[Federal Register Volume 89, Number 139 (Friday, July 19, 2024)]
[Notices]
[Pages 58819-58828]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-15910]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100536; File No. 4-575]


Program for Allocation of Regulatory Responsibilities Pursuant to 
Rule 17d-2; Notice of Filing and Order Approving and Declaring 
Effective an Amended Plan for the Allocation of Regulatory 
Responsibilities Between the Financial Industry Regulatory Authority, 
Inc., The Nasdaq Stock Market LLC, and Nasdaq BX, Inc.

July 15, 2024.
    Notice is hereby given that the Securities and Exchange Commission 
(``Commission'') has issued an Order, pursuant to Section 17(d) of the 
Securities Exchange Act of 1934 (``Act''),\1\ approving and declaring 
effective an amendment to the plan for allocating regulatory 
responsibility (``Plan'') filed on July 1, 2024, pursuant to Rule 17d-2 
of the Act,\2\ by the Financial Industry Regulatory Authority, Inc. 
(``FINRA''), The Nasdaq Stock Market LLC (``Nasdaq''), and Nasdaq BX, 
Inc. (``BX'') (collectively, ``Participating Organizations'' or 
``parties''). This Agreement amends and restates the agreement entered 
into between FINRA, Nasdaq, and BX approved by the SEC on September 23, 
2021, entitled ``Agreement Among Financial Industry Regulatory 
Authority, Inc., The Nasdaq Stock Market LLC and Nasdaq BX, Inc. 
pursuant to Rule 17d-2 under the Securities Exchange Act of 1934,'' and 
any subsequent amendments thereafter.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78q(d).
    \2\ 17 CFR 240.17d-2.
---------------------------------------------------------------------------

I. Introduction

    Section 19(g)(1) of the Act,\3\ among other things, requires every 
self-regulatory organization (``SRO'') registered as either a national 
securities exchange or national securities association to examine for, 
and enforce compliance by, its members and persons associated with its 
members with the Act, the rules and regulations thereunder, and the 
SRO's own rules,

[[Page 58820]]

unless the SRO is relieved of this responsibility pursuant to Section 
17(d) \4\ or Section 19(g)(2) \5\ of the Act. Without this relief, the 
statutory obligation of each individual SRO could result in a pattern 
of multiple examinations of broker-dealers that maintain memberships in 
more than one SRO (``common members''). Such regulatory duplication 
would add unnecessary expenses for common members and their SROs.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78s(g)(1).
    \4\ 15 U.S.C. 78q(d).
    \5\ 15 U.S.C. 78s(g)(2).
---------------------------------------------------------------------------

    Section 17(d)(1) of the Act \6\ was intended, in part, to eliminate 
unnecessary multiple examinations and regulatory duplication.\7\ With 
respect to a common member, Section 17(d)(1) authorizes the Commission, 
by rule or order, to relieve an SRO of the responsibility to receive 
regulatory reports, to examine for and enforce compliance with 
applicable statutes, rules, and regulations, or to perform other 
specified regulatory functions.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q(d)(1).
    \7\ See Securities Act Amendments of 1975, Report of the Senate 
Committee on Banking, Housing, and Urban Affairs to Accompany S. 
249, S. Rep. No. 94-75, 94th Cong., 1st Session 32 (1975).
---------------------------------------------------------------------------

    To implement Section 17(d)(1), the Commission adopted two rules: 
Rule 17d-1 and Rule 17d-2 under the Act.\8\ Rule 17d-1 authorizes the 
Commission to name a single SRO as the designated examining authority 
(``DEA'') to examine common members for compliance with the financial 
responsibility requirements imposed by the Act, or by Commission or SRO 
rules.\9\ When an SRO has been named as a common member's DEA, all 
other SROs to which the common member belongs are relieved of the 
responsibility to examine the firm for compliance with the applicable 
financial responsibility rules. On its face, Rule 17d-1 deals only with 
an SRO's obligations to enforce member compliance with financial 
responsibility requirements. Rule 17d-1 does not relieve an SRO from 
its obligation to examine a common member for compliance with its own 
rules and provisions of the federal securities laws governing matters 
other than financial responsibility, including sales practices and 
trading activities and practices.
---------------------------------------------------------------------------

    \8\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
    \9\ See Securities Exchange Act Release No. 12352 (April 20, 
1976), 41 FR 18808 (May 7, 1976).
---------------------------------------------------------------------------

    To address regulatory duplication in these and other areas, the 
Commission adopted Rule 17d-2 under the Act.\10\ Rule 17d-2 permits 
SROs to propose joint plans for the allocation of regulatory 
responsibilities with respect to their common members. Under paragraph 
(c) of Rule 17d-2, the Commission may declare such a plan effective if, 
after providing for appropriate notice and opportunity for comment, it 
determines that the plan is necessary or appropriate in the public 
interest and for the protection of investors, to foster cooperation and 
coordination among the SROs, to remove impediments to, and foster the 
development of, a national market system and a national clearance and 
settlement system, and is in conformity with the factors set forth in 
Section 17(d) of the Act. Commission approval of a plan filed pursuant 
to Rule 17d-2 relieves an SRO of those regulatory responsibilities 
allocated by the plan to another SRO.
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 12935 (October 28, 
1976), 41 FR 49091 (November 8, 1976).
---------------------------------------------------------------------------

II. The Plan

    On January 8, 2009, the Commission declared effective the Plan 
entered into between FINRA and the Boston Stock Exchange, Incorporated 
(n/k/a Nasdaq BX, Inc. (``BX'')) for allocating regulatory 
responsibility pursuant to Rule 17d-2.\11\ The Plan is intended to 
reduce regulatory duplication for firms that are common members of 
FINRA and BX by allocating regulatory responsibility with respect to 
certain applicable laws, rules, and regulations that are common among 
them. Included in the Plan is an exhibit that lists every BX rule for 
which FINRA bears responsibility under the Plan for overseeing and 
enforcing with respect to BX members that are also members of FINRA and 
the associated persons therewith (``Certification''). On September 23, 
2021, the Commission declared effective an amendment to the Plan to 
allocate surveillance, investigation, and enforcement responsibilities 
for Rule 14e-4 under the Act, to reflect the name change of Boston 
Stock Exchange, Incorporated to Nasdaq BX, Inc., and to add Nasdaq as a 
Participant to the Plan.\12\
---------------------------------------------------------------------------

    \11\ See Securities Exchange Act Release No. 59218 (January 8, 
2009), 74 FR 2143 (January 14, 2009).
    \12\ See Securities Exchange Act Release No. 93114 (September 
23, 2021), 86 FR 53996 (September 29, 2021).
---------------------------------------------------------------------------

III. Proposed Amendment to the Plan

    On July 1, 2024, the parties submitted a proposed amendment to the 
Plan (``Amended Plan''). The primary purpose of the Amended Plan is to: 
(i) update the list of Common Rules; (ii) add surveillance and 
investigation coverage for certain Common Rules specified in Exhibit 1 
to the Amended Plan; (iii) to reflect that, for Router Members, FINRA 
will retain regulatory responsibility for Nasdaq and BX rules that are 
not Common Rules; and (iv) to reflect that FINRA will not make 
referrals to Nasdaq and BX for apparent violations of any Nasdaq or BX 
Rules by any Router Member. The text of the proposed Amended Plan is as 
follows (additions are in italics; deletions are [bracketed]):
* * * * *

AGREEMENT AMONG FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC., THE 
NASDAQ STOCK MARKET LLC AND NASDAQ BX, INC. PURSUANT TO RULE 17d-2 
UNDER THE SECURITIES EXCHANGE ACT OF 1934

    This Agreement, by and among the Financial Industry Regulatory 
Authority, Inc. (``FINRA''), The Nasdaq Stock Market LLC (``Nasdaq'') 
and Nasdaq BX, Inc. (``BX''), is made this [30th]1st day of [August, 
2021] July, 2024 (the ``Agreement''), pursuant to Section 17(d) of the 
Securities Exchange Act of 1934 (the ``Exchange Act'') and Rule 17d-2 
thereunder, which permits agreements between self-regulatory 
organizations to allocate regulatory responsibility to eliminate 
regulatory duplication. FINRA, Nasdaq and BX may be referred to 
individually as a ``party'' and together as the ``parties.''
    This Agreement amends and restates the agreement entered into 
between FINRA, Nasdaq and BX approved by the SEC on September 23, 2021 
[on December 5, 2008], entitled ``Agreement [between] among Financial 
Industry Regulatory Authority, Inc., The Nasdaq Stock Market LLC and 
[Boston Stock Exchange, Incorporated] Nasdaq BX, Inc. pursuant to Rule 
17d-2 under the Securities Exchange Act of 1934,'' and any subsequent 
amendments thereafter [and the agreement entered into between FINRA and 
Nasdaq approved by the SEC on July 12, 2006, entitled ``Agreement 
between the National Association of Securities Dealers, Inc. and The 
Nasdaq Stock Market LLC Pursuant to Section 17(d) and Rule 17d-2,'' and 
any subsequent amendments thereafter].
    Whereas, FINRA, Nasdaq and BX desire to reduce duplication in the 
examination, surveillance and investigation of their Common Members (as 
defined herein) and in the filing and processing of certain 
registration and membership records; and
    Whereas, FINRA, Nasdaq and BX desire to execute an agreement 
covering such subjects pursuant to the provisions of Rule 17d-2 under 
the Exchange Act and to file such agreement with the U.S. Securities 
and Exchange Commission

[[Page 58821]]

(the ``SEC'' or ``Commission'') for its approval.
    Now, therefore, in consideration of the mutual covenants contained 
hereinafter, FINRA, Nasdaq and BX hereby agree as follows:
    1. Definitions. Unless otherwise defined in this Agreement or the 
context otherwise requires, the terms used in this Agreement shall have 
the same meaning as they have under the Exchange Act and the rules and 
regulations thereunder. As used in this Agreement, the following terms 
shall have the following meanings:
    (a) ``Nasdaq Rules'', ``BX Rules'' or ``FINRA Rules'' shall mean: 
(i) the rules of Nasdaq, (ii) the rules of BX, or (iii) the rules of 
FINRA, respectively, as the rules of an exchange or association are 
defined in Exchange Act Section 3(a)(27).
    (b) ``Common Rules'' shall mean Nasdaq Rules and BX Rules that are 
substantially similar to the applicable FINRA Rules and certain 
provisions of the Exchange Act and SEC rules set forth on Exhibit 1 in 
that examination, surveillance or investigation for compliance with 
such provisions and rules would not require FINRA to develop one or 
more new examination, surveillance or investigation standards, modules, 
procedures, or criteria in order to analyze the application of the 
provision or rule, or a Common Member's activity, conduct, or output in 
relation to such provision or rule; provided, however, Common Rules 
shall not include the application of the SEC, Nasdaq, BX or FINRA rules 
as they pertain to violations of insider trading activities, which is 
covered by a separate 17d-2 Agreement by and among Cboe BZX Exchange, 
Inc., Cboe BYX Exchange, Inc., Chicago Stock Exchange, Inc., Cboe EDGA 
Exchange, Inc., Cboe EDGX Exchange, Inc., Financial Industry Regulatory 
Authority, Inc., MEMX, LLC, MIAX PEARL, LLC, Nasdaq BX, Inc., Nasdaq 
PHLX LLC, The Nasdaq Stock Market LLC, NYSE National, Inc., New York 
Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., Investors 
Exchange LLC and Long-Term Stock Exchange, Inc. approved by the 
Commission on September 23, 2020, as may be amended from time to time. 
Common Rules shall not include any provisions regarding: (i) notice, 
reporting or any other filings made directly to or from Nasdaq or BX; 
(ii) incorporation by reference of other Nasdaq or BX Rules that are 
not Common Rules; (iii) exercise of discretion in a manner that differs 
from FINRA's exercise of discretion including, but not limited to 
exercise of exemptive authority by Nasdaq or BX; (iv) prior written 
approval of Nasdaq or BX; and (v) payment of fees or fines to Nasdaq or 
BX.
    (c) ``Common Members'' shall mean those members of FINRA and a 
member of at least one of Nasdaq or BX and the associated persons 
therewith.
    (d) ``Effective Date'' shall [have the meaning set forth in 
paragraph 13]be the date this Agreement is approved by the Commission.
    (e) ``Enforcement Responsibilities'' shall mean the conduct of 
appropriate proceedings, in accordance with FINRA's Code of Procedure 
(the Rule 9000 Series) and other applicable FINRA procedural rules, to 
determine whether violations of Common Rules have occurred, and if such 
violations are deemed to have occurred, the imposition of appropriate 
sanctions as specified under FINRA's Code of Procedure and sanctions 
guidelines.
    (f) ``Regulatory Responsibilities'' shall mean the examination, 
surveillance and investigation responsibilities and Enforcement 
Responsibilities relating to compliance by the Common Members with the 
Common Rules and the provisions of the Exchange Act and the rules and 
regulations thereunder, and other applicable laws, rules and 
regulations, each as set forth on Exhibit 1 attached hereto. [The term 
``Regulatory Responsibilities'' shall also include the surveillance, 
investigation and Enforcement Responsibilities relating to compliance 
by Common Members with Rule 14e-4 of the Securities Exchange Act 
(``Rule 14e-4''), with a focus on the standardized call option 
provision of Rule 14e-4(a)(1)(ii)(D).]
    2. Regulatory Responsibilities. FINRA shall assume Regulatory 
Responsibilities for Common Members. Attached as Exhibit 1 to this 
Agreement and made part hereof, Nasdaq and BX furnished FINRA with a 
current list of Common Rules and certified to FINRA that such rules 
that are Nasdaq Rules and BX Rules are substantially similar to the 
corresponding FINRA Rules (the ``Certification''). FINRA hereby agrees 
that the rules listed in the Certification are Common Rules as defined 
in this Agreement. Each year following the Effective Date of this 
Agreement, or more frequently if required by changes in either the 
rules of Nasdaq, BX or FINRA, Nasdaq and BX shall submit an updated 
list of Common Rules to FINRA for review which shall add Nasdaq Rules 
and BX Rules not included in the current list of Common Rules that 
qualify as Common Rules as defined in this Agreement; delete Nasdaq 
Rules and BX Rules included in the current list of Common Rules that no 
longer qualify as Common Rules as defined in this Agreement; and 
confirm that the remaining rules on the current list of Common Rules 
continue to be Nasdaq Rules and BX Rules that qualify as Common Rules 
as defined in this Agreement. Within 30 days of receipt of such updated 
list, FINRA shall confirm in writing whether the rules listed in any 
updated list are Common Rules, as defined in this Agreement. 
Notwithstanding anything herein to the contrary, it is explicitly 
understood that the term ``Regulatory Responsibilities'' does not 
include, and Nasdaq and BX shall retain full responsibility for (unless 
otherwise addressed by separate agreement or rule) (collectively, the 
``Retained Responsibilities'') the following:
    (a) surveillance, examination, investigation and enforcement with 
respect to trading activities or practices involving Nasdaq's or BX's 
own marketplaces;
    (b) registration pursuant to Nasdaq's or BX's applicable rules of 
associated persons (i.e., registration rules that are not Common 
Rules);
    (c) discharge of Nasdaq's or BX's duties and obligations as a 
Designated Examining Authority pursuant to Rule 17d-1 under the 
Exchange Act; and
    (d) any Nasdaq Rules and BX Rules that are not Common Rules, except 
for Nasdaq Rules and BX Rules for any Nasdaq member or BX member that 
operates as a facility (as defined in Section 3(a)(2) of the Exchange 
Act), acts as an outbound router for Nasdaq or BX, and is a member of 
FINRA (``Router Member'') as provided in paragraph 5. As of the date of 
this Agreement, the only Router Member is Nasdaq Execution Services, 
LLC.
    3. No Charge. There shall be no charge to Nasdaq and BX by FINRA 
for performing the Regulatory Responsibilities under this Agreement 
except as hereinafter provided. FINRA shall provide Nasdaq and BX with 
ninety (90) days advance written notice in the event FINRA decides to 
impose any charges to Nasdaq and BX for performing the Regulatory 
Responsibilities under this Agreement. If FINRA determines to impose a 
charge, Nasdaq and BX shall have the right at the time of the 
imposition of such charge to terminate this Agreement; provided, 
however, that FINRA's Regulatory Responsibilities under this Agreement 
shall continue until the Commission approves the termination of this 
Agreement.
    4. [Reassignment of Regulatory Responsibilities] Applicability of 
Certain Laws, Rules, Regulations or

[[Page 58822]]

Orders. Notwithstanding any provision hereof, this Agreement shall be 
subject to any statute, or any rule or order of the Commission 
[reassigning Regulatory Responsibilities between self-regulatory 
organizations]. To the extent such [action] statute, rule or order is 
inconsistent with this Agreement, the statue, rule or order [such 
action] shall supersede the provision(s) hereof to the extent necessary 
for them to be properly effectuated and the provision(s) hereof in that 
respect shall be null and void.
    5. Notification of Violations.
    (a) In the event that FINRA becomes aware of apparent violations of 
any Nasdaq Rules or BX Rules, which are not listed as Common Rules, 
discovered pursuant to the performance of the Regulatory 
Responsibilities assumed hereunder, FINRA shall notify Nasdaq and BX of 
those apparent violations for such response as Nasdaq and BX deem[s] 
appropriate. With respect to apparent violations of any Nasdaq Rules or 
BX Rules by any Router Member, FINRA shall not make referrals to Nasdaq 
and BX pursuant to this paragraph 5. Such apparent violations shall be 
processed by, and enforcement proceedings in respect thereto will be 
conducted by, FINRA as provided in this Agreement.
    (b) In the event that Nasdaq or BX becomes aware of apparent 
violations of any Common Rules, discovered pursuant to the performance 
of the Retained Responsibilities, Nasdaq and BX shall notify FINRA of 
those apparent violations and such matters shall be handled by FINRA 
[as provided] consistent with the provisions in this Agreement. [Each 
party agrees to make available promptly all files, records and 
witnesses necessary to assist the other in its investigation or 
proceedings.]
    (c) Apparent violations of Common Rules[, FINRA Rules, federal 
securities laws, and rules and regulations thereunder,] shall be 
processed by, and enforcement proceedings in respect thereto shall be 
conducted by FINRA as provided hereinbefore; provided, however, that in 
the event a Common Member is the subject of an investigation relating 
to a transaction on Nasdaq or BX, Nasdaq and BX, at each party's 
discretion, may assume concurrent jurisdiction and responsibility.
    (d) Each party agrees to make available promptly all files, records 
and witnesses necessary to assist the other in its investigation or 
proceedings.
    6. Continued Assistance.
    (a) FINRA shall make available to Nasdaq and BX all information 
obtained by FINRA in the performance by it of the Regulatory 
Responsibilities hereunder with respect to the Common Members subject 
to this Agreement. In particular, and not in limitation of the 
foregoing, FINRA shall furnish Nasdaq and BX any information it obtains 
about Common Members which reflects adversely on their financial 
condition. Nasdaq and BX shall make available to FINRA any information 
coming to their attention that reflects adversely on the financial 
condition of Common Members or indicates possible violations of 
applicable laws, rules or regulations by such firms.
    (b) The parties agree that documents or information shared shall be 
held in confidence, and used only for the purposes of carrying out 
their respective regulatory obligations. Neither party shall assert 
regulatory or other privileges as against the other with respect to 
documents or information that is required to be shared pursuant to this 
Agreement.
    (c) The sharing of documents or information between the parties 
pursuant to this Agreement shall not be deemed a waiver as against 
third parties of regulatory or other privileges relating to the 
discovery of documents or information.
    7. Common Member Applications.
    (a) Common Members subject to this Agreement shall be required to 
submit, and FINRA shall be responsible for processing and acting upon 
all applications submitted on behalf of allied persons, partners, 
officers, registered personnel and any other person required to be 
approved by the rules of Nasdaq, BX and FINRA or associated with Common 
Members thereof. Upon request, FINRA shall advise Nasdaq and BX of any 
changes of allied members, partners, officers, registered personnel and 
other persons required to be approved by the rules of Nasdaq, BX and 
FINRA.
    (b) Common Members shall be required to send to FINRA all letters, 
termination notices or other material respecting the individuals listed 
in paragraph 7(a).
    (c) When as a result of processing such submissions FINRA becomes 
aware of a statutory disqualification as defined in the Exchange Act 
with respect to a Common Member, FINRA shall determine pursuant to 
Sections 15A(g) and/or Section 6(c) of the Exchange Act the 
acceptability or continued applicability of the person to whom such 
disqualification applies and keep Nasdaq and BX advised of its actions 
in this regard for such subsequent proceedings as Nasdaq and BX may 
initiate.
    (d) Notwithstanding the foregoing, FINRA shall not review the 
membership application, reports, filings, fingerprint cards, notices, 
or other writings filed to determine if such documentation submitted by 
a broker or dealer, or a person associated therewith or other persons 
required to register or qualify by examination meets the Nasdaq or BX 
requirements for general membership or for specified categories of 
membership or participation in Nasdaq or BX, such as Equities Market 
Maker, Equities ECN, Order Entry Firm, or any similar type of Nasdaq or 
BX membership or participation that is created after this Agreement is 
executed. FINRA shall not review applications or other documentation 
filed to request a change in the rights or status described in this 
paragraph 7(d), including termination or limitation on activities, of a 
member or a participant of Nasdaq or BX, or a person associated with, 
or requesting association with, a member or participant of Nasdaq or 
BX.
    8. Branch Office Information. FINRA shall also be responsible for 
processing and, if required, acting upon all requests for the opening, 
address changes, and terminations of branch offices by Common Members 
and any other applications required of Common Members with respect to 
the Common Rules as they may be amended from time to time. Upon 
request, FINRA shall advise Nasdaq and BX of the opening, address 
change and termination of branch and main offices of Common Members and 
the names of such branch office managers.
    9. Customer Complaints. Nasdaq and BX shall forward to FINRA copies 
of all customer complaints involving Common Members received by Nasdaq 
and BX relating to FINRA's Regulatory Responsibilities under this 
Agreement. It shall be FINRA's responsibility to review and take 
appropriate action in respect to such complaints.
    10. Advertising. FINRA shall assume responsibility to review the 
advertising of Common Members subject to the Agreement, provided that 
such material is filed with FINRA in accordance with FINRA's filing 
procedures and is accompanied with any applicable filing fees set forth 
in FINRA Rules.
    11. No Restrictions on Regulatory Action. Notwithstanding anything 
else herein and to the contrary, except for paragraph 5(a), [N]nothing 
contained in this Agreement shall restrict or in any way encumber the 
right of either FINRA, or Nasdaq or BX, [party] to conduct its own 
independent or concurrent investigation, examination or enforcement 
proceeding of or against Common Members of the Common Rules, as either 
[party] FINRA, or

[[Page 58823]]

Nasdaq or BX, in its sole discretion, shall deem appropriate or 
necessary.
    12. Termination. This Agreement may be terminated by Nasdaq, BX or 
FINRA at any time upon the approval of the Commission after one (1) 
year's written notice to the other party, except as provided in 
paragraph 3.
    [13. Effective Date. This Agreement shall be effective upon 
approval of the Commission.]
    13[4]. Arbitration. In the event of a dispute between the parties 
as to the operation of this Agreement, Nasdaq, BX and FINRA hereby 
agree that any such dispute shall be settled by arbitration in 
Washington, DC in accordance with the rules of the American Arbitration 
Association then in effect, or such other procedures as the parties may 
mutually agree upon. Judgment on the award rendered by the 
arbitrator(s) may be entered in any court having jurisdiction. Each 
party acknowledges that the timely and complete performance of its 
obligations pursuant to this Agreement is critical to the business and 
operations of the other party. In the event of a dispute between the 
parties, the parties shall continue to perform their respective 
obligations under this Agreement in good faith during the resolution of 
such dispute unless and until this Agreement is terminated in 
accordance with its provisions. Nothing in this Section 1[4]3 shall 
interfere with a party's right to terminate this Agreement as set forth 
herein.
    14[5]. Amendment. This Agreement may be amended in writing duly 
approved by each party. All such amendments must be filed with and 
approved by the Commission before they become effective.
    15[6]. Limitation of Liability. None of the parties nor any of 
their respective directors, governors, officers or employees shall be 
liable to any other party to this Agreement for any liability, loss or 
damage resulting from or claimed to have resulted from any delays, 
inaccuracies, errors or omissions with respect to the provision of 
Regulatory Responsibilities as provided hereby or for the failure to 
provide any such responsibility, except with respect to such liability, 
loss or damages as shall have been suffered by any party and caused by 
the willful misconduct of another party or their respective directors, 
governors, officers or employees. No warranties, express or implied, 
are made by any party hereto with respect to any of the 
responsibilities to be performed by them hereunder.
    16[7]. Relief from Responsibility. Pursuant to Sections 17(d)(1)(A) 
and 19(g) of the Exchange Act and Rule 17d-2 thereunder, FINRA, Nasdaq 
and BX join in requesting the Commission, upon its approval of this 
Agreement or any part thereof, to relieve Nasdaq and BX of any and all 
responsibilities with respect to matters allocated to FINRA pursuant to 
this Agreement; provided, however, that this Agreement shall not be 
effective until the Effective Date.
    17[8]. Severability. Any term or provision of this Agreement that 
is invalid or unenforceable in any jurisdiction shall, as to such 
jurisdiction, be ineffective to the extent of such invalidity or 
unenforceability without rendering invalid or unenforceable the 
remaining terms and provisions of this Agreement or affecting the 
validity or enforceability of any of the terms or provisions of this 
Agreement in any other jurisdiction.
    18[9]. Separate Agreement. This Agreement is wholly separate from 
any other 17d-2 agreement where FINRA, NASDAQ and BX are parties, 
including but not limited to, (1) the multiparty Agreement made 
pursuant to Rule 17d-2 of the Exchange Act among [NYSE American LLC,] 
Cboe BZX Exchange, Inc., BOX Exchange, LLC, [the Cboe EDGX Exchange, 
Inc., Cboe C2 Exchange, Inc.,] Cboe Exchange, Inc., Cboe C2 Exchange, 
Inc., Nasdaq ISE, LLC, Financial Industry Regulatory Authority, Inc., 
[NYSE Arca, Inc., The Nasdaq Stock Market LLC, BOX Exchange LLC, Nasdaq 
BX, Inc., Nasdaq PHLX LLC,] Miami International Securities Exchange, 
LLC, NYSE American LLC, NYSE Arca, Inc., The Nasdaq Stock Market LLC, 
Nasdaq BX, Inc., Nasdaq PHLX LLC, Nasdaq GEMX, LLC, Cboe EDGX Exchange, 
Inc., Nasdaq MRX, LLC, MIAX PEARL, LLC, [and] MIAX Emerald, LLC and 
MEMX LLC approved by the Commission on [February 12, 2019] October 18, 
2022 concerning options related sales-practice matters [involving the 
allocation of regulatory responsibilities with respect to common 
members for compliance with common rules relating to the conduct by 
broker-dealers of accounts for listed options, index warrants, currency 
index warrants and currency warrants or] and (2) the multiparty 
Agreement made pursuant to Rule 17d-2 of the Exchange Act among NYSE 
American LLC, Cboe BZX Exchange, Inc., the Cboe EDGX Exchange, Inc., 
Cboe C2 Exchange, Inc., Cboe Exchange, Inc., Nasdaq ISE, LLC, Financial 
Industry Regulatory Authority, Inc., NYSE Arca, Inc., The Nasdaq Stock 
Market LLC, BOX Exchange LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, Miami 
International Securities Exchange, LLC, Nasdaq GEMX, LLC, Nasdaq MRX, 
LLC, MIAX PEARL, LLC, [and] MIAX Emerald, LLC, and MEMX LLC approved by 
the Commission on [February 11, 2019] November 23, 2022 involving 
options-related market surveillance matters and such agreements as may 
be amended from time to time.
    19[20]. Counterparts. This Agreement may be executed in one or more 
counterparts, each of which shall be deemed an original, and such 
counterparts together shall constitute one and the same instrument.

Exhibit 1

NASDAQ and BX Rules Certification for 17d-2 Agreement With FINRA

    The Nasdaq Stock Market LLC (``Nasdaq'') and Nasdaq BX, Inc. 
(``BX'') hereby certify that the requirements contained in the Nasdaq 
and BX rules listed below are identical to, or substantially similar 
to, the FINRA [r]Rules, Exchange Act provisions or SEA rules identified 
(``Common Rules''). [noted below:]
    # Common Rules shall not include provisions regarding (i) notice, 
reporting or any other filings made directly to or from Nasdaq or BX, 
(ii) incorporation by reference to other Nasdaq or BX Rules that are 
not Common Rules, (iii) exercise of discretion in a manner that differs 
from FINRA's exercise of discretion, including but not limited to 
exercise of exemptive authority, by Nasdaq or BX, (iv) prior written 
approval of Nasdaq or BX, and (v) payment of fees or fines to Nasdaq or 
BX.

------------------------------------------------------------------------
                                                       FINRA rule(s),
                                                       exchange action
           BX rule                 Nasdaq rule      provision(s), or SEA
                                                           rule(s)
------------------------------------------------------------------------
General 2, Section 15.        General 2, Section    4370. Business
 Business Continuity Plans     15. Business          Continuity Plans
 and General 2, Section 16.    Continuity Plans      and Emergency
 Emergency Contact             and General 2,        Contact
 Information .                Section 16.           Information.
                               Emergency Contact
                               Information .

[[Page 58824]]

 
General 2, Section 10.        General 2, Section    4517. Member Filing
 Executive Representative;     10. Executive         and Contact
 General 2, Section 11.        Representative;       Information
 Contact Information           General 2, Section    Requirements.
 Requirements .               11. Contact
                               Information
                               Requirements .
General 3, Rule 1002(b)       General 3, Rule       FINRA Bylaws Article
 Qualifications of Exchange    1002(b)               III, Sec. 1.
 Members and Associated        Qualifications of
 Persons; Registration of      Exchange Members
 Branch Offices and            and Associated
 Designation of Office of      Persons;
 Supervisory Jurisdiction .   Registration of
                               Branch Offices and
                               Designation of
                               Office of
                               Supervisory
                               Jurisdiction .
General 3, Rule 1002(d).      General 3, Rule       3110(a)(3)
 Registration of Branch        1002(d).              Supervision and SM
 Offices and Designation of    Registration of       .01 and .02
 Office of Supervisory         Branch Offices and    Supervision* and
 Jurisdiction .               Designation of        FINRA By-Laws
                               Office of             Article IV, Sec. 8.
                               Supervisory
                               Jurisdiction .
General 3, 1012(c)(1). Duty   General 3, Rule       1122. Filing of
 to Ensure the Accuracy,       1012(c)(1). Duty to   Misleading
 Completeness, and Current     Ensure the            Information as to
 Nature of Membership          Accuracy,             Membership or
 Information Filed with the    Completeness, and     Registration; FINRA
 Exchange .                   Current Nature of     Bylaws Article IV,
                               Membership            [s]Sec. 1(c) of the
                               Information Filed     By-Laws.
                               with the Exchange .
General 4, Section 1, 1210.   General 4, Section    1210. Registration
 Registration Requirements .  1, 1210.              Requirements.
                               Registration
                               Requirements .
General 4, Section 1, 1220.   General 4, Section    1220. Registration
 Registration Categories       1, 1220.              Categories.
 \1\.                         Registration
                               Categories \2\[1].
General 4, Section 1,         General 4, Section    1220.06. Eliminated
 1220.06. Eliminated           1, 1220.06.           Registration
 Registration Categories \1\.  Eliminated            Categories.
                               Registration
                               Categories.
General 4, Section 1, Rule    General 4, Section    1230. Associated
 1230(1) (2)(D) Associated     1, Rule 1230(1)-      Persons Exempt from
 Persons Exempt from           (2)(D) Associated     Registration.
 Registration .               Persons Exempt from
                               Registration .
General 4, Section 1, 1240.   General 4, Section    1240. Continuing
 Continuing Education          1, 1240. Continuing   Education
 Requirements.                 Education             Requirements.
                               Requirements \3\.
General 4, Section 1, 1250.   General 4, Section    1010. Electronic
 Electronic Filing             1, 1250. Electronic   Filing Requirements
 Requirements for Uniform      Filing Requirements   for Uniform Forms
 Forms .                      for Uniform Forms .  and FINRA Bylaws
                                                     Article V, Section
                                                     2.
[Equity 5, Section 1.         [Equity 5, Section    [7410. Definitions].
 Definitions].                 1. Definitions].
[Equity 5, Section 2.         [Equity 5, Section    [7420.
 Applicability].               2. Applicability].    Applicability].
[Equity 5, Section 3.         [Equity 5, Section    [7430.
 Synchronization of Member     3. Synchronization    Synchronization of
 Business Clocks].             of Member Business    Member Business
                               Clocks].              Clocks].
[Equity 5, Section 4.         [Equity 5, Section    [7440. Recording of
 Recording of Order            4. Recording of       Order Information].
 Information].                 Order Information].
[Equity 5, Section 5. Order   [Equity 5, Section    [7450. Order Data
 Data Transmission             5. Order Data         Transmission
 Requirements].                Transmission          Requirements].
                               Requirements].
[Equity 5, Section 6.         [Equity 5, Section    [7460. Violation of
 Violation of Order Audit      6. Violation of       Order Audit Trail
 Trail System Rules].          Order Audit Trail     System Rules].
                               System Rules].
General 9, Section 1(a).      General 9, Section    2010. Standards of
 Standards of Commercial       1(a). Standards of    Commercial Honor
 Honor and Principles of       Commercial Honor      and Principles of
 Trade.                        and Principles of     Trade.*
                               Trade.
General 9, Section 1(b).      General 9, Section    5320. Prohibition
 Prohibition Against Trading   1(b). Prohibition     Against Trading
 Ahead of Customer Orders.     Against Trading       Ahead of Customer
                               Ahead of Customer     Orders.**
                               Orders.
General 9, Section 1(c).      General 9, Section    5270. Front Running
 Front Running Policy.         1(c). Front Running   of Block
                               Policy.               Transactions.**
General 9, Section 1(d).      General 9, Section    5280. Trading Ahead
 Trading Ahead of Research     1(d). Trading Ahead   of Research
 Reports.                      of Research Reports.  Reports.**
General 9, Section 1(e).      General 9, Section    5240. Anti-
 Anti-Intimidation/            1(e). Anti-           Intimidation/
 Coordination.                 Intimidation/         Coordination.
                               Coordination.
General 9, Section 1(f).      General 9, Section    2232. Customer
 Confirmation of Callable      1(f). Confirmation    Confirmations.
 Common Stock.                 of Callable Common
                               Stock.
General 9, Section 1(g).      General 9, Section    2140. Interfering
 Interfering With the          1(h). Interfering     With the Transfer
 Transfer of Customer          With the Transfer     of Customer
 Accounts in the Context of    of Customer           Accounts in the
 Employment Disputes.          Accounts in the       Context of
                               Context of            Employment
                               Employment Disputes.  Disputes.
General 9, Section 1[(i)]     General 9, Section    2020. Use of
 (h). Use of Manipulative,     1(g). Use of          Manipulative,
 Deceptive or Other            Manipulative,         Deceptive or Other
 Fraudulent Devices.           Deceptive or Other    Fraudulent
                               Fraudulent Devices.   Devices.*
General 9, Section 2.         General 9, Section    2150. Improper Use
 Customers' Securities or      2. Customers'         of Customers'
 Funds.                        Securities or Funds.  Securities or
                                                     Funds; Prohibition
                                                     Against Guarantees
                                                     and Sharing in
                                                     Accounts.
General 9, Section 3.         General 9, Section    2210. Communications
 Communications with the       3. Communications     with the Public.
 Public.                       with the Public.
General 9, Section 5.         General 9, Section    3230. Telemarketing.
 Telemarketing.                5. Telemarketing.
General 9, Section 6.         General 9, Section    2251. Processing and
 Forwarding of Proxy and       6. Forwarding of      Forwarding of Proxy
 Other Issuer-Related          Proxy and Other       and Other Issuer-
 Materials.                    Issuer-Related        Related Materials.
                               Materials.
General 9, Section 7(a).      General 9, Section    2261. Disclosure of
 Disclosure of Financial       7(a). Disclosure of   Financial
 Condition.                    Financial Condition.  Condition.
General 9, Section 7(b).      General 9, Section    2262. Disclosure of
 Disclosure of Control         7(b). Disclosure of   Control
 Relationship with Issuer.     Control               Relationship with
                               Relationship with     Issuer.'
                               Issuer.
General 9, Section 7(c).      General 9, Section    2269. Disclosure of
 Disclosure of Participation   7(c). Disclosure of   Participation or
 or Interest in Primary or     Participation or      Interest in Primary
 Secondary Distribution.       Interest in Primary   or Secondary
                               or Secondary          Distribution.
                               Distribution.
General 9, Section 8. SIPC    General 9, Section    2266. SIPC
 Information.                  8. SIPC Information.  Information.
General 9, Section 9.         General 9, Section    5150. Fairness
 Fairness Opinions.            9. Fairness           Opinions.
                               Opinions.
General 9, Section 10         General 9, Section    2111. Suitability.
 Recommendations to            10. Recommendations
 Customers (Suitability).      to Customers
                               (Suitability).

[[Page 58825]]

 
General 9, Section 11. Best   General 9, Section    5310. Best Execution
 Execution and                 11. Best Execution    and
 Interpositioning.             and                   Interpositioning.**
                               Interpositioning.
General 9, Section 12.        General 9, Section    2231. Customer
 Customer Account Statements.  12. Customer          Account Statements.
                               Account Statements.
General 9, Section 13.        General 9, Section    2264. Margin
 Margin Disclosure Statement.  13. Margin            Disclosure
                               Disclosure            Statement.
                               Statement.
General 9, Section 14.        General 9, Section    2130. Approval
 Approval Procedures for Day-  14. Approval          Procedures for Day-
 Trading Accounts.             Procedures for Day-   Trading Accounts
                               Trading Accounts.     and Rule 2270 Day-
                                                     Trading Risk
                                                     Disclosure
                                                     Statement.
General 9, Section 15.        General 9, Section    3240. Borrowing From
 Borrowing From or Lending     15. Borrowing From    or Lending to
 to Customers.                 or Lending to         Customers.
                               Customers.
General 9, Section 16.        General 9, Section    2122. Charges for
 Charges for Services          16. Charges for       Services Performed.
 Performed.                    Services Performed.
General 9, Section 18.        General 9, Section    5250. Payments for
 Payments for Market Making.   18. Payments for      Market Making.
                               Market Making.
General 9, Section 19.        General 9, Section    3260. Discretionary
 Discretionary Accounts.       19. Discretionary     Accounts.
                               Accounts.
General 9, Section 20.        General 9, Section    3110. Supervision.
 Supervision.                  20. Supervision.
General 9, Section 21(a).     General 9, Section    3120. Supervisory
 Supervisory Control System,   21(a). Supervisory    Control System.
 Annual Certification of       Control System,
 Compliance and Supervisory    Annual
 Processes.                    Certification of
                               Compliance and
                               Supervisory
                               Processes.
General 9, Section 21(c).     General 9, Section    3130. Annual
 Supervisory Control System,   21(c). Supervisory    Certification of
 Annual Certification of       Control System,       Compliance and
 Compliance and Supervisory    Annual                Supervisory
 Processes.                    Certification of      Processes.
                               Compliance and
                               Supervisory
                               Processes.
General 9, Section 23.        General 9, Section    3270. Outside
 Outside Business Activities   23. Outside           Business Activities
 of an Associated Person.      Business Activities   of an Associated
                               of an Associated      Person.
                               Person.
General 9, Section 24.        General 9, Section    3280. Private
 Private Securities            24. Private           Securities
 Transactions of an            Securities            Transactions of an
 Associated Person.            Transactions of an    Associated Person.
                               Associated Person.
General 9, Section 25.        General 9, Section    3210. Accounts at
 Transactions for or by        25. Transactions      Other Broker-
 Associated Persons.           for or by             Dealers and
                               Associated Persons.   Financial
                                                     Institutions.
General 9, Section 26.        General 9, Section    3220. Influencing or
 Influencing or Rewarding      26. Influencing or    Rewarding Employees
 Employees of Others.          Rewarding Employees   of Others.
                               of Others.
General 9, Section 27.        General 9, Section    4530. Reporting
 Reporting Requirements .     27. Reporting         Requirements.
                               Requirements .
General 9, Section 28.        General 9, Section    2263. Arbitration
 Disclosure to Associated      28. Disclosure to     Disclosure to
 Persons When Signing Form U-  Associated Persons    Associated Persons
 4.                            When Signing Form U-  When Signing or
                               4.                    Acknowledging Form
                                                     U-4.
General 9, Section 30. Books  General 9, Section    4511. General
 and Records, Section 43.      30. Books and         Requirements.
 General Requirements.         Records, Section
                               43. General
                               Requirements.
General 9, Section 31. Use    General 9, Section    2060. Use of
 of Information Obtained in    31. Use of            Information
 Fiduciary Capacity.           Information           Obtained in
                               Obtained in           Fiduciary Capacity.
                               Fiduciary Capacity.
General 9, Section 37. Anti-  General 9, Section    3310. Anti-Money
 Money Laundering Compliance   37. Anti-Money        Laundering
 Program.                      Laundering            Compliance Program.
                               Compliance Program.
General 9, Section 39.        General 9, Section    4360. Fidelity
 Fidelity Bonds.               39. Fidelity Bonds.   Bonds.
[General 9, Section 30.       General 9, Section    4513. Records of
 Books and Records, (d)        44. Records of        Written Customer
 Record of Written             Written Customer      Complaints.
 Complaints; (e)               Complaints.
 ``Complaint'' Defined]
 General 9, Section 44.
 Records of Written Customer
 Complaints.
[General 9, Section 30.       General 9, Section    4512. Customer
 Books and Records, (b)        45. Customer          Account
 Customer Account              Account Information.  Information.
 Information] General 9,
 Section 45. Customer
 Account Information.
[General 9, Section 30.       General 9, Section    4514. Authorization
 Books and Records, (g)        46. Authorization     Records for
 Negotiable Instruments        Records for           Negotiable
 Drawn From A Customer's       Negotiable            Instruments Drawn
 Account] General 9, Section   Instruments Drawn     From a Customer's
 46. Authorization Records     From a Customer's     Account.
 for Negotiable Instruments    Account.
 Drawn From a Customer's
 Account.
[General 9, Section 30.       General 9, Section    4515. Approval and
 Books and Records, (j)        47. Approval and      Documentation of
 Changes in Account Name or    Documentation of      Changes in Account
 Designation] General 9,       Changes in Account    Name or
 Section 47. Approval and      Name or Designation.  Designation.
 Documentation of Changes in
 Account Name or Designation.
General 9, Section 49.        General 9, Section    5230. Payments
 Payments Involving            49. Payments          Involving
 Publications that Influence   Involving             Publications that
 the Market Price of a         Publications that     Influence the
 Security.                     Influence the         Market Price of a
                               Market Price of a     Security.
                               Security.
General 9, Section 50.        General 9, Section    1021. Foreign
 Foreign Members .            50. Foreign Members   Members.
                               .
General 9, Section 51.        General 9, Section    2241. Research
 Research Analysts.            51. Research          Analysts and
                               Analyst.              Research Reports.
General 9, Section 71.        General 9, Section    4570. Custodian of
 Custodian of Books and        71. Custodian of      Books and Record,
 Records.                      Books and Records.    (a) Designation of
                                                     Custodian.
Equity 2, Section 5(e).       Equity 2, Section     FINRA Rule 6240.
 Locked and Crossed Markets.   5(e). Locked and      Prohibition from
                               Crossed Markets.      Locking or Crossing
                                                     Quotations in NMS
                                                     Stocks.**
Equity 9, Section 1           Equity 9, Section 1.  5330. Adjustment of
 Adjustment of Open Orders.    Adjustment of Open    Orders.
                               Orders.

[[Page 58826]]

 
Equity 9, Section 3.          Equity 9, Section 3.  5210. Publication of
 Publication of Transactions   Publication of        Transactions and
 and Quotations.               Transactions and      Quotations.
                               Quotations.
Equity 9, Section 10. Prompt  Equity 9, Section     11860(a)(4)(A).
 Receipt and Delivery of       10. Prompt Receipt    Purchases.
 Securities.                   and Delivery of
                               Securities.
Equity 9, Section 11. Order   Equity 9, Section     5290. Order Entry
 Entry and Execution           11. Order Entry and   and Execution
 Practices .                  Execution Practices   Practices.
                               .
Equity 10, Section 1. Direct  Equity 10, Section    2310. Direct
 Participation Programs.       1. Direct             Participation
                               Participation         Programs.
                               Programs.
Equity 10, Section 2.         Equity 10, Section    2341. Investment
 Investment Company            2. Investment         Company Securities.
 Securities.                   Company Securities.
[2841. General] Equity 10,    Equity 10, Section    2351(a). General
 Section 3(a) Trading in       3(a). [General]       Provisions
 Index Warrants, Currency      Trading in Index      Applicable to
 Index Warrants, and           Warrants, Currency    Trading in Index
 Currency Warrants.            Index Warrants, and   Warrants, Currency
                               Currency Warrants.    Index Warrants and
                                                     Currency Warrants.
Equity 10, Section 4          Equity 10, Section 4  2357. Position and
 Position Limits; 5 Exercise   Position Limits; 5    Exercise Limits;
 Limits; and 7 Liquidation     Exercise Limits;      Liquidations.
 of Index Warrant Positions.   and 7 Liquidation
                               of Index Warrant
                               Positions.
Options 6E, Section 1.        Options 6E, Section   4511(a). General
 Maintenance, Retention and    1. Maintenance,       Requirements.
 Furnishing of Books,          Retention and
 Records and Other             Furnishing of
 Information .                Books, Records and
                               Other Information .
Options 9, Section 9.         Options 9, Section    Section 15(g) of the
 Prevention of the Misuse of   9. Prevention of      Securities Exchange
 Material Nonpublic            the Misuse of         Act of 1934, and
 Information .                Material Nonpublic    3110(b)(1), (d).
                               Information .        Supervision.
Options 9, Section 10.        Options 9, Section    4530(a)(1)(A) and
 Disciplinary Action by        10. Disciplinary      (2). Reporting
 Other Organizations .        Action by Other       Requirements; FINRA
                               Organizations .      By-Laws, Article V,
                                                     Section 2(c); and
                                                     FINRA By-Laws,
                                                     Article V, Section
                                                     3.
Options 10, Section 12.       Options 10, Section   SEA Rule 17a-5 [of
 Statements of Financial       12. Statements of     the Securities
 Condition to Public           Financial Condition   Exchange Act of
 Customers.                    to Public Customers.  1934].
Options 10, Section 19.       Options 10, Section   11870. Customer
 Transfer of Accounts.         19. Transfer of       Account Transfer
                               Accounts.             Contracts.
Options 10 Section 23.        Options 10 Section    3230. Telemarketing.
 Telephone Solicitation.       23. Telephone
                               Solicitation.
Equity 9, Section 15.         N/A.................  2353. Suitability.
 Suitability.
Equity 9, Section 16.         N/A.................  2354. Discretionary
 Discretionary Accounts.                             Accounts.
Equity 9, Section 17.         N/A.................  2355. Supervision of
 Supervision of Accounts.                            Accounts.
Equity 9, Section 18.         N/A.................  2356. Customer
 Customer Complaints.                                Complaints.
Equity 9, Section 19.         N/A.................  2357. Communications
 Communications with the                             with the Public and
 Public and Customers                                Customers
 Concerning Index Warrants,                          Concerning Index
 Currency Index Warrants,                            Warrants, Currency
 and Currency Warrants.                              Index Warrants and
                                                     Currency Warrants.
Equity 9, Section 20.         N/A.................  2358. Maintenance of
 Maintenance of Records.                             Records.
------------------------------------------------------------------------
\1\ FINRA shall only have Regulatory Responsibilities regarding BX
  General 4, Section 1220 to the extent that BX recognizes the same
  categories of limited principal and representative registration as the
  BX Rule, by incorporating Nasdaq General 4, Section 1220, does not
  recognize registration related to investment banking, research,
  government securities, investment company and variable contracts
  products, direct participation programs, private securities offerings,
  and operations professional.
\2\ FINRA shall only have Regulatory Responsibilities regarding Nasdaq
  General 4, Section 1220 to the extent that Nasdaq recognizes the same
  categories of limited principal and representative registration as
  Nasdaq General 4, Section 1220, does not recognize registration
  related to investment banking, research, government securities,
  investment company and variable contracts products, direct
  participation programs, private securities offerings, and operations
  professional.
\3\ FINRA Rule 1240.01 allows for eligible persons to make their
  election to participate in the continuing education program under Rule
  1240(c) either (1) between January 31, 2022, and March 15, 2022; or
  (2) between March 15, 2023, and December 31, 2023. In contrast,
  Supplementary Material .01 of Nasdaq and BX General 4, Section 1, Rule
  1240 allows for eligible persons to make their election to participate
  in the continuing education program under Nasdaq and BX General 4,
  Section 1(c) either (1) by March 15, 2022, or (2) between July 6,
  2023, and December 31, 2023. Therefore, FINRA will not accept
  Regulatory Responsibilities for elections made under Supplementary
  Material .01 of Nasdaq or BX General 4, Section 1, Rule 1240 between
  March 16, 2023, and July 5, 2023.
The following provisions are covered by the Agreement between the
  Parties:
 SEC '34 Act Section 28(e)--Effect on Existing Law
 [SEC '34 Act] SEA Rule 10b-10--Confirmation of Transactions
 SEA Rule 200 of Regulation SHO--Definition of Short Sales and
  Marking Requirements**
 SEA Rule 201 of Regulation SHO--Circuit Breaker**
 [SEC '34 Act] SEA Rule 203 of Regulation SHO--Borrowing and
  Delivery Requirements
 SEA Rule 204 of Regulation SHO--Close-Out Requirements**
 SEA Rule 101 of Regulation M--Activities by Distribution
  Participants**
 SEA Rule 102 of Regulation M--Activities by Issuers and Selling
  Security Holders During a Distribution**
 SEA Rule 103 of Regulation M--Nasdaq Passive Market Making**
 SEA Rule 104 of Regulation M--Stabilizing and Other Activities
  in Connection with an Offering**
 SEA Rule 105 of Regulation M--Short Selling in Connection With
  a Public Offering**
 SEA Rule 604 of Regulation NMS--Display of Customer Limit
  Orders**
 [SEC '34 Act] SEA Rule 606 of Regulation NMS--Disclosure of
  Order Routing Information**
 [SEC '34 Act Rule 607 of Regulation NMS Customer Account
  Statements]
 SEA Rule 610(d) of Regulation NMS--Locking or Crossing
  Quotations**
 SEA Rule 611 of Regulation NMS--Order Protection Rule**
 SEA Rule 10b-5--Employment of Manipulative and Deceptive
  Devices*
 SEA Rule 17a-3/17a-4--Records to Be Made by Certain Exchange
  Members, Brokers and Dealers/Records to Be Preserved by Certain
  Exchange Members, Brokers and Dealers*
 SEA Rule 14e-4--Prohibited Transactions in Connection with
  Partial Tender Offers[\-\]
 SEA Rule 14e-4(a)(1)(ii)(D)--Prohibited Transactions in
  Connection with Partial Tender Offers (with a focus on the
  standardized call option provision)**
[[caret] FINRA shall perform surveillance, investigation, and
  Enforcement Responsibilities for SEA Rule 14e-4(a)(1)(ii)(D).]

[[Page 58827]]

 
**In addition to performing examinations and Enforcement
  Responsibilities as provided in this Agreement for the double star
  rules, FINRA shall also perform the surveillance and investigation
  responsibilities for the double star rules. These rules may be cited
  by FINRA in both the context of this Agreement and the Regulatory
  Services Agreement among FINRA, Nasdaq and BX.
*FINRA shall not have any Regulatory Responsibilities for these rules as
  they pertain to violations of insider trading activities, which is
  covered by a separate 17d-2 Agreement by and among Cboe BZX Exchange,
  Inc., Cboe BYX Exchange, Inc., Chicago Stock Exchange, Inc., Cboe EDGA
  Exchange Inc., Cboe EDGX Exchange Inc., Financial Industry Regulatory
  Authority, Inc., MEMX, LLC, MIAX PEARL, LLC, Nasdaq BX, Inc., Nasdaq
  PHLX LLC, The Nasdaq Stock Market LLC, NYSE National, Inc., New York
  Stock Exchange, LLC, NYSE American LLC, NYSE Arca Inc., [and]
  Investors' Exchange LLC and the Long-Term Stock Exchange, Inc. as
  approved by the SEC on September 23, 2020, as may be amended from time
  to time.
[caret] FINRA shall perform the surveillance and investigation
  responsibilities for these rules. The examination responsibility for
  these rules is covered by a separate 17d-2 Agreement by and among Cboe
  BZX Exchange, Inc., Cboe BYX Exchange, Inc., BOX Exchange LLC, Cboe
  Exchange, Inc., Cboe C2 Exchange, Inc., NYSE Chicago, Inc., Cboe EDGA
  Exchange, Inc., Cboe EDGX Exchange, Inc., Financial Industry
  Regulatory Authority, Inc., MEMX LLC, Nasdaq ISE, LLC, Nasdaq GEMX,
  LLC, Nasdaq MRX, LLC, Investors Exchange LLC, Miami International
  Securities Exchange, LLC, MIAX PEARL, LLC, MIAX Emerald, LLC, The
  Nasdaq Stock Market LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, NYSE
  National, Inc., New York Stock Exchange LLC, NYSE American LLC, NYSE
  Arca, Inc. and Long-Term Stock Exchange, Inc. as approved by the SEC
  on June 10, 2020 concerning covered Regulation NMS and Consolidated
  Audit Trail Rules, as may be amended from time to time.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. 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 4-575 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 4-575. 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 plan that are filed with the 
Commission, and all written communications relating to the proposed 
plan 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 plan also will be available for inspection and 
copying at the principal offices of FINRA, Nasdaq, and BX. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to File No. 4-575 and should be submitted on 
or before August 9, 2024.

V. Discussion

    The Commission finds that the proposed Amended Plan is consistent 
with the factors set forth in Section 17(d) of the Act \13\ and Rule 
17d-2(c) thereunder \14\ in that the proposed Amended Plan is necessary 
or appropriate in the public interest and for the protection of 
investors, fosters cooperation and coordination among SROs, and removes 
impediments to and fosters the development of the national market 
system. In particular, the Commission believes that the proposed 
Amended Plan should reduce unnecessary regulatory duplication by 
allocating to FINRA certain examination and enforcement 
responsibilities for Common Members that would otherwise be performed 
by both FINRA and Nasdaq, and FINRA and BX. Accordingly, the proposed 
Amended Plan promotes efficiency by reducing costs to Common Members. 
Furthermore, because FINRA, Nasdaq, and BX will coordinate their 
regulatory functions in accordance with the Amended Plan, the Amended 
Plan should promote investor protection.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78q(d).
    \14\ 17 CFR 240.17d-2(c).
---------------------------------------------------------------------------

    The Commission notes that, under the Amended Plan, FINRA, Nasdaq, 
and BX have allocated regulatory responsibility for those Nasdaq and BX 
rules, set forth in the Certification, that are substantially similar 
to the applicable FINRA rules in that examination for compliance with 
such provisions and rules would not require FINRA to develop one or 
more new examination standards, modules, procedures, or criteria in 
order to analyze the application of the rule, or a Common Member's 
activity, conduct, or output in relation to such rule. In addition, 
under the Amended Plan, FINRA would assume regulatory responsibility 
for certain provisions of the federal securities laws and the rules and 
regulations thereunder that are set forth in the Certification. The 
Common Rules covered by the Amended Plan are specifically listed in the 
Certification, as may be amended by the Parties from time to time.
    According to the Amended Plan, Nasdaq and BX will review the 
Certification at least annually, or more frequently if required by 
changes in either the rules of Nasdaq, BX or FINRA, and, if necessary, 
submit to FINRA an updated list of Common Rules to add Nasdaq or BX 
rules not included on the then-current list of Common Rules that are 
substantially similar to FINRA rules; delete Nasdaq or BX rules 
included in the then-current list of Common Rules that no longer 
qualify as common rules; and confirm that the remaining rules on the 
list of Common Rules continue to be Nasdaq and BX rules that qualify as 
common rules.\15\ FINRA will then confirm in writing whether the rules 
listed in any updated list are Common Rules as defined in the Amended 
Plan. The Commission believes that these provisions are designed to 
provide for continuing communication between the Parties to ensure the 
continued accuracy of the scope of the proposed allocation of 
regulatory responsibility.
---------------------------------------------------------------------------

    \15\ See paragraph 2 of the Amended Plan.
---------------------------------------------------------------------------

    The Commission is hereby declaring effective an Amended Plan that, 
among other things, allocates regulatory responsibility to FINRA for 
the oversight and enforcement of all Nasdaq and BX rules that are 
substantially similar to the rules of FINRA for Common Members of BX 
and FINRA, and Nasdaq and FINRA. Therefore, modifications to the 
Certification need not be filed with the Commission as an amendment to 
the Amended Plan, provided that the Parties are only adding to, 
deleting from, or confirming changes to Nasdaq or BX rules in the 
Certification in conformance with the definition of Common Rules 
provided in the Amended Plan. However, should the

[[Page 58828]]

Parties decide to add a Nasdaq or BX rule to the Certification that is 
not substantially similar to a FINRA rule; delete a Nasdaq or BX rule 
from the Certification that is substantially similar to a FINRA rule; 
or leave in the Certification a Nasdaq or BX rule that is no longer 
substantially similar to a FINRA rule, then such a change would 
constitute an amendment to the Amended Plan, which must be filed with 
the Commission pursuant to Rule 17d-2 under the Act.\16\
---------------------------------------------------------------------------

    \16\ The addition to or deletion from the Certification of any 
federal securities laws, rules, and regulations for which FINRA 
would bear responsibility under the Amended Plan for examining, and 
enforcing compliance by, Common Members, also would constitute an 
amendment to the Amended Plan.
---------------------------------------------------------------------------

    Under paragraph (c) of Rule 17d-2, the Commission may, after 
appropriate notice and comment, declare a plan, or any part of a plan, 
effective. In this instance, the Commission believes that appropriate 
notice and comment can take place after the proposed amendment is 
effective. The primary purpose of the Amended Plan is to: (i) update 
the list of Common Rules; (ii) add surveillance and investigation 
coverage for certain Common Rules specified in Exhibit 1 to the Amended 
Plan; (iii) reflect that, for Router Members, FINRA will retain 
regulatory responsibility for Nasdaq and BX rules that are not Common 
Rules; and (iv) reflect that FINRA will not make referrals to Nasdaq 
and BX for apparent violations of any Nasdaq or BX Rules by any Router 
Member. By declaring it effective today, the Amended Plan can become 
effective and be implemented without undue delay. The Commission notes 
that the prior version of this plan immediately prior to this proposed 
amendment was published for comment and the Commission did not receive 
any comments thereon.\17\ Furthermore, the Commission does not believe 
that the amendment to the plan raises any new regulatory issues that 
the Commission has not previously considered.
---------------------------------------------------------------------------

    \17\ See supra note 12 (citing to Securities Exchange Act 
Release No. 93114).
---------------------------------------------------------------------------

VI. Conclusion

    This order gives effect to the Amended Plan filed with the 
Commission in File No. 4-575. The Parties shall notify all members 
affected by the Amended Plan of their rights and obligations under the 
Amended Plan.
    It is therefore ordered, pursuant to Section 17(d) of the Act, that 
the Amended Plan in File No. 4-575, between the FINRA, BX, and Nasdaq, 
filed pursuant to Rule 17d-2 under the Act, hereby is approved and 
declared effective.
    It is further ordered that BX and Nasdaq are relieved of those 
responsibilities allocated to FINRA under the Amended Plan in File No. 
4-575.
---------------------------------------------------------------------------

    \18\ 17 CFR 200.30-3(a)(34).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-15910 Filed 7-18-24; 8:45 am]
BILLING CODE 8011-01-P