[Federal Register Volume 86, Number 56 (Thursday, March 25, 2021)]
[Notices]
[Pages 15996-16003]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06125]



[[Page 15996]]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91370; File No. SR-BX-2021-006]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the 
Exchange's Books and Records Rules and Update Obsolete NASD References 
in Its Rulebook

March 19, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 8, 2021, Nasdaq BX, Inc. (``BX'' or ``Exchange'') 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 Exchange. 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

    The Exchange proposes to update the Exchange's books and records 
provisions; update obsolete references to NASD rules in the Exchange's 
rulebook (``Rulebook''); and make other related and cleanup changes.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    In 2008, the Financial Industry Regulatory Authority (FINRA) began 
a process to harmonize and streamline its rules by retiring, 
consolidating, and relocating NASD rules into the FINRA rulebook.\3\ 
Consistent with those changes, the Exchange is proposing to update the 
Exchange's books and records provisions; replace outdated NASD 
references in its Rulebook; delete unnecessary or duplicative rule 
text; and consolidate certain Exchange rules. Additionally, the 
Exchange proposes to make some necessary cleanup changes to improve the 
readability of its Rulebook.
---------------------------------------------------------------------------

    \3\ See Information Notice, March 28, 2008 (Rulebook 
Consolidation Process) at https://www.finra.org/sites/default/files/NoticeDocument/p038121.pdf.
---------------------------------------------------------------------------

    Generally, where appropriate, the Exchange will replace the term 
``Association'' and the ``NASD'' acronym with the acronym ``FINRA.'' 
Specifically, the Exchange will provide cites to the updated FINRA 
rules and current internal references as provided in the relocated 
FINRA rules.
    Additionally, the Exchange proposes to delete throughout its 
Rulebook the paragraphs that refer to the consolidation of NASD rules 
into the FINRA rulebook, since FINRA has completed the relocation of 
the NASD rules. Finally, the Exchange proposes to update internal 
cross-references as necessary.\4\
---------------------------------------------------------------------------

    \4\ The Exchange will request an exemption from the rule filing 
requirements of Section 19(b) of the Exchange Act for those FINRA 
rules that it proposes to incorporate by reference. The proposed 
rule changes that are the subject of this filing will be operative 
upon the approval of the Exchange's request for an exemption under 
Section 36 of the Exchange Act from filing proposed rule changes.
---------------------------------------------------------------------------

A. Books and Records Rules
    The FINRA Books and Records Filing,\5\ amended prior NASD Rule 3110 
(Books and Records) and adopted the FINRA Rule 4510 Series (Books and 
Records Requirements). This new Rule 4510 Series included FINRA Rules 
4511 (General Requirements), 4512 (Customer Account Information), 4513 
(Records of Written Customer Complaints), 4514 (Authorization Records 
for Negotiable Instruments Drawn From a Customer's Account), and 4515 
(Approval and Documentation of Changes in Account Name or Designation).
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 63784 (January 27, 
2011), 76 FR 5850 (February 2, 2011) (SR-FINRA-2010-052) (``FINRA 
Books and Records Filing'').
---------------------------------------------------------------------------

Nasdaq Books and Records Amendments
    In 2012, The Nasdaq Stock Market's (``Nasdaq'') filed a proposal to 
mirror the FINRA Books and Records filing.\6\ Nasdaq's filing 
renumbered its then Rule 3110 as Rule 3110A (which was later relocated 
under Nasdaq General 9, Section 30 \7\) and adopted the Nasdaq Rule 
4510A Series to parallel the provisions in the FINRA rulebook, as shown 
in the chart below:
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 68123 (October 31, 
2012), 77 FR 66658 (November 6, 2012) (SR-NASDAQ-2012-123).
    \7\ See Securities Exchange Act Release No. 87778 (December 17, 
2019), 84 FR 70590 (December 23, 2019) (SR-NASDAQ-2019-098).

------------------------------------------------------------------------
         Nasdaq books and records              FINRA books and records
------------------------------------------------------------------------
Rule 4511A (Now Nasdaq Gen. 9, Section 43)  FINRA Rule 4511.
Rule 4512A (Now Nasdaq Gen. 9, Section 45)  FINRA Rule 4512.
Rule 4513A (Now Nasdaq Gen. 9, Section 44)  FINRA Rule 4513.
Rule 4514A (Now Nasdaq Gen. 9, Section 46)  FINRA Rule 4514.
Rule 4515A (Now Nasdaq Gen. 9, Section 47)  FINRA Rule 4515.
------------------------------------------------------------------------

BX General 9, Section 30
    Consistent with the 2012 Nasdaq filing and the Nasdaq rules listed 
above, the Exchange proposes to amend BX General 9, Section 30 and 
provide that Exchange members (and their associated persons) shall 
comply with FINRA Rule 4511 as if such rule were part of the Exchange's 
rules. Moreover as detailed below, the Exchange proposes to incorporate 
by reference FINRA Rules 4511 through 4515 under its respective General 
9, Sections 43 through 47:
(1) General 9, Section 43
    The Exchange proposes to incorporate the FINRA rule by reference, 
indicating that Exchange members and persons associated with a member 
shall comply with FINRA Rule 4511 as if such Rule were part of the 
Exchange rules. Additionally, the Exchange proposes that references to 
FINRA rules shall be construed as references to the rules of the 
Exchange rules, and that references to FINRA's books and records shall 
be construed as references to the Exchange's books and records.
(2) General 9, Section 44
    The Exchange proposes to incorporate FINRA Rule 4513 by reference, 
indicating that Exchange members and persons associated with a member 
shall comply with FINRA Rule 4513 as if

[[Page 15997]]

such Rule were part of the Exchange rules.
(3) General 9, Section 45
    With the elimination of rule text within current General 9, Section 
30, the Exchange proposes to adopt a new rule, similar to Nasdaq 
General 9, Section 45, which provides:

    (a) Exchange members and persons associated with a member shall 
comply with FINRA Rule 4512 as if such Rule were part of the 
Exchange rules.
    (b) For purposes of this Rule:
    (1) References to Rule 3260 shall be construed as references to 
General 9, Section 19;
    (2) references to Rules 2070, 2090, and 4512 shall be construed 
as references to General 9, Sections 29, 10, and this Rule, 
respectively;
    (3) references to ``a prior FINRA rule'' shall be construed as 
references to ``a FINRA or Exchange rule in effect prior to the 
effectiveness of FINRA Rule 4512'';
    (4) The Exchange and FINRA are parties to the Regulatory 
Contract pursuant to which FINRA has agreed to perform certain 
functions on behalf of the Exchange. Therefore, Exchange members are 
complying with this Rule by complying with FINRA Rule 4512 as 
written, including, for example, providing information required by 
FINRA staff. In addition, functions performed by FINRA, FINRA 
departments, and FINRA staff under this Rule are being performed by 
FINRA on behalf of the Exchange.
(4) General 9, Section 46
    The Exchange proposes to incorporate FINRA Rule 4514 by reference, 
indicating that Exchange members and persons associated with a member 
shall comply with FINRA Rule 4514 as if such Rule were part of the 
Exchange rules.
(5) General 9, Section 47
    The Exchange proposes to incorporate FINRA Rule 4515 by reference, 
indicating that Exchange members and persons associated with a member 
shall comply with FINRA Rule 4515 as if such Rule were part of the 
Exchange rules. Furthermore, the Exchange proposes that references to 
FINRA Rule 3260 shall be construed as references to Exchange's General 
9, Section 19.
B. Global Changes
    As previously indicated, the Exchange also proposes to replace the 
terms ``Association'' and/or ``NASD'' with the term ``FINRA,'' without 
making other accompanying changes to the rules (this will also include 
a few, necessary grammatical changes, such as removing where 
appropriate the word ``the''). Accordingly, the Exchange will update 
General 2, Section 5; General 9, Section 1(b); General 9, Section 3; 
General 9, Section 10; General 9, Section 21; General 9, Section 33; 
and Rules 2830; 2843; 2848; 11210; IM-11710; 11860; and 11870. The 
Exchange notes that it will not update references to NASD notices in 
its Rulebook. Specifically, the notices referenced in General 9, 
Section 20(e) (``NASD Notice to Members 97-19'') and Rule 4630(d) 
(``NASD Notice to Members 91-45'') will remain unchanged.
C. Specific NASD Rule Changes
    The Exchange proposes the following changes to capture the 
amendments and relocation of rules in the FINRA rulebook. Additionally, 
the cross-references updates are intended to keep the Exchange's rules 
aligned with their corresponding FINRA rules:
General 2, Section 5. Regulation of the Exchange and Its Members
    The Exchange proposes to update General 2, Section 5 (``Regulation 
of the Exchange and Its Members'') by splitting its subsection (b) into 
two separate subsections and, thus, follow the same rule structure of 
equivalent General 2, Section 5 in Nasdaq rulebook.
    Additionally, as previously informed, given that FINRA has already 
completed the consolidation and relocation of the NASD rules, the 
Exchange proposes to delete current subsection (c).
General 2, Section 15. Business Continuity Plans
    The Exchange proposes to update the NASD Rule 3510 reference in 
this rule and replace it with a reference to FINRA Rule 4370 
(``Business Continuity Plans and Emergency Contact Information''). 
FINRA Rule 4370 was adopted to include NASD Rules 3510 (``Business 
Continuity Plans'') and NASD Rule 3520 (``Emergency Contact 
Information'') without substantive changes to the rule text.\8\
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 60534 (August 19, 
2009), 74 FR 44410 (August 28, 2009) (SR-FINRA-2009-036).
---------------------------------------------------------------------------

    Additionally, the Exchange proposes to include a new paragraph (b) 
that will indicate that references in FINRA Rule 4370 to Rule 4517 
shall be construed as references to Exchange's General 2, Section 16.
General 3, Section 1. Membership, Registration and Qualification 
Requirements
    The Exchange proposes to make a cleanup change in General 3, 
Section 1. Specifically, the Exchange proposes to update the text in 
the rule's introductory text by replacing the reference to BX Rule 0120 
with a reference to the General 1 and Equity 1 title. This change is 
made pursuant to the relocation of Exchange Rules 0111, 0112, 0113, 
0120, and 0121 to General 1 and Equity 1 in 2019.\9\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 87468 (November 5, 
2019), 84 FR 61091 (November 12, 2019) (SR-BX-2019-039).
---------------------------------------------------------------------------

    Additionally, the Exchange will update the reference to the BX Rule 
1200 Series with a reference to General 4 (``Registration 
Requirements''),\10\ which currently incorporates by reference Nasdaq's 
registration rules.
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 85726 (April 26, 
2019), 84 FR 18908 (May 2, 2019) (SR-BX-2019-010).
---------------------------------------------------------------------------

General 9, Section 1. General Standards
    The Exchange proposes to update the title of current Section 1(b), 
``Trading Ahead of Customer Limit Order'' with a title consistent with 
Nasdaq and FINRA rules: ``Prohibition Against Trading Ahead of Customer 
Orders.''
    Moreover, the Exchange proposes to update the introductory 
paragraph in Section 1(b), that currently points to NASD Interpretive 
Material 2110-2 with a reference to FINRA Rule 5320 (``Prohibition 
Against Trading Ahead of Customer Orders''). In 2009, FINRA proposed to 
integrate NASD IM-2110-2 and NASD Rule 2111 into FINRA Rule 5320, to 
govern members' treatment of customer orders and apply the new Rule 
5320 to all equity securities uniformly, and to extend the application 
of NASD Rule 2111 to OTC equity securities.\11\ In regard to this FINRA 
rule consolidation, the Exchange proposes to merge the contents of its 
Sections 1(b) and (h), as some of their contents will be otherwise 
duplicative.
---------------------------------------------------------------------------

    \11\ See Securities Exchange Act Release No. 63895 (February 11, 
2011), 76 FR 9386 (February 17, 2011) (SR-FINRA-2009-090).
---------------------------------------------------------------------------

    Therefore, the Exchange proposes to delete Section 1(b)(1), which 
currently points to the term ``NASD Rules'' and provides a cross-
reference to NASD Interpretive Material 2110-2(a). This is because 
Section 1(b)'s opening paragraph already requires members to comply 
with FINRA Rule 5320 as if it was an Exchange rule and FINRA Rule 5320 
does not use the term ``NASD Rules.''
    Similarly, because current FINRA Rule 5320 does not contain 
references to NASD's Board of Directors, the Exchange proposes to 
delete the text under current Section 1(b)(2) and renumber the 
subsequent subsections.
    Moreover, to be consistent with FINRA Rule 5320, the Exchange 
proposes to remove, update, and insert new cross-references under 
renumbered Section 1(b)(1). The Exchange will thus delete the cross 
reference that currently

[[Page 15998]]

points to NASD Rules 2110 since no equivalent rule is provided under 
FINRA Rule 5320; relatedly, the Exchange will delete the reference to 
General 9, Section 1. The Exchange also proposes to replace the 
references to NASD Rules 2320 and 3110, respectively, with references 
to FINRA Rules 5310, and 4512 and provide the corresponding references 
in the Exchange rulebook. The Exchange proposes also to insert a cross-
reference to FINRA Rule 7440 and the equivalent Exchange Rule 7440A.
    The Exchange proposes to delete the text under renumbered Section 
1(b)(3) and insert clarifying text indicating that FINRA Rule 
5320.02(b) and the reference to Rule 6420 therein shall be disregarded. 
This is because the Exchange does not list or trade over the counter 
securities (``OTC'').
    The Exchange proposes to update renumbered Section 1(b)(4) since 
the exemption referenced in it is now located in FINRA Rule 5320, 
Supplementary Material .03. Relatedly, the Exchange will insert in 
renumbered Section 1(b)(4) clarifying text indicating that members will 
comply with the rule's reporting requirements.
    The Exchange proposes to update Section 1(c) by replacing the 
reference to NASD Interpretive Material 2110-3 with a reference to 
FINRA Rule 5270 (``Front Running of Block Transactions''), which FINRA 
adopted to broaden the scope of the NASD rule and provide further 
clarity into activity that FINRA believes is inconsistent with just and 
equitable principles of trade.\12\
---------------------------------------------------------------------------

    \12\ See Securities Exchange Act Release No. 67774 (September 4, 
2012), 77 FR 55519 (September 10, 2012) (SR-FINRA-2012-025).
---------------------------------------------------------------------------

    The Exchange also proposes to update Section 1(f) by replacing the 
reference to NASD Interpretive Material 2110-6 with a reference to 
FINRA Rule 2232 (``Customer Confirmations''). FINRA Rule 2232 was 
adopted to streamline and consolidate basic customer confirmation 
requirements in NASD Rule 2230, NASD IM-2110-6, and Incorporated NYSE 
Rule 409(f).\13\
---------------------------------------------------------------------------

    \13\ See Securities Exchange Act Release No. 63150 (October 21, 
2010), 75 FR 66173 (October 27, 2010) (SR-FINRA-2009-058).
---------------------------------------------------------------------------

    The Exchange proposes to update Section 1(g) by replacing the 
reference to NASD Interpretive Material 2110-7 with a reference to 
FINRA Rule 2140 (``Interfering With the Transfer of Customer Accounts 
in the Context of Employment Disputes''). FINRA Rule 2140 was adopted 
without any material changes to the NASD rule text.\14\
---------------------------------------------------------------------------

    \14\ See Securities Exchange Act Release No. 59495 (March 3, 
2009), 74 FR 10632 (March 11, 2009) (SR-FINRA-2008-052).
---------------------------------------------------------------------------

    Finally, following the deletion of Section 1(h), the Exchange 
proposes to re-letter current Section 1(i) (``Use of Manipulative, 
Deceptive or Other Fraudulent Devices'') as Section 1(h).
General 9, Section 3. Communications With the Public and Section 4. 
Institutional Sales Material and Correspondence
    In 2012, FINRA adopted Rule 2210 (``Communications with the 
Public'') to encompass, among other provisions, NASD Rules 2210 and 
2211, and NASD Interpretive Materials 2210-1 and 2210-4.\15\ The 
Exchange proposes to consolidate the text of General 9, Sections 3 and 
4 into current Section 3 and reserve current Section 4, as explained 
below.
---------------------------------------------------------------------------

    \15\ See Securities Exchange Act Release No. 66681 (March 29, 
2012), 77 FR 20452 (April 4, 2012) (SR-FINRA-2011-035).
---------------------------------------------------------------------------

    Current General 9, Section 3(a) incorporates by reference NASD Rule 
2210 (``Communications with the Public''). The Exchange proposes to 
update this reference with the name ``FINRA.''
    The Exchange also proposes to delete Section 3(b) which currently 
incorporates by reference NASD IM-2210-1 which, as explained above, was 
merged into FINRA Rule 2210. Updating current Section 3(b) to 
incorporate FINRA Rule 2210 will make Section 3(b) redundant. 
Therefore, Section 3(b) will be deleted as it is no longer necessary. 
Following the deletion of Section 3(b), the Exchange will re-letter 
current Section 3(c) as (b), without any changes to the rule text.
    The Exchange proposes to delete General 9, Section 4 and relocate 
some of its contents under current General 9, Section 3. General 9, 
Section 4(a) will be deleted because Section 3(a) already incorporates 
the provisions from NASD Rule 2211 which were merged into current FINRA 
Rule 2210.
    Furthermore, the Exchange believes that the exception in current 
Section 4(a) concerning NASD Rule 2211(d)(3) does not need to be added 
to General 9, Section 3(a), because that provision is no longer 
referenced in FINRA Rule 2210.
    The Exchange also proposes to adopt current Section 4(b)(1) as 
Section 3(c), with a minor change. New Section 3(c) will provide that 
references to FINRA ``membership'' will be construed as references to 
membership with the Exchange.
    Finally, the Exchange proposes to adopt part of the text in current 
Section 4(b)(2) as Section 3(d). New Section 3(d) will omit references 
to FINRA Rule 2210 (as such incorporation is already provided in 
Section 3(a)) and will state that references to FINRA Rules 4512 \16\ 
and 3110 \17\ shall be read, respectively, as references to General 9, 
Section 45 and Section 20.
---------------------------------------------------------------------------

    \16\ See supra note 5.
    \17\ See Securities Exchange Act Release No. 71179 (December 23, 
2013), 79 FR 79542 (December 30, 2013) (SR-FINRA-2013-025).
---------------------------------------------------------------------------

General 9, Section 9. Fairness Opinions
    The Exchange proposes to update the NASD Rule 2290 reference in 
this rule and replace it with a reference to FINRA Rule 5150 
(``Fairness Opinions''). The aforementioned NASD rule was relocated to 
FINRA Rule 5150 with no changes to the rule text.\18\
---------------------------------------------------------------------------

    \18\ See Securities Exchange Act Release No. 58643 (September 
25, 2008), 73 FR 57174 (October 1, 2008) (SR-FINRA-2008-028).
---------------------------------------------------------------------------

General 9, Section 10. Recommendations to Customers (Suitability)
    The Exchange proposes to update the NASD Rule 2310 reference in 
this rule and replace it with a reference to FINRA Rule 2111 
(``Suitability''). The FINRA Suitability rule was adopted in 2010 to 
include NASD Rule 2310 (Recommendations to Customers (Suitability)) and 
its related Interpretative Materials.\19\
---------------------------------------------------------------------------

    \19\ See Securities Exchange Act Release No. 63325 (November 17, 
2010), 75 FR 71479 (November 23, 2010) (SR-FINRA-2010-039).
---------------------------------------------------------------------------

    As previously described, the Exchange will delete the paragraphs 
that refer to FINRA consolidating the NASD rules into a new FINRA 
rulebook, since such relocation has been completed. Concerning the 
second paragraph in Section 10(a), the Exchange notes that it will also 
delete the cross-reference to Rule 3110, since such reference was not 
relocated when NASD Rule 2310 was merged into FINRA Rule 2111.
    The Exchange also proposes to delete Section 10(b) since, as 
already described, NASD Rule 2310's interpretive materials were merged 
into FINRA Rule 2111, which would make Section 10(b) duplicative.
    Moreover, the Exchange proposes to assign the letter (b) to the 
text that begins with ``For purposes of . . .'' and make the following 
changes:
    The Exchange will insert a new subsection (1) which will provide 
that any references to Rules 2111 and 4512 in FINRA Rule 2111 shall be 
construed, respectively, as references to Exchange's General 9, Section 
10 and 45.
    The Exchange will also renumber the next paragraph as (2) and 
replace the references to ``Association's Rules'' and ``Association 
Rules'' with the term ``FINRA rules''.

[[Page 15999]]

    The Exchange will next delete the paragraph that refers to NASD's 
District Business Conduct Committees and Board of Governors, as such 
references are not provided in the current FINRA Suitability rule. 
Similarly, the Exchange will delete the paragraph that references the 
term ``Association'' since such term is not in the current FINRA rule. 
Furthermore, the Exchange will also delete the reference to Rule 2840 
as such rule is not referenced in FINRA Rule 2111.
    The Exchange will insert a new subsection (3) which will clarify 
that references to Rule 2214 shall be disregarded, and no comparable 
Exchange Rule shall apply to activities of Exchange Members in 
connection with investment analysis tools.\20\
---------------------------------------------------------------------------

    \20\ The Exchange notes that a correction shall be made in a 
future filing to current Nasdaq General 9, Section 10(b)(3), which 
currently points to NASD IM-2210-6, which has been relocated and 
should actually refer to FINRA Rule 2214.
---------------------------------------------------------------------------

    Finally, the Exchange proposes to delete the rule text in current 
Section 10(c) since, as already explained, the Interpretive Materials 
of NASD Rule 2310 were merged into the FINRA Suitability rule. In its 
place, the Exchange proposes to adopt the same cross-reference found in 
Nasdaq's General 9, Section 10(c) to provide that Exchange members will 
comply with FINRA Rule 2090 (``Know Your Customer'') as if such rule 
was part of the Rules of the Exchange.
General 9, Section 12. Customer Account Statements
    The Exchange proposes to update the NASD Rule 2340 reference in 
this rule and replace it with a reference to FINRA Rule 2231 
(``Customer Account Statements''). FINRA Rule 2231 was adopted without 
any substantive changes to the NASD rule text.\21\
---------------------------------------------------------------------------

    \21\ See Securities Exchange Act Release No. 85589 (April 10, 
2019), 84 FR 15646 (April 16, 2019) (SR-FINRA-2019-009).
---------------------------------------------------------------------------

    Moreover, the Exchange proposes to amend Section 12(b) to provide 
that references in FINRA Rule 2231 to FINRA Rule 2310 (``Direct 
Participation Programs'') shall be construed as a reference to the 
corresponding BX Rule 2310A. Additionally, the Exchange proposes to 
replace the reference to NASD Rule 3110 with FINRA Rule 4512 
(``Customer Account Information'') and insert its corresponding cross-
reference to General 9, Section 45. Finally, the Exchange proposes to 
delete the word ``Equity'' (used twice in the subsection) and re-
arrange the rules in Section 12(b) to match their corresponding 
references in the Nasdaq rulebook.
General 9, Section 13. Margin Disclosure Statement
    The Exchange proposes to update the NASD Rule 2341 reference in 
this rule and replace it with a reference to FINRA Rule 2264 (``Margin 
Disclosure Statement''). FINRA Rule 2264 was adopted with only minor 
changes to the text of NASD Rule 2341, and those changes were intended 
to clarify the submission of disclosure statements.\22\
---------------------------------------------------------------------------

    \22\ See Securities Exchange Act Release No. 60697 (September 
21, 2009), 74 FR 49051 (September 25, 2009) (SR-FINRA-2009-052).
---------------------------------------------------------------------------

    The Exchange also proposes to amend Section 13(b) by updating the 
reference to NASD Rule 3110 with FINRA Rule 4512 \23\ and insert its 
corresponding cross-reference to General 9, Section 45.
---------------------------------------------------------------------------

    \23\ See supra note 5.
---------------------------------------------------------------------------

General 9, Section 14. Approval Procedures for Day-Trading Accounts
    The Exchange proposes to update the second sentence in Section 
14(a) that currently refers to NASD Rule 2361 with FINRA Rule 2270. 
FINRA Rule 2270 was adopted with minor changes to the text of NASD Rule 
2361.\24\ The Exchange proposes to insert text indicating that a 
reference to FINRA Rule 2270 shall be construed as a reference to 
General 9, Section 14.
---------------------------------------------------------------------------

    \24\ See Securities Exchange Act Release No. 61059 (November 24, 
2009), 74 FR 62847 (December 1, 2009) (SR-FINRA-2009-059).
---------------------------------------------------------------------------

    The Exchange also proposes to amend Section 14(a) by updating the 
reference to NASD Rule 3110 with FINRA Rules 4511 and 4512 \25\ and 
their corresponding references to General 9, Sections 30 and 45 (as 
indicated in the preceding paragraph, the Exchange is cross-referencing 
General 9, Section 14 with FINRA Rule 2270, and thus cross-referencing 
this Section 14 with FINRA's Books and Records rules is unnecessary). 
Finally, the Exchange will insert text indicating that references to 
FINRA Rules 4210 shall be construed as references to General 9, Section 
38.
---------------------------------------------------------------------------

    \25\ See supra note 5.
---------------------------------------------------------------------------

    Similarly, the Exchange proposes to update the second paragraph in 
Section 14(b) that currently refers to NASD Rule 2360 with a reference 
to FINRA Rule 2130. FINRA Rule 2130 was adopted with minor changes to 
the text of NASD Rule 2360.\26\ The Exchange also proposes to amend 
Section 14(b) by updating the reference to NASD Rule 3110 with FINRA 
Rule 4512 \27\ and the corresponding reference to General 9, Section 30 
with Section 45, because it corresponds to FINRA Rule 4512.
---------------------------------------------------------------------------

    \26\ See supra note 24.
    \27\ See supra note 5.
---------------------------------------------------------------------------

General 9, Section 16. Charges for Services Performed
    The Exchange proposes to update the NASD Rule 2430 reference in 
this rule and replace it with a reference to FINRA Rule 2122 (``Charges 
for Services Performed''). FINRA Rule 2122 was adopted without any 
substantive changes to the NASD rule text.\28\
---------------------------------------------------------------------------

    \28\ See Securities Exchange Act Release No. 73714 (December 2, 
2014), 79 FR 72743 (December 8, 2014) (SR-FINRA-2014-049).
---------------------------------------------------------------------------

General 9, Section 17. Net Transactions With Customers
    The Exchange proposes to update the NASD Rule 2441 reference in 
this rule and replace it with a reference to FINRA Rule 2124 (``Net 
Transactions with Customers''). FINRA Rule 2124 was adopted without any 
substantive changes to the NASD rule text.\29\ The Exchange also 
proposes to update the a cross-reference to NASD Rule 3110 with 
references to FINRA Rules 4511 and 4512, which have a corresponding 
Exchange rule under General 9, Sections 30 and 45.
---------------------------------------------------------------------------

    \29\ See supra note 8.
---------------------------------------------------------------------------

General 9, Section 19. Discretionary Accounts
    The Exchange proposes to letter the first paragraph as subsection 
(a) and update the NASD Rule 2510 reference in this rule and replace it 
with a reference to FINRA Rule 3260 (``Discretionary Accounts''). FINRA 
Rule 3260 was adopted without any substantive changes to the NASD rule 
text.\30\
---------------------------------------------------------------------------

    \30\ See supra note 21.
---------------------------------------------------------------------------

    Moreover, the Exchange will letter the last paragraph in Section 19 
as subsection (b) and update the cross-references to NASD rules with 
their respective equivalent FINRA rules. Specifically, the Exchange 
will replace the NASD Rule 3010 reference with FINRA Rule 3110. 
Additionally, the Exchange will replace the NASD Rule 3110 reference 
with FINRA Rule 4512.\31\ Finally, the Exchange proposes to replace the 
reference to General 9, Section 30 with Section 45, because it 
corresponds to FINRA Rule 4512.
---------------------------------------------------------------------------

    \31\ See supra note 5.
---------------------------------------------------------------------------

General 9, Section 21. Supervisory Control System and Section 22. 
Annual Certification of Compliance and Supervisory Processes
    The Exchange proposes to consolidate Sections 21 and 22 into one 
rule, Section 21 (``Supervisory Control System, Annual Certification of 
Compliance and Supervisory Processes''), as explained below. First, the 
Exchange proposes to update the

[[Page 16000]]

NASD Rule 3012 reference in this rule and replace it with a reference 
to FINRA Rule 3120 (``Supervisory Control System''). FINRA Rule 3120 
retained the former NASD rule's testing and verification requirements 
for the member's supervisory procedures and provided requirements for 
members reporting $200 million or more in gross revenue.\32\
---------------------------------------------------------------------------

    \32\ See supra note 17.
---------------------------------------------------------------------------

    Second, the Exchange proposes to adopt as new Section 21(c) 
(``Annual Certification of Compliance and Supervisory Processes'') the 
text in current Section 22(c). Further, the Exchange will update in the 
relocated subsection the reference to NASD Rule 3013 and replace it 
with a reference to FINRA Rule 3130 (``Annual Certification of 
Compliance and Supervisory Processes''). FINRA Rule 3130 was adopted to 
streamline and combine the requirements of NASD Rule 3013 and IM-
3013.\33\
---------------------------------------------------------------------------

    \33\ See Securities Exchange Act Release No. 58661 (September 
26, 2008), 73 FR 57395 (October 2, 2008) (SR-FINRA-2008-030).
---------------------------------------------------------------------------

    Third, the Exchange proposes to adopt the text under Section 22(c) 
that begins with the words: ``For purposes of this Rule . . .'' and 
letter them as new Section 21(d). In Section (d)(2), as previously 
explained, the Exchange will update the reference to NASD Rule 3013 
with FINRA Rule 3130, which shall be read as a reference to Exchange's 
corresponding rule under General 9, Section 21. Similarly, the Exchange 
proposes to update the cross-reference to NASD Rule 2110 with FINRA 
Rule 2010. In 2008, NASD Rule 2110 was renumbered as FINRA Rule 2010 
with no changes to the rule text.\34\ Additionally, the Exchange will 
change the General 9, Section 22 reference, which will be reserved, 
with a reference to Section 21. Moreover, the Exchange proposes to 
change the reference to General 9, Section 1 with Section 1(a), because 
it corresponds to FINRA Rule 2010.
---------------------------------------------------------------------------

    \34\ See supra note 18.
---------------------------------------------------------------------------

    Finally, the Exchange will delete and reserve current General 9, 
Section 22, since its subsections will be duplicative of subsections in 
Section 21 after the proposed changes.
General 9, Section 23. Outside Business Activities of an Associated 
Person
    The Exchange proposes to update the NASD Rule 3030 reference in 
this rule and replace it with a reference to FINRA Rule 3270 (``Outside 
Business Activities of Registered Persons''). FINRA Rule 3270 was 
adopted to harmonize and simplify the events that constitute an outside 
business activity, expanding upon the obligations imposed in NASD Rule 
3030, by prohibiting any registered person from doing business with 
another person as a result of any business activity outside the scope 
of the relationship with his or her member firm, unless prior written 
notice was provided to the member.\35\
---------------------------------------------------------------------------

    \35\ See Securities Exchange Act Release No. 62762 (August 23, 
2010), 75 FR 53362 (August 31, 2010) (SR-FINRA-2009-042).
---------------------------------------------------------------------------

    Moreover, the Exchange will update the duplicative cross-reference 
to NASD Rule 3030 in Section 23(b) (which should have been a reference 
to NASD Rule 3040) and replace it with a reference to FINRA Rule 
3280.\36\ The Exchange proposes also to update the reference to General 
9, Section 23 with Section 24 (``Private Securities Transactions of an 
Associated Person''), because it corresponds to FINRA Rule 3280.
---------------------------------------------------------------------------

    \36\ See Securities Exchange Act Release No. 75757 (August 25, 
2015), 80 FR 52530 (August 31, 2015) (SR-FINRA-2015-030).
---------------------------------------------------------------------------

General 9, Section 24. Private Securities Transactions of an Associated 
Person
    The Exchange proposes to update the NASD Rule 3040 reference in 
this rule and replace it with a reference to FINRA Rule 3280 (``Private 
Securities Transactions of an Associated Person''). FINRA Rule 3280 was 
adopted without any substantive changes to the NASD rule text.\37\
---------------------------------------------------------------------------

    \37\ Id. See also Securities Exchange Act Release No. 80105 
(February 24, 2017), 82 FR 12387 (March 2, 2017) (SR-FINRA-2017-
004).
---------------------------------------------------------------------------

    The Exchange will also update the duplicative cross-reference in 
Section 24(b)(1) to NASD Rule 3040 (which should have been actually a 
reference to NASD Rule 3050) with a reference to FINRA Rule 3210.\38\ 
The Exchange proposes also to update the reference to General 9, 
Section 24 with Section 25 (``Transactions for or by Associated 
Persons''), because it incorporates FINRA Rule 3210.
---------------------------------------------------------------------------

    \38\ See Securities Exchange Act Release No. 77550 (April 7, 
2016), 81 FR 21924 (April 13, 2016) (SR-FINRA-2015-029).
---------------------------------------------------------------------------

    Furthermore, the Exchange proposes to correct a typo in the quoted 
text in General 9, Section 24(b)(2). Specifically, the Exchange will 
substitute the word ``immediately'' with ``immediate.''
    The Exchange proposes also to replace a reference to NASD Rule 2790 
with FINRA Rule 5130.\39\ The definition of ``immediate family 
member,'' cross-referenced in General 9, Section 24(b)(2), is currently 
located under FINRA Rule 5130(i)(5).
---------------------------------------------------------------------------

    \39\ See Securities Exchange Act Release No. 58421 (August 25, 
2008), 73 FR 51032 (August 29, 2008) (SR-FINRA-2008-025).
---------------------------------------------------------------------------

General 9, Section 25. Transactions for or by Associated Persons
    The Exchange proposes to update the NASD Rule 3050 reference in 
this rule and replace it with a reference to FINRA Rule 3210 
(``Accounts At Other Broker-Dealers and Financial Institutions''). 
FINRA Rule 3210 was adopted to consolidate NASD Rule 3050, Incorporated 
NYSE Rules 407 and 407A, and Incorporated NYSE Rule Interpretations 
407/01 and 407/02. The rule was designed to streamline the provisions 
of the NASD and incorporated NYSE rules and to help facilitate 
effective oversight of the specified trading activities of associated 
persons of member firms.\40\
---------------------------------------------------------------------------

    \40\ See supra note 38.
---------------------------------------------------------------------------

General 9, Section 26. Influencing or Rewarding Employees of Others
    The Exchange proposes to update the NASD Rule 3060 reference in 
this rule and replace it with a reference to FINRA Rule 3220 
(``Influencing or Rewarding Employees of Others''). FINRA Rule 3220 was 
adopted without any material changes to the NASD rule text.\41\
---------------------------------------------------------------------------

    \41\ See Securities Exchange Act Release No. 58660 (September 
26, 2008), 73 FR 57393 (October 2, 2008) (SR-FINRA-2008-027).
---------------------------------------------------------------------------

General 9, Section 28. Disclosure to Associated Persons When Signing 
Form U4
    The Exchange proposes to update the NASD Rule 3080 reference in 
this rule and replace it with a reference to FINRA Rule 2263 
(``Arbitration Disclosure to Associated Persons Signing or 
Acknowledging Form U4''). NASD Rule 3080 was transferred into FINRA 
Rule 2263 which was adopted to improve and clarify the disclosure 
requirement of Form U4.\42\
---------------------------------------------------------------------------

    \42\ See Securities Exchange Act Release No. 60348 (July 20, 
2009), 74 FR 37077 (July 27, 2009) (SR-FINRA-2009-019).
---------------------------------------------------------------------------

General 9, Section 31. Use of Information Obtained in Fiduciary 
Capacity
    The Exchange proposes to update the NASD Rule 3120 reference in 
this rule and replace it with a reference to FINRA Rule 2060 (``Use of 
Information Obtained in Fiduciary Capacity''). FINRA Rule 2060 was 
adopted without any changes to the NASD rule text.\43\
---------------------------------------------------------------------------

    \43\ See Securities Exchange Act Release No. 61071 (November 30, 
2009), 74 FR 64109 (December 7, 2009) (SR-FINRA-2009-067).

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

[[Page 16001]]

General 9, Section 33. Reporting Requirements for Clearing Firms
    The Exchange proposes to update the NASD Rule 3150 reference in 
this rule and replace it with a reference to FINRA Rule 4540 
(``Reporting Requirements for Clearing Firms''). FINRA Rule 4540 was 
adopted without any substantive changes to the NASD rule text.\44\
---------------------------------------------------------------------------

    \44\ See supra note 21.
---------------------------------------------------------------------------

General 9, Section 34. Extensions of Time Under Regulation T and SEC 
Rule 15c3-3
    The Exchange proposes to update the NASD Rule 3160 reference in 
this rule and replace it with a reference to FINRA Rule 4230 
(``Required Submissions for Requests for Extensions of Time Under 
Regulation T and SEA Rule 15c3-3''). FINRA Rule 4230 was adopted 
largely based on the text of NASD Rule 3160, with a clarification to 
the original rule text regarding the reporting obligations of clearing 
members.\45\
---------------------------------------------------------------------------

    \45\ See Securities Exchange Act Release No. 62482 (July 12, 
2010), 75 FR 41562 (July 16, 2010) (SR-FINRA-2010-024).
---------------------------------------------------------------------------

General 9, Section 38. Margin Requirements
    The Exchange proposes to update the NASD Rule 2520 references in 
this rule and replace it with references to FINRA Rule 4210 (``Margin 
Requirements''). In 2010, NASD Rules 2520, 2521, 2522, and IM-2522 were 
combined and consolidated into a single rule intended to improve the 
organization of margin rules and improve their readability.\46\
---------------------------------------------------------------------------

    \46\ Id.
---------------------------------------------------------------------------

General 9, Section 49. Payments Involving Publications That Influence 
the Market Price of a Security
    The Exchange proposes to update the NASD Rule 2711 reference in 
this rule and replace it with a reference to FINRA Rule 2241 
(``Research Analysts and Research Reports''). Specifically, the 
research report's definition referenced in General 9, Section 49(b)(3) 
was relocated to current FINRA Rule 2241(a)(11). That definition was 
amended to exclude communications concerning open-end registered 
investment companies not listed or traded on an exchange.\47\
---------------------------------------------------------------------------

    \47\ See Securities Exchange Act Release No. 75471 (July 16, 
2015), 80 FR 43482 (July 22, 2015) (SR-FINRA-2014-047).
---------------------------------------------------------------------------

Exchange Rule 2830. Investment Company Securities
    The Exchange proposes to update the NASD Rule 2830 reference in 
this rule and replace it with a reference to FINRA Rule 2341 
(``Investment Company Securities''). FINRA Rule 2341 was adopted 
without any substantive changes to the NASD rule text.\48\
---------------------------------------------------------------------------

    \48\ See Securities Exchange Act Release No. 78130 (June 22, 
2016), 81 FR 42016 (June 28, 2016) (SR-FINRA-2016-019).
---------------------------------------------------------------------------

    Moreover, to be consistent with cross-reference updates in current 
FINRA Rule 2341, the Exchange will update the cross-reference to NASD 
Rule 2820 with FINRA Rule 2320. Additionally, the Exchange will update 
Rule 2830(b)(3) by replacing the NASD Rule 2420 reference with FINRA 
Rule 2040 and update the rule text to track the text of FINRA Rule 
2040(a). Finally, the Exchange will replace the NASD Rule 2230 
reference with FINRA Rule 2232.
Exchange Rule 2843. Account Approval
    The Exchange proposes to update the references to NASD Rules 
2860(b)(16) and 2843 in this rule and replace them with references to 
FINRA Rules 2360(b)(16) (``Opening of Accounts'') and 2352 (``Account 
Approval''). FINRA Rule 2360(b)(16) was adopted with minor changes to 
its rule text and FINRA Rule 2352 was adopted without any substantive 
changes to its rule text.\49\
---------------------------------------------------------------------------

    \49\ See Securities Exchange Act Release No. 58932 (November 12, 
2008), 73 FR 69696 (November 19, 2008) (SR-FINRA-2008-032).
---------------------------------------------------------------------------

Exchange Rule 2844. Suitability
    The Exchange proposes to update the reference to NASD Rules 
2860(b)(19) and 2844 in this rule and replace them with references to 
FINRA Rules 2360(b)(19) (``Suitability'') and 2353 (``Suitability''). 
FINRA Rules 2360(b)(19) and 2353 were adopted without any substantive 
changes to their respective rule text.\50\
---------------------------------------------------------------------------

    \50\ Id.
---------------------------------------------------------------------------

Exchange Rule 2845. Discretionary Accounts
    The Exchange proposes to update the reference to NASD Rules 
2860(b)(18) and 2845 in this rule and replace them with references to 
FINRA Rules 2360(b)(18) (``Discretionary Accounts'') and 2354 
(``Discretionary Accounts''). FINRA Rules 2360(b)(18) and 2354 were 
adopted without any substantive changes to their respective rule 
text.\51\
---------------------------------------------------------------------------

    \51\ Id.
---------------------------------------------------------------------------

    Moreover, to be consistent with cross-reference updates in current 
FINRA Rule 2360(b)(18), the Exchange proposes to update the cross-
reference to NASD Rules 2510 and 3110(c)(4), respectively, with FINRA 
Rules 3260 and 4512(c). Relatedly, the Exchange proposes to update the 
references to Exchange Rules 2510 and 3110(c)(4), respectively, with a 
reference to General 9, Sections 19 and 45.\52\
---------------------------------------------------------------------------

    \52\ See supra note 9.
---------------------------------------------------------------------------

Exchange Rule 2846. Supervision of Accounts
    The Exchange proposes to update the reference to NASD Rules 
2860(b)(20) and 2846 in this rule and replace them with references to 
FINRA Rules 2360(b)(20) (``Supervision of Accounts'') and 2355 
(``Supervision of Accounts''). FINRA Rules 2360(b)(20) and 2355 were 
adopted without any substantive changes to their respective rule 
text.\53\
---------------------------------------------------------------------------

    \53\ See supra note 49.
---------------------------------------------------------------------------

    Moreover, to be consistent with cross-reference updates in current 
FINRA Rule 2360(b)(20), the Exchange proposes to update the cross-
reference to NASD Rules 3010, 3012, and 3013, respectively, with FINRA 
Rules 3110, 3120, and 3130. Relatedly, the Exchange proposes to update 
the references to Exchange Rules 3010, 3012, and 3013 with respective 
references to General 9, Sections 20 and 21.\54\
---------------------------------------------------------------------------

    \54\ See supra note 9.
---------------------------------------------------------------------------

Exchange Rule 2847. Customer Complaints
    The Exchange proposes to update the reference to NASD Rules 
2860(b)(17)(A) and 2847 in this rule and replace them with references 
to FINRA Rules 2360(b)(17)(A) and 2356. FINRA Rules 2360(b)(17)(A) and 
2356 were adopted without any substantive changes to their respective 
rule text.\55\
---------------------------------------------------------------------------

    \55\ See supra note 49.
---------------------------------------------------------------------------

    Moreover, to be consistent with cross-reference updates in current 
FINRA Rule 2360(b)(17)(A), the Exchange proposes to update the cross-
reference to NASD Rule 3110 with references to FINRA Rules 2268 and the 
Rule 4510 Series. Relatedly, the Exchange proposes to update the 
references to Exchange Rule 3110 with a reference to General 9, Section 
30.\56\ Finally, the Exchange proposes to add text indicating that the 
reference to Rule 5340 shall be disregarded as such rule does not apply 
to the Exchange, as the Exchange does not pre-time stamp order tickets 
in connection with block positioning.
---------------------------------------------------------------------------

    \56\ See supra note 9.
---------------------------------------------------------------------------

Exchange Rule 2848. Communications With the Public and Customers 
Concerning Index Warrants, Currency Index Warrants, and Currency 
Warrants
    The Exchange proposes to update the reference to NASD Rule 2848 in 
this rule and replace it with a reference to FINRA Rule 2357 
(``Communications with the Public and Customers

[[Page 16002]]

Concerning Index Warrants, Currency Index Warrants and Currency 
Warrants''). FINRA Rule 2357 was adopted without any substantive 
changes to the NASD rule text.\57\
---------------------------------------------------------------------------

    \57\ See supra note 49.
---------------------------------------------------------------------------

Exchange Rule 2849. Maintenance of Records
    The Exchange proposes to update the reference to NASD Rules 
2860(b)(17)(B) and 2849 in this rule and replace them with references 
to FINRA Rules 2360(b)(17)(B) and 2358. FINRA Rules 2360(b)(17)(B) and 
2358 were adopted without any substantive changes to their respective 
rule text.\58\
---------------------------------------------------------------------------

    \58\ See id.
---------------------------------------------------------------------------

Exchange Rule 3360. Short-Interest Reporting
    In 2008, FINRA Rule 4560 was adopted to include the short interest 
reporting requirements of the substantially similar NASD Rule 3360 and 
Incorporated NYSE Rules 421(1) and 421.10 with non-substantive changes 
to the NASD rule text.\59\ In 2010, FINRA made further amendments to 
the rule that were intended to eliminate the definition of ``OTC Equity 
Security'' in FINRA Rule 4560 (Short-Interest Reporting) and to clarify 
that the rule applied to all equity securities except restricted equity 
securities.\60\
---------------------------------------------------------------------------

    \59\ See Securities Exchange Act Release No. 58461 (September 4, 
2008), 73 FR 52710 (September 10, 2008) (SR-FINRA-2008-033).
    \60\ See Securities Exchange Act Release No. 61979 (April 23, 
2010), 75 FR 23316 (May 3, 2010) (SR-FINRA-2010-003).
---------------------------------------------------------------------------

    The Exchange proposes to update Rule 3360(a) by replacing the NASD 
Rule 3360 reference with FINRA Rule 4560 (``Short-Interest 
Reporting''). The Exchange will not update Rule 3360 to include the 
reference to ``Restricted Equity Securities'' found in FINRA Rule 4560 
since such securities are not listed or traded in the Exchange; 
relatedly, the Exchange will omit the reference to FINRA Rule 6420 
since a cross-reference to the definition of Restricted Equity 
Securities is not required. Further, the Exchange will add the word 
``all'' before the word ``securities'' but, unlike the FINRA rule, will 
not insert the word ``equities'' because the Exchange also lists 
options securities. Finally, the Exchange will remove a sentence 
concerning the reporting obligations to reflect changes also made in 
the FINRA rule.\61\
---------------------------------------------------------------------------

    \61\ See Securities Exchange Act Release No. 66872 (April 27, 
2012), 77 FR 26340 (May 3, 2012) (SR-FINRA-2012-001).
---------------------------------------------------------------------------

    The Exchange also proposes to amend current Rule 3360(b) and (c) 
and adopt the text of current FINRA Rule 4560(b) and (c).
Exchange Rule 4200. Definitions
    The Exchange proposes to update the NASD Rule 2710(b)(11) reference 
in this rule and replace it with a reference to FINRA Rule 5190 
(``Notification Requirements for Offering Participants''). In 2008, 
NASD Rules 2710(b)(10) and (11) were relocated into FINRA Rule 5190 to 
consolidate and streamline all Regulation M-related notice 
requirements.\62\
---------------------------------------------------------------------------

    \62\ See Securities Exchange Act Release No. 58514 (September 
11, 2008), 73 FR 54190 (September 18, 2008) (SR-FINRA-2008-039).
---------------------------------------------------------------------------

    The Exchange also proposes to replace in Rule 4200(a)(3) and (b) 
the cross-reference to Exchange Rule 4623 (``Alternative Trading 
Systems'') with Exchange Rule 4624. Consistent with FINRA Rule 5190(e), 
an Exchange member's notification obligation, as described in Rule 
4200, is detailed under Exchange Rule 4624 (``Penalty Bids and 
Syndicate Covering Transactions'').
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\63\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\64\ in particular, in that it is designed to 
promote just and equitable principles of trade and to protect investors 
and the public interest by bringing greater transparency to its rules 
by updating the references to the FINRA rules previously described. The 
Exchange's proposal is consistent with the Act and will protect 
investors and the public interest by harmonizing its rules and 
clarifying outdated references so that Exchange members and the general 
public can readily locate FINRA rules that are incorporated by 
reference into the Rulebook.
---------------------------------------------------------------------------

    \63\ 15 U.S.C. 78f(b).
    \64\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The amendment to the books and records rules, reference and cross-
reference updates, re-lettering, renumbering, deleting unnecessary or 
duplicative text, consolidating certain Exchange rules, and other minor 
technical changes will update the Exchange's rules and bring greater 
transparency to the Exchange's Rulebook. The Exchange believes its 
proposal will benefit investors and the general public by increasing 
the transparency of its Rulebook.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange believes that the 
proposed amendments do not impose an undue burden on competition 
because the amendments to update the references and cross-references in 
its Rulebook are intended to bring greater clarity to the Exchange's 
rules. The amendment to the books and records rules, reference and 
cross-reference updates, re-lettering, renumbering, deleting 
unnecessary or duplicative text, consolidating certain Exchange rules, 
and other minor technical changes will update the Exchange's rules 
bring greater transparency to the Exchange's Rulebook.

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

    No written comments were either solicited or received.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \65\ and Rule 19b-
4(f)(6) thereunder.\66\
---------------------------------------------------------------------------

    \65\ 15 U.S.C. 78s(b)(3)(A).
    \66\ 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. 
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    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 change 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.

[[Page 16003]]

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-BX-2021-006 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-BX-2021-006. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-BX-2021-006 and should be submitted on 
or before April 15, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\67\
---------------------------------------------------------------------------

    \67\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2021-06125 Filed 3-24-21; 8:45 am]
BILLING CODE 8011-01-P


