29820 Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices 

17 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)(iii). 4 17 CFR 240.19b–4(f)(6). 

5See Rule 1.1, Definition of ‘‘Designated Primary 

Market-Maker and DPM’’. 

6See id. 

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 No. 

SR–LTSE–2021–03, and should be 

submitted on or before June 24, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–11612 Filed 6–2–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92057; File No. SR–CBOE– 

2021–034] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Rule 3.54 and 

Rule 3.10 

May 27, 2021. 

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 May 20, 

2021, Cboe Exchange, Inc. (the 

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

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the Exchange. The 

Exchange filed the proposal as a ‘‘noncontroversial’’ 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 Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

Rule 3.54 and Rule 3.10. The text of the 

proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

AboutCBOE/CBOELegalRegulatory

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

the Secretary, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

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 

Rule 3.54 in connection with a 

Designated Primary Market-Maker 

(‘‘DPM’’) Designee. 

Pursuant to Rule 3.54(a), a DPM may 

act as a DPM solely through its DPM 

Designees. A ‘‘DPM Designee’’ is an 

individual who is approved by the 

Exchange to represent a DPM in its 

capacity as a DPM. An individual must 

satisfy various requirements, which are 

included in Rule 3.54(b), in order to be 

a DPM Designee of a DPM. Specifically, 

current Rule 3.54(b)(2) provides that, as 

one of the requirements, the individual 

must be a Responsible Person of the 

DPM. Additionally, pursuant to current 

Rule 3.9(a), each Trading Permit Holder 

(‘‘TPH’’) organization that is the holder 

of a Trading Permit that provides 

electronic access to the Exchange must 

designate at least one individual as the 

Responsible Person for that TPH 

organization. The Exchange notes that 

Off-Floor DPMs, which is a DPM 

authorized to function remotely away 

from the Exchange’s trading floor,5 must 

hold Trading Permits that provide 

electronic access to the Exchange. Rule 

3.9(a) provides that a Responsible 

Person must represent the TPH 

organization with respect to a TPH 

organization’s electronic Trading 

Permit(s) in all matters relating to the 

Exchange, and must be a U.S.-based 

officer, director or management-level 

employee of the TPH organization, who 

is responsible for the direct supervision 

and control of Associated Persons of 

that TPH organization. Rule 3.9(b) 

provides that each TPH organization 

must designate an individual nominee 

to represent the organization with 

respect to each Floor Broker Trading 

Permit or Market-Maker Floor Trading 

Permit in all matters relating to the 

Exchange. Thus, an On-Floor DPM, 

which operates on the Exchange’s 

trading floor,6 is required to have a 

nominee for its Market-Maker Floor 

Trading Permit. Rule 3.9(b) provides, 

among other things, that each nominee 

of a TPH organization is required to be 

registered as a Market-Maker if holding 

a Market-Making Trading Permit, have 

authorized trading functions, and 

perform Exchange-approved trading 

functions only on behalf of one TPH 

organization. As a result, a nominee is 

required to be materially involved in the 

daily operation of the Exchange 

business activities of the TPH 

organization for which the person is a 

nominee. 

Rule 3.10(a) requires, among other 

things, any individual designated to act 

as a Responsible Person or nominee 

desiring to act in one or more of the 

trading functions authorized by the 

Rules of the Exchange (‘‘Rules’’, and 

individually, ‘‘Rule’’) to submit an 

application to the TPH Department in a 

form and manner prescribed by the 

Exchange. Additionally, Rule 3.10(d) 

provides that the TPH Department shall 

investigate, among other applicants, 

each applicant applying to be a 

Responsible Person or nominee (with 

the exception of any associated person 

applicant that is a current Trading 

Permit Holder, Responsible Person or 

nominee, any applicant that was a 

Trading Permit Holder, Responsible 

Person or nominee within 9 months 

prior to the date of receipt of that 

applicant’s application by the TPH 

Department, and any Trading Permit 

Holder, Responsible Person, nominee or 

associated person applicant that was 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices 29821 

7See Securities Exchange Act Release No. 87377 

(October 21, 2019), 84 FR 57500 (October 25, 2019) 

(SR–CBOE–2019–099). 

8See Securities Exchange Act Release No. 87024 

(September 19, 2019), 84 FR 50545 (September 25, 

2019) (SR–CBOE–2019–059), which provided that, 

upon migration, a ‘‘DPM, like all member 

organizations, will continue to be required to 

maintain at least one nominee (or Responsible 

Person) and may choose to maintain multiple 

nominees (or Responsible Persons)’’, and that the 

Exchange ‘‘will require a designation of a nominee 

only for floor-based Trading Permits. TPH 

organizations that hold electronic permits will be 

required to designate a ‘‘Responsible Person’’, who 

must be affiliated with the TPH’’. 

9See id. 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(5). 

12 Id. 

investigated by the TPH Department 

within 9 months prior to the date of 

receipt of that applicant’s application by 

the TPH Department). 

The Exchange previously restructured 

its Trading Permits and Rules regarding 

Trading Permits in connection with a 

2019 technology migration.7 Prior to 

this restructuring and the abovedescribed Rules in their current form, 

all TPH organizations (both electronic 

and floor-based) were required to 

designate an individual nominee to 

represent the organization with respect 

to that Trading Permit in all matters 

relating to the Exchange and a nominee 

could represent either an electronic or 

floor-based DPM as a DPM Designee. 

Now, only floor-based TPHs are 

required to designate a nominee while 

TPHs that hold a Trading Permit that 

provides electronic access to the 

Exchange (including those designated as 

Off-Floor DPMs only) are required to 

designate a Responsible Person. Upon 

the migration-related restructuring of its 

Rules, the Exchange intended to require 

a designation of a nominee only for 

floor-based Trading Permits and that 

TPH organizations holding electronic 

permits would be required to designate 

a Responsible Person and, as such, 

intended to reference ‘‘Responsible 

Person’’, where appropriate in the 

Rules, alongside references to 

‘‘nominees’’.8 In the filing that revised 

the Rule governing DPM Designees for 

the migration,9 the Exchange 

inadvertently removed the reference to 

nominee in the Rule governing DPM 

Designees, and the Rule now, 

unintentionally, provides that a DPM 

Designee must be a Responsible Person 

of the DPM, without regard to whether 

the DPM is an On-Floor or Off-Floor 

DPM. This poses an unnecessary 

regulatory burden for On-Floor DPMs, 

who would not otherwise be required to 

designate a Responsible Person as a 

DPM Designee if not for the inadvertent 

deletion of the reference to ‘‘nominee’’ 

in Rule 3.54. Therefore, the proposed 

rule change amends the DPM Designee 

requirements in proposed Rules 

3.54(b)(1) and (2) to be clear that, for an 

Off-Floor DPM, at least one individual 

must be a Responsible Person of the 

DPM, and, for an On-Floor DPM, the 

individual must be a nominee of the 

DPM or an affiliate of the DPM, as was 

the requirement for an On-Floor DPM 

up until the fourth quarter of 2019 when 

the Exchange inadvertently removed the 

reference to nominees in Rule 3.54(b). 

The proposed rule change also 

eliminates the DPM Designee 

requirement in current Rule 3.54(b)(1) 

that an individual must be approved to 

be a Trading Permit Holder. A 

Responsible Person is not required to be 

approved as a Trading Permit Holder 

and the Exchange did not intend upon 

the migration-related restructuring of its 

Rules for a Responsible Person that is a 

DPM Designee to otherwise be approved 

as a Trading Permit Holder. Nominees 

are already (and will continue to be) 

required to approved as Trading Permit 

Holders pursuant to Rule 3.9(b)(5). As a 

result, the Exchange believes that the 

elimination of this provision will 

mitigate any potential confusion 

regarding DPM Designee requirements. 

Additionally, as described above, a 

Responsible Person must be a U.S.- 

based officer, director or managementlevel employee of the TPH organization, 

who is responsible for the direct 

supervision and control of Associated 

Persons of that TPH organization. 

Unlike a nominee, a Responsible Person 

is not required to have authorized 

trading functions on behalf of the DPM. 

A Responsible Person at the executive 

or managerial level might not be 

involved in the day-to-day trading 

activities of the DPM. Therefore, the 

Exchange proposes to update Rule 

3.54(b)(1) so that an Off-Floor DPM may 

also designate individuals as DPM 

Designees that are involved in the 

performance of trading functions on 

behalf of the DPM, much like that of a 

nominee for an On-Floor DPM, as 

proposed. Specifically, the proposed 

rule change provides that, if at least one 

individual satisfies the Responsible 

Person requirement, then an Off-Floor 

DPM may designate additional 

individuals as DPM Designees that are 

not required to be Responsible Persons 

but must be involved in the day-to-day 

trading of the DPM’s appointed classes 

and otherwise satisfy the DPM Designee 

requirements (in subparagraphs (b)(2) 

through (5)). As a result, an Off-Floor 

DPM will still be required to have a 

Responsible Person DPM Designee but 

will also be able to identify an 

additional DPM Designee that is more 

intimately involved in the actual daily 

trading in the DPM’s appointed classes, 

which is more aligned with the role of 

a nominee of an On-Floor DPM. 

Lastly, the proposed rule change 

amends Rules 3.10(a) and (d) to include 

the term DPM Designees among the list 

of individuals required to apply to the 

TPH Department of the Exchange and 

among the list of individual applicants 

that the TPH Department must 

investigate pursuant to the application 

process. The proposed rule change 

ensures that the Off-Floor DPM 

Designees that are not necessarily 

required to be Responsible Persons, as 

proposed, must still go through the 

Exchange’s application process. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.10 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 11 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and 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. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 12 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the proposed rule 

change removes impediments to and 

perfects the mechanism of a free and 

open market and national market system 

because it removes an unnecessary (and 

inadvertent) regulatory burden for OnFloor DPMs that are required, by nature 

of their on-floor Market-Maker position, 

to have a nominee pursuant to Rule 3.9 

but do not hold Trading Permits that 

provide electronic access to the 

Exchange and are therefore not 

automatically required to designate a 

Responsible Person pursuant to Rule 

3.9. As such, the proposed rule change 

allows an On-Floor DPM to designate a 

nominee as a DPM Designee, for which 

each On-Floor DPM must already have 


khammond on DSKJM1Z7X2PROD with NOTICES
29822 Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices 

13 15 U.S.C. 78f(c)(3). 

14 15 U.S.C. 78s(b)(3)(A)(iii). 

15 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

in place to represent its Market-Maker 

Floor Trading Permit(s), instead of 

having to take additional steps to 

identify and designate a Responsible 

Person just to qualify as a DPM 

Designee. The proposed rule change 

also reduces any potential confusion for 

investors by eliminating an unnecessary 

and redundant provision that DPM 

Designees must be approved as Trading 

Permit Holders, as this is not a 

requirement for Responsible Persons 

(nor did the Exchange otherwise 

intended to be a requirement for OffFloor DPM Designees) and is already, 

and will continue to be, a requirement 

for all nominees pursuant to the Rule 

governing nominee requirements. The 

Exchange believes that nominees and 

Responsible Persons are qualified, 

pursuant to the Rules, to respectively 

represent an On-Floor DPM or Off Floor 

DPM. Additionally, the Exchange 

believes that the proposed rule change 

does not raise any new or novel issues 

nor affect the protection of investors 

because the Rules in effect prior the 

fourth quarter of 2019 provided that 

DPM Designees were required to be 

nominees, and TPH organizations with 

Floor Trading Permits Trading are still 

required to designate nominees 

pursuant to Rule 3.9. 

The Exchange further believes that the 

proposed rule change removes 

impediments to and perfects the 

mechanism of a free and open market 

and national market system because it 

allows for an Off-Floor DPM to 

designate as a DPM Designee an 

individual who is more intimately 

involved in the daily trading functions 

and performance of the DPM in its 

appointed classes, while also still 

having a DPM Designee that is a 

Responsible Person. Although a 

Responsible Person is qualified to 

represent the DPM in all Exchange 

matters, given the more managerial and 

supervisory level requirements to be a 

Responsible Person, such an individual 

might not operate day-to-day trading 

functions in a DPM’s appointed classes. 

As such, an Off-Floor DPM will be able 

to have a DPM Designee that is more 

materially involved in the daily trading 

operation of the DPM and have 

authorized trading functions and 

perform those functions on behalf of the 

DPM. The Exchange believes this will 

provide additional assurance that a 

DPM may meets its quoting 

requirements and other Market-Maker 

obligations in its appointed classes and 

better align the level of operational 

responsibility required for an Off-Floor 

DPM Designee with that of an On-Floor 

DPM Designee, as proposed. For this 

reason, too, the Exchange also believes 

that proposed rule change furthers the 

objectives of Section 6(c)(3) of the Act,13

which authorizes the Exchange to, 

among other things, prescribe standards 

of financial responsibility or operational 

capability and standards of training, 

experience and competence for its 

Trading Permit Holders and person 

associated with Trading Permit Holders. 

The proposed rule change also ensures 

that every individual designated to 

represent a DPM pursuant to the Rules 

must continue to go through the 

Exchange’s application and 

investigation process. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange does not believe that the 

proposed rule change will impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act 

because the proposed rule change 

requiring a DPM Designee to be a 

nominee applies equally to all On-Floor 

DPMs equally, and the proposed rule 

change allowing an Off-Floor DPM to 

have additional DPM Designees 

required to be involved in the day-today operation of the DPM in its 

appointed classes applies equally to all 

Off-Floor DPMs. 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act 

because the proposed rule change only 

affects DPMs of the Exchange and the 

requirements and process regarding 

their designees. The proposed rule 

change is not intended to address any 

competitive issues, but rather to more 

appropriately align the requirements for 

individuals acting on behalf of DPMs 

with respect to their activity on the 

Exchange. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

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)(iii) of the Act 14 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.15

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 will institute proceedings 

to determine whether the proposed rule 

change 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– 

CBOE–2021–034 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–CBOE–2021–034. 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 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices 29823 

16 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)(ii). 

4 17 CFR 240.19b–4(f)(2). 

5The term ‘‘Trade Reporting Participant’’ or 

‘‘Participant’’ is defined as any member of FINRA 

in good standing that uses the System. See FINRA 

Rule 7210A(k). 

6FINRA’s oversight of this function performed by 

the Business Member is conducted through a 

recurring assessment and review of TRF operations 

by an outside independent audit firm. 

7Supplementary Material .01 of FINRA Rule 

7620A defines ‘‘Executing Party (EP)’’ as the 

member with the trade reporting obligation under 

FINRA rules. Under FINRA Rule 6380A(b), in a 

trade between a member and non-member or 

customer, the member has the obligation to report 

the trade, and in a trade between two members, the 

member that receives an order for handling or 

execution or is presented an order against its quote, 

does not subsequently re-route the order, and 

executes the transaction, has the obligation to report 

the trade. 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of 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–CBOE–2021–034 and 

should be submitted on or before June 

24, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–11613 Filed 6–2–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92044; File No. SR–FINRA– 

2021–012] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Eliminate the PerTransaction Fee for Late and 

Corrective Reports to the FINRA/ 

Nasdaq TRF and To Increase the 

Participation Fee 

May 27, 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 May 26, 

2021, the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) 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 by FINRA. FINRA has 

designated the proposed rule change as 

‘‘establishing or changing a due, fee or 

other charge’’ under Section 

19(b)(3)(A)(ii) of the Act 3 and Rule 19b– 

4(f)(2) thereunder,4 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 amend FINRA 

Rule 7620A to eliminate the pertransaction fee for late reports and 

corrective transactions that is currently 

imposed on non-Retail Participants that 

use the FINRA/Nasdaq Trade Reporting 

Facility Carteret (the ‘‘FINRA/Nasdaq 

TRF Carteret’’) and the FINRA/Nasdaq 

Trade Reporting Facility Chicago (the 

‘‘FINRA/Nasdaq TRF Chicago’’) 

(collectively, the ‘‘FINRA/Nasdaq TRF’’) 

and to increase the Participation Fee to 

account for the overhead costs 

associated with processing late and 

corrective transaction reports. 

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 

The FINRA/Nasdaq TRF is a facility 

of FINRA that is operated by Nasdaq, 

Inc. (‘‘Nasdaq’’). In connection with the 

establishment of the FINRA/Nasdaq 

TRF, FINRA and Nasdaq entered into a 

limited liability company agreement 

(the ‘‘LLC Agreement’’). Under the LLC 

Agreement, FINRA, the ‘‘SRO Member,’’ 

has sole regulatory responsibility for the 

FINRA/Nasdaq TRF. Nasdaq, the 

‘‘Business Member,’’ is primarily 

responsible for the management of the 

FINRA/Nasdaq TRF’s business affairs, 

including establishing pricing for use of 

the FINRA/Nasdaq TRF, to the extent 

those affairs are not inconsistent with 

the regulatory and oversight functions of 

FINRA. Additionally, the Business 

Member is obligated to pay the cost of 

regulation and is entitled to the profits 

and losses, if any, derived from the 

operation of the FINRA/Nasdaq TRF. 

Pursuant to FINRA Rule 7620A, 

Participants 5 are charged fees and may 

qualify for fee caps for reporting to the 

FINRA/Nasdaq TRF. Nasdaq 

administers these rules on behalf of 

FINRA 6 in its capacity as the Business 

Member and operator of the FINRA/ 

Nasdaq TRF. In addition, pursuant to 

the contractual arrangements 

establishing the FINRA/Nasdaq TRF, 

Nasdaq collects and is entitled to all 

fees on behalf of the FINRA/Nasdaq 

TRF. 

Currently, non-Retail Participants are 

charged a per-transaction fee for late 

and corrective transaction reports. 

Specifically, the FINRA/Nasdaq TRF 

imposes a ‘‘Late Report—T+N’’ fee of 

$0.288 per trade on the Executing 

Party 7 for trade reports submitted one 

or more days after the date of the trade 

(T+N). In addition, Participants are 

charged $0.25 per trade to correct 

previously submitted trade reports. The 

reporting party is charged the fee when 

the correction is due to cancellation of 

a trade execution, a reporting error, or 

an ‘‘inhibit’’ or a ‘‘kill’’ transaction. Both 

parties to the trade are charged the fee 

when the correction is due to ‘‘break’’ or 

‘‘decline’’ transactions. The FINRA/ 

Nasdaq TRF assesses these fees 

primarily to address its administrative 


khammond on DSKJM1Z7X2PROD with NOTICES