Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Notices 50391 

32 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 

4See Securities Exchange Act Release No. 64884 

(July 14, 2011), 76 FR 42755 (July 19, 2011) (Notice 

of Filing and Immediate Effectiveness of File No. 

SR–FINRA–2011–033). 

5See Public Law 111–203, 124 Stat. 1376 (2010), 

Section 701. 

6See Securities Exchange Act Release No. 88023 

(January 23, 2020), 85 FR 5261 (January 29, 2020) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2020–001). 

7See Securities Exchange Act Release No. 59955 

(May 22, 2009), 74 FR 25586 (May 28, 2009) (Order 

Approving File No. SR–FINRA–2009–012). 

8 In March 2012, the SEC approved amendments 

to FINRA Rule 4240 that, among other things, limit 

the rule’s application to CDS that are SBS. See 

Securities Exchange Act Release No. 66527 (March 

7, 2012), 77 FR 14850 (March 13, 2012) (Order 

Approving File No. SR–FINRA–2012–015). 

9See Securities Exchange Act Release No. 89036 

(June 10, 2020), 85 FR 36458 (June 16, 2020) (Notice 

of Filing and Immediate Effectiveness of File No. 

SR–FINRA–2020–016). 

10See Securities Exchange Act Release No. 91789 

(May 7, 2021), 86 FR 26084 (May 12, 2021) (Notice 

of Filing of File No. SR–FINRA–2021–008) 

(‘‘Proposal’’). 

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–NYSEArca–2021–73 and 

should be submitted on or before 

September 29, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.32

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–19293 Filed 9–7–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92837; File No. SR–FINRA– 

2021–021] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Extend the Expiration 

Dates of FINRA Rules 0180 

(Application of Rules to SecurityBased Swaps) and 4240 (Margin 

Requirements for Credit Default 

Swaps) and Amend FINRA Rule 4240 

To Add Supplementary Material .02 

September 1, 2021. 

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

Securities Exchange Act of 1934 

(‘‘Exchange Act’’ or ‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 notice is hereby 

given that on August 20, 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 (i) extend the 

expiration date of FINRA Rule 0180 

(Application of Rules to Security-Based 

Swaps) to February 6, 2022 and (ii) 

extend to April 6, 2022 the 

implementation of FINRA Rule 4240 

(Margin Requirements for Credit Default 

Swaps) and clarify that the rule does not 

apply if a member is registered with the 

SEC as a security-based swap (‘‘SBS’’) 

dealer (‘‘SBSD’’). 

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 

On July 8, 2011, FINRA filed for 

immediate effectiveness FINRA Rule 

0180, which, with certain exceptions, 

temporarily limits the application of 

FINRA rules with respect to SBS, 

thereby avoiding undue market 

disruptions resulting from the change to 

the definition of ‘‘security’’ under the 

Act to expressly encompass SBS.4

Pending the SEC’s final implementation 

of its rulemakings under Title VII of the 

Dodd-Frank Act,5 FINRA extended the 

expiration date of FINRA Rule 0180 a 

number of times, most recently in 

January 2020, when FINRA extended 

the expiration date to September 1, 

2021.6 In addition, on May 22, 2009, the 

Commission approved FINRA Rule 

4240,7 which implements an interim 

pilot program (the ‘‘Interim Pilot 

Program’’) with respect to margin 

requirements for certain transactions in 

credit default swaps (‘‘CDS’’).8 On June 

2, 2020, FINRA filed a proposed rule 

change for immediate effectiveness 

extending the implementation of FINRA 

Rule 4240 to September 1, 2021.9

Therefore, both FINRA Rule 0180 and 

the Interim Pilot Program under FINRA 

Rule 4240 are currently scheduled to 

expire on September 1, 2021. 

On April 26, 2021, FINRA filed a 

proposed rule change to amend FINRA 

Rules 0180, 4120, 4210, 4220, 4240 and 

9610 to clarify the application of its 

rules to SBS following the SEC’s 

completion of its rulemaking under 

Title VII of the Dodd-Frank Act 

regarding SBSDs and major SBS 

participants (collectively, ‘‘SBS 

Entities’’).10 Among other things, the 

Proposal would adopt a new FINRA 

Rule 0180, to replace expiring current 

FINRA Rule 0180, that would generally 

apply FINRA rules to members’ 

activities and positions with respect to 

SBS, while providing limited exceptions 

for SBS in circumstances where FINRA 

believes such exceptions are 

appropriate. The Proposal would also 

adopt a new margin rule specifically 

applicable to SBS, which would replace 

the expiring Interim Pilot Program 


jbell on DSKJLSW7X2PROD with NOTICES
50392 Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Notices 

11See Proposal, supra note 10, at 26086 n.18. 

12See Securities Exchange Act Release No. 92617 

(August 9, 2021), 86 FR 44761 (August 13, 2021) 

(Notice of Filing of Amendment No. 1 and Order 

Instituting Proceedings To Determine Whether To 

Approve or Disapprove the Proposed Rule Change, 

as Modified by Amendment No. 1, Relating to 

Security-Based Swaps) (‘‘Amendment’’). 

13See supra note 12. 

14See supra note 12. 

15FINRA notes that this provision is consistent 

with the new SBS margin rule under the Proposal, 

which provides that a member that is registered as 

an SBSD shall instead comply with Exchange Act 

Rule 18a–3. As discussed in the Proposal, FINRA 

believes it should defer to the SEC’s margin 

framework for registered SBSDs rather than impose 

additional or different requirements on such 

entities. See Proposal, supra note 10, at 26098. 

16 15 U.S.C. 78o–3(b)(6). 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f)(6). 

establishing margin requirements for 

CDS. FINRA originally proposed that 

the effective date of the Proposal would 

be October 6, 2021, to align with the 

SEC’s compliance date for registration of 

SBS Entities (the ‘‘Registration 

Compliance Date’’). FINRA noted in the 

Proposal that it intended to extend the 

expiration dates of existing FINRA 

Rules 0180 and 4240 to October 6, 2021 

to align with the Registration 

Compliance Date and implementation of 

the Proposal.11

After consideration of comments on 

the Proposal, as well as further feedback 

from member firms, on August 9, 2021 

FINRA filed Partial [sic] Amendment 

No. 1 to the Proposal.12 The 

Amendment (1) extends the effective 

date of the proposed amendments to 

FINRA Rules 0180, 4120 and 9610 from 

October 6, 2021 to February 6, 2022; (2) 

extends the effective date of the 

proposed amendments to FINRA Rules 

4210, 4220 and 4240 from October 6, 

2021 to April 6, 2022; and (3) conforms 

the proposed definition of ‘‘Legacy 

Swap’’ in proposed FINRA Rule 

4240(d)(12) to reflect the new effective 

date of April 6, 2022. FINRA noted in 

the Amendment that it intended to 

extend the expiration date of existing 

FINRA Rule 0180 until February 6, 

2022, and the expiration date of existing 

FINRA Rule 4240 until April 6, 2022, so 

as to align with the new effective dates 

of the Proposal described above.13

Accordingly, the proposed rule change 

(i) amends existing FINRA Rule 0180 to 

extend the expiration date of the rule 

from September 1, 2021 to February 6, 

2022 and (ii) amends existing FINRA 

Rule 4240 to extend the expiration date 

of the Interim Pilot Program from 

September 1, 2021 to April 6, 2022. 

FINRA believes it is appropriate to 

extend the expiring rules so as to align 

with the effective dates of the new rules 

that will replace them, thereby avoiding 

undue burdens on market participants 

and undue market disruption. 

FINRA also noted in the Amendment 

that, beginning on the Registration 

Compliance Date, members may register 

with the SEC as SBSDs, and thereby 

become subject to the margin 

requirements applicable to SBSDs under 

Exchange Act Rule 18a–3.14 Therefore, 

if a member were to register as an SBSD 

on the Registration Compliance Date or 

during the period between the 

Registration Compliance Date and April 

6, 2022, the member would be subject 

to both the new margin requirements for 

SBS under Exchange Act Rule 18a–3 

and the expiring Interim Pilot Program 

for CDS. In order to avoid unnecessary 

regulatory duplication or any potential 

conflicting obligations as between 

Exchange Act Rule 18a–3 and the 

Interim Pilot Program, FINRA is also 

amending existing, expiring FINRA Rule 

4240 to add Supplementary Material .02 

to clarify that the rule does not apply to 

a member that is registered with the SEC 

as an SBSD.15

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 on 

September 1, 2021. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,16 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 would further the 

purposes of the Act because the 

proposed rule change will help to avoid 

undue burdens on market participants 

and undue market disruption that could 

result if existing FINRA Rule 0180 

expires before the effective date of new 

FINRA Rule 0180. Similarly, FINRA 

believes that the proposed rule change 

is consistent with the Act because 

extending the implementation of FINRA 

Rule 4240 will ensure that the Interim 

Pilot Program establishing margin 

requirements for CDS will continue to 

apply until the new SBS margin rule 

under new FINRA Rule 4240 becomes 

effective, thereby helping to promote 

stability in the financial markets and 

regulatory certainty for members. 

FINRA further believes that clarifying 

that the Interim Pilot Program does not 

apply to a registered SBSD will promote 

legal certainty and avoid unnecessary 

regulatory duplication. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. FINRA 

believes that the proposed rule change 

would prevent undue burdens on 

market participants and undue market 

disruption that would otherwise result 

if FINRA Rule 0180 expires before the 

effective date of new FINRA Rule 0180. 

FINRA believes that, by extending the 

expiration of FINRA Rule 0180, the 

proposed rule change will serve to 

promote regulatory clarity and 

consistency, thereby reducing burdens 

on the marketplace and facilitating 

investor protection. Similarly, FINRA 

believes that extending the 

implementation of the Interim Pilot 

Program under FINRA Rule 4240 will 

ensure that the Interim Pilot Program 

establishing margin requirements for 

CDS will continue to apply until the 

new SBS margin rule under new FINRA 

Rule 4240 becomes effective, thereby 

helping to promote stability in the 

financial markets and regulatory 

certainty for members. FINRA further 

believes that clarifying that the Interim 

Pilot Program does not apply to a 

registered SBSD will promote legal 

certainty and avoid unnecessary 

regulatory duplication. 

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 17 and Rule 19b– 

4(f)(6) thereunder.18

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Notices 50393 

19 17 CFR 240.19b–4(f)(6)(iii). 

20See Exchange Act Release No. 64795 (Jul. 1, 

2011), 76 FR 39927 (Jul. 7, 2011) (Order Granting 

Temporary Exemptions Under the Securities 

Exchange Act of 1934 in Connection With the 

Pending Revision of the Definition of ‘‘Security’’ To 

Encompass Security-Based Swaps, and Request for 

Comment); see also supra note 7. 

21See supra note 9 (extending the 

implementation of FINRA Rule 4240 to September 

1, 2021); supra note 6 (extending the expiration 

date of FINRA Rule 0180 to September 1, 2021); 

Exchange Act Release No. 85981 (May 31, 2019), 84 

FR 26486 (Jun. 6, 2019) (Notice of Filing and 

Immediate Effectiveness of File No. SR–FINRA– 

2019–016) (extending the implementation of FINRA 

Rule 4240 to July 20, 2020); Exchange Act Release 

No. 85062 (Feb. 6, 2019), 84 FR 3524 (Feb. 12, 2019) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2019–001) (extending the 

expiration date of FINRA Rule 0180 to February 12, 

2020); Exchange Act Release No. 83474 (Jun. 20, 

2018), 83 FR 29840 (Jun. 26, 2018) (Notice of Filing 

and Immediate Effectiveness of File No. SR– 

FINRA–2018–025) (extending the implementation 

of FINRA Rule 4240 to July 18, 2019); Exchange Act 

Release No. 82480 (Jan. 10, 2018), 83 FR 2480 (Jan. 

17, 2018) (Notice of Filing and Immediate 

Effectiveness of File No. SR–FINRA–2018–001) 

(extending the expiration date of FINRA Rule 0180 

to February 12, 2019); Exchange Act Release No. 

81035 (Jun. 27, 2017), 82 FR 30914 (Jul. 3, 2017) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2017–019) (extending the 

implementation of FINRA Rule 4240 to July 18, 

2018); Exchange Act Release No. 79752 (Jan. 6, 

2017), 82 FR 3824 (Jan. 12, 2017) (Notice of Filing 

and Immediate Effectiveness of File No. SR– 

FINRA–2017–001) (extending the expiration date of 

FINRA Rule 0180 to February 12, 2018); Exchange 

Act Release No. 78182 (Jun. 28, 2016), 81 FR 43690 

(Jul. 5, 2016) (Notice of Filing and Immediate 

Effectiveness of File No. SR–FINRA–2016–020) 

(extending the implementation of FINRA Rule 4240 

to July 18, 2017); Exchange Act Release No. 76850 

(Jan. 7, 2016), 81 FR 1666 (Jan. 13, 2016) (Notice 

of Filing and Immediate Effectiveness of File No. 

SR–FINRA–2016–001) (extending the expiration 

date of FINRA Rule 0180 to February 11, 2017); 

Exchange Act Release No. 75069 (May 29, 2015), 80 

FR 31931 (Jun. 4, 2015) (Notice of Filing and 

Immediate Effectiveness of File No. SR–FINRA– 

2015–013) (extending the implementation of FINRA 

Rule 4240 to July 18, 2016); Exchange Act Release 

No. 74049 (Jan. 14, 2015), 80 FR 2983 (Jan. 21, 

2015) (Notice of Filing and Immediate Effectiveness 

of File No. SR–FINRA–2015–001) (extending the 

expiration date of FINRA Rule 0180 to February 11, 

2016); Exchange Act Release No. 72522 (Jul. 2, 

2014), 79 FR 39031 (Jul. 9, 2014) (Notice of Filing 

and Immediate Effectiveness of File No. SR– 

FINRA–2014–029) (extending the implementation 

of FINRA Rule 4240 to July 17, 2015); Exchange Act 

Release No. 71485 (Feb. 5, 2014), 79 FR 7731 (Feb. 

10, 2014) (Notice of Filing and Immediate 

Effectiveness of File No. SR–FINRA–2014–001) 

(extending the expiration date of FINRA Rule 0180 

to February 11, 2015); Exchange Act Release No. 

69993 (Jul. 16, 2013), 78 FR 43945 (Jul. 22, 2013) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2013–030) (extending the 

implementation of FINRA Rule 4240 to July 17, 

2014); Exchange Act Release No. 69262 (Apr. 1, 

2013), 78 FR 20708 (Apr. 5, 2013) (Notice of Filing 

and Immediate Effectiveness of File No. SR– 

FINRA–2013–019) (extending the expiration date of 

FINRA Rule 0180 to February 11, 2014); Exchange 

Act Release No. 68471 (Dec. 19, 2012), 77 FR 76113 

(Dec. 26, 2012) (Notice of Filing and Immediate 

Effectiveness of File No. SR–FINRA–2012–056) 

(extending the expiration date of FINRA Rule 0180 

to July 17, 2013); Exchange Act Release No. 67449 

(Jul. 17, 2012), 77 FR 43128 (Jul. 23, 2012) (Notice 

of Filing and Immediate Effectiveness of File No. 

SR–FINRA–2012–035) (extending the 

implementation of FINRA Rule 4240 to July 17, 

2013); Exchange Act Release No. 66528 (Mar. 7, 

2012), 77 FR 14848 (Mar. 13, 2012) (Notice of Filing 

and Order Granting Accelerated Approval of File 

No. SR–FINRA–2012–014) (extending the 

implementation of Rule 4240 to July 17, 2012); 

Exchange Act Release No. 66156 (Jan. 13, 2012), 77 

FR 3027 (Jan. 20, 2012) (Notice of Filing and 

Immediate Effectiveness of File No. SR–FINRA– 

2012–004) (extending the expiration date of FINRA 

Rule 0180 to January 17, 2013); Exchange Act 

Release No. 64892 (Jul. 14, 2011), 76 FR 43360 (Jul. 

20, 2011) (Notice of Filing and Order Granting 

Accelerated Approval of File No. SR–FINRA–2011– 

034) (extending the implementation of Rule 4240 to 

January 17, 2012); Exchange Act Release No. 64884 

(Jul. 14, 2011), 76 FR 42755 (Jul. 19, 2011) (Notice 

of Filing and Immediate Effectiveness of File No. 

SR–FINRA–2011–033) (extending the expiration 

date of FINRA Rule 0180 to January 17, 2012); 

Exchange Act Release No. 63391 (Nov. 30, 2010), 

75 FR 75718 (Dec. 6, 2010) (Notice of Filing and 

Immediate Effectiveness of File No. SR–FINRA– 

2010–063) (extending the implementation of Rule 

4240 to July 16, 2011); Exchange Act Release No. 

60722 (Sep. 25, 2009), 74 FR 50856 (Oct. 1, 2010) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2009–063) (extending the 

implementation of Rule 4240 to November 30, 

2010). 22For 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). 

to Rule 19b–4(f)(6)(iii),19 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. FINRA has requested that the 

Commission waive the 30-day operative 

delay requirement so that the proposed 

rule change may become operative on 

September 1, 2021. The Commission 

hereby grants the request. The proposed 

rule change is consistent with the goals 

set forth by the Commission when it 

issued the original temporary exemptive 

relief,20 as well as the subsequent 

extensions of the temporary exemptive 

relief,21 and will help avoid undue 

market interruption resulting from the 

change of the definition of ‘‘security’’ 

under the Exchange Act and the 

expiration of FINRA Rules 0180 and 

4240. Furthermore, the Commission 

finds that adding Supplemental Material 

.02 would help avoid unnecessary 

regulatory duplication or any potential 

conflicting obligations as between 

Exchange Act Rule 18a–3 and the 

Interim Pilot Program. Therefore, the 

Commission believes it is consistent 

with the protection of investors and the 

public interest to waive the 30-day 

operative delay requirement.22

Therefore, the Commission designates 

the proposal as operative on September 

1, 2021. 

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. 

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–2021–021 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–2021–021. 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 

a.m. and 3 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– 


jbell on DSKJLSW7X2PROD with NOTICES
50394 Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Notices 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 77724 

(April 27, 2016), 81 FR 30614 (May 17, 2016). 

4See Securities Exchange Act Release No. 79318 

(November 15, 2016), 81 FR 84696 (November 23, 

2016) (‘‘Order Approving the National Market 

System Plan Governing the Consolidated Audit 

Trail) (‘‘Approval Order’’). 

5See Securities Exchange Act Release No. 89679 

(August 26, 2020), 85 FR 54461 (September 1, 2020) 

(Notice of Filing of File No. SR–FINRA–2020–024). 

6See Letter from Lisa C. Horrigan, Associate 

General Counsel, FINRA, to Vanessa Countryman, 

Secretary, Commission, dated October 29, 2020. 

7See Securities Exchange Act Release No. 90535 

(November 30, 2020), 85 FR 78395 (December 4, 

2020) (Notice of Filing of Amendment No. 1 and 

Order Granting Accelerated Approval of SR– 

FINRA–2020–024). 

8See Securities Exchange Act Release No. 92239 

(June 23, 2021), 86 FR 34293 (June 29, 2021) (SR– 

FINRA–2021–017) (Notice of Filing and Immediate 

Effectiveness of a Proposed Rule Change Relating to 

the Retirement of FINRA’s Order Audit Trail 

System). 

9 17 CFR 242.600(B)(47). 

2021–021 and should be submitted on 

or before September 29, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–19291 Filed 9–7–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92845; File No. SR–NYSE– 

2021–48] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Delete the 

Order Audit Trail System Rules in the 

Rule 7400 Series 

September 1, 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 

30, 2021, New York Stock Exchange 

LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule from 

interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to delete the 

Order Audit Trail System (‘‘OATS’’) 

rules in the Rule 7400 Series as these 

Rules provide for the collection of 

information that is duplicative of the 

data collection requirements of the CAT. 

Further, the Financial Industry 

Regulatory Authority (‘‘FINRA’’) has 

determined to eliminate its OATS rules. 

The proposed rule change is available 

on the Exchange’s website at 

www.nyse.com, 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 

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 these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization 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 

Rule 613 of Regulation NMS requires 

national securities exchanges and 

FINRA to create, implement, and 

maintain a consolidated audit trail to 

capture customer and order event 

information for orders in NMS 

Securities and OTC Equity Securities, 

across all markets, from the time of 

order inception through routing, 

cancellation, modification, or execution 

in a single consolidated data source. 

The Participants filed the Plan to 

comply with Rule 613 of Regulation 

NMS under the Act. The Plan was 

published for comment in the Federal 

Register on May 17, 2016,3 and 

approved by the Commission, as 

modified, on November 15, 2016.4

On August 14, 2020, FINRA filed with 

the Commission a proposed rule change 

to delete the OATS rules once Industry 

Members are effectively reporting to the 

CAT (the ‘‘OATS Retirement Filing’’).5

On October 29, 2020, FINRA filed 

Amendment No. 1 to the proposed rule 

change (‘‘Amendment No. 1’’) and a 

response to the comments that were 

submitted on the original filing 

(‘‘Response to Comments’’).6 On 

November 30, 2020, the Commission 

approved the proposed rule change, as 

modified by Amendment No. 1, on an 

accelerated basis.7 On June 17, 2021, 

FINRA filed a proposed rule change 

setting forth the basis for its 

determination that the accuracy and 

reliability of the CAT meet the 

standards approved by the Commission 

in the OATS Retirement Filing for 

purposes of eliminating the OATS 

rules.8 The FINRA proposal stated that 

FINRA would retire OATS effective 

September 1, 2021. 

After conducting an analysis of its 

rules in accordance with the CAT NMS 

Plan, the Exchange has determined that 

the information collected pursuant to 

the OATS rules is intended to be 

collected by CAT. Further, the Exchange 

believes that the Rule 7400 Series will 

no longer be necessary and proposes to 

delete such rules from the Exchange’s 

rulebook unless FINRA decides not to 

retire OATS as scheduled in which case 

member organizations will still be 

required to report to OATS. Discussed 

below is a description of the duplicative 

rule requirements as well as the 

timeline for eliminating the duplicative 

rules followed by a discussion on the 

OATS Retirement Filing that formed the 

basis for retiring OATS. 

Duplicative OATS Requirements 

The Rule 7400 Series consists of Rules 

7410 through 7470 and sets forth the 

recording and reporting requirements of 

the OATS Rules. The OATS Rules 

require all Exchange member 

organizations and associated persons to 

record in electronic form and report to 

FINRA, on a daily basis, certain 

information with respect to orders 

originated, received, transmitted, 

modified, canceled, or executed by 

members in all NMS stocks, as that term 

is defined in Rule 600(b)(47) of 

Regulation NMS,9 traded on the 

Exchange, including NYSE-listed 

securities. The Exchange relies on the 

information reported to OATS either to 

conduct surveillance or to facilitate 

surveillance conducted by FINRA 

pursuant to a regulatory services 

agreement (‘‘RSA’’). This information is 

used by Exchange and FINRA staff to 

conduct surveillance and investigations 

of member firms for violations of 

Exchange and FINRA rules and federal 

securities laws. The Exchange believes 

it is appropriate to retire OATS because 

the requirements of the Rule 7400 Series 

are duplicative of information available 

in the CAT and thus will no longer be 

necessary now that the CAT is 

operational. 


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