Federal Register / Vol. 87, No. 22 / Wednesday, February 2, 2022 / Notices 5929 

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, Phlx, 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 2. 

6See id. at 2, n.8. The Exchange also states that 

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

would be incorporating categories of rules. See id. 

7See id. at 2–3. 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 3, n.9. 

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 3. 

9See id. 

10See id. at 2. 

11See id. 

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– 

NASDAQ–2022–006 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–2022–006. 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 (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 

10:00 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–2022–006 and 

should be submitted on or before 

February 23, 2022. 

For the Commission, by the Division 

of Trading and Markets, pursuant to 

delegated authority.15

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–02077 Filed 2–1–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94091] 

Order Granting Application by Nasdaq 

PHLX LLC 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 27, 2022. 

Nasdaq PHLX LLC (‘‘Phlx’’ 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(a) (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). 

• Options 10, Section 20 (Options 

Communications) cross-references 

FINRA Rule 2220 (except for FINRA 

Rule 2220(c)). 

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 and member organizations 

whenever FINRA proposes a change to 

FINRA Rule 2220 or 5320.7 The 

Exchange states that such notice will 

alert its members, member 

organizations, and associated persons 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, 

member organizations, and associated 

persons 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 rules 

pertaining to prohibition against trading 

ahead of customer orders and options 

communications being consistent with 

the relevant cross-referenced FINRA 

rules at all times, thus ensuring 

consistent regulation of joint members 

of Phlx and FINRA.10 The Exchange 

further states that, even if members are 

not joint members of Phlx 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 


jspears on DSK121TN23PROD with NOTICES1
5930 Federal Register / Vol. 87, No. 22 / Wednesday, February 2, 2022 / Notices 

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’’)). 

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). 

1An executed, redacted version of the lease 

agreement was filed with the petition for 

exemption. An unredacted version was submitted 

to the Board under seal along with a motion for 

protective order, which was granted by decision 

served on November 24, 2021. 

2Notice of the trackage rights exemption was 

published in the Federal Register on November 24, 

2021 (86 FR 67111), and the exemption took effect 

on December 9, 2021. See BNSF Ry.—Trackage Rts. 

Exemption—Union Pac. R.R., FD 36561 (STB served 

Nov. 24, 2021). 

3BNSF’s reference to ‘‘construction’’ is in 

connection with the planned repair and 

maintenance of the existing Line. (See Pet. 2.) 

Therefore, the Board does not construe that 

reference as involving any new line of railroad for 

which construction authority would be needed 

pursuant to 49 U.S.C. 10901, and this decision does 

not grant any such authority. 

4Pursuant to 49 CFR 1121.3(d), BNSF certifies 

that the lease does not contain a provision or 

agreement that may limit future interchange with a 

third-party connecting carrier. (Pet. 7–8.) 

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 

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. 2022–02085 Filed 2–1–22; 8:45 am] 

BILLING CODE 8011–01–P 

SURFACE TRANSPORTATION BOARD 

[Docket No. FD 36560] 

BNSF Railway Company—Lease 

Exemption—Union Pacific Railroad 

Company 

On November 9, 2021, BNSF Railway 

Company (BNSF) filed a petition under 

49 U.S.C. 10502 seeking exemption from 

the prior approval requirements of 49 

U.S.C. 11323–25 for BNSF to lease from 

Union Pacific Railroad Company (UP) 

approximately 25 miles of rail line 

extending from Sterling, Colo., near UP 

milepost 56.71, to Union, Colo., near UP 

milepost 81.1, on UP’s Julesburg 

Subdivision (the Line).1

The petition explains that BNSF and 

its predecessors have operated over the 

Line since 1900, and that, concurrently 

with the petition, BNSF filed a verified 

notice of exemption pursuant to 49 CFR 

1180.2(d)(7) pertaining to a trackage 

rights agreement to supersede the 

agreement that had been in effect since 

1951. (Pet. 2.) 2 According to the 

petition, BNSF and UP have agreed to 

enter into a lease that would modify 

certain roles and responsibilities set 

forth in the new trackage rights 

agreement; in particular, the lease 

would ‘‘allow BNSF to occupy UP’s 

property for the purposes of 

maintenance, construction, repair, and 

renewal of the track and appurtenant 

structures and facilities on the Line.’’ 

(Pet. 2.) 3 BNSF states that by permitting 

maintenance responsibilities to shift to 

BNSF, the sole user of the Line, the 

lease will streamline maintenance 

activity and produce more efficient rail 

operations. (Pet. 2.) According to BNSF, 

the lease transaction will have no 

adverse impact on commercial or 

operational access to the Line. (Id. at 5; 

see also id. at 6–7 (stating that the lease 

‘‘is simply intended to produce more 

efficient rail operations by streamlining 

the Line’s maintenance activities’’ and 

‘‘will have no adverse impact on the 

national, regional, or local rail 

industry’’).) 4

BNSF asserts that the Board has 

previously exempted similar lease 

agreements from the prior approval 

requirements of sections 11323–25 

pursuant to section 10502, and that the 

Board should grant this petition and 

exempt the lease for the same reasons. 

(Pet. 3.) 

Discussion and Conclusions 

Under 49 U.S.C. 11323(a)(2), prior 

Board approval is required for a rail 

carrier to lease the property of another 

rail carrier. Under 49 U.S.C. 10502, 

however, the Board must exempt a 

transaction or service from regulation 

when it finds that: (1) Regulation is not 

necessary to carry out the rail 


jspears on DSK121TN23PROD with NOTICES1