete (that is, an individual who holds multiple 

registrations would be subject to the same proposed 

$18 annual fee as an individual who holds a single 

registration). See note 3 above. 

7The Exchange would file to remove the rule text 

concerning the $55 fee once the $18 fee becomes 

operative. 

to identical rule text sought by more 

than one SRO.15 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 FINRA rules it has 

incorporated by reference. This 

exemption is conditioned upon the 

Exchange promptly providing written 

notice to its members whenever FINRA 

changes a rule that the Exchange has 

incorporated by reference. 

Accordingly, it is ordered, pursuant to 

Section 36 of the Exchange Act,16 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 members whenever FINRA 

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.17

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01712 Filed 1–27–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94044; File No. SR–PHLX– 

2022–02] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend References to 

FINRA Continuing Education Fees 

January 24, 2022. 

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 

12, 2022, Nasdaq PHLX LLC (‘‘Phlx’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the 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 

Phlx’s Pricing Schedule at Options 7, 

Section 9, Other Member Fees, to reflect 

adjustments to FINRA Continuing 

Education Fees. 

The Exchange also proposes technical 

amendments to Phlx Options 7, Section 

1, General Provisions. 

While the changes proposed herein 

are effective upon filing, the Exchange 

has designated the new Maintaining 

Qualifications Program (‘‘MQP’’) Fee, 

elimination of the $100 Continuing 

Education Session Fee, and technical 

amendments to become operative on 

January 31, 2022. Additionally, the 

Exchange designates an $18 Continuing 

Education Regulatory Element Session 

Fee to become operative on January 1, 

2023.3

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/phlx/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 

This proposal amends Phlx’s Pricing 

Schedule at Options 7, Section 9C, 

FINRA Fees, to reflect adjustments to 

FINRA Continuing Education Fees.4 The 

FINRA fees are collected and retained 

by FINRA via Web CRD for the 

registration of employees of Phlx 

members and member organizations that 

are not FINRA members (‘‘Non-FINRA 

members’’). The Exchange is merely 

listing these fees on its Pricing 

Schedule. The Exchange does not 

collect or retain these fees. 

Today, Phlx Options 7, Section 9C, 

provides a list of FINRA Web CRD Fees, 

Fingerprint Processing Fees, and 

Continuing Education Fees. The 

Exchange proposes to amend the 

Continuing Education Fees within 

Options 7, Section 9C on behalf of the 

Exchange. The fees listed within 

Options 7, Section 9C reflect fees set by 

FINRA. 

Specifically, the Exchange proposes to 

decrease the $55 Continuing Education 

Web-based Fee to $18. This amendment 

is made in accordance with a recent 

FINRA rule change to adjust to its fees.5

FINRA currently charges a fee of $55 to 

each individual who completes the 

Regulatory Element of the Continuing 

Education Requirements pursuant to 

Exchange General 4, Section 1240. In 

conjunction with the amendments to 

transition to an annual Regulatory 

Element requirement, FINRA amended 

the Continuing Education Regulatory 

Element Session Fee from $55 to $18.6

FINRA indicated in the Continuing 

Education Fee Filing that it would begin 

assessing the $18 Continuing Education 

Regulatory Element Session Fee as of 

January 1, 2023 to coincide with the 

effective date of the transition to an 

annual Regulatory Element 

requirement.7


jspears on DSK121TN23PROD with NOTICES1