[Federal Register Volume 85, Number 102 (Wednesday, May 27, 2020)]
[Notices]
[Pages 31832-31836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11287]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88917; File No. SR-FINRA-2020-015]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Temporarily Amend Certain Timing, Method of 
Service and Other Procedural Requirements in FINRA Rules During the 
Outbreak of the Coronavirus Disease (COVID-19)

May 20, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 8, 2020, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA proposes to temporarily amend FINRA Rules 1012, 1015, 6490, 
9132, 9133, 9146, 9321, 9341, 9349, 9351, 9522, 9524, 9525, 9559, and 
9630 primarily to provide FINRA with temporary relief from certain 
timing, method of service and other procedural requirements during the 
period in which FINRA's operations are impacted by the outbreak of the 
coronavirus disease (``COVID-19'').\3\ The text of the proposed rule 
change is available on FINRA's website at http://www.finra.org, at the 
principal office of FINRA and at the Commission's Public Reference 
Room.
---------------------------------------------------------------------------

    \3\ While the temporary rule change primarily provides FINRA 
with relief, it also requires applicants, respondents and other 
parties to file certain applications, documents or other information 
by electronic mail, unless FINRA and the relevant party agree to an 
alternative method of service. The rule change also temporarily 
provides an extension of time for a Requesting Party to file an 
appeal in connection with Rule 6490(e) and removes the requirement 
to send FINRA a duplicate hard copy of certain documents and 
filings. FINRA has proposed these temporary rule changes in an 
effort to provide consistent relief to both FINRA and the impacted 
party under those rules.

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

[[Page 31833]]

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 self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
has prepared summaries, set forth in Sections A, B, and C below, of the 
most significant aspects of such statements.
    The outbreak of COVID-19 has caused substantial impacts on FINRA's 
operations. Specifically, FINRA employees, with limited exceptions, 
have been directed to work remotely and restrict certain in-person 
activities, consistent with the recommendations of public health 
officials.\4\ FINRA faces challenges meeting certain procedural 
requirements and performing certain functions in this remote work 
environment. In particular, working remotely makes it exceedingly 
difficult to send and receive hard copy mail and conduct in-person 
meetings and hearings.
---------------------------------------------------------------------------

    \4\ FINRA has noted that state imposed restrictions on business 
operations and other activities in response to the spread of COVID-
19 continue and change rapidly. Some states have imposed significant 
limitations on business operations, and essential businesses have 
scaled back operations by, for example, reducing store hours in some 
locations. These developments may impact the ability of some 
individuals involved with FINRA proceedings to obtain and send 
necessary documents.
---------------------------------------------------------------------------

    The rule changes will provide temporary relief from the timing, 
method of service and other procedural requirements described below 
during the period in which FINRA's operations are impacted by COVID-19. 
The rule changes would also require applicants, respondents and other 
parties to serve or file certain documents or other information by 
electronic mail, unless the parties agree to an alternative method, 
during this same time period. As proposed, these changes would be in 
place through June 15, 2020.\5\
---------------------------------------------------------------------------

    \5\ If FINRA requires temporary relief from these rule 
requirements beyond June 15, 2020, FINRA may submit a separate rule 
filing to extend the effectiveness of the temporary relief under 
these rules. The amended FINRA rules will revert back to their 
current state at the conclusion of the temporary relief period and 
any extension thereof.
---------------------------------------------------------------------------

    The requested relief will help minimize the impact of the COVID-19 
outbreak on FINRA's operations, allowing FINRA 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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The FINRA Rule 1000, 6400, 9100, 9300, 9520, 9550 and 9600 Series 
contain some filing, service, timing and other procedural requirements 
that present unique challenges in the current remote work environment. 
In response to these challenges, FINRA proposed to make temporary 
amendments to these rule requirements to (i) allow, and in some 
instances require, FINRA to serve certain documents by electronic mail 
(or ``email''); (ii) require that applicants, respondents, and other 
parties file or serve documents by electronic mail in connection with 
specified proceedings and processes, unless the parties agree to an 
alternative method of service; (iii) provide extensions of time to 
FINRA staff, respondents and other parties in connection with certain 
adjudicatory and review processes; and (iv) allow for oral arguments 
before the National Adjudicatory Council (``NAC'') to be conducted by 
video conference.
a. Amendments To Allow or Require FINRA To Serve Documents by 
Electronic Mail
    The current need for FINRA employees to work remotely and restrict 
certain in-person activities makes it difficult to send hard copy 
documents. FINRA's rules, with few exceptions, however, do not 
currently provide for service by electronic mail.\6\ Continuing to 
require hard copy service despite the logistical and other challenges 
presented by the outbreak of COVID-19 could lead to significant delays 
in FINRA proceedings. Accordingly, FINRA proposed the rule amendments 
discussed below to allow, and in some instances require, FINRA to serve 
documents by electronic mail.
---------------------------------------------------------------------------

    \6\ FINRA currently permits service by electronic mail under 
some of its rules. For example, FINRA Rule 6490(d)(5) (Processing of 
Company-Related Actions; Procedures for Reviewing Submissions; 
Notice Issuance) permits a notice under that provision to be issued 
by facsimile or electronic mail, or pursuant to Rule 9134.
---------------------------------------------------------------------------

    With respect to the temporary amendments that would permit FINRA to 
serve certain documents by electronic mail, it is FINRA's intent to 
elect service by electronic mail whenever possible. If FINRA has 
knowledge that the address utilized for service is not current or not 
functional (i.e., FINRA receives a bounce back or other message 
indicating that there was a failure to deliver the electronic mail), 
FINRA will utilize other permissible methods of service.\7\
---------------------------------------------------------------------------

    \7\ As indicated in the proposed rule text, and consistent with 
service by mail, FINRA will consider service by email complete upon 
sending of the relevant document or other information.
---------------------------------------------------------------------------

    In addition, to the extent that an applicant, respondent or other 
party will suffer a hardship if FINRA elects service by electronic 
mail, FINRA encourages the applicant, respondent or other party to 
contact FINRA to discuss reasonable accommodations. FINRA noted that, 
in most cases, FINRA and the relevant party, or their counsel, will 
have already engaged in communications prior to the service of 
documents or other information under the rules that are the subject of 
this temporary proposed rule change. Accordingly, in most cases, FINRA 
will already have information regarding the relevant party, or their 
counsel's, preferred method of service.
    The FINRA Rule 1000 Series (Member Application and Associated 
Person Registration) governs, among other things, the process for (i) 
applying for FINRA membership; (ii) FINRA members to seek approval of a 
change in ownership, control or business operations, and (iii) an 
applicant to request that FINRA's appellate body, the NAC, review a 
FINRA decision rendered under the 1000 Series. In connection with these 
processes, applicants and FINRA are required to file or serve certain 
documents using the prescribed methods set forth in FINRA Rule 1012(a), 
which do not include electronic mail.\8\ In response to current 
conditions, FINRA proposes to temporarily amend Rule 1012(a)(4) to 
permit FINRA to serve documents under the Rule 1000 Series by 
electronic mail. The proposed rule change also temporarily amends FINRA 
Rule 1015(f)(1), which requires the NAC to serve a notice of a hearing 
before the NAC by facsimile or overnight courier, to allow service of 
the notice by electronic mail.\9\
---------------------------------------------------------------------------

    \8\ FINRA Rule 1012(a) (General Provisions; Filing by Applicant 
or Service by FINRA) governs the filing and service requirements for 
the Rule 1000 Series.
    \9\ In an effort to acknowledge the same logistical and other 
challenges facing applicants, FINRA also proposed to amend Rule 
1015(a) to temporarily suspend the requirement that the applicant 
simultaneously file by first-class mail a copy of the request for 
review pursuant to Rule 1015(a) to the district office where the 
applicant filed its application.
---------------------------------------------------------------------------

    The FINRA Rule 9000 Series, among other things, sets forth the 
procedure for FINRA proceedings for disciplining a member, associated 
person, or formerly associated person. The Rule 9100 Series is of 
general applicability to all proceedings set forth in the Rule 9000 
Series, unless a rule specifically

[[Page 31834]]

provides otherwise. FINRA Rules 9132(b),\10\ Rule 9133(b),\11\ and Rule 
9146(l) \12\ provide that the documents and other information governed 
by those rules be served pursuant to FINRA Rule 9134, which permits 
service on the parties using the following methods: (1) Personal 
service, (2) mail, or (3) courier; Rule 9134 does not permit service by 
electronic mail. The proposed rule change temporarily amends Rule 
9132(b) to allow FINRA to serve the relevant documents or information 
by electronic mail and Rules 9133(b) and 9146(l) to require FINRA to 
serve documents by electronic mail, unless the parties agree to an 
alternative method of service.
---------------------------------------------------------------------------

    \10\ FINRA Rule 9132(b) (Service of Orders, Notices, and 
Decisions by Adjudicator; How Served).
    \11\ FINRA Rule 9133(b) (Service of Papers Other Than 
Complaints, Orders, Notices or Decisions; How Served).
    \12\ FINRA Rule 9146(l) (Motions; General).
---------------------------------------------------------------------------

    The FINRA Rule 9300 Series sets forth the procedures for review of 
disciplinary proceedings by the NAC and FINRA Board and for 
applications for Commission review. FINRA Rules 9321,\13\ 9341(c),\14\ 
9349(c),\15\ and 9351(e) \16\ require FINRA to serve documents in 
connection with those proceedings. Service under those rules is 
governed by Rule 9134, which does not permit electronic mail as a 
method of service. The proposed rule change temporarily amends Rules 
9321, 9341(c), 9349(c), and 9351(e) to allow for electronic mail as a 
method of service.
---------------------------------------------------------------------------

    \13\ FINRA Rule 9321 (Transmission of Record).
    \14\ FINRA Rule 9341(c) (Oral Argument; Notice Regarding Oral 
Argument).
    \15\ FINRA Rule 9349(c) (National Adjudicatory Council Formal 
Consideration; Decision; Issuance of Decision After Expiration of 
Call for Review Period).
    \16\ FINRA Rule 9351(e) (Discretionary Review by FINRA Board; 
Issuance of Decision After Expiration of Call for Review Period).
---------------------------------------------------------------------------

    The FINRA Rule 9520 Series sets forth the procedures for 
eligibility proceedings and review of those proceedings by the NAC and 
FINRA Board. FINRA Rules 9522(a)(4),\17\ 9524(a)(3)(A) and (B),\18\ 
Rule 9524(b)(3),\19\ and Rule 9525(e) \20\ require FINRA to serve 
documents in connection with those proceedings, but do not allow for 
electronic mail as a method of service. The proposed rule change 
temporarily amends Rules 9522(a)(4), 9524(a)(3)(A) and (B), 9524(b)(3), 
and Rule 9525(e) to allow for electronic mail as a method of service.
---------------------------------------------------------------------------

    \17\ FINRA Rules 9522(a)(4) (Initiation of Eligibility 
Proceeding; Member Regulation Consideration; Service).
    \18\ FINRA Rule 9524(a)(3)(A) and (B) (National Adjudicatory 
Council Consideration; Transmission of Documents).
    \19\ FINRA Rule 9524(b)(3) (National Adjudicatory Council 
Consideration; Issuance of Decision After Expiration of Call for 
Review Period).
    \20\ FINRA Rule 9525(e) (Discretionary Review by the FINRA 
Board; Issuance of Decision).
---------------------------------------------------------------------------

    The FINRA Rule 9550 Series sets forth the procedures for expedited 
proceedings and the ability of the NAC to call for review a proposed 
decision prepared under the Rule 9550 Series. FINRA Rule 9559(h)(2) 
\21\ sets forth the timing and method of service requirements for the 
parties' exchange of proposed exhibit and witness lists in advance of 
an expedited proceeding.\22\ FINRA Rule 9559(q)(2) \23\ requires the 
NAC to serve its decision when it issues one and FINRA Rule 9559(q)(5) 
requires the NAC to serve the decision on the parties and all members 
with which the respondent is associated. Rule 9559(q)(2) and (5) do not 
allow for electronic mail as a method of service. The proposed rule 
change temporarily amends Rule 9559(h)(2) to require FINRA to serve its 
exhibit and witness lists by electronic mail, unless the parties agree 
to an alternative method of service, and 9559(q)(2) and (5) to allow 
for electronic mail as a method of service.
---------------------------------------------------------------------------

    \21\ FINRA Rule 9559(h) (Hearing Procedures for Expedited 
Proceedings Under the Rule 9550 Series; Transmission of Documents). 
Email is currently permitted as a method of service under Rule 
9559(h).
    \22\ As with the proposed temporary change to Rule 1015(a) noted 
supra in footnote 9, FINRA proposes to temporarily amend FINRA Rule 
9559(h) to also suspend the requirements in Rule 9559(h)(1) and (2) 
that, if the specified documents are served by facsimile or email, 
they must also be served by either overnight courier or personal 
delivery.
    \23\ FINRA Rule 9559(q) (Hearing Procedures for Expedited 
Proceedings Under the Rule 9550 Series; Call for Review by the 
National Adjudicatory Council).
---------------------------------------------------------------------------

    The FINRA Rule 9600 Series sets forth the procedures for members to 
seek exemptive relief from a variety of FINRA rules. FINRA Rule 
9630(e)(1) and (2) \24\ require the NAC to serve its decision pursuant 
to Rule 9134, which does not allow for electronic mail as a method of 
service. The proposed rule change temporarily amends Rule 9630(e) to 
allow for electronic mail as a method of service.
---------------------------------------------------------------------------

    \24\ FINRA Rule 9630(e) (Procedures for Exemptions; Appeal; 
Decision).
---------------------------------------------------------------------------

    FINRA believes the requested temporary relief to serve documents by 
electronic mail in connection with the above referenced rules is 
reasonably tailored to the needs and restraints on the organization's 
operations during the COVID-19 pandemic. The proposed rule change 
strikes an appropriate balance by seeking relief that will minimize 
disruptions to FINRA processes, and provide necessary accommodations, 
without compromising critical investor protection measures or fair 
processes. For example, FINRA is not seeking relief to permit service 
of complaints by electronic mail in FINRA disciplinary proceedings due 
to heightened fair process concerns. Further, as noted above, FINRA 
will use another permissible method of service if it has knowledge that 
the address used for service by electronic mail is not current or 
functional, or if FINRA is notified by the relevant party that service 
by electronic mail would cause a hardship. The proposed relief to serve 
some documents by electronic mail incorporated such considerations.
b. Amendments To Require Filing by Electronic Mail
    FINRA's current remote work environment and related restrictions on 
accessing FINRA buildings poses significant logistical and other 
challenges on FINRA's ability to timely receive and process hard copy 
mail. In response, the proposed rule change also temporarily amends 
FINRA Rules 1012(a)(3),\25\ 6490(e),\26\ 9133(b), 9146(l), 
9524(a)(3)(A) and (B), and 9559(h)(2) to require the applicant, 
respondent, or requesting party, depending on the rule, to file or 
serve certain documents and information by electronic mail, unless the 
parties agree to an alternative method of service. FINRA's intent is to 
accommodate an applicant, respondent or other party if service by 
electronic mail is not feasible. The requested relief will allow FINRA 
to minimize the logistical and other challenges posed by the current 
conditions and assist FINRA in maintaining fair review processes and 
proceedings.
---------------------------------------------------------------------------

    \25\ FINRA Rule 1012(a)(3), as temporarily amended, will allow 
the applicant to file requested documents or information using a 
method other than electronic mail upon agreement with FINRA.
    \26\ FINRA Rule 6490(e) (Processing of Company-Related Actions; 
Request for an Appeal to Subcommittee of Uniform Practice Code 
Committee).
---------------------------------------------------------------------------

c. Amendments To Provide Extensions of Time
    Operating remotely, and with numerous restrictions in place, also 
makes it difficult for FINRA staff to meet certain deadlines related to 
the adjudicatory and review processes set forth in FINRA Rules 1015, 
6490 and 9559. Accordingly, the proposed rule change requests temporary 
extensions of time under these Rules.
    FINRA Rule 1015 governs the process by which an applicant can 
appeal an adverse decision rendered by FINRA pursuant to Rule 1014 or 
1017 to the

[[Page 31835]]

NAC. Rule 1015(f)(1) provides that if a hearing is requested by the 
applicant or directed, the hearing must be held within 45 days after 
the filing of the request with the NAC or service of the notice by the 
Subcommittee.\27\ FINRA proposed to temporarily amend Rule 1015(f)(1) 
to require the hearing to take place within 135 days after the filing 
of the request with the NAC or service of the notice by the 
Subcommittee, providing a 90-day extension to the existing 45-day 
deadline. Rule 1015(i) (Subcommittee Recommendation) requires that the 
Subcommittee present its recommended decision in writing to the NAC 
within 60 days after the hearing held pursuant to 1015(f), and not 
later than seven days before the meeting of the NAC at which the 
membership proceeding shall be considered. The proposed rule change 
temporarily amends Rule 1015(i) to require the Subcommittee to present 
its decision in writing 150 days after the date of the hearing held 
pursuant to Rule 1015(f), providing a 90-day extension to the existing 
60-day deadline.
---------------------------------------------------------------------------

    \27\ FINRA Rule 1015(d) (Appointment of Subcommittee) requires 
that the NAC (or Review Subcommittee as defined in Rule 9120) 
appoint a Subcommittee to participate in the review of the appeal 
and provides that the Subcommittee shall be composed of two or more 
persons who shall be current or past members of the National 
Adjudicatory Council or former Directors or Governors.
---------------------------------------------------------------------------

    Rule 6490 codifies the requirements in Exchange Act Rule 10b-17 for 
issuers of a class of publicly trading securities to provide timely 
notice to FINRA of certain corporate actions (e.g., dividend or other 
distribution of cash or securities, stock split or reverse split, 
rights or subscription offering). FINRA reviews related documentation 
and, under certain circumstances, the documentation may not be 
processed if it is deemed deficient. Rule 6490(e) sets forth the 
process for appealing such a determination. Rule 6490(e) requires that 
a Requesting Party appeal an adverse determination within seven (7) 
calendar days of receiving notice of the determination under the Rule, 
otherwise the determination will constitute final FINRA action. Rule 
6490(e) further requires that the Subcommittee tasked with reviewing 
appeals under this Rule to convene once each calendar month to consider 
all appeals received during the prior month. The proposed rule change 
will temporarily amend Rule 6490(e) to (i) extend the time for a 
Requesting Party to file an appeal from seven calendar days to 30 
calendar days, and (ii) permit the Subcommittee to convene once every 
90 days instead of monthly and review appeals from within the last 90 
days rather than the prior month.
    Rule 9559(q)(2) sets forth the deadlines for the Subcommittee of 
the NAC to review a proposed decision drafted by the Office of Hearing 
Officers in connection with an expedited proceeding and issue a 
recommendation to the NAC, if the proceeding is called for review. The 
Subcommittee of the NAC is required to meet and conduct its review of 
the proposed decision, and provide its recommendation to the NAC, no 
later than 40 and 60 days, respectively, after the call for review. The 
proposed rule change temporarily amends Rule 9559(q)(2) to require a 
Subcommittee of the NAC to meet and conduct its review within 70 days 
and make a recommendation to the NAC within 90 days, providing 30-day 
extensions to the existing deadlines. These extensions of time 
requested in connection with Rules 1015(f)(1) and (i), 6490(e), and 
9559(q)(2) provide reasonable grace periods to adjust to current 
conditions, the remote work environment and the corresponding 
challenges, while maintaining fair and orderly adjudicatory and review 
processes under these Rules.
d. Amendment for In-Person Attendance Requirement
    FINRA Rule 9341(d) \28\ provides that oral arguments made in 
connection with the review of a FINRA disciplinary proceeding take 
place before the Subcommittee or, if applicable, the Extended 
Proceeding Committee and requires all members of the relevant 
Subcommittee or Extended Proceeding Committee to be present for the 
oral argument.\29\ The proposed rule change amends Rule 9341(d) to 
temporarily permit oral arguments to be conducted by video conference. 
The requested relief is a reasonable accommodation to protect the 
health and safety of all parties participating in these adjudicatory 
processes while avoiding unnecessary delays to these proceedings.
---------------------------------------------------------------------------

    \28\ FINRA Rule 9341(d) (Oral Argument; Attendance Required).
    \29\ See FINRA Rule 9331 (Appointment of Subcommittee or 
Extended Proceeding Committee) provides that the NAC or the Review 
Subcommittee shall appoint a Subcommittee or an Extended Proceeding 
Committee to participate, subject to Rule 9345, in a disciplinary 
proceeding appealed or called for review.
---------------------------------------------------------------------------

    FINRA would be able to implement the proposed rule change 
immediately upon effectiveness of this proposed rule change. FINRA has 
filed the proposed rule change for immediate effectiveness and has 
requested that the Commission waive the requirement that the proposed 
rule change not become operative for 30 days after the date of the 
filing, so FINRA can implement the proposed rule change immediately.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of
    Section 15A(b)(6) of the Act,\30\ which requires, among other 
things, that FINRA rules must be designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest. FINRA believes that the proposed rule change is also 
consistent with Section 15A(b)(8) of the Act,\31\ which requires, among 
other things, that FINRA rules provide a fair procedure for the 
disciplining of members and persons associated with members.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78o-3(b)(6).
    \31\ 15 U.S.C. 78o-3(b)(8).
---------------------------------------------------------------------------

    The proposed rule change would grant FINRA, and in some cases 
another party to a proceeding, temporary modifications to its 
procedural requirements in order to allow FINRA to maintain fair 
processes and protect investors while operating in a remote work 
environment, and with corresponding restrictions on its activities. It 
is in the public interest, and consistent with the Act's purpose, for 
FINRA to receive this relief to specify filing and service methods, 
extend certain time periods, and modify the format of oral argument for 
FINRA disciplinary and eligibility proceedings and other review 
processes in order to cope with the current pandemic conditions. 
FINRA's disciplinary and eligibility proceedings and other review 
processes serve a critical role in providing investor protection and 
maintaining fair and orderly markets by, for example, sanctioning 
misconduct and preventing further customer harm by members and 
associated persons. As noted above, the proposed rule change strikes an 
appropriate balance by seeking needed temporary relief in connection 
with rules and requirements that do not raise heightened fairness 
concerns.

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

    FINRA does not believe that the temporary proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The proposed 
rule change is intended solely to provide temporary relief from 
procedural requirements in FINRA rules

[[Page 31836]]

that would otherwise impose unnecessary impediments to FINRA's 
operations and FINRA's investor protection goals. FINRA does not 
believe that the proposed rule change will have any material negative 
effect on members and will not impose any new costs.

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

    FINRA has neither solicited nor received comments on the proposed 
rule change.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \32\ and Rule 19b-
4(f)(6) \33\ thereunder.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78s(b)(3)(A).
    \33\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
FINRA has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
pursuant to Rule 19b-4(f)(6)(iii), the Commission may designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. FINRA has asked the Commission to 
waive the 30-day operative delay so that the proposed rule change may 
become operative immediately upon filing. As noted above, FINRA stated 
that the requested relief will help minimize the impact of the COVID-19 
outbreak on FINRA's operations, allowing FINRA 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. FINRA 
also stated that while social distancing requirements have been 
implemented across the United States to benefit the health and welfare 
of its citizens, certain internal processes, as well as interactions 
with member firms, required by FINRA rules are more efficiently and 
effectively implemented when physical proximity and full access to 
necessary products and services are unhampered. FINRA noted that the 
proposed rule change will provide temporary relief on many of these 
prescriptions to accommodate the impact that the outbreak has had on, 
among other things, FINRA employees' ability to interact internally, 
with committees and with member firms. FINRA believes that, given the 
impacts of the COVID-19 crisis, there is a significant benefit to 
quickly implementing this proposed rule change. The Commission also 
notes that the proposal provides only temporary relief from, as FINRA 
states, the timing, method of service and other procedural 
requirements, described above, during the period in which FINRA's 
operations are impacted by COVID-19. As proposed, these changes would 
be in place through June 15, 2020.\34\ FINRA also noted that the 
amended rules will revert back to their current state at the conclusion 
of the temporary relief period and, if applicable, any extension 
thereof. For these reasons, the Commission believes that waiver of the 
30-day operative delay 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.\35\
---------------------------------------------------------------------------

    \34\ As noted above, see supra note 5, FINRA states that if it 
requires temporary relief from the rule requirements identified in 
this proposal beyond June 15, 2020, it may submit a separate rule 
filing to extend the effectiveness of the temporary relief under 
these rules.
    \35\ 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).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-FINRA-2020-015 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-FINRA-2020-015. 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, on business days between the 
hours of 10:00 a.m. and 3:00 p.m., located at 100 F Street NE, 
Washington, DC 20549. Copies of such filing also will be available for 
inspection and copying at the principal office of FINRA. 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-FINRA-2020-015 
and should be submitted on or before June 17, 2020.
---------------------------------------------------------------------------

    \36\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\36\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-11287 Filed 5-26-20; 8:45 am]
BILLING CODE 8011-01-P


