[Federal Register: December 6, 2007 (Volume 72, Number 234)]
[Proposed Rules]
[Page 68768-68769]
[DOCID:fr06de07-13]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 67

[Docket No. FEMA-B-7747]

Proposed Flood Elevation Determinations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Proposed rule.

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SUMMARY: Comments are requested on the proposed Base (1 percent annual-
chance) Flood Elevations (BFEs) and proposed BFE modifications for the
communities listed in the table below. The purpose of this notice is to
seek general information and comment regarding the proposed regulatory
flood elevations for the reach described by the downstream and upstream
locations in the table below. The BFEs and modified BFEs are a part of
the floodplain management measures that the community is required
either to adopt or show evidence of having in effect in order to
qualify or remain qualified for participation in the National Flood
Insurance Program (NFIP). In addition, these elevations, once
finalized, will be used by insurance agents, and others to calculate
appropriate flood insurance premium rates for new buildings and the
contents in those buildings.

DATES: Comments are to be submitted on or before March 5, 2008.

ADDRESSES: The corresponding preliminary Flood Insurance Rate Map
(FIRM) for the proposed BFEs for each community are available for
inspection at the community's map repository. The respective addresses
are listed in the table below.
    You may submit comments, identified by Docket No. FEMA-B-7747, to
William R. Blanton, Jr., Chief, Engineering Management Branch,
Mitigation Directorate, Federal Emergency Management Agency, 500 C
Street, SW., Washington, DC 20472,<PHONE_NUMBER>, or (e-mail)
<EMAIL_ADDRESS>

FOR FURTHER INFORMATION CONTACT: William R. Blanton, Jr., Chief,
Engineering Management Branch, Mitigation Directorate, Federal
Emergency Management Agency, 500 C Street, SW., Washington, DC 20472,
(202) 646-3151 or.(e-mail<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: The Federal Emergency Management Agency
(FEMA) proposes to make determinations of BFEs and modified BFEs for
each community listed below, in accordance with section 110 of the
Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR
67.4(a).
    These proposed BFEs and modified BFEs, together with the floodplain
management criteria required by 44 CFR 60.3, are the minimum that are
required. They should not be construed to mean that the community must
change any existing ordinances that are more stringent in their
floodplain management requirements. The community may at any time enact
stricter requirements of its own, or pursuant to policies established
by other Federal, State, or regional entities. These proposed
elevations are used to meet the floodplain management requirements of
the NFIP and are also used to calculate the appropriate flood insurance
premium rates for new buildings built after these elevations are made
final, and for the contents in these buildings.
    Comments on any aspect of the Flood Insurance Study and FIRM, other
than the proposed BFEs, will be considered. A letter acknowledging
receipt of any comments will not be sent.
    Administrative Procedure Act Statement. This matter is not a
rulemaking governed by the Administrative Procedure Act (APA), 5 U.S.C.
553. FEMA publishes flood elevation determinations for notice and
comment; however, they are governed by the Flood Disaster Protection
Act of 1973, 42 U.S.C. 4105, and the National Flood Insurance Act of
1968, 42 U.S.C. 4001 et seq., and do not fall under the APA.
    National Environmental Policy Act. This proposed rule is
categorically excluded from the requirements of 44 CFR part 10,
Environmental Consideration. An environmental impact assessment has not
been prepared.
    Regulatory Flexibility Act. As flood elevation determinations are
not within the scope of the Regulatory Flexibility Act, 5 U.S.C. 601-
612, a regulatory flexibility analysis is not required.
    Executive Order 12866, Regulatory Planning and Review. This
proposed rule is not a significant regulatory action under the criteria
of section 3(f) of Executive Order 12866, as amended.
    Executive Order 13132, Federalism. This proposed rule involves no
policies that have federalism implications under Executive Order 13132.
    Executive Order 12988, Civil Justice Reform. This proposed rule
meets the applicable standards of Executive Order 12988.

List of Subjects in 44 CFR Part 67

    Administrative practice and procedure, Flood insurance, Reporting
and recordkeeping requirements.
    Accordingly, 44 CFR part 67 is proposed to be amended as follows:

PART 67--[AMENDED]

    1. The authority citation for part 67 continues to read as follows:

    Authority: 42 U.S.C. 4001 et seq.; Reorganization Plan No. 3 of
1978, 3 CFR, 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, 3 CFR,
1979 Comp., p. 376.

Sec.  67.4  [Amended]

    2. The tables published under the authority of Sec.  67.4 are
proposed to be amended as follows:

----------------------------------------------------------------------------------------------------------------
                                                                  * Elevation in feet
                                                               (NGVD)  \+\ Elevation in
                                                                feet (NAVD)
         Flooding source(s)            Location of referenced     Depth in feet above      Communities affected
                                            elevation **                ground
                                                              --------------------------
                                                                Effective     Modified
----------------------------------------------------------------------------------------------------------------
                                 Furnas County, Nebraska, and Incorporated Areas
----------------------------------------------------------------------------------------------------------------
Medicine Creek......................  Approximately 0.17 mile         None        +2257  City of Cambridge,
                                       downstream of U.S.                                 Unincorporated Areas
                                       Highway 6.                                         of Furnas County.
                                      Approximately 300 feet          None        +2270
                                       upstream of Road 409.
Republican River....................  Approximately 3.18              None        +2243  City of Cambridge,
                                       miles downstream of                                Unincorporated Areas
                                       State Highway 47.                                  of Furnas County.
                                      Approximately 480 feet         +2266        +2263
                                       upstream of State
                                       Highway 47.
----------------------------------------------------------------------------------------------------------------
* National Geodetic Vertical Datum.
+ North American Vertical Datum.
 Depth in feet above ground.
** BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream
 reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at
 the community map repository (see below) for exact locations of all BFEs to be changed.

Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal
 Emergency Management Agency, 500 C Street, SW., Washington, DC 20472.

                                                 Community Name

City of Cambridge
Maps are available for inspection at 722 Patterson Avenue, Cambridge, NE 69022.

                                      Unincorporated Areas of Furnas County

Maps are available for inspection at 912 R Street, Beaver City, NE 68926.
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(Catalog of Federal Domestic Assistance No. 97.022, ``Flood
Insurance.'')

    Dated: November 28, 2007.
David I. Maurstad,
Federal Insurance Administrator of the National Flood Insurance
Program, Department of Homeland Security, Federal Emergency Management
Agency.
[FR Doc. E7-23701 Filed 12-5-07; 8:45 am]

BILLING CODE 9110-12-P


[Federal Register Volume 86, Number 11 (Tuesday, January 19, 2021)]
[Notices]
[Pages 5284-5296]
[FR Doc No: 2021-00948]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90903; File No. SR-ISE-2020-43]

Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Delete the
Exchange Membership Rules and Incorporate by Reference the Membership
Rules of The Nasdaq Stock Market LLC

January 12, 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 December 29, 2020, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to delete the Exchange's membership rules
currently under the General 3 title, incorporate by reference The
Nasdaq Stock Market LLC's (``Nasdaq'') rules in the General 3 Rule 1000
Series, and other related changes.
    The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/ise/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
    General 3 of the Exchange's General Rules and Nasdaq's General 3,
Rules 1000 Series prescribe the qualifications and procedures for
applying for membership, respectively, on the Exchange and Nasdaq. The
Exchange proposes to delete in their entirety the rules under its
General 3 title, entitled ``Membership and Access,'' and incorporate by
reference the Nasdaq General 3, Rules 1000 Series (the ``Nasdaq Rule
1000 Series'' or ``Nasdaq Membership Rules'') as described below.\3\
The Exchange will also relocate the text under its rule General 3,
Section 5(g) and place it under new Options 2A, Section 1(f) rule and
General 3, Section 4(b) which will be placed under new Exchange General
2, Section 11, as further described below.
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    \3\ The Exchange will separately request an exemption from the
rule filing requirements of Section 19(b) of the Act for changes to
General 3 to the extent such rules are effected solely by virtue of
a change to the Nasdaq Rule 1000 Series. The Exchange's proposed
rule change will not become effective unless and until the
Commission approves this exemption request.
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    This proposal is part of the Exchange's plan to harmonize its
membership rules with the membership rules of the Nasdaq and Nasdaq BX,
Inc. (``BX'') exchanges.\4\ The Exchange notes that Nasdaq GEMX, LLC,
Nasdaq MRX, LLC, and Nasdaq Phlx, LLC (``Phlx'') (together with Nasdaq
and BX, the ``Affiliated Exchanges'') each plan to propose similar rule
changes that will render their membership rules substantially similar
to those of Nasdaq and BX. To account for any differences that may
exist, the proposed introductory paragraphs list instances in which
cross references in the Nasdaq Series 1000 Rules to other Nasdaq rules
shall be read to refer instead to the Exchange Rules, and references to
Nasdaq terms (whether or not defined) shall be read to refer to the
Exchange-related meanings of those terms. For instance, references to
defined terms ``Exchange'' or ``Nasdaq'' shall be read to refer to the
Nasdaq ISE Exchange; ``Rule'' or ``Exchange Rule'' shall be read to
refer to the Exchange Rules; the defined term ``Applicant'' in the
Nasdaq Rule 1000 Series shall be read to refer to an Applicant to the
Nasdaq ISE Exchange; the defined terms ``Board'' or ``Exchange Board''
in the Nasdaq Rule 1000 Series shall be read to refer to the Nasdaq ISE
Board of Directors; the defined term ``Director'' in the Nasdaq Rule
1000 Series shall be read to refer to a Director of the Board of the
Nasdaq ISE Exchange; the defined term ``Exchange Review Council'' in
the Nasdaq Rule 1000 Series shall be read to refer to the Nasdaq ISE
Exchange Review Council; the defined term ``Subcommittee'' in the
Nasdaq Rule 1000 Series shall be read to refer to a Subcommittee of the
Nasdaq ISE Exchange Review Council; the defined term ``Interested
Staff'' in the Nasdaq Rule 1000 Series shall be read to refer to
Interested Staff of Nasdaq ISE; the defined term ``Member'' in the
Nasdaq Rule 1000 Series shall be read to refer to a Nasdaq ISE Member
who acts in its capacity as an Electronic Access Member, a Primary
Market Maker, or a Competitive Market Maker (including a ``Foreign
Member,'' as defined under Nasdaq General 9, Section 50); the defined
term ``Associated Person'' shall be read to refer to a Nasdaq ISE
Associated Person; the defined terms ``Exchange Membership Department''
or ``Membership Department'' shall be read to refer to the Nasdaq ISE
Membership Department; and the defined term ``Exchange Regulation
Department'' shall be read to refer to the Nasdaq ISE Regulation
Department.
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    \4\ The BX membership rules were previously amended to
incorporate by reference Nasdaq's membership rules. See Securities
Exchange Act Release No. 34-86425 (July 22, 2019), 84 FR 36139 (July
26, 2019) (SR-BX-2019-022).
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    Additionally, cross references in the Nasdaq Rule 1000 Series to
``General 1 and Equity 1'' shall be read as references to Nasdaq ISE
General 1, Section 1; cross references in the Nasdaq Rule 1000 Series
to ``General 9, Section 20'' shall be read as references to Nasdaq ISE
Options 10, Section 5(c)(2); cross references in the Nasdaq Rule 1000
Series to ``General 9, Section 37'' shall be read as references to
Nasdaq ISE Options 9, Section 21; and cross references to the ``General
4, Rule 1200 Series'' shall be read as references to Nasdaq ISE General
4, Section 1.\5\
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    \5\ The Exchange notes that its General 4 title (entitled
``Regulation'') currently incorporates by reference the rules
contained in Nasdaq's General 4 title. See Securities Exchange Act
Release No. 85728 (April 26, 2019), 84 FR 18892 (May 2, 2019) (SR-
ISE-2019-12).
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    Finally, as explained below, the introductory paragraph will
indicate that the Nasdaq Rule 1000 Series shall also apply to Nasdaq
ISE Members who meet the requirements of a ``Foreign Member.''
    As compared to the Exchange's existing General 3, by virtue of
incorporating by reference the Nasdaq Membership Rules into the
Exchange's rulebook, the Exchange's membership rules will be organized
in a more logical order. The incorporated rules will eliminate
unnecessary or vague provisions that exist under the current General 3
title, eliminate unnecessary complexity in the membership process, and
otherwise streamline the Exchange's existing membership rules and their
associated procedures.
Summary of Proposed Changes
    A comparison between the Exchange's existing General 3 and the
Nasdaq Membership Rules is summarized below. As a general matter, in
comparison to the Exchange's existing membership rules, the Nasdaq
Membership Rules provide for more specific membership procedures and
due process. Moreover, as described below, some of the Nasdaq Rule 1000
Series rules have no analogue in the existing Exchange rules. Finally,
as explained later, the Exchange will also relocate the text under its
General 3, Section 5(g) rule and place it under new Options 2A, Section
1(f) rule and General 3, Section 4(b) which will be relocated under new
Exchange General 2, Section 11.
Rule 1001
    Nasdaq Rule 1001 states that Nasdaq and the Financial Industry
Regulatory Authority (``FINRA'') are parties to a Regulatory Contract,
pursuant to which FINRA has agreed to perform certain functions
described in the Rule 1000 Series and the General 4, Rule 1200 Series
on behalf of Nasdaq.\6\ Moreover, Nasdaq Rule 1001 provides that Nasdaq
rules that refer to Nasdaq's Regulation Department, Nasdaq Regulation
Department staff, Nasdaq staff, and Nasdaq departments should be
understood as also referring to FINRA staff and FINRA departments
acting on behalf of Nasdaq pursuant to the Regulatory Contract.
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    \6\ Nasdaq's General 4, Section 1 (Registration, Qualification
and Continuing Education) is currently incorporated by reference
into the Exchange's General 4 title. See supra note 5.
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    Nasdaq Rule 1001 also provides that, notwithstanding the fact that
Nasdaq has entered into the Regulatory Contract with FINRA to perform
some of Nasdaq's functions, Nasdaq shall retain ultimate legal
responsibility for, and control of, such functions. In addition, the
rule informs that Nasdaq has incorporated by reference certain FINRA
rules and that Nasdaq members shall comply with those rules and

interpretations as if such rules and interpretations were part of
Nasdaq's Rules.
    The Exchange is proposing to incorporate by reference Nasdaq Rule
1001, which currently has no analogue rule under its membership rules.
The language of Nasdaq Rule 1001 is applicable to the Exchange, as the
Exchange is, similarly, a signatory of a Regulatory Contract with
FINRA, pursuant to which FINRA has agreed to perform certain membership
functions on its behalf, and also retains the ultimate legal
responsibility for the performance of said functions. The Exchange
believes that the incorporation by reference to Nasdaq Rule 1001 is not
a substantive amendment to the Exchange rules.
Rule 1002
    Nasdaq Rule 1002, which will be incorporated by reference under the
Exchange's General 3 title, describes the qualifications of Nasdaq
members and associated persons, the registration of branch offices, and
the designation of a Member's office of supervisory jurisdiction. The
Exchange will adopt by incorporation the provisions of Nasdaq Rule 1002
and delete those under current General 3, Section 1. The Exchange
believes that incorporating by reference this rule will further the
Exchange's objective to provide uniformity and clarity to its rules by
aligning them with the membership rules of the Nasdaq and BX exchanges.
    Nasdaq Rule 1002(a) provides that any registered broker or dealer
shall be eligible for membership in Nasdaq (except for those excluded
under paragraph (b) of the rule); additionally, paragraph (a) provides
that any person shall be eligible to become an Associated Person of a
Member (except for those excluded under Rule 1002(b)). Rule 1002(a) is
similar to General 3, Section 1(a) of the Exchange's membership rules
to the extent that it describes that brokers or dealers may become
Exchange members (``Members''). General 3, Section 1(a) provides that a
Member may be a corporation, partnership, or limited liability company,
and must be a registered broker-dealer and meet the qualifications for
Exchange membership. The Exchange believes that incorporating by
reference Nasdaq Rule 1002(a) expands upon Exchange General 3, Section
1(a) by including an associated person of a Member (``Associated
Person'') under this threshold requirement.
    The Exchange's General 3, Section 1(b) provides that a Member that
does not maintain an office in the United States (``Foreign Member'')
that is responsible for preparing and maintaining financial and other
reports required to be filed with the Commission and with the Exchange
must prepare such reports in English and in U.S. dollars, reimburse the
Exchange for any expense incurred in examining the Member to the extent
that such expense is in excess of the cost associated with examining a
Member located within the continental United States, and ensure the
availability of an individual who is fluent in English and
knowledgeable in securities and financial matters to assist
representatives of the Exchange during examinations. Nasdaq General 9,
Section 50 is a Nasdaq rule substantially similar to the provisions in
General 3, Section 1(b). In order to preserve the enumerated
characteristics of a Foreign Member, which would otherwise be deleted
from its Rulebook by incorporating by reference the Nasdaq Rule 1000
Series, the Exchange proposes to include the text of its General 3,
Section 1(b) under the General 3's introductory paragraph and indicate
that the Nasdaq Membership Rules will also apply to the members who
meet the Foreign Member requirements.
    Furthermore, General 3, Section 1(c) provides that every Member
shall have as the principal purpose of being a Member the conduct of a
public securities business, and that purpose shall be deemed to exist
if and so long as: (1) The Member has qualified and acts in respect of
its business on the Exchange in one or more of the following
capacities: (i) An Electronic Access Member; (ii) a Primary Market
Maker; or (iii) a Competitive Market Maker; and (2) all transactions
effected by the Member are in compliance with Section 11(a) of the
Exchange Act and the rules and regulations adopted thereunder. The
Exchange believes that the membership qualifications described in this
section are consistent with the eligibility criteria described in
Nasdaq Rule 1002 and the disclosures and information provided by
Applicant pursuant to Nasdaq Rule 1013. To account for the Exchange
rights referenced in Section 1(c) (Electronic Access Member, Primary
Market Maker, or Competitive Market Maker), as defined under the
Exchange's Options 1, Section 1 provisions, the Exchange will also
indicate in the proposed General 3 introductory paragraph that the
defined term ``Member'' in the Nasdaq Rule 1000 Series shall be read to
refer to a Nasdaq ISE Member who acts in its capacity as an Electronic
Access Member, a Primary Market Maker, or a Competitive Market Maker.
The Exchange notes that the rules related to a Primary Market Maker's
and Competitive Market Maker's trading rights are not being impacted by
this proposal. These rules are preserved and located in the Exchange's
Options 2A title, ISE Market Maker Rights.
    Nasdaq Rule 1002(b)(1) establishes that subject to such exceptions
as may be explicitly provided elsewhere in the Nasdaq rules, no
registered broker or dealer shall be admitted to membership, and no
Member shall be continued in membership, if such broker, dealer, or
Member fails or ceases to satisfy the qualification requirements
established by Nasdaq rules, or if such broker, dealer, or Member is or
becomes subject to a statutory disqualification, or if such broker,
dealer, or Member fails to file such forms as may be required in
accordance with such process as Nasdaq may prescribe. Nasdaq Rule
1002(b)(1) can be compared to the provision currently under Exchange's
General 3, Section 2(b) that establishes that the Exchange may deny or
condition the approval of a Member, or preclude or condition a person
from becoming associated with a Member, for the same reasons that the
Commission may deny or revoke a broker-dealer registration and for
those reasons required or allowed under the Act. Furthermore, the
requirement to comply with Nasdaq rules under Section (b)(1), is also
consistent with the provision under Exchange General 3, Section 4(c)
that states that every Member shall pledge to abide by the by-laws and
rules of the Exchange, as amended from time to time, and by all Options
Regulatory Alerts, notices, directives or decisions adopted pursuant to
or made in accordance with the Exchange's by-laws and rules.
    Nasdaq Rule 1002(b)(2) establishes that, subject to such exceptions
as may be explicitly provided elsewhere in Nasdaq rules, no person
shall become associated with a Member, continue to be associated with a
Member, or transfer association to another Member, if such person fails
or ceases to satisfy the qualification requirements established by
Nasdaq rules, or if such person is or becomes subject to a statutory
disqualification; and no broker or dealer shall be admitted to
membership, and no Member shall be continued in membership, if any
person associated with it is ineligible to be an Associated Person
under Nasdaq Membership Rules. Nasdaq Rule 1002(b)(2) is similar to the
requirement that applies to Associated Persons under General 3, Section
3(a) of the Exchange rules. The

Exchange's General 3, Section 3 rules enumerate conditions that apply
to persons associated with Members of the Exchange. Exchange General 3,
Section 3(a) provides that Associated Persons are bound by the
Exchange's by-laws and rules and the rules of the Clearing Corporation
and describes the circumstances concerning the barring of an Associated
Person in such role. Exchange General 3, Sections 2(b), 3(a), and 4(c)
are, substantially similar to the provisions of Nasdaq Rule 1002(b),\7\
which the Exchange proposes be incorporated by reference into its
membership rules. The Exchange notes that General 3, Section 3(b)
requires that Members file and keep current a list of its associated
persons who are its executive officers, directors, principals,
shareholders, and general partners. A Member's obligation to maintain
updated information for their registered representatives or principals
is prescribed under Nasdaq's General 4 title which was previously
incorporated by reference into the Exchange rules,\8\ rendering
Exchange General 3, Section 3(b) unnecessary.
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    \7\ The Exchange notes that it will not relocate or carve-out
this duplicative provision concerning The Options Clearing
Corporation (``OCC''). Pursuant to the Exchange's Options 9, Section
2 (``Adherence to Law''), Members are required to abide by the Act,
the Exchange's by-laws, the rules of the Exchange, and OCC rules.
    \8\ See supra note 5.
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    Exchange General 3, Section 3(c) provides that a claim of any
Associated Person described in the first sentence of General 3, Section
3(b) (i.e., a Member's executive officers, directors, principal
shareholders, and general partners) against a Member shall be
subordinate in right of payment of customers and other Members. This
subordination rule was approved as part of the Exchange's Form 1 filing
on February 24, 2000.\9\ At that time, Exchange members had equity
ownership interest in the Exchange and the subordination language was
relevant. In April of 2002, the Exchange demutualized, which ultimately
resulted in Exchange members no longer having any equity ownership
interest in ISE. As such, this language became obsolete.\10\ The
Exchange proposes to delete this provision in its entirety.
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    \9\ See Securities Exchange Act Release No. 42455 (February 24,
2000), 65 FR 11401 (March 2, 2000) (Order Granting Registration as a
National Securities Exchange).
    \10\ See Securities Exchange Act Release No. 45803 (April 23,
2002), 67 FR 21306 (April 30, 2002) (Order Approving Proposed Rule
Change and Amendment No. 1 thereto by the International Securities
Exchange LLC To Restructure From a Limited Liability Company to a
Corporation).
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    Nasdaq Rule 1002(c) establishes, as a condition to maintaining
Nasdaq membership, that Members shall at all times maintain membership
in a registered securities association or another registered exchange.
Furthermore, the rule prescribes that Members that transact business
with customers shall at all times be members of FINRA. The Exchange
proposes to incorporate this rule by reference. Because the Exchange
does not act in the capacity of a designated examining authority
(``DEA''), like the Nasdaq and BX exchanges, it requires that all
applicants for membership have an assigned DEA in place as a condition
of its membership.
    Nasdaq Rule 1002(d) states that Nasdaq members are deemed to comply
with Nasdaq's branch office registration requirements to the extent
that they keep current a Uniform Branch Office Registration Form
(``Form BR''), which contains the requisite information and which is
accessible electronically to Nasdaq. Members that are not FINRA members
shall continue to submit to Nasdaq a Branch Office Disclosure Form, as
they have done previously. The Exchange proposes to incorporate by
reference this rule, which is consistent with the provisions under the
Exchange's Options 10, Section 5, entitled Branch Offices. The Exchange
proposes that the cross-reference in Nasdaq Rule 1002(d)(2) to General
9, Section 20 shall be read as a reference to Exchange Options 10,
Section 5(c)(2).
Rule 1011
    Nasdaq Rule 1011 contains definitions applicable to the Nasdaq
Membership Rules. Nasdaq Rule 1011 has no analogue rule in the existing
Exchange's General 3 title. By incorporating by reference the Nasdaq
definitions under Rule 1011, the Exchange believes it will further
harmonize its rules with respect to the membership rules of Nasdaq and
BX. The Exchange notes that the defined terms in Nasdaq Rule 1011, to
be incorporated by reference into the Exchange's rules, are self-
contained and have no impact on ISE rules outside its membership rules.
The terms ``Applicant,'' ``Department,'' ``Director,'' ``Interested
Staff,'' ``Securities business,'' ``Exchange Board,'' ``principal place
of business,'' ``registered broker or dealer,'' ``Representative,''
``sales practice event,'' ``Subcommittee,'' and ``statutory
disqualification'' have not been defined in the Exchange's rulebook.
The Exchange notes that the term ``associated person'' as defined in
the Exchange's rulebook \11\ is substantially similar to the definition
in Nasdaq General 1(b)(2). Relatedly, the term ``Proprietary Trading
Firm'' as defined in Nasdaq Rule 1011(o) is substantially similar with
the definition of ``proprietary trading'' as defined in the Exchange's
rulebook.\12\ The Exchange proposes to adopt by incorporation the text
of Nasdaq Rule 1011 in its entirety. The Exchange believes that
incorporating by reference this rule will further the Exchange's
objective to provide uniformity and clarity to its rules by aligning
them with the membership rules of the Nasdaq and BX exchanges.
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    \11\ Exchange General 1, Section 1(a)(1).
    \12\ Exchange Options 1, Section 1(a)(41)
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Rule 1012
    Nasdaq Rule 1012 (``General Application Provisions'') provides a
detailed outline of the requirements that an Applicant must follow in
order to file an application for membership with Nasdaq. In contrast,
the Exchange membership rules contain vague provisions describing the
manner in which an application shall be submitted or how service shall
be performed. The Exchange believes that Nasdaq Rule 1012 provides a
more detailed set of instructions for Applicants, Members, and
Associated Persons to submit materials and the requirements for service
of documents. The Exchange believes that incorporating Rule 1012 by
reference will further the Exchange's objective to provide uniformity
and clarity to its rules by aligning them with the membership rules of
the Nasdaq and BX exchanges.
    Nasdaq Rule 1012(a) provides that Applicants and Nasdaq Members may
submit an application or other documents and information to Nasdaq by
first-class mail, overnight courier, hand delivery, or by electronic
means; this section also provides that Nasdaq shall serve a notice or
decision issued under the Nasdaq Membership Rules by first-class mail
or electronic means on the Applicant or Member or its counsel, unless a
Nasdaq rule specifies a different method of service; finally, this
section also details when service by Nasdaq or an Applicant shall be
deemed complete. The Exchange membership rules contain no such
provision. The Exchange believes that incorporating Nasdaq 1012(a) by
reference improves its membership application process by adopting
specific provisions regarding the manner of submission and service of
documents.
    Nasdaq Rule 1012(b) provides a definition of the term ``calendar
days'' and describes the manner in which times under the Nasdaq
Membership Rule shall be computed. The Exchange

membership rules contain no such provision. The Exchange believes that
adopting this rule by incorporation will provide further clarity to the
calculation of times under its membership rules.
    Nasdaq Rule 1012(c) describes a(n) Applicant's, Member's, and
Associated Person's duty to ensure that the information they provide to
Nasdaq at the time of the filing is accurate, complete, and current.
Moreover, this provision requires that Applicant's, Member's, and
Associated Person's shall ensure that membership applications and
supporting materials filed with Nasdaq remain accurate, complete, and
current at all times by filing supplementary amendments, which must be
filed within 15 business days of their learning of the facts or
circumstances giving rise to the need for an amendment. Furthermore,
this section requires that Applicants, Members, and Associated Persons
promptly notify Nasdaq, in writing, of any material adverse change in
their financial condition. The Exchange membership rules contain no
such provision. The Exchange believes that incorporating Nasdaq 1012(c)
by reference improves its membership rules by adopting provisions
concerning a Member's duty to ensure the accuracy, completeness, and
current nature of membership information.
    Exchange General 3, Section 4(b) states that every Member shall
report to the Exchange all contact information required by the Exchange
via the FINRA Contact System. Section 4(b) also requires Exchange
Members to update their contact information promptly when necessary,
but in no event later than 30 days following any change, and within 17
business days after the end of each calendar year; furthermore, it
requires members to comply with any request for such information by the
Exchange within 15 days or any longer period agreed upon with Exchange
staff. The Exchange proposes the relocation of this provision, with
minor lettering changes, to Exchange General 2 title (``Organization
and Administration'') under new Section 11, entitled Contact
Information Requirements. Exchange General 3, Section 4(b) is
substantially similar to the rule text in both Nasdaq's and BX's
General 2, Section 11.
    As previously stated, the Exchange proposes to adopt by
incorporation the text of Nasdaq Rule 1012 in its entirety, as the
rule's provisions provide clear instructions concerning the submission
of membership applications and other materials; the requirements for
service of documents; and the Applicants', Members', and Associated
Persons' duty to ensure that the information filed with the Exchange is
up to date.
Rule 1013
    Nasdaq Rule 1013 sets forth the procedure for filing applications
for new membership on the Exchange. The Exchange proposes to
incorporate Nasdaq Rule 1013 by reference under its General 3 title.
The Exchange is adopting Nasdaq Rule 1013 as it expands upon and
provides clarity to the procedure in the Exchange's General 3, Section
5. The Exchange believes that incorporating Rule 1013 by reference will
further the Exchange's objective to provide uniformity and clarity to
its rules by aligning them with the membership rules of the Nasdaq and
BX exchanges.
    Nasdaq Rule 1013(a) describes in detail the membership application
process. Subsection (a)(1) (``Where to File; Contents''), provides that
an application shall include (A) a copy of the Applicant's current Form
BD, if not otherwise available to Nasdaq electronically through the
Central Registration Depository (``CRD''); (B) an original Nasdaq-
approved fingerprint card for each Associated Person who will be
subject to SEC Rule 17f-2 and for whom a fingerprint card has not been
filed with another self-regulatory organization (SRO), if such
fingerprints are not otherwise available electronically to Nasdaq
through CRD; (C) payment for such fee as may be required under the
Rules; (D) a description of the Applicant's proposed trading activities
on Nasdaq, such as the types of securities it will trade, whether it
will be a market maker, or an order entry firm, and/or engage in block
trading activities, and the extent to which the Applicant is conducting
such activities as a member of other SROs; (E) a copy of the
Applicant's most recent audited financial statements and a description
of any material changes in the Applicant's financial condition since
the date of the financial statements; (F) an organizational chart; (G)
the intended location of the Applicant's principal place of business
and all other branch offices, if any, and the names of the persons who
will be in charge of each office; (H) a description of the
communications and operational systems the Applicant will employ to
conduct business and the plans and procedures the Applicant will employ
to ensure business continuity, including: system capacity to handle the
anticipated level of usage; contingency plans in the event of systems
or other technological or communications problems or failures; system
redundancies; disaster recovery plans; and system security; (I) a copy
of any decision or order by a federal or state authority or SRO taking
permanent or temporary adverse action with respect to a registration or
licensing determination regarding the Applicant or an Associated
Person; (J) a statement indicating whether the Applicant or any person
listed on Schedule A of the Applicant's Form BD is currently, or has
been in the last ten years, the subject of any investigation or
disciplinary proceeding conducted by any SRO, the foreign equivalent of
a SRO, a foreign or international securities exchange, a contract
market designated pursuant to the Commodity Exchange Act (``CEA'') or
any substantially equivalent foreign statute or regulation, a futures
association registered under the CEA or any substantially similar
foreign statute or regulation, the Commission or any other
``appropriate regulatory agency'' (as defined in the Act), the
Commodity Futures Trading Commission, or any state financial regulatory
agency regarding the Applicant's activities that has not been reported
to the CRD, together with all relevant details, including any sanctions
imposed; (K) a statement indicating whether any person listed on
Schedule A of the Applicant's Form BD is currently, or has been in the
last ten years, the subject of any investigation or disciplinary
proceeding conducted by any SRO, the foreign equivalent of an SRO, a
foreign or international securities exchange, a contract market
designated pursuant to the CEA or any substantially equivalent foreign
statute or regulation, a futures association registered under the CEA
or any substantially similar foreign statute or regulation, the
Commission or any other ``appropriate regulatory agency'', the CFTC, or
any state financial regulatory agency regarding the Applicant's
activities that has not been reported to the CRD, together with all
relevant details, including any sanctions imposed; (L) a copy of any
contract or agreement with another broker-dealer, a bank, a clearing
entity, a service bureau or a similar entity to provide the Applicant
with services regarding the execution or clearance and settlement of
transactions effected on Nasdaq; (M) if the Applicant proposes to make
markets on Nasdaq, a description of the source and amount of
Applicant's capital to support its market making activities on Nasdaq,
and the source of any additional capital that may become necessary; (N)
a description of the financial controls to be employed by the Applicant
with respect to anti-money laundering compliance rules as set forth in
General 9, Section 37; (O) a copy of

the Applicant's written supervisory procedures with respect to the
activities identified in paragraph (a)(1)(D); (P) a list of the persons
conducting the Applicant's market making and other trading activities,
and a list of the persons responsible for such persons' supervision,
together with the CRD numbers; (R) a copy of the Applicant's most
recent ``FOCUS Report'' (Form X-17A-5) filed with the SEC pursuant to
SEC Rule 17a-5; (S) all examination reports and corresponding responses
regarding the Applicant for the previous two years from the SROs of
which it is a member; (T) a copy of Nasdaq's Membership Agreement, duly
executed by the Applicant, which includes, among other things: (1) An
agreement to comply with the federal securities laws, the rules and
regulations thereunder, Nasdaq rules, and all rulings, orders,
directions, and decisions issued and sanctions imposed under Nasdaq
rules; (2) an agreement to pay such dues, assessments, and other
charges in the manner and amount as from time to time shall be fixed
pursuant to Nasdaq rules; and (U) such other reasonable information
with respect to the Applicant as Nasdaq may require.
    In contrast, current General 3, Section 2(a) states simply that to
become a Member of the Exchange an Applicant must seek approval in the
form and manner prescribed by the Exchange. Relatedly, General 3,
Section 4(a) provides a short list of documents that Applicants and
Members may submit with their application for membership with the
Exchange. Section 4(a) states that Members and Applicants shall file
with (and be subject to review by) the Exchange, at a minimum, their
partnership agreements and any subsequent amendments, in the case of
partnerships; articles of incorporation, by-laws and their amendments,
in the case of corporations; the articles of organization and operating
agreements and their respective amendments, in the case of limited
liability companies; and any lease agreements that Members may be
subject to.\13\ The paragraph further provides that no action or
failure by the Exchange to act shall be construed to mean that the
Exchange has in any way passed on the investment merits of or approved
the submitted document. The Exchange believes that deleting General 3,
Section 4(a) is appropriate because the Exchange's current rule is
ambiguous while Nasdaq Rule 1013(a)(1), which will be incorporated by
reference, lists in detail all of the supplementary application
materials required for submission by an Applicant. Incorporating this
provision by reference will further standardize the Exchange's
membership application process.
---------------------------------------------------------------------------

    \13\ Concerning the lease agreements referenced in Section 4(a),
the Exchange also believes it unnecessary to preserve this text for
purposes of the General 3 amendments. The lease agreements are fully
described in Options 2A, Section 4. (``Leasing Memberships'') in the
Exchange's rulebook.
---------------------------------------------------------------------------

    Exchange's General 3, Section 5(a) provides that to become a Member
of the Exchange an Applicant shall file an application, which must be
accompanied by a non-refundable application fee. The Exchange proposes
to delete Section 5(a) because the provisions in this section are
already included in Nasdaq Rule 1013, New Member Application which is
being incorporated by reference.
    The Exchange also believes that the provision under General 3,
Section 5(c) that indicates that an applicant must be approved by the
Exchange to perform in at least one of the recognized capacities of a
Member as stated in General 3, Section 1(c) (discussed above when
describing the incorporation by reference of Nasdaq Rule 1002) is
substantially similar to the language contained in Nasdaq Rule
1013(a)(1)(D).
    Nasdaq Rule 1013(a)(2) provides that the Membership Department will
deem an application to be filed on the date when it is substantially
complete, meaning the date on which the Membership Department receives
from the Applicant all material documentation and information required
under Rule 1013. This rule also provides that Nasdaq will notify the
Applicant in writing when it deems the Applicant's application to be
substantially complete. The Exchange's General 3, Section 5(d) contains
a parallel, although brief, provision when describing the completion of
the application process (``Upon completion of the application process,
the Exchange shall consider whether to approve the application, unless
there is just cause for delay'').
    Nasdaq Rule 1013(a)(3) provides the procedure concerning incomplete
applications (including the conditions necessary for the refund of
application fees); and the request for additional documents or
supporting information. Specifically, Nasdaq Rule 1013(a)(3)(A)
(``Lapse of Applications that are not Substantially Complete'')
provides that if an application that was initiated under 1013 is not
deemed to be substantially complete by the Membership Department within
90 calendar days after an Applicant initiates it, then absent a showing
of good cause by the Applicant, the Membership Department may, at its
discretion, deem the application to have lapsed without filing, and the
Membership Department will take no action in furtherance of the
application. If the Membership Department deems an application to have
lapsed, then the Membership Department shall serve a written notice of
that determination on the Applicant. If an Applicant still wishes to
apply for membership on Nasdaq after receiving notice of a lapse in its
application, then the Applicant will be required to submit a new
application pursuant to Nasdaq Membership Rules and pay a new
application fee for doing so, if applicable. The Membership Department
will refund fees that an Applicant has paid to the Nasdaq in connection
with a lapsed application, in accordance with Nasdaq rules regarding
fees, provided that the Nasdaq has not proceeded to process the
application at the time it lapses. The rule also provides that, for
purposes of Rule 1013(a)(3)(A), the Membership Department will deem an
application to be not ``substantially complete'' if the Applicant fails
to submit to the Membership Department materially important information
or documentation that is required or requested under these Rules.
    Nasdaq Rule 1013(a)(3)(B) (``Rejection of Filed Applications that
Remain or Become Incomplete After Filing'') provides that if an
application that was initiated under Rule 1013 is substantially
complete and thus is deemed to be filed with Nasdaq under Rule
1013(a)(2), but the application nevertheless remains or becomes
incomplete with respect to any required or requested information or
documentation, then the Membership Department shall serve written
notice to the Applicant of such incompleteness and describe the missing
information or documentation. If the Applicant fails to submit to
Nasdaq the missing information or documentation within a reasonable
period after it receives a notice of incompleteness, then absent a
showing of good cause by the Applicant, the Membership Department may,
at its discretion, reject the application. If the Membership Department
rejects an application on the basis of incompleteness, then the
Membership Department shall serve a written notice on the Applicant of
the Membership Department's determination and the reasons therefor.
Nasdaq shall not refund the application fees that an Applicant has paid
to Nasdaq in connection with an application that Nasdaq rejects. If the
Applicant determines to continue to seek membership on Nasdaq, then the
Applicant shall submit a new

application and pay a new application fee in accordance with Nasdaq
rules.
    The Exchange currently contains two provisions related to the
lapsing of its membership applications. Pursuant to General 3, Section
5(f), if the membership application process is not completed within six
(6) months of the filing of the application form and payment of the
appropriate fee, the application shall be deemed to be automatically
withdrawn. The Exchange plans to replace General 3, Section 5(f) by
incorporating by reference Rule 1013(a)(3) which provides well-defined
processes for the treatment of applications that become stale or result
in the Applicant's failure to pursue membership by not responding to
requests for additional information.
    The second rule describing the lapsing of an application is
currently located under the Exchange's General 3, Section 5(g). Section
5(g) is specific to Applicants who are seeking approval as either a
Competitive Market Maker or a Primary Market Maker on the Exchange,
either of which require the Applicant to purchase or lease trading
rights. This provision establishes that approved Applicants must become
effective Members within 90 days of the date of approval by owning or
leasing a membership or else the approval will expire (unless the
Exchange grants an extension). Because this rule specifically relates
to the requirement for Market Makers to promptly secure their trading
rights, the Exchange believes that it will be better situated under the
Options 2A, Section 1 (``Market Maker Rights'') title. The Exchange
thus proposes to relocate the rule text in General 3, Section 5(g) and
create new subsection Options 2A, Section 1(f) in the Exchange's
rulebook (the Exchange will make some minor style changes to the rule
text to facilitate its reading). The Exchange intends to preserve the
rules related to Competitive Market Makers and Primary Market Makers in
Options 2A due to the unique nature of this structure. As stated above,
the Exchange is not amending this structure nor the process by which
Exchange Members secure and exercise Market Maker trading rights.
    Nasdaq Rule 1013(a)(4) (``Requests by the Department for Additional
Documents or Information from the Applicant or from Third Parties'')
establishes that (A) at any time before the Membership Department
serves its decision as to an application for new membership in Nasdaq,
the Membership Department may serve a written request for additional
information or documentation, from the Applicant or from a third party,
if the Membership Department deems such information or documentation to
be necessary to clarify, verify, or supplement the application
materials. The Membership Department may, at its discretion, request
that the Applicant or the third party provide the requested information
or documentation in writing or through an in-person or telephonic
interview. In the written request, the Membership Department shall
afford the Applicant or the third party a reasonable period of time
within which to respond to the request; moreover, (B) in the event that
the Membership Department obtains information or documentation about an
Applicant from a third party that the Membership Department reasonably
believes could adversely impact its decision on an application, then
the Membership Department shall promptly inform the Applicant in
writing and provide the Applicant with a description of the information
or a copy of the documentation that the Membership Department obtained,
where appropriate under the circumstances. Prior to rendering an
application decision on the basis of information or documentation
obtained from a third party source, the Membership Department shall
afford the Applicant with a reasonable opportunity to discuss or to
otherwise address the information or documentation that the Membership
Department obtained from the third party.
    The provisions under the Nasdaq Rule 1013(a)(4) are similar to the
Exchange's General 3, Section 4(a), to the extent that they describe
the Exchange's authority to request additional documents or information
from the Applicant or Member. Relatedly, General 3, Section (d) also
provides the Exchange with authority to request Associated Persons to
provide additional information or testimony. The Exchange believes that
incorporating by reference Nasdaq Rule 1013(a)(4) into its membership
rules will provide a greater degree of detail concerning the Exchange's
discretion and authority to request additional information.
    Nasdaq Rule 1013(b)(1) sets forth the procedure that allows an
Applicant who is a FINRA member to ``waive-in'' to become an Exchange
Member and to register with the Exchange all persons associated with it
whose registrations FINRA has approved (in categories recognized by the
Exchange's rules). This section defines the term ``waive-in'' to mean
that the Membership Department will rely substantially upon FINRA's
prior determination to approve the Applicant for FINRA membership when
the Membership Department evaluates the Applicant for Exchange
membership. That is, the Membership Department will normally permit a
FINRA member to waive-into Exchange membership without conducting an
independent examination of the Applicant's qualifications for
membership on the Exchange, provided that the Membership Department is
not otherwise aware of any basis set forth in Nasdaq Rule 1014 to deny
or condition approval of the application.
    The second special application process, which is set forth in
Nasdaq 1013(b)(2), permits Applicants for Nasdaq membership that are
already approved members of one or more of the affiliated exchanges to
waive-into Nasdaq. In this context, ``waive-in'' means that the
Membership Department will rely substantially upon an affiliated
exchange's prior determination to approve the Applicant for Nasdaq
membership. The procedures in Nasdaq Rule 1013(b)(2) for an Applicant
to submit a waive-in application under this provision and for the
Membership Department to issue a decision based upon such an
application are identical to the procedures described above for FINRA
members that seek to waive-into Nasdaq membership. Applicants who meet
the criteria for this waive-in review process have already demonstrated
their ability to meet membership standards on one or more of the
affiliated exchanges which eliminates the need for a full review.
    Nasdaq Rule 1013(b) (``Special Application Procedures'') was
adopted by Nasdaq to expedite the membership application process of
Applicants who were already members of FINRA or members of one of the
affiliated exchanges. The Special Application Procedures also include
updated provisions requiring compliance with Nasdaq's anti-money
laundering rules.\14\ The Exchange proposes to adopt by incorporation
these same provisions to facilitate Applicants who meet the rule
requirements. The adoption of this rule will offer members of FINRA,
Nasdaq, and BX the option to apply for membership on the Exchange
through an expedited membership application process.
---------------------------------------------------------------------------

    \14\ See Securities Exchange Act Release No. 34-85513 (April 4,
2019), 84 FR 14429 (April 10, 2019) (SR-NASDAQ-2019-022).
---------------------------------------------------------------------------

    Current Exchange rules do not allow this expedited process.
However, today, this concept does exist in both GEMX and MRX General 3,
Section 5. Both GEMX and MRX rules afford an Exchange member in good
standing the ability to become a GEMX or MRX

member of the same category without application. The Exchange believes
that incorporating by reference Nasdaq's waive-in provisions will
further the Exchange's objective to provide uniformity and clarity to
its rules by aligning its membership application process with the
Nasdaq and BX exchanges.
Rule 1014
    Nasdaq Rule 1014 (``Department Decision'') describes the Membership
Department's process for the issuance of a decision. The Exchange
proposes to incorporate by reference Nasdaq Rule 1014 in its entirety
as it provides a more organized, detailed, and logical description of
the procedure currently described in General 3, Section 2 (in addition
to the grounds for approval or disapproval referenced in General 3,
Section 5(d) and (e)). Incorporating Nasdaq Rule 1014 by reference in
the Exchange's rules will improve the membership application and
decision making process by better defining the Membership Department's
authority and obligations, describing the basis for approval,
conditional approval or denial of an application. Further, the Exchange
believes that this proposed change provides consistency in the
treatment of Exchange Applicants. Nasdaq Rule 1014(a) describes the
Membership Department's authority to act on an application by approving
it, denying it, or approving it subject to restrictions: (1) That are
reasonably designed to address a specific (financial, operational,
supervisory, disciplinary, investor protection, or other regulatory)
concern; or (2) that mirror a restriction placed upon the Applicant by
FINRA or an affiliated exchange.
    Nasdaq Rule 1014(b), entitled ``Bases for Approval, Conditional
Approval, or Denial,'' provides that the Membership Department will
approve, grant conditional approval, or deny a membership application
filed under Nasdaq Rules 1013 and 1017 by an Applicant that is not, and
is not required to become, a FINRA member. Nasdaq Rule 1014(b)(1)
indicates that the Membership Department may deny or condition
membership approval for the same reasons that the Commission may deny
or revoke a broker or dealer's registration; this Nasdaq Rule parallels
existing General 3, Section 2(b), which describes the Exchange's
authority to deny an application for the same reasons that the SEC may
deny or revoke a broker-dealer registration and for those reasons
required or allowed under the Act.
    Nasdaq Rule 1014(b)(2) enumerates the reasons for denial or
conditional approval of a membership application in the cases when the
Applicant (A) is unable to satisfactorily demonstrate its capacity to
adhere to the Exchange and Commission rules; (B) has previously
violated, and there is a reasonable likelihood that such Applicant will
again engage in violative acts or practices, of any Exchange or
Commission policies, rules, and regulations; (C) has engaged in acts or
practices inconsistent with just and equitable principles of trade, and
there is a reasonable likelihood that such Applicant will again engage
in violative acts or practices, of any Exchange or Commission policies,
rules, and regulations; (D) is not in compliance with the Commission's
net capital rule or has financial difficulties greater than 5% of their
net worth; (E) has been itself, or is the successor to an entity
subject to a bankruptcy, proceeding, receivership, or arrangement for
the benefit of creditors within the past 3 years; (F) has engaged in an
established pattern of failure to pay just debts; (G) does not hold
required licenses or registrations; or (H) is unable to satisfactorily
demonstrate reasonably adequate systems capacity and capability.
    The Exchange notes that the basis for denial listed under its
General 3, Section 2(c)(1), regarding an Applicant who has a negative
net worth, has financial difficulties involving an amount that is more
than five percent (5%) of the applicant's net worth, or has a pattern
of failure to pay just debts (whether or not such debts have been the
subject of a bankruptcy action), is parallel to Nasdaq Rule
1014(b)(2)(D). Similarly, the Exchange's basis for denial under General
3, Section 2(c)(2), regarding an Applicant unable satisfactorily to
demonstrate a capacity to adhere to all applicable Exchange, SEC, the
Clearing Corporation and Federal Reserve Board policies, rules and
regulations, including those concerning record-keeping, reporting,
finance and trading procedures, is parallel to Nasdaq Rule
1014(b)(2)(A). Finally, the provision under General 3, Section 2(c)(3),
regarding an Applicant unable satisfactorily to demonstrate reasonably
adequate systems capability and capacity, is parallel to Nasdaq Rule
1014(b)(2)(H).
    Furthermore, the Exchange believes that the provisions under Nasdaq
Rule 1014(b)(2)(A), (B), and (C), which describe the basis for a
decision regarding the Applicant's inability to satisfy the Exchange
and securities rules, previous violative conduct, and past or potential
conduct inconsistent with just and equitable principles of trade,
provide the Exchange with greater authority than the one described
under General 3, Section 2(d), which provides that when an Applicant is
a subject of an investigation conducted by any SRO or government agency
involving its fitness for becoming a Member, the Exchange need not act
on the application until the matter has been resolved.
    The Exchange notes that current General 3, Section 2(e) and (f),
which refer to the basis for membership denial as it relates to
statutory disqualification, are substantially similar to Nasdaq Rule
1002(b)(1) and (2), which describe an Applicant's ineligibility of
certain persons for membership or association due to statutory
disqualification. As stated above, the Exchange proposes to incorporate
Nasdaq Rule 1002 in its entirety.
    Nasdaq Rule 1014(b)(3) provides that the Membership Department will
not approve an Applicant unless the Applicant is a member of another
registered securities exchange or association that is not registered
solely under Section 6(g) or Section 15A(k) of the Act. This rule also
provides that an Applicant that will transact business with the public
must be a member of FINRA. This requirement exists in the Exchange's
rulebook in Options 10, Section 1 (``Exchange Approval''); however, to
maintain harmonization of the rules, the Exchange proposes to
incorporate by reference this same parallel rule. There are no proposed
changes to rule text found in Exchange Options 10, Section 1 at this
time.
    The Exchange proposes to incorporate by reference Nasdaq Rule
1014(c) to establish the time and content of a decision and the
recourse available to an Applicant if the Membership Department fails
to timely issue a decision on a membership application. Current
Exchange General 3, Section 5(d), broadly prescribes that the Exchange
will consider approval of the membership application, ``unless there is
just cause for delay.'' Nasdaq Rule 1014(c) outlines this process in
greater detail. The Nasdaq rule requires the Membership Department to
serve a decision on the membership application within a reasonable time
period, not to exceed 45 (calendar) days after the Applicant files and
provides to the Exchange all required and requested information or
documents in connection with the application. Additionally, the rule
allows the Membership Department and the Applicant the ability to agree
to further extensions of the decision deadlines. Nasdaq Rule 1014(c)
also provides that the decision will detail the reason(s) for the
denial of membership

or the approval of the application subject to restrictions. This
provision is similar to General 3, Section 5(e), which currently
establishes that the Exchange will inform the Applicant of the grounds
for disapproval of a membership application. Moreover, if the
Membership Department fails to timely issue a decision, the rule
prescribes that the Applicant may request the Exchange Board to direct
the Membership Department to issue a decision. The rule further
provides that the Exchange Board, within seven days, will direct the
Membership Department to serve its decision or to show good cause for a
time extension. If the Membership Department shows good cause, the
Exchange Board may grant the Membership Department up to 45 days to
issue the decision.
    Nasdaq Rule 1014(e) prescribes that service of the Membership
Department's decision shall be made pursuant to Nasdaq Rule 1012.
Further, the rule provides that the decision shall become effective
upon service and shall remain in effect during the pendency of any
review until a decision constituting final action of the Exchange is
issued under Rule 1015 or 1016, unless otherwise directed by the
Exchange Review Council, the Exchange Board, or the Commission. Current
Exchange General 3, Section 5(e) prescribes that a notice of the
Exchange's decision shall be provided to the Applicant but does not
specify the manner of such notification. In addition, Exchange General
3, Section 5(h) indicates that once an Applicant's membership becomes
effective, the Exchange will promptly notify the Applicant of such
decision. The Exchange believes that incorporating this rule by
reference clarifies the process for serving the Membership Department's
decision on applications.
    Nasdaq Rules 1014(f) and (g), respectively, provide for the
effectiveness of restrictions on an approved application and what
constitutes final action in the Membership Department's decision. Rule
1014(f) establishes that a restriction imposed under Rule 1014 shall
remain in effect and bind the Applicant and all successors to the
ownership or control of the Applicant unless (1) it is removed or
modified by a decision constituting final action of the Exchange issued
under Nasdaq Rules 1015, 1016, or 1017; or (2) stayed by the Exchange
Review Council, the Exchange Board, or the Commission. Rule 1014(g)
provides that unless the Applicant files a written request for a review
under Rule 1015, the Membership Department's decision shall constitute
final action by Nasdaq.
Rule 1015
    The Exchange proposes to incorporate by reference Nasdaq Rule 1015
in its entirety under its General 3 title. Nasdaq Rule 1015,
subsections (a) through (j) are substantially similar to the current
provisions concerning a review by the Exchange Review Council detailed
in Exchange General 3, Section 2(g).\15\
---------------------------------------------------------------------------

    \15\ The Exchange notes that, recently, Nasdaq adopted Rule
1015(f)(5) which provides for the Exchange Review Council to conduct
its hearings via video conferencing. See Securities Exchange Act
Release No. 34-90390 (November 10, 2020), 85 FR 73302 (November 17,
2020) (SR-NASDAQ-2020-076). The Exchange has adopted an identical
provision under General 3, Section 2(g)(6)(E). See Securities
Exchange Act Release No. 34-90756 (December 21, 2020), 85 FR 85817
(December 29, 2020) (SR-ISE-2020-42).
---------------------------------------------------------------------------

    Current Exchange General 3, Section 2(g) (formerly Exchange Rule
302(g)) was amended in 2018 \16\ to base the Exchange's procedures on
those set forth in Nasdaq and BX Rules 1015 and 1016 (which were
identical to Nasdaq's and now incorporate by reference the Nasdaq
Membership rules \17\). The Exchange believes that incorporating by
reference Nasdaq Rule 1015 it will further the Exchange's objective to
provide uniformity and clarity to its rules by aligning them with the
membership rules of the Nasdaq and BX exchanges.
---------------------------------------------------------------------------

    \16\ See Securities Exchange Act Release No. 34-83703 (July 25,
2018), 83 FR 36992 (July 31, 2018) (SR-ISE-2018-59).
    \17\ See supra note 4.
---------------------------------------------------------------------------

    The Exchange proposes also to incorporate by reference Nasdaq Rule
1015(k) and (l) (respectively, ``Ex Parte Communications'' and
``Recusal or Disqualification''). Both paragraphs (k) and (l) were,
respectively, previously located under Nasdaq Rule 1012(c) and (d) but
were moved to their current location in the Nasdaq rulebook as the two
provisions logically fit within the section of the membership rules
that govern appeals of membership decisions.\18\ Nasdaq Rule 1015(k)
prohibits ex parte communications involving membership decisions
subject to review among certain Exchange staff, members of the Exchange
Review Council, members of a Subcommittee of the Council, and the Board
of Directors. Nasdaq Rule 1015(l) governs the recusal and
disqualification of a member of the Exchange Review Council, a
Subcommittee thereof, or the Board of Directors from participating in a
review of a membership decision. The Exchange has no parallel
provisions in its rulebook to Nasdaq Rule 1015(k) and (l). The Exchange
believes that incorporating Rule 1015(k) and (l) by reference enhances
the Exchange Review Council's procedures and is in line with the
Exchange's goal of harmonizing its rules with those of the Nasdaq and
BX exchanges.
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    \18\ See supra note 14.
---------------------------------------------------------------------------

Rule 1016
    Aside from their respective internal cross-references, the text in
Nasdaq Rule 1016 and Exchange General 3, Section 2(h) (both entitled
``Discretionary Review by the Exchange Board'') are identical. The
Exchange proposes to incorporate by reference Nasdaq Rule 1016 under
its General 3 title. The Exchange believes that incorporating by
reference this rule will further the Exchange's objective to provide
uniformity and clarity to its rules by aligning them with the
membership rules of the Nasdaq and BX exchanges.
Rule 1017
    Nasdaq Rule 1017, ``Application for Approval of Change in
Ownership, Control, or Material Business Operations,'' has no analogue
rule in the Exchange's current General 3 title. Incorporating Nasdaq
Rule 1017 by reference in its entirety in the Exchange's rules will
enhance the Exchange's ongoing regulatory oversight capabilities by
clearly identifying events that would trigger the requirement for an
approved Member to file an application with the Exchange. As stated
below, Nasdaq Rule 1017 outlines in detail the circumstances that
trigger the filing of an application pursuant to this rule. While the
Exchange has no corresponding rule, it does have a similar process in
place that it administers procedurally. For example, if an existing
Electronic Access Member of the Exchange is seeking market maker status
for the first time, the current Exchange process is to require that the
Member submit an amended Exchange application along with relevant
supplementary material. The Exchange believes that incorporating Nasdaq
Rule 1017 by reference and harmonizing its process with that of Nasdaq
and BX will improve its current practice by further streamlining its
current practices. As stated previously, the objective is to eventually
harmonize membership rules across all Affiliated Exchanges in order to
advance uniformity within the membership rules and procedures.
    Nasdaq Rule 1017(a) prescribes the events that require Members to
file applications with the Exchange. Paragraph (a) provides that a
Member shall file an application for approval prior to effecting the
following changes: (1) A merger of the Member with another Member; (2)
a direct or indirect

acquisition by the Member of another Member; (3) direct or indirect
acquisitions or transfers of 25% or more in the aggregate of the
Member's assets or any asset, business line or line of operations that
generates revenues comprising 25% or more in the aggregate of the
Member's earnings measured on a rolling 36 month basis; (4) a change in
the equity ownership or partnership capital of the Member that results
in one person or entity directly or indirectly owning or controlling
25% or more of the equity or partnership capital; or (5) a material
change in business operations, which consist of (A) removing or
modifying a membership restriction; (B) acting as a dealer or a market
maker for the first time; (C) adding business activities that require a
higher minimum net capital under SEC Rule 15c3-1; or (D) adding
business activities that would cause a proprietary trading firm no
longer to meet the definition of that term contained in the Rule 1000
Series.
    Nasdaq Rule 1017(b), governs the filing and content of applications
filed under Nasdaq Rule 1017. This Rule provides that the application
should be filed with the Membership Department; if the Applicant seeks
approval of change of ownership or control or a material change in the
Member's business operations, the application should (A) provide a
detailed description of the proposed change, (B) provide a business
plan, pro forma financials, an organizational chart, and written
supervisory procedures reflecting the proposed change; and (C) if the
application requests approval of a change in ownership or control, the
application also shall include the names of the new owners, their
percentage of ownership, and the sources of their funding for the
purchase and recapitalization of the member.
    Furthermore, Nasdaq Rule 1017(b) provides that if the application
requests the removal or modification of a membership restriction, the
application also shall, (A) present facts showing that the
circumstances that gave rise to the restriction have changed; and (B)
state with specificity why the restriction should be modified or
removed in light of the applicable bases for denial or standards for
approval set forth in Nasdaq Rules 1014 or 1017 and the articulated
rationale for the imposition of the restriction. Moreover, the Rule
indicates that if the application requests approval of an increase in
Associated Persons involved in sales, offices, or markets made, the
application shall set forth the increases in such areas during the
preceding 12 months.
    Nasdaq Rule 1017(c) indicates when an application shall or may be
filed. Specifically, the Rule provides that (1) an application for
approval of a change in ownership or control shall be filed at least 30
days prior to such change; (2) that an application to remove or modify
a membership restriction may be filed at any time (clarifying that an
existing restriction shall remain in effect during the pendency of the
proceeding); and that (3) an application for approval of a material
change in business operations, other than the modification or removal
of a restriction, may be filed at any time, but the Member may not
effect such change until the conclusion of the proceeding, unless the
Membership Department and the Member otherwise agree.
    Nasdaq Rule 1017(d) prescribes that an application will be deemed
to be filed on the date when it is substantially complete, meaning the
date on which the Membership Department receives from the Applicant all
material documentation and information required under this Rule, and
that the Membership Department will notify the Applicant in writing
when the Membership Department deems the Applicant's application to be
substantially complete.
    Nasdaq Rule 1017(e) indicates that, pursuant to Nasdaq Rule
1013(a)(3), the Membership Department may treat an application filed
under this Rule as having lapsed or it may reject such an application,
except that the Membership Department may treat an application as
having lapsed if it is not substantially complete for 30 days or more
after the Applicant initiates it.
    Nasdaq Rule 1017(f) provides that the Membership Department, at any
time before it serves its decision, may request additional information
or documentation from the Applicant or from a third party in accordance
with Nasdaq Rule 1013(a)(4).
    Nasdaq Rule 1017(g) establishes that a Membership Department's
decision shall be issued in accordance with Nasdaq Rule 1014, except
that (1) In rendering a decision on an application submitted under the
Rule that requests the modification or removal of a membership
restriction, the Membership Department shall consider whether
maintenance of the restriction is appropriate in light of: (A) The
applicable bases for denial or standards for approval set forth in
Nasdaq Rule 1014; (B) the circumstances that gave rise to the
imposition of the restriction; (C) the Applicant's operations since the
restriction was imposed; (D) any change in ownership or control or
supervisors and principals; and (E) any new evidence submitted in
connection with the application. Furthermore, this Rule provides that
the Membership Department shall serve a written decision on an
application filed under this Rule in accordance with Nasdaq Rule
1013(c). Moreover, the Rule provides that in the event that a proposed
change in ownership, control, or business operations by a Member
requires such Member to become a member of FINRA, the Membership
Department shall not be required to serve a written decision under this
Rule until 10 business days after the Member becomes a FINRA member.
    Nasdaq Rule 1017(h) provides that service of the decision on the
Applicant in accordance with Nasdaq Rule 1012. Moreover, the Rule
indicates that the decision shall become effective upon service and
shall remain in effect during the pendency of any review until a
decision constituting final action of the Exchange is issued under
Rules 1015 or 1016, unless otherwise directed by the Exchange Review
Council, the Exchange Board, or the Commission.
    Nasdaq Rule 1017(i) indicates that an Applicant may file a written
request for review of the Membership Department's decision with the
Exchange Review Council pursuant to Nasdaq Rule 1015, the rule further
clarifies that the procedures set forth in Nasdaq Rule 1015 shall apply
to such review, and the Exchange Review Council's decision shall be
subject to discretionary review by the Exchange Board pursuant to
Nasdaq Rule 1016. If the Applicant does not file a request for a
review, the Membership Department's decision shall constitute final
action by Nasdaq.
    Nasdaq Rule 1017(j) prescribes that the Membership Department shall
modify or remove a restriction on its own initiative if the Membership
Department determines such action is appropriate in light of the
considerations set forth in paragraph (g)(1) of the Rule. The
Membership Department shall notify the member in writing of the
Membership Department's determination and inform the member that it may
apply for further modification or removal of a restriction by filing an
application under paragraph Rule 1017(a).
Rule 1018
    Nasdaq Rule 1018, ``Resignation, Reinstatement, Termination, and
Transfer of Membership,'' has no analogue rule in the Exchange's
current General 3 title. The Exchange proposes to incorporate the rule
by reference under its General 3 title. Nasdaq Rule 1018 outlines the
process for resignation, reinstatement, termination,

and transfers of memberships. Incorporating Nasdaq Rule 1018 by
reference will eventually allow the Exchange to standardize the
processing of these requests across all the Affiliated Exchanges.
    Nasdaq Rule 1018(a) provides that membership in Nasdaq may be
voluntarily terminated only by formal resignation. Resignations of
Members must be filed via electronic process or such other process as
the Exchange may prescribe. Any Member may resign from Nasdaq at any
time. Such resignation shall not take effect until all indebtedness due
to Nasdaq from such Member shall have been paid in full and so long as
any complaint or action is pending against the Member under the Rules.
Nasdaq, however, may in its discretion declare a resignation effective
at any time.
    Nasdaq Rule 1018(b) indicates that no Member may transfer its
membership or any right arising therefrom; the membership of a
corporation, partnership, or any other business organization that is a
Member shall terminate upon its liquidation, dissolution, or winding
up; and the membership of a sole proprietorship that is a Member shall
terminate at death, provided that all obligations of membership under
the Rules have been fulfilled. Moreover, the Rule provides that the
consolidation, reorganization, merger, change of name, or similar
change in any corporate Member shall not terminate the membership of
such corporate Member, provided that the Exchange Member or surviving
corporation, if any, shall be deemed a successor to the business of the
corporate Member, and the Member or the surviving organization shall
continue in the securities business, and shall possess the
qualifications for membership in the Exchange. Furthermore, the death,
change of name, withdrawal of any partner, the addition of any new
partner, reorganization, consolidation, or any change in the legal
structure of a partnership Member shall not terminate the membership of
such partnership Member, provided that the Member or surviving
organization, if any, shall be deemed a successor to the business of
the partnership Member, and the Member or surviving organization shall
possess the qualifications for membership in the Exchange. If the
business of any predecessor Member is to be carried on by an
organization deemed to be a successor organization by the Exchange, the
membership of such predecessor Member shall be extended to the
successor organization subject to the notice and application
requirements of the Rules and the right of the Exchange to place
restrictions on the successor organization pursuant to the Rules;
otherwise, any surviving organization shall be required to satisfy all
of the membership application requirements of the Exchange's Rules.
    Nasdaq Rule 1018(c) establishes that any membership or registration
suspended or canceled under the Rules may be reinstated by the Exchange
upon such terms and conditions as are permitted under the Act and the
Exchange rules; provided, however, that any applicant for reinstatement
of membership or registration shall possess the qualifications required
for membership or registration in the Exchange.
Rule 1019
    Nasdaq Rule 1019 (``Application to Commission for Review'') has no
analogue rule in the Exchange's current General 3 title. Nasdaq Rule
1019 allows Applicants to request the Commission to review an Exchange
final action, as provided under the Nasdaq Rule 1010 Series.
Incorporating Nasdaq Rule 1019 by reference standardizes the process by
which an Applicant may dispute any final action of the Exchange.
    Nasdaq Rule 1019 provides that a person aggrieved by a Nasdaq's
final action under Nasdaq Membership Rules may apply for review by the
Commission pursuant to Section 19(d)(2) of the Act. The filing of an
application for review shall not stay the effectiveness of a decision
constituting final action of the Exchange, unless the Commission
otherwise orders.
Revised Membership Application
    As part of the harmonization of its membership rules and procedures
with those of Nasdaq and BX, the Exchange is adopting a standardized
Broker-Dealer Membership Application (``Membership Application''). The
Membership Application is submitted as Exhibit 3A of this proposed rule
change with underlined changes concerning the ISE market. Each Exchange
Membership Application will be accompanied by a ``Membership
Agreement'' (submitted as Exhibit 3B of the attached), which should be
signed by all applicants to membership with the Exchange.
Conclusion
    The changes proposed herein will allow the Exchange to harmonize
its membership rules and processes with those of Nasdaq and BX, and
ultimately, with the other Affiliated Exchanges, which will eventually
provide a uniform criteria across the Affiliated Exchanges for
membership qualifications and a consistent process across the
Affiliated Exchanges for processing membership applications. The
proposal will also provide for full membership reciprocity between
Nasdaq, BX, and the Exchange--and hopefully, in time, across all of the
Affiliated Exchanges--so that a member of one Affiliated Exchange would
receive expedited treatment in applying for membership on any other
Affiliated Exchange. Similarly, harmonized membership rules and
processes will benefit Exchange Applicants and Members by establishing
consistent membership requirements and processes that must be followed
to apply for membership on the Exchange.
    Moreover, as to the Exchange itself, the proposed changes described
herein will render the Exchange's membership rules and processes
clearer, better organized, simpler, and easier to comply with. Again,
such changes will provide benefits both to the Exchange's Membership
Department and to Exchange Applicants.
    The proposed membership rules and processes are substantially
similar to the existing rules and process, and where there are
differences between the new and old processes, the Exchange believes
that the new process does not disadvantage its Members or Associated
Persons. To the contrary, the Exchange believes that the new rules and
processes will benefit all parties as it again provides greater
clarity, simplicity, and efficiency than the retired rules and
processes.
Implementation
    To facilitate an orderly transition from the existing rules under
the General 3 title and the Nasdaq Membership Rules to be incorporated
by reference, the Exchange is proposing to apply the existing Rules to
all applications which have been submitted to the Exchange (including
applications that are not yet complete) and are pending approval prior
to the operative date. The Exchange also will apply the existing Rules
to any appeal of an Exchange membership decision or any request for the
Board to direct action on an application pending before the Exchange
Review Council, the Board, or the Commission, as applicable. As a
consequence of this transition process, the Exchange will retain the
existing processes during the transition period until such time that
there are no longer any applications or matters proceeding under the
existing rules. To facilitate this transition process, the Exchange
will retain a transitional rulebook that will contain the Exchange's
membership

rules as they are at the time that this proposal is filed with the
Commission. This transitional rulebook will apply only to matters
initiated prior to the operational date of the changes proposed herein
and it will be posted to the Exchange's public rules website. When the
transition is complete, the Exchange will remove the transitional
rulebook from its public rules website.
    The Exchange will announce and explain this transition process in a
regulatory alert.
    The Exchange notes that Nasdaq applied the same process described
above to govern its transition to its amended membership rules.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\19\ in general, and furthers the objectives of Section
6(b)(5) and of the Act,\20\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest. It is also consistent with Section 6(b)(7) of the Act in that
it provides for a fair procedure for denying Exchange membership to any
person who seeks it, barring any person from becoming associated with
an Exchange Member, and prohibiting or limiting any person with respect
to access to services offered by the Exchange or a Member thereof.\21\
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    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
    \21\ 15 U.S.C. 78f(b)(7).
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    As a general matter, the Exchange believes that its proposal to
delete its existing membership rules, incorporate by reference the
Nasdaq Membership Rules, and other related changes will promote a free
and open market, and will benefit investors, the public, and the
markets, because the new rules will be clearer, better organized, and
simpler.
    The proposal is just and equitable because it will render the
Exchange's membership rules easier for Applicants and Members to read
and understand, including by doing the following:
     Establishing a ``roadmap'' paragraph as shown in Nasdaq
Rule 1014(a) that sets forth the basic authority of the Membership
Department to approve, approve with conditions, or deny applications
for membership before the Rule goes on to enumerate criteria for the
Membership Department to apply when taking each of those actions;
     Making the titles of the rules more accurate and
descriptive (e.g., Nasdaq Rule 1014(b));
     Grouping logically-related provisions together in the
rules (e.g., provisions governing resignation, termination, transfer,
and reinstatement of membership) and recusals and disqualifications;
     Clarifying when the Membership Department will deem an
application to be filed (when the application is ``substantially
complete,'' as set forth in Nasdaq Rule 1013(a)(2)) and by requiring
the Membership Department to notify an Applicant in writing of the
filing date;
     Clarifying what the Exchange means when it states that an
Applicant may ``waive-in'' to Exchange membership (as set forth in
Nasdaq Rule 1013(b)); and
    The proposal will also make compliance with the membership rules
simpler and less burdensome for Applicants and Members by, for example,
doing the following:
     Eliminating obsolete requirements to submit paper copies
of Forms U-4 and BD or explain information listed on the forms where
the Membership Department already has electronic access to the Forms
and the information contained therein;
     Permitting electronic filing of applications (Nasdaq Rule
1012(a)(1);
     Allowing payment of application fees by means other than
paper check (Nasdaq Rule 1013(a)(1)(C));
     Harmonizing disparate procedures under Nasdaq Rules 1013
and 1017 for filing, evaluating, and responding to initial membership
applications and applications for approval of business changes;
     Detailing the circumstances in which an Applicant may
waive-into Exchange membership to include the Applicant's membership in
any of the affiliated exchanges and defining procedures for processing
and responding to waive-in applications (Nasdaq Rule 1013(b));
    In sum, the foregoing changes will update, rationalize, and
streamline the Exchange's membership rules and processes, all to the
benefit of Applicants and Members. Moreover, these changes will not
adversely impact the rights of Applicants or Members to appeal adverse
Membership Department decisions under these Rules or to request Board
action to compel the Membership Department to render decisions on
applications.
    Last, the Exchange believes that its proposal to phase-in the
implementation of the new membership rules and processes is consistent
with Section 6(b)(7) of the Act \22\ because both the current and
proposed processes provide fair procedures for granting and denying
applications for becoming an Exchange Member, becoming an Associated
Person, and making material changes to the business operations of a
Member. The Exchange is proposing to provide advanced notice of the
implementation date of the new processes, and will apply the new
processes to new applications, appeals, and requests for Board action
that are initiated on or after that implementation date. Any
application, appeal, or request for Board action initiated prior to the
implementation date will be completed using the current processes. As a
consequence, the Exchange will maintain a transitional rulebook on the
Exchange's public rules website which will contain the Exchange Rules
as they are at the time of filing this rule change. These transitional
rules will apply exclusively to applications, appeals, and requests for
Board action initiated prior to the implementation date. Upon
conclusion of the last decision on a matter to which the transitional
rules apply, the Exchange will remove the defunct transitional rules
from its public rules website. Thus, the transition will be conducted
in a fair, orderly, and transparent manner. Lastly, the proposed
transition process is the same process that Nasdaq and BX implemented
during its transition to new membership rules.
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    \22\ 15 U.S.C. 78f(b)(7).
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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 does not expect
that its proposed changes to the membership rules will have any
competitive impact on its existing or prospective membership. The
proposed changes will apply equally to all similarly situated
Applicants and Members and they will confer no relative advantage or
disadvantage upon any category of Exchange Applicant or Member.
Moreover, the Exchange does not expect that its proposal will have an
adverse impact on competition among exchanges for members; to the
contrary, the Exchange hopes that by clarifying, reorganizing, and
streamlining its membership rules, the Exchange's membership process
will be less burdensome for Applicants and Members and the Exchange
will

improve its competitive standing relative to other exchanges.

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)(iii) of the Act \23\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\24\
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    \23\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \24\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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 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. 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<EMAIL_ADDRESS>Please include
File Number SR-ISE-2020-43 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-ISE-2020-43. 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-ISE-2020-43 and should be submitted on
or before February 9, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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    \25\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-00948 Filed 1-15-21; 8:45 am]
BILLING CODE 8011-01-P