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Federal Register / Vol. 86, No. 18 / Friday, January 29, 2021 / Notices
should be submitted on or before February 19, 2021.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19
J. Matthew DeLesDernier, Assistant Secretary.
FR Doc. 202101940 Filed 12821; 8:45 am BILLING CODE 801101P

SECURITIES AND EXCHANGE
COMMISSION
Release No. 3490985; File No. 4523

Program for Allocation of Regulatory Responsibilities Pursuant To Rule 17d2; Notice of Filing and Order Approving and Declaring Effective an Amended Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and NYSE Arca, Inc.
January 25, 2021.

Notice is hereby given that the Securities and Exchange Commission Commission has issued an Order, pursuant to Section 17d of the Securities Exchange Act of 1934
Act,1 approving and declaring effective an amendment to the plan for allocating regulatory responsibility Plan filed on December 18, 2020, pursuant to Rule 17d2 of the Act,2 by the Financial Industry Regulatory Authority, Inc. FINRA and NYSE
Arca, Inc. NYSE Arca collectively, Participating Organizations or parties. This agreement amends and restates the agreement entered into between the parties on February 9, 2007, entitled Agreement Between the National Association of Securities Dealers, Inc. and NYSE Arca, Inc.
Pursuant to SEA Rule 17d2 Under the Securities Exchange Act of 1934, and any subsequent amendments thereafter.

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I. Introduction Section 19g1 of the Act,3 among other things, requires every selfregulatory organization SRO
registered as either a national securities exchange or national securities association to examine for, and enforce compliance by, its members and persons associated with its members with the Act, the rules and regulations thereunder, and the SROs own rules, unless the SRO is relieved of this responsibility pursuant to Section 19 17

CFR 200.303a12.
U.S.C. 78qd.
2 17 CFR 240.17d2.
3 15 U.S.C. 78sg1.
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17d 4 or Section 19g2 5 of the Act.
Without this relief, the statutory obligation of each individual SRO could result in a pattern of multiple examinations of broker-dealers that maintain memberships in more than one SRO common members. Such regulatory duplication would add unnecessary expenses for common members and their SROs.
Section 17d1 of the Act 6 was intended, in part, to eliminate unnecessary multiple examinations and regulatory duplication.7 With respect to a common member, Section 17d1
authorizes the Commission, by rule or order, to relieve an SRO of the responsibility to receive regulatory reports, to examine for and enforce compliance with applicable statutes, rules, and regulations, or to perform other specified regulatory functions.
To implement Section 17d1, the Commission adopted two rules: Rule 17d1 and Rule 17d2 under the Act.8
Rule 17d1 authorizes the Commission to name a single SRO as the designated examining authority DEA to examine common members for compliance with the financial responsibility requirements imposed by the Act, or by Commission or SRO
rules.9 When an SRO has been named as a common members DEA, all other SROs to which the common member belongs are relieved of the responsibility to examine the firm for compliance with the applicable financial responsibility rules. On its face, Rule 17d1 deals only with an SROs obligations to enforce member compliance with financial responsibility requirements. Rule 17d1
does not relieve an SRO from its obligation to examine a common member for compliance with its own rules and provisions of the federal securities laws governing matters other than financial responsibility, including sales practices and trading activities and practices.
To address regulatory duplication in these and other areas, the Commission adopted Rule 17d2 under the Act.10
Rule 17d2 permits SROs to propose joint plans for the allocation of regulatory responsibilities with respect 4 15

U.S.C. 78qd.
U.S.C. 78sg2.
6 15 U.S.C. 78qd1.
7 See Securities Act Amendments of 1975, Report of the Senate Committee on Banking, Housing, and Urban Affairs to Accompany S. 249, S. Rep. No. 94
75, 94th Cong., 1st Session 32 1975.
8 17 CFR 240.17d1 and 17 CFR 240.17d2, respectively.
9 See Securities Exchange Act Release No. 12352
April 20, 1976, 41 FR 18808 May 7, 1976.
10 See Securities Exchange Act Release No. 12935
October 28, 1976, 41 FR 49091 November 8, 1976.
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to their common members. Under paragraph c of Rule 17d2, the Commission may declare such a plan effective if, after providing for appropriate notice and opportunity for comment, it determines that the plan is necessary or appropriate in the public interest and for the protection of investors, to foster cooperation and coordination among the SROs, to remove impediments to, and foster the development of, a national market system and a national clearance and settlement system, and is in conformity with the factors set forth in Section 17d of the Act. Commission approval of a plan filed pursuant to Rule 17d2
relieves an SRO of those regulatory responsibilities allocated by the plan to another SRO.
II. The Plan On August 31, 2006, the Commission declared effective the Plan entered into between FINRA and NYSE Arca for allocating regulatory responsibility pursuant to Rule 17d2.11 On March 22, 2007, the Commission approved an amendment to the Plan that 1
eliminated paragraph 11 of the Plan that allocated to FINRA the responsibility to receive and act upon requests for extension of time pursuant to Federal Reserve Regulation T and Rule 15c33
under the Act, and 2 changed from monthly to upon request the obligation of FINRA to share information with NYSE Arca regarding notice of changes in allied members, partners, officers, registered personnel and other persons, and the opening, address change, and termination of main and branch offices and the names of branch office managers.12
The Plan is intended to reduce regulatory duplication for firms that are common members of FINRA and NYSE
Arca by allocating regulatory responsibility with respect to certain applicable laws, rules, and regulations that are common among them. Included in the Plan is an exhibit that lists every NYSE Arca rule for which FINRA bears responsibility under the Plan for overseeing and enforcing with respect to NYSE Arca members that are also members of FINRA and the associated persons therewith Certification.
III. Proposed Amendment to the Plan On December 18, 2020, the parties submitted a proposed amendment to the Plan Amended Plan. The primary purpose of the Amended Plan is to 11 See Securities Exchange Act Release No. 54394
August 31, 2006, 71 FR 52827 September 7, 2006.
12 See Securities Exchange Act Release No. 55505
March 22, 2007, 72 FR 14628 March 28, 2007.

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