34286 Federal Register / Vol. 86, No. 122 / Tuesday, June 29, 2021 / Notices 

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

2 17 CFR 240.19b–4. 

3The Exchange will separately request an 

exemption from the rule filing requirements of 

Section 19(b) of the Act in requesting to incorporate 

FINRA Rule 5250 and the definition of ‘‘affiliate’’ 

and the related definitions within FINRA Rule 5121 

to the extent General 9, Section 18 is affected solely 

by virtue of a change to FINRA Rule 5250 or to such 

definitions within FINRA Rule 5121. The 

Exchange’s proposed rule change will not become 

operative unless and until the Commission grants 

this exemption request. 

4See Securities Exchange Act Release No. 69398 

(April 18, 2013), 78 FR 24261 (April 24, 2013) (SR– 

FINRA–2013–020) (Notice of Filing and Immediate 

Effectiveness of a Proposed Rule Change Relating to 

FINRA Rule 5250 (Payments for Market Making) 

(‘‘2013 Rule Change’’). 

5 Id. 

6See 2013 Rule Change (citing to Securities 

Exchange Act Release No. 69195). See also 

Securities Exchange Act Release No. 69195 (March 

20, 2013), 78 FR 18393 (March 26, 2013) (SR– 

NASDAQ–2012–137) (Order Granting Approval of a 

Proposed Rule Change, as Modified by Amendment 

Nos. 1 and 3 Thereto, To Establish the Market 

Quality Program). 

their current size postcards. Id. The 

Postal Service expects to have no more 

than a negligible impact on its 

competitors. Id. 

II. Commission Action 

The Commission establishes Docket 

No. MC2021–104 to consider the Postal 

Service’s proposal described in its 

Notice. Interested persons may submit 

comments on whether the Notice is 

consistent with the policies of 39 CFR 

3040.211. Comments are due by July 6, 

2021. 

The Notice and related filings are 

available on the Commission’s website 

(http://www.prc.gov). The Commission 

encourages interested persons to review 

the Notice for further details. 

The Commission appoints Richard A. 

Oliver to serve as Public Representative 

in this proceeding. 

III. Ordering Paragraphs 

It is ordered: 

1. The Commission establishes Docket 

No. MC2021–104 for consideration of 

the matters raised by the Notice of the 

United States Postal Service of Update 

to the Maximum Size Limit for 

Presorted First-Class Mail Postcards, 

filed June 23, 2021. 

2. Pursuant to 39 U.S.C. 505, Richard 

A. Oliver is appointed to serve as an 

officer of the Commission (Public 

Representative) to represent the 

interests of the general public in this 

proceeding. 

3. Comments by interested persons 

are due by July 6, 2021. 

4. The Secretary shall arrange for 

publication of this order in the Federal 

Register. 

By the Commission. 

Mallory Smith, 

Federal Register Liaison. 

[FR Doc. 2021–13864 Filed 6–28–21; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92242; File No. SR– 

NASDAQ–2021–051] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend 

General 9, Section 18, Payments for 

Market Making 

June 23, 2021. 

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 June 14, 

2021, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) 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 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 

General 9, Section 18, Payments for 

Market Making. The text of the 

proposed rule change is available on the 

Exchange’s website at https://

listingcenter.nasdaq.com/rulebook/ 

nasdaq/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 

The Exchange proposes to amend 

General 9, Section 18, Payments for 

Market Making to align General 9, 

Section 18 with FINRA Rule 5250, 

Payments for Market Making. 

Specifically, the Exchange proposes to 

replace General 9, Section 18 with rule 

text incorporating FINRA Rule 5250 by 

reference.3 The Exchange also proposes 

to incorporate by reference the 

definition ‘‘affiliate’’ and the related 

definitions within FINRA Rule 5121 for 

purposes of FINRA Rule 5250. 

By way of background, General 9, 

Section 18 and FINRA Rule 5250 

explicitly prohibit any payment by 

issuers or issuers’ affiliates and 

promoters, directly or indirectly, to a 

member or person associated with a 

member for publishing a quotation, 

acting as a market maker, or submitting 

an application in connection therewith. 

The respective rules are intended, 

among other things, to prohibit 

members from receiving compensation 

or other payments from an issuer for 

quoting or making a market in the 

issuer’s securities and to assure that 

members act in an independent capacity 

when publishing a quotation or making 

a market in an issuer’s securities. 

Today, there are several differences 

between current General 9, Section 18 

and FINRA Rule 5250. The Exchange’s 

proposal to replace General 9, Section 

18 with an incorporation by reference to 

FINRA Rule 5250 will align Nasdaq’s 

rule to FINRA’s rule. The Exchange 

explains the differences below. 

First, by incorporating FINRA Rule 

5250, the Exchange would incorporate 

FINRA’s rule which states that members 

are not precluded from accepting ‘‘any 

payment expressly provided for under 

the rules of a national securities 

exchange that are effective after being 

filed with, or filed with and approved 

by, the SEC pursuant to the 

requirements of the Exchange Act.’’ 

General 9, Section 18 currently does not 

include this exception. FINRA 

previously amended Rule 5250 4 to 

account for cases where a market maker 

payment is provided for under the rules 

of an exchange that are effective after 

being filed with, or filed with and 

approved by, the Commission pursuant 

to the requirements of the Act. FINRA 

noted in its 2013 Rule Change that 

comity should be afforded to such 

exchange rulemaking and the payment 

should not be prohibited under Rule 

5250.5 The 2013 Rule Change cited to 

Nasdaq’s Market Quality Program as an 

example of such exchange rulemaking.6

Incorporating this exception from 


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Federal Register / Vol. 86, No. 122 / Tuesday, June 29, 2021 / Notices 34287 

7FINRA Rule 5250 refers to FINRA Rule 5121 for 

the definition of ‘‘affiliate.’’ FINRA defines the term 

‘‘affiliate’’ and the terms used with the definition 

‘‘affiliate’’. 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b-4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its 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 

Continued 

FINRA’s rule would ensure consistent 

regulation of joint members of the 

Exchange and FINRA. 

Second, by incorporating FINRA Rule 

5250, the Exchange would also 

incorporate the defined term ‘‘affiliate,’’ 

and the related definitions within 

FINRA Rule 5121(f),7 which differ from 

the definition of ‘‘affiliate’’ under 

current General 9, Section 18(c)(1). 

FINRA Rule 5250 incorporates the 

definition of ‘‘affiliate’’ within FINRA 

Rule 5121(f)(1) which provides, ‘‘The 

term ‘‘affiliate’’ means an entity that 

controls, is controlled by or is under 

common control with a member.’’ The 

term affiliate refers to ‘‘entity’’ which is 

defined within FINRA Rule 5121(f)(7) 

which provides, 

For purposes of the definitions of affiliate, 

conflict of interest and control under this 

Rule, the term ‘‘entity’’: (A) Includes a 

company, corporation, partnership, trust, 

sole proprietorship, association or organized 

group of persons; and (B) excludes the 

following: (i) An investment company 

registered under the Investment Company 

Act; (ii) a ‘‘separate account’’ as defined in 

Section 2(a)(37) of the Investment Company 

Act; (iii) a ‘‘real estate investment trust’’ as 

defined in Section 856 of the Internal 

Revenue Code; or (iv) a ‘‘direct participation 

program’’ as defined in Rule 2310. 

Finally, the term affiliate refers to 

‘‘control’’ which is defined within 

FINRA Rule 5121(f)(6) which provides, 

The term control means: (i) Beneficial 

ownership of 10 percent or more of the 

outstanding common equity of an entity, 

including any right to receive such securities 

within 60 days of the member’s participation 

in the public offering; (ii) the right to 10 

percent or more of the distributable profits or 

losses of an entity that is a partnership, 

including any right to receive an interest in 

such distributable profits or losses within 60 

days of the member’s participation in the 

public offering; (iii) beneficial ownership of 

10 percent or more of the outstanding 

preferred equity of an entity, including any 

right to receive such preferred equity within 

60 days of the member’s participation in the 

public offering; or (iv) the power to direct or 

cause the direction of the management or 

policies of an entity. (B) The term ‘‘common 

control’’ means the same natural person or 

entity controls two or more entities. 

In contrast, General 9, Section 18(c)(1) 

defines affiliate as follows, 

(A) The term ‘‘affiliate’’ shall mean a 

company which controls, is controlled by, or 

is under common control with a member; (B) 

The term affiliate is presumed to include, but 

is not limited to, the following for purposes 

of subparagraph (A), above: (i) A company 

will be presumed to control a member if the 

company beneficially owns 10 percent or 

more of the outstanding voting securities of 

a member which is a corporation, or 

beneficially owns a partnership interest in 10 

percent or more of the distributable profits or 

losses of a member which is a partnership; 

(ii) a member will be presumed to control a 

company if the member and persons 

associated with the member beneficially own 

10 percent or more of the outstanding voting 

securities of a company which is a 

corporation, or beneficially own a 

partnership interest in 10 percent or more of 

the distributable profits or losses of a 

company which is a partnership; (iii) a 

company will be presumed to be under 

common control with a member if: a. The 

same natural person or company controls 

both the member and company by 

beneficially owning 10 percent or more of the 

outstanding voting securities of a member or 

company which is a corporation, or by 

beneficially owning a partnership interest in 

10 percent or more of the distributable profits 

or losses of a member or company which is 

a partnership; or b. A person having the 

power to direct or cause the direction of the 

management or policies of the member or the 

company also has the power to direct or 

cause the direction of the management or 

policies of the other entity in question. 

Incorporating FINRA’s rule would 

ensure a consistent definition of 

‘‘affiliate’’ and, therefore, consistent 

regulation of joint members of the 

Exchange and FINRA. 

Third, by incorporating FINRA Rule 

5250, the Exchange would remove 

General 9, Section 18(c)(1)(C). General 

9, Section 18(c)(1)(C) provides, 

The provisions of subparagraphs (A) and 

(B) hereof notwithstanding, none of the 

following shall be presumed to be an affiliate 

of a member for purposes of this Rule: (i) An 

investment company registered with the 

Commission pursuant to the Investment 

Company Act of 1940, as amended; (ii) a 

‘‘separate account’’ as defined in Section 

2(a)(37) of the Investment Company Act of 

1940, as amended; (iii) a ‘‘real estate 

investment trust’’ as defined in Section 856 

of the Internal Revenue Code; (iv) a ‘‘direct 

participation program’’ as defined in Equity 

10, Section 1; and (v) a corporation, trust, 

partnership or other entity issuing financing 

instrument-backed securities which are rated 

by a nationally recognized statistical rating 

organization in one of its four highest generic 

rating categories. 

Unlike General 9, Section 18, FINRA 

Rule 5121(f)(7) does not by rule exclude 

a corporation, trust, partnership or other 

entity issuing financing instrumentbacked securities which are rated by a 

nationally recognized statistical rating 

organization in one of its four highest 

generic rating categories from the 

definition of ‘‘entity.’’ Incorporating 

FINRA’s rule, including the applicable 

definition in FINRA Rule 5121, would 

ensure consistent definition of 

‘‘affiliate’’ and consistent regulation of 

joint members of the Exchange and 

FINRA. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,8 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,9

in particular, in that it is designed to 

promote just and equitable principles of 

trade and to protect investors and the 

public interest. The Exchange’s proposal 

to replace General 9, Section 18 with 

rule text incorporating by reference 

FINRA Rule 5250, including the 

applicable provisions of FINRA Rule 

5121 as referenced in FINRA Rule 5250, 

is consistent with the Act. The 

Exchange’s proposal will align Nasdaq’s 

rule to FINRA’s rule and remove 

differences as between the two rules. 

Aligning General 9, Section 18 to 

FINRA Rule 5250 would ensure 

consistent regulation of joint members 

of the Exchange and FINRA. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed amendments do not impose an 

undue burden on competition as the 

proposal will align the Exchange’s 

General 9, Section 18 to FINRA Rule 

5250 and ensure consistent regulation of 

joint members of the Exchange and 

FINRA. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. 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 10 and Rule 19b– 

4(f)(6) thereunder.11


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34288 Federal Register / Vol. 86, No. 122 / Tuesday, June 29, 2021 / Notices 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange will separately request an 

exemption from the rule filing requirements of 

Section 19(b) of the Act in requesting to incorporate 

FINRA Rule 5250 and the definition of ‘‘affiliate’’ 

and the related definitions within FINRA Rule 5121 

to the extent General 9, Section 18 is affected solely 

by virtue of a change to FINRA Rule 5250 or to such 

definitions within FINRA Rule 5121. The 

Exchange’s proposed rule change will not become 

operative unless and until the Commission grants 

this exemption request. 

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 

change 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2021–051 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–2021–051. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of 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–2021–051 and 

should be submitted on or before July 

20, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13785 Filed 6–28–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92243; File No. SR–BX– 

2021–029] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend General 9, 

Section 18, Payments for Market 

Making 

June 23, 2021. 

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 June 14, 

2021, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) 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 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 

General 9, Section 18, Payments for 

Market Making. The text of the 

proposed rule change is available on the 

Exchange’s website at https://

listingcenter.nasdaq.com/rulebook/bx/ 

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 

The Exchange proposes to amend 

General 9, Section 18, Payments for 

Market Making to align General 9, 

Section 18 with FINRA Rule 5250, 

Payments for Market Making. 

Specifically, the Exchange proposes to 

replace General 9, Section 18 with rule 

text incorporating FINRA Rule 5250 by 

reference.3 The Exchange also proposes 

to incorporate by reference the 

definition ‘‘affiliate’’ and the related 

definitions within FINRA Rule 5121 for 

purposes of FINRA Rule 5250. 

By way of background, General 9, 

Section 18 and FINRA Rule 5250 

explicitly prohibit any payment by 

issuers or issuers’ affiliates and 

promoters, directly or indirectly, to a 

member or person associated with a 

member for publishing a quotation, 

acting as a market maker, or submitting 

an application in connection therewith. 

The respective rules are intended, 

among other things, to prohibit 

members from receiving compensation 

or other payments from an issuer for 

quoting or making a market in the 

issuer’s securities and to assure that 

members act in an independent capacity 

when publishing a quotation or making 

a market in an issuer’s securities. 

Today, there are several differences 

between current General 9, Section 18 

and FINRA Rule 5250. The Exchange’s 

proposal to replace General 9, Section 

18 with an incorporation by reference to 


lotter on DSK11XQN23PROD with NOTICES1