80 FR 61879 - Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 3.13 (Payments Involving Publications that Influence the Market Price of a Security)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 198 (October 14, 2015)

Page Range		61879-61880
FR Document		2015-26032
Federal Register, Volume 80 Issue 198 (Wednesday, October 14, 2015)
[Federal Register Volume 80, Number 198 (Wednesday, October 14, 2015)]
[Notices]
[Pages 61879-61880]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-26032]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76091; File No. SR-EDGX-2015-43]


Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Rule 3.13 (Payments Involving Publications that Influence the Market 
Price of a Security)

October 7, 2015.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 23, 2015, EDGX Exchange, Inc. (``Exchange'' or ``EDGX'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been substantially prepared by the Exchange. The Exchange has 
designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with 
the Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend EDGX Rule 3.13 to update 
references to recently amended FINRA rules and make a ministerial, non-
substantive change. The text of the proposed rule change is available 
at the Exchange's Web site at www.batstrading.com, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of 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 proposes to amend Rule 3.13 to update references to a 
recently amended FINRA rule and make a ministerial, non-substantive 
change. Rule 3.13(a) prohibits Exchange members from ``directly or 
indirectly, giv[ing], permit[ting] to be given, or offer[ing] to give 
anything of value to any person for the purpose of influencing or 
rewarding the action of such person in connection with the publication 
or circulation in any electronic or other public media, including any 
investment service or similar publication, Web site, newspaper, 
magazine or other periodical, radio, or television program of any 
matter that has, or is intended to have, an effect upon the market 
price of any security.'' The Exchange proposes to amend paragraph (a) 
by replacing the term ``Web site'' with ``Web site''.
    Rule 3.13(b) sets forth exceptions to the prohibitions under 
paragraph (a) set forth above. These exceptions allow for compensation 
paid to a person in connection with the publication or circulation of: 
(i) A communication that is clearly distinguishable as paid 
advertising; (ii) a communication that discloses the receipt of 
compensation and the amount thereof in accordance with Section 17(b) of 
the Securities Act of 1933; or (iii) a research report, as that term is 
defined in NASD Rule 2711. Rule 3.13 also states that FINRA is in the 
process of consolidating certain NASD rules into a new FINRA rulebook. 
This provision also states that ``[i]f the provisions of NASD Rule 2711 
are transferred into the FINRA rulebook, then Rule 2711 shall be 
construed to require Exchange members to comply with FINRA rule 
corresponding to NASD Rule 2711 (regardless of whether such rule is 
renumbered or amended) as if such rule were part of the Rules of the 
Exchange.''
    The Commission recently approved a proposed rule change by FINRA to 
transfer NASD Rule 2711 to the FINRA rulebook and redesignate it as 
FINRA Rule 2241.\5\ This was proposed as part of FIRNA's process of 
consolidating certain NASD rules into the new FINRA rulebook. To 
reflect the approval of this recent FINRA proposed rule change, the 
Exchange proposes to replace the reference to NASD Rule 2711 with FINRA 
2241 under paragraph (b)(3). The Exchange also proposes to delete the 
provision within Rule 3.13 referencing the transferring of NASD Rule 
2711 to the FINRA rulebook as NASD Rule 2711 was transferred to the 
FINRA rule book as Rule 2241 (described above), as no longer necessary.
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    \5\ See Exchange Act Release No. 75471 (July 16, 2015), 80 FR 
43482 (July 22, 2015) (SR-FINRA-2014-047).
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2. Statutory Basis
    The Exchange believes that proposed rule change is consistent with 
section 6(b)(5) of the Act,\6\ which requires, among other things, that 
the Exchange's rules be designed to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
to foster cooperation and coordination with persons engaged in 
facilitating transactions in securities,

[[Page 61880]]

and to remove impediments to and perfect the mechanism of a free and 
open market and a national market system. The Exchange does not propose 
to amend the prohibition or exceptions of any of its Rule 3.13. The 
Exchange believes that by updating cross references to FINRA rules as a 
result of the transfer of NASD Rule 2711 to the FINRA rulebook as FINRA 
Rule 2241 and making a ministerial, non-substantive change the proposed 
rule change would remove impediments to and perfect the mechanism of a 
free and open market and a national market system by avoiding potential 
investor and member confusion. The Exchange believes that these 
clarifying changes also would, in general, protect investors and the 
public interest.
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    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange does not 
propose to amend the prohibition or exceptions of any of its Rule 3.13. 
The proposed rule change is not designed to address any competitive 
issues but rather update Rule 3.13 to reflect the recent amendment to a 
referenced FINRA rule and make a ministerial, non-substantive change.

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

    The Exchange has neither solicited nor received written comments on 
the proposal.

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

    The Exchange has designated this rule filing as non-controversial 
under section 19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6) 
thereunder.\8\ 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 after the date of the filing, 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 
and Rule 19b-4(f)(6) thereunder.\9\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4.
    \9\ Rule 19b-4(f)(6) also requires that the Exchange give the 
Commission written notice of its intent to file the proposed rule 
change, along with a brief description and 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. The Exchange satisfied this requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily temporarily suspend the rule 
change if it appears to the Commission that this action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes this action, the 
Commission shall institute proceedings under section 19(b)(2)(B) of the 
Act \10\ to determine whether the proposed rule should be approved or 
disapproved.
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    \10\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File No. SR-EDGX-2015-43 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 No. SR-EDGX-2015-43. 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 No. SR-EDGX-2015-43 and should be 
submitted on or before November 4, 2015.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-26032 Filed 10-13-15; 8:45 am]
BILLING CODE 8011-01-P
Federal Register / Vol. 80, No. 198 / Wednesday, October 14, 2015 / Notices 61879

including a majority of the disinterested Commission (‘‘Commission’’) the newspaper, magazine or other
directors or trustees, will find that the proposed rule change as described in periodical, radio, or television program
advisory fees charged under such Items I and II below, which Items have of any matter that has, or is intended to
contract are based on services provided been substantially prepared by the have, an effect upon the market price of
that will be in addition to, rather than Exchange. The Exchange has designated any security.’’ The Exchange proposes
duplicative of, the services provided this proposal as a ‘‘non-controversial’’ to amend paragraph (a) by replacing the
under the advisory contract(s) of any proposed rule change pursuant to term ‘‘Web site’’ with ‘‘Web site’’.
Fund, or its respective Master Fund, in section 19(b)(3)(A) of the Act 3 and Rule Rule 3.13(b) sets forth exceptions to
which the Investing Management 19b–4(f)(6)(iii) thereunder,4 which the prohibitions under paragraph (a) set
Company may invest. These findings renders it effective upon filing with the forth above. These exceptions allow for
and their basis will be fully recorded in Commission. The Commission is compensation paid to a person in
the minute books of the appropriate publishing this notice to solicit connection with the publication or
Investing Management Company. comments on the proposed rule change circulation of: (i) A communication that
11. Any sales charges and/or service from interested persons. is clearly distinguishable as paid
fees charged with respect to shares of a advertising; (ii) a communication that
Fund of Funds will not exceed the I. Self-Regulatory Organization’s
Statement of the Terms of Substance of discloses the receipt of compensation
limits applicable to a fund of funds as and the amount thereof in accordance
set forth in NASD Conduct Rule 2830. the Proposed Rule Change
with Section 17(b) of the Securities Act
12. No Fund, or its respective Master The Exchange filed a proposal to of 1933; or (iii) a research report, as that
Fund, will acquire securities of any amend EDGX Rule 3.13 to update term is defined in NASD Rule 2711.
other investment company or company references to recently amended FINRA Rule 3.13 also states that FINRA is in
relying on section 3(c)(1) or 3(c)(7) of rules and make a ministerial, non- the process of consolidating certain
the Act in excess of the limits contained substantive change. The text of the NASD rules into a new FINRA rulebook.
in section 12(d)(1)(A) of the Act, except proposed rule change is available at the This provision also states that ‘‘[i]f the
to the extent (i) the Fund, or its Exchange’s Web site at provisions of NASD Rule 2711 are
respective Master Fund, acquires www.batstrading.com, at the principal transferred into the FINRA rulebook,
securities of another investment office of the Exchange, and at the then Rule 2711 shall be construed to
company pursuant to exemptive relief Commission’s Public Reference Room. require Exchange members to comply
from the Commission permitting the with FINRA rule corresponding to
II. Self-Regulatory Organization’s
Fund, or its respective Master Fund, to NASD Rule 2711 (regardless of whether
Statement of the Purpose of, and
acquire securities of one or more such rule is renumbered or amended) as
Statutory Basis for, the Proposed Rule
investment companies for short-term if such rule were part of the Rules of the
Change
cash management purposes or (ii) the Exchange.’’
Fund acquires securities of the Master In its filing with the Commission, the
Exchange included statements The Commission recently approved a
Fund pursuant to the Master-Feeder proposed rule change by FINRA to
Relief. concerning the purpose of, and basis for,
the proposed rule change and discussed transfer NASD Rule 2711 to the FINRA
For the Commission, by the Division of rulebook and redesignate it as FINRA
Investment Management, under delegated any comments it received on the
proposed rule change. The text of these Rule 2241.5 This was proposed as part
authority. of FIRNA’s process of consolidating
Robert W. Errett, statements may be examined at the
places specified in Item IV below. The certain NASD rules into the new FINRA
Deputy Secretary. rulebook. To reflect the approval of this
Exchange has prepared summaries, set
[FR Doc. 2015–26030 Filed 10–13–15; 8:45 am]
forth in sections A, B, and C below, of recent FINRA proposed rule change, the
BILLING CODE 8011–01–P
the most significant parts of such Exchange proposes to replace the
statements. reference to NASD Rule 2711 with
FINRA 2241 under paragraph (b)(3). The
SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s Exchange also proposes to delete the
COMMISSION Statement of the Purpose of, and provision within Rule 3.13 referencing
[Release No. 34–76091; File No. SR–EDGX–
Statutory Basis for, the Proposed Rule the transferring of NASD Rule 2711 to
2015–43] Change the FINRA rulebook as NASD Rule 2711
1. Purpose was transferred to the FINRA rule book
Self-Regulatory Organizations; EDGX as Rule 2241 (described above), as no
Exchange, Inc.; Notice of Filing and The Exchange proposes to amend longer necessary.
Immediate Effectiveness of a Proposed Rule 3.13 to update references to a
Rule Change To Amend Rule 3.13 recently amended FINRA rule and make 2. Statutory Basis
(Payments Involving Publications that a ministerial, non-substantive change. The Exchange believes that proposed
Influence the Market Price of a Rule 3.13(a) prohibits Exchange rule change is consistent with section
Security) members from ‘‘directly or indirectly, 6(b)(5) of the Act,6 which requires,
giv[ing], permit[ting] to be given, or among other things, that the Exchange’s
October 7, 2015. offer[ing] to give anything of value to rules be designed to prevent fraudulent
Pursuant to section 19(b)(1) of the any person for the purpose of and manipulative acts and practices, to
Securities Exchange Act of 1934 influencing or rewarding the action of promote just and equitable principles of
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 such person in connection with the trade, to foster cooperation and
tkelley on DSK3SPTVN1PROD with NOTICES

notice is hereby given that on publication or circulation in any coordination with persons engaged in
September 23, 2015, EDGX Exchange, electronic or other public media, facilitating transactions in securities,
Inc. (‘‘Exchange’’ or ‘‘EDGX’’) filed with including any investment service or
the Securities and Exchange similar publication, Web site, 5 See Exchange Act Release No. 75471 (July 16,

2015), 80 FR 43482 (July 22, 2015) (SR–FINRA–
1 15 U.S.C. 78s(b)(1). 3 15 U.S.C. 78s(b)(3)(A). 2014–047).
2 17 CFR 240.19b–4. 4 17 CFR 240.19b–4(f)(6)(iii). 6 15 U.S.C. 78f(b)(5).

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61880 Federal Register / Vol. 80, No. 198 / Wednesday, October 14, 2015 / Notices

and to remove impediments to and 19(b)(3)(A) of the Act and Rule 19b– available for Web site viewing and
perfect the mechanism of a free and 4(f)(6) thereunder.9 printing in the Commission’s Public
open market and a national market At any time within 60 days of the Reference Room, 100 F Street NE.,
system. The Exchange does not propose filing of the proposed rule change, the Washington, DC 20549, on official
to amend the prohibition or exceptions Commission may summarily business days between the hours of
of any of its Rule 3.13. The Exchange temporarily suspend the rule change if 10:00 a.m. and 3:00 p.m. Copies of such
believes that by updating cross it appears to the Commission that this filing will also be available for
references to FINRA rules as a result of action is: (i) Necessary or appropriate in inspection and copying at the principal
the transfer of NASD Rule 2711 to the the public interest; (ii) for the protection office of the Exchange. All comments
FINRA rulebook as FINRA Rule 2241 of investors; or (iii) otherwise in received will be posted without change;
and making a ministerial, non- furtherance of the purposes of the Act. the Commission does not edit personal
substantive change the proposed rule If the Commission takes this action, the identifying information from
change would remove impediments to Commission shall institute proceedings submissions. You should submit only
and perfect the mechanism of a free and under section 19(b)(2)(B) of the Act 10 to information that you wish to make
open market and a national market determine whether the proposed rule available publicly. All submissions
system by avoiding potential investor should be approved or disapproved. should refer to File No. SR–EDGX–
and member confusion. The Exchange 2015–43 and should be submitted on or
IV. Solicitation of Comments
believes that these clarifying changes before November 4, 2015.
also would, in general, protect investors Interested persons are invited to
For the Commission, by the Division of
and the public interest. submit written data, views and Trading and Markets, pursuant to delegated
arguments concerning the foregoing, authority.11
B. Self-Regulatory Organization’s including whether the proposal is Robert W. Errett,
Statement on Burden on Competition consistent with the Act. Comments may
Deputy Secretary.
be submitted by any of the following
The Exchange does not believe that methods: [FR Doc. 2015–26032 Filed 10–13–15; 8:45 am]
the proposed rule change would impose BILLING CODE 8011–01–P
any burden on competition that is not Electronic Comments
necessary or appropriate in furtherance • Use the Commission’s Internet
of the purposes of the Act. The comment form (http://www.sec.gov/ SMALL BUSINESS ADMINISTRATION
Exchange does not propose to amend rules/sro.shtml); or
the prohibition or exceptions of any of • Send an email to rule-comments@ [Disaster Declaration #14495 and #14496]
its Rule 3.13. The proposed rule change sec.gov. Please include File No. SR–
is not designed to address any South Carolina Disaster # SC–00031
EDGX–2015–43 on the subject line.
competitive issues but rather update AGENCY: U.S. Small Business
Rule 3.13 to reflect the recent Paper Comments
Administration.
amendment to a referenced FINRA rule • Send paper comments in triplicate ACTION: Notice.
and make a ministerial, non-substantive to Secretary, Securities and Exchange
change. Commission, 100 F Street NE., SUMMARY: This is a Notice of the
Washington, DC 20549–1090. Presidential declaration of a major
C. Self-Regulatory Organization’s
All submissions should refer to File No. disaster for the State of South Carolina
Statement on Comments on the
SR–EDGX–2015–43. This file number (FEMA–4241–DR), dated 10/05/2015.
Proposed Rule Change Received From
should be included on the subject line Incident: Severe Storms and Flooding
Members, Participants or Others
if email is used. To help the Incident Period: 10/01/2015 and
The Exchange has neither solicited Commission process and review your continuing.
nor received written comments on the comments more efficiently, please use Effective Date: 10/05/2015
proposal. only one method. The Commission will Physical Loan Application Deadline
post all comments on the Commission’s Date: 12/04/2015
III. Date of Effectiveness of the Internet Web site (http://www.sec.gov/ Economic Injury (EIDL) Loan
Proposed Rule Change and Timing for rules/sro.shtml). Copies of the Application Deadline Date: 07/05/2016
Commission Action submission, all subsequent ADDRESSES: Submit completed loan
The Exchange has designated this rule amendments, all written statements applications to: U.S. Small Business
filing as non-controversial under section with respect to the proposed rule Administration Processing and
19(b)(3)(A) of the Act 7 and Rule 19b– change that are filed with the Disbursement Center, 14925 Kingsport
Commission, and all written Road, Fort Worth, TX 76155.
4(f)(6) thereunder.8 Because the
communications relating to the FOR FURTHER INFORMATION CONTACT: A.
proposed rule change does not: (i)
proposed rule change between the Escobar, Office of Disaster Assistance,
Significantly affect the protection of
Commission and any person, other than U.S. Small Business Administration,
investors or the public interest; (ii)
those that may be withheld from the 409 3rd Street SW., Suite 6050,
impose any significant burden on
public in accordance with the Washington, DC 20416.
competition; and (iii) become operative
provisions of 5 U.S.C. 552, will be
for 30 days after the date of the filing, SUPPLEMENTARY INFORMATION: Notice is
or such shorter time as the Commission 9 Rule 19b–4(f)(6) also requires that the Exchange
hereby given that as a result of the
tkelley on DSK3SPTVN1PROD with NOTICES

may designate if consistent with the give the Commission written notice of its intent to President’s major disaster declaration on
protection of investors and the public file the proposed rule change, along with a brief 10/05/2015, applications for disaster
interest, the proposed rule change has description and text of the proposed rule change, loans may be filed at the address listed
become effective pursuant to section at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
above or other locally announced
as designated by the Commission. The Exchange locations.
7 15 U.S.C. 78s(b)(3)(A). satisfied this requirement.
8 17 CFR 240.19b–4. 10 15 U.S.C. 78s(b)(2)(B). 11 17 CFR 200.30–3(a)(12).

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Document Created: 2018-02-27 08:50:34
Document Modified: 2018-02-27 08:50:34
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 61879