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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Notices
things, the need for FINRA staff, with limited exceptions, to work remotely and restrict in-person activities consistent with the recommendations of public health officialshave made it challenging to meet some procedural requirements and perform some functions required under FINRA rules.
For example, working remotely makes it difficult to send and receive hard copy documents and conduct in-person oral arguments. The temporary amendments have addressed these concerns by easing logistical and other issues and providing FINRA with needed flexibility for its operations during the COVID19
outbreak, 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 staff.
FINRA staff, with limited exceptions, continue to work remotely to protect their health and safety. As indicated in its previous filings, FINRA has established a COVID19 task force to develop a data-driven, staged plan for FINRA staff to safely return to working in FINRA office locations and resume other in-person activities. Based on its assessment of current COVID19
conditions, FINRA does not believe the COVID19-related health concerns necessitating this relief will meaningfully subside by August 31, 2021, and therefore proposes to extend the expiration date of the temporary rule amendments originally set forth in SR
FINRA2020015 from August 31, 2021, to December 31, 2021.9

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ii. SRFINRA2020027
The same public health concerns and restrictions, along with a corresponding backlog of disciplinary cases,10 led FINRA to file, and subsequently extend to August 31, 2021, SRFINRA2020
027 to temporarily amend FINRA Rules 1015, 9261, 9524, and 9830 to grant OHO and the NAC authority 11 to Filing and Immediate Effectiveness of File No. SR
FINRA2020022; Securities Exchange Act Release No. 90619 December 9, 2020, 85 FR 81250
December 15, 2020 Notice of Filing and Immediate Effectiveness of File No. SRFINRA
2020042; supra note 5.
9 See supra note 8 outlining the filing history of SRFINRA2020015 and its prior extensions.
10 For example, FINRA began temporarily postponing in-person hearings as a result of the COVID19 impacts on March 16, 2020.
11 For OHO hearings under FINRA Rules 9261
and 9830, the proposed rule change temporarily grants authority to the Chief or Deputy Chief Hearing Officer to order that a hearing be conducted by video conference. For NAC hearings under FINRA Rules 1015 and 9524, this temporary authority is granted to the NAC or the relevant Subcommittee.

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conduct hearings in connection with appeals of Membership Application Program decisions, disciplinary actions, eligibility proceedings and temporary and permanent cease and desist orders by video conference, if warranted by the COVID19-related public health risks posed by an in-person hearing.12
As set forth in the previous filings, FINRA also relies on the guidance of its health and safety consultant, in conjunction with COVID19 data and guidance issued by public health authorities, to determine whether the current public health risks presented by an in-person hearing may warrant a hearing by video conference.13 Based on that guidance and data, FINRA does not believe the COVID19-related health concerns necessitating this relief will meaningfully subside by August 31, 2021, and has determined that there will be a continued need for this temporary relief for several months beyond that date.14 Accordingly, FINRA proposes to extend the expiration date of the temporary rule amendments originally set forth in SRFINRA2020027 from August 31, 2021, to December 31, 2021.15 The extension of these temporary amendments allowing for specified OHO and NAC hearings to proceed by video conference will allow FINRAs critical adjudicatory functions 12 See Securities Exchange Act Release No. 89739
September 2, 2020, 85 FR 55712 September 9, 2020 Notice of Filing and Immediate Effectiveness of File No. SRFINRA2020027; Securities Exchange Act Release No. 90619 December 9, 2020, 85 FR 81250 December 15, 2020 Notice of Filing and Immediate Effectiveness of File No. SR
FINRA2020042; supra note 5.
13 As noted in SRFINRA2020027, the temporary proposed rule change grants discretion to OHO and the NAC to order a video conference hearing. In deciding whether to schedule a hearing by video conference, OHO and the NAC may consider a variety of other factors in addition to COVID19 trends. In SRFINRA2020027, FINRA
provided a non-exhaustive list of other factors OHO
and the NAC may take into consideration, including a hearing participants individual health concerns and access to the connectivity and technology necessary to participate in a video conference hearing.
14 FINRA notes that the proposed extension of the temporary amendments does not mean a video conference hearing will be ordered in every case.
FINRA strives to hold in-person hearings when it is safe to do so and had recently begun to hold such hearings at a single location. FINRA held its first in-person hearing since the temporary rule change was implemented in July 2021. A recent surge in case numbers for the Delta variant of the COVID
19 virus caused FINRAs outside health and safety consultant to recommend in early August against in-person hearings. Accordingly, the Chief Hearing Officer recently converted a hearing scheduled for mid-September from in-person to video conference.
In addition to creating a safe environment in which an in-person hearing may be held, as mentioned above, a number of other considerations inform whether any given case will be held in-person or by video conference.
15 See supra note 5.

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to continue to operate effectively in these extraordinary circumstances enabling FINRA to fulfill its statutory obligations to protect investors and maintain fair and orderly markets while also protecting the health and safety of hearing participants.16
FINRA has filed the proposed rule change for immediate effectiveness and has requested that the SEC 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 15Ab6 of the Act,17 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 15Ab8 of the Act,18
which requires, among other things, that FINRA rules provide a fair procedure for the disciplining of members and persons associated with members.
The proposed rule change, which extends the expiration date of the temporary amendments to FINRA rules set forth in SRFINRA2020015, will continue to provide 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 Acts purpose, for FINRA to operate pursuant to this temporary relief. The temporary amendments allow FINRA to specify filing and service methods, extend 16 Since the temporary amendments were implemented, OHO and the NAC have conducted several hearings by video conference. As of July 21, 2021, OHO has conducted 10 disciplinary hearings by video conference decisions have been issued in seven of these cases and scheduled hearings in nine other disciplinary matters. The parties have agreed to proceed by video conference for one of the hearings. Also, as of July 21, 2021, the NAC, through the relevant Subcommittee, has conducted 11 oral arguments by video conference in connection with appeals of FINRA disciplinary proceedings pursuant to FINRA Rule 9341d, as temporarily amended. Furthermore, the NAC has conducted via video conference a one-day evidentiary hearing in a membership application proceeding pursuant to FINRA Rule 1015, as temporarily amended.
17 15 U.S.C. 78o3b6.
18 15 U.S.C. 78o3b8.

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