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Federal Register / Vol. 86, No. 186 / Wednesday, September 29, 2021 / Notices
14e4, with a focus on the standardized call option provision of Rule 14e 4a1iiD.
2. Regulatory and Enforcement Responsibilities. FINRA shall assume Regulatory Responsibilities and Enforcement Responsibilities for DualCommon Members. Attached as Exhibit 1 to this Agreement and made part hereof, Nasdaq and BX furnished FINRA with a current list of Common Rules and certified to FINRA that such rules that are Nasdaq Rules and BX
Rules are substantially similar to the corresponding FINRA Rules the Certification. FINRA hereby agrees that the rules listed in the Certification are Common Rules as defined in this Agreement.
Each year following the Effective Date of this Agreement, or more frequently if required by changes in either the rules of Nasdaq, BX or FINRA, Nasdaq and BX shall submit an updated list of Common Rules to FINRA for review which shall add Nasdaq Rules and BX Rules not included in the current list of Common Rules that qualify as Common Rules as defined in this Agreement; delete Nasdaq Rules and BX Rules included in the current list of Common Rules that no longer qualify as Common Rules as defined in this Agreement; and confirm that the remaining rules on the current list of Common Rules continue to be Nasdaq Rules and BX Rules that qualify as Common Rules as defined in this Agreement. Within 30 days of receipt of such updated list, FINRA shall confirm in writing whether the rules listed in any updated list are Common Rules as defined in this Agreement. Notwithstanding anything herein to the contrary, it is explicitly understood that the term Regulatory Responsibilities does not include, and Nasdaq and BX shall retain full responsibility for unless otherwise addressed by separate agreement or rule collectively, the Retained Responsibilities the following:
a Ssurveillance, examination, investigation and enforcement with respect to trading activities or practices involving Nasdaqs or BXs own marketplaces;
b registration pursuant to itsNasdaqs or BXs applicable rules of associated persons i.e., registration rules that are not Common Rules;
c discharge of itsNasdaqs or BXs duties and obligations as a Designated Examining Authority pursuant to Rule 17d1 under the Exchange Act; and d any Nasdaq Rules and BX Rules that are not Common Rules.
3. Dual Members. Prior to the Effective Date, BX shall furnish FINRA with a current list of Common Members, which shall be updated no less frequently than once each quarter.
4.3. No Charge. There shall be no charge to Nasdaq and BX by FINRA for performing the Regulatory Responsibilities and Enforcement Responsibilities under this Agreement except as hereinafter provided.
FINRA shall provide Nasdaq and BX with ninety 90 days advance written notice in the event FINRA decides to impose any charges to Nasdaq and BX for performing the Regulatory Responsibilities under this Agreement. If FINRA determines to impose a
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charge, Nasdaq and BX shall have the right at the time of the imposition of such charge to terminate this Agreement; provided, however, that FINRAs Regulatory Responsibilities under this Agreement shall continue until the Commission approves the termination of this Agreement.
5.4. Reassignment of Regulatory Responsibilities. Notwithstanding any provision hereof, this Agreement shall be subject to any statute, or any rule or order of the Commission reassigning Regulatory Responsibilities between self-regulatory organizations. To the extent such action is inconsistent with this Agreement, such action shall supersede the provisions hereof to the extent necessary for them to be properly effectuated and the provisions hereof in that respect shall be null and void.
6.5. Notification of Violations. In the event that FINRA becomes aware of apparent violations of any Nasdaq Rules or BX Rules, which are not listed as Common Rules, discovered pursuant to the performance of the Regulatory Responsibilities assumed hereunder, FINRA shall notify Nasdaq and BX of those apparent violations for such response as Nasdaq and BX deems appropriate. In the event that Nasdaq or BX
becomes aware of apparent violations of any Common Rules, discovered pursuant to the performance of the Retained Responsibilities, Nasdaq and BX shall notify FINRA of those apparent violations and such matters shall be handled by FINRA as provided in this Agreement. Each party agrees to make available promptly all files, records and witnesses necessary to assist the other in its investigation or proceedings. Apparent violations of Common Rules, FINRA Rules, federal securities laws, and rules and regulations thereunder, shall be processed by, and enforcement proceedings in respect thereto shall be conducted by FINRA as provided hereinbefore; provided, however, that in the event a DualCommon Member is the subject of an investigation relating to a transaction on Nasdaq or BX, Nasdaq and BX, at each partys may in its discretion assume concurrent jurisdiction and responsibility.
7.6. Continued Assistance.
a FINRA shall make available to Nasdaq and BX all information obtained by FINRA
in the performance by it of the Regulatory Responsibilities hereunder with respect to the DualCommon Members subject to this Agreement. In particular, and not in limitation of the foregoing, FINRA shall furnish Nasdaq and BX any information it obtains about DualCommon Members which reflects adversely on their financial condition. Nasdaq and BX shall make available to FINRA any information coming to itstheir attention that reflects adversely on the financial condition of DualCommon Members or indicates possible violations of applicable laws, rules or regulations by such firms.
b The parties agree that documents or information shared shall be held in confidence, and used only for the purposes of carrying out their respective regulatory obligations. Neither party shall assert regulatory or other privileges as against the other with respect to documents or
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information that is required to be shared pursuant to this Agreement.
c The sharing of documents or information between the parties pursuant to this Agreement shall not be deemed a waiver as against third parties of regulatory or other privileges relating to the discovery of documents or information.
8.7. DualCommon Member Applications.
a DualCommon Members subject to this Agreement shall be required to submit, and FINRA shall be responsible for processing and acting upon all applications submitted on behalf of allied persons, partners, officers, registered personnel and any other person required to be approved by the rules of bothNasdaq, BX and FINRA or associated with DualCommon Members thereof. Upon request, FINRA shall advise Nasdaq and BX
of any changes of allied members, partners, officers, registered personnel and other persons required to be approved by the rules of bothNasdaq, BX and FINRA.
b DualCommon Members shall be required to send to FINRA all letters, termination notices or other material respecting the individuals listed in paragraph 87a.
c When as a result of processing such submissions FINRA becomes aware of a statutory disqualification as defined in the Exchange Act with respect to a DualCommon Member, FINRA shall determine pursuant to Sections 15Ag and/
or Section 6c of the Exchange Act the acceptability or continued applicability of the person to whom such disqualification applies and keep Nasdaq and BX advised of its actions in this regard for such subsequent proceedings as Nasdaq and BX may initiate.
d Notwithstanding the foregoing, FINRA
shall not review the membership application, reports, filings, fingerprint cards, notices, or other writings filed to determine if such documentation submitted by a broker or dealer, or a person associated therewith or other persons required to register or qualify by examination meets the Nasdaq or BX
requirements for general membership or for specified categories of membership or participation in Nasdaq or BX, such as Equities Market Maker, Equities ECN, Order Entry Firm, or any similar type of Nasdaq or BX membership or participation that is created after this Agreement is executed.
FINRA shall not review applications or other documentation filed to request a change in the rights or status described in this paragraph 87d, including termination or limitation on activities, of a member or a participant of Nasdaq or BX, or a person associated with, or requesting association with, a member or participant of Nasdaq or BX.
9.8. Branch Office Information. FINRA
shall also be responsible for processing and, if required, acting upon all requests for the opening, address changes, and terminations of branch offices by DualCommon Members and any other applications required of DualCommon Members with respect to the Common Rules as they may be amended from time to time. Upon request, FINRA shall advise Nasdaq and BX of the opening, address change and termination of branch
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