80 FR 21790 - Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NASDAQ OMX BX, Inc. Relating to Member Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 75 (April 20, 2015)

[Federal Register Volume 80, Number 75 (Monday, April 20, 2015)]
[Notices]
[Pages 21790-21792]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-08940]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74724; File No. SR-BX-2015-017]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NASDAQ OMX BX, Inc. Relating 
to Member Application

April 14, 2015.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on April 8, 2015, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change as described in Items I, II, and III, below, 
which Items have been prepared by the Exchange. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    BX proposes to amend Rule 1013 titled ``New Member Application'' to 
include an expedited application process for firms that are already 
approved members of NASDAQ OMX PHLX LLC (``PHLX'').
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaqomxbx.cchwallstreet.com, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of

[[Page 21791]]

the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to amend BX Rule 
1013(a)(5), entitled Applicants That Are Members of an Association or 
Another Exchange, to permit an expedited review for new member 
applications seeking BX membership provided those applicants are 
approved members of PHLX.
    Specifically, Exchange Rule 1013(a)(5)(C) currently permits the 
Exchange to accept applicants that gained membership at Financial 
Industry Regulatory Authority (``FINRA'') or The NASDAQ Stock Market 
LLC (``NASDAQ'') when considering a BX new member application. 
Applicants who are approved members of FINRA or NASDAQ are eligible for 
an abbreviated waive-in application eliminating the submission and 
review of duplicative supplemental material that has already been 
submitted and reviewed in connection with a FINRA or NASDAQ new member 
application.
    At this time, the Exchange proposes to extend the abbreviated 
application process already in place for approved FINRA and/or NASDAQ 
members to PHLX members. The Exchange notes that the PHLX 
qualifications are the same as those applicable to BX membership 
requirements. PHLX approved members seeking BX membership will be 
required to submit a fully executed Waive-In Membership Application and 
Membership Agreement but will not be required to submit any duplicative 
documentation that was previously provided as part of the PHLX 
application. These PHLX members would still be required to provide 
additional information if there has been a material change in status 
from its original application with PHLX. Applicants will be required to 
attest that the information provided as part of previously conducted 
new membership review remains complete and accurate.
    The Exchange also proposes to amend language in section (C) of this 
rule to further harmonize the application with the current NASDAQ 
application by updating the title of the BX membership application from 
``Short Form'' to ``Waive-in'' and deleting unnecessary language that 
does not appear in the corresponding NASDAQ rule. The application is 
attached as Exhibit 3.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act \3\ in general, and furthers the objectives of section 
6(b)(5) of the Act \4\ in particular, in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system and, in general, to protect 
investors and the public interest.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
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    Today, the BX Membership Department performs similar functions when 
reviewing new member applications for BX, NASDAQ and PHLX.\5\ The 
Membership Department reviews: Applicant business plans, clearing 
arrangements, FOCUS reports, organizational charts, and written 
supervisory procedures for applicants desiring membership in any of the 
aforementioned markets. These membership requirements include, but are 
not limited to, review of registration as a Broker Dealer with the 
Commission, a net capital review, qualification of associated persons 
and examining written supervisory procedures. The same material is 
considered for each new member review conducted by FINRA on behalf of 
BX.
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    \5\ Today, FINRA conducts the new member application reviews for 
NASDAQ and BX pursuant to a 17d-2 and Regulatory Services Agreement. 
These application reviews are administered by FINRA and subject to 
BX's final review and decision. PHLX maintains a separate new member 
application review that is conducted by NASDAQ and not FINRA.
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    This proposed amendment is consistent with its current practices 
today when reviewing applications for members of NASDAQ and FINRA. BX 
proposes this rule change to harmonize its affiliated exchanges' rules 
to provide applicants similar application procedures for each of its 
markets. The PHLX new member review process is consistent with the BX 
new member review process. Applicants that are members of PHLX should 
be eligible for the waive-in process when seeking membership on BX 
similar to current waive-in opportunities available today for NASDAQ 
and FINRA members.
    The proposed rule change would eliminate the duplicate review for 
prospective BX applicants that were approved for membership by PHLX. 
The waive-in process will promote efficiency with respect to the 
Exchange's membership review process and reduce the burden on 
applicants that have already been approved for membership on PHLX by 
reducing the duplicative information and documentation required to be 
provided to the Exchange for these members. As a result, Exchange staff 
will be able to focus its regulatory efforts on reviewing any material 
changes or new information that may affect the applicant's eligibility 
for Exchange membership.
    This proposed rule change does not affect the protection of 
investors as BX will maintain the vigorous membership review that is 
conducted today when reviewing PHLX member applications.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed waive-in process 
for approved PHLX members will not impose any burden on competition, 
but rather it will remove unnecessary burdens that currently exist for 
PHLX member applicants seeking BX membership. The proposal will 
eliminate the redundant review process for PHLX members that currently 
does not exist for FINRA and NASDAQ members applying to become BX 
members.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not significantly 
affect the protection of investors or the public interest; does not 
impose any significant burden on competition; and by its terms does not 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to section 19(b)(3)(A) \6\ of the Act and Rule 19b-
4(f)(6) thereunder.\7\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: Necessary 
or appropriate in the public interest; for the protection of

[[Page 21792]]

investors; or otherwise in furtherance of the purposes of the Act. If 
the Commission takes such action, the Commission shall institute 
proceedings to determine whether the proposed rule should be approved 
or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BX-2015-017 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BX-2015-017. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BX-2015-017 and should be 
submitted on or before May 11, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-08940 Filed 4-17-15; 8:45 am]
 BILLING CODE 8011-01-P