80 FR 32644 - Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Provide an Expedited Process for Former Equity Trading Permit Holders To Apply for Reinstatement and Register Associated Persons
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 110 (June 9, 2015)
Federal Register Volume 80, Issue 110 (June 9, 2015)
| Page Range | 32644-32647 | |
| FR Document | 2015-13985 |
[Federal Register Volume 80, Number 110 (Tuesday, June 9, 2015)] [Notices] [Pages 32644-32647] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-13985] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75098; File No. SR-NSX-2015-02] Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Provide an Expedited Process for Former Equity Trading Permit Holders To Apply for Reinstatement and Register Associated Persons June 3, 2015. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (``Exchange Act'' or ``Act'')\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on May 27, 2015, the National Stock Exchange, Inc. (``NSX'' or the ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change, as described in Items I and II 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange is proposing to amend Exchange Rule 2.5 (Application Procedures for an ETP Holder or to become an Associated Person of an ETP Holder)\3\ to add new Interpretations and Policies section .01, entitled ``Expedited Process for Reinstatement as an ETP Holder.'' The Exchange is proposing this amendment to allow the use of an expedited process to facilitate the reinstatement, subject to certain conditions, of former ETP Holders of NSX \4\ and to register their Associated Persons.\5\ The Exchange's proposal is [[Page 32645]] designed to facilitate an efficient reinstatement process in connection with a subsequent reopening of trading on the Exchange, after all regulatory approvals are obtained. --------------------------------------------------------------------------- \3\ The term ``ETP Holder'' refers to the holder of an Equity Trading Permit, or ``ETP,'' issued by the Exchange for effecting approved securities transactions on the Exchange's trading facilities. An ETP may be issued to a sole proprietor, partnership, corporation, limited liability company or other organization which is a registered broker or dealer pursuant to section 15 of the Act (See Exchange Rule 1.5E.(1)). \4\ Pursuant to a rule filing with the Commission, the Exchange ceased trading operations as of the close of business on May 30, 2014. See Securities Exchange Act Release No. 72107 (May 6, 2014), 79 FR 27017 (May 12, 2014) (SR-NSX-2014-14). NSX continued to be registered as a national securities exchange and retained its status as a self-regulatory organization. All NSX rules remained in full force and effect after trading on the NSX's trading system ceased. \5\ The terms ``person associated with an ETP Holder'' or ``associated person of an ETP Holder'' mean any partner, officer, director, or branch manager of an ETP Holder (or any person occupying a similar status or performing similar functions), any person directly or indirectly controlling, controlled by, or under common control with an ETP Holder, or any employee of such ETP Holder, except that any person associated with an ETP Holder whose functions are solely clerical or ministerial shall not be included in the meaning of such terms. See Exchange Rule 1.5P.(1). --------------------------------------------------------------------------- The Exchange has designated this rule proposal as ``non- controversial'' pursuant to section 19(b)(3)(A) of the Act \6\ and provided the Commission with the notice required by Rule 19b- 4(f)(6)(iii) under the Act.\7\ The text of the proposed rule change is available on the Exchange's Web site at www.nsx.com, at the Exchange's principal office, and at the Commission's public reference room. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78s(b)(3)(A). \7\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- II. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and statutory basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self -Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to amend Rule 2.5 to implement, on a temporary basis, an expedited procedure to permit approved ETP Holders in good standing as of the close of business on May 30, 2014, when the Exchange ceased trading operations, to reinstate their ETP Holder status and register with the Exchange each Associated Person of such ETP Holder. As proposed, the Exchange will require that: (i) The ETP Holder using the expedited process is a member of another self- regulatory organization (``SRO''); and (ii) each proposed Associated Person holds an active and recognized securities industry registration.\8\ Former ETP Holders seeking reinstatement under the proposed expedited process would use a short-form application to reinstate their ETP Holder status and register Associated Persons. --------------------------------------------------------------------------- \8\ See footnote 4, supra. As provided in the Exchange's rule filing to cease trading operations on the Exchange as of May 30, 2014, all ETPs terminated automatically as of that date. --------------------------------------------------------------------------- The Exchange proposes that the expedited procedure for reinstatement as an ETP Holder and registering Associated Persons would be effective for 90 days from the date on which the rule amendment permitting the use of expedited procedure becomes effective. The short- form application that the Exchange proposes for use in connection with the expedited reinstatement process will include an agreement conforming with Rule 2.5(a)(1) through (a)(5).\9\ The short form application will also include the Exchange's standard routing agreement. The Exchange may request further documentation, in addition to the short-form application, in order to confirm that a former ETP Holder using the expedited process and any proposed Associated Persons meet the qualification standards set forth in Exchange Rule 2.4 (Restrictions). As part of the expedited application process, the Exchange will review the records of the prospective ETP Holder and each proposed Associated Person maintained by the Central Registration Depository System (``CRD'').\10\ --------------------------------------------------------------------------- \9\ Exchange Rule 2.5 (a)(1) through (a)(5) require [sic] that applications for an ETP contain certain agreements, including, inter alia: an agreement by the applicant to adhere to the provisions of the Exchange's amended certificate of incorporation, its by-laws, the Exchange Rules, the policies, interpretations and guidelines of the Exchange and all orders and decisions of the Exchange's Board of Directors; an agreement to pay dues, assessments and other charges in the manner and amount fixed by the Exchange; an agreement that the Exchange, its officers, employees and members of the Board and of any committee shall not be liable, except for willful malfeasance, to the applicant or to any other person for any action taken by such director, officer of member in his official capacity, or by any employee while acting within the scope of his employment, in connection with the administration or enforcement of any of the provisions of the Exchange's by-laws, its Rules, policies, interpretations or guidelines of the Exchange or of any penalty imposed by the exchange, its Board or any duly authorized committee; an agreement to maintain and make available to the Exchange, its authorized employees and its Board or committee members such books and records as may be required to be maintained by the Commission or the Exchange Rules; and such other reasonable information with respect to the applicant as the Exchange may require. \10\ The Financial Industry Regulatory Authority (``FINRA'') operates the CRD System. --------------------------------------------------------------------------- After the expiration of the 90-day period, the expedited process would no longer be available and any former ETP Holder and Associated Person seeking reinstatement after that date would be required to complete a full application. The expedited process will not be available to new ETP applicants (i.e., an applicant that was not an approved ETP Holder in good standing as of May 30, 2014) or to ETP Holders that ceased to be members of another SRO after May 30, 2014. The Exchange will not approve any application unless the prospective ETP Holder is a member of another SRO. The Exchange's proposal is intended to allow former ETP Holders to reinstate their status and register Associated Persons in an efficient manner that will enable the Exchange to progress toward a reopening of trading as soon as practicable after the Exchange has obtained all of the necessary regulatory approvals to do so. Reinstating ETP Holders and registering their Associated Persons is a critical element of this process from both an organizational and operational standpoint. Before trading on the Exchange can resume, ETP Holders will need to re- establish and test their connectivity. The Exchange will need to test its systems to confirm that the functionality to process, route and execute orders and issue reports to customers, which has not been modified since May 30, 2014, will continue to operate without incident upon a resumption of trading on the Exchange. Given these imperatives, the Exchange believes that it is important to effectuate the reinstatement of qualified former ETP Holders and the registration of their Associated Persons as quickly and efficiently as possible. The Exchange submits that its proposal does not present any significant regulatory risk. Prior to May 30, 2014, every ETP Holder was a member of another SRO with oversight responsibility, and the Exchange will not approve any ETP Holder application unless the applicant is a current member of another SRO. The short form application requires each prospective ETP Holder to identify its Designated Examining Authority (``DEA''). The expedited process proposed in this filing will only be available to approved ETP Holders in good standing as of May 30, 2014, each of which had previously been approved by the Exchange through its regular application process pursuant to Rule 2.5. Further, the Exchange will not approve any proposed Associated Person unless such person holds an active and recognized securities industry registration and meets the requirements of Rule 2.4 (Restrictions). The Exchange notes that the Commission has approved the use of an expedited membership approval process and a short-form application in other [[Page 32646]] situations where the facts and circumstances did not justify the time and administrative costs inherent in completing and processing the regular application to become a member of a national securities exchange. In the past, such situations have involved the formation of a new exchange that is an affiliate of an existing exchange and the members of the existing exchange are permitted to become members of the newly-formed exchange through an expedited process, using a short-form application.\11\ Use of an expedited process in that circumstance was appropriate since the applicants for membership on the new exchange had already been approved as members of the affiliated exchange. The Exchange submits that using an expedited process and a short-form application is similarly appropriate in this case, where the Exchange is seeking to employ an efficient and cost-effective means of reinstating previously-approved ETP Holders and registering their Associated Persons. --------------------------------------------------------------------------- \11\ See, e.g., In the Matter of the Applications of EDGX Exchange, Inc., and EDGA Exchange, Inc. for Registration as National Securities Exchanges: Findings, Opinion, and Order of the Commission, Exchange Act Release No. 61698 (March 12, 2010), 75 FR 13151 (March 18, 2010) (File Nos. 10-194 and 10-196); In the Matter of the Application of BATS Exchange, Inc. for Registration as a National Securities Exchange; Findings, Opinion, and Order of the Commission, Exchange Act Release No. 58375 (August 18, 2008), 73 FR 49498 (August 21, 2008) (File No. 10-182). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Exchange Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of section 6(b) of the Exchange Act.\12\ Pursuant to section 6(b)(2) of the Act,\13\ and subject to the conditions set forth in section 6(c) of the Act,\14\ in its capacity as a registered national securities exchange, NSX's rules must provide that any registered broker-dealer may become an ETP Holder and any person may become an Associated Person thereof. Under section 6(c) of the Act, the Exchange must deny ETP Holder status to any person, other than a natural person, that is not a registered broker or dealer, any natural person that is not, or is not associated with, a registered broker or dealer, and registered broker-dealers that do not satisfy certain standards, such as financial responsibility or operational capacity. As a registered national securities exchange, NSX must independently determine if an applicant satisfies the standards set forth in the Act and in the Exchange's rules. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78f(b). \13\ 15 U.S.C. 78f(b)(2). \14\ 15 U.S.C. 78f(c). --------------------------------------------------------------------------- The Exchange submits that its proposal for an expedited approval process for former ETP Holders and Associated Persons thereof is consistent with its obligations as a registered national securities exchange under the Exchange Act. The expedited process would only be available to ETP Holders that were in good standing as of May 30, 2014; all of such ETP Holders had previously been approved by the Exchange under its regular application process as set forth in Rule 2.5.\15\ As part of its review process in connection with submitted ``waive-in'' applications, the Exchange will review the CRD records for both the ETP Holder applicant and proposed Associated Persons, and will request additional information as necessary to assure that they continue to meet the eligibility requirements set forth in the Ace [sic] and in the Exchange's rules. --------------------------------------------------------------------------- \15\ See footnote 9, supra. --------------------------------------------------------------------------- The Exchange further believes that its proposal is consistent with the requirements of section 6(b)(5) \16\ that the rules of an exchange be designed, among other things, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and 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. Additionally, the Exchange believes the proposed rule change is consistent with the section 6(b)(5) requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \16\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that the proposed expedited process will operate to reduce the time and administrative costs normally incurred by both ETP Holders and the Exchange in processing applications to become ETP Holders and registering their Associated Persons. The Exchange further believes that its proposal will thus promote just and equitable principles of trade and remove impediments to and perfect the mechanism of a free and open market and a national market system. The Exchange's proposal will be available to all ETP Holders in good standing as of May 30, 2014 that seek to reinstate their status as ETP Holders of NSX, thus meeting the requirement of section 6(b)(5) that the Exchange's rules not be designed to permit unfair discrimination between customers, issuers, brokers or dealers. Additionally, the Exchange notes that its proposed expedited procedure for reinstatement will have duration of 90 days from the date that the instant rule change becomes effective. This is consistent with the approach in other instances where national securities exchanges used an expedited application process for a limited purpose and a similar time frame, after which the expedited process was no longer available. The Exchange believes that by utilizing an expedited process that has precedent in both its application and its time duration with the process used by other national securities exchanges, it is fulfilling the requirement of section 6(b)(5) of the Act that its rules foster cooperation and coordination with persons engaged in, among other things, regulating and processing information with respect to, and facilitating transactions in securities. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that the proposed rule change is consistent with section 6(b)(8) of the Act \17\ in that it will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange's proposed expedited process will only be available to broker-dealers that were registered ETP Holders as of the date the Exchange ceased trading operations. Allowing for an expedited and efficient process for reinstatement of ETP Holders and registering their Associated Persons will facilitate the process of preparing the Exchange for a resumption of trading, thereby providing another competitive trading venue for market participants. The Exchange notes that new ETP Holder applicants would not be eligible for the expedited process, nor would any otherwise eligible former ETP Holder that sought reinstatement after the 90-day time period for use of the expedited process had elapsed. Associated Persons that an ETP Holder seeks to register through the expedited process must hold an active and recognized securities industry registration and meet the requirements of Rule 2.4(e) [sic]. The Exchange submits that these factors indicate that its proposal will not impose any unnecessary or inappropriate burden on competition and therefore is consistent with the Act. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- [[Page 32647]] C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited or received comments on the proposed rule change from market participants or others. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to section 19(b)(3)(A) of the Act \18\ and Rule 19b- 4(f)(6) thereunder.\19\ --------------------------------------------------------------------------- \18\ 15 U.S.C. 78s(b)(3)(A). \19\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b- 4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. --------------------------------------------------------------------------- At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under section 19(b)(2)(B) of the Act \20\ to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \20\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- 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 CommentsUse 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-NSX-2015-02 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NSX-2015-02. 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 will also 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-NSX-2015-02 and should be submitted on or before June 30, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\21\ --------------------------------------------------------------------------- \21\ 17 CFR 200.30-3(a)(12). Robert W. Errett, Deputy Secretary. [FR Doc. 2015-13985 Filed 6-8-15; 8:45 am] BILLING CODE 8011-01-P
![32644 Federal Register / Vol. 80, No. 110 / Tuesday, June 9, 2015 / Notices
securities thereby helping the Fund to • Send an email to rule-comments@ SECURITIES AND EXCHANGE
achieve its investment objective, and sec.gov. Please include File Number SR– COMMISSION
will enhance competition among issues NYSEArca–2015–47 on the subject line.
[Release No. 34–75098; File No. SR–NSX–
of Managed Fund Shares that invest in 2015–02]
non-U.S. equity securities. Paper Comments
C. Self-Regulatory Organization’s • Send paper comments in triplicate Self-Regulatory Organizations;
Statement on Comments on the to Brent J. Fields, Secretary, Securities National Stock Exchange, Inc.; Notice
Proposed Rule Change Received From and Exchange Commission, 100 F Street of Filing and Immediate Effectiveness
Members, Participants, or Others NE., Washington, DC 20549–1090. of Proposed Rule Change To Provide
an Expedited Process for Former
No written comments were solicited All submissions should refer to File Equity Trading Permit Holders To
or received with respect to the proposed Number SR–NYSEArca–2015–47. This Apply for Reinstatement and Register
rule change. file number should be included on the Associated Persons
III. Date of Effectiveness of the subject line if email is used. To help the
June 3, 2015.
Proposed Rule Change and Timing for Commission process and review your
Commission Action Pursuant to section 19(b)(1) of the
comments more efficiently, please use
Securities Exchange Act of 1934
Because the proposed rule change only one method. The Commission will (‘‘Exchange Act’’ or ‘‘Act’’)1 and Rule
does not (i) significantly affect the post all comments on the Commission’s 19b–4 thereunder,2 notice is hereby
protection of investors or the public Internet Web site (http://www.sec.gov/ given that on May 27, 2015, the National
interest; (ii) impose any significant rules/sro.shtml). Copies of the Stock Exchange, Inc. (‘‘NSX’’ or the
burden on competition; and (iii) become submission, all subsequent ‘‘Exchange’’) filed with the Securities
operative for 30 days from the date on amendments, all written statements and Exchange Commission
which it was filed, or such shorter time with respect to the proposed rule (‘‘Commission’’) the proposed rule
as the Commission may designate, if change that are filed with the change, as described in Items I and II
consistent with the protection of Commission, and all written below, which Items have been prepared
investors and the public interest, the communications relating to the by the Exchange. The Commission is
proposed rule change has become proposed rule change between the publishing this notice to solicit
effective pursuant to section 19(b)(3)(A) Commission and any person, other than comments on the proposed rule change
of the Act 16 and Rule 19b–4(f)(6) those that may be withheld from the from interested persons.
thereunder.17 public in accordance with the
At any time within 60 days of the I. Self-Regulatory Organization’s
filing of such proposed rule change, the provisions of 5 U.S.C. 552, will be Statement of the Terms of the Substance
Commission summarily may available for Web site viewing and of the Proposed Rule Change
temporarily suspend such rule change if printing in the Commission’s Public
The Exchange is proposing to amend
it appears to the Commission that such Reference Section, 100 F Street NE.,
Exchange Rule 2.5 (Application
action is necessary or appropriate in the Washington, DC 20549 on official
Procedures for an ETP Holder or to
public interest, for the protection of business days between 10:00 a.m. and
become an Associated Person of an ETP
investors, or otherwise in furtherance of 3:00 p.m. Copies of the filing will also Holder)3 to add new Interpretations and
the purposes of the Act. If the be available for inspection and copying Policies section .01, entitled ‘‘Expedited
Commission takes such action, the at the principal office of the Exchange. Process for Reinstatement as an ETP
Commission shall institute proceedings All comments received will be posted Holder.’’ The Exchange is proposing this
under section 19(b)(2)(B) of the Act 18 to without change; the Commission does amendment to allow the use of an
determine whether the proposed rule not edit personal identifying expedited process to facilitate the
change should be approved or information from submissions. You reinstatement, subject to certain
disapproved. should submit only information that conditions, of former ETP Holders of
IV. Solicitation of Comments you wish to make available publicly. All NSX 4 and to register their Associated
submissions should refer to File Persons.5 The Exchange’s proposal is
Interested persons are invited to Number SR–NYSEArca–2015–47 and
submit written data, views, and
should be submitted on or before June 1 15 U.S.C. 78s(b)(1).
arguments concerning the foregoing, 2 17 CFR 240.19b–4.
30, 2015.
including whether the proposed rule 3 The term ‘‘ETP Holder’’ refers to the holder of
change is consistent with the Act. For the Commission, by the Division of an Equity Trading Permit, or ‘‘ETP,’’ issued by the
Comments may be submitted by any of Trading and Markets, pursuant to delegated Exchange for effecting approved securities
authority.19 transactions on the Exchange’s trading facilities. An
the following methods: ETP may be issued to a sole proprietor, partnership,
Robert W. Errett, corporation, limited liability company or other
Electronic Comments
Deputy Secretary. organization which is a registered broker or dealer
• Use the Commission’s Internet pursuant to section 15 of the Act (See Exchange
[FR Doc. 2015–13986 Filed 6–8–15; 8:45 am] Rule 1.5E.(1)).
comment form (http://www.sec.gov/
BILLING CODE 8011–01–P 4 Pursuant to a rule filing with the Commission,
rules/sro.shtml); or the Exchange ceased trading operations as of the
close of business on May 30, 2014. See Securities
16 15 U.S.C. 78s(b)(3)(A). Exchange Act Release No. 72107 (May 6, 2014), 79
17 17 CFR 240.19b–4(f)(6). As required under Rule FR 27017 (May 12, 2014) (SR–NSX–2014–14). NSX
tkelley on DSK3SPTVN1PROD with NOTICES
19b–4(f)(6)(iii), the Exchange provided the continued to be registered as a national securities
Commission with written notice of its intent to file exchange and retained its status as a self-regulatory
the proposed rule change, along with a brief organization. All NSX rules remained in full force
description and the text of the proposed rule and effect after trading on the NSX’s trading system
change, at least five business days prior to the date ceased.
of filing of the proposed rule change, or such 5 The terms ‘‘person associated with an ETP
shorter time as designated by the Commission. Holder’’ or ‘‘associated person of an ETP Holder’’
18 15 U.S.C. 78s(b)(2)(B). 19 17 CFR 200.30–3(a)(12). mean any partner, officer, director, or branch
VerDate Sep<11>2014 18:47 Jun 08, 2015 Jkt 235001 PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 E:\FR\FM\09JNN1.SGM 09JNN1](https://thefederalregister.org/doc/80_FR_32754/page/1.svg)
![Federal Register / Vol. 80, No. 110 / Tuesday, June 9, 2015 / Notices 32645
designed to facilitate an efficient seeking reinstatement under the The expedited process will not be
reinstatement process in connection proposed expedited process would use available to new ETP applicants (i.e., an
with a subsequent reopening of trading a short-form application to reinstate applicant that was not an approved ETP
on the Exchange, after all regulatory their ETP Holder status and register Holder in good standing as of May 30,
approvals are obtained. Associated Persons. 2014) or to ETP Holders that ceased to
The Exchange has designated this rule The Exchange proposes that the be members of another SRO after May
proposal as ‘‘non-controversial’’ expedited procedure for reinstatement 30, 2014. The Exchange will not
pursuant to section 19(b)(3)(A) of the as an ETP Holder and registering approve any application unless the
Act 6 and provided the Commission Associated Persons would be effective prospective ETP Holder is a member of
with the notice required by Rule 19b– for 90 days from the date on which the another SRO.
4(f)(6)(iii) under the Act.7 The text of the rule amendment permitting the use of
proposed rule change is available on the expedited procedure becomes effective. The Exchange’s proposal is intended
Exchange’s Web site at www.nsx.com, at The short-form application that the to allow former ETP Holders to reinstate
the Exchange’s principal office, and at Exchange proposes for use in their status and register Associated
the Commission’s public reference connection with the expedited Persons in an efficient manner that will
room. reinstatement process will include an enable the Exchange to progress toward
agreement conforming with Rule a reopening of trading as soon as
II. Self-Regulatory Organization’s practicable after the Exchange has
2.5(a)(1) through (a)(5).9 The short form
Statement of the Purpose of, and the obtained all of the necessary regulatory
application will also include the
Statutory Basis for, the Proposed Rule approvals to do so. Reinstating ETP
Exchange’s standard routing agreement.
Change Holders and registering their Associated
The Exchange may request further
In its filing with the Commission, the documentation, in addition to the short- Persons is a critical element of this
self-regulatory organization included form application, in order to confirm process from both an organizational and
statements concerning the purpose of, that a former ETP Holder using the operational standpoint. Before trading
and statutory basis for, the proposed expedited process and any proposed on the Exchange can resume, ETP
rule change and discussed any Associated Persons meet the Holders will need to re-establish and
comments it received on the proposed qualification standards set forth in test their connectivity. The Exchange
rule change. The text of those Exchange Rule 2.4 (Restrictions). As will need to test its systems to confirm
statements may be examined at the part of the expedited application that the functionality to process, route
places specified in Item IV below. The process, the Exchange will review the and execute orders and issue reports to
Exchange has prepared summaries, set records of the prospective ETP Holder customers, which has not been modified
forth in sections A, B, and C below, of and each proposed Associated Person since May 30, 2014, will continue to
the most significant parts of such maintained by the Central Registration operate without incident upon a
statements. Depository System (‘‘CRD’’).10 resumption of trading on the Exchange.
A. Self -Regulatory Organization’s After the expiration of the 90-day Given these imperatives, the Exchange
Statement of the Purpose of, and period, the expedited process would no believes that it is important to effectuate
Statutory Basis for, the Proposed Rule longer be available and any former ETP the reinstatement of qualified former
Change Holder and Associated Person seeking ETP Holders and the registration of their
reinstatement after that date would be Associated Persons as quickly and
1. Purpose required to complete a full application. efficiently as possible.
The Exchange is proposing to amend The Exchange submits that its
Rule 2.5 to implement, on a temporary the Exchange as of May 30, 2014, all ETPs proposal does not present any
basis, an expedited procedure to permit terminated automatically as of that date.
9 Exchange Rule 2.5 (a)(1) through (a)(5) require
significant regulatory risk. Prior to May
approved ETP Holders in good standing [sic] that applications for an ETP contain certain 30, 2014, every ETP Holder was a
as of the close of business on May 30, agreements, including, inter alia: an agreement by member of another SRO with oversight
2014, when the Exchange ceased trading the applicant to adhere to the provisions of the responsibility, and the Exchange will
operations, to reinstate their ETP Holder Exchange’s amended certificate of incorporation, its
not approve any ETP Holder application
status and register with the Exchange by-laws, the Exchange Rules, the policies,
interpretations and guidelines of the Exchange and unless the applicant is a current
each Associated Person of such ETP all orders and decisions of the Exchange’s Board of member of another SRO. The short form
Holder. As proposed, the Exchange will Directors; an agreement to pay dues, assessments application requires each prospective
require that: (i) The ETP Holder using and other charges in the manner and amount fixed
ETP Holder to identify its Designated
the expedited process is a member of by the Exchange; an agreement that the Exchange,
its officers, employees and members of the Board Examining Authority (‘‘DEA’’). The
another self-regulatory organization and of any committee shall not be liable, except for expedited process proposed in this
(‘‘SRO’’); and (ii) each proposed willful malfeasance, to the applicant or to any other filing will only be available to approved
Associated Person holds an active and person for any action taken by such director, officer
ETP Holders in good standing as of May
recognized securities industry of member in his official capacity, or by any
employee while acting within the scope of his 30, 2014, each of which had previously
registration.8 Former ETP Holders employment, in connection with the administration been approved by the Exchange through
or enforcement of any of the provisions of the its regular application process pursuant
manager of an ETP Holder (or any person occupying Exchange’s by-laws, its Rules, policies,
a similar status or performing similar functions), interpretations or guidelines of the Exchange or of
to Rule 2.5. Further, the Exchange will
any person directly or indirectly controlling, any penalty imposed by the exchange, its Board or not approve any proposed Associated
controlled by, or under common control with an any duly authorized committee; an agreement to Person unless such person holds an
ETP Holder, or any employee of such ETP Holder, maintain and make available to the Exchange, its active and recognized securities
tkelley on DSK3SPTVN1PROD with NOTICES
except that any person associated with an ETP authorized employees and its Board or committee
Holder whose functions are solely clerical or members such books and records as may be
industry registration and meets the
ministerial shall not be included in the meaning of required to be maintained by the Commission or the requirements of Rule 2.4 (Restrictions).
such terms. See Exchange Rule 1.5P.(1). Exchange Rules; and such other reasonable
6 15 U.S.C. 78s(b)(3)(A).
The Exchange notes that the
information with respect to the applicant as the
7 17 CFR 240.19b–4(f)(6)(iii). Exchange may require. Commission has approved the use of an
8 See footnote 4, supra. As provided in the 10 The Financial Industry Regulatory Authority expedited membership approval process
Exchange’s rule filing to cease trading operations on (‘‘FINRA’’) operates the CRD System. and a short-form application in other
VerDate Sep<11>2014 18:47 Jun 08, 2015 Jkt 235001 PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 E:\FR\FM\09JNN1.SGM 09JNN1](https://thefederalregister.org/doc/80_FR_32754/page/2.svg)
![32646 Federal Register / Vol. 80, No. 110 / Tuesday, June 9, 2015 / Notices
situations where the facts and independently determine if an applicant designed to permit unfair
circumstances did not justify the time satisfies the standards set forth in the discrimination between customers,
and administrative costs inherent in Act and in the Exchange’s rules. issuers, brokers or dealers.
completing and processing the regular The Exchange submits that its Additionally, the Exchange notes that
application to become a member of a proposal for an expedited approval its proposed expedited procedure for
national securities exchange. In the past, process for former ETP Holders and reinstatement will have duration of 90
such situations have involved the Associated Persons thereof is consistent days from the date that the instant rule
formation of a new exchange that is an with its obligations as a registered change becomes effective. This is
affiliate of an existing exchange and the national securities exchange under the consistent with the approach in other
members of the existing exchange are Exchange Act. The expedited process instances where national securities
permitted to become members of the would only be available to ETP Holders exchanges used an expedited
newly-formed exchange through an that were in good standing as of May 30, application process for a limited
expedited process, using a short-form 2014; all of such ETP Holders had purpose and a similar time frame, after
application.11 Use of an expedited previously been approved by the which the expedited process was no
process in that circumstance was Exchange under its regular application longer available. The Exchange believes
appropriate since the applicants for process as set forth in Rule 2.5.15 As that by utilizing an expedited process
membership on the new exchange had part of its review process in connection that has precedent in both its
already been approved as members of with submitted ‘‘waive-in’’ applications, application and its time duration with
the affiliated exchange. The Exchange the Exchange will review the CRD the process used by other national
submits that using an expedited process records for both the ETP Holder securities exchanges, it is fulfilling the
and a short-form application is similarly applicant and proposed Associated requirement of section 6(b)(5) of the Act
appropriate in this case, where the Persons, and will request additional that its rules foster cooperation and
Exchange is seeking to employ an information as necessary to assure that coordination with persons engaged in,
efficient and cost-effective means of they continue to meet the eligibility among other things, regulating and
reinstating previously-approved ETP requirements set forth in the Ace [sic] processing information with respect to,
Holders and registering their Associated and in the Exchange’s rules. and facilitating transactions in
Persons. The Exchange further believes that its
securities.
proposal is consistent with the
2. Statutory Basis requirements of section 6(b)(5) 16 that B. Self-Regulatory Organization’s
The Exchange believes the proposed the rules of an exchange be designed, Statement on Burden on Competition
rule change is consistent with the among other things, to promote just and
The Exchange believes that the
Exchange Act and the rules and equitable principles of trade, to foster
cooperation and coordination with proposed rule change is consistent with
regulations thereunder applicable to the section 6(b)(8) of the Act 17 in that it will
Exchange and, in particular, the persons engaged in regulating, clearing,
settling, processing information with not impose any burden on competition
requirements of section 6(b) of the that is not necessary or appropriate in
Exchange Act.12 Pursuant to section respect to, and facilitating transactions
in securities, to remove impediments to furtherance of the purposes of the Act.
6(b)(2) of the Act,13 and subject to the The Exchange’s proposed expedited
conditions set forth in section 6(c) of the and perfect the mechanism of a free and
open market and a national market process will only be available to broker-
Act,14 in its capacity as a registered dealers that were registered ETP Holders
national securities exchange, NSX’s system, and, in general, to protect
investors and the public interest. as of the date the Exchange ceased
rules must provide that any registered trading operations. Allowing for an
broker-dealer may become an ETP Additionally, the Exchange believes the
proposed rule change is consistent with expedited and efficient process for
Holder and any person may become an reinstatement of ETP Holders and
Associated Person thereof. Under the section 6(b)(5) requirement that the
rules of an exchange not be designed to registering their Associated Persons will
section 6(c) of the Act, the Exchange facilitate the process of preparing the
must deny ETP Holder status to any permit unfair discrimination between
customers, issuers, brokers, or dealers. Exchange for a resumption of trading,
person, other than a natural person, that thereby providing another competitive
is not a registered broker or dealer, any The Exchange believes that the
proposed expedited process will operate trading venue for market participants.
natural person that is not, or is not The Exchange notes that new ETP
associated with, a registered broker or to reduce the time and administrative
costs normally incurred by both ETP Holder applicants would not be eligible
dealer, and registered broker-dealers for the expedited process, nor would
that do not satisfy certain standards, Holders and the Exchange in processing
applications to become ETP Holders and any otherwise eligible former ETP
such as financial responsibility or Holder that sought reinstatement after
operational capacity. As a registered registering their Associated Persons.
The Exchange further believes that its the 90-day time period for use of the
national securities exchange, NSX must expedited process had elapsed.
proposal will thus promote just and
11 See, e.g., In the Matter of the Applications of equitable principles of trade and remove Associated Persons that an ETP Holder
EDGX Exchange, Inc., and EDGA Exchange, Inc. for impediments to and perfect the seeks to register through the expedited
Registration as National Securities Exchanges: mechanism of a free and open market process must hold an active and
Findings, Opinion, and Order of the Commission, and a national market system. The recognized securities industry
Exchange Act Release No. 61698 (March 12, 2010), registration and meet the requirements
75 FR 13151 (March 18, 2010) (File Nos. 10–194 Exchange’s proposal will be available to
and 10–196); In the Matter of the Application of all ETP Holders in good standing as of of Rule 2.4(e) [sic]. The Exchange
tkelley on DSK3SPTVN1PROD with NOTICES
BATS Exchange, Inc. for Registration as a National May 30, 2014 that seek to reinstate their submits that these factors indicate that
Securities Exchange; Findings, Opinion, and Order status as ETP Holders of NSX, thus its proposal will not impose any
of the Commission, Exchange Act Release No. unnecessary or inappropriate burden on
58375 (August 18, 2008), 73 FR 49498 (August 21, meeting the requirement of section
2008) (File No. 10–182). 6(b)(5) that the Exchange’s rules not be competition and therefore is consistent
12 15 U.S.C. 78f(b). with the Act.
13 15 U.S.C. 78f(b)(2). 15 See footnote 9, supra.
14 15 U.S.C. 78f(c). 16 15 U.S.C. 78f(b)(5). 17 15 U.S.C. 78f(b)(8).
VerDate Sep<11>2014 17:12 Jun 08, 2015 Jkt 235001 PO 00000 Frm 00123 Fmt 4703 Sfmt 4703 E:\FR\FM\09JNN1.SGM 09JNN1](https://thefederalregister.org/doc/80_FR_32754/page/3.svg)
![Federal Register / Vol. 80, No. 110 / Tuesday, June 9, 2015 / Notices 32647
C. Self-Regulatory Organization’s Paper Comments below. The Paperwork Reduction Act
Statement on Comments on the • Send paper comments in triplicate (PRA) of 1995, 44 U.S.C. Chapter 35
Proposed Rule Change Received From to Secretary, Securities and Exchange requires federal agencies to publish a
Members, Participants or Others Commission, 100 F Street NE., notice in the Federal Register
Washington, DC 20549–1090. concerning each proposed collection of
The Exchange has not solicited or
All submissions should refer to File information to OMB, and to allow 60
received comments on the proposed
Number SR–NSX–2015–02. This file days for the public to comment in
rule change from market participants or
number should be included on the response to the notice. This notice
others.
subject line if email is used. To help the complies with such requirements and
III. Date of Effectiveness of the Commission process and review your announces SBA’s proposal to conduct a
Proposed Rule Change and Timing for comments more efficiently, please use survey of the small businesses who
Commission Action only one method. The Commission will participate in SBA’s Regional
post all comments on the Commission’s Innovation Clusters (RIC) program.
Because the proposed rule change
does not (i) significantly affect the Internet Web site (http://www.sec.gov/ DATES: Submit comments on or before
protection of investors or the public rules/sro.shtml). Copies of the August 10, 2015.
interest; (ii) impose any significant submission, all subsequent ADDRESSES: Send all comments to
burden on competition; and (iii) become amendments, all written statements Brittany Borg, Contracting Officer
operative for 30 days from the date on with respect to the proposed rule Representative, Office of
which it was filed, or such shorter time change that are filed with the Entrepreneurial Development, U.S.
as the Commission may designate, if Commission, and all written Small Business Administration, 409 3rd
consistent with the protection of communications relating to the Street SW. Suite 6200, Washington, DC
investors and the public interest, the proposed rule change between the 20416.
proposed rule change has become Commission and any person, other than FOR FURTHER INFORMATION CONTACT:
effective pursuant to section 19(b)(3)(A) those that may be withheld from the Brittany Borg, Contracting Officer
of the Act 18 and Rule 19b–4(f)(6) public in accordance with the Representative, 202–401–1354,
thereunder.19 provisions of 5 U.S.C. 552, will be oedsurvey@sba.gov or Curtis B. Rich,
At any time within 60 days of the available for Web site viewing and Management Analyst, 202–205–7030,
filing of such proposed rule change, the printing in the Commission’s Public curtis.rich@sba.gov
Commission summarily may Reference Room, 100 F Street NE.,
Washington, DC 20549, on official SUPPLEMENTARY INFORMATION: This is a
temporarily suspend such rule change if
business days between the hours of request for the collection of new
it appears to the Commission that such
10:00 a.m. and 3:00 p.m. Copies of such information.
action is necessary or appropriate in the
filing will also be available for In October 2014, a new cohort of sites
public interest, for the protection of
inspection and copying at the principal was added to the Regional Innovation
investors, or otherwise in furtherance of
office of the Exchange. All comments Clusters (RIC) initiative, which was
the purposes of the Act. If the
received will be posted without change; originally started in October 1, 2010 by
Commission takes such action, the
the Commission does not edit personal the Small Business Administration
Commission shall institute proceedings
identifying information from (SBA)’s Office of Entrepreneurial
under section 19(b)(2)(B) of the Act 20 to
submissions. You should submit only Development. Through this initiative,
determine whether the proposed rule
information that you wish to make organizations in 11 communities across
change should be approved or
available publicly. All submissions the U.S. have been selected to provide
disapproved.
should refer to File Number SR–NSX– industry-specific assistance to small
IV. Solicitation of Comments 2015–02 and should be submitted on or businesses, and to develop industry
before June 30, 2015. relationships and supply chains within
Interested persons are invited to
their regions. Clusters—geographically
submit written data, views, and For the Commission, by the Division of
concentrated groups of interconnected
arguments concerning the foregoing, Trading and Markets, pursuant to delegated
authority.21 businesses, suppliers, service providers,
including whether the proposed rule
and associated institutions in a
change is consistent with the Act. Robert W. Errett, particular industry or field—act as a
Comments may be submitted by any of Deputy Secretary. networking hub to convene a number of
the following methods: [FR Doc. 2015–13985 Filed 6–8–15; 8:45 am] resources to help navigate the funding,
Electronic Comments BILLING CODE 8011–01–P procurement, and supply-chain
opportunities in a specific industry.
• Use the Commission’s Internet
comment form (http://www.sec.gov/ SBA is conducting an evaluation of
SMALL BUSINESS ADMINISTRATION the Regional Innovation Clusters
rules/sro.shtml); or
initiative to determine how the clusters
• Send an email to rule-comments@ Data Collection Available for Public have developed, the type and volume of
sec.gov. Please include File Number SR– Comments services they provided to small
NSX–2015–02 on the subject line.
60-day notice and request for
ACTION:
businesses, client perceptions of the
18 15 comments. program, and the various outcomes
U.S.C. 78s(b)(3)(A).
19 17 CFR 240.19b–4(f)(6). As required under Rule
related to their existence, including
tkelley on DSK3SPTVN1PROD with NOTICES
19b–4(f)(6)(iii), the Exchange provided the SUMMARY: The Small Business collaboration among firms, innovation,
Commission with written notice of its intent to file Administration (SBA) intends to request and small business growth. Small
the proposed rule change, along with a brief approval, from the Office of business growth will be compared to the
description and the text of the proposed rule overall growth of firms in those same
change, at least five business days prior to the date
Management and Budget (OMB) for the
of filing of the proposed rule change, or such new collection of information described regions and industries. This evaluation
shorter time as designated by the Commission. will also include lessons learned and
20 15 U.S.C. 78s(b)(2)(B). 21 17 CFR 200.30–3(a)(12). success stories. SBA proposes the use of
VerDate Sep<11>2014 18:47 Jun 08, 2015 Jkt 235001 PO 00000 Frm 00124 Fmt 4703 Sfmt 4703 E:\FR\FM\09JNN1.SGM 09JNN1](https://thefederalregister.org/doc/80_FR_32754/page/4.svg)
Document Created: 2015-12-15 15:26:02
Document Modified: 2015-12-15 15:26:02
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 32644 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR