Document ID: SEC-2021-1824-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market, LLC
Posted Date: 2021-12-29T05:00Z

[Federal Register Volume 86, Number 247 (Wednesday, December 29, 2021)]
[Notices]
[Pages 74201-74204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-28247]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93852; File No. SR-NASDAQ-2021-104]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Extend the Expiration Date of the Temporary Amendments Concerning Video 
Conference Hearings

December 22, 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 December 17, 2021, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
The Exchange has designated the proposed rule change as constituting a 
``non-controversial'' rule change under paragraph (f)(6) of Rule 19b-4 
under the Act,\3\ which renders the proposal effective upon receipt of 
this filing by the Commission. The Commission is publishing this notice 
to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the expiration date of the 
temporary amendments in SR-NASDAQ-2020-076 from December 31, 2021, to 
March 31, 2022.\4\ The proposed rule change would not make any changes 
to the text of the Exchange rules.
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    \4\ If the Exchange seeks to provide additional temporary relief 
from the rule requirements identified in this proposed rule change 
beyond March 31, 2022, the Exchange will submit a separate rule 
filing to further extend the temporary extension of time. The 
amended Exchange rules will revert to their original form at the 
conclusion of the temporary relief period and any extension thereof.
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    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, at 
the principal office of the Exchange, and at the Commission's Public 
Reference Room.

[[Page 74202]]

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 continue to harmonize Exchange Rules 1015, 
9261, 9524 and 9830 with recent changes by the Financial Industry 
Regulatory Authority, Inc. (``FINRA'') to its Rules 1015, 9261, 9524 
and 9830 in response to the COVID-19 global health crisis and the 
corresponding need to restrict in-person activities. The Exchange 
originally filed proposed rule change SR-NASDAQ-2020-076, which allows 
the Exchange's Office of Hearing Officers (``OHO'') and the Exchange 
Review Council (``ERC'') to conduct hearings, on a temporary basis, by 
video conference, if warranted by the current COVID-19-related public 
health risks posed by an in-person hearing. In August 2021, the 
Exchange filed a proposed rule change, SR-NASDAQ-2021-067, to extend 
the expiration date of the temporary amendments in SR- NASDAQ-2020-076 
from August 31, 2021, to December 31, 2021.\5\ While there are signs of 
improvement, much uncertainty remains for the coming months. The 
presence of the Delta variant, dissimilar vaccination rates throughout 
the United States, and the uptick in transmissions in many locations 
indicate that COVID-19 remains an active and real public health 
concern.\6\ Due to the uncertainty and the lack of a clear timeframe 
for a sustained and widespread abatement of COVID-19-related health 
concerns and corresponding restrictions,\7\ the Exchange believes that 
there is a continued need for temporary relief beyond December 31, 
2021. Accordingly, the Exchange proposes to extend the expiration date 
of the temporary rule amendments in SR-NASDAQ-2020-076 from December 
31, 2021, to March 31, 2022.
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    \5\ See Securities Exchange Act Release No. 92911 (September 9, 
2021), 86 FR 51395 (September 15, 2021) (Notice of Filing and 
Immediate Effectiveness of File No. SR-NASDAQ-2021-067).
    \6\ For example, President Joe Biden on July 29, 2021, announced 
several measures to increase the number of people vaccinated against 
COVID-19 and to slow the spread of the Delta variant, including 
strengthening safety protocols for federal government employees and 
contractors. See https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/29/fact-sheet-president-biden-to-announce-new-actions-to-get-more-americans-vaccinated-and-slow-the-spread-of-the-delta-variant/. Thereafter, the Biden Administration 
announced on November 4, 2021, details of two major vaccination 
policies to further help fight COVID-19. See https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/04/fact-sheet-biden-administration-announces-details-of-two-major-vaccination-policies/. Most recently, President Biden announced 
several new actions to help protect Americans against the Delta and 
Omicron variants. See https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/02/fact-sheet-president-biden-announces-new-actions-to-protect-americans-against-the-delta-and-omicron-variants-as-we-battle-covid-19-this-winter/.
    \7\ For instance, the Centers for Disease Control and Prevention 
(``CDC'') recently announced that the first confirmed case of COVID-
19 caused by the Omicron variant was detected in the United States. 
See https://www.cdc.gov/media/releases/2021/s1201-omicron-variant.html. The CDC also recommends that fully vaccinated people 
wear a mask in public indoor settings in areas of substantial or 
high transmission and noted that fully vaccinated people might 
choose to wear a mask regardless of the level of transmission, 
particularly if they are immunocompromised or at increased risk for 
severe disease from COVID-19. See https://www.cdc.gov/coronavirus/2019-ncov/vaccines/fully-vaccinated-guidance.html. Furthermore, 
numerous states currently have COVID-19 restrictions in place. Six 
states (Hawaii, Illinois, Nevada, New Mexico, Oregon, and 
Washington) require most people to wear masks in indoor public 
places regardless of vaccination status, and three states 
(California, Connecticut, and New York) have mask mandates in indoor 
public places for those individuals who are unvaccinated. Several 
other states have mask mandates in certain settings, such as 
healthcare facilities, schools, and correctional facilities.
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    On November 5, 2020, the Exchange filed, and subsequently extended 
to December 31, 2021, SR-NASDAQ-2020-076, to temporarily amend Exchange 
Rules 1015, 9261, 9524 and 9830 to grant OHO and the ERC authority \8\ 
to conduct hearings in connection with appeals of Membership 
Application Program decisions, disciplinary actions, eligibility 
proceedings and temporary and permanent cease and desist orders by 
video conference, if warranted by the COVID-19-related public health 
risks posed by an in-person hearing.\9\
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    \8\ For OHO hearings under Exchange Rules 9261 and 9830, the 
proposed rule change temporarily grants authority to the Chief or 
Deputy Chief Hearing Officer to order that a hearing be conducted by 
video conference. For ERC hearings under Exchange Rules 1015 and 
9524, this temporary authority is granted to the ERC or relevant 
Subcommittee.
    \9\ See Securities Exchange Act Release No. 90390 (November 10, 
2020), 85 FR 73302 (November 17, 2020) (Notice of Filing and 
Immediate Effectiveness of File No. SR-NASDAQ-2020-076); Securities 
Exchange Act Release No. 90774 (December 22, 2020), 85 FR 86614 
(December 30, 2020) (Notice of Filing and Immediate Effectiveness of 
File No. SR-NASDAQ-2020-092); supra note 5.
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    As set forth in the previous filings, the Exchange also relies on 
COVID-19 data and the guidance issued by public health authorities to 
determine whether the current public health risks presented by an in-
person hearing may warrant a hearing by video conference.\10\ Based on 
that data and guidance, the Exchange does not believe the COVID-19-
related health concerns necessitating this relief will meaningfully 
subside by December 31, 2021, and believes that there will be a 
continued need for this temporary relief beyond that date. Accordingly, 
the Exchange proposes to extend the expiration date of the temporary 
rule amendments originally set forth in SR-NASDAQ-2020-076 from 
December 31, 2021, to March 31, 2022. The extension of these temporary 
amendments allowing for specified OHO and ERC hearings to proceed by 
video conference will allow the Exchange's critical adjudicatory 
functions to continue to operate effectively in these extraordinary 
circumstances--enabling the Exchange to fulfill its statutory 
obligations to protect investors and maintain fair and orderly 
markets--while also protecting the health and safety of hearing 
participants.
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    \10\ As noted in SR-NASDAQ-2020-076, the temporary proposed rule 
change grants discretion to OHO and the ERC to order a video 
conference hearing. In deciding whether to schedule a hearing by 
video conference, OHO and the ERC may consider a variety of other 
factors in addition to COVID-19 trends.
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    The Exchange has filed the proposed rule change for immediate 
effectiveness and has requested that the SEC waive the requirement that 
the proposed rule change not become operative for 30 days after the 
date of the filing, so the Exchange can implement the proposed rule 
change immediately.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\11\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\12\ in particular, in that it is designed to 
promote just and equitable principles of trade, 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, by continuing to provide greater harmonization between the 
Exchange rules and FINRA rules of similar

[[Page 74203]]

purpose,\13\ resulting in less burdensome and more efficient regulatory 
compliance.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
    \13\ See Securities Exchange Act Release No. 93758 (December 13, 
2021) (SR-FINRA-2021-031).
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    The proposed rule change, which extends the expiration date of the 
temporary amendments to the Exchange rules set forth in SR-NASDAQ-2020-
076, will continue to aid the Exchange's efforts to timely conduct 
hearings in connection with its core adjudicatory functions. Given the 
current and frequently changing COVID-19 conditions and the uncertainty 
around when those conditions will see meaningful, widespread, and 
sustained improvement, without this relief allowing OHO and ERC 
hearings to proceed by video conference, the Exchange might be required 
to postpone some or almost all hearings indefinitely. The Exchange must 
be able to perform its critical adjudicatory functions to fulfill its 
statutory obligations to protect investors and maintain fair and 
orderly markets. As such, this relief is essential to the Exchange's 
ability to fulfill its statutory obligations and allows hearing 
participants to avoid the serious COVID-19-related health and safety 
risks associated with in-person hearings.
    Among other things, this relief will allow OHO to conduct temporary 
cease and desist proceedings by video conference so that the Exchange 
can take immediate action to stop ongoing customer harm and will allow 
the ERC to timely provide members, disqualified individuals and other 
applicants an approval or denial of their applications. As set forth in 
detail in SR-NASDAQ-2020-076, this temporary relief allowing OHO and 
ERC hearings to proceed by video conference accounts for fair process 
considerations and will continue to provide fair process while avoiding 
the COVID-19-related public health risks for hearing participants. 
Accordingly, the proposed rule change extending this temporary relief 
is in the public interest and consistent with the Act's purpose.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the temporary proposed rule 
change will impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Act. As set forth in 
SR-NASDAQ-2020-076, the proposed rule change is intended solely to 
extend temporary relief necessitated by the continued impacts of the 
COVID-19 outbreak and the related health and safety risks of conducting 
in-person activities. The Exchange believes that the proposed rule 
change will prevent unnecessary impediments to its operations, 
including its critical adjudicatory processes, and its ability to 
fulfill its statutory obligations to protect investors and maintain 
fair and orderly markets that would otherwise result if the temporary 
amendments were to expire on December 31, 2021.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \14\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\15\
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    \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) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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.
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    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange has 
indicated that the proposed rule change to extend the expiration date 
will continue to prevent unnecessary impediments to its operations, 
including its critical adjudicatory processes, and its ability to 
fulfill its statutory obligations to protect investors and maintain 
fair and orderly markets that would otherwise result if the temporary 
amendments were to expire on December 31, 2021.\18\ Importantly, the 
Exchange has also stated that extending the temporary relief provided 
in SR-NASDAQ-2020-076 immediately upon filing and without a 30-day 
operative delay will allow the Exchange to continue critical 
adjudicatory and review processes in a reasonable and fair manner and 
meet its critical investor protection goals, while also following best 
practices with respect to the health and safety of its employees.\19\ 
The Commission also notes that this proposal extends without change the 
temporary relief previously provided by SR-NASDAQ-2020-076.\20\ As 
proposed, the temporary changes would be in place through March 31, 
2022 and the amended rules will revert back to their original state at 
the conclusion of the temporary relief period and, if applicable, any 
extension thereof.\21\ For these reasons, the Commission believes that 
waiver of the 30-day operative delay for this proposal is consistent 
with the protection of investors and the public interest. Accordingly, 
the Commission hereby waives the 30-day operative delay and designates 
the proposal operative upon filing.\22\
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ See supra Item II.
    \19\ See Securities Exchange Act Release No. 93758 (December 13, 
2021); 86 FR 71695, 71696 (December 17, 2021) (noting the same in 
granting FINRA's request to waive the 30-day operative delay so that 
SR-FINRA-2021-031 would become operative immediately upon filing).
    \20\ See supra note 9.
    \21\ See supra note 4. As noted above, the Exchange states that 
if it requires temporary relief from the rule requirements 
identified in this proposal beyond March 31, 2022, it may submit a 
separate rule filing to extend the effectiveness of the temporary 
relief under these rules.
    \22\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

[[Page 74204]]

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NASDAQ-2021-104 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-NASDAQ-2021-104. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of 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-NASDAQ-2021-104 and should be submitted 
on or before January 19, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-28247 Filed 12-28-21; 8:45 am]
BILLING CODE 8011-01-P