80 FR 60426 - Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing of Proposed Amended Plan for the Allocation of Regulatory Responsibilities Between BATS Exchange, Inc., BATS Y-Exchange, Inc., BOX Options Exchange LLC, Chicago Board Options Exchange, Incorporated, C2 Options Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., International Securities Exchange, LLC, ISE Gemini, LLC, Miami International Securities Exchange, LLC, The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX, Inc., National Stock Exchange, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 193 (October 6, 2015)

Page Range		60426-60431
FR Document		2015-25328
Federal Register, Volume 80 Issue 193 (Tuesday, October 6, 2015)
[Federal Register Volume 80, Number 193 (Tuesday, October 6, 2015)]
[Notices]
[Pages 60426-60431]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-25328]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76056; File No. 4-618]


Program for Allocation of Regulatory Responsibilities Pursuant to 
Rule 17d-2; Notice of Filing of Proposed Amended Plan for the 
Allocation of Regulatory Responsibilities Between BATS Exchange, Inc., 
BATS Y-Exchange, Inc., BOX Options Exchange LLC, Chicago Board Options 
Exchange, Incorporated, C2 Options Exchange, Incorporated, Chicago 
Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., 
Financial Industry Regulatory Authority, Inc., International Securities 
Exchange, LLC, ISE Gemini, LLC, Miami International Securities 
Exchange, LLC, The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., NASDAQ 
OMX PHLX, Inc., National Stock Exchange, Inc., New York Stock Exchange 
LLC, NYSE MKT LLC, and NYSE Arca, Inc.

September 30, 2015.
    Pursuant to Section 17(d) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 17d-2 thereunder,\2\ notice is hereby given that 
on September 2, 2015, BATS Exchange, Inc. (``BATS''), BATS Y-Exchange, 
Inc. (``BATS Y''), BOX Options Exchange LLC (``BOX''), Chicago Board 
Options Exchange, Incorporated (``CBOE''), C2 Options Exchange, 
Incorporated (``C2''), Chicago Stock Exchange, Inc. (``CHX''), EDGA 
Exchange, Inc. (``EDGA''), EDGX Exchange, Inc. (``EDGX''), Financial 
Industry Regulatory Authority, Inc. (``FINRA''), International 
Securities Exchange, LLC (``ISE''), ISE Gemini, LLC (``ISE Gemini''), 
Miami International Securities Exchange, LLC (``MIAX''), The NASDAQ 
Stock Market LLC (``NASDAQ''), NASDAQ OMX BX, Inc. (``BX''), NASDAQ OMX 
PHLX, Inc. (``Phlx''), National Stock Exchange, Inc. (``NSX''), New 
York Stock Exchange LLC (``NYSE''), NYSE MKT LLC (``NYSE MKT''), and 
NYSE Arca, Inc. (``NYSE Arca'') (each, a ``Participating 
Organization,'' and, together, the ``Participating Organizations'' or 
the ``Parties''), filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') an amended plan for the allocation of 
regulatory responsibilities with respect to certain Regulation NMS 
Rules listed in Exhibit A to the Plan (``17d-2 Plan'' or the ``Plan''). 
As further discussed in Section II, below, this Agreement amends and 
restates the agreement by and among the Participating Organizations 
approved by the SEC on December 3, 2010.\3\ The Commission is 
publishing this notice to solicit comments on the 17d-2 Plan from 
interested persons.
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    \1\ 15 U.S.C. 78q(d).
    \2\ 17 CFR 240.17d-2.
    \3\ See Securities Exchange Act Release No. 63230 (November 2, 
2010), 75 FR 68632 (November 8, 1976).
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I. Introduction

    Section 19(g)(1) of the Act,\4\ among other things, requires every 
self-regulatory organization (``SRO'') registered as either a national 
securities exchange or national securities association to examine for, 
and enforce compliance by, its members and persons associated with its 
members with the Act, the rules and regulations thereunder, and the 
SRO's own rules, unless the SRO is relieved of this responsibility 
pursuant to Section 17(d) or Section 19(g)(2) of the Act.\5\ Without 
this relief, the statutory obligation of each individual SRO could 
result in a pattern of multiple examinations of broker-dealers that 
maintain memberships in more than one SRO (``common members''). Such 
regulatory duplication would add unnecessary expenses for common 
members and their SROs.
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    \4\ 15 U.S.C. 78s(g)(1).
    \5\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively.
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    Section 17(d)(1) of the Act \6\ was intended, in part, to eliminate 
unnecessary multiple examinations and regulatory duplication.\7\ With 
respect to a common member, Section 17(d)(1) authorizes the Commission, 
by rule or order, to relieve an SRO of the responsibility to receive 
regulatory reports, to examine for and enforce compliance with 
applicable statutes, rules, and regulations, or to perform other 
specified regulatory functions.
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    \6\ 15 U.S.C. 78q(d)(1).
    \7\ See Securities Act Amendments of 1975, Report of the Senate 
Committee on Banking, Housing, and Urban Affairs to Accompany S. 
249, S. Rep. No. 94-75, 94th Cong., 1st Session 32 (1975).
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    To implement Section 17(d)(1), the Commission adopted two rules: 
Rule 17d-1 and Rule 17d-2 under the Act.\8\ Rule 17d-1 authorizes the 
Commission to name a single SRO as the designated examining authority 
(``DEA'') to examine common members for compliance with the financial 
responsibility requirements imposed by the Act, or by Commission or SRO 
rules.\9\ When an SRO has been named as a common member's DEA, all 
other SROs to which the common member belongs are relieved of the 
responsibility

[[Page 60427]]

to examine the firm for compliance with the applicable financial 
responsibility rules. On its face, Rule 17d-1 deals only with an SRO's 
obligations to enforce member compliance with financial responsibility 
requirements. Rule 17d-1 does not relieve an SRO from its obligation to 
examine a common member for compliance with its own rules and 
provisions of the federal securities laws governing matters other than 
financial responsibility, including sales practices and trading 
activities and practices.
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    \8\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
    \9\ See Securities Exchange Act Release No. 12352 (April 20, 
1976), 41 FR 18808 (May 7, 1976).
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    To address regulatory duplication in these and other areas, the 
Commission adopted Rule 17d-2 under the Act.\10\ Rule 17d-2 permits 
SROs to propose joint plans for the allocation of regulatory 
responsibilities with respect to their common members. Under paragraph 
(c) of Rule 17d-2, the Commission may declare such a plan effective if, 
after providing for appropriate notice and comment, it determines that 
the plan is necessary or appropriate in the public interest and for the 
protection of investors; to foster cooperation and coordination among 
the SROs; to remove impediments to, and foster the development of, a 
national market system and a national clearance and settlement system; 
and is in conformity with the factors set forth in Section 17(d) of the 
Act. Commission approval of a plan filed pursuant to Rule 17d-2 
relieves an SRO of those regulatory responsibilities allocated by the 
plan to another SRO.
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    \10\ See Securities Exchange Act Release No. 12935 (October 28, 
1976), 41 FR 49091 (November 8, 1976).
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II. Proposed Amended Plan

    On September 2, 2015, the parties submitted a proposed amendment to 
the Plan. The primary purpose of the amendment is to add Regulation NMS 
Rules 606, 607, and 611(c) and (d). In addition, because Regulation NMS 
Rule 606 applies to ``NMS Securites,'' and thus includes responsibility 
for options, the Amended Plan adds additional Participating 
Organizations that are options markets.
    The proposed 17d-2 Plan is intended to reduce regulatory 
duplication for firms that are members of more than one Participating 
Organization.\11\ The proposed amendments to the Plan provide for the 
allocation of regulatory responsibility according to whether the 
covered rule pertains to NMS stocks or NMS securities. For covered 
rules that pertain to NMS stocks (i.e., Rules 607, 611, and 612), FINRA 
would serve as the ``Designated Regulation NMS Examining Authority'' 
(``DREA'') for common members that are members of FINRA, and therein 
would assume certain examination and enforcement responsibilities for 
those members with respect to specified Regulation NMS rules. For 
common members that are not members of FINRA, the amended Plan provides 
that the member's DEA would serve as the DREA, provided that the DEA 
exchange operates a national securities exchange or facility that 
trades NMS stocks and the common member is a member of such exchange or 
facility. Section 1(c) of the amended Plan contains a list of proposed 
principles that would be applicable to the allocation of common members 
in cases not specifically addressed in the Plan. An exchange that does 
not trade NMS stocks would have no regulatory authority for covered 
Regulation NMS rules pertaining to NMS stocks. For covered rules that 
pertain to NMS securities, and thus include options (i.e., Rule 606), 
the proposed amended Plan provides that the DREA will be the same as 
the DREA for the rules pertaining to NMS stocks. For common members 
that are not members of an exchange that trades NMS stocks, the common 
member would be allocated according to the principles set forth in 
Section 1(c) of the Plan.
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    \11\ The proposed 17d-2 Plan refers to these members as ``Common 
Members.''
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    The text of the Plan delineates the proposed regulatory 
responsibilities with respect to the Parties. Included in the proposed 
Plan is an exhibit (the ``Covered Regulation NMS Rules'') that lists 
the federal securities laws, rules, and regulations, for which the 
applicable DREA would bear examination and enforcement responsibility 
under the proposed amended Plan for Common Members of the Participating 
Organization and their associated persons.
    Specifically, under the 17d-2 Plan, the applicable DREA would 
assume examination and enforcement responsibility relating to 
compliance by Common Members with the Covered Regulation NMS Rules. 
Covered Regulation NMS Rules would not include the application of any 
rule of a Participating Organization, or any rule or regulation under 
the Act, to the extent that it pertains to violations of insider 
trading activities, because such matters are covered by a separate 
multiparty agreement under Rule 17d-2.\12\ Under the Plan, 
Participating Organizations would retain full responsibility for 
surveillance and enforcement with respect to trading activities or 
practices involving their own marketplace.\13\
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    \12\ See Securities Exchange Act Release No. 58350 (August 13, 
2008), 73 FR 48247 (August 18, 2008) (File No. 4-566) (notice of 
filing of proposed plan). See also Securities Exchange Act Release 
No. 58536 (September 12, 2008) (File No. 4-566) (order approving and 
declaring effective the plan).
    \13\ See paragraph 1 of the proposed 17d-2 Plan.
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    The text of the proposed amended 17d-2 Plan is as follows 
(additions are in italics; deletions are in brackets):

Agreement for the Allocation of Regulatory Responsibility for the 
Covered Regulation NMS Rules Pursuant to Sec.  17(d) of the Securities 
Exchange Act of 1934, 15 U.S.C. 78q(d), and Rule 17d-2 Thereunder

    This agreement (the ``Agreement'') by and among BATS Exchange, Inc. 
(``BATS''), BATS Y-Exchange, Inc. (``BATS Y''), BOX Options Exchange 
LLC (``BOX''), Chicago Board Options Exchange, Incorporated[.] 
(``CBOE'')[\1\], C2 Options Exchange, Incorporated (``C2''), Chicago 
Stock Exchange, Inc. (``CHX''), EDGA Exchange, Inc. (``EDGA''), EDGX 
Exchange, Inc. (``EDGX''), Financial Industry Regulatory Authority, 
Inc. (``FINRA''), International Securities Exchange, LLC (``ISE''), ISE 
Gemini, LLC (``ISE Gemini''), Miami International Securities Exchange, 
LLC (``MIAX''), The NASDAQ Stock Market LLC (``NASDAQ''), NASDAQ OMX 
BX, Inc., NASDAQ OMX PHLX, Inc., National Stock Exchange, Inc. 
(``NSX''), New York Stock Exchange LLC (``NYSE''), NYSE [Amex]MKT LLC 
(``NYSE [Amex]MKT''), and NYSE Arca, Inc. (``NYSE Arca'') (each, a 
``Participating Organization,'' and, together, the ``Participating 
Organizations''), is made pursuant to Sec.  17(d) of the Securities 
Exchange Act of 1934 (the ``Act'' or ``SEA''), 15 U.S.C. 78q(d), and 
Rule 17d-2 thereunder, which allow for plans to allocate regulatory 
responsibility among self-regulatory organizations (``SROs''). Upon 
approval by the Securities and Exchange Commission (``Commission'' or 
``SEC''), this Agreement shall amend and restate the agreement by and 
among the Participating Organizations approved by the SEC on December 
3, 2010.
    WHEREAS, the Participating Organizations desire to: (a) Foster 
cooperation and coordination among the SROs; (b) remove impediments to, 
and foster the development of, a national market system; (c) strive to 
protect the interest of investors; and (d) eliminate duplication in 
their examination and enforcement of SEA Rules 606, 607, 611[(a) and 
(b)] and 612 (the ``Covered Regulation NMS Rules'');
    WHEREAS, the Participating Organizations are interested in 
allocating regulatory responsibilities

[[Page 60428]]

with respect to broker-dealers that are members of more than one 
Participating Organization (the ``Common Members'') relating to the 
examination and enforcement of the Covered Regulation NMS Rules; and
    WHEREAS, the Participating Organizations will request regulatory 
allocation of these regulatory responsibilities by executing and filing 
with the [Securities and Exchange Commission (``Commission'' or 
``]SEC['') a] this plan for the above stated purposes [(this 
Agreement)] pursuant to the provisions of Sec.  17(d) of the Act, and 
Rule 17d-2 thereunder, as described below.
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    [\1\ CBOE's allocation of certain regulatory responsibilities 
under this Agreement is limited to the activities of the CBOE Stock 
Exchange, LLC, a facility of CBOE.]
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    NOW, THEREFORE, in consideration of the mutual covenants contained 
hereafter, and other valuable consideration to be mutually exchanged, 
the Participating Organizations hereby agree as follows:
    1. Assumption of Regulatory Responsibility. The Designated 
Regulation NMS Examining Authority (the ``DREA'') shall assume 
examination and enforcement responsibilities relating to compliance by 
Common Members with the Covered Regulation NMS Rules to which the DREA 
is allocated responsibility (``Regulatory Responsibility''). A list of 
the Covered Regulation NMS Rules is attached hereto as Exhibit A.
    a. For Covered Regulation NMS Rules Pertaining to ``NMS stocks'' 
(as defined in Regulation NMS) (i.e., Rules 607, 611 and 612): FINRA 
shall serve as DREA for Common Members that are members of FINRA. The 
Designated Examining Authority (``DEA'') pursuant to SEA Rule 17d-1 
shall serve as DREA for Common Members that are not members of FINRA, 
provided that the DEA operates a national securities exchange or 
facility that trades NMS stocks and the Common Member is a member of 
such exchange or facility. For all other Common Members, the 
Participating Organizations shall allocate Common Members among the 
Participating Organizations (other than FINRA) that operate a national 
securities exchange that trades NMS stocks based on the principles 
outlined below and the Participating Organization to which such a 
Common Member is allocated shall serve as the DREA for that Common 
Member. (A Participating Organization that operates a national 
securities exchange that does not trade NMS stocks has no regulatory 
responsibilities related to Covered Regulation NMS Rules pertainining 
to NMS stocks and will not serve as DREA for such Covered Regulation 
NMS Rules.)
    b. For Covered Regulation NMS Rules Pertaining to ``NMS 
securities'' (as defined in Regulation NMS) (i.e., Rule 606), the DREA 
shall be same as the DREA for Covered Regulation NMS Rules pertaining 
to NMS stocks. For Common Members that are not members of a national 
securities exchange that trades NMS stocks and thus have not been 
appointed a DREA under paragraph a., the Participating Organizations 
shall allocate the Common Members among the Participating Organizations 
(other than FINRA) that operate a national securities exchange that 
trades NMS securities based on the principles outlined below and the 
Participating Organization to which such a Common Member is allocated 
shall serve as the DREA for that Common Member with respect to Covered 
Regulation NMS Rules pertaining to NMS securities. The allocation of 
Common Members to DREAs (including FINRA) for all Covered Regulation 
NMS Rules is provided in Exhibit B.
    c. For purposes of this paragraph 1, any allocation of a Common 
Member to a Participating Organization other than as specified in 
paragraphs a. and b. above shall be based on the following principles, 
except to the extent all affected Participating Organizations consent 
to one or more different principles and any such agreement to different 
principles would be deemed an amendment to this Agreement as provided 
in paragraph 22:
    i. The Participating Organizations shall not allocate a Common 
Member to a Participating Organization unless the Common Member is a 
member of that Participating Organization.
    ii. To the extent practicable, Common Members shall be allocated 
among the Participating Organizations of which they are members in such 
a manner as to equalize, as nearly as possible, the allocation among 
such Participating Organizations.
    iii. To the extent practicable, the allocation will take into 
account the amount of NMS stock activity (or NMS security activity, as 
applicable) conducted by each Common Member in order to most evenly 
divide the Common Members with the largest amount of activity among the 
Participating Organizations of which they are a members. The allocation 
will also take into account similar allocations pursuant to other plans 
or agreements to which the Participating Organizations are party to 
maintain consistency in oversight of the Common Members.\1\
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    \1\ For example, if one Participating Organization was allocated 
responsibility for a particular Common Member pursuant to a separate 
Rule 17d-2 Agreement, that Participant Organization would be 
assigned to be the DREA of that Common Member, unless there is good 
cause not to make that assignment.
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    iv. The Participating Organizations may reallocate Common Members 
from time-to-time and in such manner as they deem appropriate 
consistent with the terms of this Agreement.
    v. Whenever a Common Member ceases to be a member of its DREA 
(including FINRA), the DREA shall promptly inform the Participating 
Organizations, who shall review the matter and reallocate the Common 
Member to another Participating Organization.
    vi. The DEA or DREA (including FINRA) may request that a Common 
Member be reallocated to another Participating Organization (including 
the DEA or DREA (including FINRA)) by giving 30 days written notice to 
the Participating Organizations. The Participating Organizations shall 
promptly consider such request and, in their discretion, may approve or 
disapprove such request and if approved, reallocate the Common Member 
to such Participating Organization.
    vii. All determinations by the Participating Organizations with 
respect to allocations shall be by the affirmative vote of a majority 
of the Participating Organizations that, at the time of such 
determination, share the applicable Common Member being allocated; a 
Participating Organization shall not be entitled to vote on any 
allocation related to a Common Member unless the Common Member is a 
member of such Participating Organization.
    d. The Participating Organizations agree that they shall conduct 
meetings among them as needed for the purposes of ensuring proper 
allocation of Common Members and identifying issues or concerns with 
respect to the regulation of Common Members.
    Notwithstanding anything herein to the contrary, it is explicitly 
understood that the term ``Regulatory Responsibility'' does not 
include, and each of the Participating Organizations shall retain full 
responsibility for, examination, surveillance and enforcement with 
respect to trading activities or practices involving its own 
marketplace unless otherwise allocated pursuant to a separate Rule 17d-
2 Agreement. [Whenever a Common Member ceases to be a member of its 
DREA, the DREA shall promptly inform

[[Page 60429]]

the Common Member's DEA, which will become such Common Member's new 
DREA.]
    2. No Retention of Regulatory Responsibility. The Participating 
Organizations do not contemplate the retention of any responsibilities 
with respect to the regulatory activities being assumed by the DREA 
under the terms of this Agreement. Nothing in this Agreement will be 
interpreted to prevent a DREA from entering into Regulatory Services 
Agreement(s) to perform its Regulatory Responsibility.
    3. No Charge. A DREA shall not charge Participating Organizations 
for performing the Regulatory Responsibility under this Agreement.
    4. Applicability of Certain Laws, Rules, Regulations or Orders. 
Notwithstanding any provision hereof, this Agreement shall be subject 
to any statute, or any rule or order of the SEC. To the extent such 
statute, rule, or order is inconsistent with one or more provisions of 
this Agreement, the statute, rule, or order shall supersede the 
provision(s) hereof to the extent necessary to be properly effectuated 
and the provision(s) hereof in that respect shall be null and void.
    5. Customer Complaints. If a Participating Organization receives a 
copy of a customer complaint relating to a DREA's Regulatory 
Responsibility as set forth in this Agreement, the Participating 
Organization shall promptly forward to such DREA a copy of such 
customer complaint. It shall be such DREA's responsibility to review 
and take appropriate action in respect to such complaint.
    6. Parties to Make Personnel Available as Witnesses. Each 
Participating Organization shall make its personnel available to the 
DREA to serve as testimonial or non-testimonial witnesses as necessary 
to assist the DREA in fulfilling the Regulatory Responsibility 
allocated under this Agreement. The DREA shall provide reasonable 
advance notice when practicable and shall work with a Participating 
Organization to accommodate reasonable scheduling conflicts within the 
context and demands as the entity with ultimate regulatory 
responsibility. The Participating Organization shall pay all reasonable 
travel and other expenses incurred by its employees to the extent that 
the DREA requires such employees to serve as witnesses, and provide 
information or other assistance pursuant to this Agreement.
    7. Sharing of Work-Papers, Data and Related Information.
    a. Sharing. A Participating Organization shall make available to 
the DREA information necessary to assist the DREA in fulfilling the 
Regulatory Responsibility assumed under the terms of this Agreement. 
Such information shall include any information collected by a 
Participating Organization in the course of performing its regulatory 
obligations under the Act, including information relating to an on-
going disciplinary investigation or action against a member, the amount 
of a fine imposed on a member, financial information, or information 
regarding proprietary trading systems gained in the course of examining 
a member (``Regulatory Information''). This Regulatory Information 
shall be used by the DREA solely for the purposes of fulfilling the 
DREA's Regulatory Responsibility.
    b. No Waiver of Privilege. The sharing of documents or information 
between the parties pursuant to this Agreement shall not be deemed a 
waiver as against third parties of regulatory or other privileges 
relating to the discovery of documents or information.
    8. Special or Cause Examinations and Enforcement Proceedings. 
Nothing in this Agreement shall restrict or in any way encumber the 
right of a Participating Organization to conduct special or cause 
examinations of a Common Member, or take enforcement proceedings 
against a Common Member as a Participating Organization, in its sole 
discretion, shall deem appropriate or necessary.
    9. Dispute Resolution Under this Agreement.
    a. Negotiation. The Participating Organizations will attempt to 
resolve any disputes through good faith negotiation and discussion, 
escalating such discussion up through the appropriate management levels 
until reaching the executive management level. In the event a dispute 
cannot be settled through these means, the Participating Organizations 
shall refer the dispute to binding arbitration.
    b. Binding Arbitration. All claims, disputes, controversies, and 
other matters in question between the Participating Organizations to 
this Agreement arising out of or relating to this Agreement or the 
breach thereof that cannot be resolved by the Participating 
Organizations will be resolved through binding arbitration. Unless 
otherwise agreed by the Participating Organizations, a dispute 
submitted to binding arbitration pursuant to this paragraph shall be 
resolved using the following procedures:
    (i) The arbitration shall be conducted in a city selected by the 
DREA in which it maintains a principal office or where otherwise agreed 
to by the Participating Organizations in accordance with the Commercial 
Arbitration Rules of the American Arbitration Association and judgment 
upon the award rendered by the arbitrator may be entered in any court 
having jurisdiction thereof; and
    (ii) There shall be three arbitrators, and the chairperson of the 
arbitration panel shall be an attorney. The arbitrators shall be 
appointed in accordance with the Commercial Arbitration Rules of the 
American Arbitration Association.
    10. Limitation of Liability. As between the Participating 
Organizations, no Participating Organization, including its respective 
directors, governors, officers, employees and agents, will be liable to 
any other Participating Organization, or its directors, governors, 
officers, employees and agents, for any liability, loss or damage 
resulting from any delays, inaccuracies, errors or omissions with 
respect to its performing or failing to perform regulatory 
responsibilities, obligations, or functions, except: (a) As otherwise 
provided for under the Act[,]; (b) in instances of a Participating 
Organization's gross negligence, willful misconduct or reckless 
disregard with respect to another Participating Organization[,]; or (c) 
in instances of a breach of confidentiality obligations owed to another 
Participating Organization. The Participating Organizations understand 
and agree that the regulatory responsibilities are being performed on a 
good faith and best effort basis and no warranties, express or implied, 
are made by any Participating Organization to any other Participating 
Organization with respect to any of the responsibilities to be 
performed hereunder. This paragraph is not intended to create liability 
of any Participating Organization to any third party.
    11. SEC Approval.
    a. The Participating Organizations agree to file promptly this 
Agreement with the SEC for its review and approval. FINRA shall file 
this Agreement on behalf, and with the explicit consent, of all 
Participating Organizations.
    b. If approved by the SEC, the Participating Organizations will 
notify their members of the general terms of the Agreement and of its 
impact on their members.
    12. Subsequent Parties; Limited Relationship. This Agreement shall 
inure to the benefit of and shall be binding upon the Participating 
Organizations hereto and their respective legal representatives, 
successors, and assigns. Nothing in this Agreement, expressed or 
implied, is intended or shall: (a) Confer on any

[[Page 60430]]

person other than the Participating Organizations hereto, or their 
respective legal representatives, successors, and assigns, any rights, 
remedies, obligations or liabilities under or by reason of this 
Agreement, (b) constitute the Participating Organizations hereto 
partners or participants in a joint venture, or (c) appoint one 
Participating Organization the agent of the other.
    13. Assignment. No Participating Organization may assign this 
Agreement without the prior written consent of the DREAs performing 
Regulatory Responsibility on behalf of such Participating Organization, 
which consent shall not be unreasonably withheld, conditioned or 
delayed; provided, however, that any Participating Organization may 
assign the Agreement to a corporation controlling, controlled by or 
under common control with the Participating Organization without the 
prior written consent of such Participating Organization's DREAs. No 
assignment shall be effective without Commission approval.
    14. Severability. Any term or provision of this Agreement that is 
invalid or unenforceable in any jurisdiction shall, as to such 
jurisdiction, be ineffective to the extent of such invalidity or 
unenforceability without rendering invalid or unenforceable the 
remaining terms and provisions of this Agreement or affecting the 
validity or enforceability of any of the terms or provisions of this 
Agreement in any other jurisdiction.
    15. Termination. Any Participating Organization may cancel its 
participation in the Agreement at any time upon the approval of the 
Commission after 180 days written notice to the other Participating 
Organizations (or in the case of a change of control in ownership of a 
Participating Organization, such other notice time period as that 
Participating Organization may choose). The cancellation of its 
participation in this Agreement by any Participating Organization shall 
not terminate this Agreement as to the remaining Participating 
Organizations.
    16. General. The Participating Organizations agree to perform all 
acts and execute all supplementary instruments or documents that may be 
reasonably necessary or desirable to carry out the provisions of this 
Agreement.
    17. Written Notice. Any written notice required or permitted to be 
given under this Agreement shall be deemed given if sent by certified 
mail, return receipt requested, or by a comparable means of electronic 
communication to each Participating Organization entitled to receipt 
thereof, to the attention of the Participating Organization's 
representative at the Participating Organization's then principal 
office or by email.
    18. Confidentiality. The Participating Organizations agree that 
documents or information shared shall be held in confidence, and used 
only for the purposes of carrying out their respective regulatory 
obligations under this Agreement, provided, however, that each 
Participating Organization may disclose such documents or information 
as may be required to comply with applicable requlatory requirements or 
requests for information from the SEC. Any Participating Organization 
disclosing confidential documents or information in compliance with 
applicable regulatory or oversight requirements will request 
confidential treatment of such information. No Participating 
Organization shall assert regulatory or other privileges as against the 
other with respect to Regulatory Information that is required to be 
shared pursuant to this Agreement.
    19. Regulatory Responsibility. Pursuant to Section 17(d)(1)(A) of 
the Act, and Rule 17d-2 thereunder, the Participating Organizations 
request the SEC, upon its approval of this Agreement, to relieve the 
Participating Organizations which are participants in this Agreement 
that are not the DREA as to a Common Member of any and all 
responsibilities with respect to the matters allocated to the DREA 
pursuant to this Agreement for purposes of Sec. Sec.  17(d) and 19(g) 
of the Act.
    20. Governing Law. This Agreement shall be deemed to have been made 
in the State of New York, and shall be construed and enforced in 
accordance with the law of the State of New York, without reference to 
principles of conflicts of laws thereof. Each of the Participating 
Organizations hereby consents to submit to the jurisdiction of the 
courts of the State of New York in connection with any action or 
proceeding relating to this Agreement.
    21. Survival of Provisions. Provisions intended by their terms or 
context to survive and continue notwithstanding delivery of the 
regulatory services by the DREA and any expiration of this Agreement 
shall survive and continue.
    22. Amendment.
    a. This Agreement may be amended to add a new Participating 
Organization, provided that such Participating Organization does not 
assume regulatory responsibility, [solely] by an amendment executed by 
all applicable DREAs and such new Participating Organization. All other 
Participating Organizations expressly consent to allow such DREAs to 
jointly add new Participating Organizations to the Agreement as 
provided above. Such DREAs will promptly notify all Participating 
Organizations of any such amendments to add a new Participating 
Organization.
    b. All other amendments must be [made] approved by each 
Participating Organization. All amendments, including adding a new 
Participating Organization but excluding changes to Exhibit B, must be 
filed with and approved by the Commission before they become effective.
    23. Effective Date. The Effective Date of this Agreement will be 
the date the SEC declares this Agreement to be effective pursuant to 
authority conferred by Sec.  17(d) of the Act, and Rule 17d-2 
thereunder.
    24. Counterparts. This Agreement may be executed in any number of 
counterparts, including facsimile, each of which will be deemed an 
original, but all of which taken together shall constitute one single 
agreement among the Participating Organizations.
* * * * *

EXHIBIT A

COVERED REGULATION NMS RULES

    SEA Rule 606--Disclosure of Order Routing Information.*
    SEA Rule 607--Customer Account Statements.
    SEA Rule 611[(a)]--Order Protection Rule. [-- Reasonable Policies 
and Procedures.]
    [SEA Rule 611(b)--Order Protection Rule.--Exceptions.]
    SEA Rule 612--Minimum Pricing Increment.
    *Covered Regulation NMS Rules with asterisks (*) pertain to NMS 
securities. Covered Regulation NMS Rules without asterisks pertain to 
NMS stocks.
* * * * *

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

    Pursuant to Section 17(d)(1) of the Act \14\ and Rule 17d-2 
thereunder,\15\ October 27, 2015, the Commission may, by written 
notice, declare the amended plan submitted by the Parties, File No. 4-
618, to be effective if the Commission finds that the plan is necessary 
or appropriate in the public interest and for the protection of 
investors, to foster cooperation and coordination among self-regulatory 
organizations, or to remove impediments to and foster the

[[Page 60431]]

development of the national market system and a national system for the 
clearance and settlement of securities transactions and in conformity 
with the factors set forth in Section 17(d) of the Act.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78q(d)(1).
    \15\ 17 CFR 240.17d-2.
---------------------------------------------------------------------------

IV. Solicitation of Comments

    In order to assist the Commission in determining whether to approve 
the proposed 17d-2 Plan and to relieve the Parties of the 
responsibilities which would be assigned to the applicable DREA, 
interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/other.shtml); or
     Send an email to [email protected]. Please include 
File Number 4-618 on the subject line.

Paper Comments

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

All submissions should refer to File Number 4-618. 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/other.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed plan that are filed with the 
Commission, and all written communications relating to the proposed 
plan 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, on official business days between 
the hours of 10:00 a.m. and 3:00 p.m. Copies of the plan also will be 
available for inspection and copying at the principal offices of the 
Parties. 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 4-618 
and should be submitted on or before October 27, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Robert W. Errett,
Deputy Secretary.
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(34).
---------------------------------------------------------------------------

[FR Doc. 2015-25328 Filed 10-5-15; 8:45 am]
 BILLING CODE 8011-01-P
60426 Federal Register / Vol. 80, No. 193 / Tuesday, October 6, 2015 / Notices

• Send an email to rule-comments@ SECURITIES AND EXCHANGE Participating Organizations approved by
sec.gov. Please include File Number SR– COMMISSION the SEC on December 3, 2010.3 The
BYX–2015–42 on the subject line. Commission is publishing this notice to
[Release No. 34–76056; File No. 4–618]
solicit comments on the 17d–2 Plan
Paper Comments from interested persons.
Program for Allocation of Regulatory
• Send paper comments in triplicate Responsibilities Pursuant to Rule 17d– I. Introduction
to Secretary, Securities and Exchange 2; Notice of Filing of Proposed
Section 19(g)(1) of the Act,4 among
Commission, 100 F Street NE., Amended Plan for the Allocation of
other things, requires every self-
Washington, DC 20549–1090. Regulatory Responsibilities Between
regulatory organization (‘‘SRO’’)
BATS Exchange, Inc., BATS Y-
All submissions should refer to File registered as either a national securities
Exchange, Inc., BOX Options
Number SR–BYX–2015–42. This file exchange or national securities
Exchange LLC, Chicago Board Options
number should be included on the association to examine for, and enforce
Exchange, Incorporated, C2 Options
subject line if email is used. To help the compliance by, its members and persons
Exchange, Incorporated, Chicago
associated with its members with the
Commission process and review your Stock Exchange, Inc., EDGA
Act, the rules and regulations
comments more efficiently, please use Exchange, Inc., EDGX Exchange, Inc.,
thereunder, and the SRO’s own rules,
only one method. The Commission will Financial Industry Regulatory
unless the SRO is relieved of this
post all comments on the Commission’s Authority, Inc., International Securities
responsibility pursuant to Section 17(d)
Internet Web site (http://www.sec.gov/ Exchange, LLC, ISE Gemini, LLC,
or Section 19(g)(2) of the Act.5 Without
rules/sro.shtml). Miami International Securities
this relief, the statutory obligation of
Exchange, LLC, The NASDAQ Stock
Copies of the submission, all each individual SRO could result in a
Market LLC, NASDAQ OMX BX, Inc.,
subsequent amendments, all written pattern of multiple examinations of
NASDAQ OMX PHLX, Inc., National
statements with respect to the proposed broker-dealers that maintain
Stock Exchange, Inc., New York Stock
rule change that are filed with the memberships in more than one SRO
Exchange LLC, NYSE MKT LLC, and
Commission, and all written (‘‘common members’’). Such regulatory
NYSE Arca, Inc.
communications relating to the duplication would add unnecessary
proposed rule change between the September 30, 2015. expenses for common members and
Commission and any person, other than Pursuant to Section 17(d) of the their SROs.
Securities Exchange Act of 1934 Section 17(d)(1) of the Act 6 was
those that may be withheld from the
(‘‘Act’’),1 and Rule 17d–2 thereunder,2 intended, in part, to eliminate
public in accordance with the
notice is hereby given that on unnecessary multiple examinations and
provisions of 5 U.S.C. 552, will be regulatory duplication.7 With respect to
September 2, 2015, BATS Exchange,
available for Web site viewing and a common member, Section 17(d)(1)
Inc. (‘‘BATS’’), BATS Y-Exchange, Inc.
printing in the Commission’s Public (‘‘BATS Y’’), BOX Options Exchange authorizes the Commission, by rule or
Reference Room, 100 F Street NE., LLC (‘‘BOX’’), Chicago Board Options order, to relieve an SRO of the
Washington, DC 20549, on official Exchange, Incorporated (‘‘CBOE’’), C2 responsibility to receive regulatory
business days between the hours of Options Exchange, Incorporated (‘‘C2’’), reports, to examine for and enforce
10:00 a.m. and 3:00 p.m. Copies of the Chicago Stock Exchange, Inc. (‘‘CHX’’), compliance with applicable statutes,
filing also will be available for EDGA Exchange, Inc. (‘‘EDGA’’), EDGX rules, and regulations, or to perform
inspection and copying at the principal Exchange, Inc. (‘‘EDGX’’), Financial other specified regulatory functions.
office of the Exchange. All comments Industry Regulatory Authority, Inc. To implement Section 17(d)(1), the
received will be posted without change; (‘‘FINRA’’), International Securities Commission adopted two rules: Rule
the Commission does not edit personal Exchange, LLC (‘‘ISE’’), ISE Gemini, LLC 17d–1 and Rule 17d–2 under the Act.8
identifying information from (‘‘ISE Gemini’’), Miami International Rule 17d–1 authorizes the Commission
submissions. You should submit only Securities Exchange, LLC (‘‘MIAX’’), to name a single SRO as the designated
information that you wish to make The NASDAQ Stock Market LLC examining authority (‘‘DEA’’) to
available publicly. (‘‘NASDAQ’’), NASDAQ OMX BX, Inc. examine common members for
(‘‘BX’’), NASDAQ OMX PHLX, Inc. compliance with the financial
All submissions should refer to File responsibility requirements imposed by
(‘‘Phlx’’), National Stock Exchange, Inc.
Number SR–BYX–2015–42 and should (‘‘NSX’’), New York Stock Exchange the Act, or by Commission or SRO
be submitted on or before October 27, LLC (‘‘NYSE’’), NYSE MKT LLC (‘‘NYSE rules.9 When an SRO has been named as
2015. MKT’’), and NYSE Arca, Inc. (‘‘NYSE a common member’s DEA, all other
For the Commission, by the Division of Arca’’) (each, a ‘‘Participating SROs to which the common member
Trading and Markets, pursuant to delegated Organization,’’ and, together, the belongs are relieved of the responsibility
authority.16 ‘‘Participating Organizations’’ or the
Robert W. Errett, ‘‘Parties’’), filed with the Securities and 3 See Securities Exchange Act Release No. 63230

Exchange Commission (‘‘Commission’’ (November 2, 2010), 75 FR 68632 (November 8,
Deputy Secretary. 1976).
or ‘‘SEC’’) an amended plan for the 4 15 U.S.C. 78s(g)(1).
[FR Doc. 2015–25326 Filed 10–5–15; 8:45 am]
allocation of regulatory responsibilities 5 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2),
BILLING CODE 8011–01–P with respect to certain Regulation NMS respectively.
Rules listed in Exhibit A to the Plan 6 15 U.S.C. 78q(d)(1).
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(‘‘17d–2 Plan’’ or the ‘‘Plan’’). As further 7 See Securities Act Amendments of 1975, Report

discussed in Section II, below, this of the Senate Committee on Banking, Housing, and
Urban Affairs to Accompany S. 249, S. Rep. No. 94–
Agreement amends and restates the 75, 94th Cong., 1st Session 32 (1975).
agreement by and among the 8 17 CFR 240.17d–1 and 17 CFR 240.17d–2,

respectively.
1 15 U.S.C. 78q(d). 9 See Securities Exchange Act Release No. 12352
16 See 17 CFR 200.30–3(a)(12). 2 17 CFR 240.17d–2. (April 20, 1976), 41 FR 18808 (May 7, 1976).

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to examine the firm for compliance with Examining Authority’’ (‘‘DREA’’) for responsibility for surveillance and
the applicable financial responsibility common members that are members of enforcement with respect to trading
rules. On its face, Rule 17d–1 deals only FINRA, and therein would assume activities or practices involving their
with an SRO’s obligations to enforce certain examination and enforcement own marketplace.13
member compliance with financial responsibilities for those members with The text of the proposed amended
responsibility requirements. Rule 17d–1 respect to specified Regulation NMS 17d–2 Plan is as follows (additions are
does not relieve an SRO from its rules. For common members that are not in italics; deletions are in brackets):
obligation to examine a common members of FINRA, the amended Plan Agreement for the Allocation of
member for compliance with its own provides that the member’s DEA would Regulatory Responsibility for the
rules and provisions of the federal serve as the DREA, provided that the Covered Regulation NMS Rules
securities laws governing matters other DEA exchange operates a national Pursuant to § 17(d) of the Securities
than financial responsibility, including securities exchange or facility that Exchange Act of 1934, 15 U.S.C. 78q(d),
sales practices and trading activities and trades NMS stocks and the common and Rule 17d–2 Thereunder
practices. member is a member of such exchange
To address regulatory duplication in or facility. Section 1(c) of the amended This agreement (the ‘‘Agreement’’) by
these and other areas, the Commission Plan contains a list of proposed and among BATS Exchange, Inc.
adopted Rule 17d–2 under the Act.10 principles that would be applicable to (‘‘BATS’’), BATS Y-Exchange, Inc.
Rule 17d–2 permits SROs to propose the allocation of common members in (‘‘BATS Y’’), BOX Options Exchange
joint plans for the allocation of cases not specifically addressed in the LLC (‘‘BOX’’), Chicago Board Options
regulatory responsibilities with respect Plan. An exchange that does not trade Exchange, Incorporated[.] (‘‘CBOE’’)[1],
to their common members. Under NMS stocks would have no regulatory C2 Options Exchange, Incorporated
paragraph (c) of Rule 17d–2, the authority for covered Regulation NMS (‘‘C2’’), Chicago Stock Exchange, Inc.
Commission may declare such a plan rules pertaining to NMS stocks. For (‘‘CHX’’), EDGA Exchange, Inc.
effective if, after providing for covered rules that pertain to NMS (‘‘EDGA’’), EDGX Exchange, Inc.
appropriate notice and comment, it securities, and thus include options (‘‘EDGX’’), Financial Industry
determines that the plan is necessary or (i.e., Rule 606), the proposed amended Regulatory Authority, Inc. (‘‘FINRA’’),
appropriate in the public interest and Plan provides that the DREA will be the International Securities Exchange, LLC
for the protection of investors; to foster same as the DREA for the rules (‘‘ISE’’), ISE Gemini, LLC (‘‘ISE
cooperation and coordination among the pertaining to NMS stocks. For common Gemini’’), Miami International
SROs; to remove impediments to, and members that are not members of an Securities Exchange, LLC (‘‘MIAX’’), The
foster the development of, a national exchange that trades NMS stocks, the NASDAQ Stock Market LLC
market system and a national clearance common member would be allocated (‘‘NASDAQ’’), NASDAQ OMX BX, Inc.,
and settlement system; and is in according to the principles set forth in NASDAQ OMX PHLX, Inc., National
conformity with the factors set forth in Section 1(c) of the Plan. Stock Exchange, Inc. (‘‘NSX’’), New
Section 17(d) of the Act. Commission The text of the Plan delineates the York Stock Exchange LLC (‘‘NYSE’’),
approval of a plan filed pursuant to Rule proposed regulatory responsibilities NYSE [Amex]MKT LLC (‘‘NYSE
17d–2 relieves an SRO of those with respect to the Parties. Included in [Amex]MKT’’), and NYSE Arca, Inc.
regulatory responsibilities allocated by the proposed Plan is an exhibit (the (‘‘NYSE Arca’’) (each, a ‘‘Participating
the plan to another SRO. ‘‘Covered Regulation NMS Rules’’) that Organization,’’ and, together, the
lists the federal securities laws, rules, ‘‘Participating Organizations’’), is made
II. Proposed Amended Plan pursuant to § 17(d) of the Securities
and regulations, for which the
On September 2, 2015, the parties applicable DREA would bear Exchange Act of 1934 (the ‘‘Act’’ or
submitted a proposed amendment to the examination and enforcement ‘‘SEA’’), 15 U.S.C. 78q(d), and Rule
Plan. The primary purpose of the responsibility under the proposed 17d–2 thereunder, which allow for
amendment is to add Regulation NMS amended Plan for Common Members of plans to allocate regulatory
Rules 606, 607, and 611(c) and (d). In the Participating Organization and their responsibility among self-regulatory
addition, because Regulation NMS Rule associated persons. organizations (‘‘SROs’’). Upon approval
606 applies to ‘‘NMS Securites,’’ and Specifically, under the 17d–2 Plan, by the Securities and Exchange
thus includes responsibility for options, the applicable DREA would assume Commission (‘‘Commission’’ or ‘‘SEC’’),
the Amended Plan adds additional examination and enforcement this Agreement shall amend and restate
Participating Organizations that are responsibility relating to compliance by the agreement by and among the
options markets. Common Members with the Covered Participating Organizations approved by
The proposed 17d–2 Plan is intended Regulation NMS Rules. Covered the SEC on December 3, 2010.
to reduce regulatory duplication for Regulation NMS Rules would not WHEREAS, the Participating
firms that are members of more than one include the application of any rule of a Organizations desire to: (a) Foster
Participating Organization.11 The Participating Organization, or any rule cooperation and coordination among the
proposed amendments to the Plan or regulation under the Act, to the SROs; (b) remove impediments to, and
provide for the allocation of regulatory extent that it pertains to violations of foster the development of, a national
responsibility according to whether the insider trading activities, because such market system; (c) strive to protect the
covered rule pertains to NMS stocks or matters are covered by a separate interest of investors; and (d) eliminate
NMS securities. For covered rules that multiparty agreement under Rule 17d– duplication in their examination and
pertain to NMS stocks (i.e., Rules 607, 2.12 Under the Plan, Participating enforcement of SEA Rules 606, 607,
tkelley on DSK3SPTVN1PROD with NOTICES

611, and 612), FINRA would serve as Organizations would retain full 611[(a) and (b)] and 612 (the ‘‘Covered
the ‘‘Designated Regulation NMS Regulation NMS Rules’’);
12 See Securities Exchange Act Release No. 58350
WHEREAS, the Participating
10 SeeSecurities Exchange Act Release No. 12935 (August 13, 2008), 73 FR 48247 (August 18, 2008) Organizations are interested in
(October 28, 1976), 41 FR 49091 (November 8, (File No. 4–566) (notice of filing of proposed plan).
1976). See also Securities Exchange Act Release No. 58536 allocating regulatory responsibilities
11 The proposed 17d–2 Plan refers to these (September 12, 2008) (File No. 4–566) (order
members as ‘‘Common Members.’’ approving and declaring effective the plan). 13 See paragraph 1 of the proposed 17d–2 Plan.

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the Common Member’s DEA, which will the DREA in fulfilling the Regulatory Organizations in accordance with the
become such Common Member’s new Responsibility assumed under the terms Commercial Arbitration Rules of the
DREA.] of this Agreement. Such information American Arbitration Association and
2. No Retention of Regulatory shall include any information collected judgment upon the award rendered by
Responsibility. The Participating by a Participating Organization in the the arbitrator may be entered in any
Organizations do not contemplate the course of performing its regulatory court having jurisdiction thereof; and
retention of any responsibilities with obligations under the Act, including (ii) There shall be three arbitrators,
respect to the regulatory activities being information relating to an on-going and the chairperson of the arbitration
assumed by the DREA under the terms disciplinary investigation or action panel shall be an attorney. The
of this Agreement. Nothing in this against a member, the amount of a fine arbitrators shall be appointed in
Agreement will be interpreted to imposed on a member, financial accordance with the Commercial
prevent a DREA from entering into information, or information regarding Arbitration Rules of the American
Regulatory Services Agreement(s) to proprietary trading systems gained in Arbitration Association.
perform its Regulatory Responsibility. the course of examining a member 10. Limitation of Liability. As between
3. No Charge. A DREA shall not (‘‘Regulatory Information’’). This the Participating Organizations, no
charge Participating Organizations for Regulatory Information shall be used by Participating Organization, including its
performing the Regulatory the DREA solely for the purposes of respective directors, governors, officers,
Responsibility under this Agreement. fulfilling the DREA’s Regulatory employees and agents, will be liable to
4. Applicability of Certain Laws, Responsibility. any other Participating Organization, or
Rules, Regulations or Orders. b. No Waiver of Privilege. The sharing its directors, governors, officers,
Notwithstanding any provision hereof, of documents or information between employees and agents, for any liability,
this Agreement shall be subject to any the parties pursuant to this Agreement loss or damage resulting from any
statute, or any rule or order of the SEC. shall not be deemed a waiver as against delays, inaccuracies, errors or omissions
To the extent such statute, rule, or order third parties of regulatory or other with respect to its performing or failing
is inconsistent with one or more privileges relating to the discovery of to perform regulatory responsibilities,
provisions of this Agreement, the documents or information. obligations, or functions, except: (a) As
statute, rule, or order shall supersede 8. Special or Cause Examinations and otherwise provided for under the Act[,];
the provision(s) hereof to the extent Enforcement Proceedings. Nothing in (b) in instances of a Participating
necessary to be properly effectuated and this Agreement shall restrict or in any Organization’s gross negligence, willful
the provision(s) hereof in that respect way encumber the right of a misconduct or reckless disregard with
shall be null and void. Participating Organization to conduct respect to another Participating
5. Customer Complaints. If a special or cause examinations of a Organization[,]; or (c) in instances of a
Participating Organization receives a Common Member, or take enforcement breach of confidentiality obligations
copy of a customer complaint relating to proceedings against a Common Member owed to another Participating
a DREA’s Regulatory Responsibility as as a Participating Organization, in its Organization. The Participating
set forth in this Agreement, the sole discretion, shall deem appropriate Organizations understand and agree that
Participating Organization shall or necessary. the regulatory responsibilities are being
promptly forward to such DREA a copy 9. Dispute Resolution Under this performed on a good faith and best
of such customer complaint. It shall be Agreement. effort basis and no warranties, express
such DREA’s responsibility to review a. Negotiation. The Participating or implied, are made by any
and take appropriate action in respect to Organizations will attempt to resolve Participating Organization to any other
such complaint. any disputes through good faith Participating Organization with respect
6. Parties to Make Personnel Available negotiation and discussion, escalating to any of the responsibilities to be
as Witnesses. Each Participating such discussion up through the performed hereunder. This paragraph is
Organization shall make its personnel appropriate management levels until not intended to create liability of any
available to the DREA to serve as reaching the executive management Participating Organization to any third
testimonial or non-testimonial witnesses level. In the event a dispute cannot be party.
as necessary to assist the DREA in settled through these means, the 11. SEC Approval.
fulfilling the Regulatory Responsibility Participating Organizations shall refer a. The Participating Organizations
allocated under this Agreement. The the dispute to binding arbitration. agree to file promptly this Agreement
DREA shall provide reasonable advance b. Binding Arbitration. All claims, with the SEC for its review and
notice when practicable and shall work disputes, controversies, and other approval. FINRA shall file this
with a Participating Organization to matters in question between the Agreement on behalf, and with the
accommodate reasonable scheduling Participating Organizations to this explicit consent, of all Participating
conflicts within the context and Agreement arising out of or relating to Organizations.
demands as the entity with ultimate this Agreement or the breach thereof b. If approved by the SEC, the
regulatory responsibility. The that cannot be resolved by the Participating Organizations will notify
Participating Organization shall pay all Participating Organizations will be their members of the general terms of
reasonable travel and other expenses resolved through binding arbitration. the Agreement and of its impact on their
incurred by its employees to the extent Unless otherwise agreed by the members.
that the DREA requires such employees Participating Organizations, a dispute 12. Subsequent Parties; Limited
to serve as witnesses, and provide submitted to binding arbitration Relationship. This Agreement shall
tkelley on DSK3SPTVN1PROD with NOTICES

information or other assistance pursuant pursuant to this paragraph shall be inure to the benefit of and shall be
to this Agreement. resolved using the following binding upon the Participating
7. Sharing of Work-Papers, Data and procedures: Organizations hereto and their
Related Information. (i) The arbitration shall be conducted respective legal representatives,
a. Sharing. A Participating in a city selected by the DREA in which successors, and assigns. Nothing in this
Organization shall make available to the it maintains a principal office or where Agreement, expressed or implied, is
DREA information necessary to assist otherwise agreed to by the Participating intended or shall: (a) Confer on any

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60430 Federal Register / Vol. 80, No. 193 / Tuesday, October 6, 2015 / Notices

person other than the Participating Participating Organization entitled to Organizations expressly consent to
Organizations hereto, or their respective receipt thereof, to the attention of the allow such DREAs to jointly add new
legal representatives, successors, and Participating Organization’s Participating Organizations to the
assigns, any rights, remedies, representative at the Participating Agreement as provided above. Such
obligations or liabilities under or by Organization’s then principal office or DREAs will promptly notify all
reason of this Agreement, (b) constitute by email. Participating Organizations of any such
the Participating Organizations hereto 18. Confidentiality. The Participating amendments to add a new Participating
partners or participants in a joint Organizations agree that documents or Organization.
venture, or (c) appoint one Participating information shared shall be held in b. All other amendments must be
Organization the agent of the other. confidence, and used only for the [made] approved by each Participating
13. Assignment. No Participating purposes of carrying out their respective Organization. All amendments,
Organization may assign this Agreement regulatory obligations under this including adding a new Participating
without the prior written consent of the Agreement, provided, however, that Organization but excluding changes to
DREAs performing Regulatory each Participating Organization may Exhibit B, must be filed with and
Responsibility on behalf of such disclose such documents or information approved by the Commission before
Participating Organization, which as may be required to comply with they become effective.
consent shall not be unreasonably applicable requlatory requirements or 23. Effective Date. The Effective Date
withheld, conditioned or delayed; requests for information from the SEC. of this Agreement will be the date the
provided, however, that any Any Participating Organization SEC declares this Agreement to be
Participating Organization may assign disclosing confidential documents or effective pursuant to authority conferred
the Agreement to a corporation information in compliance with by § 17(d) of the Act, and Rule 17d–2
controlling, controlled by or under applicable regulatory or oversight thereunder.
common control with the Participating requirements will request confidential 24. Counterparts. This Agreement
Organization without the prior written treatment of such information. No may be executed in any number of
consent of such Participating Participating Organization shall assert counterparts, including facsimile, each
Organization’s DREAs. No assignment regulatory or other privileges as against of which will be deemed an original, but
shall be effective without Commission the other with respect to Regulatory all of which taken together shall
approval. Information that is required to be shared constitute one single agreement among
14. Severability. Any term or pursuant to this Agreement. the Participating Organizations.
provision of this Agreement that is 19. Regulatory Responsibility.
* * * * *
invalid or unenforceable in any Pursuant to Section 17(d)(1)(A) of the
jurisdiction shall, as to such Act, and Rule 17d–2 thereunder, the EXHIBIT A
jurisdiction, be ineffective to the extent Participating Organizations request the
COVERED REGULATION NMS RULES
of such invalidity or unenforceability SEC, upon its approval of this
without rendering invalid or Agreement, to relieve the Participating SEA Rule 606—Disclosure of Order
unenforceable the remaining terms and Organizations which are participants in Routing Information.*
provisions of this Agreement or this Agreement that are not the DREA as SEA Rule 607—Customer Account
affecting the validity or enforceability of to a Common Member of any and all Statements.
any of the terms or provisions of this responsibilities with respect to the SEA Rule 611[(a)]—Order Protection
Agreement in any other jurisdiction. matters allocated to the DREA pursuant Rule. [— Reasonable Policies and
15. Termination. Any Participating to this Agreement for purposes of Procedures.]
Organization may cancel its §§ 17(d) and 19(g) of the Act. [SEA Rule 611(b)—Order Protection
participation in the Agreement at any 20. Governing Law. This Agreement Rule.—Exceptions.]
time upon the approval of the shall be deemed to have been made in SEA Rule 612—Minimum Pricing
Commission after 180 days written the State of New York, and shall be Increment.
notice to the other Participating construed and enforced in accordance *Covered Regulation NMS Rules with
Organizations (or in the case of a change with the law of the State of New York, asterisks (*) pertain to NMS securities.
of control in ownership of a without reference to principles of Covered Regulation NMS Rules without
Participating Organization, such other conflicts of laws thereof. Each of the asterisks pertain to NMS stocks.
notice time period as that Participating Participating Organizations hereby * * * * *
Organization may choose). The consents to submit to the jurisdiction of
cancellation of its participation in this III. Date of Effectiveness of the
the courts of the State of New York in
Agreement by any Participating Proposed Plan and Timing for
connection with any action or
Organization shall not terminate this Commission Action
proceeding relating to this Agreement.
Agreement as to the remaining 21. Survival of Provisions. Provisions Pursuant to Section 17(d)(1) of the
Participating Organizations. intended by their terms or context to Act 14 and Rule 17d–2 thereunder,15
16. General. The Participating survive and continue notwithstanding October 27, 2015, the Commission may,
Organizations agree to perform all acts delivery of the regulatory services by the by written notice, declare the amended
and execute all supplementary DREA and any expiration of this plan submitted by the Parties, File No.
instruments or documents that may be Agreement shall survive and continue. 4–618, to be effective if the Commission
reasonably necessary or desirable to 22. Amendment. finds that the plan is necessary or
carry out the provisions of this a. This Agreement may be amended to appropriate in the public interest and
tkelley on DSK3SPTVN1PROD with NOTICES

Agreement. add a new Participating Organization, for the protection of investors, to foster
17. Written Notice. Any written notice provided that such Participating cooperation and coordination among
required or permitted to be given under Organization does not assume self-regulatory organizations, or to
this Agreement shall be deemed given if regulatory responsibility, [solely] by an remove impediments to and foster the
sent by certified mail, return receipt amendment executed by all applicable
requested, or by a comparable means of DREAs and such new Participating 14 15 U.S.C. 78q(d)(1).
electronic communication to each Organization. All other Participating 15 17 CFR 240.17d–2.

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Document Created: 2015-12-15 08:50:56
Document Modified: 2015-12-15 08:50:56
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 60426