[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