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Frequently Asked Questions
  What is the scope of the Exchange's disciplinary authority?
Identification Number 1568

The Exchange has the right to impose sanctions on a member, member organization or person associated with a member organization for violations of the federal securities laws, rules or regulations thereunder, or Exchange Rules, or for any neglect or refusal to comply with an order, direction, or decision issued under the Exchange Rules. See Rule 8310.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1568
Frequently Asked Questions
  If I am no longer a member of the Exchange, am I still subject to the Exchange's jurisdiction?
Identification Number 1569

Yes. Under the PHLX Rules, any member, or any partner, officer, director, or person employed by or associated with a member organization, and any member organization shall continue to be subject to the disciplinary jurisdiction of the Exchange following the termination of such person's permit or the termination of the employment by or the association with a member organization of such member or partner, officer, director or person, or following the deregistration of a member organization from the Exchange. See PHLX Rule 9110(d).

Under Nasdaq and BX Rules, a resigned member or a member that has had its membership canceled or revoked shall continue to be subject to the filing of a complaint under the Rules based upon conduct that commenced prior to the effective date of the member's resignation or the cancellation or revocation of its membership. Any such complaint, however, shall be filed within two years after the effective date of resignation, cancellation, or revocation. See Rule 1012(h).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1569
Frequently Asked Questions
  I received a letter from the Exchange requesting information and documents. Am I obligated to respond?
Identification Number 1570

Yes, if you are subject to the Exchange's jurisdiction. For the purpose of an investigation, compliant, examination, or proceeding authorized by the Exchange's By-Laws or Rules, the Exchange shall have the right to inspect and copy your books, records, and accounts with respect to any matter involved in the investigation, complaint, examination, or proceeding. The Exchange also has the right to require you to provide information orally, in writing, or electronically (if the requested information is, or is required to be, maintained in electronic form) with respect to any matter involved in the investigation, complaint, examination, or proceeding. See Rule 8210(a).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1570
Frequently Asked Questions
  I received a letter from the Exchange asking to interview me. Am I obligated to cooperate?
Identification Number 1571

Yes, if you are subject to the Exchange's jurisdiction. For the purpose of an investigation, complaint, examination, or proceeding authorized by the Exchange's By-Laws or Rules, the Exchange shall have the right to require you to provide information orally and to testify at a location specified by the Exchange under oath or affirmation administered by a court reporter or a notary public if requested, with respect to any matter involved in the investigation, complaint, examination, or proceeding. See Rule 8210(a).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1571
Frequently Asked Questions
  What happens if I refuse to comply with the Exchange's request for information/documents or to interview me?
Identification Number 1572

You may be subject to suspension. If you are subject to the Exchange's jurisdiction and fail to provide any information, report, material, data, or testimony requested or required to be filed pursuant to the Exchange's By-Laws or the Rules of the Exchange, or fail to keep your membership application or supporting documents current, the Exchange may provide written notice to you specifying the nature of the failure and stating that the failure to take corrective action within 21 days after service of the notice will result in suspension of membership or of association with any member or member organization. See Rule 9552(a).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1572
Frequently Asked Questions
  Am I able to appeal the Exchange's decision to suspend me for failure to comply with an information/document request or interview?
Identification Number 1573

Yes. If you have been served with a notice under Rule 9552, you may file with the Office of Hearing Officers a written request for a hearing pursuant to Rule 9559. A request for a hearing shall be made before the effective date of the notice. A request for a hearing must set forth with specificity any and all defenses to the Exchange action. See Rule 9552(e).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1573
Frequently Asked Questions
  What happens if the Exchange has reason to believe that I violated the Exchange Act and related rules or regulations, the Exchange's By-Laws or Rules, or the other rules over which the Exchange has jurisdiction to enforce, and I did not dispute the violation?
Identification Number 1574

If the Exchange has reason to believe a violation has occurred and you do not dispute the violation, the Exchange will prepare and ask that you execute an acceptance, waiver, and consent letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive your right to a hearing and any right of appeal, or to otherwise challenge the validity of the letter, if the letter is accepted. See Rule 9216(a).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1574
Frequently Asked Questions
  What kind of information is included in an acceptance, waiver, and consent letter?
Identification Number 1577

The letter will describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed. See Rule 9216(a)(1).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1577
Frequently Asked Questions
  If I sign an acceptance, waiver, and consent letter, what happens next?
Identification Number 1578

The executed acceptance, waiver, and consent letter will be submitted to the Review Council, which will either accept or reject the letter. See Rule 9216(a)(3).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1578
Frequently Asked Questions
  What happens if the Review Subcommittee or the Review Council rejects the acceptance, waiver, and consent letter?
Identification Number 1579

If the Review Subcommittee or the Review Council rejects the acceptance, waiver, and consent letter, the Exchange may take any other appropriate disciplinary action with respect to the alleged violation or violations. That may include a decision to pursue formal disciplinary action. Note that you will not be prejudiced by the execution of the acceptance, waiver, and consent letter, and the letter may not be introduced into evidence in connection with the determination of the issues set forth in any complaint or in any other proceeding. See Rule 9216(a)(4).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1579
Frequently Asked Questions
  What happens if the acceptance, waiver, and consent letter is accepted?
Identification Number 1580

If the letter is accepted by the Review Council, the Review Subcommittee, or the Office of Disciplinary Affairs, it will be deemed final and will constitute the complaint, answer, and decision in the matter. See Rule 9216(a)(4).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1580
Frequently Asked Questions
  If I sign an acceptance, waiver, and consent letter, will it be made public?
Identification Number 1581

Maybe, depending on the circumstances. The Exchange must release to the public information with respect to any acceptance, waiver, and consent letter, imposing a suspension, cancellation or expulsion of a member organization or member; suspension or revocation of a member's permit (on PHLX); or suspension or revocation of the registration of a member or person associated with a member organization; or suspension or barring of a member organization, member or person associated with a member organization from association with all member organizations; or imposition of monetary sanctions of $10,000 or more upon a member organization, member or person associated with a member organization; or containing an allegation of a violation of a Designated Rule; and may also release such information with respect to any disciplinary decision or group of decisions that involve a significant policy or enforcement determination where the release of information is deemed by the Chief Regulatory Officer to be in the public interest. See IM-8310-3(c)(1).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1581
Frequently Asked Questions
  What are the Floor Procedure Advices?
Identification Number 1582

Refer to PHLX IM-9216 for a list of equity and option floor procedure advices. See PHLX Rule 9216(b).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1582
Frequently Asked Questions
  What happens if the Exchange has reason to believe that I violated a rule subject to an SEC-approved minor rule violation plan?
Identification Number 1583

The Exchange may prepare and request that you execute a minor rule violation plan letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a Hearing Panel or, if applicable, an Extended Hearing Panel, and any right of appeal to the Review Council, the Commission, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. See Rule 9216(b).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1583
Frequently Asked Questions
  What rules are subject to an SEC-approved minor rule violation plan?
Identification Number 1584

Refer to IM-9216 for a list of rules subject to an SEC-approved minor rule violation plan.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1584
Frequently Asked Questions
  What happens if the PHLX Regulation Department has reason to believe that I violated the Floor Procedure Advices other than regulations concerning violation of order, decorum, health, safety and welfare on the Exchange, and I do not dispute the violation?
Identification Number 1585

The PHLX Regulation Department may prepare and request that you execute a minor rule violation plan letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive your right to a hearing before a Hearing Panel or, if applicable, an Extended Hearing Panel, and any right of appeal to the Exchange Review Council, the Commission, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. See Rule 9216(b).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1585
Frequently Asked Questions
  What information will the Exchange include in the minor rule violation plan letter?
Identification Number 1586

The letter will describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed. Unless the letter states otherwise, the effective date of any sanction(s) imposed will be a date to be determined by the PHLX Regulation Department staff. See Rule 9216(b).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1586
Frequently Asked Questions
  What fine is assessed for a minor rule violation?
Identification Number 1587

A fine of up to $2,500 may be assessed for a minor rule violation. See Rule 9216(b).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1587
Frequently Asked Questions
  If I sign the minor rule violation plan letter, what happens next?
Identification Number 1588

If you execute the minor rule violation plan letter, it will be submitted to the Review Council for acceptance. See Rule 9216(b).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1588
Frequently Asked Questions
  What happens if the minor rule violation plan letter is accepted?
Identification Number 1589

If the letter is accepted by the Review Council, the Review Subcommittee, or the Office of Disciplinary Affairs, it shall be deemed final and the Exchange shall report the violation to the Commission as required by the Commission pursuant to a plan approved under SEC Rule 19d-1(c)(2). See Rule 9216(b).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1589
Frequently Asked Questions
  What happens if the minor rule violation plan letter is rejected?
Identification Number 1590

If the letter is rejected by the Review Subcommittee or the Review Council, the Exchange may take any other appropriate disciplinary action with respect to the alleged violation or violations. That may include a decision to pursue formal disciplinary action. Note that you will not be prejudiced by the execution of the minor rule violation plan letter, and the letter may not be introduced into evidence in connection with the determination of the issues set forth in any complaint or in any other proceeding. See Rule 9216(b).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1590
Frequently Asked Questions
  What if I do not agree to execute an acceptance, waiver, and consent letter or a minor rule violation letter?
Identification Number 1591

The Exchange or FINRA may decide to pursue a formal disciplinary action against you by filing a complaint. If the Exchange or FINRA believes that you are violating or have violated the federal securities laws, rules or regulations thereunder, or Exchange Rules, the Exchange or FINRA may request authorization from the FINRA Office of Disciplinary Affairs to issue a complaint. See Rule 9211(a).

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1591
Frequently Asked Questions
  Will I have an opportunity to submit an answer to the complaint once it is issued?
Identification Number 1592

Yes. You must file an answer to the complaint on all other Parties within 25 days after service of the complaint, and at the time of service shall file such answer with the Office of Hearing Officers pursuant to Rules 9135, 9136 and 9137. See Rule 9215.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1592
Frequently Asked Questions
  Will I have the opportunity to appear before a hearing panel to contest the complaint?
Identification Number 1593

Yes. You may request a hearing with the filing of your answer.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1593
Frequently Asked Questions
  What happens if I do not request a hearing with the filing of my answer?
Identification Number 1594

If you fail to request a hearing with the filing of your answer, you will waive your right to a hearing unless a Hearing Officer, Hearing Panel, or, if applicable, an Extended Hearing Panel, grants, for good cause shown, a later filed motion by you requesting a hearing. See Rule 9221.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1594
Frequently Asked Questions
  May I appeal an unfavorable panel decision?
Identification Number 1595

Yes. You, the Exchange, or FINRA may file a written notice of appeal within 25 days after service of a decision issued by the Hearing Panel provided, however, that a decision with respect to a Respondent that is an affiliate of the Exchange within the meaning of Nasdaq and BX Rule 2140, or PHLX Rule 985 may not be appealed to the Review Council. See Rule 9311.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1595
Frequently Asked Questions
  Will my appeal stay the Hearing Panel's decision?
Identification Number 1596

Yes. An appeal to the Review Council from a decision issued by the Hearing Panel shall operate as a stay of that decision until the Review Council issues a decision. Any such appeal, however, will not stay a decision, or that part of a decision, that imposes a permanent cease and desist order. See Rule 9311.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1596
Frequently Asked Questions
  Can the Review Council appeal a Hearing Panel's decision?
Identification Number 1597

Yes. A decision issued by the Hearing Panel may be subject to a call for review by any member of the Review Council or, pursuant to authority delegated from the Review Council, by any member of the Review Subcommittee. A decision issued pursuant to Rule 9268 shall be subject to a call for review within 45 days after the date of service of the decision. If called for review, such decision shall be reviewed by the Review Council.

A default decision issued pursuant to Rule 9269 shall be subject to a call for review by the Chief Regulatory Officer, on his or her own motion within 25 days after the date of service of the decision. If called for review, such decision shall be reviewed by the Exchange Review Council.

Note, however, that a decision with respect to a member or member organization that is an affiliate of the Exchange (within the meaning of Nasdaq and BX Rule 2140, or PHLX Rule 985) may not be called for review by the Review Council. See Rule 9312.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1597
Frequently Asked Questions
  Who will consider my appeal?
Identification Number 1598

Following the filing of a notice of appeal, the Review Council or the Review Subcommittee shall appoint a Subcommittee or an Extended Proceeding Committee to participate, subject to Rule 9345, in a disciplinary proceeding appealed or called for review. A Subcommittee shall be composed of two or more persons who shall be current or former members of the Review Council or former Directors. See Rule 9331.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1598
Frequently Asked Questions
  May I request oral argument of my appeal?
Identification Number 1599

Yes. A Party may request oral argument before the Subcommittee or, if applicable, the Extended Proceeding Committee. Oral argument shall be requested in writing either in the Party's notice of appeal or cross-appeal or within 15 days after service of the Review Council's notice of review. Subject to the limitations of Rules 9342 and Rule 9344, oral argument shall be granted if timely requested. See Rule 9341.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1599
Frequently Asked Questions
  May I submit an appellate brief?
Identification Number 1600

Yes. Briefs shall be due upon dates established by the Subcommittee or, if applicable, the Extended Proceeding Committee, the Review Council, the Review Subcommittee, or Counsel to the Review Council in a scheduling order. Unless the Subcommittee or, if applicable, the Extended Proceeding Committee, the Review Council, the Review Subcommittee, or Counsel to the Review Council specifies otherwise, opening briefs shall be submitted not less than 21 days from the date of the scheduling order, and answering briefs shall be submitted 21 days thereafter. When reply briefs are submitted, such briefs shall be filed not later than ten days after service of the answering brief. Counsel to the Review Council may not shorten a period previously established for the filing of briefs except with the consent of the Parties. The time periods listed in this provision are only applicable to the filing of opening briefs, answering briefs, and reply briefs. See Rule 9347.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1600
Frequently Asked Questions
  How does the Review Council reach a decision?
Identification Number 1601

A Subcommittee or, if applicable, an Extended Proceeding Committee, will present a recommended decision in writing to the Review Council before the meeting of the Review Council at which the disciplinary proceeding shall be considered. See Rule 9345.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1601
Frequently Asked Questions
  What power does the Review Council have on appeal?
Identification Number 1602

In an appeal or review of a disciplinary proceeding governed by the Rule 9300 Series that is not withdrawn or dismissed prior to a decision on the merits, the Review Council, after considering all matters presented in the appeal or review and the written recommended decision of the Subcommittee or, if applicable, the Extended Proceeding Committee, may affirm, dismiss, modify or reverse the decision of the Hearing Panel or, if applicable, Extended Hearing Panel, with respect to each Respondent who has appealed or cross-appealed or is subject to a call for review. The Review Council may affirm, modify, reverse, increase, or reduce any sanction, or impose any other fitting sanction. Alternatively, the Review Council or the Review Subcommittee may remand the disciplinary proceeding with instructions. The Review Council shall prepare a proposed written decision. See Rule 9348.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1602
Frequently Asked Questions
  May I appeal the decision of the Review Council?
Identification Number 1603

Yes. You may appeal the decision to the Securities & Exchange Commission. See Rule 9370.

Publication Date*: 6/26/2018 Mailto Link Identification Number: 1603
Frequently Asked Questions
  What sanctions can the Exchange impose if it believes that I have violated the federal securities laws, rules or regulations thereunder, or the Exchange Rules?
Identification Number 1604

The Exchange can impose the following sanctions:

  1. censure a member, member organization or person associated with a member organization;
  2. impose a fine upon a member, member organization or person associated with a member organization;
  3. suspend the membership of a member organization, suspend the permit of a member (under the PHLX Rules), or suspend the registration of a person associated with a member organization for a definite period or a period contingent on the performance of a particular act;
  4. expel a member, member organization, cancel the membership of a member organization, revoke or cancel the permit of a member, or revoke or cancel the registration of a person associated with a member organization;
  5. suspend or bar a member, member organization or person associated with a member organization from association with all member organizations;
  6. impose a temporary or permanent cease and desist order against a member, member organization or a person associated with a member organization; or
  7. impose any other fitting sanction
See Rule 8310(a).


Publication Date*: 6/26/2018 Mailto Link Identification Number: 1604
material_search_footer*The Publication Date reflects the date of first inclusion in the Reference Library, which was launched on July 31, 2012, or a subsequent update to the material. Material may have been previously available on a different Nasdaq web site.
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