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53 Id. 

54 17 CFR 240.17Ad–22(e)(6)(i). 

55The Commission also reviewed and considered 

the results of FICC’s impact analyses and believes 

that the analyses further support its findings 

regarding the consistency of the proposed changes 

with Rule 17Ad–22(e)(6)(i), for the reasons 

discussed in note 49 supra. 

56 Id. 

57 17 CFR 240.17Ad–22(e)(6)(iii). 

58 Id. 

59 In approving this Proposed Rule Change, the 

Commission has considered the proposed rules’ 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

60 15 U.S.C. 78s(b)(2). 

61 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. 94370 

(March 7, 2022), 87 FR 14071. 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 94778, 

87 FR 25069 (April 27, 2022). The Commission 

designated June 9, 2022 as the date by which the 

Commission shall approve or disapprove, or 

institute proceedings to determine whether to 

disapprove, the proposed rule change. 

current practice, on both SIFMA 

designated settlement dates and nonSIFMA designated settlement dates. The 

Commission also believes that the 

proposed Intraday VaR Charge would 

effectively mitigate the risks related to 

intraday increases in volatility and 

would address the increased risks FICC 

may face related to liquidating a 

Clearing Member’s portfolio following 

that Clearing Member’s default. 

Accordingly, the Commission believes 

the proposed rule would enhance 

FICC’s ability to effectively identify, 

measure and monitor its credit 

exposures and would enhance its ability 

to maintain sufficient financial 

resources to cover its credit exposure to 

each participant fully with a high degree 

of confidence, consistent with Rule 

17Ad–22(e)(4)(i) under the Act.53

C. Consistency With Rule 17Ad– 

22(e)(6)(i) 

Rule 17Ad–22(e)(6)(i) 54 under the Act 

requires, in part, a clearing agency 

establish, implement, maintain, and 

enforce written policies and procedures 

reasonably designed to cover its credit 

exposures to its participants by 

establishing a risk-based margin system 

that, at a minimum, considers, and 

produces margin levels commensurate 

with, the risks and particular attributes 

of each relevant product, portfolio, and 

market. 

A member’s margin (in the form of its 

Required Fund Deposit) is made up of 

risk-based components that are 

calculated and assessed daily to limit 

FICC’s credit exposures to its members. 

As discussed in Section II.B, FICC 

proposes to move DRC items to Cash 

Settlement. The Commission believes 

that the proposed rule change should 

help ensure that FICC produces margin 

levels commensurate with, the risks and 

particular attributes of each relevant 

product, portfolio, and market by better 

segregating the unrealized gains or 

losses associated with a Clearing 

Member’s margin portfolio from the 

portion of the margin that measures 

potential future exposure. Further, as 

discussed in Section II.C, FICC proposes 

to amend and remove certain thresholds 

and parameters in its determination of 

the Intraday Mark-to-Market Charge, 

and as discussed in Section II.D, FICC 

proposes to introduce an Intraday VaR 

Charge, which is designed to more 

effectively address the risks presented 

by significant intraday changes to 

market price volatility or a clearing 

member’s portfolio. The Commission 

believes these changes should enable 

FICC to assess a more appropriate level 

of margin that accounts for increases in 

these risks that may occur intraday.55

Accordingly, the Commission believes 

the proposed change is consistent with 

Rule 17Ad–22(e)(6)(i) under the Act.56

D. Consistency With 17Ad–22(e)(6)(iii) 

Rule 17Ad–22(e)(6)(iii) under the 

Act 57 requires a covered clearing 

agency to establish, implement, 

maintain and enforce written policies 

and procedures reasonably designed to 

cover its credit exposures to its 

participants by establishing a risk-based 

margin system that, at a minimum, 

calculates margin sufficient to cover its 

potential future exposure to participants 

in the interval between the last margin 

collection and the close out of positions 

following a participant default. 

As discussed above in Section II.B, 

FICC proposes to move certain DRC 

items to Cash Settlement. The 

Commission believes the proposed rule 

change would better segregate the 

unrealized gains or losses associated 

with a Clearing Member’s margin 

portfolio from the portion of the margin 

that measures potential future exposure 

and limit the build-up of systemic risk. 

By segregating the unrealized mark-tomarket gains and losses from the 

Required Fund Deposit, the Commission 

believes that the proposed changes 

would allow FICC to calculate amounts 

that are sufficient to cover FICC’s 

potential future exposure to Clearing 

Members in the interval between the 

last margin collection and the close out 

of positions following a participant 

default. Therefore, the Commission 

believes the proposed change is 

consistent with Rule 17Ad–22(e)(6)(iii) 

under the Act.58

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the Proposed 

Rule Change is consistent with the 

requirements of the Exchange Act, and 

in particular, the requirements of 

Section 17A of the Exchange Act 59 and 

the rules and regulations thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,60

that the Proposed Rule Change (SR– 

FICC–2022–002) be, and hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.61

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12733 Filed 6–13–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95069; File No. SR– 

NASDAQ–2022–017] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Order 

Approving Proposed Rule Change, as 

Modified by Amendment No. 1, To 

Modify Equity 4, Rule 4120 To Add 

Categories of Regulatory and 

Operational Halts, To Reorganize the 

Remaining Text of the Rule, and To 

Make Conforming Changes to Related 

Rules 

June 8, 2022. 

I. Introduction 

On February 22, 2022, The Nasdaq 

Stock Market LLC (‘‘Nasdaq’’ or 

‘‘Exchange’’) 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 a proposed rule change to 

modify Equity 4, Rule 4120 to add 

categories of regulatory and operational 

halts, to reorganize the remaining text of 

the rule, and to make conforming 

changes to related rules. The proposed 

rule change was published for comment 

in the Federal Register on March 11, 

2022.3 On April 21, 2022, pursuant to 

Section 19(b)(2) of the Act,4 the 

Commission designated a longer period 

within which to approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to disapprove the 

proposed rule change.5 On April 29, 

2022, the Exchange filed Amendment 

No. 1 to the proposed rule change, 

which amended and superseded the 


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6See Securities Exchange Act Release No. 94838 

(May 3, 2022), 87 FR 27683 (‘‘Amendment No. 1’’). 

The Commission received one comment letter on 

the proposed rule change, which does not relate to 

the substance of the proposed rule change. The 

comment letter is available at https://www.sec.gov/ 

comments/sr-nasdaq-2022-017/srnasdaq2022017- 

289449.htm. 

7See Securities Exchange Act Release No. 92071, 

86 FR 29846 (June 3, 2021) (S7–24–89) (‘‘Fiftieth 

Amendment Order’’). 

8A ‘‘Regulatory Halt’’ is ‘‘a halt declared by the 

Primary Listing Market in trading in one or more 

securities on all Trading Centers for regulatory 

purposes, including for the dissemination of 

material news, news pending, suspensions, or 

where otherwise necessary to maintain a fair and 

orderly market. A Regulatory Halt includes a 

trading pause triggered by Limit Up Limit Down, a 

halt based on Extraordinary Market Activity, a 

trading halt triggered by a Market-Wide Circuit 

Breaker, and a SIP Halt.’’ See Section X.A.10 of the 

Amended UTP Plan. 

9An ‘‘Operational Halt’’ is ‘‘a halt in trading in 

one or more securities only on a Market declared 

by such Participant and is not a Regulatory Halt.’’ 

See Section X.A.7 of the Amended UTP Plan. 

10The ‘‘Primary Listing Market’’ is ‘‘the national 

securities exchange on which an Eligible Security 

is listed. If an Eligible Security is listed on more 

than one national securities exchange, Primary 

Listing Market means the exchange on which the 

security has been listed the longest.’’ See Section 

X.A.8 of the Amended UTP Plan. 

11See Section X.C of the Amended UTP Plan. See 

also Section X.G of the Amended UTP Plan 

(requiring a Plan participant to halt trading for any 

security traded on its market if the Primary Listing 

Market declares a Regulatory Halt for the security). 

12See Section X.D of the Amended UTP Plan. See 

also Section X.H of the Amended UTP Plan (setting 

forth further requirements for notifications of the 

initiation and lifting of Regulatory Halts). 

13See Section X.E of the Amended UTP Plan. 

14See Section X.F of the Amended UTP Plan. 

15See Section X.B of the Amended UTP Plan. 

16Specifically, the Exchange proposes to 

incorporate the definitions for the following terms 

from the Amended UTP Plan: Extraordinary Market 

Activity, Material SIP Latency, Operating 

Committee, Operational Halt, Primary Listing 

Market, Processor, Regulatory Halt, SIP Halt, SIP 

Halt Resume Time, and SIP Outage. See Sections 

X.A.1, X.A.5, IV.A, X.A.7, X.A.8, III.Q, X.A.10, 

X.A.11, X.A.12, and X.A.13 of the Amended UTP 

Plan, respectively. 

17Specifically, the Exchange proposes to 

incorporate the definition of Trading Center from 

Rule 600(b)(95) of Regulation NMS. See 17 CFR 

242.600(b)(95). 

18Specifically, the Exchange proposes to relocate 

the following definitions within Rule 4120 without 

substantive change: Derivative Securities Product, 

IPO, Pre-Market Session, and Required Value. 

19Specifically, Regulation NMS defines Regular 

Trading Hours as the time between 9:30 a.m. and 

4:00 p.m. Eastern Time, or such other time as is set 

forth in the procedures established pursuant to 17 

CFR 242.605(a)(2). See 17 CFR 242.600(b)(77). 

20The Exchange proposes to make conforming 

changes to Rules 5710 and 5711 to replace the term 

‘‘Regular Market Session’’ with the term ‘‘Regular 

Trading Hours.’’ 21See Amendment No. 1, supra note 6, at 27694. 22Currently, Post-Market Session means the 

trading session that begins at 4:00 p.m. or 4:15 p.m., 

and that continues until 8:00 p.m. See current Rule 

4120(b)(4)(C). 23See Amendment No. 1, supra note 6, at 27686, 

27689. 24See id. at 27689. 25The Exchange proposes to define SIP to have 

the same meaning as the term Processor in the 

Amended UTP Plan or in the Consolidated Tape 

Association Plan, as applicable. See proposed Rule 

4120(a)(10). 26The Exchange proposes to define SIP Plan to 

mean the national market system plan governing 

the SIP. See proposed Rule 4120(a)(17). 

27The Amended UTP Plan provides that a 

Primary Listing Market may declare a Regulatory 

Halt in trading for any security for which it is the 

Primary Listing Market: as provided for in the rules 

of the Primary Listing Market; if it determines there 

is a SIP Outage, Material SIP Latency, or 

Extraordinary Market Activity; or in the event of 

national, regional, or localized disruption that 

necessitates a Regulatory Halt to maintain a fair and 

orderly market. See Section X.C.1 of the Amended 

UTP Plan. 

28Specifically, the Exchange proposes to relocate 

rule provisions relating to the following types of 

Continued 

proposed rule change as originally filed. 

Amendment No. 1 was published for 

comment in the Federal Register on 

May 9, 2022.6 This order approves the 

proposed rule change, as modified by 

Amendment No. 1. 

II. Description of the Proposal 

On May 28, 2021, the Commission 

approved the Fiftieth Amendment to the 

Joint Self-Regulatory Organization Plan 

(‘‘Plan’’) Governing the Collection, 

Consolidation and Dissemination of 

Quotation and Transaction Information 

for Nasdaq-Listed Securities Traded on 

Exchanges on an Unlisted Trading 

Privileges Basis (‘‘Amended UTP 

Plan’’),7 which revised the Plan’s 

provisions that governed Regulatory 

Halts 8 and Operational Halts.9 In 

particular, the Amended UTP Plan sets 

forth the circumstances in which a 

Primary Listing Market 10 may declare a 

Regulatory Halt for any security for 

which it is the Primary Listing Market, 

and the factors a Primary Listing Market 

will consider when determining 

whether to declare a Regulatory Halt.11

The Amended UTP Plan also sets forth 

the process for initiating a Regulatory 

Halt, including the start time of a 

Regulatory Halt and the dissemination 

of notice of a Regulatory Halt,12 as well 

as the process for resuming trading after 

a Regulatory Halt other than a SIP Halt, 

including the Primary Listing Market’s 

determination of a resumption and the 

resumption time.13 In addition, the 

Amended UTP Plan sets forth a specific 

process for resumption of trading after 

a SIP Halt, including the Primary Listing 

Market’s determination of a resumption 

and the SIP Halt Resume Time.14

Finally, the Amended UTP Plan 

requires a Plan participant to notify the 

Processor where it has declared an 

Operational Halt.15

The Exchange proposes to amend 

Rule 4120 to incorporate provisions of 

the Amended UTP Plan, including the 

provisions that were approved as part of 

the Fiftieth Amendment to the Plan, and 

to reorganize certain existing text in 

Rule 4120 without substantive change 

other than to conform to the language of 

the Amended UTP Plan. The Exchange 

also proposes to add new text in Rule 

4120 pursuant to, and to implement, the 

provisions of the Amended UTP Plan. 

Finally, the Exchange proposes to make 

conforming changes throughout its rules 

to reflect Rule 4120, as amended by this 

proposal. 

Proposed Rule 4120(a) would set forth 

the definitions for certain terms that are 

used in the rule. In particular, proposed 

Rule 4120(a) would incorporate certain 

definitions from the Amended UTP 

Plan 16 and Commission rules,17 and 

would include certain relocated 

definitions that currently exist in Rule 

4120.18 The Exchange also proposes to 

incorporate the definition of Regular 

Trading Hours from the Amended UTP 

Plan, which refers to the definition in 

Rule 600 of Regulation NMS (i.e., 

between 9:30 a.m. and 4:00 p.m. Eastern 

Time).19 This reflects a change from the 

Exchange’s current definition of Regular 

Market Session, which means the 

trading session from 9:30 a.m. until 4:00 

p.m. or 4:15 p.m.20 According to the 

Exchange, no securities currently traded 

on the Exchange close at 4:15 p.m. and 

therefore the alternative closing time 

reflected in the current definition of 

Regular Market Session is 

unnecessary.21 In connection with the 

proposed definition of Regular Trading 

Hours, the Exchange proposes to define 

Post-Market Session to mean the trading 

session that begins after Regular Trading 

Hours at approximately 4:00 p.m., and 

that continues until 8:00 p.m.22

According to the Exchange, this 

proposed definition will reflect that all 

securities traded on the Exchange 

commence their closing process at 4:00 

p.m.23 The Exchange also states that the 

word ‘‘approximately’’ in the proposed 

definition reflects that the Exchange’s 

closing cross preceding the Post-Market 

Session at 4:00 p.m. is not 

instantaneous.24 Finally, the Exchange 

proposes to add definitions for the terms 

SIP 25 and SIP Plan.26

Proposed Rule 4120(b)(1) would set 

forth three categories of Regulatory 

Halts: (a) those provided by the 

Amended UTP Plan; 27 (b) discretionary 

Regulatory Halts; and (3) mandatory 

Regulatory Halts. With respect to 

discretionary Regulatory Halts, the 

Exchange proposes to relocate, without 

substantive change other than to 

conform to the language of the 

Amended UTP Plan, certain existing 

provisions of Rule 4120 under which 

the Exchange may halt trading.28 The 


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halts: request of certain information from the issuer 

(with revisions to conform to the language of the 

Amended UTP Plan regarding Regulatory Halts to 

maintain a fair and orderly market and regarding 

the considerations of a Primary Listing Market for 

initiating a Regulatory Halt); dissemination of 

material news; in connection with an IPO; and halt 

of index warrants, Derivative Securities Products, 

American Depositary Receipts, and other securities 

listed on the Exchange under specified conditions. 

See proposed Rule 4120(b)(1)(B). Rule 4120 

currently permits the Exchange to halt trading in a 

security listed on the Exchange, if the security is 

listed on another national securities exchange and 

that exchange halts the security for regulatory 

reasons. The Exchange now proposes to remove the 

reference to another national securities exchange 

because under the Amended UTP Plan, if the 

Nasdaq-listed security is also listed on another 

national securities exchange, only the Primary 

Listing Market may declare a Regulatory Halt, and 

the Exchange would be required to halt trading in 

a security if its Primary Listing Market declares a 

Regulatory Halt. See proposed Rule 

4120(b)(1)(B)(vi). 

29See Section X.C.1(c) of the Amended UTP Plan. 

30The Exchange proposes to delete current Rule 

4120(a)(11), which has been superseded by the 

LULD Plan. 

31The Exchange proposes to delete current Rule 

4120(a)(6), which would be superseded by the 

provisions of the Amended UTP Plan relating to 

Regulatory Halts due to Extraordinary Market 

Activity (as proposed to be incorporated within 

proposed Rule 4120), as well as current Rule 

4120(a)(3)(A), which will be superseded by the 

Exchange’s proposed rules governing Operational 

Halts. 

32Specifically, the Exchange proposes to relocate 

rule provisions relating to the following types of 

halts: Derivative Securities Products when certain 

information is not disseminated to all market 

participants at the same time; the Limit Up-Limit 

Down (‘‘LULD’’) mechanism; and Equity Investment 

Tracking Stocks and Subscription Receipts under 

specified conditions. See proposed Rule 

4120(b)(1)(C). 

33See proposed Rule 4120(b)(1)(C)(iii). 

34See Sections X.C.2, X.D, and X.H of the 

Amended UTP Plan. 

35The Exchange proposes to delete current Rule 

4120(c)(4), which describes the start time of a 

trading halt and the manner in which the Exchange 

disseminates notice of the commencement of a 

trading halt, and current Rule 4120(c)(6)(A), which 

describes trading halts due to extraordinary market 

activity. These rules would be replaced by the 

proposed rules that incorporate provisions of the 

Amended UTP Plan that govern the start time and 

notification of trading halts, including trading halts 

due to Extraordinary Market Activity. 

36See Section X.G of the Amended UTP Plan. 

37The Exchange proposes to delete current Rule 

4120(a)(2), which permits the Exchange to halt 

trading in a security listed on another exchange 

during a trading halt imposed by such exchange to 

permit the dissemination of material news. 

38See proposed Rule 4120(b)(3)(A)(ii). 

39See Sections X.E.1 and X.H of the Amended 

UTP Plan. The Exchange proposes to delete current 

Rule 4120(c)(5), which describes the resumption 

time following a trading halt and the manner in 

which the Exchange disseminates notice of the 

resumption, and current Rule 4120(c)(6)(B), which 

describes resumptions following trading halts due 

to extraordinary market activity. These rules would 

be replaced by proposed rules that incorporate the 

provisions of the Amended UTP Plan that govern 

the resumption of trading following trading halts, 

including trading halts due to Extraordinary Market 

Activity. 

40See proposed Rule 4120(b)(4)(A)(i)a–e. The 

Exchange also proposes to clarify that the 

resumption process in proposed Rule 

4120(b)(4)(A)(i)a–e applies to all types of Regulatory 

Halts other than SIP Halts or IPO Halts. See 

Amendment No. 1, supra note 6, at 27691. 

Similarly, the Exchange proposes to amend Rule 

4753(b) to specify that the halt cross process in Rule 

4753 applies generally to Nasdaq-listed securities 

that are the subject of a trading halt or pause under 

Rule 4120. 

41See Section X.E.2 of the Amended UTP Plan. 

42See proposed Rule 4120(b)(4)(A)(ii). 

43See Section X.F of the Amended UTP Plan. 

44See id. 

45See proposed Rule 4120(b)(4)(B)(i)b. 

46See Section X.F.2 of the Amended UTP Plan 

(stating that the Primary Listing Market ‘‘shall 

provide a minimum notice of a SIP Halt Resume 

Time, as specified by the rules of the Primary 

Listing Market, during which period market 

participants may enter quotes and orders in affected 

securities’’). 

47See proposed Rule 4120(b)(4)(B)(i)b. 

48See Section X.F.2 of the Amended UTP Plan 

(stating that ‘‘[d]uring Regular Trading Hours, the 

last SIP Halt Resume Time before the end of Regular 

Trading Hours shall be an amount of time as 

specified by the rules of the Primary Listing 

Market’’). 

49See proposed Rule 4120(b)(4)(B)(i)b. If trading 

has not resumed by this time, the Exchange would 

establish its closing price in the halted securities 

using its contingency closing process in Rule 

4754(b)(7). See Amendment No. 1, supra note 6, at 

27692. 

Exchange also proposes to incorporate 

the provision of the Amended UTP Plan 

that permits Regulatory Halts in 

connection with a national, regional, or 

localized disruption.29 In addition, the 

Exchange proposes to delete existing 

rule text that describes a halt type that 

is obsolete 30 and halt types that are 

superseded by the new proposed text 

within Rule 4120.31

With respect to mandatory Regulatory 

Halts, the Exchange proposes to 

relocate, without substantive change, 

certain existing provisions of Rule 4120 

under which the Exchange is required to 

halt trading.32 The Exchange also 

proposes to make clear that a trading 

halt due to extraordinary market 

volatility (i.e., the market-wide circuit 

breaker) is a mandatory Regulatory 

Halt.33

Proposed Rule 4120(b)(2) would set 

forth the procedures for initiating a 

Regulatory Halt, which would be 

substantively identical to the analogous 

provisions in the Amended UTP Plan 

that were approved as part of the 

Fiftieth Amendment. Consistent with 

the Amended UTP Plan,34 proposed 

Rule 4120(b)(2) would govern the start 

time of a Regulatory Halt, the 

notification of a Regulatory Halt, 

retroactive halts, consultations and 

considerations prior to declaring a 

Regulatory Halt, and evaluations after 

the declaration of a Regulatory Halt.35

Proposed Rule 4120(b)(3) would 

govern the scenario where another 

exchange initiates a Regulatory Halt. 

Consistent with the Amended UTP 

Plan,36 proposed Rule 4120(b)(3) would 

provide that the Exchange would halt 

trading for a security when the Primary 

Listing Market declares a Regulatory 

Halt for the security.37 The Exchange 

also proposes to relocate, without 

substantive change, existing provisions 

of Rule 4120 that govern halts for 

Derivative Securities Products that are 

traded on the Exchange pursuant to 

unlisted trading privileges.38

Proposed Rule 4120(b)(4) would set 

forth the process for the resumption of 

trading after a Regulatory Halt. With 

respect to Regulatory Halts other than 

IPO or SIP Halts, proposed Rule 

4120(b)(4)(A) would provide for the 

timing and notification of resumption 

where the Exchange is the Primary 

Listing Market, consistent with the 

Amended UTP Plan.39 The Exchange 

also proposes to relocate, without 

substantive change, existing provisions 

of Rule 4120 that govern the process for 

the resumption of trading following 

Regulatory Halts other than IPO or SIP 

halts, including specific provisions that 

govern the process for the resumption of 

trading following LULD halts.40

Moreover, consistent with the Amended 

UTP Plan,41 proposed Rule 

4120(b)(4)(A) would provide for the 

timing of a resumption where the 

Exchange is not the Primary Listing 

Market.42

Proposed Rule 4120(b)(4)(B) would 

set forth the process for the resumption 

of trading after a SIP Halt. Consistent 

with the Amended UTP Plan,43

proposed Rule 4120(b)(4)(B) would set 

forth the considerations for the 

Exchange in determining the SIP Halt 

Resume Time, and the Exchange’s 

ability to delay the SIP Halt Resume 

Time or stagger the SIP Halt Resume 

Time for multiple symbols. Also 

consistent with the Amended UTP 

Plan,44 the Exchange would terminate a 

SIP Halt with a notification that 

specifies a SIP Halt Resume Time.45 As 

required by the Amended UTP Plan,46

the Exchange proposes to provide a 

minimum five-minute notice of a SIP 

Halt Resume Time, during which period 

(‘‘Display Only Period’’) market 

participants may enter quotes and 

orders in the affected securities.47 Also 

as required by the Amended UTP 

Plan,48 the Exchange proposes to 

provide that, during Regular Trading 

Hours, the last SIP Halt Resume Time 

would be 20 minutes before the end of 

Regular Trading Hours (e.g., 3:40 p.m. 

ET).49 The Exchange states that 20 

minutes before the end of Regular 

Trading Hours is the latest time that the 


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50See Amendment No. 1, supra note 6, at 27692. 51See proposed Rule 4120(b)(4)(B)(i)c. See also 

Section X.F of the Amended UTP Plan (stating that 

the Primary Listing Market ‘‘retains discretion to 

delay the SIP Halt Resume Time if it believes 

trading will not resume in a fair and orderly 

manner’’). 

52See Section X.F.3 of the Amended UTP Plan 

(stating that ‘‘[d]uring Regular Trading Hours, if the 

Primary Listing Market does not open a security 

within the amount of time as specified by the rules 

of the Primary Listing Market after the SIP Halt 

Resume Time, a Participant may resume trading in 

that security’’). 

53See proposed Rule 4120(b)(4)(B)(i)d. 

54See Amendment No. 1, supra note 6, at 27692. 

55See proposed Rule 4120(b)(4)(B)(ii). 

56See Section X.F.3 of the Amended UTP Plan. 

57See proposed Rule 4120(b)(4)(B)(ii). 

58See proposed Rule 4120(b)(4)(C). 59See Section X.B of the Amended UTP Plan. 60As proposed, trading in a security subject to an 

Operational Halt would resume at the time 

specified by the Exchange in a notice disseminated 

in the same manner as a notice initiating a 

Regulatory Halt. See proposed Rule 4120(c)(3)(C). 61See proposed Rule 4120(c)(3)(A). 62See id. For any Operational Halt for which a 

halt cross will not occur, consistent with current 

Rule 4120, orders entered during the halt will not 

be accepted, unless subject to instructions that the 

order will be directed to another exchange as 

described in Rule 4758. See proposed Rule 

4120(c)(3)(B). The Exchange also proposes to make 

conforming changes to Rule 4753(b) to provide that, 

for Nasdaq-listed securities that are the subject of 

a trading halt or pause pursuant to Rule 4120, 

market hours trading will commence when the 

Exchange releases the security, in the case of a 

security for which the Exchange determines not to 

hold a halt cross. 

63See Amendment No. 1, supra note 6, at 27693. 

64See id. 

65See proposed Rule 4120(c)(3)(A). 

66See proposed changes to Rule 4702, Rule 4753, 

Rule 4754, IM–5315–2, IM–5405–1, IM–5505–1, 

and Rule 5711. 

67See proposed changes to IM–5220. 

68See proposed changes to Rule 5711. 

69See proposed changes to IM–5220. 

70See current Rule 4120(c)(1) and (2). 

71 15 U.S.C. 78f(b)(5). 

Exchange believes that it would be able 

to conduct an orderly halt cross process 

and without impacting the closing cross 

process.50

For a SIP Halt initiated by the 

Exchange, the Exchange also proposes 

to use the same reopening process as for 

non-IPO and non-LULD Regulatory 

Halts, except that the Display Only 

Period will be a minimum of five 

minutes, and may be extended at the 

discretion of the Exchange if it believes 

that trading will not resume in a fair and 

orderly manner.51 Furthermore, as 

required by the Amended UTP Plan,52

the Exchange proposes that, for a SIP 

Halt initiated by the Exchange, if during 

Regular Trading Hours, the Exchange 

does not resume trading in a security for 

which it is the Primary Listing Market 

within 10 minutes after the SIP Halt 

Resume Time, then other markets may 

resume trading in that security.53 The 

Exchange states that the proposed 10- 

minute time period corresponds to a 10- 

minute time period set forth in the 

LULD Plan, after which the Processor 

may update LULD price bands for 

paused securities if the primary listing 

market for such security is unable to 

reopen trading following a trading pause 

due to a systems or technology issue.54

With respect to a SIP Halt initiated by 

another exchange that is the Primary 

Listing Market, during Regular Trading 

Hours, the Exchange would resume 

trading after trading has resumed on the 

Primary Listing Market or notice has 

been received from the Primary Listing 

Market that trading may resume.55

Consistent with the Amended UTP 

Plan,56 during Regular Trading Hours, if 

the Primary Listing Market does not 

open a security within the amount of 

time specified by the rules of the 

Primary Listing Market after the SIP 

Halt Resume Time, the Exchange may 

resume trading in that security; and 

outside Regular Trading Hours, the 

Exchange may resume trading 

immediately after the SIP Halt Resume 

Time.57

The Exchange proposes to relocate, 

without substantive change, the existing 

provisions of Rule 4120 that govern the 

process for resumption of trading 

following an IPO halt.58

The Exchange proposes to adopt Rule 

4120(c) to govern Operational Halts on 

the Exchange. Consistent with current 

Rule 4120, proposed Rule 4120(c)(1) 

would allow the Exchange to declare an 

Operational Halt in a security listed on 

the Exchange if the Primary Listing 

Market imposes an Operational Halt in 

a security that is a derivative or 

component of the security listed on the 

Exchange. Proposed Rule 4120(c)(1) 

would also allow the Exchange to 

declare an Operational Halt for a 

security if the Exchange itself is 

experiencing extraordinary market 

activity or when it is otherwise 

necessary to maintain a fair and orderly 

market or in the public interest. 

Consistent with the Amended UTP 

Plan,59 proposed Rule 4120(c)(2) would 

require the Exchange to notify the 

Processor if it has concerns about its 

ability to collect and transmit quotation 

and transactions information, or where 

it has declared an Operational Halt or 

suspension of trading. 

Under proposed Rule 4120(c)(3), the 

Exchange may resume trading following 

an Operational Halt when it determines 

that trading may resume on its market 

in a fair and orderly manner and in 

accordance with its rules.60 As 

proposed, when the Exchange is the 

Primary Listing Market, the resumption 

of trading after an Operational Halt 

would follow the same reopening 

process as for a non-IPO and non-LULD 

Regulatory Halt.61 However, the 

Exchange would be able to determine to 

resume trading without a halt cross if it 

determines that such action is in the 

best interests of the market.62 According 

to the Exchange, in certain 

circumstances, a halt cross following an 

Operational Halt, which only applies to 

the Exchange, may be disruptive or 

result in trade-throughs.63 The 

Exchange also states that another 

exchange already has the flexibility to 

reopen trading without an auction 

following an Operational Halt.64 As 

proposed, when the Exchange is not the 

Primary Listing Market, but halted 

trading based on an Operational Halt 

initiated by the Primary Listing Market, 

the Exchange would be able to resume 

trading once it has determined that 

trading may be resumed in a fair and 

orderly manner.65

Finally, the Exchange proposes to 

make non-substantive and conforming 

changes throughout its rules. 

Specifically, the Exchange proposes 

update its rules that currently contain 

cross-citations to various provisions of 

Rule 4120 to reflect the citations for 

these same provisions in proposed Rule 

4120.66 The Exchange also proposes to 

remove references to the obsolete 

Intermarket Trading System 67 and to 

update references to the obsolete circuit 

breaker in current Rule 4120(a)(11) with 

references to the LULD mechanism.68 In 

addition, the Exchange proposes to 

remove rule text relating to the 

applicability of Rule 4120 to duallylisted securities, because the Amended 

UTP Plan defines the Primary Listing 

Market for a dually-listed security and 

sets forth the role of the Primary Listing 

Market in trading halts.69 Moreover, the 

Exchange proposes to remove rule text 

relating to Exchange notification of 

material news by issuers, which is 

already covered elsewhere in the 

Exchange’s rules.70

III. Discussion and Commission 

Findings 

The Commission believes that the 

proposed rule change, as modified by 

Amendment No. 1, is consistent with 

the requirements of the Act and the 

rules and regulations thereunder that 

are applicable to a national securities 

exchange. In particular, the Commission 

finds that the proposed rule change, as 

modified by Amendment No. 1, is 

consistent with Section 6(b)(5) of the 

Act,71 which requires, among other 

things, that the rules of a national 

securities exchange be designed to 

prevent fraudulent and manipulative 


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72See Fiftieth Amendment Order, supra note 7, 

at 29848. 

73See id. 

74See id. 

75See supra notes 19–23 and accompanying text 

(describing the proposal to replace the term 

‘‘Regular Market Session’’ with the term ‘‘Regular 

Trading Hours’’ and to make conforming and 

clarifying changes to the definition of ‘‘Post-Market 

Session’’) and note 28 and accompanying text 

(describing the proposal to amend Rule 4120 to 

conform to the fair and orderly market standard for 

Regulatory Halts in the Amended UTP Plan and to 

reflect that, under the Amended UTP Plan, only the 

Primary Listing Market may declare a Regulatory 

Halt, and the Exchange would be required to halt 

trading in a security if its Primary Listing Market 

declares a Regulatory Halt). Also as described 

above, the Exchange proposes to add the marketwide circuit breaker halt as a type of mandatory 

Regulatory Halt. See supra note 33 and 

accompanying text. 

76See supra notes 46–54 and accompanying text. 

77See current Rule 4120(c)(7). 

78As described above, for a SIP Halt initiated by 

the Exchange, the Exchange proposes to resume 

trading using the same reopening process as for 

non-IPO and non-LULD Regulatory Halts. See supra 

note 51 and accompanying text. 

79The Exchange currently has authority under its 

bylaws to implement an Operational Halt under 

certain circumstances. See Article IX, Section 5 of 

the Exchange’s By-Laws (stating that the Exchange 

board, or such person or persons as may be 

designated by the board, in the event of an 

emergency or extraordinary market conditions, has 

the authority to take any action regarding the 

trading in or operation of the Exchange). 

80See supra notes 30–31 (describing the deletion 

of rule provisions that are superseded by the LULD 

Plan, the Amended UTP Plan, and the proposed 

rules on Operational Halts), notes 35 and 39 

(describing the deletion of rule provisions that are 

superseded by the Amended UTP Plan), notes 67– 

68 and accompany text (describing the deletion of 

references to the obsolete Intermarket Trading 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. 

As described above, the Exchange 

proposes to amend Rule 4120 to 

incorporate provisions of the Amended 

UTP Plan, including the provisions that 

were approved as part of the Fiftieth 

Amendment to the Plan; reorganize 

certain existing text in Rule 4120 

without substantive change, other than 

to conform to the language of the 

Amended UTP Plan; add new text in 

Rule 4120 pursuant to the provisions of 

the Amended UTP Plan; and make 

conforming changes throughout its rules 

to reflect Rule 4120, as amended by this 

proposal. 

In approving the Fiftieth Amendment 

to the Plan, the Commission stated that 

the amendment established a clear and 

uniform approach with respect to 

trading halts under various defined 

circumstances.72 In particular, the 

Commission stated that the Fiftieth 

Amendment provided uniform rules 

that govern how Plan participants will 

address, among other things, the 

initiation, implementation, and 

communication of trading halts, as well 

as the resumption of trading after a 

trading halt, thereby clarifying the 

procedures to be followed and the 

standards to be applied, improving 

coordination and certainty among the 

Plan participants and other market 

participants, and enhancing the 

resiliency and integrity of market 

systems.73 The Commission also stated 

that the requirement for Primary Listing 

Markets to make good-faith 

determinations concerning the 

appropriateness of declaring a 

Regulatory Halt and resuming trading 

thereafter should promote fair and 

orderly markets and the protection of 

investors, because it encourages Primary 

Listing Markets to consider the broader 

interests of the national market system 

and addresses potential concerns that 

Primary Listing Markets may be subject 

to commercial pressures in making 

decisions to call a Regulatory Halt and 

resuming trading thereafter.74

The Commission believes that the 

Exchange’s proposal to incorporate 

provisions of the Amended UTP Plan, 

including the provisions that were 

approved as part of the Fiftieth 

Amendment, is consistent with the goal 

of establishing a clear and uniform 

approach with respect to trading halts 

under various defined circumstances, 

improving coordination and certainty 

among the Plan participants and other 

market participants, enhancing the 

resiliency and integrity of market 

systems, and encouraging Primary 

Listing Markets to consider the broader 

interests of the national market system 

in declaring a Regulatory Halt and 

resuming trading thereafter. The 

Commission similarly believes that the 

Exchange’s proposal to reorganize the 

provisions of existing Rule 4120 that 

describe the various types of 

discretionary and mandatory Regulatory 

Halts, with changes to conform these 

provisions to the language of the 

Amended UTP Plan, is consistent with 

these goals.75

As described above, the 

implementation of certain provisions of 

the Amended UTP Plan, which were 

approved as part of the Fiftieth 

Amendment, requires the Exchange to 

adopt certain rules.76 In accordance 

with these provisions of the Amended 

UTP Plan, the Exchange proposes to 

adopt a five-minute minimum notice 

and Display Only Period for a SIP Halt 

Resume Time, which is consistent with 

the minimum length of the Display Only 

Period that the Exchange applies to 

certain other types of Regulatory 

Halts.77 The Exchange also proposes to 

establish the last SIP Halt Resume Time 

as 20 minutes before the end of Regular 

Trading Hours, which is designed to 

allow the Exchange to conduct an 

orderly halt cross process before the end 

of Regular Trading Hours and without 

impacting the closing cross process.78

Moreover, the Exchange proposes to 

provide a 10-minute waiting period for 

other markets to resume trading in a 

security, if the Exchange is the Primary 

Listing Market for the security and does 

not resume trading following the SIP 

Halt Resume Time, which is similar to 

a waiting period that is currently in the 

LULD Plan. The Commission believes 

that these aspects of the proposal are 

reasonably designed to allow the 

Exchange to implement the Fiftieth 

Amendment to the Plan. 

Furthermore, as described above, the 

Exchange proposes to specify in Rule 

4120(c) the circumstances under which 

it may declare an Operational Halt 

(which applies only to trading on the 

Exchange), as well as the process for 

initiating an Operational Halt and 

resuming trading following an 

Operational Halt. The Exchange 

proposes to use the existing halt cross 

process to reopen trading following an 

Operational Halt, although the Exchange 

would be permitted to reopen trading 

following an Operational Halt without a 

halt cross if it determines such action to 

be in the best interest of the market. The 

Commission believes that the proposed 

rules governing Operational Halts on the 

Exchange are reasonably designed to 

allow the Exchange to halt trading 

(which applies only to trading on the 

Exchange) when there are unusual 

conditions with respect to trading on 

the Exchange and when necessary to 

main a fair and orderly market on the 

Exchange.79 The Commission also 

believes that the proposed rules would 

allow the Exchange to resume trading 

following an Operational Halt in a fair 

and orderly manner using the 

Exchange’s established halt cross 

process, while providing the Exchange 

the ability to reopen trading without a 

halt cross if that is in the best interest 

of the market, including when trading 

has continued in a fair and orderly 

manner on other markets. 

Finally, the Commission believes that 

the proposed non-substantive and 

conforming changes would remove 

obsolete or superseded text from the 

Exchange’s rules 80 and ensure internal 


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system and circuit breaker), and note 70 and 

accompanying text (describing the deletion of rule 

provisions that are covered elsewhere in the 

Exchange’s rules). 

81See supra note 66 and accompany text 

(describing updates to the cross-citations to the 

provisions within Rule 4120) and note 69 and 

accompany text (describing deletions to ensure 

consistency with the definition and role of the 

Primary Listing Market under the Amended UTP 

Plan). See also supra note 40 (describing the 

proposal to relocate the provisions of existing Rule 

4120 that describe the reopening process following 

a Regulatory Halt, with a proposed change to clarify 

the applicability of the process to the various types 

of Regulatory Halts, and the proposal to amend Rule 

4753(b) to specify that the halt cross process in Rule 

4753 applies generally to Nasdaq-listed securities 

that are the subject of a trading halt or pause in Rule 

4120). 

82 15 U.S.C. 78s(b)(2). 

83 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5OCC’s By-Laws and Rules can be found on 

OCC’s public website: https://www.theocc.com/ 

Company-Information/Documents-and-Archives/ 

By-Laws-and-Rules. 

6OCC was designated as a SIFMU under Title VIII 

of the Dodd-Frank Wall Street Reform and 

Consumer Protection Act of 2010. 12 U.S.C. 

5465(e)(1). 

7See Exchange Act Release No. 90797 (Dec. 23, 

2020), 85 FR 86592, 86593 (Dec. 30, 2020) (File No. 

SR–OCC–2020–014). 

consistency within the Exchange’s 

rules.81

For the foregoing reasons, the 

Commission finds that the proposed 

rule change, as modified by Amendment 

No. 1, is consistent with the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,82 that the 

proposed rule change (SR–NASDAQ– 

2022–017), as modified by Amendment 

No. 1, be, and hereby is approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.83

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12732 Filed 6–13–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95068; File No. SR–OCC– 

2022–008] 

Clearing Agency; The Options Clearing 

Corporation; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Concerning Adoption of 

a Cybersecurity Attestation Program 

June 8, 2022. 

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 May 25, 

2022, The Options Clearing Corporation 

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

Exchange Commission (‘‘Commission’’) 

the proposed rule change as described 

in Items I, II, and III below, which Items 

have been prepared primarily by OCC. 

OCC filed the proposed rule change 

pursuant to Section 19(b)(3)(A) 3 of the 

Act and Rule 19b–4(f)(6) 4 thereunder. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The proposed rule change would 

amend the OCC’s Rules to (1) define 

‘‘Cybersecurity Confirmation’’ as a 

signed, written representation that 

addresses the submitting firm’s 

cybersecurity program; and (2) enhance 

the OCC application requirements and 

ongoing requirements for applicants for 

clearing membership (‘‘Applicants’’) 

and Clearing Members to require (a) 

each Applicant to provide a completed 

Cybersecurity Confirmation as part of its 

application materials, and (b) each 

Clearing Member to deliver to OCC a 

complete, updated Cybersecurity 

Confirmation at least every two years, as 

described in greater detail below. The 

proposed changes to OCC’s Rules are 

included as Exhibit 5 of File No. SR– 

OCC–2022–008. Material proposed to be 

added to the Rules as currently in effect 

is underlined and material proposed to 

be deleted is marked in strikethrough 

text. All capitalized terms not defined 

herein have the same meaning as set 

forth in the OCC By-Laws and Rules.5

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, 

OCC 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. OCC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

(1) Purpose 

Overview 

OCC is proposing to modify the Rules 

in order to (1) define ‘‘Cybersecurity 

Confirmation’’ as a signed, written 

representation that addresses the 

submitting firm’s cybersecurity 

program; and (2) enhance its existing 

practices to require that (a) all 

Applicants deliver a complete 

Cybersecurity Confirmation as part of 

their application materials, and (b) all 

Clearing Members to deliver a complete, 

updated Cybersecurity Confirmation at 

least every two years, on a date 

established by OCC. 

As described in more detail below, 

the Cybersecurity Confirmation would 

help OCC assess the cybersecurity risks 

that may be introduced to it by Clearing 

Members and Applicants that connect to 

OCC’s networks and systems. The 

proposed Cybersecurity Confirmation 

would allow OCC to better assess its 

Clearing Members’ and Applicants’ 

cybersecurity programs and frameworks 

and identify possible cybersecurity risk 

exposures. Based on this information, 

OCC could take action to enhance its 

existing controls and mitigate identified 

risks and potential impacts to OCC’s 

operations. 

OCC believes it is prudent to 

implement a standardized approach for 

due diligence of cybersecurity risks that 

it may face through its interconnections 

to Clearing Members. As a designated 

systemically important financial market 

utility (‘‘SIFMU’’),6 a failure or 

disruption to OCC could increase the 

risk of significant liquidity problems 

spreading among financial institutions 

or markets and thereby threaten the 

stability of the financial system in the 

United States. Given its designation as 

a SIFMU, OCC believes it is prudent to 

enhance its understanding of endpoint 

security frameworks so that its network 

and systems remain protected against 

cyberattacks. 

OCC maintains a Third-Party Risk 

Management (‘‘TPRM’’) Framework that 

is designed to enable OCC to identify, 

measure and manage potential 

operational, information technology and 

security risks arising from third-parties, 

including Clearing Members and 

Applicants.7 Under the TPRM 

framework, OCC obtains information 

regarding the security of an Applicant’s 

systems and cybersecurity program 

prior to admitting the firm as a Clearing 

Member and permitting it to connect 

directly to OCC or through another 

means, such as a through a third-party 

service provider, service bureau, 

network, or the internet. OCC obtains 

information regarding the security of a 

Clearing Member’s systems and 

cybersecurity program on a periodic 

basis thereafter through risk 


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