Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Notices 47169 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4 If FINRA seeks to provide additional temporary 

relief from the rule requirements identified in this 

proposed rule change beyond December 31, 2021, 

FINRA will submit a separate rule filing to further 

extend the temporary extension of time. The 

amended FINRA rules will revert to their original 

form at the conclusion of the temporary relief 

period and any extension thereof. 

5See Securities Exchange Act Release No. 91495 

(April 7, 2021), 86 FR 19306 (April 13, 2021) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2021–006). 

6For example, President Joe Biden on July 29, 

2021, announced several measures to increase the 

number of people vaccinated against COVID–19 and 

to slow the spread of the Delta variant, including 

strengthening safety protocols for federal 

government employees and contractors. See https:// 

www.whitehouse.gov/briefing-room/statementsreleases/2021/07/29/fact-sheet-president-biden-toannounce-new-actions-to-get-more-americansvaccinated-and-slow-the-spread-of-the-deltavariant/. 

7For instance, the Centers for Disease Control and 

Prevention on July 27, 2021, began recommending 

that fully vaccinated people wear a mask in public 

indoor settings in areas of substantial or high 

transmission and noted that fully vaccinated people 

might choose to wear a mask regardless of the level 

of transmission, particularly if they are 

immunocompromised or at increased risk for severe 

disease from COVID–19. See https://www.cdc.gov/ 

coronavirus/2019-ncov/vaccines/fully-vaccinatedguidance.html. Also, several cities, including 

Atlanta, Baltimore, Los Angeles, New Haven and 

San Francisco, have recently reinstated their mask 

mandates. 

8See Securities Exchange Act Release No. 88917 

(May 20, 2020), 85 FR 31832 (May 27, 2020) (Notice 

of Filing and Immediate Effectiveness of File No. 

SR–FINRA–2020–015); Securities Exchange Act 

Release No. 89055 (June 12, 2020), 85 FR 36928 

(June 18, 2020) (Notice of Filing and Immediate 

Effectiveness of File No. SR–FINRA–2020–017); 

Securities Exchange Act Release No. 89423 (July 29, 

2020), 85 FR 47278 (August 4, 2020) (Notice of 

Continued 

Analysis 

Agency: Administrative Law Judge 

Program Office, Office of Personnel 

Management. 

Title: OPM 1655, Application for 

Senior Administrative Law Judge, and 

OPM 1655–A, Geographic Preference 

Statement for Senior Administrative 

Law Judge Applicant. 

OMB Number: 3206–0248. 

Frequency: Annually. 

Affected Public: Federal 

Administrative Law Judge Retirees. 

Number of Respondents: 

Approximately 150—OPM 1655/ 

Approximately 200—OPM 1655–A. 

Estimated Time per Respondent: 

Approximately 30–45 Minutes—OPM 

1655/Approximately 15–25 Minutes— 

OPM 1655–A. 

Total Burden Hours: Estimated 94 

hours—OPM 1655/Estimated 67 hours— 

OPM 1655–A. 

Office of Personnel Management. 

Kellie Cosgrove Riley, 

Director, Office of Privacy and Information 

Management. 

[FR Doc. 2021–18074 Filed 8–20–21; 8:45 am] 

BILLING CODE 6325–43–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92685; File No. SR–FINRA– 

2021–019] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Extend the Expiration 

Date of the Temporary Amendments 

set Forth in SR–FINRA–2020–015 and 

SR–FINRA–2020–027 

August 17, 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 August 

13, 2021, the Financial Industry 

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

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 FINRA. FINRA 

has designated the proposed rule change 

as constituting a ‘‘non-controversial’’ 

rule change under paragraph (f)(6) of 

Rule 19b–4 under the Act,3 which 

renders the proposal effective upon 

receipt of this filing by the Commission. 

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 

FINRA is proposing to extend the 

expiration date of the temporary 

amendments set forth in SR–FINRA– 

2020–015 and SR–FINRA–2020–027 

from August 31, 2021, to December 31, 

2021.4 The proposed rule change would 

not make any changes to the text of 

FINRA rules. 

The text of the proposed rule change 

is available on FINRA’s website at 

http://www.finra.org, at the principal 

office of FINRA 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, 

FINRA 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. FINRA 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 

In response to the COVID–19 global 

health crisis and the corresponding 

need to restrict in-person activities, 

FINRA filed proposed rule changes, SR– 

FINRA–2020–015 and SR–FINRA– 

2020–027, which respectively provide 

temporary relief from some timing, 

method of service and other procedural 

requirements in FINRA rules and allow 

FINRA’s Office of Hearing Officers 

(‘‘OHO’’) and the National Adjudicatory 

Council (‘‘NAC’’) to conduct hearings, 

on a temporary basis, by video 

conference, if warranted by the current 

COVID–19-related public health risks 

posed by an in-person hearing. In April 

2021, FINRA filed a proposed rule 

change, SR–FINRA–2021–006, to extend 

the expiration date of the temporary 

amendments in both SR–FINRA–2020– 

015 and SR–FINRA–2020–027 from 

April 30, 2021, to August 31, 2021.5

While there are signs of improvement, 

much uncertainty remains for the 

coming months. The emergence of the 

Delta variant, dissimilar vaccination 

rates throughout the United States, and 

the uptick in transmissions in many 

locations indicate that COVID–19 

remains an active and real public health 

concern.6 Based on its assessment of 

current COVID–19 conditions and the 

lack of a clear timeframe for a sustained 

and widespread abatement of COVID– 

19-related health concerns and 

corresponding restrictions,7 FINRA has 

determined that there is a continued 

need for temporary relief for several 

months beyond August 31, 2021. 

Accordingly, FINRA proposes to extend 

the expiration date of the temporary rule 

amendments in SR–FINRA–2020–015 

and SR–FINRA–2020–027 from August 

31, 2021, to December 31, 2021. 

i. SR–FINRA–2020–015 

As stated in its previous filings, 

FINRA proposed, and subsequently 

extended, the changes set forth in SR– 

FINRA–2020–015 to temporarily amend 

some timing, method of service and 

other procedural requirements in FINRA 

rules during the period in which 

FINRA’s operations are impacted by the 

outbreak of COVID–19.8 Among other 


jbell on DSKJLSW7X2PROD with NOTICES
47170 Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Notices 

Filing and Immediate Effectiveness of File No. SR– 

FINRA–2020–022); Securities Exchange Act Release 

No. 90619 (December 9, 2020), 85 FR 81250 

(December 15, 2020) (Notice of Filing and 

Immediate Effectiveness of File No. SR–FINRA– 

2020–042); supra note 5. 

9See supra note 8 (outlining the filing history of 

SR–FINRA–2020–015 and its prior extensions). 

10For example, FINRA began temporarily 

postponing in-person hearings as a result of the 

COVID–19 impacts on March 16, 2020. 

11For OHO hearings under FINRA Rules 9261 

and 9830, the proposed rule change temporarily 

grants authority to the Chief or Deputy Chief 

Hearing Officer to order that a hearing be conducted 

by video conference. For NAC hearings under 

FINRA Rules 1015 and 9524, this temporary 

authority is granted to the NAC or the relevant 

Subcommittee. 

12See Securities Exchange Act Release No. 89739 

(September 2, 2020), 85 FR 55712 (September 9, 

2020) (Notice of Filing and Immediate Effectiveness 

of File No. SR–FINRA–2020–027); Securities 

Exchange Act Release No. 90619 (December 9, 

2020), 85 FR 81250 (December 15, 2020) (Notice of 

Filing and Immediate Effectiveness of File No. SR– 

FINRA–2020–042); supra note 5. 

13As noted in SR–FINRA–2020–027, the 

temporary proposed rule change grants discretion to 

OHO and the NAC to order a video conference 

hearing. In deciding whether to schedule a hearing 

by video conference, OHO and the NAC may 

consider a variety of other factors in addition to 

COVID–19 trends. In SR–FINRA–2020–027, FINRA 

provided a non-exhaustive list of other factors OHO 

and the NAC may take into consideration, including 

a hearing participant’s individual health concerns 

and access to the connectivity and technology 

necessary to participate in a video conference 

hearing. 

14FINRA notes that the proposed extension of the 

temporary amendments does not mean a video 

conference hearing will be ordered in every case. 

FINRA strives to hold in-person hearings when it 

is safe to do so and had recently begun to hold such 

hearings at a single location. FINRA held its first 

in-person hearing since the temporary rule change 

was implemented in July 2021. A recent surge in 

case numbers for the Delta variant of the COVID– 

19 virus caused FINRA’s outside health and safety 

consultant to recommend in early August against 

in-person hearings. Accordingly, the Chief Hearing 

Officer recently converted a hearing scheduled for 

mid-September from in-person to video conference. 

In addition to creating a safe environment in which 

an in-person hearing may be held, as mentioned 

above, a number of other considerations inform 

whether any given case will be held in-person or 

by video conference. 

15See supra note 5. 

16Since the temporary amendments were 

implemented, OHO and the NAC have conducted 

several hearings by video conference. As of July 21, 

2021, OHO has conducted 10 disciplinary hearings 

by video conference (decisions have been issued in 

seven of these cases) and scheduled hearings in 

nine other disciplinary matters. The parties have 

agreed to proceed by video conference for one of 

the hearings. Also, as of July 21, 2021, the NAC, 

through the relevant Subcommittee, has conducted 

11 oral arguments by video conference in 

connection with appeals of FINRA disciplinary 

proceedings pursuant to FINRA Rule 9341(d), as 

temporarily amended. Furthermore, the NAC has 

conducted via video conference a one-day 

evidentiary hearing in a membership application 

proceeding pursuant to FINRA Rule 1015, as 

temporarily amended. 

17 15 U.S.C. 78o–3(b)(6). 

18 15 U.S.C. 78o–3(b)(8). 

things, the need for FINRA staff, with 

limited exceptions, to work remotely 

and restrict in-person activities— 

consistent with the recommendations of 

public health officials—have made it 

challenging to meet some procedural 

requirements and perform some 

functions required under FINRA rules. 

For example, working remotely makes it 

difficult to send and receive hard copy 

documents and conduct in-person oral 

arguments. The temporary amendments 

have addressed these concerns by easing 

logistical and other issues and providing 

FINRA with needed flexibility for its 

operations during the COVID–19 

outbreak, allowing FINRA to continue 

critical adjudicatory and review 

processes in a reasonable and fair 

manner and meet its critical investor 

protection goals, while also following 

best practices with respect to the health 

and safety of its staff. 

FINRA staff, with limited exceptions, 

continue to work remotely to protect 

their health and safety. As indicated in 

its previous filings, FINRA has 

established a COVID–19 task force to 

develop a data-driven, staged plan for 

FINRA staff to safely return to working 

in FINRA office locations and resume 

other in-person activities. Based on its 

assessment of current COVID–19 

conditions, FINRA does not believe the 

COVID–19-related health concerns 

necessitating this relief will 

meaningfully subside by August 31, 

2021, and therefore proposes to extend 

the expiration date of the temporary rule 

amendments originally set forth in SR– 

FINRA–2020–015 from August 31, 2021, 

to December 31, 2021.9

ii. SR–FINRA–2020–027 

The same public health concerns and 

restrictions, along with a corresponding 

backlog of disciplinary cases,10 led 

FINRA to file, and subsequently extend 

to August 31, 2021, SR–FINRA–2020– 

027 to temporarily amend FINRA Rules 

1015, 9261, 9524, and 9830 to grant 

OHO and the NAC authority 11 to 

conduct hearings in connection with 

appeals of Membership Application 

Program decisions, disciplinary actions, 

eligibility proceedings and temporary 

and permanent cease and desist orders 

by video conference, if warranted by the 

COVID–19-related public health risks 

posed by an in-person hearing.12

As set forth in the previous filings, 

FINRA also relies on the guidance of its 

health and safety consultant, in 

conjunction with COVID–19 data and 

guidance issued by public health 

authorities, to determine whether the 

current public health risks presented by 

an in-person hearing may warrant a 

hearing by video conference.13 Based on 

that guidance and data, FINRA does not 

believe the COVID–19-related health 

concerns necessitating this relief will 

meaningfully subside by August 31, 

2021, and has determined that there will 

be a continued need for this temporary 

relief for several months beyond that 

date.14 Accordingly, FINRA proposes to 

extend the expiration date of the 

temporary rule amendments originally 

set forth in SR–FINRA–2020–027 from 

August 31, 2021, to December 31, 

2021.15 The extension of these 

temporary amendments allowing for 

specified OHO and NAC hearings to 

proceed by video conference will allow 

FINRA’s critical adjudicatory functions 

to continue to operate effectively in 

these extraordinary circumstances— 

enabling FINRA to fulfill its statutory 

obligations to protect investors and 

maintain fair and orderly markets— 

while also protecting the health and 

safety of hearing participants.16

FINRA has filed the proposed rule 

change for immediate effectiveness and 

has requested that the SEC waive the 

requirement that the proposed rule 

change not become operative for 30 days 

after the date of the filing, so FINRA can 

implement the proposed rule change 

immediately. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,17 which 

requires, among other things, that 

FINRA rules must 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. FINRA believes that the 

proposed rule change is also consistent 

with Section 15A(b)(8) of the Act,18

which requires, among other things, that 

FINRA rules provide a fair procedure for 

the disciplining of members and 

persons associated with members. 

The proposed rule change, which 

extends the expiration date of the 

temporary amendments to FINRA rules 

set forth in SR–FINRA–2020–015, will 

continue to provide FINRA, and in some 

cases another party to a proceeding, 

temporary modifications to its 

procedural requirements in order to 

allow FINRA to maintain fair processes 

and protect investors while operating in 

a remote work environment and with 

corresponding restrictions on its 

activities. It is in the public interest, and 

consistent with the Act’s purpose, for 

FINRA to operate pursuant to this 

temporary relief. The temporary 

amendments allow FINRA to specify 

filing and service methods, extend 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Notices 47171 

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f)(6). 

21See SR–FINRA–2020–015, 85 FR at 31836. 

Although FINRA did not request that the 

Commission waive the 30-day operative delay for 

SR–FINRA–2020–027, FINRA did request that the 

Commission waive the 30-day operative delay for 

SR–FINRA–2020–042 and FINRA–2021–006, which 

extended the expiration date of the temporary 

amendments originally set forth in SR–FINRA– 

2020–027. 

22See supra Item II.A.1; see also SR–FINRA– 

2020–015, 85 FR at 31833. 

23As noted above, see supra note 4, FINRA stated 

that if it requires temporary relief from the rule 

requirements identified in this proposal beyond 

December 31, 2021, it may submit a separate rule 

filing to extend the effectiveness of the temporary 

relief under these rules. 

24See SR–FINRA–2020–015, 85 FR at 31833; see 

also SR–FINRA–2020–027, 85 FR at 55712. 

25For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

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

78c(f). 

certain time periods, and modify the 

format of oral argument for FINRA 

disciplinary and eligibility proceedings 

and other review processes to cope with 

the current pandemic conditions. In 

addition, extending this temporary relief 

will further support FINRA’s 

disciplinary and eligibility proceedings 

and other review processes that serve a 

critical role in providing investor 

protection and maintaining fair and 

orderly markets. 

The proposed rule change, which also 

extends the expiration date of the 

temporary amendments to FINRA rules 

set forth in SR–FINRA–2020–027, will 

continue to aid FINRA’s efforts to timely 

conduct hearings in connection with its 

core adjudicatory functions. Given the 

current and frequently changing 

COVID–19 conditions and the 

uncertainty around when those 

conditions will see meaningful, 

widespread and sustained 

improvement, without this relief 

allowing OHO and NAC hearings to 

proceed by video conference, FINRA 

might be required to postpone some or 

almost all hearings indefinitely. FINRA 

must be able to perform its critical 

adjudicatory functions to fulfill its 

statutory obligations to protect investors 

and maintain fair and orderly markets. 

As such, this relief is essential to 

FINRA’s ability to fulfill its statutory 

obligations and allows hearing 

participants to avoid the serious 

COVID–19-related health and safety 

risks associated with in-person hearings. 

Among other things, this relief will 

allow OHO to conduct temporary cease 

and desist proceedings by video 

conference so that FINRA can take 

immediate action to stop ongoing 

customer harm and will allow the NAC 

to timely provide members, disqualified 

individuals and other applicants an 

approval or denial of their applications. 

As set forth in detail in the original 

filing, this temporary relief allowing 

OHO and NAC hearings to proceed by 

video conference accounts for fair 

process considerations and will 

continue to provide fair process while 

avoiding the COVID–19-related public 

health risks for hearing participants. 

Accordingly, the proposed rule change 

extending this temporary relief is in the 

public interest and consistent with the 

Act’s purpose. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

temporary proposed rule change will 

result in any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

As set forth in SR–FINRA–2020–015 

and SR–FINRA–2020–027, the proposed 

rule change is intended solely to extend 

temporary relief necessitated by the 

continued impacts of the COVID–19 

outbreak and the related health and 

safety risks of conducting in-person 

activities. FINRA believes that the 

proposed rule change will prevent 

unnecessary impediments to FINRA’s 

operations, including its critical 

adjudicatory processes, and its ability to 

fulfill its statutory obligations to protect 

investors and maintain fair and orderly 

markets that would otherwise result if 

the temporary amendments were to 

expire on August 31, 2021. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor 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 19 and Rule 19b– 

4(f)(6) thereunder.20

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing. However, pursuant to 

Rule 19b–4(f)(6)(iii), the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. As 

FINRA requested in connection with 

SR–FINRA–2020–015 and related 

extensions,21 FINRA has also asked the 

Commission to waive the 30-day 

operative delay so that this proposed 

rule change may become operative 

immediately upon filing. 

FINRA has indicated that extending 

the relief provided originally in SR– 

FINRA–2020–015 and SR–FINRA– 

2020–027 will continue to ease 

logistical and other issues by providing 

FINRA with needed flexibility for its 

operations during the COVID–19 

outbreak. Importantly, extending the 

relief provided in these prior rule 

changes immediately upon filing and 

without a 30-day operative delay will 

allow FINRA to continue critical 

adjudicatory and review processes in a 

reasonable and fair manner and meet its 

critical investor protection goals, while 

also following best practices with 

respect to the health and safety of its 

employees.22 The Commission also 

notes that this proposal, like SR– 

FINRA–2020–015 and SR–FINRA– 

2020–027, provides only temporary 

relief during the period in which 

FINRA’s operations are impacted by 

COVID–19. As proposed, the changes 

would be in place through December 31, 

2021.23 FINRA also noted in both SR– 

FINRA–2020–015 and SR–FINRA– 

2020–027 that the amended rules will 

revert back to their original state at the 

conclusion of the temporary relief 

period and, if applicable, any extension 

thereof.24 For these reasons, the 

Commission believes that waiver of the 

30-day operative delay for this proposal 

is consistent with the protection of 

investors and the public interest. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposal operative upon 

filing.25

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 

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. 


jbell on DSKJLSW7X2PROD with NOTICES
47172 Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Notices 

26 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Capitalized terms not defined herein are defined 

in the Rules, available at http://www.dtcc.com/∼/ 

media/Files/Downloads/legal/rules/nscc_rules.pdf. 

4 26 U.S.C. 1446(f). 

5Securities Exchange Act Release No. 92437 (July 

19, 2021), 86 FR 39092 (July 23, 2021) (‘‘Notice of 

Filing’’). 

6 26 U.S.C. 1446(f)(1); Withholding of Tax and 

Information Reporting With Respect to Interests in 

Partnerships Engaged in a U.S. Trade or Business, 

85 FR 76910 (Nov. 30, 2020) (‘‘Final Regulations’’). 

7 Id.; 26 CFR 1.1446(f)–4(a). 

8Final Regulations, supra note 6, at 76922. 

9Notice of Filing, supra note 5, at 39093. 

10 Id. 

11The term ‘‘FFI Member’’ means any Member or 

Limited Member that is treated as a non-U.S. entity 

for U.S. federal income tax purposes. See Rules, 

supra note 3. 

12NSCC states that, based on the types of services 

that NSCC provides to Limited Members, 

notwithstanding any exception, NSCC would not 

need to perform Section 1446(f) Withholding with 

respect to Limited Members’ activities at NSCC. 

Notice of Filing, supra note 5, at 39093. 

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– 

FINRA–2021–019 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–FINRA–2021–019. 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 such 

filing also will be available for 

inspection and copying at the principal 

office of FINRA. 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–FINRA– 

2021–019 and should be submitted on 

or before September 13, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Jill Peterson, 

Assistant Secretary. 

[FR Doc. 2021–17964 Filed 8–20–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92682; File No. SR–NSCC– 

2021–009] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Order Approving a 

Proposed Rule Change To Modify the 

Rules & Procedures of National 

Securities Clearing Corporation in 

Connection With the Implementation of 

Section 1446(f) of the Internal Revenue 

Code of 1986 

August 17, 2021. 

On July 14, 2021, National Securities 

Clearing Corporation (‘‘NSCC’’) 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 proposed rule 

change SR–NSCC–2021–009 to modify 

NSCC’s Rules & Procedures (‘‘Rules’’) 3

in connection with the implementation 

of Section 1446(f) of the Internal 

Revenue Code of 1986.4 The proposed 

rule change was published for comment 

in the Federal Register on July 23, 

2021,5 and the Commission received no 

comment letters regarding the changes 

proposed in the proposed rule change. 

For the reasons discussed below, the 

Commission is approving the proposed 

rule change. 

I. Description of the Proposed Rule 

Change 

A. Background 

Section 1446(f) generally imposes a 

ten percent withholding tax on the 

payment of gross proceeds arising from 

the sale or other disposition by a nonU.S. person of an interest in a publicly 

traded partnership (‘‘Section 1446(f) 

Withholding’’) that is engaged in a U.S. 

trade or business.6 A tax withholding 

obligation is imposed on the buyer of 

the partnership interest, who is required 

to remit the withheld tax amount to the 

U.S. Internal Revenue Service (‘‘IRS’’), 

unless or to the extent an applicable 

exception applies. The buyer obligated 

to withhold the ten percent tax is liable 

for any amount that it underwithheld, 

plus associated interest and penalties. 

Further, partnerships that are publicly 

traded on exchanges (‘‘PTPs’’) in respect 

of transfers that occur on or after 

January 1, 2022 will be subject to 

Section 1446(f) Withholding. The U.S. 

Treasury Department (‘‘Treasury 

Department’’) and the IRS implemented 

a tax withholding requirement pursuant 

to Treasury Regulation Section 

1.1446(f)–4(a).7

Section 1.1446(f)–4(b) provides 

certain exceptions to 1.1446(f)–4(a). 

Under one of the exceptions, U.S. 

clearing organizations, which, under its 

definition, would include NSCC, are 

discharged from fulfilling Section 

1446(f) Withholding at this time. The 

Treasury Department and the IRS 

provided this exception because they 

understood that there are no 

nonqualified intermediary Members that 

participate directly in the net settlement 

system at a U.S. clearing organization at 

the present time.8

NSCC represents that, all of NSCC’s 

non-U.S. Members are currently of the 

types of entities permitted to perform 

the Section 1446(f) Withholding 

themselves either because (i) they are 

the types of entities allowed to perform 

U.S. tax withholdings pursuant to 

applicable Treasury Regulations, or (ii) 

they have entered into the requisite 

agreements with the IRS that allow them 

to perform U.S. tax withholdings 

(commonly known as the Qualified 

Intermediary Agreements).9 NSCC 

further represents that nearly all such 

Members have historically accepted the 

responsibility to perform all U.S. tax 

withholdings in respect of their NSCC 

accounts, and it is NSCC’s 

understanding that they would continue 

do the same for Section 1446(f) 

Withholding.10

B. Proposed Rule Changes 

NSCC proposes to amend its Rules to 

ensure that all NSCC’s FFI Members 11

that are Members would accept the 

responsibility to perform the Section 

1446(f) Withholding.12

First, NSCC proposes to add new 

definitions: Section 1446(f), Section 

1446(f) Withholding, Section 1446(f) 


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