22962 Federal Register / Vol. 87, No. 74 / Monday, April 18, 2022 / Notices 

1See Letter from Stephen Matthews, Principal 

Associate General Counsel, Nasdaq, to J. Matthew 

DeLesDernier, Assistant Secretary, SEC, dated 

February 12, 2021 (‘‘Exemptive Request’’). 

2 15 U.S.C. 78mm. 

3 17 CFR 240.0–12 (Commission procedures for 

filing applications for orders for exemptive relief 

under Section 36 of the Exchange Act). 

4 15 U.S.C. 78s(b). 

5Exemptive Request, supra note 1, at 2–3. An 

SRO wishing to incorporate rules of another SRO 

by reference may submit a written request for an 

order exempting it from the requirement in Section 

19(b) of the Exchange Act to file proposed rule 

changes relating to the rules incorporated by 

reference, if, among other things, the rules to be 

incorporated are categories of rules (rather than 

individual rules within a category) that are not 

trading rules (e.g., the SRO has requested 

incorporation of rules such as margin, suitability, or 

arbitration). See Exchange Act Release No. 49260 

(Feb. 17, 2004), 69 FR 8500 (Feb. 24, 2004). 

6The Nasdaq Exchanges will provide such notice 

via a posting on the same website location where 

they post their own rule filings pursuant to and 

within the timeframe required by Rule 19b–4(1) 

under the Exchange Act. The website posting will 

include a link to the location on Nasdaq’s website 

where the applicable proposed rule change is 

posted. Exemptive Request, supra note 1, at 3 & n.7. 

7Exemptive Request, supra note 1, at 3. 

8 Id. 

9See, e.g., Release No. 34–83040 (Apr. 12, 2018), 

83 FR 17198 (Apr. 18, 2018) (order granting MIAX 

PEARL, LLC, an exemption under Section 36(a) of 

the Exchange Act from the rule filing requirements 

of Section 19(b) of the Exchange Act with respect 

to certain of its rules incorporating by reference 

rules of the Miami International Securities 

Exchange, LLC); Release No. 34–61534 (Feb. 18, 

2010), 75 FR 8760 (Feb. 25, 2010) (order granting 

BATS Exchange, Inc., an exemption under Section 

36(a) of the Exchange Act from the rule filing 

requirements of Section 19(b) of the Exchange Act 

with respect to certain of its rules incorporating by 

reference rules of the Chicago Board Options 

Exchange, Incorporated, Financial Industry 

Regulatory Authority, Inc., and the New York Stock 

Exchange, LLC) (‘‘BATS Order’’). 

10See Release No. 34–83040, supra note 17, at 75 

FR 17199 (footnotes omitted). 

11 Id. at 75 FR 17199 & n.15. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94707] 

Order Granting Application by The 

Nasdaq Stock Market LLC and Five 

Affiliated National Securities 

Exchanges for Exemption, Pursuant to 

Section 36(a) of the Exchange Act, 

From the Rule Filing Requirements of 

Section 19(b) of the Exchange Act With 

Respect to Certain Rules Incorporated 

by Reference 

April 12, 2022. 

The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’) and its affiliated national 

securities exchanges Nasdaq PHLX LLC 

(‘‘Phlx’’), Nasdaq BX, Inc. (‘‘BX’’), 

Nasdaq ISE, LLC (‘‘ISE’’), Nasdaq 

GEMX, LLC (‘‘GEMX’’), and Nasdaq 

MRX, LLC (‘‘MRX’’) (each a ‘‘Nasdaq 

Exchange’’ and collectively the ‘‘Nasdaq 

Exchanges’’) have filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’ or ‘‘SEC’’) an 

application 1 for exemption under 

Section 36(a) of the Securities Exchange 

Act of 1934 (‘‘Exchange Act’’) 2 and Rule 

0–12 thereunder 3 from the rule filing 

requirements of Section 19(b) of the 

Exchange Act 4 with respect to the rules 

of the Nasdaq Exchanges relating to 

arbitration. Section 36 of the Exchange 

Act authorizes the Commission to 

conditionally or unconditionally 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities, or transactions, from 

any provision or provisions of the 

Exchange Act or of any rule or 

regulation thereunder, to the extent that 

such exemption is necessary or 

appropriate in the public interest, and is 

consistent with the protection of 

investors. 

The Nasdaq Exchanges have 

requested that the Commission: (i) Grant 

Nasdaq an exemption from the rule 

filing requirements of Section 19(b) of 

the Exchange Act for changes to rules on 

arbitration in the ‘‘General 6’’ section of 

Nasdaq’s rulebook (the ‘‘General 6 

Rules’’) effected solely by virtue of 

changes to rules on arbitration in the 

Rule 12000 Series and Rule 13000 

Series of the Financial Industry 

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

Manual (Code of Arbitration Procedures 

for Customer Disputes and Code of 

Arbitration Procedures for Industry 

Disputes) (‘‘FINRA Arbitration Rules’’) 

that are incorporated by reference into 

the General 6 Rules; and (ii) grant the 

remaining Nasdaq Exchanges an 

exemption from the rule filing 

requirements of Section 19(b) of the 

Exchange Act for changes to their rules 

on arbitration that are effected solely by 

virtue of a change to the General 6 Rules 

that are incorporated into the remaining 

Nasdaq Exchanges’ rules by reference. 

Specifically, the Nasdaq Exchanges 

request that they be permitted to 

incorporate by reference changes made 

to the FINRA Arbitration Rules and 

Nasdaq General 6 Rules (as applicable) 

that are incorporated by reference into 

the Nasdaq Exchanges’ rules without the 

need for each Nasdaq Exchange to 

separately file, pursuant to Section 19(b) 

of the Exchange Act, a proposed rule 

change similar to the one filed by 

FINRA or Nasdaq (as applicable). The 

Nasdaq Exchanges believe that these 

exemptions are appropriate because 

they will promote consistency among 

the Nasdaq Exchanges’ rules pertaining 

to arbitration, which are not trading 

rules.5

As a condition of the requested 

exemption, the Nasdaq Exchanges have 

agreed to provide written notice to their 

members whenever a change is 

proposed to FINRA Arbitration Rules or 

Nasdaq General 6 Rules (as applicable) 

that are incorporated by reference into 

the rules of the Nasdaq Exchanges.6

Such notice will alert the Nasdaq 

Exchanges’ members to the proposed 

FINRA or Nasdaq rule change and give 

them an opportunity to comment on the 

proposal.7 The Nasdaq Exchanges will 

similarly inform members in writing 

when the Commission approves any 

such proposed changes.8

The Commission has issued 

exemptions similar to the Nasdaq 

Exchanges’ request.9 In granting one 

such exemption in 2010, the 

Commission repeated an earlier 

Commission statement that it would 

consider similar future exemption 

requests from other self-regulatory 

organizations (‘‘SROs’’), provided that: 

• An SRO wishing to incorporate 

rules of another SRO by reference has 

submitted a written request for an order 

exempting it from the requirement in 

Section 19(b) of the Exchange Act to file 

proposed rule changes relating to the 

rules incorporated by reference, has 

identified the applicable originating 

SRO(s), together with the rules it wants 

to incorporate by reference, and 

otherwise has complied with the 

procedural requirements set forth in the 

Commission’s release governing 

procedures for requesting exemptive 

orders pursuant to Rule 0–12 under the 

Exchange Act; 

• The incorporating SRO has 

requested incorporation of categories of 

rules (rather than individual rules 

within a category) that are not trading 

rules (e.g., the SRO has requested 

incorporation of rules such as margin, 

suitability, or arbitration); and 

• The incorporating SRO has 

reasonable procedures in place to 

provide written notice to its members 

each time a change is proposed to the 

incorporated rules of another SRO.10

The Commission believes that the 

Nasdaq Exchanges have satisfied each of 

these conditions. The Commission also 

believes that granting the Nasdaq 

Exchanges an exemption from the rule 

filing requirements under Section 19(b) 

of the Exchange Act will promote 

efficient use of Commission and 

exchange resources by avoiding 

duplicative rule filings based on 

simultaneous changes to identical rule 

text sought by more than one SRO.11

The Commission therefore finds it 

appropriate in the public interest, and 

consistent with the protection of 

investors, to exempt the Nasdaq 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 74 / Monday, April 18, 2022 / Notices 22963 

12 15 U.S.C. 78mm. 

13 17 CFR 200.30–3(a)(76). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5See Securities Exchange Act Release No. 67090 

(May 31, 2012), 77 FR 33531 (June 6, 2012) (SR– 

BATS–2011–038; SR–BYX–2011–025; SR–BX– 

2011–068; SR–CBOE–2011–087; SR–C2–2011–024; 

SR–CHX–2011–30; SR–EDGA–2011–31; SR–EDGX– 

2011–30; SR–FINRA–2011–054; SR–ISE–2011–61; 

SR–NASDAQ–2011–131; SR–NSX–2011–11; SR– 

NYSE–2011–48; SR–NYSEAmex–2011–73; SR– 

NYSEArca–2011–68; SR–Phlx–2011–129) (‘‘Pilot 

Rules Approval Order’’). 

6The rules of the equity options exchanges 

similarly provide for a halt in trading if the cash 

equity exchanges invoke a MWCB Halt. See, e.g., 

NYSE Arca Rule 6.65–O(d)(4). 

7See Securities Exchange Act Release No. 67091 

(May 31, 2012), 77 FR 33498 (June 6, 2012). The 

LULD Plan provides a mechanism to address 

extraordinary market volatility in individual 

securities. 

8See Securities Exchange Act Release Nos. 67090 

(May 31, 2012), 77 FR 33531 (June 6, 2012) (SR– 

EDGA–2011–31) (Approval Order); and 68806 

(February 1, 2013), 78 FR 8670 (February 6, 2013) 

(SR–EDGA–2013–05) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

to Delay the Operative Date of Changes to the Rule 

Continued 

Exchanges from the rule filing 

requirements under Section 19(b) of the 

Exchange Act with respect to the abovedescribed rules they have incorporated 

by reference. 

Accordingly, it is ordered, pursuant to 

Section 36 of the Exchange Act,12 that 

the Nasdaq Exchanges are exempt from 

the rule filing requirements of Section 

19(b) of the Exchange Act with respect 

to changes to their rules on arbitration 

resulting solely from changes made to 

the FINRA Arbitration Rules or the 

Nasdaq General 6 Rules (as applicable) 

that are incorporated by reference into 

the Nasdaq Exchanges’ rules without the 

need for each Nasdaq Exchange to 

separately file, pursuant to Section 19(b) 

of the Exchange Act, a proposed rule 

change similar to the one filed by 

FINRA or Nasdaq, provided that the 

Nasdaq Exchanges promptly provide 

written notice to their members 

whenever a change is proposed to the 

FINRA Arbitration Rules or the Nasdaq 

General 6 Rules, and provided that they 

inform their members in writing when 

the Commission approves any such 

proposed change. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–08181 Filed 4–15–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94701; File No. SR– 

CboeEDGA–2022–008] 

Self-Regulatory Organizations; Cboe 

EDGA Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Adopt on a 

Permanent Basis the Pilot Program for 

Market-Wide Circuit Breakers, 

Currently Codified in Rule 11.16 

April 12, 2022. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on April 11, 

2022, Cboe EDGA Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGA’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange filed the 

proposal as a ‘‘non-controversial’’ 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 

Rule 19b–4(f)(6) thereunder.4 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 EDGA Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGA’’) is filing with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) a 

proposal to adopt on a permanent basis 

the pilot program for Market-Wide 

Circuit Breakers, currently codified in 

Rule 11.16(a)–(d), (f) and (g). The text of 

the proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is available on the Exchange’s website 

(https://markets.cboe.com/us/equities/ 

regulation/rule_filings/edga/), 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 

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 

Exchange Rule 11.16 to make permanent 

the Market-Wide Circuit Breaker 

(‘‘MWCB’’) pilot program. The proposal 

is substantively identical to New York 

Stock Exchange LLC (‘‘NYSE’’) Rule 

7.12 and NYSE American LLC (‘‘NYSE 

American’’) Rule 7.12E. 

The Pilot Rules 

The MWCB rules, including the 

Exchange’s Rule 11.16(a)–(d), (f) and (g), 

provide an important, automatic 

mechanism that is invoked to promote 

stability and investor confidence during 

periods of significant stress when cash 

equities securities experience extreme 

market-wide declines. The MWCB rules 

are designed to slow the effects of 

extreme price declines through 

coordinated trading halts across both 

cash equity and equity options 

securities markets. 

The cash equities rules governing 

MWCBs were first adopted in 1988 and, 

in 2012, all U.S. cash equity exchanges 

and FINRA amended their cash equities 

uniform rules on a pilot basis (the ‘‘Pilot 

Rules,’’ i.e., Rule 11.16(a)–(d), (f) and 

(g)).5 The Pilot Rules currently provide 

for trading halts in all cash equity 

securities during a severe market 

decline as measured by a single-day 

decline in the S&P 500 Index (‘‘SPX’’).6

Under the Pilot Rules, a market-wide 

trading halt will be triggered if SPX 

declines in price by specified 

percentages from the prior day’s closing 

price of that index. The triggers are set 

at three circuit breaker thresholds: 7% 

(Level 1), 13% (Level 2), and 20% 

(Level 3). A market decline that triggers 

a Level 1 or Level 2 halt after 9:30 a.m. 

and before 3:25 p.m. would halt marketwide trading for 15 minutes, while a 

similar market decline at or after 3:25 

p.m. would not halt market-wide 

trading. (Level 1 and Level 2 halts may 

occur only once a day.) A market 

decline that triggers a Level 3 halt at any 

time during the trading day would halt 

market-wide trading for the remainder 

of the trading day. 

The Commission approved the Pilot 

Rules, the term of which was to 

coincide with the pilot period for the 

Plan to Address Extraordinary Market 

Volatility Pursuant to Rule 608 of 

Regulation NMS (the ‘‘LULD Plan’’),7

including any extensions to the pilot 

period for the LULD Plan.8 In April 


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