[Federal Register Volume 86, Number 88 (Monday, May 10, 2021)]
[Notices]
[Pages 25055-25057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-09770]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91763; File No. SR-NASDAQ-2021-033]


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

May 4, 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 April 28, 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 April 30, 2021, to 
August 31, 2021.\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 August 31, 2021, 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.

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 December 2020, the 
Exchange filed a proposed rule change, SR-NASDAQ-2020-092, to extend 
the expiration date of the temporary amendments in SR-NASDAQ-2020-076 
from December 31, 2020, to April 30, 2021.\5\ While there are signs of 
improvement, the COVID-19 conditions necessitating these temporary 
amendments persist and, based on its assessment of current COVID-19 
conditions and the lack of certainty as to when COVID-19-related health 
concerns and corresponding restrictions will meaningfully subside, the 
Exchange has determined that there is a continued need for this 
temporary relief for several months beyond April 30, 2021. Accordingly, 
the Exchange proposes to extend the expiration date of the temporary 
rule amendments in SR-NASDAQ-2020-076 from April 30, 2021, to August 
31, 2021.
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    \5\ See 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).
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    On November 5, 2020, the Exchange filed, and subsequently extended 
to

[[Page 25056]]

April 30, 2021, SR-NASDAQ-2020-076, to temporarily amend Exchange Rules 
1015, 9261, 9524 and 9830 to grant OHO and the ERC authority \6\ 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.\7\
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    \6\ 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.
    \7\ 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); 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.\8\ Based on 
that data and guidance, the Exchange does not believe the COVID-19-
related health concerns necessitating this relief will meaningfully 
subside by April 30, 2021, and has determined that there will be a 
continued need for this temporary relief for several months 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 April 30, 2021, to August 31, 2021. 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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    \8\ 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,\9\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\10\ 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 purpose,\11\ resulting in 
less burdensome and more efficient regulatory compliance.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ See Securities Exchange Act Release No. 91495 (April 7, 
2021), 86 FR 19306 (April 13, 2021) (SR-FINRA-2021-006).
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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 
current COVID-19 conditions and the uncertainty around when those 
conditions will meaningfully improve, without this relief allowing OHO 
and ERC hearings to continue to proceed by video conference, such 
hearings may need to be postponed indefinitely. The Exchange must be 
able to perform its critical adjudicatory functions in order 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 April 30, 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 \12\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 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) \14\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ 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

[[Page 25057]]

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 April 30, 2021.\16\ Importantly, extending 
the relief provided in NASDAQ-2020-092 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.\17\ The Commission also notes that this proposal extends 
without change the temporary relief previously provided by NASDAQ-2020-
092,\18\ and only during the period in which the Exchange's operations 
are impacted by COVID-19. As proposed, the changes would be in place 
through August 31, 2021 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.\19\ 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.\20\
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ See supra Item II.
    \17\ See FINRA Filing, 86 FR 19308 (noting the same in granting 
FINRA's request to waive the 30-day operative delay so that SR-
FINRA-2021-006 would become operative immediately upon filing).
    \18\ See supra note 5.
    \19\ 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 August 31, 2021, it may submit a 
separate rule filing to extend the effectiveness of the temporary 
relief under these rules.
    \20\ 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:

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-2021-033 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-2021-033. 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; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NASDAQ-2021-033 and should 
be submitted on or before June 1, 2021.
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    \21\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-09770 Filed 5-7-21; 8:45 am]
BILLING CODE 8011-01-P