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Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Notices The Exchange has requested, pursuant to Rule 012 under the Exchange Act,7
that the Commission grant the Exchange an exemption from the rule filing requirements of Section 19b of the Exchange Act for changes to the Exchanges rules that are effected solely by virtue of a change to the Nasdaq Rule 1000 Series that are incorporated by reference. Specifically, the Exchange requests that it be permitted to incorporate by reference changes made to the Nasdaq Rule 1000 Series that are cross-referenced in the Exchanges rules without the need for the Exchange to file separately the same proposed rule change pursuant to Section 19b of the Exchange Act.8
The Exchange represents that the Nasdaq Rule 1000 Series are not trading rules.9 Moreover, the Exchange states that it proposes to incorporate by reference a category of rules rather than individual rules within a category.10
The Exchange also represents that, as a condition of this exemption, the Exchange will provide written notice to its applicants and members whenever Nasdaq proposes a change to Nasdaq Rule 1000 Series.11
According to the Exchange, this exemption is necessary and appropriate because it will result in the Exchanges membership rules and processes being consistent with the relevant crossreferenced Nasdaq membership rules and processes at all times.12 The Exchange states that harmonization of the membership rules and processes between the Exchange and Nasdaq will ease compliance burdens for those seeking membership on both exchanges and increase internal efficiencies associated with administering the membership rules and processes of each exchange.13
The Commission has issued exemptions similar to the Exchanges request.14 In granting similar 7 17

CFR 240.012.
Exemptive Request, supra note 3.

8 See 9 Id.

10 Id.

at 2 n.7.
at 3. The Exchange states that it will provide such notice via a posting on the same website location where the Exchange posts its own rule filings pursuant to Rule 19b4l within the timeframe required by such Rule. In addition, the Exchange states that the website posting will include a link to the location on Nasdaqs website where the applicable proposed rule change is posted. Id. at 3 n.8.
12 See id. at 2.
13 See id.
14 See, e.g., Securities Exchange Act Release Nos.
86896 September 6, 2019, 84 FR 48186 September 12, 2019 order granting application by Nasdaq BX, Inc. for exemption pursuant to section 36a of the Exchange Act from the rule filing requirements of section 19b of the Exchange Act with respect to the Nasdaq Rule 1000 Series incorporated by
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exemptions, the Commission stated that it would consider future exemption requests, provided that:
A self-regulatory organization SRO wishing to incorporate rules of another SRO by reference has submitted a written request for an order exempting it from the requirement in Section 19b of the Exchange Act to file proposed rule changes relating to the rules incorporated by reference, has identified the applicable originating SROs, together with the rules it wants to incorporate by reference, and otherwise has complied with the procedural requirements set forth in the Commissions release governing procedures for requesting exemptive orders pursuant to Rule 012 under the Exchange Act; 15
The incorporating SRO has requested incorporation of categories of rules rather than individual rules within a category that are not trading rules e.g., the SRO has requested incorporation of rules such as margin, suitability, or arbitration; and The incorporating SRO has reasonable procedures in place to provide written notice to its members each time a change is proposed to the incorporated rules of another SRO.16
The Commission believes that the Exchange has satisfied each of these conditions. Further, the Commission also believes that granting the Exchange an exemption from the rule filing requirements under Section 19b of the Exchange Act will promote efficient use
of the Commissions and the Exchanges resources by avoiding duplicative rule filings based on simultaneous changes to identical rule text sought by more than one SRO.17 The Commission therefore finds it appropriate in the public interest and consistent with the protection of investors to exempt the Exchange from the rule filing requirements under Section 19b of the Exchange Act with respect to the abovedescribed rules it incorporates by reference. This exemption is conditioned upon the Exchange promptly providing written notice to its applicants and members whenever Nasdaq changes a rule that the Exchange incorporates by reference.
Accordingly, it is ordered, pursuant to Section 36 of the Exchange Act,18 that the Exchange is exempt from the rule filing requirements of Section 19b of the Exchange Act solely with respect to changes to the rules identified in the Exemptive Request, provided that the Exchange promptly provides written notice to its applicants and members whenever Nasdaq proposes to change a rule that the Exchange has incorporated by reference.

reference; 80338 March 29, 2017, 82 FR 16464
April 4, 2017 order granting exemptive request from MIAX PEARL, LLC relating to rules of Miami International Securities Exchange, LLC
incorporated by reference; 72650 July 22, 2014, 79 FR 44075 July 29, 2014 order granting exemptive requests from NASDAQ OMX BX, Inc.
and the NASDAQ Stock Market LLC relating to rules of NASDAQ OMX PHLX LLC incorporated by reference; 67256 June 26, 2012, 77 FR 39277, 39286 July 2, 2012 order approving SRBX2012
030 and granting exemptive request relating to rules incorporated by reference by the BX Options rules;
61534 February 18, 2010, 75 FR 8760 February 25, 2010 order granting BATS Exchange, Inc.s exemptive request relating to rules incorporated by reference by the BATS Exchange Options Market rules BATS Options Market Order; and 57478
March 12, 2008, 73 FR 14521, 1453940 March 18, 2008 order approving SRNASDAQ2007004
and SRNASDAQ2007080, and granting exemptive request relating to rules incorporated by reference by The NASDAQ Options Market.
15 See 17 CFR 240.012 and Securities Exchange Act Release No. 39624 February 5, 1998, 63 FR
8101 February 18, 1998 Commission Procedures for Filing Applications for Orders for Exemptive Relief Pursuant to Section 36 of the Exchange Act;
Final Rule.
16 See BATS Options Market Order, supra note 14
citing Securities Exchange Act Release No. 49260
February 17, 2004, 69 FR 8500 February 24, 2004
order granting exemptive request relating to rules incorporated by reference by several SROs 2004
Order.

SECURITIES AND EXCHANGE
COMMISSION

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For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19
J. Matthew DeLesDernier, Assistant Secretary.
FR Doc. 202104219 Filed 3121; 8:45 am BILLING CODE 801101P

Release No. 3491203

Order Granting Application by Cboe C2
Exchange, Inc. for Exemption Pursuant to Section 36a of the Exchange Act From the Rule Filing Requirements of Section 19b of the Exchange Act With Respect to Certain Rules Incorporated by Reference February 24, 2021.

Cboe C2 Exchange, Inc. C2 or the Exchange has filed with the Securities and Exchange Commission the Commission an application for an exemption under Section 36a1 of the Securities Exchange Act of 1934
Exchange Act 1 from the rule filing requirements of Section 19b of the 17 See BATS Options Market Order, supra note 14, 75 FR at 8761; see also 2004 Order, supra note 16, 69 FR at 8502.
18 15 U.S.C. 78mm.
19 17 CFR 200.303a76.
1 15 U.S.C. 78mma1.

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