Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Notices 47527 

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

2 17 CFR 240.19b–4. 

3See Exchange Act Release No. 90635 (Dec. 10, 

2020), 85 FR 81540 (Dec. 16, 2020) (Order 

Approving File No. SR–FINRA–2020–011) 

(‘‘December 2020 Order’’). 

4See Exchange Act Release No. 91959 (May 20, 

2021), 86 FR 28405 (May 26, 2021) (File No. SR– 

FINRA–2021–011) (‘‘Notice’’). 

5See letter from Isaiah Sanderman, dated May 28, 

2021 (‘‘Sanderman Letter’’), available at https://

www.sec.gov/comments/sr-finra-2021-011/ 

srfinra2021011-8852748-238381.htm. 

6See letter from Michael Garawski, Associate 

General Counsel, OGC Regulatory Practice and 

Policy, FINRA, to Daniel Fisher, Branch Chief, 

Division of Trading and Markets, Commission, 

dated July 9, 2021, available at SR–FINRA–2021– 

011-Extension1.pdf. 

7See supra note 3. 8See December 2020 Order at 81541. In general, 

a member firm initiates a materiality consultation 

with FINRA’s Department of Member Regulation 

(‘‘Member Regulation’’) by submitting a letter 

requesting its determination as to whether a 

proposed change is material such that it requires 

the submission of a Continuing Membership 

Application (‘‘CMA’’). If Member Regulation 

determines that a proposed change is material, it 

will instruct the broker-dealer to file a CMA if it 

intends to proceed with the proposed change. See 

Regulatory Notice 18–23 (Proposal Regarding the 

Rules Governing the New and Continuing 

Membership Application Process) (Jul. 2018); see 

also December 2020 Order at n. 9. 

9See Regulatory Notice 21–09 (Mar. 2021). 

10See FINRA Rule 1011(p); see also Notice at 

28406. FINRA Rule 1011(r) defines ‘‘Uniform 

Registration Forms’’ to mean the Uniform 

Application for Broker-Dealer Registration (Form 

BD), the Uniform Application for Securities 

Industry Registration or Transfer (Form U4), the 

Uniform Termination Notice for Securities Industry 

Registration (Form U5) and the Uniform 

Disciplinary Action Reporting Form (Form U6), as 

such may be amended or any successor(s) thereto. 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

gives notice that, pursuant to 39 U.S.C. 

3642 and 3632(b)(3), on August 9, 2021, 

it filed with the Postal Regulatory 

Commission a USPS Request to Add 

Priority Mail Express Contract 90 to 

Competitive Product List. Documents 

are available at www.prc.gov, Docket 

Nos. MC2021–124, CP2021–126. 

Sean Robinson, 

Attorney, Corporate and Postal Business Law. 

[FR Doc. 2021–18314 Filed 8–24–21; 8:45 am] 

BILLING CODE 7710–12–P 

POSTAL SERVICE 

Product Change—Priority Mail 

Express, Priority Mail, First-Class 

Package Service, and Parcel Select 

Service Negotiated Service Agreement 

AGENCY: Postal ServiceTM. 

ACTION: Notice. 

SUMMARY: The Postal Service gives 

notice of filing a request with the Postal 

Regulatory Commission to add a 

domestic shipping services contract to 

the list of Negotiated Service 

Agreements in the Mail Classification 

Schedule’s Competitive Products List. 

DATES: Date of required notice: August 

25, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Sean Robinson, 202–268–8405. 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

gives notice that, pursuant to 39 U.S.C. 

3642 and 3632(b)(3), on August 9, 2021, 

it filed with the Postal Regulatory 

Commission a USPS Request to Add 

Priority Mail Express, Priority Mail, 

First-Class Package Service, and Parcel 

Select Service Contract 9 to Competitive 

Product List. Documents are available at 

www.prc.gov, Docket Nos. MC2021–122, 

CP2021–124. 

Sean Robinson, 

Attorney, Corporate and Postal Business Law. 

[FR Doc. 2021–18312 Filed 8–24–21; 8:45 am] 

BILLING CODE 7710–12–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92710; File No. SR–FINRA– 

2021–011] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving a 

Proposed Rule Change To Amend 

FINRA Rule 1011(p) (‘‘Specified Risk 

Event’’) 

August 19, 2021. 

I. Introduction 

On May 12, 2021, the Financial 

Industry Regulatory Authority, Inc. 

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

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Exchange Act’’ or ‘‘Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to amend FINRA Rule 1011(p) 

(which defines the term ‘‘specified risk 

event’’) to clarify the scope of ‘‘final 

regulatory actions’’ that are included in 

the definition of ‘‘specified risk event’’ 

for purposes of the Rule 1000 Series 

(Member Application and Associated 

Person Registration).3

The proposed rule change was 

published for comment in the Federal 

Register on May 26, 2021.4 The public 

comment period closed on June 16, 

2021. The Commission received one 

comment letter in response to the 

Notice.5 On July 9, 2021, FINRA 

consented to an extension of the time 

period in which the Commission must 

approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether to approve or disapprove the 

proposed rule change to August 24, 

2021.6 This order approves the 

proposed rule change. 

II. Description of the Proposed Rule 

Change 

On December 10, 2020, the 

Commission approved a proposed rule 

change concerning brokers with a 

significant history of misconduct 

(‘‘Misconduct Rule’’).7 Among other 

things, the Misconduct Rule amended 

the FINRA Rule 1000 Series (Member 

Application and Associated Person 

Registration) to require a FINRA 

member broker-dealer (‘‘member firm’’) 

to seek a materiality consultation and 

approval of a continuing membership 

application, if required, when a natural 

person seeking to become an owner, 

control person, principal, or registered 

person of the member firm has, in the 

prior five years, one or more ‘‘final 

criminal matters’’ or two or more 

‘‘specified risk events.’’ 8 The 

amendments to the Rule 1000 Series 

will become effective on September 1, 

2021.9

To provide clarity to member firms 

determining whether they need to seek 

a materiality consultation or approval of 

a CMA, the Misconduct Rule defines 

‘‘specified risk event’’ to mean ‘‘any one 

of the . . . events’’ described in Rule 

1011(p) ‘‘that are disclosed, or are or 

were required to be disclosed, on an 

applicable Uniform Registration 

Form.’’ 10 The events described in Rule 

1011(p) include, among others, a ‘‘final 

regulatory action’’ as set forth in Rule 

1011(p)(4). Specifically, Rule 1011(p)(4) 

describes ‘‘a final regulatory action’’ to 

include final regulatory actions ‘‘where 

(A) the total monetary sanctions 

(including civil and administrative 

penalties or fines, disgorgement, 

monetary penalties other than fines, or 

restitution) were ordered for a dollar 

amount at or above $15,000; or (B) the 

sanction against the person was a bar 

(permanently or temporarily), 

expulsion, rescission, revocation, or 

suspension from associating with a 

member.’’ The proposed rule change 


khammond on DSKJM1Z7X2PROD with NOTICES
47528 Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Notices 

11See supra note 4. 

12 In approving this rule change, the Commission 

has considered the rule’s impact on efficiency, 

competition, and capital formation. See 15 U.S.C. 

78c(f). 

13 15 U.S.C. 78o–3(b)(6). 

14See Notice at 28406. 

15 Id. 

16 Id. 

17 Id. 

18See Form 19b–4, Exs. 3a and 3b, File No. SR– 

FINRA–2020–011, available at https://

www.finra.org/sites/default/files/2020-04/SRFINRA-2020-011.pdf; see also Notice at n. 7. 

19See Form U4, Regulatory Action Disclosure 

Reporting Page, Questions 1 (requesting information 

about which regulator initiated the regulatory 

action) and 13 (Sanction Detail); Form BD, 

Regulatory Action Disclosure Reporting Page, Part 

II, Questions 1 (requesting information about which 

regulator initiated the regulatory action) and 

Question 2 (Principal Sanction). FINRA also stated 

that the data that it provided in SR–FINRA–2020– 

011 concerning the regulatory action disclosures 

included regulatory actions that resulted in any 

suspension, not just suspensions from associating 

with a member; see also Notice at n. 8. 

20See Notice at 28407. 

21 Id. 

22 Id. 

23 Id. 

24See Sanderman Letter. 

25See December 2020 Order at 81548. 

26 Id. 

27See December 2020 Order at 81546 (explaining 

that the rules approved in SR–FINRA–2020–011 

‘‘further promote investor protection by applying 

additional safeguards and disclosure obligations for 

a broker-dealer’s continuing membership with 

FINRA and for changes to a current member brokerdealer’s ownership, control, or business 

operations,’’ where those changes involve persons 

with a significant history of misconduct). See 

Notice at note 9. 

28 15 U.S.C. 78s(b)(2). 

would delete from Rule 1011(p)(4) the 

phrase ‘‘from associating with a 

member,’’ which appears after the word 

‘‘suspension.’’ 11

III. Discussion and Commission 

Findings 

After careful review of the proposed 

rule change and the comment letter, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Exchange Act and 

the rules and regulations thereunder 

that are applicable to a national 

securities association.12 Specifically, the 

Commission finds that the proposed 

rule change is consistent with Section 

15A(b)(6) of the Exchange Act,13 which 

requires, among other things, that 

FINRA rules 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. 

A. Consistent With Basis for Approving 

the December 2020 Order 

FINRA stated that including the 

phrase ‘‘from associating with a 

member’’ in Rule 1011(p)(4) was an 

‘‘inadvertent drafting error’’ that 

inappropriately narrowed the ‘‘final 

regulatory actions’’ included in the 

‘‘specified risk event’’ definition.14 In 

particular, FINRA notes that the current 

rule may be interpreted to exclude from 

the definition of ‘‘specified risk event’’ 

final SEC and CFTC regulatory actions 

where the sanction against the person 

was a suspension other than a 

suspension from associating with a 

member.15 FINRA stated that it did not 

intend to narrow the scope of ‘‘final 

regulatory actions’’ that are included in 

the ‘‘specified risk event’’ definition in 

this manner.16 Rather, FINRA stated that 

it intended Rule 1011(p)(4) to be 

consistent with Rule 1011(p)(3), which 

describes the ‘‘final investment-related 

civil actions’’ that are included in the 

‘‘specified risk event’’ definition. Rule 

1011(p)(3) includes final investmentrelated civil actions that result in a 

‘‘suspension,’’ and does not limit the 

suspensions to suspensions from 

associating with a member.17 FINRA 

further cited the mapping exhibits it 

provided in SR–FINRA–2020–011 to 

illustrate its intent to include ‘‘final 

regulatory actions’’ beyond those 

resulting in suspensions ‘‘from 

associating with a member’’ in the 

‘‘specified risk event’’ definition. FINRA 

stated that these exhibits demonstrated 

how the ‘‘final regulatory actions’’ 

included within the scope of the 

‘‘specified risk event’’ definition should 

include final regulatory actions 

disclosed on the Uniform Registration 

Forms that resulted in a suspension.18

FINRA stated that those mapping 

exhibits are consistent with how the 

relevant sanctions-related questions on 

the Uniform Registration Forms require 

the reporting of regulatory actions 

initiated by numerous regulators and 

self-regulatory organizations—not just 

FINRA—and include data fields for 

suspensions.19

FINRA believes that by amending 

Rule 1011(p)(4) to accurately describe 

the ‘‘final regulatory actions’’ that the 

definition of ‘‘specified risk event’’ 

should include, the proposed rule 

change would provide greater clarity to 

members and the public and serve the 

intended investor-protection purposes 

of the Misconduct Rule.20

B. The Proposed Rule Change Would 

Impose No Additional Burden 

FINRA does not believe that the 

proposed rule change would result in 

any additional burdens not already 

contemplated in SR–FINRA–2020– 

011.21 FINRA stated that the aspect of 

the economic impact assessment 

undertaken in SR–FINRA–2020–011 

that pertained to the amendments to the 

Rule 1000 Series was based on the 

broader scope for the ‘‘final regulatory 

actions’’ that are included in the 

‘‘specified risk event’’ definition that 

FINRA is proposing here.22 Consistent 

with FINRA’s original intent, the 

broader scope for the ‘‘final regulatory 

actions’’ that are included in the 

‘‘specified risk event’’ definition 

includes final SEC and CFTC regulatory 

actions where the sanction against the 

person was a suspension other than a 

suspension from associating with a 

member.23

The Commission received one 

comment letter in response to the 

proposed rule change. Because the letter 

failed to address any component of the 

proposed rule change, the Commission 

believes the comment is beyond the 

scope of the proposal.24

In sum, the Commission finds that the 

proposed rule change is consistent with 

its findings in the December 2020 Order. 

In the December 2020 Order, the 

Commission found that the Misconduct 

Rules would result in ‘‘greater investor 

protections by helping address the 

concerns raised by associated persons 

with a significant history of misconduct 

and the broker-dealers that employ 

them.’’ 25 Specifically, the Commission 

stated that the Misconduct Rules would 

‘‘strengthen the tools available to FINRA 

in responding to associated persons who 

have a significant history of 

misconduct’’ and were sufficiently 

tailored ‘‘to target the specific 

misconduct it seeks to address, which 

would minimize the potential costs to 

broker-dealers.’’ 26 The Commission 

agrees that by amending the ‘‘final 

regulatory actions’’ that are included in 

the ‘‘specified risk event’’ definition, the 

proposed rule change would provide 

greater clarity to members and the 

public and serve the intended investor 

protection purposes of the Misconduct 

Rules approved in the December 2020 

Order.27 The Commission also agrees 

with FINRA’s assessment that the 

proposed rule change would impose no 

additional burden not already 

contemplated and approved by the 

Commission. 

IV. Conclusion 

It is therefore ordered pursuant to 

Section 19(b)(2) of the Exchange Act 28

that the proposal (SR–FINRA–2021– 

011), be and hereby is approved. 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Notices 47529 

29 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4 An ‘‘Index Combo’’ order is an order to 

purchase or sell one or more index option series 

and the offsetting number of Index Combinations 

(with an ‘‘Index Combination’’ defined as a 

purchase (sale) of an index option call and sale 

(purchase) of an index option put with the same 

underlying index, expiration date, and strike price) 

defined by the delta (defined as the positive 

(negative) number of Index Combinations that must 

be sold (purchased) to establish a market neutral 

hedge with one or more series of the same index 

option. See Rule 5.33(b)(5). 

5 The minimum increment for bids and offers on 

complex orders in options on the S&P 500 Index 

(SPX) or on the S&P 100 Index (OEX and XEO), 

except for box/roll spreads, is $0.05 or greater, or 

in any increment, which may be determined by the 

Exchange on a class-by-class basis. Rule 5.4(c) sets 

forth the minimum increment applicable to other 

types of options. 

6 If the Securities and Exchange Commission (the 

‘‘Commission’’) approves the proposed rule change, 

the Exchange intends to begin accepting complex 

orders with ratios greater than three-to-one or less 

than one-to-three for electronic execution, in 

addition to open outcry. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–18237 Filed 8–24–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92709; File No. SR–CBOE– 

2021–046] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing of a 

Proposed Rule Change To Amend Rule 

5.4 and Make Corresponding Changes 

to Other Rules 

August 19, 2021. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),2 and Rule 19b–4 thereunder,3

notice is hereby given that on August 6, 

2021, Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. 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 

Cboe Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

Rule 5.4 and make corresponding 

changes to other Rules. The text of the 

proposed rule change is provided 

below. 

(additions are italicized; deletions are 

[bracketed]) 

* * * * * 

Rules of Cboe Exchange, Inc. 

* * * * * 

Rule 5.4. Minimum Increments for Bids and 

Offers 

(a) No change. 

(b) Except as provided in Rule 5.33, the 

minimum increment for bids and offers on 

complex orders [with any ratio equal to or 

greater than one-to-three (.333) and less than 

or equal to three-to-one (3.00) for equity and 

index options, and for Index Combo orders,] 

is $0.01 or greater, which may be determined 

by the Exchange on a class-by-class basis, 

and the legs may be executed in $0.01 

increments. [The minimum increment for 

bids and offers on complex orders with any 

ratio less than one-to-three (.333) or greater 

than three-to-one (3.00) for equity and index 

options (except for Index Combo orders) is 

the standard increment for the class pursuant 

to paragraph (a), and the legs may be 

executed in the minimum increment 

applicable to the class pursuant to paragraph 

(a).] Notwithstanding the foregoing, the 

minimum increment for bids and offers on 

complex orders in options on the S&P 500 

Index (SPX) or on the S&P 100 Index (OEX 

and XEO), except for box/roll spreads, is 

$0.05 or greater, or in any increment, which 

may be determined by the Exchange on a 

class-by-class basis. 

* * * * * 

Rule 5.33. Complex Orders 

Trading of complex orders (as defined in 

Rule 1.1) is subject to all other Rules 

applicable to the trading of orders, unless 

otherwise provided in this Rule 5.33. 

(a)–(e) No change. 

(f) Minimum Increments, Execution Prices, 

and Priority. 

(1) Minimum Increments. No change. 

(2) Execution Prices and Complex Order 

Priority. 

(A) Complex Orders. The System does not 

execute a complex order pursuant to this 

Rule 5.33 at a net price: 

(i)–(iv) No change. 

(v) that would cause any component of the 

complex strategy to be executed at a price 

ahead of a Priority Customer Order on the 

Simple Book without improving the BBO of 

(a) at least one component of the complex 

strategy, if the complex order has a ratio 

equal to or greater than one-to-three (.333) 

and less than or equal to three-to-one (3.00), 

or is an Index Combo order, or (b) each 

component of the complex strategy with a 

Priority Customer Order at the BBO, if the 

complex order has a ratio less than one-tothree (.333) or greater than three-to-one 

(3.00). 

* * * * * 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/CBOELegalRegulatory

Home.aspx), at the Exchange’s Office of 

the Secretary, 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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The proposed rule change amends the 

minimum increment for complex orders 

with ratios of greater than three-to-one 

or less than one-to-three. Currently, 

Rule 5.4(b) provides that the minimum 

increment for bids and offers on 

complex orders with any ratio greater 

than or equal to one-to-three (.333) and 

less than or equal to three-to-one (3.00) 

for equity and index options, and for 

Index Combo 4 orders, is $0.01 or 

greater, which may be determined by 

the Exchange on a class-by-class basis, 

and the legs may be executed in $0.01 

increments. However, the minimum 

increment for bids and offers on 

complex orders with any ratio less than 

one-to-three (.333) or greater than threeto-one (3.00) for equity and index 

options (except for Index Combo orders) 

is the standard increment for the class 

pursuant to Rule 5.4(a), and the legs 

may be executed in the minimum 

increment applicable to the class 

pursuant to paragraph 5.4(a).5 The 

Exchange currently only permits 

complex orders with ratios greater than 

three-to-one or less than one-to-three for 

execution on the Exchange’s trading 

floor.6 The proposed rule change 

provides that the minimum increment 

for bids and offers on complex orders 

with any ratio may be in $0.01 or 

greater, as determined by the Exchange 

on a class-by-class basis. This will 

provide TPHs with the same pricing 

flexibility with respect to all complex 

orders they submit to the Exchange, 

regardless of their ratios. 

Complex orders involve special 

pricing and handling. Bids and offers for 


khammond on DSKJM1Z7X2PROD with NOTICES