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  • Corporate Organization

    • Restated Certificate of Incorporation of Financial Industry Regulatory Authority, Inc.

      The present name of the corporation is Financial Industry Regulatory Authority, Inc. (the "Corporation"). The Corporation was originally incorporated as a nonstock corporation under the name of Investment Bankers Conference, Inc., and its original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on September 3, 1936. This Restated Certificate of Incorporation of the Corporation, which both restates and further amends the provisions of the Corporation's Certificate of Incorporation as heretofore amended, was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware.
      Name
      First: The name of the Corporation is Financial Industry Regulatory Authority, Inc.
      Delaware Office and Agent
      Second: The registered office of the Corporation in the State of Delaware is located at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808. The registered agent at such address is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808.
      Objects or Purposes
      Third: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware, and, without limiting the generality of the foregoing, the business or purposes to be conducted or promoted shall include the following:
      (1) To promote through cooperative effort the investment banking and securities business, to standardize its principles and practices, to promote therein high standards of commercial honor, and to encourage and promote among members observance of federal and state securities laws;
      (2) To provide a medium through which its membership may be enabled to confer, consult, and cooperate with governmental and other agencies in the solution of problems affecting investors, the public, and the investment banking and securities business;
      (3) To adopt, administer, and enforce rules of fair practice and rules to prevent fraudulent and manipulative acts and practices, and in general to promote just and equitable principles of trade for the protection of investors;
      (4) To promote self-discipline among members, and to investigate and adjust grievances between the public and members and between members;
      (5) To establish, and to register with the Securities and Exchange Commission as, a national securities association pursuant to Section 15A of the Securities Exchange Act of 1934, as amended, and thereby to provide a medium for effectuating the purposes of said Section; and
      (6) To transact business and to purchase, hold, own, lease, mortgage, sell, and convey any and all property, real and personal, necessary, convenient, or useful for the purposes of the Corporation.
      The objects and purposes specified in the foregoing clauses shall, except where otherwise expressed, not be limited or restricted by reference to, or inference from, the terms of any other clause in this Restated Certificate of Incorporation, but the objects and purposes specified in each of the foregoing clauses of this Article shall be regarded as independent objects and purposes.
      Form of Organization
      Fourth: The Corporation shall be a membership corporation and shall have no capital stock. The Corporation is not organized and shall not be conducted for profit, and no part of its net revenues or earnings shall inure to the benefit of any individual, subscriber, contributor, or member.
      Except as may be otherwise provided by the General Corporation Law of the State of Delaware or this Restated Certificate of Incorporation, the members of the Corporation shall have no voting rights. Notwithstanding the foregoing, Small Firm Members shall be entitled to vote for the election of Small Firm Governors, Mid-Size Firm Members shall be entitled to vote for the election of Mid-Size Firm Governors, Large Firm Members shall be entitled to vote for the election of Large Firm Governors and the members shall be entitled to vote on any amendment to the By-Laws of the Corporation, in each case, in accordance with the procedures for such a vote as provided in the By-Laws.
      Except as may be otherwise provided by the General Corporation Law of the State of Delaware, other applicable law or this Restated Certificate of Incorporation, the conditions, method of admission, qualifications and classifications of membership, the limitations, rights, powers and duties of members, the dues, assessments, and contributions of members, the method of expulsion from and termination of membership, and all other matters pertaining to the membership and the conduct, management, and control of the business, property, and affairs of the Corporation shall be provided from time to time in the By-Laws of the Corporation and the Rules of the Corporation.
      Indemnification; Liability
      Fifth:
      (a) The Corporation shall indemnify, and hold harmless, to the fullest extent permitted by the General Corporation Law of the State of Delaware as it presently exists or may thereafter be amended, any person (and the heirs, executors, and administrators of such person) who, by reason of the fact that he or she is or was a Governor, officer, employee, or National Adjudicatory Council or committee member of the Corporation, or is or was a Governor, officer, or employee of the Corporation who is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or non-profit entity, including service with respect to employee benefit plans, is or was a party, or is threatened to be made a party to:
      (i) any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the Corporation) against expenses (including attorneys' fees and disbursements), judgments, fines, and amounts paid in settlement actually and reasonably incurred by such person in connection with any such action, suit, or proceeding; or
      (ii) any threatened, pending, or completed action or suit by or in the right of the Corporation to procure a judgment in its favor against expenses (including attorneys' fees and disbursements) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit.
      (b) The Corporation shall advance expenses (including attorneys' fees and disbursements) to persons described in Article Fifth (a); provided, however, that the payment of expenses incurred by such person in advance of the final disposition of the matter shall be conditioned upon receipt of a written undertaking by that person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under this Article Fifth or otherwise.
      (c) The Corporation may, in its discretion, indemnify and hold harmless, to the fullest extent permitted by the General Corporation Law of the State of Delaware as it presently exists or may thereafter be amended, any person (and the heirs, executors, and administrators of such persons) who, by reason of the fact that he or she is or was an agent of the Corporation or is or was an agent of the Corporation who is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, trust, enterprise, or non-profit entity, including service with respect to employee benefit plans, was or is a party, or is threatened to be made a party to any action or proceeding described in Article Fifth (a).
      (d) The Corporation may, in its discretion, pay the expenses (including attorneys' fees and disbursements) reasonably and actually incurred by an agent in defending any action, suit, or proceeding in advance of its final disposition; provided, however, that the payment of expenses incurred by such person in advance of the final disposition of the matter shall be conditioned upon receipt of a written undertaking by that person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under this Article Fifth or otherwise.
      (e) Notwithstanding the foregoing or any other provision of this Restated Certificate of Incorporation, no advance shall be made by the Corporation to an agent or non-officer employee if a determination is reasonably and promptly made by the Board by a majority vote of those Governors who have not been named parties to the action, even though less than a quorum, or, if there are no such Governors or if such Governors so direct, by independent legal counsel, that, based upon the facts known to the Board or such counsel at the time such determination is made: (1) the person seeking advancement of expenses (i) acted in bad faith, or (ii) did not act in a manner that he or she reasonably believed to be in or not opposed to the best interests of the Corporation; (2) with respect to any criminal proceeding, such person believed or had reasonable cause to believe that his or her conduct was unlawful; or (3) such person deliberately breached his or her duty to the Corporation.
      (f) The indemnification provided by this Article Fifth in a specific case shall not be deemed exclusive of any other rights to which a person seeking indemnification may be entitled, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a Governor, officer, employee, or agent and shall inure to the benefit of such person's heirs, executors, and administrators.
      (g) Notwithstanding the foregoing, but subject to Article Fifth (j), the Corporation shall be required to indemnify any person identified in Article Fifth (a) in connection with a proceeding (or part thereof) initiated by such person only if the initiation of such proceeding (or part thereof) by such person was authorized by the Board.
      (h) The Corporation's obligation, if any, to indemnify or advance expenses to any person who is or was serving at its request as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or non-profit entity shall be reduced by any amount such person may collect as indemnification or advancement from such other corporation, partnership, joint venture, trust, enterprise, or non-profit entity.
      (i) Any repeal or modification of the foregoing provisions of this Article Fifth shall not adversely affect any right or protection hereunder of any person respecting any act or omission occurring prior to the time of such repeal or modification.
      (j) If a claim for indemnification or advancement of expenses under this Article Fifth is not paid in full within 60 days after a written claim therefor by an indemnified person has been received by the Corporation, the indemnified person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action, the Corporation shall have the burden of proving that the indemnified person is not entitled to the requested indemnification or advancement of expenses under the General Corporation Law of the State of Delaware.
      (k) The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a Governor, officer, employee, agent, or National Adjudicatory Council or committee member of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or non-profit entity against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability hereunder.
      (l) A Governor shall not be liable to the Corporation or its members for monetary damages for breach of fiduciary duty as a Governor, except to the extent such exemption from liability or limitation thereof is not permitted under the General Corporation Law of the State of Delaware as it presently exists or may hereafter be amended.
      Perpetual Existence
      Sixth: The Corporation shall have perpetual existence.
      Members' Liability
      Seventh: The private property of the members shall not be subject to the payment of corporate debts to any extent whatever.
      Governors
      Eighth:
      (a) To the fullest extent permitted by Sections 141(a), 141(j), and 215 of the General Corporation Law of the State of Delaware and other applicable law, the business and affairs of the Corporation shall be managed and the election of Governors shall be conducted in the manner provided in this Restated Certificate of Incorporation and the By-Laws of the Corporation. To the extent there is any inconsistency between the provisions of this Restated Certificate of Incorporation and the By-Laws relating to such matters and the General Corporation Law, the provisions of this Restated Certificate of Incorporation and the By-Laws shall govern to the fullest extent permitted by the General Corporation Law and other applicable law. To the fullest extent permitted by the General Corporation Law of the State of Delaware and other applicable law, the Board of Governors may delegate such powers, authority, and functions as it shall determine from time to time, in a manner not inconsistent with the "Plan of Allocation and Delegation of Functions by NASD to Subsidiaries," approved by the Securities and Exchange Commission, as amended from time to time.
      (b) The Corporation shall be managed under the direction of a Board of Governors having such powers and duties as shall be provided from time to time in this Restated Certificate of Incorporation or the By-Laws of the Corporation. The Board of Governors shall be the governing body of the Corporation. Each member of the Board of Governors who is to be elected by members of the Corporation shall be elected by a plurality of the votes of the members of the Corporation present in person or represented by proxy at the annual meeting of the members of the Corporation and entitled to vote for such category of Governors. Elections shall be by written ballot. Any Governor so elected by members of the Corporation must be nominated by the Nominating Committee or certified by the Secretary of the Corporation (as provided in the By-Laws of the Corporation) and must satisfy the other qualifications for Governors set forth in this Restated Certificate of Incorporation or the By-Laws or established by resolution of the Board of Governors from time to time, which qualifications shall be consistent with the "Plan of Allocation and Delegation of Functions by NASD to Subsidiaries". The By-Laws may also provide for such assistants to the Board of Governors, and such officers, agents, and employees, as may be deemed necessary to administer affairs of the Corporation.
      From and after the Transitional Period, the Board of Governors shall consist of (i) the Chief Executive Officer of the Corporation, (ii) a number of Public Governors determined by the Board of Governors, (iii) a Floor Member Governor, an Independent Dealer/Insurance Affiliate Governor and an Investment Company Affiliate Governor and (iv) three Small Firm Governors, one Mid-Size Firm Governor and three Large Firm Governors. The number of Public Governors shall exceed the number of Industry Governors.
      The Chief Executive Officer shall serve as a Governor until a successor is elected, or until death, resignation, or removal.
      Public Governors and the Floor Member Governor, the Independent Dealer/Insurance Affiliate Governor and the Investment Company Affiliate Governor (the "Appointed Governors") shall be appointed by the Board of Governors from candidates recommended to the Board by the Nominating Committee of the Board of Governors.
      As of the first annual meeting of members following the Transitional Period, the Appointed Governors shall be divided by the Board of Governors into three classes, as equal in number as possible, with the first class holding office until the first succeeding annual meeting of members, the second class holding office until the second succeeding annual meeting of members and the third class holding office until the third succeeding annual meeting of members, or until a successor is duly appointed and qualified, or until death, resignation, disqualification, or removal. Each class shall initially contain as equivalent a number as possible of Appointed Governors who were members of the NYSE Group Committee during the Transitional Period or are successors to such Governor positions, on the one hand, and Appointed Governors who were members of the NASD Group Committee during the Transitional Period or are successors to such Governor positions, on the other hand, to the extent the Board of Governors determines that such persons are to remain Governors after the Transitional Period. No Appointed Governor may serve more than two consecutive terms. If an Appointed Governor is appointed to fill a vacancy of such a Governor position for a term of less than one year, the Governor may serve up to two consecutive terms following the expiration of the Governor's initial term. At each annual election following the first annual meeting of members following the Transitional Period, Appointed Governors shall be appointed by the Board of Governors for a term of three years to replace those whose terms expire.
      As of the first annual meeting of members following the Transitional Period, the Large Firm Governors, the Mid-Size Firm Governor and the Small Firm Governors shall be divided into three classes, as equal in number as possible, with the first class, being comprised of one Large Firm Governor and one Small Firm Governor, holding office until the first succeeding annual meeting of members, the second class, being comprised of one Large Firm Governor, one Mid-Size Firm Governor and one Small Firm Governor, holding office until the second succeeding annual meeting of members and the third class, being comprised of one Large Firm Governor and one Small Firm Governor, holding office until the third succeeding annual meeting of members, or until a successor is duly elected and qualified, or until death, resignation, disqualification, or removal. A Governor elected by members of the Corporation may not serve more than two consecutive terms.
      If a Governor is elected to fill a vacancy of such a Governor position for a term of less than one year, the Governor may serve up to two consecutive terms following the expiration of the Governor's initial term. At each annual election following the first annual meeting of members following the Transitional Period, Large Firm Governors, Small Firm Governors and the Mid-Size Firm Governor shall be elected for a term of three years to replace those whose terms expire.
      In the event of any vacancy among the Large Firm Governors, the Mid-Size Firm Governor or the Small Firm Governors, such vacancy shall only be filled by the Large Firm Governor Committee in the case of a Large Firm Governor vacancy, the Board of Governors in the case of a Mid-Size Firm Governor vacancy or the Small Firm Governor Committee in the case of a Small Firm Governor vacancy; provided, however, that in the event the remaining term of office of any Large Firm, Mid-Size Firm or Small Firm Governor position that becomes vacant is for more than 12 months, such vacancy shall be filled by the members of the Corporation entitled to vote thereon at a meeting thereof convened to vote thereon.
      (c) In furtherance and not in limitation of the powers granted by the General Corporation Law of the State of Delaware, the Board of Governors is expressly authorized unless the By-Laws otherwise provide, to make, alter, or repeal the By-Laws of the Corporation.
      In the event of the refusal, failure, neglect, or inability of any member of the Board of Governors to discharge such member's duties, or for any cause affecting the best interest of the Corporation the sufficiency of which the Board of Governors shall be the sole judge, the Board shall have the power, by the affirmative vote of two-thirds of the Governors then in office, to remove such member and declare such member's position vacant and that, subject to this Restated Certificate of Incorporation, it shall be filled in accordance with the provisions of the By-Laws; provided, that during the Transitional Period, (i) a Governor that is a member of the NYSE Group Committee may only be removed by the affirmative vote of a majority of the Governors who are members of the NYSE Group Committee and (ii) a Governor that is a member of the NASD Group Committee may only be removed by the affirmative vote of a majority of the Governors who are members of the NASD Group Committee.
      The Corporation may, in its By-Laws, confer powers upon its Board of Governors in addition to the foregoing and in addition to the powers and authorities expressly conferred upon them by the General Corporation Law of the State of Delaware.
      Meetings and Offices
      Ninth: Both members and the Board of Governors shall have power, if the By-Laws so provide, to hold their meetings and to have one or more offices within or without the State of Delaware and to keep the books of the Corporation (subject to the provision of the statutes), outside the State of Delaware at such places as may be from time to time designated by the Board of Governors. At all meetings of members of the Corporation the presence in person or by proxy of one-third of the members entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum; provided, however, where a separate vote by a class or group or classes or groups is required, the presence in person or by proxy of one-third of the members of such class or group or classes or groups shall be necessary and sufficient to constitute a quorum with respect to that vote on that matter.
      Right to Amend Certificate of Incorporation
      Tenth: The Corporation reserves the right to amend, alter, change, or repeal any provisions contained in this Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon members herein are granted subject to this reservation.
      Transitional Governance
      Eleventh: Notwithstanding anything herein to the contrary, to the extent there is any inconsistency between the other provisions of this Restated Certificate of Incorporation, including, without limitation, Paragraph (b) of Article Eighth, and this Article Eleventh, the provisions of this Article Eleventh shall govern as of Closing and for the Transitional Period to the fullest extent permitted by applicable law:
      (a) The Corporation shall be managed under the direction of a Board of Governors having such powers and duties as shall be provided from time to time in this Restated Certificate of Incorporation or the By-Laws of the Corporation; provided, however, that (i) during the Transitional Period, the Board of Governors, after consultation with the Chief Executive Officer of the Corporation, shall have the exclusive authority to appoint any Lead Governor of the Corporation, (ii) during the Transitional Period, the Board of Governors, after receiving the recommendation of the Chief Executive Officer, shall have the exclusive authority to appoint the Chair of the Finance Committee and (iii) during the Transitional Period, the Nominating Committee of the Board of Governors will be jointly populated by the Chief Executive Officer and the Chief Executive Officer of NYSE Regulation, Inc. as of Closing (or his duly appointed or elected successor as Chair of the Board of Governors), subject to ratification of the appointees by the Board of Governors. Any Governor elected by members of the Corporation must be nominated by the Nominating Committee or certified by the Secretary of the Corporation (as provided in the By-Laws of the Corporation) and must satisfy the other qualifications for Governors set forth in this Restated Certificate of Incorporation or the By-Laws or established by resolution of the Board of Governors from time to time, which qualifications shall be consistent with the "Plan of Allocation and Delegation of Functions by NASD to Subsidiaries"; provided, however, that, in the case of the first annual meeting of members following the Closing, nominations shall be by the Board of Directors of NYSE Group, Inc. with respect to Large Firm Governors, jointly by the Board of Directors of NYSE Group, Inc. and the Board of Governors in office prior to the Closing with respect to the Mid-Size Firm Governor and by the Board of Governors in office prior to the Closing with respect to Small Firm Governors, instead of the Nominating Committee.
      (b) Upon the Closing, the term of office of each Governor in office immediately prior to the Closing who is not to be a Governor as of Closing pursuant to the immediately succeeding paragraph shall automatically, and without any further action, terminate, and such persons shall no longer be members of the Board of Governors.
      (c) As of Closing, and for the Transitional Period, the Board of Governors shall consist of 23 authorized members, consisting of (i) the Chief Executive Officer of the Corporation, (ii) the Chief Executive Officer of NYSE Regulation, Inc., (iii) eleven Public Governors, (iv) a Floor Member Governor, an Independent Dealer/Insurance Affiliate Governor and an Investment Company Affiliate Governor and (v) three Small Firm Governors, one Mid-Size Firm Governor and three Large Firm Governors; provided, however that the Board of Governors shall not include such Small Firm Governors, Mid-Size Firm Governor or Large Firm Governors, but rather shall include three persons, who immediately prior to the Closing are Industry Governors, selected by the Board of Governors in office prior to the Closing, three persons, who immediately prior to the Closing qualified as Industry Governors pursuant to the By-Laws in existence prior to the Closing, selected by the Board of Directors of NYSE Group, Inc. and one person, who immediately prior to the Closing qualified as an Industry Governor pursuant to the By-Laws in existence prior to the Closing, selected by the Board of Directors of NYSE Group, Inc. and the Board of Governors in office prior to the Closing jointly, until the election of such Small Firm Governors, Mid-Size Firm Governor or Large Firm Governors at the first annual meeting of members following the Closing (which shall be held as soon as practicable after the Closing).
      The Chief Executive Officer shall serve as a Governor until a successor is elected, or until death, resignation, or removal.
      The Chief Executive Officer of NYSE Regulation, Inc. as of Closing shall serve as a Governor during the Transitional Period, until death, resignation, or removal; provided, however, in the event of a vacancy during the Transitional Period with respect to this Governor position by virtue of death, resignation or removal, the then Chief Executive Officer of NYSE Regulation, Inc. shall serve as a Governor for the remainder of the Transitional Period, until death, resignation or removal; provided, further however, a person who becomes a Governor pursuant to the immediately preceding proviso shall not be qualified to serve as Chair of the Board of Governors.
      Effective as of Closing, the Board of Directors of NYSE Group, Inc. shall appoint the NYSE Public Governors, the Board of Governors in office prior to the Closing shall appoint the NASD Public Governors and the Board of Directors of NYSE Group, Inc. and the Board of Governors in office prior to the Closing jointly shall appoint the Joint Public Governor.
      The Public Governors appointed in accordance with the preceding paragraph shall hold office for the Transitional Period, or until death, resignation, disqualification, or removal. In the event of any vacancy among the NYSE Public Governors, the Joint Public Governor or the NASD Public Governors during the Transitional Period, such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NYSE Group Committee in the case of a vacant NYSE Public Governor position, such vacancy shall only be filled by the Board of Governors, and nominations for persons to fill such vacancy shall be made by the Nominating Committee, in the case of a vacant Joint Public Governor position or such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NASD Group Committee in the case of a vacant NASD Public Governor position.
      Effective as of Closing, the Board of Directors of NYSE Group, Inc. shall appoint the Floor Member Governor, the Board of Governors in office prior to the Closing shall appoint the Independent Dealer/Insurance Affiliate Governor and the Board of Directors of NYSE Group, Inc. and the Board of Governors in office prior to the Closing jointly shall appoint the Investment Company Affiliate Governor.
      The Floor Member Governor, the Investment Company Affiliate Governor and the Independent Dealer/Insurance Affiliate Governor appointed in accordance with the preceding paragraph shall hold office for the Transitional Period, or until death, resignation, disqualification, or removal. In the event of any vacancy among the Floor Member Governor, the Investment Company Affiliate Governor or the Independent Dealer/Insurance Affiliate Governor during the Transitional Period, such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NYSE Group Committee in the case of a Floor Member Governor vacancy, such vacancy shall only be filled by the Board of Governors, and nominations for persons to fill such vacancy shall be made by the Nominating Committee, in the case of an Investment Company Affiliate Governor vacancy or such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NASD Group Committee in the case of an Independent Dealer/Insurance Affiliate Governor vacancy.
      Three Large Firm Governors, three Small Firm Governors and one Mid-Size Firm Governor shall be elected as Governors at the first annual meeting of members following the Closing (the "Initial Member Elected Governors"). The Initial Member Elected Governors shall hold office until the first annual meeting of members following the Transitional Period, or until a successor is duly elected and qualified, or until death, resignation, disqualification, or removal.
      In the event of any vacancy among the Large Firm Governors, the Mid-Size Firm Governor or the Small Firm Governors during the Transitional Period, such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NYSE Group Committee in the case of a Large Firm Governor vacancy, such vacancy shall only be filled by the Board of Governors, and nominations for persons to fill such vacancy shall be made by the Nominating Committee, in the case of a Mid-Size Firm Governor vacancy or such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NASD Group Committee in the case of a Small Firm Governor vacancy; provided, however, that in the event the remaining term of office of any Large Firm, Mid-Size Firm or Small Firm Governor position that becomes vacant is for more than 12 months, such vacancy shall be filled by the members of the Corporation entitled to vote thereon at a meeting thereof convened to vote thereon.
      (d) The annual meeting of members shall be on such date and at such place as the Board of Governors shall designate; provided, however, that, except for the first annual meeting following the Closing at which Large Firm Governors, the Mid-Size Firm Governor and Small Firm Governors shall be elected, there shall be no annual meetings of members during the Transitional Period.
      (e) Upon the expiration of the Transitional Period, the term of office of the Chief Executive Officer of NYSE Regulation, Inc. as a member of the Board shall automatically, and without any further action, terminate, such person shall no longer be a member of the Board of Governors and the authorized number of members of the Board of Governors shall automatically be reduced by one.
      Definitions
      Twelfth: For purposes hereof:
      A) "bank" shall mean:
      (1) a banking institution organized under the laws of the United States;
      (2) a member bank of the Federal Reserve System;
      (3) any other banking institution, whether incorporated or not, doing business under the laws of any State or of the United States, a substantial portion of the business of which consists of receiving deposits or exercising fiduciary powers similar to those permitted to national banks under the authority of the Comptroller of the Currency pursuant to the first section of Public Law 87-722 (12 U.S.C. § 92a), and which is supervised and examined by a State or Federal authority having supervision over banks, and which is not operated for the purpose of evading the provisions of the Securities Exchange Act of 1934, as amended (the "Act"); and
      (4) a receiver, conservator, or other liquidating agent of any institution or firm included in clauses (1), (2), or (3) of this definition;
      B) "broker" shall mean any individual, corporation, partnership, association, joint stock company, business trust, unincorporated organization, or other legal entity engaged in the business of effecting transactions in securities for the account of others, but does not include a bank;
      C) "Closing" shall mean the closing of the consolidation of certain member firm regulatory functions of NYSE Regulation, Inc. and the Corporation;
      D) "controlling" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract or otherwise. A person who is the owner of 20% or more of the outstanding voting stock of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds voting stock, in good faith, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity;
      E) "dealer" shall mean any individual, corporation, partnership, association, joint stock company, business trust, unincorporated organization, or other legal entity engaged in the business of buying and selling securities for such individual's or entity's own account, through a broker or otherwise, but does not include a bank, or any person insofar as such person buys or sells securities for such person's own account, either individually or in some fiduciary capacity, but not as part of a regular business;
      F) "Floor Member Governor" shall mean a member of the Board of Governors appointed as such who is a person associated with a member (or a firm in the process of becoming a member) which is a specialist or floor broker on the New York Stock Exchange trading floor;
      G) "Independent Dealer/Insurance Affiliate Governor" shall mean a member of the Board of Governors appointed as such who is a person associated with a member which is an independent contractor financial planning member firm or an insurance company, or an affiliate of such a member;
      H) "Industry Governor" shall mean the Floor Member Governor, the Independent Dealer/Insurance Affiliate Governor and the Investment Company Affiliate Governor and any other Governor (excluding the Chief Executive Officer of the Corporation and, during the Transitional Period, the Chief Executive Officer of NYSE Regulation, Inc.) who:
      (1) is or has served in the prior year as an officer, director (other than as an independent director), employee or controlling person of a broker or dealer; or
      (2) has a consulting or employment relationship with or provides professional services to a self regulatory organization registered under the Act or has had any such relationship or provided any such services at any time within the prior year;
      I) "Investment Company Affiliate Governor" shall mean a member of the Board of Governors of the Corporation appointed as such who is a person associated with a member which is an "investment company" as such term is defined in The Investment Company Act of 1940, as amended, or an affiliate of such a member;
      J) "Joint Public Governor" shall mean the one Public Governor to be appointed as such by the Board of Directors of NYSE Group, Inc. and the Board of Governors in office prior to the Closing jointly;
      K) "Large Firm Governors" shall mean the members of the Board of Governors of the Corporation to be elected by Large Firm Members, provided, however, that in order to be eligible to serve, a Large Firm Governor must be an Industry Governor and must be registered with a member which is a Large Firm Member;
      L) "Large Firm Governor Committee" shall mean a committee of the Board of Governors comprised of all of the Large Firm Governors;
      M) "Large Firm Member" shall mean any broker or dealer admitted to membership in the Corporation which, at the time of determination, has 500 or more registered persons;
      N) "Mid-Size Firm Governor" shall mean the member of the Board of Governors of the Corporation to be elected by Mid-Size Firm Members, provided, however, that in order to be eligible to serve, a Mid-Size Firm Governor must be an Industry Governor and must be registered with a member which is a Mid-Size Firm Member;
      O) "Mid-Size Firm Member" shall mean any broker or dealer admitted to membership in the Corporation which, at the time of determination, has at least 151 and no more than 499 registered persons;
      P) "NASD Group Committee" shall mean a committee of the Board of Governors comprised of the five Public Governors and the Independent Dealer/Insurance Affiliate Governor appointed as such by the Board of Governors in office prior to Closing, and the Small Firm Governors which were nominated for election as such by the Board of Governors in office prior to Closing, and in each case their successors;
      Q) "NASD Public Governors" shall mean the five Public Governors to be appointed as such by the Board of Governors in office prior to the Closing effective as of Closing;
      R) "NYSE Group Committee" shall mean a committee of the Board of Governors comprised of the five Public Governors and the Floor Member Governor appointed as such by the Board of Directors of NYSE Group, Inc., and the Large Firm Governors which were nominated for election as such by the Board of Directors of NYSE Group, Inc., and in each case their successors;
      S) "NYSE Public Governors" shall mean the five Public Governors to be appointed as such by the Board of Directors of NYSE Group, Inc. effective as of Closing;
      T) "person associated with a member" shall mean:
      (1) a natural person who is registered or has applied for registration under the Rules of the Corporation;
      (2) a sole proprietor, partner, officer, director, or branch manager of a member, or other natural person occupying a similar status or performing similar functions, or a natural person engaged in the investment banking or securities business who is directly or indirectly controlling or controlled by a member, whether or not any such person is registered or exempt from registration with the Corporation under the By-Laws of the Corporation or the Rules of the Corporation; and
      (3) for purposes of Rule 8210, any other person listed in Schedule A of Form BD of a member;
      U) "Public Governor" shall mean any Governor who is not the Chief Executive Officer of the Corporation or, during the Transitional Period, the Chief Executive Officer of NYSE Regulation, Inc., who is not an Industry Governor and who otherwise has no material business relationship with a broker or dealer or a self regulatory organization registered under the Act (other than serving as a public director of such a self regulatory organization);
      V) "Rules of the Corporation" or "Rules" shall mean the numbered rules set forth in the manual of the Corporation beginning with the Rule 0100 Series, as adopted by the Board of Governors of the Corporation pursuant to the By-Laws of the Corporation, as hereafter amended or supplemented;
      W) "Small Firm Governors" shall mean the members of the Board of Governors of the Corporation to be elected by Small Firm Members, provided, however, that in order to be eligible to serve, a Small Firm Governor must be registered with a member which is a Small Firm Member and must be an Industry Governor;
      X) "Small Firm Governor Committee" shall mean a committee of the Board of Governors comprised of all the Small Firm Governors;
      Y) "Small Firm Member" shall mean any broker or dealer admitted to membership in the Corporation which, at the time of determination, has at least 1 and no more than 150 registered persons; and
      Z) "Transitional Period" shall mean the period commencing on the date of the Closing and ending on the third anniversary of the date of the Closing.

      IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been signed under the seal of the Corporation the 15th day of July, 2010.


      FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC.

      By: _______________________
      T. Grant Callery
      EVP & General Counsel

      Amended by SR-FINRA-2010-027 eff. July 2, 2010.

    • TRF LLC Agreements

      • Limited Liability Company Agreement of the FINRA/NASDAQ Trade Reporting Facility LLC

        This First Amended and Restated Limited Liability Company Agreement of The FINRA/NASDAQ Trade Reporting Facility LLC (the "Company") (together with the schedules attached hereto, this "Agreement"), dated as of July 23, 2008, to the Limited Liability Company Agreement of the Trade Reporting Facility, LLC, between the Nasdaq Stock Market, Inc. and National Association of Securities Dealers, Inc. dated April 27, 2006 ("Prior Agreement"), is entered into by and between The NASDAQ OMX Group, Inc., a Delaware corporation (the "Business Member"), and Financial Industry Regulatory Authority, Inc. ("FINRA"), a Delaware non-stock corporation (the "SRO Member" and, together with the Business Member, the "Members", and each, a "Member"). Capitalized terms used herein and not otherwise defined have the meanings set forth on Schedule A hereto.
        WHEREAS, the Members formed and continued the Company as a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del.C. §18-101, et seq.), as amended from time to time (the "Act") on April 27, 2006 (the "Original Effective Date"). By execution of this Agreement, the Members continue the Company as a limited liability company pursuant to and in accordance with the Act. This Agreement is effective as of the date of this Agreement; and
        WHEREAS the Members have determined that it is appropriate to amend and restate the Prior Agreement for the purposes of reflecting the change in the names of the Members,
        NOW, THEREFORE, for and in consideration of the covenants, conditions and agreements contained herein, the Members do hereby agree as follows:
        1. Name.
        The name of the limited liability company operating under this Agreement shall be The FINRA/NASDAQ Trade Reporting Facility LLC.
        2. Principal Business Office.
        The principal business office of the Company shall be located at such location as may hereafter be determined by the Members.
        3. Registered Office.
        The address of the registered office of the Company in the State of Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, County of New Castle, Delaware 19801.
        4. Registered Agent.
        The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, County of New Castle, Delaware 19801.
        5. Members.
        The name and the mailing address of the Members are set forth on Schedule B attached hereto.
        6. Certificates.
        John M. Yetter as an "authorized person" within the meaning of the Act, executed, delivered and filed the Certificate of Formation with the Secretary of State of the State of Delaware on April 27, 2006. Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, his powers as an "authorized person" ceased, and each Member thereupon became a designated "authorized person" and each Member shall continue as a designated "authorized person" within the meaning of the Act. The Members or an Officer shall execute, deliver and file any other certificates (and any amendments thereto and/or restatements thereof) necessary for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.
        7. Purposes.
        The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, to operate a facility for Non-System Trading and to engage in all related activities arising therefrom or relating thereto or necessary, desirable, advisable, convenient or appropriate in connection therewith as the Members may determine. The Company may not undertake material business activities unrelated to the business of Non-System Trading without obtaining the approval required by Section 10(e).
        8. Powers.
        The Company (a) shall have and exercise all powers necessary, convenient or incidental to accomplish its purposes as set forth in Section 7 and (b) shall have and exercise all of the powers and rights conferred upon limited liability companies formed pursuant to the Act.
        9. Roles of Members.
        (a) SRO Member. The SRO Member shall have the sole regulatory responsibility for the activities of the Company. Pursuant to the Statement of Work, the SRO Member shall perform for the Company SRO Responsibilities including, but not limited to, those relating to:
        (i) adoption, amendment and interpretation of policies arising out of and regarding:
        (A) any material aspect of the operation of the facilities of the SRO;
        (B) any statement made generally available to membership of, to all participants in, or to Persons having or seeking access to facilities of the SRO, or to a group or category of specified Persons, that establishes or changes any standard, limit, or guideline with respect to (1) the rights, obligations, or privileges of specified Persons or, Persons associated with specific Persons, or (2) the meaning, administration, or enforcement of an existing rule of the SRO, including any generally applicable exemption from such a rule;
        (ii) approval of rule filings of the SRO prior to filing with the SEC;
        (iii) regulation of the Company's activities, including the right to review and approve the regulatory budget for the Company;
        (iv) securities regulation and any other matter implicating SRO Responsibilities; and
        (v) real-time market surveillance;
        (b) Business Member. The Business Member shall be primarily responsible for the management of the Company's business affairs. Pursuant to the Facility Services Agreement, the Business Member shall provide those services relating to:
        (i) matters regarding business policy;
        (ii) approval of business decisions, including budgets, capital expenditures, technology changes, marketing and product changes;
        (iii) identification and creation of officer positions necessary to manage the Company pursuant to Section 11 hereof and appointment or termination of the officers of the Company;
        (iv) management and control of day-to-day operations, including business management, technology operations and enhancements, accounting, finance, human resources, pricing recommendations and market operations;
        (v) incurrence, issuance, assumption, guarantee or refinancing of any debt of the Company;
        (vi) acquisition of assets consistent with the purpose set forth in Section 7;
        (vii) engaging or terminating an independent auditor;
        (viii) declaration and payment of any distributions;
        (ix) commencement or settlement of litigation not directly related to the SRO Responsibilities;
        (x) internal audits, including Sarbanes-Oxley 404 compliance efforts and business risk review; and
        (xi) other operations of the Company.
        (c) Consultation with Business Member. Notwithstanding anything to the contrary contained in this Section 9 or elsewhere in this Agreement, the SRO Member shall endeavor to carry out its material regulatory obligations, pursuant to Section 9(a), in consultation with the Business Member. Such consultation shall, to the extent reasonably practicable, include providing the Business Member with the opportunity to review and comment upon in advance nonroutine information relating to the Company that appears in filings, statements or applications submitted to the SEC or another governmental or regulatory authority on behalf of the Company that are material to ensuring that the Company complies with applicable federal securities laws and keeping the Company and the Business Member apprised, in a regular and timely manner, of nonroutine notices or orders relating to the Company received by the SRO Member from the SEC or another governmental or regulatory authority. Nothing in this Section 9(c) shall be construed to allow the Business Member to require the SRO Member to act or fail to act in a manner that the SRO Member believes to be inconsistent with its regulatory obligations.
        (d) Compliance with Securities Laws. Each Member agrees to comply with the federal securities laws and the rules and regulations thereunder and to cooperate with the SEC pursuant to its regulatory authority and the provisions of this Agreement.
        (e) Other Facilities. The SRO Member covenants and agrees if it enters into an agreement with another party regarding a facility for Non-System Trading the terms and conditions shall be no more favorable to such other party than the terms and conditions of this Agreement.
        10. Board of Directors.
        (a) Number and Composition. The Company shall be managed by or under the direction of the board of directors (the "Board of Directors" or "Board"), which shall be established by the Members. The Board is comprised of three (3) Directors. The Business Member is entitled to designate two (2) Directors, each of whom must be a director, officer or employee of the Business Member or an Affiliate thereof. The SRO Member is entitled to designate one (1) Director (the "SRO Member Director") who shall be a member of the SRO Member's Board of Governors or an officer or employee of the SRO Member designated by the SRO Member's Board of Governors. Each Director elected, designated or appointed to the Board shall hold office until a successor is elected and qualified or until such Director's earlier death, resignation or removal. Each Director shall execute and deliver a Management Agreement or other instrument pursuant to which such Director shall accept its appointment and duties as a Director and agree to be bound by the terms of this Agreement. Subject to Section 10(e) of this Agreement, the Board may change the number of the Directors and the composition of the Board from time to time at its discretion; provided, however, that the Board shall, at all times, include at least one SRO Member Director. No person that is subject to any statutory disqualification (as defined in Section 3(a)(39) of the Exchange Act) may be a Director.
        (b) Authority and Conduct. The Board shall have the authority to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise. Subject to Section 10(e), the Board shall have the authority to bind the Company. Each Director agrees to comply with the federal securities laws and the rules and regulations thereunder and to cooperate with the SEC and the SRO Member pursuant to their regulatory authority and the provisions of this Agreement. Furthermore, in discharging his or her responsibilities as a member of the Board, each Director shall take into consideration whether his or her actions as a Director would cause the Company or either Member to engage in conduct that would be consistent with the purposes of the Exchange Act.
        (c) Meetings. The Board may hold meetings, both regular and special, within or outside the State of Delaware. Regular or special meetings of the Board may be held at such time and at such place as shall from time to time be determined by the Board. Regular meetings of the Board may be held without notice. The President or other Officer of the Company as designated by the Board may call special meetings of the Board on not less than one day's notice to each Director of the Board by telephone, facsimile, mail, telegram or any other means of communication, and special meetings of the Board shall be called by the President or other Officer of the Company as designated by the Board in like manner and with like notice upon the written request of any one or more of the Directors of the Board.
        (d) Quorum; Acts of the Board. At all meetings of the Board, a majority of the Directors of the Board shall constitute a quorum for the transaction of business and, except as otherwise provided in any other provision of this Agreement, the act of a majority of the Directors of the Board present at any meeting at which there is a quorum shall be the act of the Board. If a quorum shall not be present at any meeting of the Board, the Directors of the Board present at such meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. Notwithstanding the foregoing, any act of the Board shall be subject to the limitations set forth in Section 10(e).
        (e) Special Voting Requirements; Major Actions. Notwithstanding the provisions set forth in Section 10(d) regarding voting requirements, no action with respect to any Major Action (as defined below), shall be effective unless approved by consent of the SRO Member Director. Additionally, unless approved by the SRO Member Director, neither Member on behalf of the Company shall enter into or permit the Company to enter into any Major Action. For purposes of this Agreement, "Major Action" means any of the following:
        (i) approving pricing decisions that are subject to the SEC filing process;
        (ii) approving contracts between the Company and the Business Member, any of its Affiliates, directors, officers or employees;
        (iii) approving Director compensation;
        (iv) selling, licensing, leasing or otherwise transferring material assets used in the operation of the Company's business outside of the ordinary course of business with an aggregate value in excess of $3 million;
        (v) approving or undertaking a merger, consolidation or reorganization of the Company with any other entity;
        (vi) entering into any partnership, joint venture or other similar joint business undertaking;
        (vii) making any fundamental change in the market structure of the Company from that contemplated by the Members as of the date hereof;
        (viii) to the fullest extent permitted by law, taking any action to effect the voluntary, or which would precipitate an involuntary, dissolution or winding up of the Company, other than as contemplated by Section 20;
        (ix) conversion of the Company from a Delaware limited liability company into any other type of entity;
        (x) expansion of or modification to the business which results in the Company engaging in material business unrelated to the business of Non-System Trading;
        (xi) changing the number of Directors on or composition of the Board; and
        (xii) adopting or amending policies regarding access and credit matters affecting the Company.
        (f) Electronic Communications. Directors on the Board, or any committee of the Board, may participate in meetings of the Board, or any committee, by means of telephone conference or similar communications equipment that allows all Persons participating in the meeting to hear each other, and such participation in a meeting shall constitute presence in person at the meeting. If all the participants are participating by telephone conference or similar communications equipment, the meeting shall be deemed to be held at the principal place of business of the Company.
        (g) Committees of Directors. The Board may, by resolution passed by the unanimous vote of the Board, designate one or more committees thereof, each committee to consist of one or more of the Directors. The Board may designate one or more Directors as alternate members of any committee thereof, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board designating such committee, shall have and may exercise all the powers and authority of the Board in the management of the affairs of the Company. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board. Each committee shall keep regular minutes of its meetings and report the same to the Board when required. Notwithstanding the foregoing, committees of the Board shall not have any power or authority to approve or transact any Major Action.
        (h) Compensation of Directors; Expenses. Subject to Section 10(e) hereof, the Board shall have the authority to fix the compensation of the Company's Directors. The Directors may be paid their expenses, if any, associated with attendance at Board meetings, which may be a fixed sum for attendance at each such meeting or a stated Director salary. No such payment shall preclude any Director from serving the Company in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.
        (i) Removal of Directors. Unless otherwise restricted by law and notwithstanding any other provision of this Agreement, any Director may be removed, with or without cause, by the Member that had appointed such Director, and any vacancy caused by any such removal may be filled by action of such Member.
        (j) Directors as Agents. To the extent of their powers set forth in this Agreement, the Directors are agents of the Company for the purpose of the Company's business, and the actions of the Directors taken in accordance with such powers set forth in this Agreement shall bind the Company. Except as provided in this Agreement or pursuant to an authorization from the Board, an individual Director may not bind the Company.
        (k) Duties of Directors. Except as provided in this Agreement, in exercising their rights and performing their duties under this Agreement, the Directors shall have a fiduciary duty of loyalty and care similar to that of a director of a business corporation organized under the General Corporation Law of the State of Delaware.
        11. Officers.
        The Officers of the Company shall be appointed by the Business Member and approved by a majority of the Board and shall consist of at least a President, Secretary and Treasurer. In addition, the Business Member may appoint subject to the Board's approval one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers. Any number of offices may be held by the same person. Any Officer or Director of the Company may also serve as an officer or director of the Business Member or the SRO Member. The Business Member may appoint subject to the Board's approval such other Officers and agents as it shall deem necessary or advisable who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. The salaries of all Officers and agents of the Company appointed by the Business Member subject to the Board's approval shall be fixed by or in the manner prescribed by the Board. The Officers of the Company shall hold office until their successors are chosen and qualified. Any Officer may be removed at any time, with or without cause, by the Board. Any vacancy occurring in any office of the Company shall be filled by the Business Member subject to the Board's approval. No person that is subject to any statutory disqualification (as defined in Section 3(a)(39) of the Exchange Act) may be an Officer.
        (a) President. The President shall be the chief executive officer of the Company, shall preside at all meetings of the Members, if any, and of the Board, shall be responsible for the general and active management of the business of the Company and shall see that all orders and resolutions of the Company's Board are carried into effect. The President shall execute all bonds, mortgages and other contracts, except: (i) where required or permitted by law or this Agreement to be otherwise signed and executed; (ii) where signing and execution thereof shall be expressly delegated by the Company's Directors to some other Officer or agent of the Company; and (iii) as otherwise permitted in Section 11(b).
        (b) Vice President. In the absence of the President or in the event of the President's inability to act, the Vice President, if any (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Directors, or in the absence of any designation, then in the order of their election), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents, if any, shall perform such other duties and have such other powers as the Board may from time to time prescribe.
        (c) Secretary and Assistant Secretary. The Secretary shall be responsible for filing legal documents and maintaining records for the Company. The Secretary shall attend all meetings of the Board and all meetings of the Members, if any, and record all the proceedings of the meetings of the Board and the Members in a book to be kept for that purpose and shall perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the Members, if any, and special meetings of the Board, and shall perform such other duties as may be prescribed by the Board or the President, under whose supervision the Secretary shall serve. The Assistant Secretary, or if there be more than one, in the order determined by the Board (or if there be no such determination, then in order of their election), shall, in the absence of the Secretary or in the event of the Secretary's inability to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board may from time to time prescribe.
        (d) Treasurer and Assistant Treasurer. The Treasurer shall have the custody of the Company funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Board. The Treasurer shall disburse the funds of the Company as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and to the Board, at their regular meetings or when the Board so requires, an account of all of the Treasurer's transactions and of the financial condition of the Company. The Assistant Treasurer, or if there shall be more than one, in the order determined by the Board (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of the Treasurer's inability to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board may from time to time prescribe.
        (e) Officers as Agents. The Officers, to the extent of their powers set forth in this Agreement or otherwise vested in them by action of the Board not inconsistent with this Agreement, are agents of the Company for the purpose of the Company's business, and, the actions of the Officers taken in accordance with such powers shall bind the Company.
        (f) Duties of Officers. Except to the extent otherwise provided herein, each Officer shall have a fiduciary duty of loyalty and care similar to that of officers of business corporations organized under the General Corporation Law of the State of Delaware.
        12. Limited Liability.
        Except as otherwise expressly provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be the debts, obligations and liabilities solely of the Company and neither the SRO Member, Business Member nor any Director of the Company shall be obligated personally for any debt, obligation or liability of the Company solely by reason of being a Member or Director of the Company. Notwithstanding the foregoing, the Business Member shall ensure that the Company has funds sufficient to satisfy its regulatory obligations and shall guaranty the Company's payment obligations relating to the costs associated with those SRO Responsibilities performed for the Company pursuant to the Statement of Work.
        13. Capital Contributions.
        The Business Member shall contribute the property, rights and other assets and liabilities to the Company listed on Schedule B attached hereto. The SRO Member shall not make any capital contribution to the Company and shall have no claim to any assets, tangible or intangible, of the Company.
        14. Additional Contributions.
        The Members are not required to make any additional capital contributions to the Company. However, the Business Member may make additional capital contributions to the Company at any time upon the written consent of such Member. To the extent that the Business Member makes an additional capital contribution to the Company, the Business Member shall revise Schedule B of this Agreement. The SRO Member may not make and shall not be required to make any capital contribution to the Company. The provisions of this Agreement, including this Section 14, are intended solely to benefit the Members and, to the fullest extent permitted by law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor of the Company shall be a third-party beneficiary of this Agreement) and no Member shall have any duty or obligation to any creditor of the Company to make any contribution to the Company or to issue any call for capital pursuant to this Agreement.
        15. Allocation of Profits and Losses.
        The Company's profits and losses shall be allocated to the Business Member.
        16. Distributions.
        Distributions shall be made to the Business Member at the times and in the aggregate amounts determined by the Business Member. Distributions shall not be made to the SRO Member. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not be required to make a distribution to any Member on account of its interest in the Company if such distribution would violate the Act or any other applicable law.
        17. Books, Records and Jurisdiction.
        (a) The Board shall keep or cause to be kept complete and accurate books of account and records with respect to the Company's business. The books of the Company shall at all times be maintained by the Board in compliance with Section 17(a)(1) of the Exchange Act and the rules thereunder. Each Member and its duly authorized representatives and the SEC shall have the right to examine the Company books, records and documents during normal business hours. At the request of the SEC, the Company shall provide to the SEC copies of the Company books and the costs associated with such copies shall be borne by the Company. The Company, and the Board on behalf of the Company, shall not have the right to keep confidential from any Member information that the Board would otherwise be permitted to keep confidential from any Member pursuant to Section 18-305(c) of the Act. The Company's books of account shall be kept using the method of accounting determined by the Business Member. The Company's independent auditor shall be an independent public accounting firm selected by the Business Member.
        (b) The Members acknowledge that to the extent directly related to the Company's activities, the books, records, premises, officers, directors, governors, agents and employees of the Members shall be deemed to be the books, records, premises, officers, directors, governors, agents and employees of FINRA and its Affiliates for the purpose of and subject to oversight pursuant to the Exchange Act.
        (c) The Members and the officers, directors, governors, agents and employees of the Members irrevocably submit to the jurisdiction of the U.S. federal courts, SEC and FINRA for the purpose of any suit, action or proceeding pursuant to U.S. federal securities laws, and the rules or regulations thereunder, arising from, or relating to, the Company's activities or Section 17(b) hereof (except that such jurisdictions shall include Delaware for any such matter relating to the organization or internal affairs of the Company, provided that such matter is not related to trading on, or the regulation of, the market operated by the Company), and hereby waive and agree not to assert by way of motion, as a defense or otherwise, in any such suit, action or proceeding any claims that they are not personally subject to the jurisdiction of the SEC, that the suit, action or proceeding is an inconvenient forum or that the venue of the suit, action or proceeding is improper, or that the subject matter hereof may not be enforced in or by such courts or agency.
        (d) During the term of this Agreement, none of the Company, any Member or their respective Affiliates shall reveal to any Person any confidential or proprietary information or trade secrets of the Company or any of the Members or their respective Affiliates ("Confidential Information"); provided, however, that such Confidential Information may be disclosed (i) to any employee and subcontractor involved in the performance of this Agreement, (ii) to any Person who is a director, officer, employee of, or counsel or advisor to, the Company or any of the Members or any of their respective Affiliates, (iii) to any person who is an official or employee of, or counsel to, any regulatory body or agency having jurisdiction over the Company or its Affiliates, (iv) for the purpose of furthering the aims and interests of the Company as determined by its Board, or (v) pursuant to a subpoena or order issued by a court of competent jurisdiction or as otherwise required by law. The obligations of this Section 17(d) shall survive for a period of five years from termination of this Agreement.
        (e) The Company and each Member shall cause its respective Affiliates, officers, directors, governors, employees, representatives and agents to comply with this Section 17.
        18. Exculpation and Indemnification.
        (a) To the fullest extent permitted by law, no Member, Officer, Director, employee or agent of the Company and no officer, director, governor, employee, representative, agent or Affiliate of any Member (collectively, the "Covered Persons") shall be liable to the Company or any other Person who is bound by this Agreement for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person's gross negligence or willful misconduct.
        (b) To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of such Covered Person's gross negligence or willful misconduct with respect to such acts or omissions; provided, however, that any indemnity under this Section 18 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.
        (c) To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by a Covered Person defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Covered Person to repay such amount if it shall be determined that the Covered Person is not entitled to be indemnified as authorized in this Section 18.
        (d) A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Covered Person reasonably believes are within such other Person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, or any other facts pertinent to the existence and amount of assets from which distributions to any Member might properly be paid.
        (e) To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Company or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Company or to any other Covered Person bound by this Agreement for its good faith reliance on the provisions of this Agreement or any approval or authorization granted by the Company or any other Covered Person. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of such Covered Person.
        (f) The foregoing provisions of this Section 18 shall survive any termination of this Agreement.
        19. Assignment.
        Neither Member may transfer or assign in whole or in part its limited liability company interest in the Company except (i) in the case of either Member, to an Affiliate of such Member, provided in the case of the SRO Member, that the Affiliate has proper authority to perform the SRO Responsibilities of the SRO Member.
        20. Termination.
        (a) Unless otherwise agreed in writing by the Members, the Company may be dissolved by either Member in accordance with this Section 20. Either Member may dissolve the Company by providing to the other Member prior written notice of at least one year, unless the Member revokes such notice prior to the expiration of the one-year period; provided, however, that neither Member may deliver such notice of dissolution to the other Member before the second anniversary of the Effective Date of the Prior Agreement. Unless the notice is revoked prior to the date of dissolution or as otherwise agreed to by the Members, the Company shall dissolve in accordance with the terms of this Agreement one year from the date notice of such dissolution is received by the applicable Member or at such later time as expressly set forth in the notice (the "Dissolution Date"). If the SRO Member provides notice of dissolution pursuant to this Section 20 (the date of delivery by the SRO Member of such notice of dissolution is hereinafter referred to as the "Notice of Dissolution Delivery Date"), then the Members shall negotiate in good faith to: (i) allow the Business Member to continue to operate the Company or the business of the Company under the SRO Member's SRO registration, (ii) restructure the Company so that the Business Member can operate the Company or the business of the Company under the SRO registration of the Business Member or any Affiliate thereof, as the case may be, or (iii) sell the Company or the business of the Company to the SRO Member based on a valuation of the Company's business and assets conducted in such manner as the parties may agree, and consideration for the sale may include a contract for the Business Member to provide services to the SRO Member relating to the operation of the Company and the business of the Company.
        (b) In the event the parties have not agreed on any of (i), (ii) or (iii) of Section 20(a) by the date that is 60 days after the Notice of Dissolution Delivery Date (the "FMV Commencement Date"), the Members shall thereafter in good faith seek to agree on the Fair Market Value. If the Members cannot agree on the Fair Market Value within 30 days after the FMV Commencement Date, the Members shall cooperate in good faith to select an independent investment banking firm (an "Investment Bank") of recognized international standing (the "Appraiser") to determine the Fair Market Value. Any Investment Bank that has received an aggregate of $100,000 or more for services or otherwise from either Member during the three-year period prior to the Dissolution Date shall not be eligible to serve as the Appraiser. The fees and expenses of the Appraiser will be borne by the Members in equal amounts. Each Member will share with the other Member any written information it provides to the Appraiser and will not communicate with the Appraiser, other than through such written information, without giving the other Member an opportunity to be present at any such communication. Within 90 days after the date on which the date the Appraiser has been selected, the Appraiser will determine the Fair Market Value and will notify the Members in writing of such determination (specifying the Fair Market Value and setting forth, in reasonable detail, the basis for such determination). The determination of Fair Market Value in accordance with this Section 20(b) will be final, binding and conclusive upon the Members. At a closing to occur on the date that is 10 business days following the determination of the Fair Market Value (whether by agreement of the Members or by determination of the Appraiser), or such other date as the Members shall mutually determine: (i) the SRO Member shall pay to the Business Member an amount equal to the Fair Market Value; (ii) the Business Member shall transfer to the SRO Member the Business Member's interest in the Company in its entirety; and (iii) the Notice of Dissolution shall be deemed revoked. Upon dissolution of the Company, except as may be prohibited by applicable law, the Business Member covenants and agrees that it will not apply to register as a Registered Securities Association. This covenant shall survive termination of this Agreement for a period of five years.
        21. Dissolution and Winding Up.
        (a) The Company shall be dissolved, and its affairs shall be wound up upon the first to occur of the following: (i) an action by either Member in accordance with and pursuant to Section 20 herein, (ii) the occurrence of any event which terminates the continued membership of the last remaining Member in the Company unless the Company is continued in a manner permitted by the Act or (iii) the entry of a decree of judicial dissolution under Section 18-802 of the Act.
        (b) The bankruptcy (as defined in Section 18-101(1) of the Act) of any Member shall not cause such Member to cease to be a member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution.
        (c) In the event of dissolution, the Business Member shall be responsible for the winding up of the Company and the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.
        (d) The Company and, except as otherwise provided herein, this Agreement shall each terminate when (i) all of the assets of the Company, after payment of or due provision for all debts, liabilities and obligations of the Company, shall have been distributed to the Business Member in the manner provided for in this Agreement and (ii) the Certificate of Formation shall have been canceled in the manner required by the Act.
        22. Waiver of Partition.
        Except as otherwise expressly provided in this Agreement, to the fullest extent permitted by law, the SRO Member hereby irrevocably waives any right or power that such Member might have to cause the Company or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of the Company, to compel any sale of all or any portion of the assets of the Company pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of the Company.
        23. Related Party Transactions.
        Subject to Section 10(e) hereof, the Company may enter into transactions with its Members.
        24. Severability of Provisions.
        Each provision of this Agreement shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal.
        25. Entire Agreement.
        This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof.
        26. Governing Law.
        This Agreement shall be governed by and construed under the laws of the State of Delaware (without regard to conflict of laws principles), all rights and remedies being governed by said laws.
        27. Amendments.
        This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by both Members.
        28. Counterparts.
        This Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this Agreement and all of which together shall constitute one and the same instrument.
        29. Notices.
        Any notices required to be delivered hereunder shall be in writing and personally delivered, mailed or sent by telecopy, electronic mail, or other similar form of rapid transmission, and shall be deemed to have been duly given upon receipt (a) in the case of the Company, to the Company at its address determined pursuant to Section 2, (b) in the case of a Member, to such Member at its address as listed on Schedule B attached hereto and (c) in the case of either of the foregoing, at such other address as may be designated by written notice to the other party.
        IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly executed this Agreement as of the date first written herein.

        THE NASDAQ OMX GROUP, INC.

        By:

        Name: Christopher R. Concannon
        Title: Executive Vice President — Transaction Services

        FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC.

        By:

        Name: Steven A. Joachim
        Title: Executive Vice President, Transparency Services and International Affairs and Service

        SCHEDULE A

        Definitions

        A. Definitions
        When used in this Agreement, the following terms not otherwise defined herein have the following meanings:
        "Act" has the meaning set forth in the preamble to this Agreement.
        "Affiliate" means, with respect to any Person, any other Person directly or indirectly Controlling or Controlled by or under direct or indirect common Control with such Person.
        "Agreement" means this First Amended and Restated Limited Liability Company Agreement of the Company, together with the schedules attached hereto, as amended, restated or supplemented from time to time.
        "Appraiser" has the meaning set forth in Section 20(b) of this Agreement.
        "Board" or "Board of Directors" has the meaning set forth in Section 10(a).
        "Business Member" means The NASDAQ OMX Group, Inc., a Delaware corporation, in its capacity as a member of the Company, and includes any of its permitted successors or assigns admitted to the Company as such pursuant to this Agreement.
        "Certificate of Formation" means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware on April 27, 2006, as amended or amended and restated from time to time.
        "Confidential Information" has the meaning set forth in Section 17(d) of this Agreement.
        "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities or general partnership or managing member interests, by contract or otherwise. "Controlling" and "Controlled" shall have correlative meanings. Without limiting the generality of the foregoing, a Person shall be deemed to Control any other Person in which it owns, directly or indirectly, a majority of the ownership interests.
        "Covered Persons" has the meaning set forth in Section 18(a) of this Agreement.
        "Directors" means the directors elected, designated or appointed to the Board from time to time by the Members. A Director is hereby designated as a "manager" of the Company within the meaning of Section 18-101(10) of the Act.
        "Dissolution Date" has the meaning set forth in Section 20(a) of this Agreement.
        "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
        "Facility Services Agreement" means the Facility Services Agreement entered into between the Company and the Business Member or an Affiliate thereof, as such agreement may from time to time be amended.
        "Fair Market Value" means the private market value that a willing Third Party would pay for the Business Member's interest in the Company in an arms-length transaction taking into account the prospects and potential of the Company's business operated as a going concern under a valid SRO registration.
        "FMV Commencement Date" has the meaning set forth in Section 20(b) of this Agreement.
        "Investment Bank" has the meaning set forth in Section 20(b) of this Agreement.
        "Major Action" has the meaning set forth in Section 10(e) of this Agreement.
        "Management Agreement" means the agreement of the Directors in substantially the form attached hereto as Schedule C.
        "Member" has the meaning set forth in the preamble to this Agreement.
        "Non-System Trading" means trading otherwise than on an exchange of securities for which the SEC has approved a transaction reporting plan pursuant to SEC Rule 240.11Aa3-1 or SEC Rule 242.601
        "Notice of Dissolution Delivery Date" has the meaning set forth in Section 20(a) of this Agreement.
        "Officer" means an officer of the Company described in Section 11. The Officers are listed on Schedule D hereto.
        "Person" means any individual, corporation, partnership, joint venture, limited liability company, limited liability partnership, association, joint-stock company, trust, unincorporated organization, or other organization, whether or not a legal entity, and any governmental authority.
        "Registered Securities Association" means a "registered securities association" within the meaning of the Exchange Act.
        "SEC" means the Securities and Exchange Commission.
        "SRO" means a "self-regulatory organization" within the meaning of the Exchange Act.
        "SRO Member" means Financial Industry Regulatory Authority, Inc., a Delaware non-stock corporation, in its capacity as a member of the Company, and includes any of its permitted successors or assigns admitted to the Company pursuant to this Agreement.
        "SRO Member Director" has the meaning set forth in Section 10(a) of this Agreement.
        "SRO Responsibilities" means those duties or responsibilities of an SRO pursuant to the Exchange Act and the rules promulgated thereunder.
        "Statement of Work" means the written statement to be delivered to the Company by FINRA or an Affiliate thereof setting forth the SRO Responsibilities that FINRA or an Affiliate thereof will perform for the Company.
        "Third Party" means any person other than (i) the Company or any Affiliate thereof or (ii) either Member or any Affiliate thereof.
        B. Rules of Construction
        Definitions in this Agreement apply equally to both the singular and plural forms of the defined terms. The words "include" and "including" shall be deemed to be followed by the phrase "without limitation." The terms "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Section, paragraph or subdivision. The Section titles appear as a matter of convenience only and shall not affect the interpretation of this Agreement. All Section, paragraph, clause, Exhibit or Schedule references not attributed to a particular document shall be references to such parts of this Agreement.

        SCHEDULE B

        Members

        Name Mailing Address Capital Contribution
        The NASDAQ OMX Group, Inc. One Liberty Plaza
        New York, NY 10006
        $1,000,000
        Financial Industry Regulatory Authority, Inc. 1735 K Street, N.W.
        Washington D.C. 20006
        None



        SCHEDULE C

        Management Agreement

        April 7, 2010

        The FINRA/NASDAQ Trade Reporting Facility LLC
        One Liberty Plaza
        New York, New York 10006
             Re: Management Agreement
        The FINRA/NASDAQ Trade Reporting Facility LLC
        Ladies and Gentlemen:
        For good and valuable consideration, each of the undersigned persons, who have been designated as directors of the Board of Directors (the "Board") of The FINRA/NASDAQ Trade Reporting Facility LLC, a Delaware limited liability company (the "Company"), in accordance with the First Amended and Restated Limited Liability Company Agreement of the Company, dated as of July 23, 2008, as it may be amended or restated from time to time (the "LLC Agreement"), hereby agree as follows:
        1. Each of the undersigned accepts such person's rights and authority as a Director (as defined in the LLC Agreement) of the Board of the Company under the LLC Agreement and agrees to perform and discharge such person's duties and obligations as a Director of such Board under the LLC Agreement, and further agrees that such rights, authorities, duties and obligations under the LLC Agreement shall continue until such person's successor as a Director is designated or until such person's resignation or removal as a Director in accordance with the LLC Agreement. Each of the undersigned agrees and acknowledges that it has been designated as a "manager" of the Company within the meaning of the Delaware Limited Liability Company Act.
        2. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
        IN WITNESS WHEREOF, the undersigned have executed this Management Agreement as of the day and year first above written.



        Name: Eric Noll


        Name: Adena T. Friedman


        Name: Steven A. Joachim


        SCHEDULE D

        Officers of The FINRA/NASDAQ Trade Reporting Facility LLC

        Name Title
        Brian Hyndman President
        Randall Hopkins Vice President and Chief Operating Officer
        Donald Bollerman Vice President
        Joan C. Conley Secretary
        Ronald Hassen Treasurer

        Amended by SR-FINRA-2010-020 eff. April 27, 2010.

      • First Amended and Restated Limited Liability Company Agreement of FINRA/NYSE Trade Reporting Facility LLC

        This First Amended and Restated Limited Liability Company Agreement of FINRA/NYSE Trade Reporting Facility LLC (the "Company") to the Limited Liability Company Agreement of NASD/NYSE Trade Reporting Facility LLC, between the NYSE Market, Inc., and National Association of Securities Dealers, Inc., dated January 10, 2007 (the "Prior Agreement"), is entered into by and between NYSE Market, Inc., a Delaware corporation with a principal place of business at 11 Wall Street, New York, New York (the "Business Member"), and Financial Industry Regulatory Authority, Inc. ("FINRA"), a Delaware non-stock corporation (the "SRO Member" and, together with the Business Member, the "Members" and each a "Member") dated as of October 10, 2008, (together with the schedules attached hereto, the "Agreement"). Capitalized terms used herein and not otherwise defined have the meanings set forth on Schedule A hereto.
        WHEREAS, on January 10, 2007 (the "Effective Date of the Prior Agreement") the Members formed and continue to operate the Company as a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del.C. §18-101, et seq.), as amended from time to time (the "Act"). By execution of the Agreement, the Members continue the Company as a limited liability company pursuant to and in accordance with the Act. This Agreement is effective as of the date of this Agreement; and
        WHEREAS, the Members have determined that it is appropriate to amend and restate the Prior Agreement for the purposes of reflecting the change in the name of SRO Member;
        NOW, THEREFORE, for and in consideration of the covenants, conditions and agreements contained herein, the Members do hereby agree as follows:
        1. Name.
        The name of the limited liability company operating under this Agreement shall be FINRA/NYSE Trade Reporting Facility LLC.
        2. Principal Business Office.
        The principal business office of the Company shall be located at such location as may hereafter be determined by the Members.
        3. Registered Office.
        The address of the registered office of the Company in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree Drive, in the City of Dover, Suite 101, County of Kent, State of Delaware 19904.
        4. Registered Agent.
        The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is National Registered Agents, Inc., 160 Greentree Drive, in the City of Dover, Suite 101, County of Kent, State of Delaware.
        5. Members.
        The name and the mailing address of the Members are set forth on Schedule B attached hereto.
        6. Certificates.
        William M. Freeman, as an "authorized person" within the meaning of the Act, executed, delivered and filed the Certificate of Formation with the Secretary of State of the State of Delaware on January 10, 2007. Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, his powers as an "authorized person" ceased, and each Member thereupon became a designated "authorized person" and each Member shall continue as a designated "authorized person" within the meaning of the Act. The Members or an Officer shall execute, deliver and file any other certificates (and any amendments thereto and/or restatements thereof) necessary for the Company to qualify to do business in any jurisdiction in which the Company may wish to conduct business.
        7. Purposes.
        The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, to operate a facility for Non-System Trading and to engage in all related activities arising therefrom or relating thereto or necessary, desirable, advisable, convenient or appropriate in connection therewith as the Members may determine. The Company may not undertake material business activities unrelated to the business of Non-System Trading without obtaining the approval required by Section 10(e).
        8. Powers.
        The Company (a) shall have and exercise all powers necessary, convenient or incidental to accomplish its purposes as set forth in Section 7 and (b) shall have and exercise all of the powers and rights conferred upon limited liability companies formed pursuant to the Act.
        9. Roles of Members.
        (a) SRO Member.
        The SRO Member shall have the sole regulatory responsibility for the activities of the Company. In furtherance of its regulatory responsibility and pursuant to the Statement of Work, SRO Member shall perform SRO Responsibilities for the Company which shall include, but not be limited to, actions relating to:
        (i) adoption, amendment and interpretation of policies arising out of and regarding:
        (A) any aspect of the operation of the facility considered material by SRO Member;
        (B) any statement made generally available to membership of, to all participants in, or to Persons having or seeking access to facilities of the SRO Member, or to a group or category of specified Persons, that establishes or changes any standard, limit, or guideline with respect to (1) the rights, obligations, or privileges of specified Persons or, Persons associated with specific Persons, or (2) the meaning, administration, or enforcement of an existing rule of the SRO Member, including any generally applicable exemption from such a rule;
        (ii) approval of rule filings of the SRO Member prior to filing with the SEC;
        (iii) regulation of the Company's activities of or relating to SRO Responsibilities, including the right to review and approve in SRO Member's sole reasonable discretion all budgets relating to the provision of SRO Responsibilities for the Company;
        (iv) securities regulation and any other matter implicating SRO Responsibilities; and
        (v) real-time market surveillance and trading activity reported to the Company.
        (b) Business Member.
        The Business Member shall be primarily responsible for the management of the Company's business affairs. Pursuant to the Facility Services Agreement, the Business Member shall provide those services relating to:
        (i) executing on matters regarding business policy;
        (ii) approval of business decisions, including budgets, capital expenditures, technology changes, marketing and product changes;
        (iii) identification and creation of management team and officer positions necessary to manage the Company pursuant to Section 11 hereof and appointment or termination of the officers of the Company;
        (iv) management and control of day-to-day operations, including business management, technology operations and enhancements, accounting, finance, human resources, pricing recommendations and market operations;
        (v) incurrence, issuance, assumption, guarantee or refinancing of any debt of the Company;
        (vi) acquisition of assets consistent with the purpose set forth in Section 7;
        (vii) engaging or terminating an independent auditor;
        (viii) declaration and payment of any distributions;
        (ix) commencement, defense or settlement of litigation or claims not related to SRO Responsibilities or the SRO Member's responsibilities (Business Member shall follow the direction of SRO Member which, in the operation of its sole reasonable discretion, shall direct Business Member on the disposition of all claims relating to SRO Responsibilities or the SRO Member's responsibilities);
        (x) internal audits and business risk review; and
        (xi) other operations of the Company.
        (c) Consultation with Business Member.
        Notwithstanding anything to the contrary contained in this Section 9 or elsewhere in this Agreement, the SRO Member shall endeavor to carry out its material regulatory obligations, pursuant to Section 9(a), in consultation with the Business Member. Such consultation shall, to the extent reasonably practicable, include providing the Business Member with the opportunity to review and comment in advance upon nonroutine information relating to the Company that appears in filings, statements or applications submitted to the SEC or another governmental or regulatory authority on behalf of the Company that are material to ensuring that the Company complies with applicable federal securities laws and keeping the Company and the Business Member apprised, in a regular and timely manner, of nonroutine notices or orders relating to the Company received by the SRO Member from the SEC or another governmental or regulatory authority. Nothing in this Section 9(c) shall be construed to allow the Business Member to require the SRO Member to act or fail to act in a manner that the SRO Member believes to be inconsistent with its regulatory obligations.
        (d) Compliance with Securities Laws.
        Each Member agrees to comply with the federal securities laws and the rules and regulations thereunder and to cooperate with the SEC pursuant to its regulatory authority and the provisions of this Agreement.
        10. Board of Directors.
        (a) Number and Composition.
        The Company shall be managed by or under the direction of the board of directors (the "Board of Directors" or "Board"), which shall be established by the Members. The Board is comprised of three (3) Directors. The Business Member is entitled to designate two (2) Directors, each of whom must be a director, officer or employee of the Business Member or an Affiliate thereof. The SRO Member is entitled to designate one (1) Director (the "SRO Member Director") who shall be a member of the SRO Member's Board of Governors or an officer or employee of the SRO Member designated by the SRO Member's Board of Governors. Each Director elected, designated or appointed to the Board shall hold office until a successor is elected and qualified or until such Director's earlier death, resignation or removal. Each Director shall execute and deliver a Management Agreement or other instrument pursuant to which such Director shall accept its appointment and duties as a Director and agree to be bound by the terms of this Agreement. Subject to Section 10(e) of this Agreement, the Board may change the number of the Directors and the composition of the Board from time to time at its discretion; provided, however, that the Board shall, at all times, include at least one SRO Member Director. No person that is subject to any statutory disqualification (as defined in Section 3(a)(39) of the Exchange Act) may be a Director.
        (b) Authority and Conduct.
        The Board shall have the authority to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise. Subject to Section 10(e), the Board shall have the authority to bind the Company. Each Director agrees to comply with the federal securities laws and the rules and regulations thereunder and to cooperate with the SEC and the SRO Member pursuant to their regulatory authority and the provisions of this Agreement. Furthermore, in discharging his or her responsibilities as a member of the Board, each Director shall take into consideration whether his or her actions as a Director would cause the Company or either Member to engage in conduct that would be consistent with the purposes of the Exchange Act.
        (c) Meetings.
        The Board may hold meetings, both regular and special, within or outside the State of Delaware. Regular or special meetings of the Board may be held at such time and at such place as shall from time to time be determined by the Board. Regular meetings of the Board may be held without notice. The President or other Officer of the Company as designated by the Board may call special meetings of the Board on not less than one day's notice to each Director of the Board by telephone, facsimile, mail, telegram or any other means of communication, and special meetings of the Board shall be called by the President or other Officer of the Company as designated by the Board in like manner and with like notice upon the written request of any one or more of the Directors of the Board.
        (d) Quorum; Acts of the Board.
        At all meetings of the Board, a majority of the Directors of the Board shall constitute a quorum for the transaction of business and, except as otherwise provided in any other provision of this Agreement, the act of a majority of the Directors of the Board present at any meeting at which there is a quorum shall be the act of the Board. If a quorum shall not be present at any meeting of the Board, the Directors of the Board present at such meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. Notwithstanding the foregoing, any act of the Board shall be subject to the limitations set forth in Section 10(e).
        (e) Special Voting Requirements; Major Actions.
        Notwithstanding the provisions set forth in Section 10(d) regarding voting requirements, no action with respect to any Major Action (as defined below), shall be effective unless approved by consent of the SRO Member Director. Additionally, unless approved by the SRO Member Director, neither Member on behalf of the Company shall enter into or permit the Company to enter into any Major Action. For purposes of this Agreement, "Major Action" means any of the following:
        (i) approving pricing decisions that are subject to the SEC filing process;
        (ii) approving contracts between the Company and the Business Member, any of its Affiliates, directors, officers or employees;
        (iii) approving Director compensation;
        (iv) selling, licensing, leasing or otherwise transferring material assets used in the operation of the Company's business outside of the ordinary course of business with an aggregate value in excess of $3 million;
        (v) approving or undertaking a merger, consolidation or reorganization of the Company with any other entity;
        (vi) entering into any partnership, joint venture or other similar joint business undertaking;
        (vii) making any fundamental change in the market structure of the Company from that contemplated by the Members as of the date hereof;
        (viii) to the fullest extent permitted by law, taking any action to effect the voluntary, or which would precipitate an involuntary, dissolution or winding up of the Company, other than as contemplated by Section 21;
        (ix) conversion of the Company from a Delaware limited liability company into any other type of entity;
        (x) expansion of or modification to the business which results in the Company engaging in material business unrelated to the business of Non-System Trading;
        (xi) changing the number of Directors on or composition of the Board; and
        (xii) adopting or amending policies regarding access and credit matters affecting the Company.
        (f) Electronic Communications.
        Directors on the Board, or any committee of the Board, may participate in meetings of the Board, or any committee, by means of telephone conference or similar communications equipment that allows all Persons participating in the meeting to hear each other, and such participation in a meeting shall constitute presence in person at the meeting. If all the participants are participating by telephone conference or similar communications equipment, the meeting shall be deemed to be held at the principal place of business of the Company.
        (g) Committees of Directors.
        The Board may, by resolution passed by the unanimous vote of the Board, designate one or more committees thereof, each committee to consist of one or more of the Directors. The Board may designate one or more Directors as alternate members of any committee thereof, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board designating such committee, shall have and may exercise all the powers and authority of the Board in the management of the affairs of the Company. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board. Each committee shall keep regular minutes of its meetings and report the same to the Board when required. Notwithstanding the foregoing, committees of the Board shall not have any power or authority to approve or transact any Major Action.
        (h) Compensation of Directors; Expenses.
        Subject to Section 10(e) hereof, the Board shall have the authority to fix the compensation of the Company's Directors. The Directors may be paid their expenses, if any, associated with attendance at Board meetings, which may be a fixed sum for attendance at each such meeting or a stated Director salary. No such payment shall preclude any Director from serving the Company in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.
        (i) Removal of Directors.
        Unless otherwise restricted by law and notwithstanding any other provision of this Agreement, any Director may be removed, with or without cause, by the Member that had appointed such Director, and any vacancy caused by any such removal may be filled by action of such Member.
        (j) Directors as Agents.
        To the extent of their powers set forth in this Agreement, the Directors are agents of the Company for the purpose of the Company's business, and the actions of the Directors taken in accordance with such powers set forth in this Agreement shall bind the Company. Except as provided in this Agreement or pursuant to an authorization from the Board, an individual Director may not bind the Company.
        (k) Duties of Directors.
        Except as provided in this Agreement, in exercising their rights and performing their duties under this Agreement, the Directors shall have a fiduciary duty of loyalty and care similar to that of a director of a business corporation organized under the General Corporation Law of the State of Delaware.
        11. Officers.
        The Officers of the Company shall be appointed by the Business Member and approved by a majority of the Board and shall consist of at least a President, Secretary and Treasurer. In addition, the Business Member may appoint subject to the Board's approval one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers. Any number of offices may be held by the same person. Any Officer or Director of the Company may also serve as an officer or director of the Business Member or the SRO Member. The Business Member may appoint subject to the Board's approval such other Officers and agents as it shall deem necessary or advisable who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. The salaries of all Officers and agents of the Company appointed by the Business Member subject to the Board's approval shall be fixed by or in the manner prescribed by the Board. The Officers of the Company shall hold office until their successors are chosen and qualified. Any Officer may be removed at any time, with or without cause, by the Board. Any vacancy occurring in any office of the Company shall be filled by the Business Member subject to the Board's approval. No person that is subject to any statutory disqualification (as defined in Section 3(a)(39) of the Exchange Act) may be an Officer.
        (a) President.
        The President shall be the chief executive officer of the Company, shall preside at all meetings of the Members, if any, and of the Board, shall be responsible for the general and active management of the business of the Company and shall see that all orders and resolutions of the Company's Board are carried into effect. The President shall execute all bonds, mortgages and other contracts, except: (i) where required or permitted by law or this Agreement to be otherwise signed and executed; (ii) where signing and execution thereof shall be expressly delegated by the Company's Directors to some other Officer or agent of the Company; and (iii) as otherwise permitted in Section 11(b).
        (b) Vice President.
        In the absence of the President or in the event of the President's inability to act, the Vice President, if any (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Directors, or in the absence of any designation, then in the order of their election), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents, if any, shall perform such other duties and have such other powers as the Board may from time to time prescribe.
        (c) Secretary and Assistant Secretary.
        The Secretary shall be responsible for filing legal documents and maintaining records for the Company. The Secretary shall attend all meetings of the Board and all meetings of the Members, if any, and record all the proceedings of the meetings of the Board and the Members in a book to be kept for that purpose and shall perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the Members, if any, and special meetings of the Board, and shall perform such other duties as may be prescribed by the Board or the President, under whose supervision the Secretary shall serve. The Assistant Secretary, or if there be more than one, in the order determined by the Board (or if there be no such determination, then in order of their election), shall, in the absence of the Secretary or in the event of the Secretary's inability to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board may from time to time prescribe.
        (d) Treasurer and Assistant Treasurer.
        The Treasurer shall have the custody of the Company funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Board. The Treasurer shall disburse the funds of the Company as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and to the Board, at their regular meetings or when the Board so requires, an account of all of the Treasurer's transactions and of the financial condition of the Company. The Assistant Treasurer, or if there shall be more than one, in the order determined by the Board (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of the Treasurer's inability to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board may from time to time prescribe.
        (e) Officers as Agents.
        The Officers, to the extent of their powers set forth in this Agreement or otherwise vested in them by action of the Board not inconsistent with this Agreement, are agents of the Company for the purpose of the Company's business, and, the actions of the Officers taken in accordance with such powers shall bind the Company.
        (f) Duties of Officers.
        Except to the extent otherwise provided herein, each Officer shall have a fiduciary duty of loyalty and care similar to that of officers of business corporations organized under the General Corporation Law of the State of Delaware.
        12. Limited Liability.
        Except as otherwise expressly provided by this Agreement or the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be the debts, obligations and liabilities solely of the Company and neither the SRO Member, Business Member nor any Director of the Company shall be obligated personally for any debt, obligation or liability of the Company solely by reason of being a Member or Director of the Company. Notwithstanding the foregoing, Business Member shall ensure that the Company has funds sufficient to satisfy its regulatory obligations and shall guarantee the Company's payment obligations relating to the costs associated with those SRO Responsibilities performed for the Company pursuant to the Statement of Work.
        13. Capital Contributions.
        The Business Member shall contribute the property, rights and other assets and liabilities to the Company listed on Schedule B attached hereto. The SRO Member shall not make any capital contribution to the Company and shall have no claim to any assets, tangible or intangible, of the Company.
        14. Additional Contributions.
        The Members are not required to make any capital contributions to the Company in addition to those specifically set forth in this Agreement. However, the Business Member may make additional capital contributions to the Company at any time upon the written consent of such Member. To the extent that the Business Member makes an additional capital contribution to the Company, the Business Member shall revise Schedule B of this Agreement. The SRO Member may not make and shall not be required to make any capital contribution to the Company. The provisions of this Agreement, including this Section 14, are intended solely to benefit the Members and, to the fullest extent permitted by law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor of the Company shall be a third-party beneficiary of this Agreement) and no Member shall have any duty or obligation to any creditor of the Company to make any contribution to the Company or to issue any call for capital pursuant to this Agreement.
        14A. Capital Accounts.
        It is intended that the Company will be disregarded for federal income tax purposes. If the Company ceases to be disregarded as a separate entity for federal income tax purposes, then the Business Member shall establish capital accounts and related balances in such accounts as necessary. Any amounts paid or distributed to the SRO Member will be treated as fees paid by the Business Member to the SRO Member.
        15. Allocation of Profits and Losses.
        The Company's profits and losses shall be allocated solely to the Business Member.
        16. Distributions.
        Distributions shall be made to the Business Member at the times and in the aggregate amounts determined by the Business Member. Other than as specifically set forth herein, distributions shall not be made to the SRO Member. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not be required to make a distribution to any Member on account of its interest in the Company if such distribution would violate the Act or any other applicable law.
        17. Books, Records and Jurisdiction.
        (a) The Board shall keep or cause to be kept complete and accurate books of account and records with respect to the Company's business. The books of the Company shall at all times be maintained by the Board in compliance with Section 17(a)(1) of the Exchange Act and the rules thereunder. Each Member and its duly authorized representatives and the SEC shall have the right to examine the Company books, records and documents during normal business hours. At the request of the SEC, the Company shall provide to the SEC copies of the Company books and the costs associated with such copies shall be borne by the Company. The Company, and the Board on behalf of the Company, shall not have the right to keep confidential from any Member information that the Board would otherwise be permitted to keep confidential from any Member pursuant to Section 18-305(c) of the Act. The Company's books of account shall be kept using the method of accounting determined by the Business Member. The Company's independent auditor shall be an independent public accounting firm selected by the Business Member.
        (b) The Members acknowledge that to the extent directly related to the Company's activities, the books, records, premises, officers, directors, governors, agents and employees of the Members shall be deemed to be the books, records, premises, officers, directors, governors, agents and employees of FINRA and its Affiliates for the purpose of and subject to oversight pursuant to the Exchange Act. Notwithstanding the foregoing, with respect to all other employment matters or concerns, other than as set forth above, employees of the Company are not employees of SRO Member.
        (c) The Members and the officers, directors, governors, agents and employees of the Members irrevocably submit to the jurisdiction of the U.S. federal courts, SEC and FINRA for the purpose of any suit, action or proceeding pursuant to U.S. federal securities laws, and the rules or regulations thereunder, arising from, or relating to, the Company's activities or Section 17(b) hereof (except that such jurisdictions shall include Delaware for any such matter relating to the organization or internal affairs of the Company, provided that such matter is not related to trading on, or the regulation of, the market operated by the Company), and hereby waive and agree not to assert by way of motion, as a defense or otherwise, in any such suit, action or proceeding any claims that they are not personally subject to the jurisdiction of the SEC, that the suit, action or proceeding is an inconvenient forum or that the venue of the suit, action or proceeding is improper, or that the subject matter hereof may not be enforced in or by such courts or agency.
        (d) During the term of this Agreement, none of the Company, any Member or their respective Affiliates shall reveal to any Person any confidential or proprietary information or trade secrets of the Company or any of the Members or their respective Affiliates ("Confidential Information"); provided, however, that such Confidential Information may be disclosed (i) to any employee and subcontractor involved in the performance of this Agreement provided they are under an obligation of confidentiality that is no less restrictive that is set out herein, (ii) to any Person who is a director, officer, employee of, or counsel or advisor to, the Company or any of the Members or any of their respective Affiliates, (iii) to any person who is an official or employee of, or counsel to, any regulatory body or agency having jurisdiction over the Company or its Affiliates, (iv) for the purpose of furthering the aims and interests of the Company as determined by its Board, or (v) pursuant to a subpoena or order issued by a court of competent jurisdiction or as otherwise required by law. The obligations of this Section 17(d) shall survive for a period of five years from termination of this Agreement with the exception of Confidential Information which is comprised of trade secrets which shall be subject to the confidentiality obligations set out in this Agreement in perpetuity.
        (e) The Company and each Member shall cause its respective Affiliates, officers, directors, governors, employees, representatives and agents to comply with this Section 17.
        18. Exculpation, Indemnification and Limitation on Liability.
        (a) Unless specifically set forth herein, to the fullest extent permitted by law, no Member, Officer, Director, employee or agent of the Company and no officer, director, governor, employee, representative, agent or Affiliate of any Member (collectively, the "Covered Persons") shall be liable to the Company or any other Person who is bound by this Agreement for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person's gross negligence or willful misconduct.
        (b) To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by a Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of such Covered Person's gross negligence or willful misconduct with respect to such acts or omissions; provided, however, that any indemnity under this Section 18, other than as specifically set forth herein, shall be provided out of and to the extent of Company assets only, and no Member, unless such Member has committed gross negligence or willful misconduct, or unless specifically set forth in this Agreement, shall have personal liability on account thereof. The Covered Person shall provide the indemnifying party with prompt, written notice of any such claim, sole control of the defense and settlement of such claim, and all reasonable assistance to defend such claim at the indemnifying party's cost. The Covered Person may appear in such action with counsel of its choice, at its own expense. The indemnifying party shall have no obligations under this section up to and to the extent any such claims, damages and liabilities result from the Covered Person's material breach of any term of the agreement under which such indemnification is sought, and up to and to the extent such breach prejudices the indemnifying party's ability to provide the indemnification set out in this section.
        (c) To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by a Covered Person defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Covered Person to repay such amount if it shall be determined that the Covered Person is not entitled to be indemnified as authorized in this Section 18.
        (d) A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Covered Person reasonably believes are within such other Person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, or any other facts pertinent to the existence and amount of assets from which distributions to any Member might properly be paid.
        (e) Except as otherwise set forth in this Agreement or the Facilities Agreement, to the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Company or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Company or to any other Covered Person bound by this Agreement for its good faith reliance on the provisions of this Agreement or any approval or authorization granted by the Company or any other Covered Person that does not contradict any agreements between the parties put in place to effectuate Section 7. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of such Covered Person.
        (f) The foregoing provisions of this Section 18 shall survive any termination of this Agreement.
        19. Assignment.
        Neither Member may transfer or assign in whole or in part its limited liability Company interest in the Company without the prior written permission of the other Member(s).
        20. Termination.
        (a) For Breach. Any Member may terminate this Agreement for material breach of another Member if the material breach is not cured within 30 days of receipt of written notice to the other Member, such notice to set forth in reasonable detail the material breach and state that this Agreement will be terminated if such breach is not cured.
        (b) For Bankruptcy. Either party will have the right to terminate this Agreement upon a Member's bankruptcy or insolvency on 30 days notice.
        (c) By SRO Member for maintenance of its status as a preeminent SRO. In the event Business Member or the Company take any action or fail to take any action that SRO Member determines in the exercise of its business judgment, could or does in fact jeopardize SRO Member status or reputation as an SRO, that cannot be cured or that has not been cured within thirty (30) days of receipt of written notice to the Business Member, such notice to set forth in reasonable detail the nature of the action, SRO Member shall thereafter be entitled to immediate dissolution of the Company. In such an event, the Company shall immediately suspend all operations and SRO Member shall have no further obligations to the Company but shall be entitled to any and all amounts due to SRO Member under the then current term in which the dissolution was commenced, in addition to any other damages provided for under common law or the agreements between the parties.
        (d) For Convenience. In the event the Company does not reach Substantial Trade Volume (as defined below), Business Member may terminate this Agreement, Statement of Work, the Facilities Agreement and any other agreement between the parties executed to effectuate the Purpose of the Company as set out in Section 2 upon sixty (60) days prior written notice. Notwithstanding anything to the contrary, Business Member shall not terminate the Facilities Agreement prior to termination or dissolution of this Agreement without SRO Member's prior written approval. SRO Member shall not terminate for convenience for one year from the Effective Date of the Prior Agreement. Thereafter, if the Company has not reach Substantial Trade Volume, FINRA may terminate for convenience with 180 days prior written notice.
        (e) Upon Substantial Trade Volume. In the event the Company averages 250,000 trades or more per day for three consecutive months ("Substantial Trade Volume"), other than as provided for under Sections (a) through (c) above, a Member may only dissolve the Company by providing to the non-terminating Member with at least one year's prior written notice. Notwithstanding the foregoing, neither Member may deliver such notice of dissolution to the other Member before the second anniversary of the Effective Date of the Prior Agreement. Unless the notice is revoked prior to the date of dissolution or as otherwise agreed to by the Members, the Company shall dissolve in accordance with the terms of this Agreement one year from the date notice of such dissolution is received by the non-terminating Member or at such later time as expressly set forth in the notice (the "Dissolution Date").
        21. Dissolution and Winding Up.
        (a) The Company shall be dissolved, and its affairs shall be wound up upon the first to occur of the following: (i) an action by either Member in accordance with and pursuant to Section 20 herein, (ii) the occurrence of any event which terminates the continued membership of the last remaining Member in the Company unless the Company is continued in a manner permitted by the Act or (iii) the entry of a decree of judicial dissolution under Section 18-802 of the Act.
        (b) In the event of dissolution, the Business Member shall be responsible for the winding up of the Company and the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.
        (c) The Company and, except as otherwise provided herein, this Agreement shall each terminate when (i) all of the assets of the Company, after payment of or due provision for all debts, liabilities and obligations of the Company, shall have been distributed to the Business Member in the manner provided for in this Agreement and (ii) the Certificate of Formation shall have been canceled in the manner required by the Act.
        (d) All other agreements between the Members to effectuate the operation of a facility for Non-System Trading and to engage in all related activities arising therefrom or relating thereto or necessary, desirable, advisable, convenient or appropriate in connection therewith shall automatically terminate on the date of termination of this Agreement, should this Agreement be terminated for any reason.
        22. Waiver of Partition.
        Except as otherwise expressly provided in this Agreement, to the fullest extent permitted by law, the SRO Member hereby irrevocably waives any right or power that such Member might have to cause the Company or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of the Company, to compel any sale of all or any portion of the assets of the Company pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of the Company.
        23. Related Party Transactions.
        Subject to Section 10(e) hereof, the Company may enter into transactions with its Members.
        24. Severability of Provisions.
        Each provision of this Agreement shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal.
        25. Entire Agreement.
        This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof.
        26. Governing Law.
        This Agreement shall be governed by and construed under the laws of the State of Delaware (without regard to conflict of laws principles), all rights and remedies being governed by said laws.
        27. Amendments.
        This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by both Members.
        28. Counterparts.
        This Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this Agreement and all of which together shall constitute one and the same instrument.
        29. Notices.
        Any notices required to be delivered hereunder shall be in writing and personally delivered, mailed or sent by telecopy, electronic mail, or other similar form of rapid transmission, and shall be deemed to have been duly given upon receipt (a) in the case of the Company, to the Company at its address determined pursuant to Section 2, (b) in the case of a Member, to such Member at its address as listed on Schedule B attached hereto and (c) in the case of either of the foregoing, at such other address as may be designated by written notice to the other party.
        IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly executed this Agreement as of the date first written herein.
        NYSE Market, Inc.
        By: _________________________________
        Name: Louis G. Pastina
        Title: EVP, NYSE Operations

        FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC.
        By: _________________________________
        Name: Steven A. Joachim
        Title: Executive Vice President,
        Transparency Services and
        International Affairs and Services

        SCHEDULE A

        Definitions and Rules of Construction

        A. Definitions
        When used in this Agreement, the following terms not otherwise defined herein have the following meanings:
        "Act" has the meaning set forth in the preamble to this Agreement.
        "Affiliate" means, with respect to any Person, any other Person directly or indirectly Controlling or Controlled by or under direct or indirect common Control with such Person.
        "Agreement" means this First Amended and Restated Limited Liability Company Agreement of the Company, together with the schedules attached hereto, as amended, restated or supplemented from time to time.
        "Board" or "Board of Directors" has the meaning set forth in Section 10(a).
        "Business Member" means NYSE Market, Inc., a Delaware corporation, in its capacity as a member of the Company, and includes any of its permitted successors or assigns admitted to the Company as such pursuant to this Agreement.
        "Certificate of Formation" means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware on January 10, 2007, as amended or amended and restated from time to time.
        "Confidential Information" has the meaning set forth in Section 17(d) of this Agreement.
        "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities or general partnership or managing member interests, by contract or otherwise. "Controlling" and "Controlled" shall have correlative meanings. Without limiting the generality of the foregoing, a Person shall be deemed to Control any other Person in which it owns, directly or indirectly, a majority of the ownership interests.
        "Covered Persons" has the meaning set forth in Section 18(a) of this Agreement.
        "Directors" means the directors elected, designated or appointed to the Board from time to time by the Members. A Director is hereby designated as a "manager" of the Company within the meaning of Section 18-101(10) of the Act.
        "Dissolution Date" has the meaning set forth in Section 20(d) of this Agreement.
        "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
        "Facility Services Agreement" means the Facility Services Agreement entered into between the Company and the Business Member or an Affiliate thereof, as such agreement may from time to time be amended.
        "FINRA" has the meaning set forth in the preamble to this Agreement.
        "Major Action" has the meaning set forth in Section 10(e) of this Agreement.
        "Management Agreement" means the agreement of the Directors in substantially the form attached hereto as Schedule C.
        "Member" has the meaning set forth in the preamble to this Agreement.
        "Non-System Trading" means trading otherwise than on an exchange of securities for which the SEC has approved a transaction reporting plan pursuant to SEC Rule 601 under Regulation NMS under the Act.
        "Officer" means an officer of the Company described in Section 11. The Officers are listed on Schedule D hereto.
        "Person" means any individual, corporation, partnership, joint venture, limited liability company, limited liability partnership, association, joint-stock company, trust, unincorporated organization, or other organization, whether or not a legal entity, and any governmental authority.
        "Registered Securities Association" means a "registered securities association" within the meaning of the Exchange Act.
        "SEC" means the Securities and Exchange Commission.
        "SIP" means Securities Information Processor.
        "SRO" means a "self-regulatory organization" within the meaning of the Exchange Act.
        "SRO Member" means Financial Industry Regulatory Authority, Inc., a Delaware non-stock corporation, in its capacity as a member of the Company, and includes any of its permitted successors or assigns admitted to the Company pursuant to this Agreement.
        "SRO Member Director" has the meaning set forth in Section 10(a) of this Agreement.
        "SRO Responsibilities" means those duties or responsibilities of an SRO pursuant to the Exchange Act and the rules promulgated thereunder, including but not limited to those set out in Section 9(a) supra.
        "Statement of Work" means the written statement to be delivered to the Company by FINRA or an Affiliate thereof setting forth the SRO Responsibilities that SRO Member or an Affiliate thereof will perform for the Company.
        "Third Party" means any person other than (i) the Company or any Affiliate thereof or (ii) either Member or any Affiliate thereof.
        B. Rules of Construction
        Definitions in this Agreement apply equally to both the singular and plural forms of the defined terms. The words "include" and "including" shall be deemed to be followed by the phrase "without limitation." The terms "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Section, paragraph or subdivision. The Section titles appear as a matter of convenience only and shall not affect the interpretation of this Agreement. All Section, paragraph, clause, Exhibit or Schedule references not attributed to a particular document shall be references to such parts of this Agreement.

        SCHEDULE B

        Members

        Name Mailing Address Capital Contribution
        NYSE Market, Inc. 11 Wall Street
        New York, NY 10005
        $150,000
        Financial Industry Regulatory Authority, Inc. 1735 K Street, N.W.
        Washington D.C. 20006
        None

        SCHEDULE C

        Management Agreement

        October 10, 2008

        The FINRA/NYSE Trade Reporting Facility, LLC
        Re: Management Agreement
        The FINRA/NYSE Trade Reporting Facility LLC
        Ladies and Gentlemen:
        For good and valuable consideration, each of the undersigned persons, who have been designated as directors of the Board of Directors (the "Board") of FINRA/NYSE Trade Reporting Facility LLC, a Delaware limited liability company (the "Company"), in accordance with the First Amended and Restated Limited Liability Company Agreement of the Company, dated as of October 10, 2008, as it may be amended or restated from time to time (the "LLC Agreement"), hereby agree as follows:
        1. Each of the undersigned accepts such person's rights and authority as a Director (as defined in the LLC Agreement) of the Board of the Company under the LLC Agreement and agrees to perform and discharge such person's duties and obligations as a Director of such Board under the LLC Agreement, and further agrees that such rights, authorities, duties and obligations under the LLC Agreement shall continue until such person's successor as a Director is designated or until such person's resignation or removal as a Director in accordance with the LLC Agreement. Each of the undersigned agrees and acknowledges that it has been designated as a "manager" of the Company within the meaning of the Delaware Limited Liability Company Act.
        2. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
        IN WITNESS WHEREOF, the undersigned have executed this Management Agreement as of the day and year first above written.

        __________________________________
        Name: Louis G. Pastina

        __________________________________
        Name: Paul Adcock

        __________________________________
        Name: Steven A. Joachim


        SCHEDULE D

        Officers of FINRA/NYSE Trade Reporting Facility LLC

        Name Title
        Mark Wille President
        Karen Lorentz Vice President
        Bob Hill Vice President
        Janet Kissane Secretary
        Greg Ochojski Treasurer

        Amended by SR-FINRA-2010-020 eff. April 27, 2010.
        Adopted by SR-NASD-2007-011 eff. April 18, 2007.

    • Plan of Allocation and Delegation of Functions by FINRA to FINRA Regulation, Inc.

      • I. FINRA, Inc.

        FINRA, Inc. (referenced as "FINRA"), the Registered Section 15A Association, is the parent company of FINRA Regulation, Inc. (referenced as "FINRA Regulation"). The term "Association" shall refer to FINRA and FINRA Regulation collectively.
        A. Other Defined Terms—The terms "Industry Governors," "Non-Industry Governors," "Public Governors," "Industry Directors," "Non-Industry Directors," "Public Directors," "Industry committee members," "Non-Industry committee members," and "Public committee members," as used herein, shall have the meanings set forth in the By-Laws of FINRA and FINRA Regulation, as applicable.
        B. Functions and Authority of FINRAFINRA shall have ultimate responsibility for the rules and regulations of the Association and its operation and administration. As set forth below in Section II.A., FINRA has delegated certain authority and functions to FINRA Regulation. Actions taken pursuant to delegated authority, however, remain subject to review, ratification or rejection by the FINRA Board in accordance with procedures established by that Board. Any function or responsibility as a registered securities association under the Securities Exchange Act of 1934 ("Act"), or as set forth in the Restated Certificate of Incorporation or the By-Laws is hereby reserved, except as expressly delegated to FINRA Regulation. In addition, FINRA expressly retains the following authority and functions:
        1. To exercise overall responsibility for ensuring that the Association's statutory and self-regulatory obligations and functions are fulfilled.
        2. To delegate authority to FINRA Regulation to take actions on behalf of FINRA.
        3. To elect the FINRA Regulation Board of Directors.
        4. To review the rulemaking and disciplinary decisions of FINRA Regulation (See Section II.B. below).
        5. To administer overhead and technology of FINRA Regulation.
        6. To administer the Office of Internal Audit as provided in the FINRA By-Laws.
        7. To manage external Association relations on major policy issues.
        8. To direct FINRA Regulation to take action necessary to effectuate the purposes and functions of the Association.
        9. To take action ab initio in an area of responsibility delegated to FINRA Regulation in Section II.
        C. Management Compensation Committee
        1. The Management Compensation Committee shall be a Committee of the FINRA Board and shall have the following functions: To consider and recommend compensation policies, programs, and practices for employees of the Association.
        2. Composition: The Management Compensation Committee shall consist of no fewer than four and no more than seven Governors. The number of Non-Industry committee members shall equal or exceed the number of Industry committee members. The Chief Executive Officer shall be an ex-officio, non-voting member of the Management Compensation Committee. Each member shall serve a term of office of one year.
        3. Quorum: At all meetings of the Management Compensation Committee, a quorum for the transaction of business shall consist of a majority of the Management Compensation Committee, including not less than 50 percent of the Non-Industry committee members. In the absence of a quorum, a majority of the committee members present may adjourn the meeting until a quorum is present.
        D. Market Regulation Committee
        The Market Regulation Committee shall exercise the functions contained in the Rule 6200 Series, among others, in accordance with the procedures specified therein.
        E. Access to and Status of Officers, Directors, Employees, Books, Records, and Premises of FINRA Regulation
        Notwithstanding the delegation of authority to FINRA Regulation, as set forth in Section II.A. below, the staff, books, records, and premises of FINRA Regulation are the staff, books, records, and premises of FINRA subject to oversight pursuant to the Act, and all officers, directors, employees, and agents of FINRA Regulation are officers, directors, employees, and agents of FINRA for purposes of the Act.
        Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
        Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
        Amended by SR-NASD-2006-135 eff. Dec. 20, 2006.
        Amended by SR-NASD-2005-087 eff. Aug. 1, 2006.
        Amended by SR-NASD-2005-089 eff. Oct. 1, 2005.
        Amended by SR-NASD-2004-159 eff. May 26, 2005.
        Amended by SR-NASD-99-21 eff. July 9, 2000.
        Amended by SR-NASD-98-46 eff. July 9, 1998.

        Selected Notices: 05-30, 16-04.

      • II. FINRA Regulation, Inc.

        A. Delegation of Functions and Authority:
        1. Subject to Section I.B.9., FINRA hereby delegates to FINRA Regulation and FINRA Regulation assumes the following responsibilities and functions as a registered securities association:
        a. To establish and interpret rules and regulations and provide exemptions for FINRA members including, but not limited to, fees, membership requirements and dispute resolution programs.
        b. To determine Association policy, including developing and adopting necessary or appropriate rule changes, relating to the business and sales practices of FINRA members and associated persons with respect to, but not limited to, (i) public and private sale or distribution of securities including underwriting arrangements and compensation, (ii) financial responsibility, (iii) qualifications for FINRA membership and association with FINRA members, (iv) clearance and settlement of securities transactions and other financial responsibility and operational matters affecting members in general and securities quoted or trade reported through a FINRA facility, (v) FINRA member advertising practices, (vi) administration, interpretation, and enforcement of FINRA rules, (vii) administration and enforcement of Municipal Securities Rulemaking Board ("MSRB") rules, the federal securities laws, and other laws, rules and regulations that the Association has the authority to administer or enforce, (viii) standards of proof for violations and sanctions imposed on FINRA members and associated persons in connection with disciplinary actions, and (ix) arbitration, mediation or other resolution of disputes among and between FINRA members, associated persons and customers.
        c. To take necessary or appropriate action to assure compliance with Association policy, FINRA and MSRB rules, the federal securities laws, and other laws, rules and regulations that the Association has the authority to administer or enforce, through examination, surveillance, investigation, enforcement, disciplinary, and other programs.
        d. To administer programs and systems for the surveillance and enforcement of FINRA rules governing members' conduct and trading activities.
        e. To examine and investigate FINRA members and associated persons to determine if they have violated FINRA or MSRB rules, the federal securities laws, and other laws, rules, and regulations that the Association has the authority to administer, interpret, or enforce.
        f. To administer Association enforcement and disciplinary programs, including investigation, adjudication of cases and the imposition of fines and other sanctions.
        g. To administer the Association's office of professional hearing officers.
        h. To conduct qualification examinations and continuing education programs.
        i. To operate the Central Registration Depository.
        j. To determine whether applicants for FINRA membership have met the requirements for membership established by the Association.
        k. To place restrictions on the business activities of FINRA members consistent with the public interest, the protection of investors, and the federal securities laws.
        l. To determine whether persons seeking to register as associated persons of FINRA members have met such qualifications for registration as may be established by the Association, including whether statutorily disqualified persons will be permitted to associate with particular FINRA members and the conditions of such association.
        m. To oversee all District Office activities.
        n. To conduct arbitrations, mediations, and other dispute resolution programs.
        o. To establish the annual budget and business plan for FINRA Regulation.
        p. To determine allocation of FINRA Regulation resources.
        q. To establish and assess fees and other charges on FINRA members, persons associated with FINRA members, and others using the services or facilities of FINRA or FINRA Regulation, which includes the dispute resolution forum.
        r. To manage external relations on enforcement, regulatory, dispute resolution, and other policy issues with Congress, the Securities and Exchange Commission ("Commission"), state regulators, other self-regulatory organizations, business groups, and the public.
        s. To establish internal procedures for considering complaints by members, associated persons, and members of the public who request an investigation or disciplinary action by the Association.
        t. To develop and adopt rule changes (i) applicable to the collection, processing, and dissemination of quotation and transaction information for securities traded in the over-the-counter market, and (ii) establishing trading practices with respect to these securities.
        u. To develop and adopt rules, interpretations, policies, and procedures and provide exemptions to maintain and enhance the integrity, fairness, efficiency, and competitiveness of the over-the-counter market.
        2. All action taken pursuant to authority delegated pursuant to A.1 shall be subject to the review, ratification, or rejection by the FINRA Board in accordance with procedures established by the FINRA Board.
        B. FINRA Regulation Board Procedures
        1. Rule Filings—The FINRA Board shall review and ratify a rule change adopted by the FINRA Regulation Board before the rule change becomes the final action of the Association if the rule change: (a) imposes fees or other charges on persons or entities other than FINRA members; (b) raises significant policy issues in the view of the FINRA Regulation Board, and the FINRA Regulation Board refers the rule change to the FINRA Board; or (c) is materially inconsistent with a recommendation of the National Adjudicatory Council. If the FINRA Regulation Board does not refer a rule change to the FINRA Board for review, the FINRA Regulation Board action shall become the final action of the Association unless called for review by any member of the FINRA Board not later than the FINRA Board meeting next following the FINRA Regulation Board's action.
        2. Petitions for Reconsideration
        a. If the FINRA Regulation Board or FINRA Board takes action on a rule change relating to the business and sales practices of FINRA members or associated persons or enforcement policies, including policies with respect to fines and other sanctions, and such action is materially inconsistent with the recommendation of the National Adjudicatory Council, the FINRA Regulation Board or the FINRA Board, as applicable, shall provide written notice of its action to the National Adjudicatory Council within one calendar day.
        b. Within two calendar days after receipt of such notice, the National Adjudicatory Council, by majority vote, may petition the FINRA Board for reconsideration. Such petition shall be in writing and include a statement explaining in detail why the National Adjudicatory Council believes that the FINRA Regulation Board's or FINRA Board's action should be set aside.
        c. The FINRA Executive Committee shall act on a timely and complete petition for reconsideration within three calendar days after its receipt. If the FINRA Executive Committee grants reconsideration, the matter shall be added to the agenda of the next regularly scheduled meeting of the FINRA Board. If the FINRA Executive Committee denies reconsideration, the FINRA Regulation Board's or FINRA Board's previous action on the rule shall be final, and staff shall submit the necessary rule filing to the Commission.
        C. Supplemental Delegation Regarding Committees
        1. Market Regulation Committee
        a. The Market Regulation Committee shall advise the FINRA Regulation Board on regulatory proposals and industry initiatives relating to quotations, execution, trade reporting, and trading practices; advise the FINRA Regulation Board in its administration of programs and systems for the surveillance and enforcement of rules governing FINRA members' conduct and trading activities in the over-the-counter market; provide a pool of panelists for those hearing panels that the Chief Hearing Officer or his or her designee determines should include a member of the Market Regulation Committee pursuant to FINRA rules; participate in the training of hearing panelists on issues relating to quotations, executions, trade reporting, and trading practices; and review and recommend to the National Adjudicatory Council changes to the Association's Sanction Guidelines.
        b. The FINRA Regulation Board shall appoint the Market Regulation Committee by resolution. The members of the Market Regulation Committee shall be balanced between Industry and Non-Industry committee members.
        c. At all meetings of the Market Regulation Committee, a quorum for the transaction of business shall consist of a majority of the Market Regulation Committee, including not less than 50 percent of the Non-Industry committee members. If at least 50 percent of the Non-Industry committee members are (i) present at or (ii) have filed a waiver of attendance for a meeting after receiving an agenda prior to such meeting, the requirement that not less than 50 percent of the Non-Industry committee members be present to constitute the quorum shall be waived.
        2. Uniform Practice Code Committee
        a. The Uniform Practice Code Committee shall have the following functions:
        i. to issue interpretations or rulings with respect to the Uniform Practice Code ("UPC");
        ii. to advise the FINRA Regulation Board with respect to the clearance and settlement of securities transactions and other financial responsibility and operational matters that may require modifications to the UPC or other FINRA rules; and
        iii. to exercise the functions contained in the Rule 11000 Series in accordance with the procedures specified therein.
        b. The FINRA Regulation Board shall appoint the Uniform Practice Code Committee by resolution. The Uniform Practice Code Committee shall have not more than 50 percent of its members directly engaged in market-making activity or employed by a member firm whose revenues from market-making activity exceed ten percent of its total revenues.
        3. National Arbitration and Mediation Committee
        a. The National Arbitration and Mediation Committee shall have the powers and authority pursuant to FINRA rules to advise the FINRA Regulation Board on the development and maintenance of an equitable and efficient system of dispute resolution that will equally serve the needs of public investors and FINRA members, to monitor rules and procedures governing the conduct of dispute resolution, and to have such other powers and authority as is necessary to effectuate the purposes of FINRA rules.
        b. The FINRA Regulation Board shall appoint the National Arbitration and Mediation Committee by resolution. The National Arbitration and Mediation Committee shall consist of no fewer than ten and no more than 25 members. The National Arbitration and Mediation Committee shall have at least 50 percent Non-Industry members.
        c. At all meetings of the National Arbitration and Mediation Committee, a quorum for the transaction of business shall consist of a majority of the National Arbitration and Mediation Committee, including not less than 50 percent of the Non-Industry committee members. If at least 50 percent of the Non-Industry committee members are either (i) present at or (ii) have filed a waiver of attendance for a meeting after receiving an agenda prior to such meeting, the requirement that not less than 50 percent of the Non-Industry committee members be present to constitute the quorum shall be waived.
        Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
        Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
        Amended by SR-NASD-2006-135 eff. Dec. 20, 2006.
        Amended by SR-NASD-2005-087 eff. Aug. 1, 2006.
        Amended by SR-NASD-2005-089 eff. Oct. 1, 2005.
        Amended by SR-NASD-99-21 eff. July 9, 2000.

        Selected Notice: 16-04

    • By-Laws of the Corporation

      • ARTICLE I DEFINITIONS

        When used in these By-Laws, unless the context otherwise requires, the term:
        (a) "Act" means the Securities Exchange Act of 1934, as amended;
        (b) "bank" means (1) a banking institution organized under the laws of the United States, (2) a member bank of the Federal Reserve System, (3) any other banking institution, whether incorporated or not, doing business under the laws of any State or of the United States, a substantial portion of the business of which consists of receiving deposits or exercising fiduciary powers similar to those permitted to national banks under the authority of the Comptroller of the Currency pursuant to the first section of Public Law 87-722 (12 U.S.C. § 92a), and which is supervised and examined by a State or Federal authority having supervision over banks, and which is not operated for the purpose of evading the provisions of the Act, and (4) a receiver, conservator, or other liquidating agent of any institution or firm included in clauses (1), (2), or (3) of this subsection;
        (c) "Board" means the Board of Governors of the Corporation;
        (d) "branch office" means an office defined as a branch office in the Rules of the Corporation;
        (e) "broker" means any individual, corporation, partnership, association, joint stock company, business trust, unincorporated organization, or other legal entity engaged in the business of effecting transactions in securities for the account of others, but does not include a bank;
        (f) "Closing" means the closing of the consolidation of certain member firm regulatory functions of NYSE Regulation, Inc. and the Corporation;
        (g) "Commission" means the Securities and Exchange Commission;
        (h) "controlling" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract or otherwise. A person who is the owner of 20% or more of the outstanding voting stock of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds voting stock, in good faith, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity;
        (i) "Corporation" means the National Association of Securities Dealers, Inc. or any future name of this entity;
        (j) "day" means calendar day;
        (k) "dealer" means any individual, corporation, partnership, association, joint stock company, business trust, unincorporated organization, or other legal entity engaged in the business of buying and selling securities for such individual's or entity's own account, through a broker or otherwise, but does not include a bank, or any person insofar as such person buys or sells securities for such person's own account, either individually or in some fiduciary capacity, but not as part of a regular business;
        (l) "Delegation Plan" means the "Plan of Allocation and Delegation of Functions by NASD to Subsidiaries" as approved by the Commission, and as amended from time to time;
        (m) "district" means a district established by the NASD Regulation Board pursuant to the NASD Regulation By-Laws;
        (n) "Floor Member Governor" means a member of the Board appointed as such who is a person associated with a member (or a firm in the process of becoming a member) which is a specialist or floor broker on the New York Stock Exchange trading floor;
        (o) "government securities broker" shall have the same meaning as in Section 3(a)(43) of the Act except that it shall not include financial institutions as defined in Section 3(a)(46) of the Act;
        (p) "government securities dealer" shall have the same meaning as in Section 3(a)(44) of the Act except that it shall not include financial institutions as defined in Section 3(a)(46) of the Act;
        (q) "Governor" means a member of the Board;
        (r) "Independent Dealer/Insurance Affiliate Governor" means a member of the Board appointed as such who is a person associated with a member which is an independent contractor financial planning member firm or an insurance company, or an affiliate of such a member;
        (s) "Industry Director" means a Director of the NASD Regulation Board or NASD Dispute Resolution Board (excluding the Presidents) who: (1) is or has served in the prior year as an officer, director (other than as an independent director), employee or controlling person of a broker or dealer, or (2) has a consulting or employment relationship with or provides professional services to a self regulatory organization registered under the Act, or has had any such relationship or provided any such services at any time within the prior year;
        (t) "Industry Governor" or "Industry committee member" means the Floor Member Governor, the Independent Dealer/Insurance Affiliate Governor and the Investment Company Affiliate Governor and any other Governor (excluding the Chief Executive Officer of the Corporation and, during the Transitional Period, the Chief Executive Officer of NYSE Regulation, Inc.) or committee member who: (1) is or has served in the prior year as an officer, director (other than as an independent director), employee or controlling person of a broker or dealer, or (2) has a consulting or employment relationship with or provides professional services to a self regulatory organization registered under the Act, or has had any such relationship or provided any such services at any time within the prior year;
        (u) "investment banking or securities business" means the business, carried on by a broker, dealer, or municipal securities dealer (other than a bank or department or division of a bank), or government securities broker or dealer, of underwriting or distributing issues of securities, or of purchasing securities and offering the same for sale as a dealer, or of purchasing and selling securities upon the order and for the account of others;
        (v) "Investment Company" means an "investment company" as such term is defined in The Investment Company Act of 1940, as amended;
        (w) "Investment Company Affiliate Governor" means a member of the Board appointed as such who is a person associated with a member which is an Investment Company or an affiliate of such a member;
        (x) "Joint Public Governor" means the one Public Governor to be appointed as such by the Board of Directors of NYSE Group, Inc. and the Board in office prior to the Closing jointly;
        (y) "Large Firm" means any broker or dealer admitted to membership in the Corporation which, at the time of determination, has 500 or more registered persons;
        (z) "Large Firm Governor" means a member of the Board to be elected by Large Firm members, provided, however, that in order to be eligible to serve, a Large Firm Governor must be an Industry Governor and must be registered with a member which is a Large Firm member;
        (aa) "Large Firm Governor Committee" means a committee of the Board comprised of all of the Large Firm Governors;
        (bb) "Lead Governor" means a member of the Board elected as such by the Board, provided, however, that any member of the Board who is concurrently serving as a member of the Board of Directors of NYSE Group, Inc. shall not be eligible to serve as the Lead Governor;
        (cc) "Mid-Size Firm" means any broker or dealer admitted to membership in the Corporation which, at the time of determination, has at least 151 and no more than 499 registered persons;
        (dd) "Mid-Size Firm Governor" means a member of the Board to be elected by Mid-Size Firm members, provided, however, that in order to be eligible to serve, a Mid-Size Firm Governor must be an Industry Governor and must be registered with a member which is a Mid-Size Firm member;
        (ee) "member" means any broker or dealer admitted to membership in the Corporation;
        (ff) "municipal securities" means securities which are direct obligations of, or obligations guaranteed as to principal or interest by, a State or any political subdivision thereof, or any agency or instrumentality of a State or any political subdivision thereof, or any municipal corporate instrumentality of one or more States, or any security which is an industrial development bond as defined by Section 3(a)(29) of the Act;
        (gg) "municipal securities broker" means a broker, except a bank or department or division of a bank, engaged in the business of effecting transactions in municipal securities for the account of others;
        (hh) "municipal securities dealer" means any person, except a bank or department or division of a bank, engaged in the business of buying and selling municipal securities for such person's own account, through a broker or otherwise, but does not include any person insofar as such person buys or sells securities for such person's own account either individually or in some fiduciary capacity, but not as a part of a regular business;
        (ii) "NASD Dispute Resolution" means NASD Dispute Resolution, Inc. or any future name of this entity;
        (jj) "NASD Group Committee" means a committee of the Board comprised of the five Public Governors and the Independent Dealer/Insurance Affiliate Governor appointed as such by the Board in office prior to Closing, and the Small Firm Governors which were nominated for election as such by the Board in office prior to Closing, and in each case their successors;
        (kk) "NASD Public Governors" means the five Public Governors to be appointed as such by the Board in office prior to the Closing effective as of Closing;
        (ll) "NASD Regulation" means NASD Regulation, Inc. or any future name of this entity;
        (mm) "NASD Regulation Board" means the Board of Directors of NASD Regulation;
        (nn) "National Adjudicatory Council" means a body appointed pursuant to Article V of the NASD Regulation By-Laws;
        (oo) "Nominating Committee" means the Nominating Committee appointed pursuant to Article VII, Section 9 of these By-Laws;
        (pp) "NYSE Group Committee" means a committee of the Board comprised of the five Public Governors and the Floor Member Governor appointed as such by the Board of Directors of NYSE Group, Inc., and the Large Firm Governors which were nominated for election as such by the Board of Directors of NYSE Group, Inc., and in each case their successors;
        (qq) "NYSE Public Governors" shall mean the five Public Governors to be appointed as such by the Board of Directors of NYSE Group, Inc. effective as of Closing;
        (rr) "person associated with a member" or "associated person of a member" means: (1) a natural person who is registered or has applied for registration under the Rules of the Corporation; (2) a sole proprietor, partner, officer, director, or branch manager of a member, or other natural person occupying a similar status or performing similar functions, or a natural person engaged in the investment banking or securities business who is directly or indirectly controlling or controlled by a member, whether or not any such person is registered or exempt from registration with the Corporation under these By-Laws or the Rules of the Corporation; and (3) for purposes of Rule 8210, any other person listed in Schedule A of Form BD of a member;
        (ss) "Public Director" means a Director of the NASD Regulation Board or NASD Dispute Resolution Board who is not an Industry Director and who otherwise has no material business relationship with a broker or dealer or a self regulatory organization registered under the Act (other than serving as a public director of such a self regulatory organization);
        (tt) "Public Governor" or "Public committee member" means any Governor or committee member who is not the Chief Executive Officer of the Corporation or, during the Transitional Period, the Chief Executive Officer of NYSE Regulation, Inc., who is not an Industry Governor and who otherwise has no material business relationship with a broker or dealer or a self regulatory organization registered under the Act (other than serving as a public director of such a self regulatory organization);
        (uu) "registered broker, dealer, municipal securities broker or dealer, or government securities broker or dealer" means any broker, dealer, municipal securities broker or dealer, or government securities broker or dealer which is registered with the Commission under the Act;
        (vv) "Rules of the Corporation" or "Rules" means the numbered rules set forth in the manual of the Corporation beginning with the Rule 0100 Series, as adopted by the Board pursuant to these By-Laws, as hereafter amended or supplemented;
        (ww) "Small Firm" means any broker or dealer admitted to membership in the Corporation which, at the time of determination, has at least 1 and no more than 150 registered persons;
        (xx) "Small Firm Governor" means a member of the Board to be elected by Small Firm members, provided, however, that in order to be eligible to serve, a Small Firm Governor must be registered with a member which is a Small Firm member and must be an Industry Governor;
        (yy) "Small Firm Governor Committee" means a committee of the Board comprised of all the Small Firm Governors; and
        (zz) "Transitional Period" means the period commencing on the date of the Closing and ending on the third anniversary of the date of the Closing.
        Amended by SR-NASD-2007-023 eff. July 30, 2007.
        Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
        Amended by SR-NASD-2006-135 eff. Dec. 20, 2006.
        Amended by SR-NASD-2004-110 eff. Dec. 31, 2004.
        Amended by SR-NASD-2001-06 eff. May 8, 2001.
        Amended by SR-NASD-99-35 eff. Dec. 1, 1999.
        Amended by SR-NASD-98-56 eff. Oct. 30, 1998.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
        Amended by SR-NASD-95-39 eff. Aug 20, 1996.
        Amended by SR-NASD-94-64 eff. Feb. 9, 1995.
        Amended eff. Mar. 9, 1988 and Sept. 4, 1990.

        Selected Notices: 87-14, 87-37, 87-41, 88-51, 94-52, 99-95.

      • ARTICLE II OFFICES

        • Location

          Sec. 1.  The address of the registered office of the Corporation in the State of Delaware and the name of the registered agent at such address shall be: The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801. The Corporation also may have offices at such other places both within and without the State of Delaware as the Board may from time to time designate or the business of the Corporation may require.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.

        • Change of Location

          Sec. 2.  In the manner permitted by law, the Board or the registered agent may change the address of the Corporation's registered office in the State of Delaware and the Board may make, revoke, or change the designation of the registered agent.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE III QUALIFICATIONS OF MEMBERS AND ASSOCIATED PERSONS

        • Persons Eligible to Become Members and Associated Persons of Members

          Sec. 1.  (a) Any registered broker, dealer, municipal securities broker or dealer, or government securities broker or dealer authorized to transact, and whose regular course of business consists in actually transacting, any branch of the investment banking or securities business in the United States, under the laws of the United States, shall be eligible for membership in the Corporation, except such registered brokers, dealers, or municipal securities brokers or dealers, or government securities brokers or dealers which are excluded under the provisions of Section 3.
          (b) Any person shall be eligible to become an associated person of a member, except such persons who are excluded under the provisions of Section 3.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Authority of Board to Adopt Qualification Requirements

          Sec. 2.  (a) The Board shall have authority to adopt rules and regulations applicable to applicants for membership, members, and persons associated with applicants or members establishing specified and appropriate standards with respect to the training, experience, competence, and such other qualifications as the Board finds necessary or desirable, and in the case of an applicant for membership or a member, standards of financial responsibility and operational capability.
          (b) In establishing and applying such standards, the Board may classify members and persons associated with such members, taking into account relevant matters, including the nature, extent, and type of business being conducted and of securities sold, dealt in, or otherwise handled. The Board may specify that all or any portion of such standards shall be applicable to any such class and may require the persons in any such class to be registered with the Corporation.
          (c) The Board may from time to time make changes in such rules, regulations, and standards as it deems necessary or appropriate.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Ineligibility of Certain Persons for Membership or Association

          Sec. 3.  (a) No registered broker, dealer, municipal securities broker or dealer, or government securities broker or dealer shall be admitted to membership, and no member shall be continued in membership, if such broker, dealer, municipal securities broker or dealer, government securities broker or dealer, or member fails or ceases to satisfy the qualification requirements established under Section 2, if applicable, or if such broker, dealer, municipal securities broker or dealer, government securities broker or dealer, or member is or becomes subject to a disqualification under Section 4, or if such member fails to comply with the requirement that all forms filed pursuant to these By-Laws be filed via electronic process or such other process as the Corporation may prescribe.
          (b) 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 under Section 2, if applicable, or if such person is or becomes subject to a disqualification under Section 4; and no broker, dealer, municipal securities broker or dealer, or government securities 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 this subsection.
          (c) If it deems appropriate, the Board, upon notice and opportunity for a hearing, may cancel the membership of a member if it becomes ineligible for continuance in membership under subsection (a), may suspend or bar a person from continuing to be associated with any member if such person is or becomes ineligible for association under subsection (b), and may cancel the membership of any member who continues to be associated with any such ineligible person.
          (d) Any member that is ineligible for continuance in membership may file with the Board an application requesting relief from the ineligibility pursuant to the Rules of the Corporation. A member may file such application on its own behalf and on behalf of a current or prospective associated person. The Board may, in its discretion, approve the continuance in membership, and may also approve the association or continuance of association of any person, if the Board determines that such approval is consistent with the public interest and the protection of investors. Any approval hereunder may be granted unconditionally or on such terms and conditions as the Board considers necessary or appropriate. In the exercise of the authority granted hereunder, the Board may conduct such inquiry or investigation into the relevant facts and circumstances as it, in its discretion, considers necessary to its determination, which, in addition to the background and circumstances giving rise to the failure to qualify or disqualification, may include the proposed or present business of a member and the conditions of association of any current or prospective associated person.
          (e) An application filed under subsection (d) shall not foreclose any action which the Board is authorized to take under subsection (c) until approval has been granted.
          (f) Approval by the Board of an application made under subsection (d) shall be subject to whatever further action the Commission may take pursuant to authority granted to the Commission under the Act.
          (g) The Board may delegate its authority under this Section in a manner not inconsistent with the Delegation Plan.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-21 eff. July 15, 1996.
          Amended by SR-NASD-95-45 eff. Nov. 8, 1995.

          Selected Notices: 86-85, 87-13, 88-96, 95-61.

        • Definition of Disqualification

          Sec. 4.  A person is subject to a "disqualification" with respect to membership, or association with a member, if such person is subject to any "statutory disqualification" as such term is defined in Section 3(a)(39) of the Act.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-21 eff. July 15, 1996.
          Amended by SR-NASD-95-45 eff. Nov. 8, 1995.

          Selected Notices: 86-85, 87-13, 88-96, 95-61.

      • ARTICLE IV MEMBERSHIP

        • Application for Membership

          Sec. 1.  (a) Application for membership in the Corporation, properly signed by the applicant, shall be made to the Corporation via electronic process or such other process as the Corporation may prescribe, on the form to be prescribed by the Corporation, and shall contain:
          (1) an agreement to comply with the federal securities laws, the rules and regulations thereunder, the rules of the Municipal Securities Rulemaking Board and the Treasury Department, the By-Laws of the Corporation, NASD Regulation, or NASD Dispute Resolution, the Rules of the Corporation, and all rulings, orders, directions, and decisions issued and sanctions imposed under the Rules of the Corporation;
          (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 the By-Laws of the Corporation, Schedules to the By-Laws of the Corporation, and the Rules of the Corporation; and
          (3) such other reasonable information with respect to the applicant as the Corporation may require.
          (b) Any application for membership received by the Corporation shall be processed in the manner set forth in the Rules of the Corporation.
          (c) Each applicant and member shall ensure that its membership application with the Corporation is kept current at all times by supplementary amendments via electronic process or such other process as the Corporation may prescribe to the original application. Such amendments to the application shall be filed with the Corporation not later than 30 days after learning of the facts or circumstances giving rise to the amendment.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
          Amended by SR-NASD-2006-135 eff. Dec. 20, 2006.
          Amended by SR-NASD-2001-06 eff. May. 8, 2001.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff. July 11, 1996.
          Amended by SR-NASD-96-21 eff. July 15, 1996.
          Amended by SR-NASD-94-14 eff. July 20, 1994.

          Selected Notice: 94-22.

        • Similarity of Membership Names

          Sec. 2.  (a) No person or firm shall be admitted to or continued in membership in the Corporation having a name that is identical to the name of another member appearing on the membership roll of the Corporation or a name so similar to any such name as to tend to confuse or mislead.
          (b) No member may change its name without prior approval of the Corporation.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Executive Representative

          Sec. 3.  Each member shall appoint and certify to the Secretary of the Corporation one "executive representative" who shall represent, vote, and act for the member in all the affairs of the Corporation, except that other executives of a member may also hold office in the Corporation, serve on the Board or committees appointed under Article IX, Section 1 or otherwise take part in the affairs of the Corporation. A member may change its executive representative upon giving notice thereof via electronic process or such other process as the Corporation may prescribe to the Secretary, or may, when necessary, appoint, by notice via electronic process to the Secretary, a substitute for its executive representative. An executive representative of a member or a substitute shall be a member of senior management and registered principal of the member. Not later than January 1, 1999, each executive representative shall maintain an Internet electronic mail account for communication with the Corporation and shall update firm contact information via the NASD Regulation Web Site or such other means as prescribed by the Corporation.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-92 eff. May 5, 1998.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-21 eff. July 15, 1996.
          Amended eff. Dec. 23, 1991.

          Selected Notice: 92-10.

        • Membership Roll

          Sec. 4.  The Secretary of the Corporation shall keep a currently accurate and complete membership roll, containing the name and address of each member, and the name and address of the executive representative of each member. In any case where a membership has been terminated, such fact shall be recorded together with the date on which the membership ceased. The membership roll of the Corporation shall at all times be available to all members of the Corporation, to all governmental authorities, and to the general public.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Resignation of Members

          Sec. 5.  Membership in the Corporation may be voluntarily terminated only by formal resignation. Resignations of members must be filed via electronic process or such other process as the Corporation may prescribe and addressed to the Corporation. Any member may resign from the Corporation at any time. Such resignation shall not take effect until 30 days after receipt thereof by the Corporation and until all indebtedness due the Corporation 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 of the Corporation. The Corporation, however, may in its discretion declare a resignation effective at any time.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-21 eff. July 15, 1996.
          Amended by SR-NASD-96-20 eff. July 11, 1996.

        • Retention of Jurisdiction

          Sec. 6.  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 of the Corporation based upon conduct which commenced prior to the effective date of the member's resignation from the Corporation 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.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended eff. Apr. 15, 1992.

          Selected Notice: 92-19.

        • Transfer and Termination of Membership

          Sec. 7.  (a) Except as provided hereinafter, no member of the Corporation may transfer its membership or any right arising therefrom and the membership of a corporation, partnership, or any other business organization which is a member of the Corporation shall terminate upon its liquidation, dissolution, or winding up, and the membership of a sole proprietor which is a member shall terminate at death, provided that all obligations of membership under the By-Laws and the Rules of the Corporation have been fulfilled.
          (b) 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 member or surviving organization, 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 investment banking and securities business, and shall possess the qualifications for membership in the Corporation. 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 continue in the investment banking and securities business and shall possess the qualifications for membership in the Corporation. If the business of any predecessor member is to be carried on by an organization deemed to be a successor organization by the Corporation, the membership of such predecessor member shall be extended to the successor organization subject to the notice and application requirements of the Rules of the Corporation and the right of the Corporation to place restrictions on the successor organization pursuant to the Rules of the Corporation; otherwise, any surviving organization shall be required to satisfy all of the membership application requirements of these By-Laws and the Rules of the Corporation.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Registration of Branch Offices

          Sec. 8.  (a) Each branch office of a member of the Corporation shall be registered with and listed upon the membership roll of the Corporation, and shall pay such dues, assessments, and other charges as shall be fixed from time to time by the Board pursuant to Article VI.
          (b) Each member of the Corporation shall promptly advise the Corporation via electronic process or such other process as the Corporation may prescribe of the opening, closing, relocation, change in designated supervisor, or change in designated activities of any branch office of such member not later than 30 days after the effective date of such change.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-21 eff. July 15, 1996.
          Amended by SR-NASD-94-64 eff. Feb. 9, 1995.
          Amended eff. Apr. 15, 1992.

      • ARTICLE V REGISTERED REPRESENTATIVES AND ASSOCIATED PERSONS

        • Qualification Requirements

          Sec. 1.  No member shall permit any person associated with the member to engage in the investment banking or securities business unless the member determines that such person satisfies the qualification requirements established under Article III, Section 2 and is not subject to a disqualification under Article III, Section 4.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Application for Registration

          Sec. 2.  (a) Application by any person for registration with the Corporation, properly signed by the applicant, shall be made to the Corporation via electronic process or such other process as the Corporation may prescribe, on the form to be prescribed by the Corporation and shall contain:
          (1) an agreement to comply with the federal securities laws, the rules and regulations thereunder, the rules of the Municipal Securities Rulemaking Board and the Treasury Department, the By-Laws of the Corporation, NASD Regulation, and NASD Dispute Resolution, the Rules of the Corporation, and all rulings, orders, directions, and decisions issued and sanctions imposed under the Rules of the Corporation; and
          (2) such other reasonable information with respect to the applicant as the Corporation may require.
          (b) The Corporation shall not approve an application for registration of any person who is not eligible to be an associated person of a member under the provisions of Article III, Section 3.
          (c) Every application for registration filed with the Corporation shall be kept current at all times by supplementary amendments via electronic process or such other process as the Corporation may prescribe to the original application. Such amendment to the application shall be filed with the Corporation not later than 30 days after learning of the facts or circumstances giving rise to the amendment. If such amendment involves a statutory disqualification as defined in Section 3(a)(39) and Section 15(b)(4) of the Act, such amendment shall be filed not later than ten days after such disqualification occurs.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
          Amended by SR-NASD-2006-135 eff. Dec. 20, 2006.
          Amended by SR-NASD-2001-06 eff. May. 8, 2001.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-21 eff. July 15, 1996.

        • Notification by Member to the Corporation and Associated Person of Termination; Amendments to Notification

          Sec. 3.  (a) Following the termination of the association with a member of a person who is registered with it, such member shall, not later than 30 days after such termination, give notice of the termination of such association to the Corporation via electronic process or such other process as the Corporation may prescribe on a form designated by the Corporation, and concurrently shall provide to the person whose association has been terminated a copy of said notice as filed with the Corporation. A member that does not submit such notification and provide a copy to the person whose association has been terminated, within the time period prescribed, shall be assessed a late filing fee as specified by the Corporation. Termination of registration of such person associated with a member shall not take effect so long as any complaint or action under the Rules of the Corporation is pending against a member and to which complaint or action such person associated with a member is also a respondent, or so long as any complaint or action is pending against such person individually under the Rules of the Corporation. The Corporation, however, may in its discretion declare the termination effective at any time.
          (b) The member shall notify the Corporation via electronic process or such other process as the Corporation may prescribe by means of an amendment to the notice filed pursuant to subsection (a) in the event that the member learns of facts or circumstances causing any information set forth in said notice to become inaccurate or incomplete. Such amendment shall be filed with the Corporation via electronic process or such other process as the Corporation may prescribe and a copy provided to the person whose association with the member has been terminated not later than 30 days after the member learns of the facts or circumstances giving rise to the amendment.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-21 eff. July 15, 1996.
          Amended eff. June 12, 1989 and Apr. 15, 1992.

        • Retention of Jurisdiction

          Sec. 4.  (a) A person whose association with a member has been terminated and is no longer associated with any member of Corporation or a person whose registration has been revoked or canceled shall continue to be subject to the filing of a complaint under the Corporation Rules based upon conduct that commenced prior to the termination, revocation, or cancellation or upon such person's failure, while subject to the Corporation's jurisdiction as provided herein, to provide information requested by Corporation pursuant to the Corporation's Rules, but any such complaint shall be filed within:
          (i) two years after the effective date of termination of registration pursuant to Section 3, provided, however that any amendment to a notice of termination filed pursuant to Section 3(b) that is filed within two years of the original notice that discloses that such person may have engaged in conduct actionable under any applicable statute, rule, or regulation shall operate to recommence the running of the two-year period under this subsection;
          (ii) two years after the effective date of revocation or cancellation of registration pursuant to the Corporation's Rules ; or
          (iii) in the case of an unregistered person, two years after the date upon which such person ceased to be associated with the member.
          (b) A person whose association with a member has been terminated and is no longer associated with any member of Corporation shall continue to be subject to a proceeding to suspend, consistent with Article VI, Section 3 of the By-Laws, his or her ability to associate with a member based on such person's failure to comply with an arbitration award or a written and executed settlement agreement obtained in connection with an arbitration or mediation submitted for disposition pursuant to the Corporation's Rules, provided that such proceeding is instituted within two years after the date of entry of such award or settlement.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2003-069 eff. Sept. 9, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-94-64 eff. Feb. 9, 1995.
          Amended eff. Apr. 15, 1992.

          Selected Notices: 87-16, 88-67, 88-68, 89-57, 90-61, 91-60, 91-61, 94-52, 04-57.

      • ARTICLE VI DUES, ASSESSMENTS, AND OTHER CHARGES

        • Power of the Corporation to Fix and Levy Assessments

          Sec. 1.  The Corporation shall prepare an estimate of the funds necessary to defray reasonable expenses of administration in carrying on the work of the Corporation each fiscal year, and on the basis of such estimate, shall fix and levy the amount of admission fees, dues, assessments, and other charges to be paid by the members and issuers and any other persons using any facility or system which the Corporation, NASD Regulation, or NASD Dispute Resolution operates or controls. Fees, dues, assessments, and other charges shall be called and payable as determined by the Corporation from time to time; provided, however, that such admission fees, dues, assessments, and other charges shall be equitably allocated among members and issuers and any other persons using any facility or system which the Corporation operates or controls. The Corporation may from time to time make such changes or adjustments in such fees, dues, assessments, and other charges as it deems necessary or appropriate to assure equitable allocation of dues among members. In the event of termination of membership or the extension of any membership to a successor organization during any fiscal year for which an assessment has been levied and become payable, the Corporation may make such adjustment in the fees, dues, assessments, or other charges payable by any such member or successor organization or organizations during such fiscal years as it deems fair and appropriate in the circumstances.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
          Amended by SR-NASD-2006-135 eff. Dec. 20, 2006.
          Amended by SR-NASD-2001-06 eff. May. 8, 2001.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Reports of Members

          Sec. 2.  Each member, issuer, or other person shall promptly furnish all information or reports requested by the Corporation in connection with the determination of the amount of admission fees, dues, assessments, or other charges.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Suspension or Cancellation

          Sec. 3.  (a) The Corporation after 15 days notice in writing, may suspend or cancel the membership of any member or the registration of any person in arrears in the payment of any fees, dues, assessments, or other charges or for failure to furnish any information or reports requested pursuant to Section 2 .
          (b) The Corporation after 15 days notice in writing, may suspend or cancel the membership of any member or suspend from association with any member any person, for failure to comply with an award of arbitrators properly rendered pursuant to the Corporation's Rules, where a timely motion to vacate or modify such award has not been made pursuant to applicable law or where such a motion has been denied, or for failure to comply with a written and executed settlement agreement obtained in connection with an arbitration or mediation submitted for disposition pursuant to the Corporation's Rules.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2003-069 eff. Sept. 9, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-95-20 eff. Oct. 2, 1995.
          Amended eff. Aug. 29, 1991 and Jan. 26, 1993.

          Selected Notices: 91-24, 04-57.

        • Reinstatement of Membership or Registration

          Sec. 4.  Any membership or registration suspended or canceled under this Article may be reinstated by the Corporation upon such terms and conditions as it shall deem just; provided, however, that any applicant for reinstatement of membership or registration shall possess the qualifications required for membership or registration in the Corporation.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff. July 11, 1996.
          Amended eff. Aug. 29, 1991.

          Selected Notices: 91-24, 93-16, 95-33.

        • Delegation

          Sec. 5.  The Corporation may delegate its authority under this Article in a manner not inconsistent with the Delegation Plan.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE VII BOARD OF GOVERNORS

        • Powers and Authority of Board

          Sec. 1.  (a) The Board shall be the governing body of the Corporation and, except as otherwise provided by applicable law, the Restated Certificate of Incorporation, or these By-Laws, shall be vested with all powers necessary for the management and administration of the affairs of the Corporation and the promotion of the Corporation's welfare, objects, and purposes. In the exercise of such powers, the Board shall have the authority to:
          (i) adopt for submission to the membership, as hereinafter provided, such By-Laws and changes or additions thereto as it deems necessary or appropriate;
          (ii) adopt such other Rules of the Corporation and changes or additions thereto as it deems necessary or appropriate, provided, however, that the Board may at its option submit to the membership any such adoption, change, or addition to such Rules;
          (iii) make such regulations, issue such orders, resolutions, exemptions, interpretations, including interpretations of these By-Laws and the Rules of the Corporation, and directions, and make such decisions as it deems necessary or appropriate;
          (iv) prescribe rules for the required or voluntary arbitration of controversies between members and between members and customers or others as it shall deem necessary or appropriate;
          (v) establish rules and procedures to be followed by members in connection with the distribution of securities issued by members and affiliates thereof;
          (vi) require all over-the-counter transactions in securities between members, other than transactions in exempted securities as defined in Section 3(a)(12) of the Act, to be cleared and settled through the facilities of a clearing agency registered with the Commission pursuant to the Act, which clears and settles such over-the-counter transactions in securities;
          (vii) organize and operate automated systems to provide qualified subscribers with securities information and automated services. The systems may be organized and operated by a division or subsidiary company of the Corporation or by one or more independent firms under contract with the Corporation as the Board may deem necessary or appropriate. The Board may adopt rules for such automated systems, establish reasonable qualifications and classifications for members and other subscribers, provide qualification standards for securities included in such systems, require members to report promptly information in connection with securities included in such systems, and establish charges to be collected from subscribers and others;
          (viii) require the prompt reporting by members of such original and supplementary trade data as the Board deems appropriate. Such reporting requirements may be administered by the Corporation, a division or subsidiary thereof, or a clearing agency registered under the Act; and
          (ix) engage in any activities or conduct necessary or appropriate to carry out the Corporation's purposes under its Restated Certificate of Incorporation and the federal securities laws.
          (b) In the event of the refusal, failure, neglect, or inability of any Governor to discharge such Governor's duties, or for any cause affecting the best interests of the Corporation the sufficiency of which the Board shall be the sole judge, the Board shall have the power, by the affirmative vote of two-thirds of the Governors then in office, to remove such Governor and declare such Governor's position vacant and that, subject to the Restated Certificate of Incorporation, such position shall be filled in accordance with these By-Laws; provided, that during the Transitional Period, (i) a Governor that is a member of the NYSE Group Committee may only be removed by the affirmative vote of a majority of the Governors who are members of the NYSE Group Committee and (ii) a Governor that is a member of the NASD Group Committee may only be removed by the affirmative vote of a majority of the Governors who are members of the NASD Group Committee.
          (c) To the fullest extent permitted by applicable law, the Restated Certificate of Incorporation, and these By-Laws, the Corporation may delegate any power of the Corporation or the Board to a committee appointed pursuant to Article IX, Section 1, the NASD Regulation Board, the NASD Dispute Resolution Board, or the Corporation's staff in a manner not inconsistent with the Delegation Plan; provided, that during the Transitional Period, no such delegation shall occur without the prior affirmative vote of two-thirds of the Governors then in office.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
          Amended by SR-NASD-2001-06 eff. May. 8, 2001.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff. July 11, 1996.
          Amended by SR-NASD-93-48 eff. Mar. 8, 1994.
          Amended eff. Oct. 25, 1988.

          Selected Notice: 93-15.

        • Authority to Cancel or Suspend for Failure to Submit Required Information

          Sec. 2.  (a) The Board shall have authority, upon notice and opportunity for a hearing, to cancel or suspend the membership of any member or suspend the association of any person associated with a member for failure to file, or to submit on request, any report, document, or other information required to be filed with or requested by the Corporation pursuant to these By-Laws or the Rules of the Corporation.
          (b) Any membership or association suspended or canceled pursuant to this Section may be reinstated by the Corporation pursuant to the Rules of the Corporation.
          (c) The Board is authorized to delegate its authority under this Section in a manner not inconsistent with the Delegation Plan and otherwise in accordance with the Rules of the Corporation.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Authority to Take Action Under Emergency or Extraordinary Market Conditions

          Sec. 3.  The Board, or such person or persons as may be designated by the Board, in the event of an emergency or extraordinary market conditions, shall have the authority to take any action regarding:
          (a) the trading in or operation of the over-the-counter securities market, the operation of any automated system owned or operated by the Corporation or NASD Regulation, and the participation in any such system of any or all persons or the trading therein of any or all securities; and
          (b) the operation of any or all member firms' offices or systems, if, in the opinion of the Board or the person or persons hereby designated, such action is necessary or appropriate for the protection of investors or the public interest or for the orderly operation of the marketplace or the system.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
          Amended by SR-NASD-2006-135 eff. Dec. 20, 2006.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff,. July 11, 1996.
          Amended by SR-NASD-94-64 eff. Feb. 9, 1995.
          Adopted Sept. 12, 1988.

        • Composition and Qualifications of the Board

          Sec. 4.  (a) The Board shall consist of no fewer than 16 nor more than 25 Governors. The number of Public Governors shall exceed the number of Industry Governors.

          From and after the Transitional Period, the Board of Governors shall consist of (i) the Chief Executive Officer of the Corporation, (ii) a number of Public Governors determined by the Board, (iii) a Floor Member Governor, an Independent Dealer/Insurance Affiliate Governor and an Investment Company Affiliate Governor and (iv) three Small Firm Governors, one Mid-Size Firm Governor and three Large Firm Governors.
          (b) As soon as practicable following the annual election of Governors, the Board shall elect from among its members a Chair and such other persons having such titles as it shall deem necessary or advisable, to serve until the next annual election or until their successors are chosen and qualify. The Chair of the Board shall preside over all meetings of the Board, and shall not have any other power or authority except as otherwise expressly provided for herein. The Lead Governor shall preside at all meetings of the Board at which the Chair is not present, and shall have the authority to call, and will lead if the Chair of the Board is recused, executive sessions of the Board. Any other persons elected under this subsection shall have such powers and duties as may be determined from time to time by the Board. Except as otherwise provided herein, the Board, by resolution adopted by a majority of the Governors then in office, (i) after the completion of the Transitional Period, may remove the Chair and any person elected under this subsection from such position at any time and (ii) during the Transitional Period, may remove any person, other than the Chair, elected under this subsection from such position at any time.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2004-110 eff. Dec. 31, 2004.
          Amended by SR-NASD-2001-06 eff. May. 8, 2001.
          Amended by SR-NASD-98-56 eff. Oct. 30, 1998.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff. July 11, 1996.
          Amended by SR-NASD-96-02 eff. Apr. 11, 1996.
          Amended by SR-NASD-94-64 eff. Feb. 9, 1995.
          Amended eff. Sept. 4, 1990.

          Selected Notices: 88-8, 88-29.

        • Term of Office of Governors

          Sec. 5.  From and after the Transitional Period:

          The Chief Executive Officer shall serve as a Governor until a successor is elected, or until death, resignation, or removal.
          Public Governors and the Floor Member Governor, the Independent Dealer/Insurance Affiliate Governor and the Investment Company Affiliate Governor (the "Appointed Governors") shall be appointed by the Board from candidates recommended to the Board by the Nominating Committee.
          As of the first annual meeting of members following the Transitional Period, the Appointed Governors shall be divided by the Board into three classes, as equal in number as possible, with the first class holding office until the first succeeding annual meeting of members, the second class holding office until the second succeeding annual meeting of members and the third class holding office until the third succeeding annual meeting of members, or until a successor is duly appointed and qualified, or until death, resignation, disqualification, or removal. Each class shall initially contain as equivalent a number as possible of Appointed Governors who were members of the NYSE Group Committee during the Transitional Period or are successors to such Governor positions, on the one hand, and Appointed Governors who were members of the NASD Group Committee during the Transitional Period or are successors to such Governor positions, on the other hand, to the extent the Board determines such persons are to remain Governors after the Transitional Period. No Appointed Governor may serve more than two consecutive terms. If a Governor is appointed to fill a vacancy of such a Governor position for a term of less than one year, the Governor may serve up to two consecutive terms following the expiration of the Governor's initial term. At each annual election following the first annual meeting of members following the Transitional Period, Appointed Governors shall be appointed by the Board for a term of three years to replace those whose terms expire.
          As of the first annual meeting of members following the Transitional Period, the Large Firm Governors, the Mid-Size Firm Governor and the Small Firm Governors shall be divided into three classes, as equal in number as possible, with the first class, being comprised of one Large Firm Governor and one Small Firm Governor, holding office until the first succeeding annual meeting of members, the second class, being comprised of one Large Firm Governor, one Mid-Size Firm Governor and one Small Firm Governor, holding office until the second succeeding annual meeting of members and the third class, being comprised of one Large Firm Governor and one Small Firm Governor, holding office until the third succeeding annual meeting of members, or until a successor is duly elected and qualified, or until death, resignation, disqualification, or removal. A Governor elected by the members may not serve more than two consecutive terms. If a Governor is elected to fill a vacancy of such a Governor position for a term of less than one year, the Governor may serve up to two consecutive terms following the expiration of the Governor's initial term. At each annual election following the first annual meeting of members following the Transitional Period, Large Firm Governors, Small Firm Governors and the Mid-Size Firm Governor shall be elected for a term of three years to replace those whose terms expire.
          In the event of any vacancy among the Large Firm Governors, the Mid-Size Firm Governor or the Small Firm Governors, such vacancy shall only be filled by the Large Firm Governor Committee in the case of a Large Firm Governor vacancy, the Board in the case of a Mid-Size Firm Governor vacancy or the Small Firm Governor Committee in the case of a Small Firm Governor vacancy; provided, however, that in the event the remaining term of office of any Large Firm, Mid-Size Firm or Small Firm Governor position that becomes vacant is for more than 12 months, such vacancy shall be filled by the members entitled to vote thereon at a meeting thereof convened to vote thereon.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2004-110 eff. Dec. 31, 2004.
          Amended by SR-NASD-2001-06 eff. May. 8, 2001.
          Amended by SR-NASD-98-56 eff. Oct. 30, 1998.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff. July 11, 1996.
          Amended eff. Sept. 4, 1990.

        • Disqualification

          Sec. 6.  Notwithstanding Section 5 or Article XXII, the term of office of a Governor shall terminate immediately upon a determination by the Board, by a majority vote of the remaining Governors, that: (a) the Governor no longer satisfies the classification for which the Governor was elected; and (b) the Governor's continued service as such would violate the compositional requirements of the Board set forth in Section 4 (or, in the case of the Transitional Period, Article XXII). If the term of office of a Governor terminates under this Section, and the remaining term of office of such Governor at the time of termination is not more than six months, during the period of vacancy the Board shall not be deemed to be in violation of Section 4 (or, in the case of the Transitional Period, Article XXII) by virtue of such vacancy.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-98-56 eff. Oct. 30, 1998.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Filling of Vacancies

          Intentionally Deleted
          Sec. 7. Intentionally Deleted
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2001-06 eff. May. 8, 2001.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff. July 11, 1996.
          Amended by SR-NASD-96-02 eff. Apr. 11, 1996.
          Amended eff. Sept. 4, 1990.

        • Meetings of Board; Quorum; Required Vote

          Sec. 8.  Meetings of the Board shall be held at such times and places, upon such notice, and in accordance with such procedure as the Board in its discretion may determine. Special meetings of the Board of the Corporation may be called by the Board, the Chief Executive Officer of the Corporation, the Chair or the Lead Governor. Each of the Chief Executive Officer of the Corporation and the Chair, and with respect to matters from which the Chief Executive Officer of the Corporation and the Chair recuse themselves, the Lead Governor, shall have the authority to include matters on the agenda of a meeting of the Board. At all meetings of the Board, unless otherwise set forth in these By-Laws or required by law, a quorum for the transaction of business shall consist of a majority of the Board, including not less than 50 percent of the Public Governors. Any action taken by a majority vote at any meeting at which a quorum is present, except as otherwise provided in the Restated Certificate of Incorporation or these By-Laws, shall constitute the action of the Board. Governors or members of any committee appointed by the Board under Article IX, Section 1 may participate in a meeting of the Board or a committee by means of communications facilities that ensure all persons participating in the meeting can hear and speak to one another, and participation in a meeting pursuant to this By-Law shall constitute presence in person at such meeting. No Governor shall vote by proxy at any meeting of the Board.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff. July 11, 1996.
          Amended eff. Dec. 15, 1986.

          Selected Notices: 88-96, 93-15, 94-24, 94-52.

        • The Nominating Committee

          Sec. 9.  (a) Except as otherwise provided in these By-Laws, the Nominating Committee shall nominate and, in the event of a contested election, may, as described in Section 11(b), support: Large Firm, Mid-Size Firm, Small Firm, Public, Floor Member, Independent Dealer/Insurance Affiliate and Investment Company Affiliate Governors for each such vacant or new Governor position on the Board; Industry and Public Directors for each vacant or new position on the NASD Regulation Board and the NASD Dispute Resolution Board for election by the stockholder; and Industry and Public members for each vacant or new position on the National Adjudicatory Council for appointment by the NASD Regulation Board.
          (b) Except as otherwise provided in these By-laws, after the completion of the Transitional Period the Nominating Committee shall consist of such number of members of the Board as the Board shall determine from time to time; provided, however, that the Nominating Committee shall at all times be comprised of a number of members which is a minority of the entire Board and the Chief Executive Officer shall not be a member of the Nominating Committee. The number of Public Governors on the Nominating Committee shall equal or exceed the number of Industry Governors on the Nominating Committee.
          (c) After the completion of the Transitional Period, and except as otherwise provided in these By-Laws, members of the Nominating Committee shall be appointed annually by the Board and may be removed only by majority vote of the whole Board, after appropriate notice, for refusal, failure, neglect, or inability to discharge such member's duties.
          (d) The Secretary of the Corporation shall collect from each nominee for Governor such information as is reasonably necessary to serve as the basis for a determination of the nominee's classification a Large Firm, Mid-Size Firm, Small Firm, Public, Floor Member, Independent Dealer/Insurance Affiliate and/or Investment Company Affiliate Governor, and the Secretary shall certify to the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein) each nominee's classification.
          (e) At all meetings of the Nominating Committee, a quorum for the transaction of business shall consist of a majority of the Nominating Committee. In the absence of a quorum, a majority of the committee members present may adjourn the meeting until a quorum is present.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2001-06 eff. May 8, 2001.
          Amended by SR-NASD-97-92 eff. May 5, 1998.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998 (Sec. 9(a), 9(e) eff. Nov. 14, 1997).
          Amended by SR-NASD-96-20 eff. July 11, 1996.
          Amended by SR-NASD-94-64 eff. Feb. 9, 1995.
          Amended eff. July 19, 1990 and Sept. 4, 1990.

        • Procedure for Nomination of Governors

          Sec. 10.  Prior to a meeting of members pursuant to Article XXI for the election of Governors, the Corporation shall notify the members of the names of each nominee selected by the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein) for each governorship up for election by the members, the classification of governorship (Large Firm, Mid-Size Firm or Small Firm) for which the nominee is nominated, the qualifications of each nominee, and such other information regarding each nominee as the Board or the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein) deems pertinent. A person who has not been so nominated may be included on the ballot for the election of Governors if: (a) within 45 days after the date of such notice, such person presents to the Secretary of the Corporation (i) in the case of petitions solely in support of such person, petitions in support of his or her nomination duly executed by three percent of the members entitled to vote for such nominees' election, and no such member shall endorse more than one such nominee, or (ii) in the case of petitions in support of more than one person, petitions in support of the nominations of such persons duly executed by ten percent of the members entitled to vote for such nominees' election; and (b) the Secretary certifies that (i) the petitions are duly executed by the Executive Representatives of the requisite number of members entitled to vote for such nominee's/nominees' election, and (ii) the person(s) satisfies/satisfy the classification (Large Firm, Mid-Size Firm or Small Firm) of the governorship(s) to be filled, based on such information provided by the person(s) as is reasonably necessary to make the certification. The Secretary shall not unreasonably withhold or delay the certification. Upon certification, the election shall be deemed a contested election with respect to the category of Governor to which the nomination relates. After the certification of a contested election or the expiration of time for contesting an election under this Section, the Secretary shall deliver notice of a meeting of members pursuant to Article XXI, Section 3(a).
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2001-06 eff. May. 8, 2001.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff. July 11, 1996.
          Amended by SR-NASD-94-64 eff. Feb. 9, 1995.
          Amended eff. July 19, 1990 and Sept. 4, 1990.

        • Communication of Views

          Sec. 11.  (a) The Corporation, the Board, a committee appointed pursuant to Article IX, Section 1, and the Corporation's staff shall not take any position publicly or with a member or person associated with or employed by a member with respect to any candidate in a contested election or nomination held pursuant to these By-Laws or the NASD Regulation By-Laws. A Governor or a member of any committee (other than the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein)) may communicate his or her views with respect to any candidate if such Governor or committee member acts solely in his or her individual capacity and disclaims any intention to communicate in any official capacity on behalf of the Corporation, the Board, or any committee (other than the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein)). Except as provided herein, any candidate and his or her representatives may communicate support for the candidate to a member or person associated with or employed by a member.
          (b) In a contested election, the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein) may support its nominees under this Article by sending to members eligible to vote up to two mailings of materials in support of its nominees in lieu of mailings sent by its candidates under Article VII, Section 12. In addition to such mailings, in the event of mailings and or other communications to members by or on behalf of a candidate by petition in a contested election, the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein) may respond in-kind, but shall not take a position unresponsive, to the contesting candidate's communications.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2001-06 eff. May. 8, 2001.
          Adopted by SR-NASD-97-71 eff. Nov. 14, 1997.

        • Administrative Support

          Sec. 12.  The Secretary of the Corporation shall provide administrative support to the candidates in a contested election under this Article by sending to members eligible to vote for such category of Governors up to two mailings of materials prepared by the candidates. The Corporation shall pay the postage for the mailings. If a candidate wants such mailings sent, the candidate shall prepare such material on the candidate's personal stationery. The material shall state that it represents the opinions of the candidate. The candidate shall provide a copy of such material for each member eligible to vote for such category of Governors. A candidate nominated by the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein) may identify himself or herself as such in his or her materials. Any candidate may send additional materials to members at the candidate's own expense. Except as provided in this Article, the Corporation, the Board, any committee, and the Corporation's staff shall not provide any other administrative support to a candidate in a contested election conducted under this Article or a contested election or nomination conducted under the NASD Regulation By-Laws.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Election of Governors

          Sec. 13.  Governors that are to be elected by the members shall be elected by a plurality of the votes of the members of the Corporation present in person or represented by proxy at the annual meeting of the Corporation and entitled to vote for such category of Governors. The annual meeting of the Corporation shall be on such date and at such place as the Board shall designate pursuant to Article XXI. Except as otherwise provided in these By-Laws or the Restated Certificate of Incorporation, any Governor so elected must be nominated by the Nominating Committee or certified by the Secretary pursuant to Section 10.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2001-06 eff. May 8, 2001.
          Amended by SR-NASD-97-71 eff. Nov. 14, 1997.
          Amended by SR-NASD-96-20 eff. July 11, 1996.
          Amended by SR-NASD-94-64 eff. Feb. 9, 1995.
          Amended eff. July 19, 1990 and Sept. 4, 1990.

        • Maintenance of Compositional Requirements of the Board

          Sec. 14.  Each elected or appointed Governor shall update the information submitted under Section 9(d) regarding his or her classification as a Large Firm, Mid-Size Firm, Small Firm, Public, Floor Member, Independent Dealer/Insurance Affiliate and/or Investment Company Affiliate Governor at least annually and upon request of the Secretary of the Corporation, and shall report immediately to the Secretary any change in such classification.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2001-06 eff. May 8, 2001.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Resignation

          Sec. 15.  Any Governor may resign at any time either upon written notice of resignation to the Chief Executive Officer or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt thereof, and the acceptance of such resignation, unless required by the terms thereof, shall not be necessary to make such resignation effective.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE VIII OFFICERS, AGENTS, AND EMPLOYEES

        • Officers

          Sec. 1.  The Board shall elect a Chief Executive Officer, who shall be responsible for the management and administration of its affairs and shall be the official representative of the Corporation in all public matters and who shall have such powers and duties in the management of the Corporation as may be prescribed in a resolution by the Board, and which powers and duties shall not be inconsistent with the Delegation Plan. The Board shall elect a Secretary, who shall have such powers and duties conferred by these By-Laws and such other powers and duties as may be prescribed in a resolution by the Board. The Board may provide for such other executive or administrative officers as it shall deem necessary or advisable. All such officers shall have such titles, powers, and duties, and shall be entitled to such compensation, as shall be determined from time to time by the Board. Each such officer shall hold office until a successor is elected and qualified or until such officer's earlier resignation or removal. Any officer may resign at any time upon written notice to the Corporation.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Nov. 17, 1997.
          Amended by SR-NASD-96-20 eff. July 11, 1996.

        • Absence of Chief Executive Officer

          Sec. 2.  In the case of the absence or inability to act of the Chief Executive Officer of the Corporation, or in the case of a vacancy in such office, the Board may appoint its Chair or such other person as it may designate to act as such officer pro tem, who shall assume all the functions and discharge all the duties of the Chief Executive Officer.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Nov. 17, 1997.
          Amended by SR-NASD-96-20 July 11, 1996.

        • Agents and Employees

          Sec. 3.  The Board may employ or authorize the employment and prescribe the powers and duties of such agents and employees as it deems necessary or advisable. The employment and compensation of such agents and employees shall be at the pleasure of the Board, provided that such determinations are not inconsistent with the requirements of the Delegation Plan. Except as provided in Article IX, Section 5(d), agents and employees of the Corporation shall be under the supervision and control of the officers of the Corporation, unless the Board provides by resolution that an agent or employee shall be under the supervision and control of the Board.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Nov. 17, 1997.
          Amended by SR-NASD-96-20 July 11, 1996.

        • Employment of Counsel

          Sec. 4.  The Board may retain or authorize the employment of counsel, with such powers, titles, duties, and authority as it shall deem necessary or advisable.
          Amended by SR-NASD-97-71 eff. Nov. 17, 1997.
          Amended by SR-NASD-96-20 eff. July 11, 1996.

        • Delegation of Duties of Officers

          Sec. 5.  The Board may delegate the duties and powers of any officer of the Corporation to any other officer or to any Governor for a specified period of time and for any reason that the Board may deem sufficient.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Resignation and Removal of Officers

          Sec. 6.  (a) Any officer may resign at any time upon written notice of resignation to the Board, the Chief Executive Officer, or the Secretary. Any such resignation shall take effect upon receipt of such notice or at any later time specified therein. The acceptance of a resignation shall not be necessary to make the resignation effective.
          (b) Any officer of the Corporation may be removed, with or without cause, by resolution adopted by a majority of the Governors then in office at any regular or special meeting of the Board or by a consent adopted by all of the Governors then in office in accordance with applicable law. Such removal shall be without prejudice to the contractual rights of the affected officer, if any, with the Corporation.

          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2001-06 eff. May 8, 2001.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Bond

          Sec. 7.  The Corporation may secure the fidelity of any or all of its officers, agents, or employees by bond or otherwise.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE IX COMMITTEES

        • Appointment

          Sec. 1.  (a) The Corporation shall have the following committees of the Board: the NASD Group Committee (during the Transitional Period); the NYSE Group Committee (during the Transitional Period); the Small Firm Governor Committee; and the Large Firm Governor Committee, which in each case shall be comprised of the Governors specified herein and in the Restated Certificate of Incorporation to be the members thereof and shall have the authority provided for herein and in the Restated Certificate of Incorporation. The Corporation shall also have the following committees: the Audit Committee, the Finance Committee and, during the first year of the Transitional Period or as extended thereafter by resolution of the Board, the Integration Committee, which in each case shall have the authority provided for herein.
          (b) Subject to Article VII, Section 1(c), the Board may appoint such other committees or subcommittees as it deems necessary or desirable, and it shall fix their powers, duties, and terms of office in a manner not inconsistent with these By-Laws or the Restated Certificate of Incorporation. Any such other committee or subcommittee consisting solely of one or more Governors, to the extent provided by these By-Laws or by resolution of the Board and to the extent not inconsistent with these By-Laws or the Restated Certificate of Incorporation, shall have and may exercise all powers and authority of the Board in the management of the business and affairs of the Corporation. Any such other committee having the authority to exercise the powers and authority of the Board shall have a number of Public Governors as members thereof in excess of the number of Industry Governors which are members thereof. During the Transitional Period, all committees of the Board having the authority to exercise the powers and authority of the Board (with the exception of the Large Firm Governor Committee, the Small Firm Governor Committee, the NASD Group Committee and the NYSE Group Committee), shall also have (i) a percentage of members (to the nearest whole number of committee members) that are members of the NASD Group Committee at least as great as the percentage of Governors on the Board that are members of the NASD Group Committee; and (ii) a percentage of members (to the nearest whole number of committee members) that are members of the NYSE Group Committee at least as great as the percentage of Governors on the Board that are members of the NYSE Group Committee.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2001-06 eff. May 8, 2001.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff. July 11, 1996
          Amended eff. Sept. 4, 1990;

        • Maintenance of Compositional Requirements of Committees

          Sec. 2.  Upon request of the Secretary of the Corporation, each prospective committee member who is not a Governor shall provide to the Secretary such information as is reasonably necessary to serve as the basis for a determination of the prospective committee member's classification as an Industry or Public committee member. The Secretary shall certify to the Board each prospective committee member's classification. Each committee member shall update the information submitted under this Section at least annually and upon request of the Secretary of the Corporation, and shall report immediately to the Secretary any change in such classification.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Removal of Committee Member

          Sec. 3.  A member of the Audit Committee, the Finance Committee (other than the Chair thereof) or a committee or subcommittee appointed pursuant to Section 1(b) of this Article may be removed from such committee or subcommittee only by a majority vote of the whole Board, after appropriate notice, for refusal, failure, neglect, or inability to discharge such member's duties.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff. July 11, 1996.
          Amended eff. Sept. 4, 1990.

        • Executive Committee

          Sec. 4.  (a) The Board may appoint an Executive Committee, which shall, to the fullest extent permitted by the General Corporation Law of the State of Delaware and other applicable law, and subject to the Restated Certificate of Incorporation and these By-Laws, have and be permitted to exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation between meetings of the Board, and which may authorize the seal of the Corporation to be affixed to all papers that may require it.
          (b) The Executive Committee shall consist of no fewer than five and no more than eight Governors. The Executive Committee shall include the Chief Executive Officer of the Corporation and the Chair of the Board.
          (c) An Executive Committee member shall hold office for a term of one year.
          (d) At all meetings of the Executive Committee, a quorum for the transaction of business shall consist of a majority of the Executive Committee, including not less than 50 percent of the Public committee members. In the absence of a quorum, a majority of the committee members present may adjourn the meeting until a quorum is present.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2004-110 eff. Dec. 31, 2004.
          Amended by SR-NASD-2001-06 eff. May 8, 2001.
          Amended by SR-NASD-98-56 eff. Oct. 30, 1998.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Audit Committee

          Sec. 5.  (a) The Board shall appoint an Audit Committee. The Audit Committee shall consist of four or five Governors, none of whom shall be officers or employees of the Corporation. The Audit Committee shall include at least two Public Governors. A Public Governor shall serve as Chair of the Committee. An Audit Committee member shall hold office for a term of one year.
          (b) The Audit Committee shall perform the following functions: (i) ensure the existence of adequate controls and the integrity of the financial reporting process of the Corporation; (ii) recommend to the Board, and monitor the independence and performance of, the certified public accountants retained as outside auditors by the Corporation; and (iii) direct and oversee all the activities of the Corporation's internal review function, including but not limited to management's responses to the internal review function.
          (c) No member of the Audit Committee shall participate in the consideration or decision of any matter relating to a particular member, company, or individual if such Audit Committee member has a material interest in, or a professional, business, or personal relationship with, that member, company, or individual, or if such participation shall create an appearance of impropriety. An Audit Committee member shall consult with the General Counsel of the Corporation to determine if recusal is necessary. If a member of the Audit Committee is recused from consideration of a matter, any decision on the matter shall be by a vote of a majority of the remaining members of the Audit Committee.
          (d) The Audit Committee shall have exclusive authority to: (i) hire or terminate the Director of Internal Review; (ii) determine the compensation of the Director of Internal Review; and (iii) determine the budget for the Office of Internal Review. The Office of Internal Review and the Director of Internal Review shall report directly to the Audit Committee. The Audit Committee may, in its discretion, direct that the Office of Internal Review also report to senior management of the Corporation on matters the Audit Committee deems appropriate and may request that senior management perform such operational oversight as necessary and proper, consistent with preservation of the independence of the internal review function.
          (e) At all meetings of the Audit Committee, a quorum for the transaction of business shall consist of a majority of the Audit Committee, including not less than 50 percent of the Public committee members. In the absence of a quorum, a majority of the committee members present may adjourn the meeting until a quorum is present.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Finance Committee

          Sec. 6.  (a) The Board shall appoint a Finance Committee. The Finance Committee shall advise the Board with respect to the oversight of the financial operations and conditions of the Corporation, including recommendations for the Corporation's annual operating and capital budgets and proposed changes to the rates and fees charged by Corporation.
          (b) The Finance Committee shall consist of four or more Governors. The Chief Executive Officer of the Corporation shall be a member of the Finance Committee. A Finance Committee member shall hold office for a term of one year.
          (c) At all meetings of the Finance Committee, a quorum for the transaction of business shall consist of a majority of the Finance Committee, including not less than 50 percent of the Public committee members. In the absence of a quorum, a majority of the committee members present may adjourn the meeting until a quorum is present.
          (d) The Corporation shall also have an Investment Committee which shall not be a committee of the Board. The majority of the Investment Committee during the Transitional Period will be comprised of members of the Investment Committee immediately prior to the Closing, unless otherwise determined by the NASD Group Committee, and a minority of the Investment Committee during the Transitional Period will be comprised of members of the NYSE Group Committee.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Integration Committee

          Sec. 7.   (a) The Board shall appoint an Integration Committee. The Integration Committee shall have a term not to exceed one year from the Closing unless continued for a longer period by resolution of the Board.
          (b) The Chair of the Board shall be the Chair of the Integration Committee unless, in the case of the Integration Committee continuing beyond one year after Closing pursuant to Section 7(a), otherwise determined by the Board.
          (c) At all meetings of the Integration Committee, a quorum for the transaction of business shall consist of a majority of the Integration Committee, including not less than 50 percent of the Public committee members. In the absence of a quorum, a majority of the committee members present may adjourn the meeting until a quorum is present.
          Adopted by SR-NASD-2007-023 eff. July 30, 2007.

      • ARTICLE X COMPENSATION OF BOARD AND COMMITTEE MEMBERS

        Sec. 1.  The Board may provide for reasonable compensation of the Chair of the Board, the Governors, and the members of any committee. The Board may also provide for reimbursement of reasonable expenses incurred by such persons in connection with the business of the Corporation, including those expenses incurred in connection with the support of a candidate or candidates by the Nominating Committee in contested elections in accordance with the By-Laws.
        Amended by SR-NASD-2007-023 eff. July 30, 2007.
        Amended by SR-NASD-2001-06 eff. May 8, 2001.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
        Amended eff. Apr. 15, 1987 and Sept. 4, 1990.

      • ARTICLE XI RULES

        Sec. 1.  To promote and enforce just and equitable principles of trade and business, to maintain high standards of commercial honor and integrity among members of the Corporation, to prevent fraudulent and manipulative acts and practices, to provide safeguards against unreasonable profits or unreasonable rates of commissions or other charges, to protect investors and the public interest, to collaborate with governmental and other agencies in the promotion of fair practices and the elimination of fraud, and in general to carry out the purposes of the Corporation and of the Act, the Board is hereby authorized to adopt such rules for the members and persons associated with members, and such amendments thereto as it may, from time to time, deem necessary or appropriate. If any such rules or amendments thereto are approved by the Commission as provided in the Act, they shall become effective Rules of the Corporation as of such date as the Board may prescribe. The Board is hereby authorized, subject to the provisions of the By-Laws and the Act, to administer, enforce, suspend, or cancel any Rules of the Corporation adopted hereunder.
        Amended by SR-NASD-2007-023 eff. July 30, 2007.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
        Amended by SR-NASD-96-20 eff. July 11, 1996.
        Amended by SR-NASD-93-48 eff. Mar. 8, 1994.

        Selected Notice: 93-15, 94-52.

      • ARTICLE XII DISCIPLINARY PROCEEDINGS

        Sec. 1.  The Board shall have authority to establish procedures relating to disciplinary proceedings involving members and their associated persons.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
        Amended by SR-NASD-96-20 eff. July 11, 1996.

        Sec. 2.  Except as otherwise permitted under these By-Laws or the Act, in any disciplinary proceeding under the Rules of the Corporation, any member or person associated with a member shall be given the opportunity to have a hearing at which such member or person associated with a member shall be entitled to be heard in person or by counsel or by a representative as provided in the Rules of the Corporation. Such persons may present any relevant material in accordance with the Rules of the Corporation. In any such proceeding against a member or against a person associated with a member to determine whether the member or the person associated with a member shall be disciplined:
        (a) specific charges shall be brought;

        (b) such member or person associated with a member shall be notified of and be given an opportunity to defend against such charges;

        (c) a record shall be kept; and

        (d) any determination shall include a statement setting forth:

        (i) any act or practice, in which such member or person associated with a member may be found to have engaged or which such member or person associated with a member may be found to have omitted;

        (ii) the rule, regulation, or statutory provision of which any such act or practice, or omission to act, is deemed to be in violation;

        (iii) the basis upon which any findings are made; and

        (iv) the sanction imposed.

        Amended by SR-NASD-2007-023 eff. July 30, 2007.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
        Amended by SR-NASD-96-20 eff. July 11, 1996.

      • ARTICLE XIII POWERS OF BOARD TO IMPOSE SANCTIONS

        Sec. 1.  The Board is hereby authorized to impose appropriate sanctions applicable to members, including censure, fine, suspension, or expulsion from membership, suspension or bar from being associated with all members, limitation of activities, functions, and operations of a member, or any other fitting sanction, and to impose appropriate sanctions applicable to persons associated with members, including censure, fine, suspension or barring a person associated with a member from being associated with all members, limitation of activities, functions, and operations of a person associated with a member, or any other fitting sanction, for:
        (a) breach by a member or a person associated with a member of any covenant with the Corporation or its members;
        (b) violation by a member or a person associated with a member of any of the terms, conditions, covenants, and provisions of the By-Laws of the Corporation, NASD Regulation, or NASD Dispute Resolution, the Rules of the Corporation, or the federal securities laws, including the rules and regulations adopted thereunder, the rules of the Municipal Securities Rulemaking Board, and the rules of the Treasury Department;
        (c) failure by a member or person associated with a member to: (i) submit a dispute for arbitration as required by the Rules of the Corporation; (ii) appear or produce any document in the member's or person's possession or control as directed pursuant to the Rules of the Corporation; (iii) comply with an award of arbitrators properly rendered pursuant to the Rules of the Corporation, where a timely motion to vacate or modify such award has not been made pursuant to applicable law or where such a motion has been denied; or (iv) comply with a written and executed settlement agreement obtained in connection with an arbitration or mediation submitted for disposition pursuant to the Rules of the Corporation;
        (d) refusal by a member or person associated with a member to abide by an official ruling of the Board or any committee exercising powers assigned by the Board with respect to any transaction which is subject to the Uniform Practice Code; or
        (e) failure by a member or person associated with a member to adhere to any ruling, order, direction, or decision of or to pay any sanction, fine, or costs imposed by the Board or any entity to which the Board has delegated its powers in accordance with the Delegation Plan.
        Amended by SR-NASD-2007-023 eff. July 30, 2007.
        Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
        Amended by SR-NASD-2006-135 eff. Dec. 20, 2006.
        Amended by SR-NASD-2001-06 eff. May 8, 2001.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
        Amended by SR-NASD-96-20 eff. July 11, 1996.
        Amended eff. Sept. 4, 1990.

        Sec. 2.  The Board may delegate its authority under this Article in accordance with the Delegation Plan.
        Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE XIV UNIFORM PRACTICE CODE

        • Authority to Adopt Code

          Sec. 1.  The Board is hereby authorized to adopt a Uniform Practice Code and amendments, interpretations and explanations thereto, designed to make uniform, where practicable, custom, practice, usage, and trading technique in the investment banking and securities business with respect to such matters as trade terms, deliveries, payments, dividends, rights, interest, reclamations, exchange of confirmations, stamp taxes, claims, assignments, powers of substitution, computation of interest and basis prices, due-bills, transfer fees, "when, as and if issued" trading, "when, as and if distributed" trading, marking to the market, and close-out procedure, all to the end that the transaction of day-to-day business by members may be simplified and facilitated, that business disputes and misunderstandings, which arise from uncertainty and lack of uniformity in such matters, may be eliminated, and that the mechanisms of a free and open market may be improved and impediments thereto removed.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff. July 11, 1996.

        • Administration of Code

          Sec. 2.  The administration of any Uniform Practice Code, or any amendment thereto, adopted by the Board pursuant to Section 1, shall be vested in the Board, and the Board is hereby granted such powers as are reasonably necessary to achieve its effective operation. In the exercise of such powers, the Board may issue explanations and interpretations and make binding rulings with respect to the applicability of the provisions of the Uniform Practice Code to situations in which there is no substantial disagreement as to the facts involved. In accordance with the Delegation Plan, the Board may delegate to the NASD Regulation Board such of the Board's powers hereunder as it deems necessary and appropriate to achieve effective administration and operation of the Uniform Practice Code.
          Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
          Amended by SR-NASD-2006-135 eff. Dec. 20, 2006.
          Amended by SR-NASD-2005-087 eff. Aug. 1, 2006
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff. July 11, 1996.

        • Transactions Subject to Code

          Sec. 3.  All over-the-counter transactions in securities by members, except transactions in securities which are exempted under Section 3(a)(12) of the Act, or are municipal securities as defined in Section 3(a)(29) of the Act, are subject to the provisions of the Uniform Practice Code and to the provisions of Section 2 unless exempted therefrom by the terms of the Uniform Practice Code.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
          Amended by SR-NASD-96-20 eff. July 11, 1996.

      • ARTICLE XV LIMITATION OF POWERS

        • Prohibitions

          Sec. 1.  Under no circumstances shall the Board or any officer, employee, or member of the Corporation have the power to:
          (a) make any donation or contribution from the funds of the Corporation or to commit the Corporation for the payment of any donations or contributions for political or charitable purposes; or
          (b) use the name or the facilities of the Corporation in aid of any political party or candidate for any public office.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
          Amended by SR-NASD-2006-135 eff. Dec. 20, 2006.
          Amended by SR-NASD-2005-087 eff. Aug. 1, 2006
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Use of Name of the Corporation by Members

          Sec. 2.  No member shall use the name of the Corporation except to the extent that may be permitted by the Rules of the Corporation.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Unauthorized Expenditures

          Sec. 3.  No officer, employee, member of the Board or of any committee shall have any power to incur or contract any liability on behalf of the Corporation not authorized by the Board. The Board may delegate to the Chief Executive Officer of the Corporation or the Chief Executive Officer's delegate such authority as it deems necessary to contract on behalf of the Corporation or to satisfy unanticipated liabilities during the period between Board meetings.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Conflicts of Interest

          Sec. 4.  (a) A Governor or a member of a committee shall not directly or indirectly participate in any adjudication of the interests of any party if such Governor or committee member has a conflict of interest or bias, or if circumstances otherwise exist where his or her fairness might reasonably be questioned. In any such case, the Governor or committee member shall recuse himself or herself or shall be disqualified in accordance with the Rules of the Corporation.
          (b) No contract or transaction between the Corporation and one or more of its Governors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its Governors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason if: (i) the material facts pertaining to such Governor's or officer's relationship or interest and the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested Governors, even though the disinterested governors be less than a quorum; or (ii) the material facts are disclosed or become known to the Board or committee after the contract or transaction is entered into, and the Board or committee in good faith ratifies the contract or transaction by the affirmative vote of a majority of the disinterested Governors even though the disinterested governors be less than a quorum. Only disinterested Governors may be counted in determining the presence of a quorum at the portion of a meeting of the Board or of a committee that authorizes the contract or transaction. This subsection shall not apply to any contract or transaction between the Corporation and NASD Regulation, or NASD Dispute Resolution.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
          Amended by SR-NASD-2006-135 eff. Dec. 20, 2006.
          Amended by SR-NASD-2004-110 eff. Dec. 31, 2004.
          Amended by SR-NASD-2001-06 eff. May 8, 2001.
          Amended by SR-NASD-98-56 eff. Oct. 30, 1998.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Municipal Securities

          Sec. 5.  The provisions of the By-Laws conferring rulemaking authority upon the Board shall not be applicable to the municipal securities activities of members or persons associated with members to the extent that the application of such authority would be inconsistent with Section 15B of the Act.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE XVI PROCEDURE FOR ADOPTING AMENDMENTS TO BY-LAWS

        Sec. 1.  A Governor or a committee appointed by the Board may propose amendments to these By-Laws. Any 25 members of the Corporation by petition signed by such members may propose amendments to these By-Laws. Every proposed amendment shall be presented in writing to the Board, and a record shall be kept thereof. The Board may adopt any proposed amendment to these By-Laws by affirmative vote of a majority of the Governors then in office. The Board, upon adoption of any such amendment to these By-Laws, except as to spelling or numbering corrections or as otherwise provided in these By-Laws, shall forthwith cause a copy to be sent to and voted upon by each member of the Corporation. If such amendment to these By-Laws is approved by a majority of the members voting within 30 days after the date of submission to the membership, and is approved by the Commission as provided in the Act, it shall become effective as of such date as the Board may prescribe.
        Amended by SR-NASD-2007-023 eff. July 30, 2007.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE XVII CORPORATE SEAL

        Sec. 1.  The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware." Said seal may be used by causing it or a facsimile thereof to be imposed or affixed or reproduced or otherwise.
        Amended by SR-NASD-2007-023 eff. July 30, 2007.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE XVIII CHECKS

        Sec. 1.  All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board may from time to time designate.
        Amended by SR-NASD-2007-023 eff. July 30, 2007.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE XIX ANNUAL FINANCIAL STATEMENT

        Sec. 1.  As soon as practicable after the end of each fiscal year, the Board shall send to each member of the Corporation a reasonably itemized statement of receipts and expenditures of the Corporation for such preceding fiscal year.
        Amended by SR-NASD-2007-023 eff. July 30, 2007.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE XX RECORD DATES

        • Fixing of Date by Board

          Sec. 1.  In order that the Corporation may determine the members entitled to notice of or to vote at any meeting of members or any adjournment thereof, or to express consent or dissent to corporate action in writing without a meeting, or for the purpose of any other lawful action, the Board may fix, in advance, a record date, pursuant to Section 213 of the General Corporation Law of the State of Delaware. Only such members as shall be members of record on the date so fixed shall be entitled to notice of and to vote at such meeting or any adjournment thereof, or to give such consent or dissent.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Default Date

          Sec. 2.  If no record date is fixed by the Board, the record date for determining members entitled to notice of or to vote at a meeting of members shall be at the close of business on the day next preceding the date on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Adjournment

          Sec. 3.  A determination of members of record entitled to notice of or to vote at a meeting of members shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE XXI MEETINGS OF MEMBERS

        • Annual Meeting

          Sec. 1.  The annual meeting shall be on such date and at such place as the Board shall designate; provided, however, that, except for the first annual meeting following the Closing at which Large Firm Governors, the Mid-Size Governor and Small Firm Governors shall be elected, there shall be no annual meetings of members during the Transitional Period. The business of the meeting shall include: (a) election of the members of the Board pursuant to Article VII, Section 13; and (b) the proposal of business (i) by or at the direction of the Chief Executive Officer of the Corporation or the Board, or (ii) by any member entitled to vote at the meeting who complied with the notice procedures set forth in Section 3 and was a member at the time such notice was delivered to the Secretary of the Corporation.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Special Meetings

          Sec. 2.  A special meeting shall be on such date and at such place as the Board shall designate. Only such business shall be conducted at a special meeting as shall have been brought before the meeting pursuant to Section 3(a); provided, however, that in no event shall the announcement to the members of an adjournment of a special meeting commence a new time period for the giving of notice.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Notice of Meeting; Member Business

          Sec. 3.  (a) Notice of each meeting shall be written or printed; shall state the date, time, and place of the meeting; shall state the purpose or purposes for which the meeting is called; and unless it is the annual meeting, indicate that the notice is being issued at the direction of the person or persons calling the meeting. The Secretary of the Corporation shall deliver the notice to the Executive Representative of each member entitled to vote not less than 30 days nor more than 60 days before the date of an annual meeting and not less than ten days nor more than 60 days before the date of a special meeting. If mailed, the notice shall be deemed to be delivered when deposited with postage in the United States mail and addressed to the Executive Representative of the member as it appears on the records of the Corporation. Such further notice shall be given as may be required by law. Meetings may be held without notice if all members entitled to vote are present (except as otherwise provided by law), or if notice is waived by those not present. Any previously scheduled meeting of the members may be postponed and any special meeting of the members may be canceled by resolution of the Board upon notice given to the members prior to the time previously scheduled for the meeting.
          (b) For business other than the election of Governors to be brought properly before an annual meeting by a member pursuant to Section 1, the member must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for member action. To be timely, a member's notice shall be delivered to the Secretary at the Corporation's principal executive offices within 25 days after the date of the notice of the meeting. Such member's notice shall set forth a brief description of the business desired to be brought before the meeting, any material interest of the member in such business, and the reasons for conducting such business at the meeting. In no event shall the announcement to the members of an adjournment of an annual meeting commence a new time period for the giving of a member's notice as described above.
          (c) Except as otherwise provided by applicable law, the Restated Certificate of Incorporation, or these By-Laws, the chairman of the meeting shall have the power and duty to determine whether any nomination or other business proposed to be brought before the meeting pursuant to subsection (b) or Article VII, Section 10 was made in accordance with the procedures set forth herein and, if any proposed nomination or business is not in compliance with these By-Laws, to declare that such defective nomination or proposal shall be disregarded.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Inspector

          Sec. 4.  At each meeting of the members, the polls shall be opened and closed, the proxies and ballots received and taken in charge, and all questions touching the qualification of voters and the validity of proxies and the acceptance or rejection of votes shall be decided by an inspector appointed by the Secretary of the Corporation before the meeting, or in default thereof by the chairman of the meeting. If the inspector previously appointed fails to attend or refuses or is unable to serve, a substitute shall be appointed by the chairman of the meeting. The inspector shall not be a Governor, officer, or employee of the Corporation or a director, officer, partner, or employee of an Corporation subsidiary or member.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Conduct of Meetings

          Sec. 5.  The chairman of the meeting shall be the Chief Executive Officer of the Corporation or his or her designee. The date and time of the opening and closing of the polls for each matter upon which the members will vote at a meeting shall be announced at the meeting by the chairman of the meeting. The Board may adopt by resolution such rules and regulations for the conduct of the meeting of members as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations, and procedures and to do all such acts as, in the judgment of the chairman of the meeting, are appropriate for the proper conduct of the meeting. Such rules, regulations, or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to members, their duly authorized and constituted proxies, or such other persons as the chairman of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (e) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of members shall not be required to be held in accordance with the rules of parliamentary procedure.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Adopted by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE XXII TRANSITIONAL PERIOD

        Notwithstanding anything herein to the contrary, to the extent there is any inconsistency between the other provisions of these By-Laws, including, without limitation, Sections 1, 4, 5 and 9 of Article VII hereof, and this Article XXII, the provisions of this Article XXII shall govern as of Closing and for the Transitional Period to the fullest extent permitted by applicable law:
        Adopted by SR-NASD-2007-023 eff. July 30, 2007.

        • Powers and Authority of Board

          Sec. 1.   The Board shall be the governing body of the Corporation and, except as otherwise provided by applicable law, the Restated Certificate of Incorporation, or these By-Laws, shall be vested with all powers necessary for the management and administration of the affairs of the Corporation and the promotion of the Corporation's welfare, objects, and purposes; provided, however, that (i) during the Transitional Period, the Board, after consultation with the Chief Executive Officer of the Corporation, shall have the exclusive authority to appoint any Lead Governor of the Corporation, (ii) during the Transitional Period, the Board, after receiving the recommendation of the Chief Executive Officer, shall have the exclusive authority to appoint the Chair of the Finance Committee and (iii) during the Transitional Period, the Nominating Committee will be jointly populated by the Chief Executive Officer and the Chief Executive Officer of NYSE Regulation, Inc. as of Closing (or his duly appointed or elected successor as Chair of the Board), subject to ratification of the appointees by the Board.
          Adopted by SR-NASD-2007-023 eff. July 30, 2007.

        • Composition and Qualifications of the Board

          Sec. 2.   (a) As of Closing, and for the Transitional Period, the Board shall consist of 23 authorized members, consisting of (i) the Chief Executive Officer of the Corporation, (ii) the Chief Executive Officer of NYSE Regulation, Inc., (iii) eleven Public Governors, (iv) a Floor Member Governor, an Independent Dealer/Insurance Affiliate Governor and an Investment Company Affiliate Governor and (v) three Small Firm Governors, one Mid-Size Firm Governor and three Large Firm Governors; provided, however that the Board shall not include such Small Firm Governors, Mid-Size Firm Governor or Large Firm Governors, but rather shall include three persons, who immediately prior to the Closing are Industry Governors, selected by the Board in office prior to the Closing, three persons, who immediately prior to the Closing qualified as Industry Governors pursuant to the By-Laws in existence prior to the Closing, selected by the Board of Directors of NYSE Group, Inc. and one person, who immediately prior to the Closing qualified as an Industry Governor pursuant to the By-Laws in existence prior to the Closing, selected by the Board of Directors of NYSE Group, Inc. and the Board of Governors in office prior to the Closing jointly, until the election of such Small Firm Governors, Mid-Size Firm Governor and Large Firm Governors at the first annual meeting of members following the Closing (which shall be held as soon as practicable after the Closing).
          (b) During the Transitional Period, the Chair shall be the Chief Executive Officer of NYSE Regulation, Inc. as of Closing so long as he remains a Governor. In the event the Chief Executive Officer of NYSE Regulation, Inc. as of the Closing ceases to be Chair during the Transitional Period, subject to the Restated Certificate of Incorporation and these By-Laws, the Chair shall be selected by the NYSE Group Committee from among its members; provided that the Chair so selected shall not be a member of the Board of Directors of NYSE Group, Inc.
          Adopted by SR-NASD-2007-023 eff. July 30, 2007.

        • Term of Office of Governors

          Sec. 3.   Upon the Closing, the term of office of each Governor in office immediately prior to the Closing who is not to be a Governor as of Closing pursuant to this Article XXII shall automatically, and without any further action, terminate, and such persons shall no longer be members of the Board of Governors.
          The Chief Executive Officer shall serve as a Governor until a successor is elected, or until death, resignation, or removal.
          The Chief Executive Officer of NYSE Regulation, Inc. as of Closing shall serve as a Governor during the Transitional Period, until death, resignation, or removal; provided, however, in the event of a vacancy during the Transitional Period with respect to this Governor position by virtue of death, resignation or removal, the then Chief Executive Officer of NYSE Regulation, Inc. shall serve as a Governor for the remainder of the Transitional Period, until death, resignation or removal; provided, further however, a person who becomes a Governor pursuant to the immediately preceding proviso shall not be qualified to serve as Chair.
          Effective as of Closing, the Board of Directors of NYSE Group, Inc. shall appoint the NYSE Public Governors, the Board in office prior to the Closing shall appoint the NASD Public Governors and the Board of Directors of NYSE Group, Inc. and the Board in office prior to the Closing jointly shall appoint the Joint Public Governor.
          The Public Governors appointed in accordance with the preceding paragraph shall hold office for the Transitional Period, or until death, resignation, disqualification, or removal. In the event of any vacancy among the NYSE Public Governors, the Joint Public Governor or NASD Public Governors during the Transitional Period, such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NYSE Group Committee in the case of a vacant NYSE Public Governor position, such vacancy shall only be filled by the Board, and nominations for persons to fill such vacancy shall be made by the Nominating Committee, in the case of a vacant Joint Public Governor position or such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NASD Group Committee in the case of a vacant NASD Public Governor position.
          Effective as of Closing, the Board of Directors of NYSE Group, Inc. shall appoint the Floor Member Governor, the Board of Governors in office prior to the Closing shall appoint the Independent Dealer/Insurance Affiliate Governor and the Board of Directors of NYSE Group, Inc. and the Board of Governors in office prior to the Closing jointly shall appoint the Investment Company Affiliate Governor.
          The Floor Member Governor, the Investment Company Affiliate Governor and the Independent Dealer/Insurance Affiliate Governor appointed in accordance with the preceding paragraph shall hold office for the Transitional Period, or until death, resignation, disqualification, or removal. In the event of any vacancy among the Floor Member Governor, the Investment Company Affiliate Governor or the Independent Dealer/Insurance Affiliate Governor during the Transitional Period, such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NYSE Group Committee in the case of a Floor Member Governor vacancy, such vacancy shall only be filled by the Board, and nominations for persons to fill such vacancy shall be made by the Nominating Committee, in the case of an Investment Company Affiliate Governor vacancy or such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NASD Group Committee in the case of an Independent Dealer/Insurance Affiliate Governor vacancy.
          Three Large Firm Governors, three Small Firm Governors and one Mid-Size Governor shall be elected as Governors at the first annual meeting of members following the Closing (the "Initial Member Elected Governors"). The Initial Member Elected Governors shall hold office until the first annual meeting of members following the Transitional Period, or until a successor is duly elected and qualified, or until death, resignation, disqualification, or removal.
          In the event of any vacancy among the Large Firm Governors, the Mid-Size Firm Governor or the Small Firm Governors during the Transitional Period, such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NYSE Group Committee in the case of a Large Firm Governor vacancy, such vacancy shall only be filled by the Board, and nominations for persons to fill such vacancy shall be made by the Nominating Committee, in the case of a Mid-Size Firm Governor vacancy or such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NASD Group Committee in the case of a Small Firm Governor vacancy; provided, however, that in the event the remaining term of office of any Large Firm, Mid-Size Firm or Small Firm Governor position that becomes vacant is for more than 12 months, nominations shall be made as set forth above in this paragraph, but such vacancy shall be filled by the members entitled to vote thereon at a meeting thereof convened to vote thereon.
          Upon the expiration of the Transitional Period, the term of office of the Chief Executive Officer of NYSE Regulation, Inc. as a member of the Board shall automatically, and without any further action, terminate, such person shall no longer be a member of the Board and the authorized number of members of the Board shall automatically be reduced by one.
          Adopted by SR-NASD-2007-023 eff. July 30, 2007.

        • Nominations at the First Annual Meeting Following Closing

          Sec. 4.   In the case of the first annual meeting of members following the Closing, nominations shall be by the Board of Directors of NYSE Group, Inc. with respect to Large Firm Governors, jointly by the Board of Directors of NYSE Group, Inc. and the Board in office prior to the Closing with respect to the Mid-Size Firm Governor and by the Board in office prior to the Closing with respect to Small Firm Governors, instead of the Nominating Committee.
          Adopted by SR-NASD-2007-023 eff. July 30, 2007.

      • Schedule A to the By-Laws of the Corporation

        Assessments and fees pursuant to the provisions of Article VI of the By-Laws of the Corporation shall be determined on the following basis.
        Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008.
        Amended by SR-NASD-2002-162 eff. Dec. 24, 2002.
        Amended by SR-NASD-2002-98 eff. July 24, 2002.

        • Section 1 — Member Regulatory Fees

          (a) Recovery of cost of services. FINRA shall, in accordance with this section, collect member regulatory fees that are designed to recover the costs to FINRA of the supervision and regulation of members, including performing examinations, financial monitoring, and policy, rulemaking, interpretive, and enforcement activities. FINRA shall periodically review these revenues in conjunction with these costs to determine the applicable rate. FINRA shall publish notices of the fees and adjustments to the assessment rates applicable under this section.
          (b) Each member shall be assessed a Trading Activity Fee for the sale of covered securities.
          (1) Covered Securities. For purposes of the rule, covered securities shall mean:
          (A) All exchange registered securities wherever executed (except debt securities that are not TRACE-Eligible Securities);
          (B) All other equity securities traded otherwise than on an exchange;
          (C) All security futures wherever executed;
          (D) All "TRACE-Eligible Securities" wherever executed, provided that the transaction also is a "Reportable TRACE Transaction," as these terms are defined in Rule 6710; and
          (E) All municipal securities subject to MSRB reporting requirements.
          (2) Transactions exempt from the fee. The following shall be exempt from the Trading Activity Fee:
          (A) Transactions in securities offered pursuant to an effective registration statement under the Securities Act of 1933 (except transactions in put or call options issued by the Options Clearing Corporation) or offered in accordance with an exemption from registration afforded by Section 3(a) or 3(b) thereof, or a rule thereunder;
          (B) Transactions by an issuer not involving any public offering within the meaning of Section 4(2) of the Securities Act of 1933 (except any "Reportable TRACE Transaction");
          (C) The purchase or sale of securities pursuant to and in consummation of a tender or exchange offer;
          (D) The purchase or sale of securities upon the exercise of a warrant or right (except a put or call), or upon the conversion of a convertible security;
          (E) Transactions that are executed outside the United States and are not reported, or required to be reported, to a transaction reporting association as defined in SEC Rule 600(b)(81) and any approved plan filed in accordance with SEC Rule 11Aa3-1 or SEC Rule 601;
          (F) Proprietary transactions by a firm that is a member of both FINRA and a national securities exchange, effected in its capacity as an exchange specialist or market maker, that are subject to Securities Exchange Act of 1934, Section 11(a) and Rule 11a1-1(T)(a) thereunder; however this exemption does not apply to other transactions permitted by Section 11(a) such as bona fide arbitrage or hedge transactions;
          (G) Transactions by a firm that is a floor based broker and that is a member of both FINRA and a national securities exchange provided that the floor based broker qualifies for exemption from FINRA membership under Exchange Act Rule 15b9-1;
          (H) Transactions in conventional options;
          (I) Transactions in options and futures involving narrow and broad based indexes;
          (J) Transactions in security futures held in futures accounts;
          (K) Proprietary transactions in TRACE-Eligible Securities by a firm that is a member of both FINRA and a national securities exchange and that are effected in the firm's capacity as an exchange specialist or exchange market maker; and
          (L) Transactions in U.S. Treasury Securities, as that term is defined in Rule 6710.
          FINRA may exempt other securities and transactions as it deems appropriate.
          (3) Fee Rates*
          (A) Each member shall pay to FINRA a fee per share for each sale of a covered equity security.
          (B) Each member shall pay to FINRA a fee per contract for each sale of an option.
          (C) Each member shall pay to FINRA a fee for each round turn transaction (treated as including one purchase and one sale of a contract of sale for future delivery) of a security future.
          (D) Each member shall pay to FINRA a fee per bond for each sale of a covered TRACE-Eligible Security (other than an Asset-Backed Security, as that term is defined in Rule 6710) and/or municipal security.
          (E) Each member shall pay to FINRA a fee based on the reported value of the sale of an Asset-Backed Security, as that term is defined in Rule 6710.
          (4) Reporting of Transactions. Members shall report to FINRA the aggregate share, bond, contract, and/or round turn volume of sales of covered securities in a manner as prescribed by FINRA from time to time.
          (c) Subject to paragraph (d), each member shall pay an annual Gross Income Assessment equal to the greater of:
          (1) the total of:
          (A) $1,200.00 on annual gross revenue up to $1 million;
          (B) 0.1215% of annual gross revenue greater than $1 million up to $25 million;
          (C) 0.2599% of annual gross revenue greater than $25 million up to $50 million;
          (D) 0.0518% of annual gross revenue greater than $50 million up to $100 million;
          (E) 0.0365% of annual gross revenue greater than $100 million up to $5 billion;
          (F) 0.0397% of annual gross revenue greater than $5 billion up to $25 billion; and
          (G) 0.0855% of annual gross revenue greater than $25 billion; or
          (2) The average Gross Income Assessment from the preceding three calendar years, to be determined by adding the Gross Income Assessment calculation pursuant to paragraph (c)(1) to the actual Gross Income Assessment in the preceding two calendar years, then dividing by three.
          The rate structure set forth in paragraph (c)(1) will be implemented over a three year period beginning in 2008 in such manner as specified by FINRA.
          For the purpose of paragraph (c)(1), each member is to report annual gross revenue as defined in Section 2 of this Schedule for the preceding calendar year.
          (d) Notwithstanding paragraph (c)(2), a member whose annual gross revenue does not exceed $25 million shall pay an annual Gross Income Assessment equal to amount set forth in paragraphs (c)(1).
          (e) Each member shall pay an annual Personnel Assessment equal to:
          (1) $150.00 per principal and each representative up to five principals and representatives as defined below;
          (2) $140.00 per principal and each representative for six principals and representatives up to twenty-five principals and representatives as defined below; or
          (3) $130.00 per principal and each representative for twenty-six or more principals and representatives as defined below.
          A principal or representative is defined as a principal or representative in the member's organization who is registered with FINRA as of December 31st of the prior fiscal year.


          * Trading Activity Fee rates are as follows: Each member shall pay to FINRA: (1) $0.000119 per share for each sale of a covered equity security, with a maximum charge of $5.95 per trade; (2) $0.002 per contract for each sale of an option; (3) $0.00008 per contract for each round turn transaction of a security future, provided there is a minimum charge of $0.01 per round turn transaction; (4) $0.00075 per bond for each sale of a covered TRACE-Eligible Security (other than an Asset-Backed Security) and/or municipal security, with a maximum charge of $0.75 per trade; and (5) $0.00000075 times the value, as reported to TRACE, of a sale of an Asset-Backed Security, with a maximum charge of $0.75 per trade. In addition, if the execution price for a covered security is less than the Trading Activity Fee rate ($0.000119 for covered equity securities, $0.002 for covered option contracts, or $0.01 for a security future) on a per share, per contract, or round turn transaction basis then no fee will be assessed.

          Amended by SR-FINRA-2016-027 eff. July 10, 2017.
          Amended by SR-FINRA-2014-046 eff. Jan. 1, 2015.
          Amended by SR-FINRA-2012-044 eff. Oct. 1, 2012.
          Amended by SR-FINRA-2012-023 eff. July 1, 2012.
          Amended by SR-FINRA-2012-008 eff. March 1, 2012.
          Amended by SR-FINRA-2011-071 eff. March 1, 2012.
          Amended by SR-FINRA-2011-020 eff. July 1, 2011.
          Amended by SR-FINRA-2011-004 eff. May 16, 2011.
          Amended by SR-FINRA-2010-046 eff. Nov. 1, 2010.
          Amended by SR-FINRA-2009-057 eff. Jan. 1, 2010.
          Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008.
          Amended by SR-NASD-2006-091 eff. March 5, 2007.
          Amended by SR-NASD-2003-201 partially effective Nov. 1, 2004 and fully effective April 1, 2005.
          Amended by SR-NASD-2003-93 eff. Sept. 1, 2003.
          Amended by SR-NASD-2002-148 eff. May 30, 2003.
          Amended by SR-NASD-2002-182 eff. Dec. 24, 2002.
          Amended by SR-NASD-2002-147 eff. Oct. 18, 2002.
          Amended by SR-NASD-2002-98 eff. July 24, 2002.
          Amended by SR-NASD-2002-65 eff. June 27, 2002.
          Amended by SR-NASD-97-62 eff. Aug. 22, 1997.
          Amended by SR-NASD-96-57 eff. Jan. 2, 1997.
          Amended by SR-NASD-95-52 eff. Nov. 3, 1995.
          Amended by SR-NASD-95-23 eff. July 11, 1995.
          Amended by SR-NASD-94-58 eff. Nov. 30, 1994.
          Amended by SR-NASD-94-29 eff. May 23, 1994.
          Amended by SR-NASD-94-03 eff. Jan. 14, 1994.
          Amended by SR-NASD-93-71 eff. Dec. 2, 1993.
          Amended by SR-NASD-93-30 eff. July 4, 1993.
          Amended by SR-NASD-92-24 eff. July 23, 1992.
          Amended by SR-NASD-91-69 eff. Dec. 17, 1991.
          Amended by SR-NASD-90-66 eff. Jan. 1, 1991.
          Amended by SR-NASD-89-37 eff. Oct. 1, 1989.
          Amended by SR-NASD-88-55 eff. Sept. 21, 1989.
          Amended by SR-NASD-88-41 eff. Oct. 1, 1988.
          Amended by SR-NASD-87-30 eff. Oct. 1, 1987.
          Amended by SR-NASD-86-24 eff. Oct. 1, 1986.
          Amended by SR-NASD-85-23 eff. Oct. 1, 1985.
          Amended by SR-NASD-84-13 eff. Sept. 6, 1984.
          Amended by SR-NASD-83-18 eff. Oct. 1, 1983.
          Amended by SR-NASD-83-7 eff. July 1, 1983
          Amended by SR-NASD-79-7 eff. Oct. 1, 1979.
          Amended by SR-NASD-78-18 eff. Nov. 22, 1978.
          Amended by SR-NASD-78-01 eff. Oct. 1, 1977.
          Amended by SR-NASD-76-12 eff. Oct. 1, 1976.
          Former Schedule A, Sec. 1 amended by SR-NASD-75-01 eff. Dec. 1, 1975.

          Selected Notices: 83-35, 96-81, 97-62, 02-63, 04-84, 08-19, 09-56, 09-68, 10-56, 11-27, 12-06, 12-31, 12-41, 16-39.

        • Section 2 — Gross Revenue for Assessment Purposes

          Gross revenue is defined for assessment purposes as total income as reported on FOCUS form Part II or IIA with the following exclusion: commodities income.
          Amended by SR-NASD-2002-99 eff. Dec. 30, 2002.
          Amended by SR-NASD-2002-182 eff. Dec. 24, 2002.
          Amended by SR-NASD-2002-98 eff. July 24, 2002.
          Amended by SR-NASD-96-15 eff. June 13, 1996.
          Amended by SR-NASD-94-58 eff. Nov 30, 1994.
          Amended by SR-NASD-88-41 eff. Oct. 1, 1988.
          Amended by SR-NASD-83-18 eff. Oct. 1, 1983.
          Amended by SR-NASD-78-01 eff. Oct. 1, 1977.
          Amended by SR-NASD-76-12 eff. Oct. 1, 1976.
          Schedule A, Sec. 5 amended by SR-NASD-75-01 eff. Dec. 1, 1975.

          Selected Notices: 95-54, 96-43.

        • Section 3 — Regulatory Transaction Fee

          Each member shall be assessed a regulatory transaction fee. The amount shall be determined periodically in accordance with Section 31 of the Act. Transactions assessable under this Section 3 that must be reported to FINRA shall be reported in an automated manner.
          Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008.
          Amended by SR-NASD-2006-055 eff. Dec. 1, 2006.
          Amended by SR-NASD-2004-129 eff. Aug. 20, 2004.
          Amended by SR-NASD-2002-182 eff. Dec. 24, 2002.
          Amended by SR-NASD-2002-98 eff. July 24, 2002.
          Adopted by SR-NASD-96-57 eff. Jan. 2, 1997.

          Selected Notices: 04-63, 06-39.

        • Section 4 — Fees

          (a)(1) Each member shall be assessed a registration fee of $75.00 and a branch office system processing fee of $20.00 upon the registration of each branch office, as defined in the By-Laws.
          (2) FINRA shall waive, for the first branch office registered by a member, payment of the $75.00 registration fee and the $20.00 branch office system processing fee (where such fees have been assessed pursuant to paragraph (a)(1)).
          (3) Each member also shall be assessed:
          (A) an annual registration fee of:
          (i) $175, for each of the first 250 branch offices registered by the member;
          (ii) $150, for each of branch offices 251 to 500 registered by the member;
          (iii) $125, for each of branch offices 501 to 1,000 registered by the member;
          (iv) $100, for each of branch offices 1,001 to 2,000 registered by the member;
          (v) $75, for every branch office greater than 2,000 registered by the member; and
          (B) an annual branch office system processing fee of $20.00 per registered branch.
          (4) FINRA shall waive, for one branch office per member per year, payment of the $175 annual registration fee (where such fee has been assessed pursuant to paragraph (a)(3)(A)(i) and the $20.00 annual branch office system processing fee assessed pursuant to paragraph (a)(3)(B).
          (b) FINRA shall assess each member a fee of:
          (1) $100.00 for each initial Form U4 filed by the member with FINRA for the registration of a representative or principal, except that the following discounts shall apply to the filing of Forms U4 to transfer the registration of representatives or principals in connection with acquisition of all or a part of a member's business by another member:

          Number of Registered Personnel Transferred

          Discount

          1,000–1,999

          10%

          2,000–2,999

          20%

          3,000–3,999

          30%

          4,000–4,999

          40%

          5,000 and over

          50%

          (2) $40.00 for each initial Form U5 filed by the member with FINRA for the termination of a registered representative or registered principal, plus a late filing fee of $80.00 if the member fails to file the initial Form U5 within 30 days after the date of termination;
          (3) $110.00 for the additional processing of each initial or amended Form U4, Form U5 or Form BD that includes the initial reporting, amendment, or certification of one or more disclosure events or proceedings;
          (4) $15.00 for processing and posting to the CRD system each set of fingerprints submitted electronically by the member to FINRA, plus any other charge that may be imposed by the United States Department of Justice for processing each set of fingerprints;
          (5) $30.00 for processing and posting to the CRD system each set of fingerprint cards submitted in non-electronic format by the member to FINRA, plus any other charge that may be imposed by the United States Department of Justice for processing each set of fingerprints;
          (6) $30.00 for processing and posting to the CRD system each set of fingerprint results and identifying information that have been processed through another self-regulatory organization and submitted by a member to FINRA;
          (7) $45.00 annually for each of the member's registered representatives and principals for system processing; and
          (8) 10% of a member's final annual renewal assessment or $100, whichever is greater, with a maximum charge of $5,000, if the member fails timely to pay the amount indicated on its preliminary annual renewal statement.
          (c) The following fees shall be assessed to each individual who registers to take an examination as described below. These fees are in addition to the registration fee described in paragraph (b) and any other fees that the owner of an examination that FINRA administers may assess.
          Series 4 Registered Options Principal $105
          Series 6 Investment Company Products/Variable Contracts Representative $100
          Series 7 General Securities Representative $305
          Series 9 General Securities Sales Supervisor — Options Module $80
          Series 10 General Securities Sales Supervisor — General Module $125
          Series 11 Assistant Representative — Order Processing $80
          Series 14 Compliance Official $350
          Series 16 Supervisory Analyst $240
          Series 17 Limited Registered Representative $80
          Series 22 Direct Participation Programs Representative $100
          Series 23 General Securities Principal Sales Supervisor Module $100
          Series 24 General Securities Principal $120
          Series 26 Investment Company Products/Variable Contracts Principal $100
          Series 27 Financial and Operations Principal $120
          Series 28 Introducing Broker-Dealer Financial and Operations Principal $100
          Series 37 Canada Module of S7 (Options Required) $185
          Series 38 Canada Module of S7 (No Options Required) $185
          Series 39 Direct Participation Programs Principal $95
          Series 42 Registered Options Representative $75
          Series 50 Municipal Advisor Representative $115
          Series 51 Municipal Fund Securities Limited Principal $105
          Series 52 Municipal Securities Representative $130
          Series 53 Municipal Securities Principal $115
          Series 57 Securities Trader $120
          Series 62 Corporate Securities Limited Representative $95
          Series 72 Government Securities Representative $110
          Series 79 Investment Banking Qualification Examination $305
          Series 82 Limited Representative — Private Securities Offering $95
          Series 86 Research Analyst — Analysis $185
          Series 87 Research Analyst — Regulatory $130
          Series 99 Operations Professional $130
          (1) Persons for whom any qualification examination is waived pursuant to Rule 1070 shall be assessed as an application fee the examination fee for each qualification examination so waived.
          (2) There shall be an additional service charge of $15.00 for any examination or Regulatory Element session taken in a test center located outside the territorial limits of the United States.
          (3) There shall be a service charge equal to the examination or Regulatory Element session fee assessed to each individual who, having made an appointment for a specific time and place for a test center-based administration of an examination listed above or Regulatory Element session, fails to timely appear for such appointment or cancels or reschedules such appointment within two business days prior to the test center appointment date.
          (4) There shall be a service charge equal to one-half of the examination or Regulatory Element session fee assessed to each individual who, having made an appointment for a specific time and place for a test center-based administration of an examination listed above or Regulatory Element session, cancels or reschedules such appointment three to 10 business days prior to the test center appointment date.
          (d) In the event a member believes it should not be required to pay the late filing fee, it shall be entitled to a hearing in accordance with the procedures set forth in the Rule 9520 Series.
          (e)(1) In addition to any dues or fees otherwise payable, each applicant for membership shall be assessed an application fee, based on the number of registered persons proposed to be associated with the applicant at the time the application is filed, as outlined in the tables below:
          Number of Registered Persons Associated with Applicant Small Medium Large
          Tier 1 1–10 151–300 501–1,000
          Tier 2 11–100 301–500 1,001–5,000
          Tier 3 101–150 N/A >5,000

          Application Fee per Tier Small Medium Large
          Tier 1 $7,500 $25,000 $35,000
          Tier 2 $12,500 $30,000 $45,000
          Tier 3 $20,000 N/A $55,000
          (2) Each applicant for membership also shall be assessed an additional $5,000 if the applicant will be engaging in any clearing and carrying activity.
          (f) There shall be a session fee of $55 assessed to each individual who completes the Regulatory Element of the Continuing Education requirements pursuant to FINRA rules.
          (g)(1) Unless a specific temporary extension of time has been granted, there shall be imposed upon each member required to file reports, as designated by this paragraph ("Designated Reports"), a fee of $100 for each day that such report is not timely filed. The fee will be assessed for a period not to exceed 10 business days. Requests for such extension of time must be submitted to FINRA at least three business days prior to the due date; and
          (2) Any report filed pursuant to this Rule containing material inaccuracies or filed incompletely shall be deemed not to have been filed until a corrected copy of the report has been resubmitted.
          (3) List of Designated Reports:
          (A) SEA Rule 17a-5 — Monthly and quarterly FOCUS reports and annual audit reports;
          (B) SEA Rule 17a-10 — Schedule I;
          (C) FINRA Rule 4140 — any audited financial and/or operational report or examination report required pursuant to Rule 4140; and
          (D) FINRA Rule 4521 — any report, notification or information required pursuant to Rule 4521.
          (h) FINRA shall assess each member a fee of $100.00 on the first day and $25.00 for each subsequent day, up to a maximum of $1,575, that a new disclosure event or a change in the status of a previously reported disclosure event is not timely filed as required by FINRA on an initial Form U5, an amendment to a Form U5, or an amendment to a Form U4, with such fee to be assessed starting on the day following the last date on which the event was required to be reported.
          (i)(1) In addition to any dues or fees otherwise payable, each applicant submitting an application for approval of a change in ownership, control, or business operations shall be assessed an application fee, based on the number of registered persons associated with the applicant (including registered persons proposed to be associated with the applicant upon approval of the application) at the time the application is filed and the type of change in ownership, control, or business operations, as outlined in the tables below:
          Number of Registered Persons Associated with Applicant Small Medium Large
          Tier 1 1–10 151–300 501–1,000
          Tier 2 11–100 301–500 1,001–5,000
          Tier 3 101–150 N/A >5,000

          Application Fee per Tier Small Medium Large
          Merger      
          Tier 1 $7,500 $25,000 $50,000
          Tier 2 $12,500 $30,000 $75,000
          Tier 3 $20,000 N/A $100,000
          Material Change      
          Tier 1 $5,000 $20,000 $35,000
          Tier 2 $10,000 $25,000 $50,000
          Tier 3 $15,000 N/A $75,000
          Ownership Change $5,000 $10,000 $15,000
          Transfer of Assets $5,000 $10,000 $15,000
          Acquisition $5,000 $10,000 $15,000
          (2) If an applicant's application for approval of a change in ownership, control, or business operations involves more than one type of application identified in the "application fee per tier and application type" table in paragraph (i)(1) of this section, the application fee shall be the highest amount of the applicable fees (e.g., the application fee for an applicant associated with 1–10 registered persons filing an application involving a merger and material change would be $7,500).
          (3) FINRA shall waive the fee assessed pursuant to paragraph (i)(1) for a continuing membership application where FINRA determines that such application is proposing less significant changes that do not require substantial staff review. For example, a continuing membership application may qualify for a fee waiver under this paragraph (i)(3) where the proposed change:
          (A) does not make any day-to-day changes in the applicant's business activities, management, supervision, assets, or liabilities, and the applicant is only proposing a change in the:
          (i) applicant's legal structure (e.g., changing from a corporation to an LLC);
          (ii) equity ownership, partnership capital, or other ownership interest in an applicant held by a corporate legal structure that is due solely to a reorganization of ownership or control of the applicant within the corporate legal structure (e.g., reorganizing only to add a holding company to the corporate legal structure's ownership or control chain of the applicant); or
          (iii) percentage of ownership interest or partnership capital of an applicant's existing owners or partners resulting in an owner or partner owning or controlling 25 percent or more of the ownership interest or partnership and that owner or partner has no disclosure or disciplinary issues in the preceding five years; or
          (B) is filed in connection with a direct or indirect acquisition or transfer of 25 percent or more in the aggregate of the applicant's assets or any asset, business, or line of operation that generates revenues composing 25 percent or more in the aggregate of the applicant's earnings, measured on a rolling 36-month basis, where the applicant also is ceasing operations as a broker or dealer (including filing a Form BDW with the SEC); and there are either:
          (i) no pending or unpaid settled customer related claims (including, but not limited to, pending or unpaid settled arbitration or litigation actions) against the applicant or any of its associated persons; or
          (ii) pending or unpaid settled customer related claims (including, but not limited to, pending or unpaid settled arbitration or litigation actions) against the applicant or its associated persons, but the applicant demonstrates in the continuing membership application its ability to satisfy in full any unpaid customer related claim (e.g., sufficient capital or escrow funds, proof of adequate insurance for customer related claims).
          Amended by SR-FINRA-2016-025 eff. July 1, 2016.
          Amended by SR-FINRA-2015-044 eff. Jan. 4, 2016.
          Amended by SR-FINRA-2015-015 eff. Oct. 1, 2015.
          Amended by SR-FINRA-2015-031 eff. Sept. 21, 2015.
          Amended by SR-FINRA-2015-027 eff. Aug. 24, 2015.
          Amended by SR-FINRA-2015-006 eff. Apr. 1, 2015.
          Amended by SR-FINRA-2013-015 eff. Feb. 5, 2013.
          Amended by SR-FINRA-2012-030 eff. Jan. 2, 2013.
          Amended by SR-FINRA-2012-031 eff. Jan. 2, 2013.
          Amended by SR-FINRA-2012-031 eff. July 23, 2012.
          Amended by SR-FINRA-2012-009 eff. Apr. 2, 2012.
          Amended by SR-FINRA-2011-042 eff. Oct. 17, 2011.
          Amended by SR-FINRA-2011-026 eff. Sept. 1, 2011.
          Amended by SR-FINRA-2010-016 eff. April 9, 2010.
          Amended by SR-FINRA-2008-067 eff. Feb. 8, 2010.
          Amended by SR-FINRA-2009-071 eff. Jan. 4, 2010.
          Amended by SR-FINRA-2009-056 eff. Nov. 2, 2009.
          Amended by SR-FINRA-2008-053 eff. Jan. 2, 2009.
          Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008.
          Amended by SR-FINRA-2008-035 eff. July 30, 2007.
          Amended by SR-NASD-2006-065 eff. July 3, 2006.
          Amended by SR-NASD-2005-133 eff. Jan. 1, 2006.
          Amended by SR-NASD-2005-132 eff. Jan. 1, 2006.
          Amended by SR-NASD-2004-145 eff. Jan. 1, 2005.
          Amended by SR-NASD-2004-087 eff. June 7, 2004.
          Amended by SR-NASD-2004-049 eff. Mar. 30, 2004.
          Amended by SR-NASD-2003-192 eff. Feb. 11, 2004.
          Amended by SR-NASD-2004-115 eff. Jan. 1, 2004.
          Amended by SR-NASD-2003-148 eff. Oct. 3, 2003.
          Amended by SR-NASD-2003-109 eff. July 10, 2003.
          Amended by SR-NASD-2002-182 eff. Dec. 24, 2002.
          Amended by SR-NASD-2002-147 eff. Oct. 18, 2002.
          Amended by SR-NASD-2002-100 eff. July 25, 2002.
          Amended by SR-NASD-2002-98 eff. July 24, 2002.
          Amended by SR-NASD-00-39 eff. Sept. 10, 2001.
          Amended by SR-NASD-99-38 eff. Sept. 15, 1999.
          Amended by SR-NASD-99-43 eff. Sept. 7, 1999.
          Amended by SR-NASD-98-77 eff. Jan 1, 1999.
          Amended by SR-NASD-98-95 eff. Dec 21, 1998.
          Amended by SR-NASD-96-53 eff. Jan 3, 1997.
          Amended by SR-NASD-95-32 eff. July 26, 1995.
          Amended by SR-NASD-95-23 eff. July 1, 1995.
          Amended by SR-NASD-94-58 eff. Dec. 9, 1994.
          Amended by SR-NASD-94-06 eff. Feb. 9, 1994.
          Amended by SR-NASD-94-05 eff. Jan. 21, 1994.
          Schedule A, Sec. 2 amended eff. May 20, 1975; May 30, 1979; Oct. 1, 1979; Nov. 23, 1982; Oct. 1, 1985; Aug. 14, 1987; Apr. 4, 1990 (eff. May 1, 1990); May 3, 1990; Aug. 13, 1990; Mar. 1, 1991; July 16, 1991; Nov. 4, 1992; July 13, 1993.

          Selected Notices: 95-59, 98-89; 99-75, 01-54, 04-25, 08-61, 09-67, 09-71, 11-36, 12-16, 12-32, 13-11, 15-28, 15-45.

          • IM-Section 4(b)(1) and (e) Exemption from Certain Registration and Membership Application Fees for Certain NYSE and NYSE Alternext US LLC Member Organizations

            NYSE and NYSE Alternext US LLC member organizations that become members of FINRA pursuant to IM-1013-1 and IM-1013-2, respectively, shall not be assessed the fee set forth in Section 4(b)(1) to Schedule A of the FINRA By-Laws for the initial Form U4 filed by firms for the registration of any representative or principal associated with the member organization at the time a firm submits its application for FINRA membership. Such firms also shall not be assessed the membership application fee set forth in Section 4(e) to Schedule A of the FINRA By-Laws. However, those firms will otherwise remain subject to FINRA's By-Laws and Schedules to By-Laws, including Schedule A.
            Amended by SR-FINRA-2008-043 eff. Oct. 1, 2008.
            Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008.
            Adopted by SR-NASD-2007-056 eff. Oct. 12, 2007.

        • Section 5 — Elimination of Duplicate Assessments and Fees

          Two or more members under substantially the same ownership or control shall be required to pay (1) only one personnel assessment and one system processing fee annually for those individuals employed by more than one of the members; (2) only one fee annually for each branch office registered at the same location by more than one of the members; and (3) one registration fee, one fingerprint processing fee, and one termination fee applicable to each applicant registered or terminated simultaneously with two or more members under substantially the same ownership or control. To establish their eligibility to receive the reduction in fees described herein, members must provide FINRA with information as requested by FINRA and in the format specified by FINRA prior to FINRA's assessment of such fees.
          Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008.
          Amended by SR-NASD-2003-194 eff. Jan. 6, 2004.
          Amended by SR-NASD-2002-182 eff. Dec. 24, 2002.
          Amended by SR-NASD-2002-98 eff. July 24, 2002.
          Amended by SR-NASD-98-77 eff. Jan 1, 1999.

          Selected Notice: 98-89.

        • Section 6 — Assessments and Fees for New Members, Resigning Members and Successor Organizations

          (a) The assessment of a firm, which is not a member throughout FINRA's full calendar year from January 1 to December 31, shall be based upon the number of quarter years of membership. The proration for a new member shall include the quarter year in which the member is admitted to membership. The proration for a member which resigns shall include the quarter year in which the member's letter of resignation is received in FINRA's Executive Office.
          (b) A member that is a successor organization to a previous member or members shall assume the unpaid balance of the assessments of its predecessor or predecessors and its next assessment shall be determined, if applicable, upon the assessment data of its predecessors. Such successor member shall not be required to re-register branch offices and personnel of predecessor members, but shall be required to pay registration fees therefor. Whether a member is the successor organization to a previous member or members shall be determined by FINRA upon a consideration of the terms and conditions of the particular merger, consolidation, reorganization, or succession. A member that has simply acquired the personnel and offices of another member under circumstances that do not constitute the member a successor organization shall not be required to assume the unpaid assessments of the other member. Such non-successor member shall be required to re-register the branch offices and personnel acquired from the other member and pay applicable registration fees.
          Amended by SR-FINRA-2012-030 eff. Jan. 2, 2013.
          Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008.
          Amended by SR-NASD-2002-182 eff. Dec. 24, 2002.
          Amended by SR-NASD-2002-98 eff. July 24, 2002.
          Schedule A, Sec. 4 added by SR-NASD-75-01 eff. Dec. 1, 1975.

          Selected Notices: 95-94, 96-43, 08-19, 12-32.

        • Section 7 — Fees for Filing Documents Pursuant to the Corporate Financing Rule

          (a) There shall be a fee imposed for the filing of initial documents relating to any offering filed with FINRA pursuant to the Corporate Financing Rule equal to: (1) $500 plus .015% of the proposed maximum aggregate offering price or other applicable value of all securities registered on an SEC registration statement or included on any other type of offering document (where not filed with the SEC), but shall not exceed $225,500; or (2) $225,500 for an offering of securities on an automatically effective Form S-3 or F-3 registration statement filed with the SEC and offered pursuant to Securities Act Rule 415 by a Well-Known Seasoned Issuer as defined in Securities Act Rule 405. The amount of the filing fee may be rounded to the nearest dollar.
          (b) There shall be an additional fee imposed for the filing of any amendment or other change to the documents initially filed with FINRA pursuant to the Corporate Financing Rule equal to .015% of the net increase in the maximum aggregate offering price or other applicable value of all securities registered on an SEC registration statement, or any related Securities Act Rule 462(b) registration statement, or reflected on any Securities Act Rule 430A prospectus, or included on any other type of offering document. However, the aggregate of all filing fees paid in connection with an SEC registration statement or other type of offering document shall not exceed $225,500.
          Amended by SR-FINRA-2012-029 eff. July 2, 2012.
          Amended by SR-FINRA-2008-001 eff. Jan 1, 2008.
          Amended by SR-NASD-2007-006 eff. Feb. 26, 2007.
          Amended by SR-NASD-2004-177 eff. Jan. 1, 2005.
          Amended by SR-NASD-2002-99 eff. Dec. 30, 2002.
          Amended by SR-NASD-2002-182 eff. Dec. 24, 2002.
          Amended by SR-NASD-2002-98 eff. July 24, 2002.
          Amended by SR-NASD-99-01 eff. May 17, 1999.
          Amended by SR-NASD-98-87 eff. Nov. 23, 1998.
          Amended by SR-NASD-94-12 eff. Mar. 7, 1994.
          Amended eff. Sept. 7, 1989 and Apr. 15, 1992.
          Schedule A, Sec. 6 added eff. May 25, 1970.

          Selected Notices: 88-81, 99-50, 04-91, 07-05, 12-32.

        • Section 8 — Service Charge for Processing Extension of Time Requests

          (a) There shall be a service charge imposed on all members who file with the association a request for an extension of time pursuant to the provisions of Section 220.4(c)(3) of Regulation T and/or paragraph (n) of Rule 15c3-3 under the Act.
          (b) The service charge for processing each initial extension of time request and for all subsequent extension of time requests (1) involving the same transaction under Regulation T and/or (2) involving an extension of time previously granted pursuant to SEC Rule 15c3-3(n) shall be $4.00 per request.
          Amended by SR-NASD-2006-063 eff. July 1, 2006.
          Amended by SR-NASD-2002-99 eff. Dec. 30, 2002.
          Amended by SR-NASD-2002-182 eff. Dec. 24, 2002.
          Amended by SR-NASD-2002-98 eff. July 24, 2002.
          Amended Oct. 1, 1979 and Sept. 7, 1989.
          Schedule A, Sec. 7 added eff. Oct. 1, 1974.

        • Section 9 — Subscription Charges for Registration Batch Filing/Data Download Via the Web CRD Electronic File Transfer (EFT) System

          (a) Each firm electing to subscribe to the Web CRD Electronic File Transfer (EFT) System for registration batch filing and/or data download will be assessed an annual subscription fee based on the type of service that the firm uses. The fee schedule to be paid by each firm is as follows:
          (1) Data Download — $1,800.00
          (2) Form Filing — $3,600.00
          (3) Data Download and Form Filing — $4,800.00
          Amended by SR-NASD-2003-18 effective date February 11, 2003 (implementation date March 24, 2003).
          Amended by SR-NASD-2002-99 eff. Dec. 30, 2002.
          Amended by SR-NASD-2002-182 eff. Dec. 24, 2002.
          Amended by SR-NASD-2002-98 eff. July 24, 2002.
          Renumbered as Sec. 9 by SR-NASD-85-23 eff. Oct. 1, 1985.
          Amended by SR-NASD-84-13 eff. Sept. 6, 1984.
          Sec. 10 added by SR-NASD-83-18 eff. Oct. 1, 1983.

        • Section 10 — Request for Data and Publications

          Where there is no provision elsewhere in the By-Laws for specific fees, the corporation may impose and collect compensatory charges for data from its records or for its publications.
          Amended by SR-NASD-2002-99 eff. Dec. 30, 2002.
          Amended by SR-NASD-2002-182 eff. Dec. 24, 2002.
          Amended by SR-NASD-2002-98 eff. July 24, 2002.
          Renumbered as Sec. 10 eff. Oct. 1, 1985.
          Schedule A, Sec. 11 added eff. Mar. 19, 1985.

        • Section 11 — Reserved



          * * *

          Resolution of the Board of Governors

          Failure to File Assessment Report with Membership Application

          District Committees shall not consider applications for membership and in no event shall an application for membership be approved for admission to membership, until an assessment report has been filed by the applicant.

          The President shall notify District Committees when assessment reports have not been filed with the membership applications.

          * * *

          Resolution of the Board of Governors

          Branch Offices

          Each member of the Corporation shall immediately advise the Board of Governors of the opening or closing of any branch office of such member.

          Each member shall be subject to the fee specified in Schedule A to the By-Laws for each branch office in existence during the fiscal year or part thereof.

          * * *

          Resolution of the Board of Governors

          Expulsion and Revocation for Failure to Pay Dues and Assessments

          Article VI, Section 3 of the By-Laws provides that the Board of Governors, after fifteen days notice in writing, may suspend or cancel the membership of any member in arrears in the payment of any dues, assessments or other charges or for failure to furnish any information or reports requested by the Board of Governors pursuant to Article VI, Section 2 of the By-Laws, pertaining to furnishing any information or reports in connection with the determination of the amount of admission fees, dues, assessments or other charges payable by the members during any given fiscal year; and the Board of Governors deems it necessary and advisable that the President exercise the power granted to the Board of Governors by this provision when he deems it necessary and appropriate.

          Therefore, the President of the Association is authorized and empowered to take any and all action permitted by the authority granted to the Board of Governors in Article VI, Section 3 of the By-Laws in respect to the suspension or cancellation of membership.

          * * *

          Cross Reference:

          The procedures for suspension or cancellation of membership are contained in the Rule 9620 Series.

          * * *

          Resolution of the Board of Governors

          Suspension for Failure to Register Personnel and to Pay Fees

          Pursuant to the provisions of Section 3 of Article VI of the Association's By-Laws, the President be and hereby is authorized and directed, after fifteen days notice in writing, to suspend the membership of any member on behalf of the Board of Governors who has not filed appropriate application for registration of Registered Representatives after due notice by registered mail, return receipt requested, and has not paid the prescribed fee; provided that the President shall further notify the Executive Committee of the Board of Governors with respect to such suspension and shall advise the member concerned in writing as to such suspension.

          * * *

          Cross Reference:

          The procedures for suspension or cancellation of membership are contained in the Rule 9620 Series.

          * * *

          Resolution of the Board of Governors

          Fees for Registered Representatives

          Each application for registration as a "Registered Representative" or "Registered Principal" filed with the Corporation shall be accompanied by payment of the fee specified in Schedule A of the By-Laws.

          Where an applicant for registration as a "Registered Representative" or "Registered Principal" is required to pass an examination in accordance with the provisions of Section 2 of Article II of the By-Laws the application shall be accompanied by payment of such additional fee as specified in Schedule A of the By-Laws.

          The registration of a "Registered Representative" or "Registered Principal" of the member shall not become effective unless accompanied by such payment as required above.

          In no event shall such fees be refunded.

          The President is directed to advise any member who has filed an application for registration of a "Registered Representative" or "Registered Principal" and has not accompanied such application with payment of the required fee or fees as described above that such registration may not become effective until such payment is made.

          * * *

          Renumbered by SR-NASD-2002-99 eff. Dec. 30, 2002.
          Amended by SR-NASD-2002-182 eff. Dec. 24, 2002.
          Renumbered by SR-NASD-2002-98 eff. July 24, 2002.
          Schedule A, Sec. 11 deleted eff. Jan. 5, 1993.

        • Section 12 — Application and Annual Fees for Member Firms with Statutorily Disqualified Individuals

          (a) Any member firm seeking to employ or continuing to employ as an associated person any individual who is subject to a disqualification from association with a member as set forth in Article III, Section 4 of the By-Laws of the Corporation shall, upon the filing of an application pursuant to Article III, Section 3, paragraph (d) of the By-Laws of the Corporation, pay to FINRA a fee of $1,500.00. Any member firm whose application filed pursuant to Article III, Section 3, paragraph (d) of the By-Laws of the Corporation results in a full hearing for eligibility in FINRA pursuant to the Rule 9520 Series, shall pay to FINRA an additional fee of $2,500.00.
          (b) Any member firm continuing to employ as an associated person any individual subject to disqualification from association with a member as set forth in Article III, Section 4 of the By-Laws of the Corporation shall pay annually to FINRA a fee of $1,500.00 when such person or individual is classified as a Tier 1 statutorily disqualified individual, and a fee of $1,000.00 when such person or individual is classified as a Tier 2 statutorily disqualified individual.
          Amended by SR-FINRA-2015-027 eff. Aug. 24, 2015.
          Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008.
          Amended by SR-NASD-2002-99 eff. Dec. 30, 2002.
          Amended by SR-NASD-2002-182 eff. Dec. 24, 2002.
          Amended by SR-NASD-2002-98 eff. July 24, 2002.
          Amended by SR-NASD-94-57 eff. Oct. 14, 1994.
          Amended by SR-NASD-88-3 eff. Feb. 29, 1988.
          Adopted by SR-NASD-86-1 eff. Jan. 29, 1986.

          Selected Notices: 86-11, 88-15.

        • Section 13 — Review Charge for Communications Filed or Submitted

          There shall be a review charge for each and every communication, whether in printed, video or other form, filed with or submitted to FINRA, except for items that are filed or submitted in response to a written request from FINRA's Advertising Regulation Department ("the Department") issued pursuant to the spot check procedures set forth in FINRA rules as follows: (1) for printed material reviewed, $125.00, plus $10.00 for each page reviewed in excess of 10 pages; and (2) for video or audio media, $125.00, plus $10.00 per minute for each minute of tape reviewed in excess of 10 minutes.
          Where a member requests expedited review of material submitted to the Department there shall be a review charge of $600.00 per item plus $50.00 for each page reviewed in excess of 10 pages. Expedited review shall be completed within three business days, not including the date the item is received by the Department, unless a shorter or longer period is agreed to by the Department. The Department may, in its sole discretion, refuse requests for expedited review.
          Amended by SR-FINRA-2013-001 eff. Feb. 4, 2013.
          Amended by SR-FINRA-2012-028 eff. July 2, 2012.
          Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008.
          Amended by SR-NASD-2004-179 eff. Dec. 8, 2004.
          Amended by SR-NASD-2002-99 eff. Dec. 30, 2002.
          Amended by SR-NASD-2002-182 eff. Dec. 24, 2002.
          Amended by SR-NASD-2002-98 eff. July 24, 2002.
          Amended by SR-NASD-98-82 eff. Jan. 1, 1999.
          Amended by SR-NASD-94-21 eff. May 1, 1994.
          Amended by SR-NASD-89-37 eff. Sept. 7, 1989; Jan. 25, 1991.
          Adopted by SR-NASD-88-2 eff. Feb. 22, 1988.

          Selected Notices: 88-14, 91-13, 94-27, 98-97, 12-32.

        • Section 14 — Accounting Support Fee for Governmental Accounting Standards Board

          (a) FINRA shall, in accordance with this Section, allocate, assess, and collect a GASB Accounting Support Fee to fund the annual budget of the Governmental Accounting Standards Board. The GASB Accounting Support Fee is based on the recoverable annual budgeted expenses provided to FINRA by the Governmental Accounting Standards Board, and amounts collected under this Section shall be remitted to the Financial Accounting Foundation.
          (b) Except as provided in paragraph (c), each calendar quarter, each member shall pay an assessment to FINRA of its portion of one quarter of the annual GASB Accounting Support Fee amount that reflects the member's portion of the total par value of municipal securities transactions reported by members to the Municipal Securities Rulemaking Board under MSRB Rule G-14(b) in the previous calendar quarter.
          (c) If, in a given calendar quarter, a member's GASB Accounting Support Fee assessment is less than $25, the member will not be assessed a GASB Accounting Support Fee for that quarter. The amount not assessed to the member will be reallocated among the other members assessed a GASB Accounting Support Fee for that quarter based on each member's portion of the total par value of municipal securities transactions reported by members to the Municipal Securities Rulemaking Board under MSRB Rule G-14(b) in the previous calendar quarter.
          Adopted by SR-FINRA-2011-073 eff. Feb. 23, 2012.

          Selected Notice: 12-15.

        • Section 15 — Funding Portal Member Fees

          (a) FINRA shall, in accordance with this section, collect fees that are designed to recover the costs to FINRA of the supervision and regulation of funding portal members, including the membership process and performing examinations, policy, rulemaking, interpretive and enforcement activities. FINRA shall periodically review funding portal fee revenues in conjunction with these costs to determine the applicable fees and rates. FINRA shall publish notices of the fees and adjustments to the assessment rates applicable under this section.
          (b)(1) Each funding portal applicant for membership shall be assessed an application fee of $2,700 at the time Form FP-NMA is filed.
          (b)(2) Each funding portal applicant for approval of a change in ownership or control shall be assessed an application fee of $500 at the time Form FP-CMA is filed.
          (b)(3) If an application pursuant to paragraph (b)(1) or (b)(2) is rejected as incomplete or is withdrawn by the funding portal applicant in accordance with Funding Portal Rule 110(a)(5) or (a)(7), the application fee shall be refunded less $250, which shall be retained by FINRA as a processing fee.
          (c)(1) Each funding portal member shall pay an annual gross income assessment determined in accordance with Section 1(c) of this Schedule A. Gross revenue is defined for assessment purposes as gross revenue as reported on Form FP-Statement of Revenue.
          (c)(2) The annual fee of a funding portal that is not a member throughout FINRA's full calendar year from January 1 to December 31 shall be based upon the number of quarter years of membership. The proration for a new funding portal member shall include the quarter year in which the funding portal member is admitted to membership. The proration for a funding portal member that withdraws from membership shall include the quarter year in which the funding portal member's withdrawal from membership is effective.
          (c)(3) A funding portal member that is a successor organization to a previous funding portal member or members shall assume the unpaid balance of the assessments of its predecessor or predecessors and its next assessment shall be determined, if applicable, upon the assessment data of its predecessors. Whether a funding portal member is the successor organization to a previous funding portal member or members shall be determined by FINRA upon a consideration of the terms and conditions of the particular merger, consolidation, reorganization, or succession. A funding portal member that has simply acquired the personnel and offices of another funding portal member under circumstances that do not constitute the funding portal member a successor organization shall not be required to assume the unpaid assessments of the other member.
          (d) A nonresident funding portal member shall reimburse FINRA for any expenses incurred in connection with examinations of the member to the extent that such expenses exceed the cost of examining a member located within the continental United States in the geographic location most distant from the District Office of appropriate jurisdiction.
          (e) FINRA shall assess each funding portal member a fee of $100 on the first day and $25 for each subsequent day, up to a maximum of $1,575, that a new disclosure event or a change in the status of a previously reported matter is not timely filed pursuant to Funding Portal Rule 800(b)(2).
          (f)(1) A funding portal member shall pay a fee of $1,500 at the time that it files an application to initiate eligibility proceedings pursuant to Funding Portal Rule 900(b). Any funding portal member whose application results in a full hearing for eligibility in FINRA pursuant to Funding Portal Rule 900(b) shall pay to FINRA an additional fee of $2,500.
          (f)(2) A funding portal member that continues to associate with any individual subject to disqualification or otherwise ineligible from association with a member shall pay annually to FINRA a fee of $1,500 when such person or individual is classified as a Tier 1 statutorily disqualified individual, and a fee of $1,000 when such person or individual is classified as a Tier 2 statutorily disqualified individual.
          (g) A funding portal member shall pay $15 for processing and posting to the CRD system each set of fingerprints submitted electronically by the member, or $30 if submitted in non-electronic format, to FINRA, plus any other charge that may be imposed by the United States Department of Justice for processing each set of fingerprints.
          (h) Request for Data and Publications. Where there is no provision elsewhere in the By-Laws for specific fees, the corporation may impose and collect compensatory charges for data from its records or for its publications.
          Adopted by SR-FINRA-2015-041 eff. Jan. 29, 2016.

    • By-Laws of FINRA Regulation, Inc.

      • ARTICLE I DEFINITIONS

        When used in these By-Laws, unless the context otherwise requires, the term:
        (a) "Act" means the Securities Exchange Act of 1934, as amended;
        (b) "Board" means the Board of Directors of FINRA Regulation;
        (c) "broker" shall have the same meaning as in Section 3(a)(4) of the Act;
        (d) "Commission" means the Securities and Exchange Commission;
        (e) "Corporation" means the Financial Industry Regulatory Authority, Inc., the National Association of Securities Dealers, Inc., or any future name of the entity;
        (f) "day" means calendar day;
        (g) "dealer" shall have the same meaning as in Section 3(a)(5) of the Act;
        (h) "Delaware law" means the General Corporation Law of the State of Delaware;
        (i) "Delegation Plan" means the "Plan of Allocation and Delegation of Functions by FINRA to FINRA Regulation, Inc." as approved by the Commission, and as amended from time to time;
        (j) "Director" means a member of the Board;
        (k) "district" means a district established by the Board pursuant to Article VIII, Section 8.1 of these By-Laws;
        (l) "District Committee" means a District Committee elected pursuant to Article VIII of these By-Laws;
        (m) "District Director" means a FINRA Regulation staff member who heads a district office;
        (n) "district office" means an office of FINRA Regulation located in a district;
        (o) "Electronic transmission" means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process;
        (p) "Executive Representative" means the executive representative of a FINRA member appointed pursuant to Article IV, Section 3 of the FINRA By-Laws;
        (q) "FINRA" means the Financial Industry Regulatory Authority, Inc.;
        (r) "FINRA Board" means the FINRA Board of Governors;
        (s) "FINRA member" means any broker or dealer admitted to membership in FINRA. For purposes of the Code of Arbitration Procedure for Customer Disputes or the Code of Arbitration Procedure for Industry Disputes, FINRA members include any broker or dealer admitted to membership in FINRA whether or not the membership has been terminated or cancelled; and any broker or dealer admitted to membership in a self-regulatory organization that, with FINRA consent, has required its members to arbitrate pursuant to the Code of Arbitration Procedure for Customer Disputes or the Code of Arbitration Procedure for Industry Disputes and/or to be treated as members of FINRA for purposes of the Codes of Arbitration Procedure, whether or not the membership has been terminated or cancelled;
        (t) "FINRA Regulation" means FINRA Regulation, Inc.;
        (u) “Governor” means a member of the FINRA Board;
        (v) "Independent Agent" means a corporation or entity selected by the Secretary of FINRA or FINRA Regulation to assist FINRA Regulation with nomination and election procedures under Articles VI and VIII of these By-Laws and the representatives of such corporation or entity;
        (w) "Industry Director" means a Director of the Board (other than the Chairman of the FINRA Board and the Chief Executive Officer of FINRA) who (1) is or has served in the prior year as an officer, director (other than as an independent director), employee, or controlling person of a broker or dealer, or (2) has a consulting or employment relationship with or provides professional services to a self-regulatory organization registered under the Act, or has had any such relationship or provided any such services at any time within the prior year;
        (x) “Industry Member” means a National Adjudicatory Council or committee member who (1) is or has served in the prior year as an officer, director, employee, or controlling person of a broker or dealer, excluding an independent director, an outside director, or a director not engaged in the day-to-day management of a broker or dealer; (2) is an officer, director (excluding an outside director), or employee of an entity that owns more than ten percent of the equity of a broker or dealer, and the broker or dealer accounts for more than five percent of the gross revenues received by the consolidated entity; (3) owns more than five percent of the equity securities of any broker or dealer, whose investments in brokers or dealers exceed ten percent of his or her net worth, or whose ownership interest otherwise permits him or her to be engaged in the day-to-day management of a broker or dealer; (4) provides professional services to brokers or dealers, and such services constitute 20 percent or more of the professional revenues received by the member or 20 percent or more of the gross revenues received by the member's firm or partnership (for the purposes of determining membership on the National Arbitration and Mediation Committee, any services provided in the capacity as a mediator of disputes involving a broker or dealer and not representing any party in such mediations shall not be considered professional services provided to brokers or dealers); (5) provides professional services to a director, officer, or employee of a broker, dealer, or corporation that owns 50 percent or more of the voting stock of a broker or dealer, and such services relate to the director's, officer's, or employee's professional capacity and constitute 20 percent or more of the professional revenues received by the member or 20 percent or more of the gross revenues received by the member's firm or partnership (for the purposes of determining membership on the National Arbitration and Mediation Committee, any services provided in the capacity as a mediator of disputes involving a director, officer, or employee as described in this subsection (5) and not representing any party in such mediations shall not be considered professional services provided to such individuals); or (6) has a consulting or employment relationship with or provides professional services to a self-regulatory organization registered under the Act, or has had any such relationship or provided any such services at any time within the prior year;
        (y) “Large Firm” means any broker or dealer admitted to membership in the Corporation which, at the time of determination, has 500 or more registered persons;
        (z) “Large Firm NAC Member” or “Large Firm Committee Member” means a National Adjudicatory Council or committee member that must, in order to be eligible to serve, be an Industry Member and, at the time of election or appointment, must be registered with a member which is a Large Firm;
        (aa) “Mid-Size Firm” means any broker or dealer admitted to membership in the Corporation which, at the time of determination, has at least 151 and no more than 499 registered persons;
        (bb) “Mid-Size Firm NAC Member” or “Mid-Size Firm Committee Member” means a National Adjudicatory Council or committee member that must, in order to be eligible to serve, be an Industry Member and, at the time of election or appointment, must be registered with a member which is a Mid-Size Firm;
        (cc) "National Adjudicatory Council" or “NAC” means a body appointed pursuant to Article V of these By-Laws.
        (dd) "Nominating Committee" means the Nominating Committee appointed pursuant to Article VII, Section 9 of the FINRA By-Laws;
        (ee) "Non-Industry Member" means a National Adjudicatory Council or committee member who is (1) a Public Member; (2) an officer or employee of an issuer of securities listed on a market for which FINRA provides regulation; (3) an officer or employee of an issuer of unlisted securities that are traded in the over-the-counter market; or (4) any other individual who would not be an Industry Member;
        (ff) "person associated with a member" or "associated person of a member" means: (1) a natural person who is registered or has applied for registration under the Rules of the Corporation; (2) a sole proprietor, partner, officer, director, or branch manager of a member, or other natural person occupying a similar status or performing similar functions, or a natural person engaged in the investment banking or securities business who is directly or indirectly controlling or controlled by a member, whether or not any such person is registered or exempt from registration with FINRA under these By-Laws or the Rules of the Corporation; and (3) for purposes of Rule 8210, any other person listed in Schedule A of Form BD of a member;
        (gg) "Public Director" means a Director of the Board who is not an Industry Director and who otherwise has no material business relationship with a broker or dealer or a self-regulatory organization registered under the Act (other than serving as a public director of such a self-regulatory organization);
        (hh) “Public Member” means a National Adjudicatory Council or committee member who has no material business relationship with a broker or dealer or a self-regulatory organization registered under the Act (other than serving as a public director or a public member on a committee of such a self-regulatory organization or, for the purposes of determining membership on the National Arbitration and Mediation Committee, acting in the capacity as a mediator of disputes involving a broker or dealer and not representing any party in such mediations);
        (ii) “Rules of the Corporation” or “Rules” means the numbered rules set forth in the Manual of the Corporation beginning with the Rule 0100 Series, as adopted by the FINRA Board pursuant to the FINRA By-Laws, as hereafter amended or supplemented;
        (jj) “Small Firm” means any broker or dealer admitted to membership in the Corporation which, at the time of determination, has at least one and no more than 150 registered persons; and
        (kk) “Small Firm NAC Member” or “Small Firm Committee Member” means a National Adjudicatory Council or committee member that must, in order to be eligible to serve, be an Industry Member and, at the time of election or appointment, must be registered with a member which is a Small Firm.
        Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046. eff. Nov. 6, 2008.
        Amended by SR-NASD-2004-110 eff. Dec. 31, 2004.
        Amended by SR-NASD-2001-57 eff. Sept. 12, 2001.
        Amended by SR-NASD-01-13 eff. May 12, 2001.
        Amended by SR-NASD-99-21 eff. July 9, 2000.
        Amended by SR-NASD-99-35 eff. Dec. 1, 1999.
        Amended by SR-NASD-98-56 eff. Oct. 30, 1998.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 99-95, 16-04

      • ARTICLE II OFFICES

        • Location

          Sec. 2.1  The address of the registered office of FINRA Regulation in the State of Delaware and the name of the registered agent at such address shall be: Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808. FINRA Regulation also may have offices at such other places both within and without the State of Delaware as the Board may from time to time designate or the business of FINRA Regulation may require.
          Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notices: 16-04

        • Change of Location

          Sec. 2.2  In the manner permitted by law, the Board or the registered agent may change the address of FINRA Regulation's registered office in the State of Delaware and the Board may make, revoke, or change the designation of the registered agent.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE III MEETINGS OF THE STOCKHOLDER

        • Action by Consent of Stockholder

          Sec. 3.1  Any action required or permitted by law to be taken at any meeting of the stockholder of FINRA Regulation may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, is signed by the holder of the outstanding stock.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE IV BOARD OF DIRECTORS

        • General Powers

          Sec. 4.1  The property, business, and affairs of FINRA Regulation shall be managed by or under the direction of the Board. The Board may exercise all such powers of FINRA Regulation and have the authority to perform all such lawful acts as are permitted by law, the Restated Certificate of Incorporation, these By-Laws, or the Delegation Plan to assist FINRA in fulfilling its self-regulatory responsibilities as set forth in Section 15A of the Act, and to support such other initiatives as the Board may deem appropriate. To the fullest extent permitted by applicable law, the Restated Certificate of Incorporation, and these By-Laws, the Board may delegate any of its powers to a committee appointed pursuant to Section 4.13 or to FINRA Regulation staff in a manner not inconsistent with the Delegation Plan.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Number of Directors

          Sec. 4.2  The Board shall consist of no fewer than five and no more than seventeen Directors, the exact number of Board members will be determined by resolution adopted by the stockholder of FINRA Regulation from time to time. Any new Director position created as a result of an increase in the size of the Board shall be filled pursuant to Section 4.4.
          Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-2001-57 eff. Sept. 12, 2001.
          Amended by SR-NASD-00-43 eff. July 21, 2000.
          Amended by SR-NASD-99-10 eff. Feb. 8, 1999.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notices: 09-39, 16-04.

        • Qualifications

          Sec. 4.3  (a) The Board shall consist exclusively of members of the FINRA Board. The number of Public Directors shall exceed the number of Industry Directors. The Chairman of the FINRA Board and the Chief Executive Officer of FINRA shall be ex-officio non-voting members of the Board. At least two, and not less than 20%, of the Directors shall be Small Firm, Mid-Size Firm, or Large Firm Governors. The terms "Small Firm Governor," "Mid-Size Firm Governor," and "Large Firm Governor" are defined as specified in the FINRA By-Laws. Ex-officio non-voting members of the Board shall not be counted as Board members for purposes of this section.
          (b) Contemporaneous with the annual election of Directors, the stockholder of FINRA Regulation shall designate from the elected Directors a Chair and such other persons having such titles as it shall deem necessary or advisable to serve until the next annual election or until their successors are chosen and qualify. The persons so elected shall have such powers and duties as may be determined from time to time by the Board. The Board, by resolution adopted by a majority of Directors then in office, may remove any such person from such position at any time.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-2001-57 eff. Sept. 12, 2001.
          Amended by SR-NASD-99-10 eff. Feb. 8, 1999.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Election

          Sec. 4.4  Except as otherwise provided by law, these By-Laws, or the Delegation Plan, Directors of FINRA Regulation shall be elected each year at the annual meeting of the stockholder, or at a special meeting called for such purpose in lieu of the annual meeting. If the annual election of Directors is not held on the date designated therefor, the Directors shall cause such election to be held as soon thereafter as convenient.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Resignation

          Sec. 4.5  Any Director may resign at any time either upon written notice of resignation to the Chair of the Board or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt thereof, and the acceptance of such resignation, unless required by the terms thereof, shall not be necessary to make such resignation effective.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Removal

          Sec. 4.6  Any or all of the Directors may be removed from office at any time, with or without cause by the stockholder of FINRA Regulation.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Disqualification

          Sec. 4.7  The term of office of a Director shall terminate immediately upon a determination by the Board, by a majority vote of the remaining Directors, that: (a) the Director no longer satisfies the classification for which the Director was elected; and (b) the Director's continued service as such would violate the compositional requirements of the Board set forth in Section 4.3. If the term of office of a Director terminates under this Section, and the remaining term of office of such Director at the time of termination is not more than six months, during the period of vacancy the Board shall not be deemed to be in violation of the provisions of Section 4.3 requiring that the number of Public Directors exceed the number of Industry Directors by virtue of such vacancy and no violation of the provisions of Section 4.3 regarding the number of Small Firm, Mid-Size Firm, and Large Firm Governors shall be deemed to have occurred.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-98-56 eff. Oct. 30, 1998.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Filling of Vacancies

          Sec. 4.8  If a Director position becomes vacant, whether because of death, disability, disqualification, removal, or resignation, the Nominating Committee shall nominate, and the FINRA Board shall, by majority vote, cause the election of a person satisfying the qualifications for the directorship as provided in Section 4.3 to fill such vacancy, except that if the remaining term of office for the vacant Director position is not more than six months, no replacement shall be required.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Quorum and Voting

          Sec. 4.9  (a) At all meetings of the Board, unless otherwise set forth in these By-Laws or required by law, a quorum for the transaction of business shall consist of a majority of the Board, including not less than 50 percent of the Public Directors. In the absence of a quorum, a majority of the Directors present may adjourn the meeting until a quorum is present.
          (b) The vote of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Regulation

          Sec. 4.10  The Board may adopt such rules, regulations, and requirements for the conduct of the business and management of FINRA Regulation not inconsistent with the law, the Restated Certificate of Incorporation, these By-Laws, the Delegation Plan, the Rules of the Corporation, or the By-Laws of FINRA, as the Board may deem proper. A Director shall, in the performance of such Director's duties, be fully protected in relying in good faith upon the books of account or reports made to FINRA Regulation by any of its officers, by an independent certified public accountant, by an appraiser selected with reasonable care by the Board or any committee of the Board or by any agent of FINRA Regulation, or in relying in good faith upon other records of FINRA Regulation.
          Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notices: 09-39, 16-04.

        • Meetings

          Sec. 4.11  (a) An annual meeting of the Board shall be held for the purpose of organization, election of officers, and transaction of any other business. If such meeting is held promptly after and at the place specified for the annual meeting of the stockholder, no notice of the annual meeting of the Board need be given. Otherwise, such annual meeting shall be held at such time and place as may be specified in a notice given in accordance with Section 4.12.
          (b) Regular meetings of the Board may be held at such time and place, within or without the State of Delaware, as determined from time to time by the Board. After such determination has been made, notice shall be given in accordance with Section 4.12.
          (c) Special meetings of the Board may be called by the Chair of the Board or by at least one-third of the Directors then in office. Notice of any special meeting of the Board shall be given to each Director in accordance with Section 4.12.
          (d) A Director or member of any committee appointed by the Board may participate in a meeting of the Board or of such committee through the use of a conference telephone or similar communications equipment by means of which all persons participating in the meeting may hear one another, and such participation in a meeting shall constitute presence in person at such meeting for all purposes.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Notice of Meetings; Waiver of Notice

          Sec. 4.12  (a) Notice of any meeting of the Board shall be deemed to be duly given to a Director if: (i) mailed to the address last made known in writing to FINRA Regulation by such Director as the address to which such notices are to be sent, at least seven days before the day on which such meeting is to be held; (ii) sent to the Director at such address by electronic transmission not later than the day before the day on which such meeting is to be held; or (iii) delivered to the Director personally or orally, by telephone or otherwise, not later than the day before the day on which such meeting is to be held. Each notice shall state the time and place of the meeting and the purpose(s) thereof.
          (b) Notice of any meeting of the Board need not be given to any Director if waived by that Director in writing or by electronic transmission whether before or after the holding of such meeting, or if such Director is present at such meeting, subject to Article XII, Section 12.3(b).
          (c) Any meeting of the Board shall be a legal meeting without any prior notice if all Directors then in office shall be present thereat, subject to Article XII, Section 12.3(b) of these By-Laws.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Committees

          Sec. 4.13  (a) The Board may, by resolution or resolutions adopted by a majority of the whole Board, appoint one or more committees. Except as herein provided, vacancies in membership of any committee shall be filled by the vote of a majority of the whole Board. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another Director to act at the meeting in the place of any such absent or disqualified member. Members of a committee shall hold office for such period as may be fixed by a resolution adopted by a majority of the whole Board. Any member of a committee may be removed from such committee only after a majority vote of the whole Board, after appropriate notice, for refusal, failure, neglect, or inability to discharge such member's duties.
          (b) The Board may, by resolution or resolutions adopted by a majority of the whole Board, delegate to one or more committees the power and authority to act on behalf of the Board in carrying out the functions and authority delegated to FINRA Regulation by FINRA under the Delegation Plan. Such delegations shall be in conformance with applicable law, the Restated Certificate of Incorporation, these By-Laws, and the Delegation Plan. Action taken by a committee pursuant to such delegated authority shall be subject to review, ratification, or rejection by the Board. In all other matters, the Board may, by resolution or resolutions adopted by a majority of the whole Board, delegate to one or more committees that consist solely of one or more Directors the power and authority to act on behalf of the Board in the management of the business and affairs of FINRA Regulation to the extent permitted by law and not inconsistent with the Delegation Plan. A committee, to the extent permitted by law and provided in the resolution or resolutions creating such committee, may authorize the seal of FINRA Regulation to be affixed to all papers that may require it.
          (c) Except as otherwise permitted by applicable law, no committee shall have the power or authority of the Board with regard to: amending the Restated Certificate of Incorporation or the By-Laws of FINRA Regulation; adopting an agreement of merger or consolidation; recommending to the stockholder the sale, lease, or exchange of all or substantially all FINRA Regulation's property and assets; or recommending to the stockholder a dissolution of FINRA Regulation or a revocation of a dissolution. Unless the resolution of the Board expressly so provides, no committee shall have the power or authority to authorize the issuance of stock.
          (d) Each committee may adopt its own rules of procedure and may meet at stated times or on such notice as such committee may determine. Each committee shall keep regular minutes of its proceedings and report the same to the Board when required.
          (e) Unless otherwise provided by these By-Laws, a majority of a committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of such committee present at a meeting at which a quorum is present shall be an act of such committee.
          (f) The Board may appoint an Executive Committee, which shall, to the fullest extent permitted by Delaware law and other applicable law, have and be permitted to exercise all the powers and authority of the Board in the management of the business and affairs of FINRA Regulation between meetings of the Board, and which may authorize the seal of FINRA Regulation to be affixed to all papers that may require it. The Executive Committee shall consist of three or four Directors. The number of Public Directors shall exceed the number of Industry Directors. An Executive Committee member shall hold office for a term of one year. At all meetings of the Executive Committee, a quorum for the transaction of business shall consist of a majority of the Executive Committee, including not less than 50 percent of the Public Directors. In the absence of a quorum, a majority of the committee members present may adjourn the meeting until a quorum is present.
          (g) The Board may appoint a Finance Committee. The Finance Committee shall advise the Board with respect to the oversight of the financial operations and conditions of FINRA Regulation, including recommendations for FINRA Regulation's annual operating and capital budgets and proposed changes to the rates and fees charged by FINRA Regulation. The Finance Committee shall consist of three or four Directors. A Finance Committee member shall hold office for a term of one year.
          (h) Upon request of the Secretary of FINRA Regulation, each prospective committee member who is not a Director shall provide to the Secretary such information as is reasonably necessary to serve as the basis for a determination of the prospective committee member's classification as an Industry, Non-Industry or Public Member. The Secretary of FINRA Regulation shall certify to the Board each prospective committee member's classification. Such committee members shall update the information submitted under this Section at least annually and upon request of the Secretary of FINRA Regulation, and shall report immediately to the Secretary any change in such classification.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-2001-57 eff. Sept. 12, 2001.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Conflicts of Interest; Contracts and Transactions Involving Directors

          Sec. 4.14  (a) A Director or a National Adjudicatory Council or committee member shall not directly or indirectly participate in any adjudication of the interests of any party if that Director or National Adjudicatory Council or committee member has a conflict of interest or bias, or if circumstances otherwise exist where his or her fairness might reasonably be questioned. In any such case, the Director or National Adjudicatory Council or committee member shall recuse himself or herself or shall be disqualified in accordance with the Rules of the Corporation.
          (b) No contract or transaction between FINRA Regulation and one or more of its Directors or officers, or between FINRA Regulation and any other corporation, partnership, association, or other organization in which one or more of its Directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason if: (i) the material facts pertaining to such Director's or officer's relationship or interest and the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested Directors; (ii) the material facts are disclosed or become known to the Board or committee after the contract or transaction is entered into, and the Board or committee in good faith ratifies the contract or transaction by the affirmative vote of a majority of the disinterested Directors; or (iii) the material facts pertaining to the Director's or officer's relationship or interest and the contract or transaction are disclosed or are known to the stockholder entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholder. Only disinterested Directors may be counted in determining the presence of a quorum at the portion of a meeting of the Board or of a committee that authorizes the contract or transaction. This subsection shall not apply to a contract or transaction between FINRA Regulation and FINRA.
          Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
          Amended by SR-NASD-2006-135 eff. Dec. 20, 2006.
          Amended by SR-NASD-2004-110 eff. Dec. 31, 2004.
          Amended by SR-NASD-98-56 eff. Oct. 30, 1998.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39, 16-04.

        • Action Without Meeting

          Sec. 4.15  Any action required or permitted to be taken at a meeting of the Board or of a committee may be taken without a meeting if all Directors or all members of such committee, as the case may be, consent thereto in accordance with applicable law.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Communication of Views Regarding Contested Election or Nomination

          Sec. 4.16  (a) FINRA Regulation, the Board, any committee, the National Adjudicatory Council, and FINRA Regulation staff shall not take any position publicly or with a FINRA member or person associated with or employed by a member with respect to any candidate in a contested election or nomination held pursuant to these By-Laws or the FINRA By-Laws. A Director, committee member (other than the Nominating Committee) or National Adjudicatory Council member may communicate his or her views with respect to a candidate if such Director or committee or National Adjudicatory Council member acts solely in his or her individual capacity and disclaims any intention to communicate in any official capacity on behalf of FINRA Regulation, the Board, the National Adjudicatory Council, or any committee (other than the Nominating Committee). Except as provided herein, any candidate and his or her representatives may communicate support for the candidate to a member or person associated with or employed by a member.
          (b) In a contested election, the Nominating Committee may support its nominee by sending to members eligible to vote up to two mailings of materials in support of its nominees in lieu of mailings sent by its candidates pursuant to these By-Laws. In addition to such mailings, in the event of mailings or other communications to members by or on behalf of a candidate by petition in a contested election, the Nominating Committee may respond in-kind, but shall not take a position unresponsive to the contesting candidate's communications.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE V NATIONAL ADJUDICATORY COUNCIL

        • Authority

          Sec. 5.1  The National Adjudicatory Council may be authorized to act for the FINRA Board in a manner consistent with these By-Laws, the Rules of the Corporation, and the Delegation Plan with respect to an appeal or review of a disciplinary proceeding, a statutory disqualification proceeding, or a membership proceeding; a review of an offer of settlement, a letter of acceptance, waiver, and consent, and a minor rule violation plan letter; the exercise of exemptive authority; and such other proceedings or actions authorized by the Rules of the Corporation. The National Adjudicatory Council also shall consider and make recommendations to the FINRA Board on policy and rule changes relating to the business and sales practices of FINRA members and associated persons and enforcement policies, including policies with respect to fines and other sanctions. The FINRA Board may delegate such other powers and duties to the National Adjudicatory Council as the FINRA Board deems appropriate in a manner not inconsistent with the Delegation Plan.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Number of Members and Qualifications

          Sec. 5.2  (a) The National Adjudicatory Council shall consist of 15 members. The number of Non-Industry Members, including at least three Public Members, shall exceed the number of Industry Members. Industry Members shall include two Small Firm NAC Members, one Mid-Size Firm NAC Member, two Large Firm NAC Members, and two at-large Industry Members. The at-large Industry Members shall be appointed to the NAC without being designated as Small, Mid-Size, or Large Firm NAC Members.
          (b) The incumbent National Adjudicatory Council shall elect a Chair and a Vice Chair from among the members serving during the following term. The Chair and Vice Chair shall have such powers and duties as may be determined from time to time by the National Adjudicatory Council. The FINRA Board, by resolution adopted by a majority of Governors then in office, may remove the Chair or Vice Chair from such position at any time for refusal, failure, neglect, or inability to discharge his or her duties.
          Amended by SR-FINRA-2016-014 eff. Aug. 11, 2016.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2007-023 eff. July 30, 2007.
          Amended by SR-NASD-99-36 eff. Aug. 4, 1999.
          Amended by SR-NASD-98-36 eff. July 15, 1998.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 16-27

        • Appointments

          Sec. 5.3  The FINRA Board shall appoint a National Adjudicatory Council and all its members. The at-large Industry and Non-Industry Members of the NAC shall be appointed by the FINRA Board from candidates recommended by the Nominating Committee. The Small Firm, Mid-Size Firm and Large Firm NAC Members also shall be appointed by the FINRA Board from candidates recommended by the Nominating Committee, but in the event of a contested election, the Small Firm, Mid-Size Firm and Large Firm NAC Members shall be elected by the membership by a plurality of the votes of the members entitled to vote for such category in accordance with the provisions of these By-Laws and thereafter appointed by the FINRA Board.

          Adopted by SR-FINRA-2008-046 eff. Nov. 6, 2008.

        • Nomination Process

          Sec. 5.4  The Secretary of the Corporation shall collect from each nominee for the office of member of the National Adjudicatory Council such information as is reasonably necessary to serve as the basis for a determination of the nominee's classification as an Industry, Small Firm, Mid-Size Firm, Large Firm, Non-Industry, or Public Member, and the Secretary shall certify to the Nominating Committee each nominee's classification. After appointment to the National Adjudicatory Council, each member shall update such information at least annually and upon request of the Secretary, and shall report immediately to the Secretary any change in such classification.
          Renumbered from Sec. 5.3 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-98-36 eff. July 15, 1998.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Rejection of Nominating Committee Nominee

          Sec. 5.5  If the FINRA Board rejects the nominee of the Nominating Committee, the Nominating Committee shall repeat the nomination procedures in Sections 5.2 though 5.4. The FINRA Board may not reject Small Firm, Mid-Size Firm and Large Firm NAC Members elected in accordance with the provisions of Article VI.
          Adopted by SR-FINRA-2008-046 eff. Nov. 6, 2008.

        • Term of Office

          Sec. 5.6  (a) After a transitional period beginning in January 2017 and ending in December 2019, during which members may be appointed to terms of office necessary to achieve the requirements of Section 5.6(b) of this Article, each National Adjudicatory Council member shall hold office for a term of four years or until a successor is duly appointed and qualified, except in the event of earlier termination from office by reason of death, resignation, removal, disqualification, or other reason.
          (b) The NAC shall be divided into four classes, as equal in number as practicable, with terms of office that commence and expire on a staggered, annual basis.
          (c) No member may serve consecutive terms, except that if a member is appointed to fill a term of less than one year, such member may serve a single four year term following the expiration of such member's initial term.
          Amended by SR-FINRA-2016-014 eff. Aug. 11, 2016.
          Renumbered from Sec. 5.4 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2001-74 eff. Oct. 17, 2001.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 16-27

        • Resignation

          Sec. 5.7  A member of the National Adjudicatory Council may resign at any time upon written notice of resignation to the FINRA Board. Any such resignation shall take effect at the time specified therein, or if the time is not specified, upon receipt thereof, and the acceptance of such resignation, unless required by the terms thereof, shall not be necessary to make such resignation effective.
          Renumbered from Sec. 5.5 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Removal

          Sec. 5.8  Any or all of the members of the National Adjudicatory Council may be removed from office at any time for refusal, failure, neglect, or inability to discharge the duties of such office by majority vote of the FINRA Board.
          Renumbered from Sec. 5.6 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Disqualification

          Sec. 5.9  Notwithstanding Section 5.6, the term of office of a National Adjudicatory Council member shall terminate immediately upon a determination by the FINRA Board, by a majority vote, that: (a) the member no longer satisfies the classification (Industry, Non-Industry, or Public member) for which the member was appointed or elected; and (b) the member's continued service as such would violate the compositional requirements of the National Adjudicatory Council set forth in Section 5.2. If the term of office of a National Adjudicatory Council member terminates under this Section, and the remaining term of office of such member at the time of termination is not more than six months, during the period of vacancy the National Adjudicatory Council shall not be deemed to be in violation of the compositional requirements of Section 5.2 by virtue of such vacancy.
          Renumbered from Sec. 5.7 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Filling of Vacancies

          Sec. 5.10  If a position on the National Adjudicatory Council becomes vacant, whether because of death, disability, disqualification, removal, or resignation, the Nominating Committee shall nominate, and the FINRA Board shall appoint a person satisfying the classification (Industry, Non-Industry, or Public) for the position as provided in Section 5.2(a) to fill such vacancy, except that if the remaining term of office for the vacant position is not more than six months, no replacement shall be required and no violation of the compositional requirements of Section 5.2 shall be deemed to have occurred. For any vacancy of a seat on the National Adjudicatory Council for which the remaining term of office is more than six months, such vacancy shall be filled in accordance with Articles V and VI of these By-Laws, and, during this process, no violation of the compositional requirements of Section 5.2 shall be deemed to have occurred.
          Renumbered from Sec. 5.8 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Quorum and Voting

          Sec. 5.11  At all meetings of the National Adjudicatory Council, a quorum for the transaction of business shall consist of a majority of the National Adjudicatory Council, including not less than 50 percent of the Non-Industry members. In the absence of a quorum, a majority of the members present may adjourn the meeting until a quorum is present.
          Renumbered from Sec. 5.9 by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Meetings

          Sec. 5.12  The members of the National Adjudicatory Council may participate in a meeting through the use of a conference telephone or similar communications equipment by means of which all persons participating in the meeting may hear one another, and such participation in a meeting shall constitute presence in person at such meeting for all purposes.
          Renumbered from Sec. 5.10 by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Review Subcommittee

          Sec. 5.13  The National Adjudicatory Council shall appoint a Review Subcommittee to determine whether disciplinary and membership proceedings decisions should be called for review by the National Adjudicatory Council under the Rules of the Corporation and to perform any other function authorized by the Rules of the Corporation. The Review Subcommittee shall be composed of no fewer than two and no more than four members of the National Adjudicatory Council. The number of Non-Industry Members shall equal or exceed the number of Industry Members. At all meetings of the Review Subcommittee, a quorum for the transaction of business shall consist of not less than 50 percent of the members of the Review Subcommittee, including not less than 50 percent of the Non-Industry Members.
          Renumbered from Sec. 5.11 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE VI SELECTION OF SMALL FIRM, MID-SIZE FIRM AND LARGE FIRM INDUSTRY MEMBERS OF THE NATIONAL ADJUDICATORY COUNCIL

        • Identification of Candidates

          Sec. 6.1  The Nominating Committee shall nominate one or more candidates for appointment by the FINRA Board for any open Small Firm, Mid-Size Firm and Large Firm Industry Member seats on the National Adjudicatory Council.
          Renumbered from Sec. 6.11 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Designation of Additional Candidates

          Sec. 6.2  The Corporation shall notify the members of the names of each nominee selected by the Nominating Committee for open National Adjudicatory Council seats that are Small Firm, Mid-Size Firm, and Large Firm seats, the qualifications of the nominee, and such other information regarding each nominee as the Nominating Committee deems pertinent. A person who has not been so nominated may be included on a ballot for an election to fill an open Small Firm, Mid-Size Firm or Large Firm seat on the National Adjudicatory Council if: (a) within 45 days after the date of such notice, such person presents to the Secretary of the Corporation (i) in the case of petitions solely in support of such person, petitions in support of his or her nomination duly executed by three percent of the members entitled to vote (based on firm size classification) for such nominee’s election, and no such member shall endorse more than one such nominee, or (ii) in the case of petitions in support of more than one person, petitions in support of the nominations of such persons duly executed by ten percent of the members entitled to vote (based on firm size classification) for such nominees’ election; and (b) the Secretary certifies that (i) the petitions are duly executed by the Executive Representatives of the requisite number of members entitled to vote for such nominee’s/nominees’ election, and (ii) the person(s) satisfies/satisfy the classification (Large Firm, Mid-Size Firm or Small Firm) of the National Adjudicatory Council seat to be filled, based on such information provided by the person(s) as is reasonably necessary to make the certification. Only an Executive Representative may sign a petition on behalf of a FINRA member. The Secretary shall not unreasonably withhold or delay the certification. Upon certification, the election shall be deemed a contested election with respect to the NAC seat for which the nomination relates
          Renumbered from Sec. 6.13 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • List of FINRA Members Eligible to Vote

          Sec. 6.3  (a) The Secretary of the Corporation shall mail a list of all FINRA members eligible to vote based on the firm size classifications (Small Firm, Mid-Size Firm, or Large Firm) defined in these By-Laws and the names of their Executive Representatives to the additional candidate immediately following receipt of the additional candidate's notice by the Secretary of the Corporation.
          (b) A FINRA member that meets the firm size classification (Small Firm, Mid-Size Firm, or Large Firm) of the open seat on the NAC shall be eligible to cast one vote on the nomination through the FINRA member's Executive Representative.
          Renumbered from Sec. 6.14 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Uncontested Nomination

          Sec. 6.4  If the Nominating Committee proposes one candidate for nomination and no additional candidate is proposed for nomination pursuant to Section 6.2, the Nominating Committee shall nominate its candidate to the FINRA Board.
          Renumbered from Sec. 6.16 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Notice of Contested Nomination

          Sec. 6.5  If the Nominating Committee proposes more than one candidate for nomination for an open Industry Member seat, or if an additional candidate is proposed for nomination pursuant to Section 6.2, the Secretary of the Corporation shall send a written notice to the Executive Representatives of the FINRA members eligible to vote based on the firm size classifications (Small Firm, Mid-Size Firm, or Large Firm) defined in these By-Laws announcing the names of the candidates and describing contested nomination procedures.
          Renumbered from Sec. 6.17 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Administrative Support

          Sec. 6.6  The Secretary of the Corporation shall provide administrative support to all candidates by sending to FINRA members eligible to vote based on the firm size classifications (Small Firm, Mid-Size Firm, or Large Firm) defined in these By-Laws up to two mailings of materials prepared by the candidates. The Corporation shall pay the postage for the mailings. If a candidate wants such mailings sent, the candidate shall prepare such material on the candidate’s personal stationery. The material shall state that it represents the opinion of the candidate. The candidate shall provide a copy of such material for each member eligible to vote in the size classification of the open seat on the NAC. A candidate proposed for nomination by the Nominating Committee may identify himself or herself as such in his or her materials. Any candidate may send additional mailings to FINRA members at the candidate’s own expense. Except as provided in these By-Laws, FINRA Regulation, the Board, the Nominating Committee, any other committee, the National Adjudicatory Council, and FINRA Regulation staff shall not provide any other administrative support to a candidate for the nomination under this Article or any candidate in a contested election conducted under Article VII of the FINRA By-Laws.
          Renumbered from Sec. 6.18 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Ballots

          Sec. 6.7  With the assistance of the Secretary of the Corporation and an Independent Agent, the Nominating Committee shall prepare a ballot with the name or names of its candidate and any additional candidates proposed for nomination pursuant to Section 6.2. The ballot shall list the candidates in alphabetical order and shall identify the candidate or candidates proposed for nomination by the Nominating Committee. The Secretary of the Corporation shall send a ballot to the Executive Representative of each FINRA member eligible to vote based on the firm size classifications (Small Firm, Mid-Size Firm, or Large Firm) defined in these By-Laws. Instructions on the ballot shall direct the Executive Representative to return the ballot to the Independent Agent and state that the ballot must be postmarked or otherwise delivered on or before the return date specified on the ballot. The return date specified on the ballot shall be no fewer than 30 and no more than 45 days after the date of mailing or other delivery of the ballot.
          Amended by SR-FINRA-2016-014 eff. Aug. 11, 2016.
          Renumbered from Sec. 6.19 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 16-27

        • Vote Qualification List

          Sec. 6.8  Eligibility to vote on a nomination shall be based on FINRA’s membership records as of a date designated by the Secretary of the Corporation that is not more than 30 days before the date of mailing of the ballot. The Secretary of the Corporation shall prepare a list of FINRA members eligible to vote in the election and the names of their Executive Representatives, which shall be used for vote qualification purposes, and shall provide the list to the candidates.
          Renumbered from Sec. 6.20 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Ballots Returned As Undelivered

          Sec. 6.9  The Independent Agent shall investigate any ballot returned undelivered and shall determine whether it was sent to the FINRA member's address of record. If incorrectly addressed, the Independent Agent shall send a new ballot to the FINRA member's address of record.
          Amended by SR-FINRA-2016-014 eff. Aug. 11, 2016.
          Renumbered from Sec. 6.21 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 16-27

        • General Procedures for Qualification and Accounting of Ballots

          Sec. 6.10  After the close of the voting period, the Independent Agent shall tabulate the ballots and notify the Secretary of the Corporation of the voting results for each National Adjudicatory position subject to election within 14 calendar days after the return date specified on the ballot pursuant to Section 6.7.
          Amended by SR-FINRA-2016-014 eff. Aug. 11, 2016.
          Renumbered from Sec. 6.22 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 16-27

        • Ballots Set Aside

          Sec. 6.11  The Independent Agent shall set aside a ballot if: (a) the ballot is received from a FINRA member eligible to vote based on the firm size classifications (Small Firm, Mid-Size Firm, or Large Firm) defined in these By-Laws and the ballot is signed by a person who is not the Executive Representative listed on the vote qualification list prepared under Section 6.8, and the Secretary of the Corporation has not received proper notice of a change in Executive Representative pursuant to the FINRA By-Laws; or (b) two or more properly executed ballots are received from a FINRA member eligible to vote based on the firm size classifications (Small Firm, Mid-Size Firm, or Large Firm) defined in these By-Laws. If the Independent Agent determines that the ballots set aside are material to the outcome of the nomination, the Secretary of the Corporation and the Independent Agent shall make reasonable efforts to resolve each ballot set aside. With respect to a ballot not signed by an Executive Representative of record, the Secretary of the Corporation shall contact the FINRA member to request that the FINRA member send proper written notice of any change in Executive Representative by facsimile so that the ballot may be counted. With respect to multiple ballots from any FINRA member, the Independent Agent shall contact the Executive Representative of the FINRA member to obtain the FINRA member's vote. The Secretary of the Corporation shall keep a list of FINRA members that reported their ballot was lost or not received and that were provided with a duplicate ballot. The Secretary of the Corporation shall provide the list to the Independent Agent and, upon request, to the candidates.
          Renumbered from Sec. 6.23 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Invalid Ballots

          Sec. 6.12  The Independent Agent shall declare a ballot invalid if one or more of the following conditions exists:
          (a) the ballot is not signed by the Executive Representative (unless Section 6.11 applies);
          (b) a vote is not indicated on the ballot; or
          (c) a vote for more than one candidate is indicated on the ballot.
          Renumbered from Sec. 6.24 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Certification of Nomination

          Sec. 6.13  Under the direction of the Secretary of the Corporation or the Secretary’s designee, the Independent Agent shall count the votes received for each candidate. The candidate receiving the largest number of votes cast by FINRA members eligible to vote based on the firm size classifications (Small Firm, Mid- Size Firm, or Large Firm) defined in these By-Laws shall be declared the nominee and the Nominating Committee shall nominate such candidate to the FINRA Board. In the event of a tie, there shall be a run-off vote for the nomination. The Nominating Committee shall send a written certification of the nomination results to the FINRA Board. The certification shall state the number of votes received by each candidate and the number of ballots set aside.
          Renumbered from Sec. 6.25 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Extension of Time and Additional Procedures

          Sec. 6.14  The Secretary of the Corporation may extend a time period under this Article for good cause shown. In extraordinary circumstances, the Secretary of the Corporation, with the approval of the Executive Committee or the FINRA Board, may adopt additional procedures for nominations under this Article.
          Renumbered from Sec. 6.27 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE VII OFFICERS, AGENTS, AND EMPLOYEES

        • Officers

          Sec. 7.1  The Board shall elect the officers of FINRA Regulation, which shall include a President, a Secretary, and such other executive or administrative officers as it shall deem necessary or advisable, including, but not limited to: Executive Vice President, Senior Vice President, Vice President, General Counsel, and Treasurer of FINRA Regulation. All such officers shall have such titles, powers, and duties, and shall be entitled to such compensation, as shall be determined from time to time by the Board. The terms of office of such officers shall be at the pleasure of the Board, which by affirmative vote of a majority of the Board, may remove any such officer at any time. One person may hold the offices and perform the duties of any two or more of said offices, except the offices and duties of President and Vice President or of President and Secretary. None of the officers, except the President, need be Directors of FINRA Regulation.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Absence of the President

          Sec. 7.2  In the case of the absence or inability to act of the President of FINRA Regulation, or in the case of a vacancy in such office, the Board may appoint its Chair or such other person as it may designate to act as such officer pro tem, who shall assume all the functions and discharge all the duties of the President.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Agents and Employees

          Sec. 7.3  In addition to the officers, FINRA Regulation may employ such agents and employees as the Board may deem necessary or advisable, each of whom shall hold office for such period and exercise such authority and perform such duties as the Board, the President, or any officer designated by the Board may from time to time determine. Agents and employees of FINRA Regulation shall be under the supervision and control of the officers of the FINRA Regulation, unless the Board, by resolution, provides that an agent or employee shall be under the supervision and control of the Board.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Delegation of Duties of Officers

          Sec. 7.4  The Board may delegate the duties and powers of any officer of FINRA Regulation to any other officer or to any Director for a specified period of time and for any reason that the Board may deem sufficient.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Resignation and Removal of Officers

          Sec. 7.5  (a) Any officer may resign at any time upon written notice of resignation to the Board, the President, or the Secretary. Any such resignation shall take effect upon receipt of such notice or at any later time specified therein. The acceptance of a resignation shall not be necessary to make the resignation effective.
          (b) Any officer of FINRA Regulation may be removed, with or without cause, by resolution adopted by a majority of the Directors then in office at any regular or special meeting of the Board or by a written consent signed by all of the Directors then in office. Such removal shall be without prejudice to the contractual rights of the affected officer, if any, with FINRA Regulation.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Bond

          Sec. 7.6  FINRA Regulation may secure the fidelity of any or all of its officers, agents, or employees by bond or otherwise.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE VIII DISTRICT COMMITTEES

        • Establishment of Districts and Regions

          Sec. 8.1  The Board shall establish boundaries for districts within the United States to assist FINRA Regulation in administering its affairs in a manner that is consistent with applicable law, the Restated Certificate of Incorporation, these By-Laws, the Delegation Plan, and the Rules of the Corporation. The Board may organize the districts into regions to promote efficiency and sound administration. It may make changes from time to time in the number or boundaries of the districts or regions as it deems necessary or appropriate. The Board shall prescribe such policies and procedures as are necessary or appropriate to address the implementation of a new district or region configuration in the event of a change in the number or boundaries of the districts or regions. Schedule A to these By-Laws identifies the districts, their territorial boundaries and respective regions as currently established by the Board.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Composition of District Committees

          Sec. 8.2  (a) A district created under Section 8.1 shall elect a District Committee pursuant to this Article. A District Committee shall consist of no fewer than five and no more than 20 members, unless otherwise provided by resolution of the Board. Subject to the limitation set forth in the immediately preceding sentence, the authorized number of members of a District Committee shall be determined from time to time by the Board; provided, however, that no decrease in the authorized number of members of a District Committee shall shorten the term of office of any member thereof. Each District Committee member shall: (1) be associated with a FINRA member eligible to vote in the district for District Committee elections and registered in the capacity of a branch manager or principal or denoted as a corporate officer of the FINRA member; (2) work primarily from such FINRA member's principal office or a branch office that is located within the district where the member serves on a District Committee; and (3) represent and be directly elected by the applicable classification of FINRA members based on the size of the firm with which he or she is associated: Small Firm, Mid-Size Firm, or Large Firm as defined in these By-Laws. The Board shall determine the composition of District Committees based on firm size classifications (Small Firm, Mid-Size Firm, or Large Firm), taking into account the composition of the membership and the Board. Members of the District Committees shall serve as panelists in disciplinary proceedings in accordance with the Rules of the Corporation. The District Committees shall consider and recommend policies and rule changes to the Board. The District Committees shall endeavor to educate FINRA members and other brokers and dealers in their respective districts as to the objects, purposes, and work of FINRA and FINRA Regulation in order to foster FINRA members' interest and cooperation.
          (b) A member of a District Committee may resign at any time upon giving Notice to the District Director. Any such resignation shall take effect upon receipt of such Notice or at any later time specified therein, provided that notice of resignation at a later date may be made immediately effective at the discretion of the Chief Executive Officer or his or her designee. The acceptance of such resignation shall not be necessary to make such resignation effective.
          (c) In the event of the refusal, failure, neglect, or inability of a member of a District Committee to discharge his or her duties, or for any cause affecting the best interests of FINRA Regulation, the sufficiency of which shall be decided by the District Committee, the District Committee may remove the member by the affirmative vote of two-thirds of the members of the District Committee then in office and declare the District Committee member's position vacant. The District Committee shall notify the District Committee member of his or her removal within seven days after the vote. A District Committee member who is removed may submit a written appeal of the removal to the Board within 30 days after the date he or she is notified of the removal. The Board may affirm, reverse, or modify the determination of the District Committee. A vote of a majority of the Directors then in office shall be required to reverse or modify the action of the District Committee.
          (d) In the event of a vacancy in a District Committee resulting from death, resignation, removal, or other cause, the Chief Executive Officer or his or her designee shall determine whether such vacancy shall be filled prior to the next regularly scheduled election of District Committee members. In the event the Chief Executive Officer or his or her designee determines that a vacancy on a District Committee should be filled, the vacancy shall be filled pursuant to Section 8.4.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2005-086 eff. July 5, 2005.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Term of Office of District Committee Members

          Sec. 8.3  Each regularly elected member of a District Committee shall hold office for a "full term" which is the later of three years or until a successor is elected and qualified. Notwithstanding the term of office for a regularly elected District Committee member, such member's term shall terminate sooner upon the member's death, resignation, or removal. There is no limit on the number of terms that may be served by a member of a District Committee, except that a District Committee member may not serve two full terms consecutively.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Filling of Vacancies on District Committees

          Sec. 8.4  In the event of a vacancy on a District Committee prior to the expiration of the District Committee member's term of office, and where the Chief Executive Officer or his or her designee determines, pursuant to Section 8.2(d), that such vacancy should be filled, or in the event of a newly created membership on a District Committee by virtue of an increase in the authorized number of members thereof, the District Committee shall appoint by majority vote an individual who meets the qualification requirements of Section 8.2(a), including meeting the requirement of representing the applicable firm size classification (Small Firm, Mid-Size Firm, or Large Firm) to fill the vacancy or newly created membership. If the District Committee is unable to identify or appoint an individual meeting the requirement of representing the applicable firm size classification, it may appoint for that vacancy an individual who otherwise meets the qualification requirements of Section 8.2(a) associated with a firm having another firm size classification. The appointment by the District Committee shall be effective until the next regularly scheduled election, and until such District Committee member's successor is elected and qualified. Following the next regularly scheduled election, in the event of a vacancy, the newly elected District Committee member shall serve only the duration of the departed District Committee member's term, and in the event of a newly created membership, the newly elected District Committee member shall serve only the duration of the term for such class of membership.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Meetings of District Committees

          Sec. 8.5  Meetings of a District Committee shall be held jointly with the other District Committees in its region, as identified in Schedule A to these By-Laws, at such times and places, upon such notice, and in accordance with such procedures as the Chief Executive Officer or his or her designee in his or her discretion may determine. A quorum of a District Committee shall consist of a majority of its members, and any action taken by a majority present at any meeting at which a quorum is present, except as otherwise provided in these By-Laws, shall constitute the action of the Committee. Any or all members of a District Committee may participate in any such meeting by means of conference telephone or other communications equipment by means of which all participants can communicate with each other, and such participation shall constitute presence in person at the meeting. Action by a District Committee may be taken by consent in writing or by electronic transmission in lieu of a meeting, in which case any action taken by a majority of the Committee shall constitute the action of the Committee.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Expenses of District Committees

          Sec. 8.6  Funds to meet the regular expenses of each District Committee shall be provided by the Board, and all such expenses shall be subject to the approval of the Board.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Solicitation of Candidates and Secretary's Notice to FINRA Members

          Sec. 8.7  The Secretary of FINRA Regulation shall give a Notice of the upcoming election to FINRA members and the Executive Representatives of FINRA members describing the election procedures and stating that FINRA members may submit names of District Committee member candidates for consideration to the Secretary of FINRA Regulation.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Self-Nomination of Candidates and Vacancy Appointments

          Sec. 8.8  (a) An individual who meets the qualification requirements of Section 8.2(a) wishing to be considered for election to the District Committee shall deliver a written Notice to the Secretary of FINRA Regulation within 30 calendar days after the Secretary of FINRA Regulation gives the Notice of the upcoming elections pursuant to Section 8.7. The Secretary of FINRA Regulation shall make a written record of the time and date of the receipt of each Notice from a qualified individual, and designate that individual as a candidate.
          (b) In the event that no candidate is designated for a particular District Committee vacancy, the Chief Executive Officer or his or her designee shall appoint an individual who meets the qualification requirements of Section 8.2(a), including representing the applicable firm size classification (Small Firm, Mid-Size Firm or Large Firm), to fill that vacancy for a full term. If the Chief Executive Office or his or her designee is unable to identify or appoint an individual meeting the requirement of representing the applicable firm size classification, he or she may appoint for that vacancy an individual who otherwise meets the qualification requirements of Section 8.2(a) associated with a firm having another firm size classification.
          Adopted by SR-FINRA-2011-011 eff. April 28, 2011.

        • FINRA Members Eligible to Vote

          Sec. 8.9  A FINRA member that has its principal office or one or more registered branch offices in the district shall be eligible to cast one vote through the FINRA member's Executive Representative for each position representing its firm size classification (Small Firm, Mid-Size Firm, or Large Firm) on the District Committee to be filled in the election.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Administrative Support

          Sec. 8.10  The Secretary of FINRA Regulation shall provide administrative support to all candidates, according to procedures published by the Secretary. Any candidate may also send communications to FINRA members eligible to vote in the district based on the firm size classification (Small Firm, Mid-Size Firm, or Large Firm) at the candidate's own expense, provided that such communications clearly state that they represent the opinions of the candidate. Except as provided in this Article, FINRA Regulation, the Board, any committee, and FINRA Regulation staff shall not provide any other administrative support to a candidate in the election.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Ballots

          Sec. 8.11  The Secretary of FINRA Regulation shall send a ballot to the Executive Representative of each FINRA member eligible to vote in the district. The ballot shall list the candidates for each position subject to election in alphabetical order. Instructions on the ballot shall direct the Executive Representative to return the ballot to the Independent Agent and state that the ballot must be postmarked or otherwise delivered on or before the return date specified on the ballot. The return date specified on the ballot shall be no fewer than 20 and no more than 30 days after the date of mailing or other delivery of the ballot.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Vote Qualification List

          Sec. 8.12  Eligibility to vote in a district election shall be based on FINRA's membership records as of a date selected by the Secretary of FINRA Regulation that is not more than 30 days before the date of mailing of the ballot. The Secretary of FINRA Regulation shall prepare a list of FINRA members in each firm size classification (Small Firm, Mid-Size Firm, or Large Firm) eligible to vote in the district, their mailing addresses, and their Executive Representatives, which shall be used for vote qualification purposes, and shall provide the applicable list to candidates upon request.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Ballots Returned As Undelivered

          Sec. 8.13  The Independent Agent shall investigate any ballot returned undelivered and shall determine whether it was sent to the FINRA member's address of record. If incorrectly addressed, the Independent Agent shall send a new ballot to the address of record.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • General Procedures for Qualification and Accounting of Ballots

          Sec. 8.14  After the close of the voting period, the Independent Agent shall tabulate the ballots and notify the Secretary of FINRA Regulation of the voting results for each District Committee position subject to election within 14 calendar days after the return date specified on the ballot pursuant to Section 8.11.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Ballots Set Aside

          Sec. 8.15  The Independent Agent shall set aside a ballot if: (a) the ballot is received from a FINRA member eligible to vote in the district and the ballot is signed by a person who is not the Executive Representative listed on the vote qualification list prepared under Section 8.12, and the Secretary of FINRA has not received proper notice of a change in Executive Representative pursuant to the FINRA By-Laws; or (b) if two or more properly executed ballots are received from a FINRA member eligible to vote in the district. If the Independent Agent determines that the ballots set aside are material to the outcome of the election, the Secretary of FINRA Regulation and the Independent Agent shall make reasonable efforts to resolve each ballot set aside. With respect to a ballot not signed by an Executive Representative of record, the Secretary of FINRA Regulation shall contact the FINRA member to request that the FINRA member send written notice of any change in Executive Representative to a FINRA designated system or by facsimile so that the ballot may be counted. With respect to multiple ballots from a FINRA member, the Independent Agent shall contact the Executive Representative of the FINRA member to obtain the FINRA member's vote. The Secretary of FINRA Regulation shall keep a list of FINRA members that reported their ballot was lost or not received and that were provided with a duplicate ballot. The Secretary of FINRA Regulation shall provide the list to the Independent Agent and, upon request, to the candidates.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Invalid Ballots

          Sec. 8.16  The Independent Agent shall declare a ballot invalid if one or more of the following conditions exist:
          (a) the ballot is not signed by the Executive Representative (unless Section 8.15 applies);
          (b) a vote is not indicated on the ballot; or
          (c) the ballot indicates votes for more than one candidate per position subject to election.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Election Results

          Sec. 8.17  The Independent Agent shall count the votes received for each candidate in a district. The candidates for the office of member of the District Committee receiving the largest number of votes cast by FINRA members eligible to vote in the district for the office shall be declared elected such that the number and firm size classification (Small Firm, Mid-Size Firm, or Large Firm) of candidates declared elected corresponds to the number and firm size classification of positions on the District Committee subject to election. In the event of a tie, there shall be a run-off election. The Secretary of FINRA Regulation shall notify the Board of the election results. The notification shall state the number of votes received by each candidate in each firm size classification and the number of ballots set aside.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Extensions of Time and Additional Procedures

          Sec. 8.18  The Secretary of FINRA Regulation may extend a time period under this Article for good cause shown. In extraordinary circumstances, the Secretary of FINRA Regulation, with the approval of the Executive Committee or the Board, may adopt additional procedures for elections under this Article.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Definitions

          Sec. 8.19  (a) When used in Article VIII of these By-Laws, the term "Notice" means a notice in writing or by electronic transmission.
          (b) For purposes of this Article VIII, any Notice by FINRA Regulation, the Secretary of FINRA Regulation, or the District Director given by electronic transmission shall be deemed given: (1) if by facsimile telecommunication, when directed to a number at which the person entitled to notice has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail address at which the person entitled to notice has consented to receive notice; (3) if by a posting on an electronic network when the person entitled to notice has consented to receive notice in this manner, together with separate notice to the person entitled to notice of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (4) if by any other form of electronic transmission when the person entitled to notice has consented to receive notice in this manner, when directed to the person entitled to notice. For purposes of this Article VIII, if mailed, any such Notice by FINRA Regulation, the Secretary of FINRA Regulation, or the District Director shall be deemed given when deposited in the United States mail, postage prepaid, directed to the person entitled to notice at such person's address as it appears on the records of FINRA Regulation.
          Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
          Amended by SR-FINRA-2011-011 eff. April 28, 2011.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.

          Selected Notice: 16-04

      • ARTICLE IX COMPENSATION

        • Compensation of Board, Council, and Committee Members

          Sec. 9.1  The Board may provide for reasonable compensation of the Chair of the Board, the Directors, National Adjudicatory Council members, and the members of any committee of the Board or any District Committee. The Board may also provide for reimbursement of reasonable expenses incurred by such persons in connection with the business of FINRA Regulation.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE X INDEMNIFICATION

        • Indemnification of Directors, Officers, Employees, Agents, National Adjudicatory Council and Committee Members

          Sec. 10.1  (a) FINRA Regulation shall indemnify, and hold harmless, to the fullest extent permitted by Delaware law as it presently exists or may thereafter be amended, any person (and the heirs, executors, and administrators of such person) who, by reason of the fact that he or she is or was a Director, officer, or employee of FINRA Regulation or a National Adjudicatory Council or committee member, or is or was a Director, officer, or employee of FINRA Regulation who is or was serving at the request of FINRA Regulation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or non-profit entity, including service with respect to employee benefit plans, is or was a party, or is threatened to be made a party to:
          (i) any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of FINRA Regulation) against expenses (including attorneys' fees and disbursements), judgments, fines, and amounts paid in settlement actually and reasonably incurred by such person in connection with any such action, suit, or proceeding; or
          (ii) any threatened, pending, or completed action or suit by or in the right of FINRA Regulation to procure a judgment in its favor against expenses (including attorneys' fees and disbursements) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit.
          (b) FINRA Regulation shall advance expenses (including attorneys' fees and disbursements) to persons described in subsection (a); provided, however, that the payment of expenses incurred by such person in advance of the final disposition of the matter shall be conditioned upon receipt of a written undertaking by that person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under this Section or otherwise.
          (c) FINRA Regulation may, in its discretion, indemnify and hold harmless, to the fullest extent permitted by Delaware law as it presently exists or may thereafter be amended, any person (and the heirs, executors, and administrators of such persons) who, by reason of the fact that he or she is or was an agent of FINRA Regulation or is or was an agent of FINRA Regulation who is or was serving at the request of FINRA Regulation as a director, officer, employee, or agent of another corporation, partnership, trust, enterprise, or non-profit entity, including service with respect to employee benefit plans, was or is a party, or is threatened to be made a party to any action or proceeding described in subsection (a).
          (d) FINRA Regulation may, in its discretion, pay the expenses (including attorneys' fees and disbursements) reasonably and actually incurred by an agent in defending any action, suit, or proceeding in advance of its final disposition; provided, however, that the payment of expenses incurred by such person in advance of the final disposition of the matter shall be conditioned upon receipt of a written undertaking by that person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under this Section or otherwise.
          (e) Notwithstanding the foregoing or any other provision of these By-Laws, no advance shall be made by FINRA Regulation to an agent or non-officer employee if a determination is reasonably and promptly made by the Board by a majority vote of those Directors who have not been named parties to the action, even though less than a quorum, or, if there are no such Directors or if such Directors so direct, by independent legal counsel, that, based upon the facts known to the Board or such counsel at the time such determination is made: (1) the person seeking advancement of expenses (i) acted in bad faith, or (ii) did not act in a manner that he or she reasonably believed to be in or not opposed to the best interests of FINRA Regulation; (2) with respect to any criminal proceeding, such person believed or had reasonable cause to believe that his or her conduct was unlawful; or (3) such person deliberately breached his or her duty to FINRA Regulation.
          (f) The indemnification provided by this Section in a specific case shall not be deemed exclusive of any other rights to which a person seeking indemnification may be entitled, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a Director, officer, National Adjudicatory Council or committee member, employee, or agent and shall inure to the benefit of such person's heirs, executors, and administrators.
          (g) Notwithstanding the foregoing, but subject to subsection (j), FINRA Regulation shall be required to indemnify any person identified in subsection (a) in connection with a proceeding (or part thereof) initiated by such person only if the initiation of such proceeding (or part thereof) by such person was authorized by the Board.
          (h) FINRA Regulation's obligation, if any, to indemnify or advance expenses to any person who is or was serving at its request as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or non-profit entity shall be reduced by any amount such person may collect as indemnification or advancement from such other corporation, partnership, joint venture, trust, enterprise, or non-profit entity.
          (i) Any repeal or modification of the foregoing provisions of this Section shall not adversely affect any right or protection hereunder of any person respecting any act or omission occurring prior to the time of such repeal or modification.
          (j) If a claim for indemnification or advancement of expenses under this Article is not paid in full within 60 days after a written claim therefor by an indemnified person has been received by FINRA Regulation, the indemnified person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action, FINRA Regulation shall have the burden of proving that the indemnified person is not entitled to the requested indemnification or advancement of expenses under Delaware law.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Indemnification Insurance

          Sec. 10.2  FINRA Regulation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, National Adjudicatory Council or committee member, employee, or agent of FINRA Regulation, or is or was serving at the request of FINRA Regulation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or non-profit entity against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not FINRA Regulation would have the power to indemnify such person against such liability hereunder.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE XI CAPITAL STOCK

        • Sole Stockholder

          Sec. 11.1  FINRA shall be the sole stockholder of the capital stock of FINRA Regulation.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Certificates

          Sec. 11.2  The stockholder shall be entitled to a certificate or certificates in such form as shall be approved by the Board, certifying the number of shares of capital stock in FINRA Regulation owned by the stockholder.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Signatures

          Sec. 11.3  (a) Certificates representing shares of capital stock of FINRA Regulation shall be signed in the name of FINRA Regulation by two officers with one being the President or a Vice President, and the other being the Secretary or the Treasurer. Such certificates may be sealed with the corporate seal of FINRA Regulation or a facsimile thereof.
          (b) Any signature on the stock certificate may be a facsimile. In the event that any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a stock certificate shall cease to be such officer, transfer agent, or registrar before such certificate is issued, such certificate may be issued by FINRA Regulation with the same effect as if such person were such officer, transfer agent, or registrar at the date of issue.
          Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notices: 09-39, 16-04.

        • Stock Ledger

          Sec. 11.4  (a) A record of all certificates representing capital stock issued by FINRA Regulation shall be kept by the Secretary or any other officer, employee, or agent designated by the Board. Such record shall show the name and address of the person, firm, or corporation in which certificates representing capital stock are registered, the number of shares represented by each such certificate, the date of each such certificate, and in the case of certificates that have been canceled, the date of cancellation thereof.
          (b) FINRA Regulation shall be entitled to treat the holder of record of shares of capital stock as shown on the stock ledger as the owner thereof and as the person entitled to vote such shares and to receive notice of meetings, and for all other purposes. Except as otherwise required by applicable law, FINRA Regulation shall not be bound to recognize any equitable or other claim to or interest in any share of capital stock on the part of any other person, whether or not FINRA Regulation shall have express or other notice thereof.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Transfers of Stock

          Sec. 11.5  (a) The Board may make such rules and regulations as it may deem expedient, not inconsistent with law, the Restated Certificate of Incorporation, or these By-Laws, concerning the issuance, transfer, and registration of shares of capital stock of FINRA Regulation. The Board may appoint, or authorize any principal officer to appoint, one or more transfer agents or one or more transfer clerks and one or more registrars and may require all certificates representing capital stock to bear the signature or signatures of any of them.
          (b) Transfers of capital stock shall be made on the books of FINRA Regulation only upon delivery to FINRA Regulation or its transfer agent of: (i) a written direction of the registered holder named in the certificate or such holder's attorney lawfully constituted in writing; (ii) the certificate representing the shares of capital stock being transferred; and (iii) a written assignment of the shares of capital stock evidenced thereby.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Cancellation

          Sec. 11.6  Each certificate representing capital stock surrendered to FINRA Regulation for exchange or transfer shall be canceled and no new certificate or certificates shall be issued in exchange for any existing certificate other than pursuant to Section 11.7 until such existing certificate shall have been canceled.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Lost, Stolen, Destroyed, and Mutilated Certificates

          Sec. 11.7  In the event that any certificate representing shares of capital stock of FINRA Regulation shall be mutilated, FINRA Regulation shall issue a new certificate in place of such mutilated certificate. In the event that any such certificate shall be lost, stolen, or destroyed FINRA Regulation may, in the discretion of the Board or a committee appointed thereby with power so to act, issue a new certificate representing shares of capital stock in the place of any such lost, stolen, or destroyed certificate. The applicant for any substituted certificate or certificates shall surrender any mutilated certificate or, in the case of any lost, stolen, or destroyed certificate, furnish satisfactory proof of such loss, theft, or destruction of such certificate and of the ownership thereof. The Board or such committee may, in its discretion, require the owner of a lost or destroyed certificate, or such owner's representatives, to furnish to FINRA Regulation a bond with an acceptable surety or sureties and in such sum as shall be sufficient to indemnify FINRA Regulation against any claim that may be made against it on account of the lost, stolen, or destroyed certificate or the issuance of such new certificate. A new certificate may be issued without requiring a bond when, in the judgment of the Board, it is proper to do so.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Fixing of Record Date

          Sec. 11.8  The Board may fix a record date in accordance with Delaware law.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE XII MISCELLANEOUS PROVISIONS

        • Corporate Seal

          Sec. 12.1  The seal of FINRA Regulation shall be circular in form and shall bear, in addition to any other emblem or device approved by the Board, the name of FINRA Regulation, the year of its incorporation, and the words "Corporate Seal" and "Delaware." The seal may be used by causing it to be affixed or impressed, or a facsimile thereof may be reproduced or otherwise used in such manner as the Board may determine.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Fiscal Year

          Sec. 12.2  The fiscal year of FINRA Regulation shall begin on the first day of January in each year, or such other month as the Board may determine by resolution.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Waiver of Notice

          Sec. 12.3  (a) Whenever notice is required to be given by law, the Restated Certificate of Incorporation, or these By-Laws, a written waiver thereof, signed by the person or persons entitled to such notice, or a waiver by electronic transmission by the person entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholder, Directors, or members of a committee of Directors need be specified in any written waiver of notice.
          (b) Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
          Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

          Selected Notice: 09-39.

        • Execution of Instruments, Contracts, Etc.

          Sec. 12.4  (a) All checks, drafts, bills of exchange, notes, or other obligations or orders for the payment of money shall be signed in the name of FINRA Regulation by such officer or officers or person or persons as the Board, or a duly authorized committee thereof, may from time to time designate. Except as otherwise provided by law, the Board, any committee given specific authority in the premises by the Board, or any committee given authority to exercise generally the powers of the Board during intervals between meetings of the Board, may authorize any officer, employee, or agent, in the name of and on behalf of FINRA Regulation, to enter into or execute and deliver deeds, bonds, mortgages, contracts, and other obligations or instruments, and such authority may be general or confined to specific instances.
          (b) All applications, written instruments, and papers required by any department of the United States Government or by any state, county, municipal, or other governmental authority, may be executed in the name of FINRA Regulation by any principal officer or subordinate officer of FINRA Regulation, or, to the extent designated for such purpose from time to time by the Board, by an employee or agent of FINRA Regulation. Such designation may contain the power to substitute, in the discretion of the person named, one or more other persons.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Form of Records

          Sec. 12.5  Any records maintained by FINRA Regulation in the regular course of business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, magnetic tape, computer disk, or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • ARTICLE XIII AMENDMENTS; EMERGENCY BY-LAWS

        • By Stockholder

          Sec. 13.1  These By-Laws may be altered, amended, or repealed, or new By-Laws may be adopted, at any meeting of the stockholder, provided that, in the case of a special meeting, notice that an amendment is to be considered and acted upon shall be inserted in the notice or waiver of notice of said meeting.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • By Directors

          Sec. 13.2  To the extent permitted by the Restated Certificate of Incorporation, these By-Laws may be altered, amended, or repealed, or new By-Laws may be adopted, at any regular or special meeting of the Board.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        • Emergency By-Laws

          Sec. 13.3  The Board may adopt emergency By-Laws subject to repeal or change by action of the stockholder that shall, notwithstanding any different provision of law, the Restated Certificate of Incorporation, or these By-Laws, be operative during any emergency resulting from any nuclear or atomic disaster, an attack on the United States or on a locality in which FINRA Regulation conducts its business or customarily holds meetings of the Board or stockholder, any catastrophe, or other emergency condition, as a result of which a quorum of the Board or a committee thereof cannot readily be convened for action. Such emergency By-Laws may make any provision that may be practicable and necessary under the circumstances of the emergency.
          Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
          Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Schedule A to the FINRA Regulation By-Laws

        The number and territorial boundaries of the several districts and their respective regions, established as provided in Article VIII, Section 8.1, are as follows:
        Districts
        District No. 1 State of Hawaii; in the State of California, the Counties of Monterey, San Benito, Fresno and Inyo, and the remainder of the State North or West of such Counties; and in the State of Nevada, the Counties of Esmeralda and Nye, and the remainder of the State North or West of such Counties.
        District No. 2 In the State of California, that part of the State South or East of the Counties of Monterey, San Benito, Fresno and Inyo; and, in the State of Nevada, that part of the State South or East of the Counties of Esmeralda and Nye, and all Pacific possessions and territories of the United States.
        District No. 3 States of Alaska, Arizona, Colorado, Idaho, Montana, New Mexico, Oregon, Utah, Washington and Wyoming.
        District No. 4 States of Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota.
        District No. 5 States of Alabama, Arkansas, Louisiana, Mississippi, Oklahoma and Tennessee.
        District No. 6 State of Texas.
        District No. 7 States of Florida, Georgia, North Carolina, and South Carolina, Puerto Rico and the Virgin Islands.
        District No. 8 States of Illinois, Indiana, Kentucky, Michigan, Ohio and Wisconsin.
        District No. 9 The District of Columbia, and the States of Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia, and New York (except for the five Boroughs of New York City and the Counties of Nassau and Suffolk).
        District No. 10 In the State of New York, the five Boroughs of New York City and the Counties of Nassau and Suffolk.
        District No. 11 States of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.
        Regions
        Midwest Region: Districts 4 and 8
        New York Region: District 10
        North Region: Districts 9 and 11
        South Region: Districts 5, 6 and 7
        West Region: Districts 1, 2 and 3
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Adopted by SR-FINRA-2009-020 eff. Aug. 20, 2009.

        Selected Notice: 09-39.