80 FR 68361 - Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing and Order Approving and Declaring Effective an Amendment to the Plan for the Allocation of Regulatory Responsibilities Among NYSE MKT LLC, BATS Exchange, Inc., BOX Options Exchange LLC, C2 Options Exchange, Incorporated, the Chicago Board Options Exchange, Incorporated, the EDGX Exchange, Inc., the International Securities Exchange LLC, ISE Gemini, LLC, Financial Industry Regulatory Authority, Inc., the New York Stock Exchange LLC, NYSE Arca, Inc., The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., the NASDAQ OMX PHLX, Inc., and Miami International Securities Exchange, LLC Concerning Options-Related Sales Practice Matters
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 213 (November 4, 2015)
Federal Register Volume 80, Issue 213 (November 4, 2015)
| Page Range | 68361-68367 | |
| FR Document | 2015-28066 |
[Federal Register Volume 80, Number 213 (Wednesday, November 4, 2015)] [Notices] [Pages 68361-68367] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-28066] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76309; File No. S7-966) Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing and Order Approving and Declaring Effective an Amendment to the Plan for the Allocation of Regulatory Responsibilities Among NYSE MKT LLC, BATS Exchange, Inc., BOX Options Exchange LLC, C2 Options Exchange, Incorporated, the Chicago Board Options Exchange, Incorporated, the EDGX Exchange, Inc., the International Securities Exchange LLC, ISE Gemini, LLC, Financial Industry Regulatory Authority, Inc., the New York Stock Exchange LLC, NYSE Arca, Inc., The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., the NASDAQ OMX PHLX, Inc., and Miami International Securities Exchange, LLC Concerning Options-Related Sales Practice Matters October 29, 2015. Notice is hereby given that the Securities and Exchange Commission (``Commission'') has issued an Order, pursuant to Section 17(d) of the Securities Exchange Act of 1934 (``Act''),\1\ approving and declaring effective an amendment to the plan for allocating regulatory responsibility (``Plan'') filed on October 9, 2015, pursuant to Rule 17d-2 of the Act,\2\ by NYSE MKT LLC (``MKT''), BATS Exchange, Inc., (``BATS''), the BOX Options Exchange LLC (``BOX''), C2 Options Exchange, Incorporated (``C2''), the Chicago Board Options Exchange, Incorporated (``CBOE''), the EDGX Exchange, Inc. (``EDGX'') the International Securities Exchange LLC (``ISE''), ISE Gemini, LLC (``Gemini''), Financial Industry Regulatory Authority, Inc. (``FINRA''), the New York Stock Exchange LLC (``NYSE''), NYSE Arca, Inc. (``Arca''), The NASDAQ Stock Market LLC (``Nasdaq''), NASDAQ OMX BX, Inc. (``BX''), NASDAQ OMX PHLX, Inc. (``PHLX''), and Miami International Securities Exchange (``MIAX'') (collectively, ``Participating Organizations'' or ``parties''). --------------------------------------------------------------------------- \1\ 15 U.S.C. 78q(d). \2\ 17 CFR 240.17d-2. --------------------------------------------------------------------------- I. Introduction Section 19(g)(1) of the Act,\3\ 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) \4\ or Section 19(g)(2) \5\ of the Act. 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. --------------------------------------------------------------------------- \3\ 15 U.S.C. 78s(g)(1). \4\ 15 U.S.C. 78q(d). \5\ 15 U.S.C. 78s(g)(2). --------------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \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). --------------------------------------------------------------------------- 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 to examine the firm for compliance with the applicable financial responsibility [[Page 68362]] 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. --------------------------------------------------------------------------- \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). --------------------------------------------------------------------------- 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 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. --------------------------------------------------------------------------- \10\ See Securities Exchange Act Release No. 12935 (October 28, 1976), 41 FR 49091 (November 8, 1976). --------------------------------------------------------------------------- II. The Plan On September 8, 1983, the Commission approved the SRO participants' plan for allocating regulatory responsibilities pursuant to Rule 17d- 2.\11\ On May 23, 2000, the Commission approved an amendment to the plan that added the ISE as a participant.\12\ On November 8, 2002, the Commission approved another amendment that replaced the original plan in its entirety and, among other things, allocated regulatory responsibilities among all the participants in a more equitable manner.\13\ On February 5, 2004, the parties submitted an amendment to the plan, primarily to include the BSE, which was establishing a new options trading facility to be known as BOX, as an SRO participant.\14\ On December 5, 2007, the parties submitted an amendment to the plan to, among other things, provide that the National Association of Securities Dealers (``NASD'') (n/k/a FINRA) and NYSE are Designated Options Examining Authorities under the plan.\15\ On June 5, 2008, the parties submitted an amendment to the plan primarily to remove the NYSE as a Designated Options Examining Authority, leaving FINRA as the sole Designated Options Examining Authority for all common members that are members of FINRA.\16\ On February 9, 2010, the parties submitted a proposed amendment to the plan to add BATS and C2 as SRO participants and to reflect the name changes of the American Stock Exchange LLC to the NYSE Amex LLC, the Boston Stock Exchange, Inc., to the NASDAQ OMX BX, Inc. and the Philadelphia Stock Exchange, Inc. to the NASDAQ OMX PHLX, Inc. \17\ On May 22, 2012, the parties submitted a proposed amendment to add BOX as an SRO participant, and to amend Section XIII of the plan to set forth a revised procedure for adding new participants to the plan.\18\ On November 20, 2012, the parties submitted a proposed amendment to add MIAX as an SRO participant, and to change the name of NYSE Amex LLC to NYSE MKT LLC. \19\ On June 21, 2013, the parties submitted a proposed amendment to add Topaz Exchange LLC as an SRO participant. \20\ --------------------------------------------------------------------------- \11\ See Securities Exchange Act Release No. 20158 (September 8, 1983), 48 FR 41256 (September 14, 1983). \12\ See Securities Exchange Act Release No. 42816 (May 23, 2000), 65 FR 34759 (May 31, 2000). \13\ See Securities Exchange Act Release No. 46800 (November 8, 2002), 67 FR 69774 (November 19, 2002). \14\ See Securities Exchange Act Release No. 49197 (February 5, 2004), 69 FR 7046 (February 12, 2004). \15\ See Securities Exchange Act Release No. 55532 (March 26, 2007), 72 FR 15729 (April 2, 2007). \16\ See Securities Exchange Act Release No. 57987 (June 18, 2008), 73 FR 36156 (June 25, 2008). \17\ See Securities Exchange Act Release No. 61589 (February 25, 2012), 75 FR 9976 (March 4, 2010). \18\ See Securities Exchange Act Release No. 66974 (May 11, 2012), 77 FR 29705 (May 18, 2012). \19\ See Securities Exchange Act Release No. 68363 (December 5, 2012), 77 FR 73711 (December 11, 2012). \20\ See Securities Exchange Act Release No. 70051 (July 26, 2013), 78 FR 46644 (August 1, 2013). --------------------------------------------------------------------------- The plan reduces regulatory duplication for a large number of firms currently members of two or more of the SRO participants by allocating regulatory responsibility for certain options-related sales practice matters to one of the SRO participants. Generally, under the plan, the SRO participant responsible for conducting options-related sales practice examinations of a firm, and investigating options-related customer complaints and terminations for cause of associated persons of that firm, is known as the firm's ``Designated Options Examining Authority'' (``DOEA''). Pursuant to the plan, any other SRO of which the firm is a member is relieved of these responsibilities during the period in which the firm is assigned to another SRO acting as that firm's DOEA. III. Proposed Amendment to the Plan On October 9, 2015, the Parties submitted a proposed amendment to the Plan. The primary purpose of the amendment is to add EDGX as a Participant to the Plan and to change the name of Topaz Exchange, LLC to ISE Gemini, LLC. The text of the proposed amended 17d-2 plan is as follows (additions are italicized; deletions are [bracketed]): * * * * * Agreement by and among BATS Exchange, Inc., BOX Options Exchange, LLC, the Chicago Board Options Exchange, Incorporated, C2 Options Exchange, Incorporated, the International Securities Exchange, LLC, Financial Industry Regulatory Authority, Inc., Miami International Securities Exchange, LLC, the New York Stock Exchange LLC, the NYSE MKT LLC, the NYSE Arca, Inc., The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., the NASDAQ OMX PHLX LLC, ISE Gemini, LLC, and [Topaz Exchange, LLC] EDGX Exchange, Inc., Pursuant to Rule 17d-2 under the Securities Exchange Act of 1934. This agreement (``Agreement''), by and among BATS Exchange, Inc., BOX Options Exchange, LLC, the Chicago Board Options Exchange, Incorporated, C2 Options Exchange, Incorporated, the International Securities Exchange, LLC, Financial Industry Regulatory Authority, Inc. (``FINRA''), Miami International Securities Exchange, LLC, The NASDAQ Stock Market LLC (``NASDAQ''), NASDAQ OMX BX, Inc., the New York Stock Exchange LLC (``NYSE''), the NYSE MKT LLC, the NYSE Arca, Inc., the NASDAQ OMX PHLX LLC, ISE Gemini, LLC [Topaz Exchange LLC] and EDGX Exchange, Inc. hereinafter collectively referred to as the Participants, is made this [21st]8th day of [June, 2013] October, 2015, pursuant to the provisions of Rule 17d-2 under the Securities Exchange Act of 1934 (the ``Exchange Act''), which allows for plans among self- regulatory organizations to allocate regulatory responsibility. This Agreement shall be administered by a committee known as the Options Self-Regulatory Council (the ``Council''). This Agreement amends and restates the agreement entered into among the Participants on [November 19, 2012]June 21, 2013, entitled ``Agreement by and among BATS Exchange, Inc., BOX Options Exchange, LLC, the Chicago Board Options [[Page 68363]] Exchange, Incorporated, C2 Options Exchange, Incorporated, the International Securities Exchange, LLC, Financial Industry Regulatory Authority, Inc., Miami International Securities Exchange, LLC, the New York Stock Exchange LLC, NYSE MKT LLC, the NYSE Arca, Inc., the NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc. [and], the NASDAQ OMX PHLX, Inc and Topaz Exchange, LLC, Pursuant to Rule 17d-2 under the Securities Exchange Act of 1934.'' WHEREAS, the Participants are desirous of allocating regulatory responsibilities with respect to broker-dealers, and persons associated therewith, that are members \1\ of more than one Participant (the ``Common Members'') and conduct a public business for compliance with Common Rules (as hereinafter defined) relating to the conduct by broker-dealers of accounts for listed options, index warrants, currency index warrants and currency warrants (collectively, ``Covered Securities''); and --------------------------------------------------------------------------- \1\ In the case of BOX Options Exchange, LLC (``BOX''), NASDAQ OMX BX, Inc. (``BX'') and NASDAQ members are those persons who are options participants (as defined in the BOX, BX and NASDAQ Options Market Rules). --------------------------------------------------------------------------- Whereas, the Participants are desirous of executing a plan for this purpose pursuant to the provisions of Rule 17d-2 and filing such plan with the Securities and Exchange Commission (``SEC'' or the ``Commission'') for its approval; Now, therefore, in consideration of the mutual covenants contained hereafter, the Participants agree as follows: I. As used herein the term Designated Options Examining Authority (``DOEA'') shall mean: (1) FINRA insofar as it shall perform Regulatory Responsibility (as hereinafter defined) for its broker-dealer members that also are members of another Participant or (2) the Designated Examination Authority (``DEA'') pursuant to SEC Rule 17d-1 under the Securities Exchange Act (``Rule 17d-1'') for a broker-dealer that is a member of a more than one Participant (but not a member of FINRA). II. As used herein, the term ``Regulatory Responsibility'' shall mean the examination and enforcement responsibilities relating to compliance by Common Members with the rules of the applicable Participant that are substantially similar to the rules of the other Participants (the ``Common Rules''), insofar as they apply to the conduct of accounts for Covered Securities. A list of the current Common Rules of each Participant applicable to the conduct of accounts for Covered Securities is attached hereto as Exhibit A. Each year within 30 days of the anniversary date of the commencement of operation of this Agreement, each Participant shall submit in writing to FINRA and each DEA performing as a DOEA for any members of such Participant any revisions to Exhibit A reflecting changes in the rules of the Participant, and confirm that all other rules of the Participant listed in Exhibit A continue to meet the definition of Common Rules as defined in this Agreement. Within 30 days from the date that FINRA and each DEA performing as a DOEA has received revisions and/or confirmation that no change has been made to Exhibit A from all Participants, FINRA and each DEA performing as a DOEA shall confirm in writing to each Participant whether the rules listed in any updated Exhibit A are Common Rules as defined in this Agreement. Notwithstanding anything herein to the contrary, it is explicitly understood that the term ``Regulatory Responsibility'' does not include, and each of the Participants shall (unless allocated pursuant to Rule 17d-2 otherwise than under this Agreement) retain full responsibility for, each of the following: (a) Surveillance and enforcement with respect to trading activities or practices involving its own marketplace, including without limitation its rules relating to the rights and obligations of specialists and other market makers; (b) Registration pursuant to its applicable rules of associated persons; (c) Discharge of its duties and obligations as a DEA; and (d) Evaluation of advertising, responsibility for which shall remain with the Participant to which a Common Member submits same for approval. III. Apparent violations of another Participant's rules discovered by a DOEA, but which rules are not within the scope of the discovering DOEA's Regulatory Responsibility, shall be referred to the relevant Participant for such action as the Participant to which such matter has been referred deems appropriate. Notwithstanding the foregoing, nothing contained herein shall preclude a DOEA in its discretion from requesting that another Participant conduct an enforcement proceeding on a matter for which the requesting DOEA has Regulatory Responsibility. If such other Participants agree, the Regulatory Responsibility in such case shall be deemed transferred to the accepting Participant and confirmed in writing by the Participants involved. Each Participant agrees, upon request, to make available promptly all relevant files, records and/or witnesses necessary to assist another Participant in an investigation or enforcement proceeding. IV. The Council shall be composed of one representative designated by each of the Participants. Each Participant shall also designate one or more persons as its alternate representative(s). In the absence of the representative of a Participant, such alternate representative shall have the same powers, duties and responsibilities as the representative. Each Participant may, at any time, by notice to the then Chair of the Council, replace its representative and/or its alternate representative on such Council. A majority of the Council shall constitute a quorum and, unless specifically otherwise required, the affirmative vote of a majority of the Council members present (in person, by telephone or by written consent) shall be necessary to constitute action by the Council. The representative from FINRA shall serve as Chair of the Council. All notices and other communications for the Council shall be sent to it in care of the Chair or to each of the representatives. V. The Council shall determine the times and locations of Council meetings, provided that the Chair, acting alone, may also call a meeting of the Council in the event the Chair determines that there is good cause to do so. To the extent reasonably possible, notice of any meeting shall be given at least ten-business days prior thereto. Notwithstanding anything herein to the contrary, representatives shall always be given the option of participating in any meeting telephonically at their own expense rather than in person. VI. FINRA shall have Regulatory Responsibility for all Common Members that are members of FINRA. For the purpose of fulfilling the Participants' Regulatory Responsibilities for Common Members that are not members of FINRA, the Participant that is the DEA shall serve as the DOEA. All Participants shall promptly notify the DOEAs no later than the next scheduled meeting of any change in membership of Common Members. A DOEA may request that a Common Member that is allocated to it be reallocated to another DOEA by giving thirty days written notice thereof. The DOEAs in their discretion may approve such request and reallocate such Common Member to another DOEA. VII. Each DOEA shall conduct an examination of each Common Member. The Participants agree that, upon request, relevant information in their respective files relative to a Common Member will be made available to the [[Page 68364]] applicable DOEA. At each meeting of the Council, each DOEA shall be prepared to report on the status of its examination program for the previous quarter and any period prior thereto that has not previously been reported to the Council. VIII. Each DOEA will promptly furnish a copy of the Examination report, relating to Covered Securities, of any examination made pursuant to the provisions of this Agreement to each other Participant of which the Common Member examined is a member. IX. Each DOEA's Regulatory Responsibility shall for each Common Member allocated to it include investigations into terminations ``for cause'' of associated persons relating to Covered Securities, unless such termination is related solely to another Participant's market. In the latter instance, that Participant to whose market the termination for cause relates shall discharge Regulatory Responsibility with respect to such termination for cause. In connection with a DOEA's examination, investigation and/or enforcement proceeding regarding a Covered Security-related termination for cause, the other Participants of which the Common Member is a member shall furnish, upon request, copies of all pertinent materials related thereto in their possession. As used in this Section, ``for cause'' shall include, without limitation, terminations characterized on Form U5 under the label ``Permitted to Resign,'' ``Discharge'' or ``Other.'' X. Each DOEA shall discharge the Regulatory Responsibility for each Common Member allocated to it relative to a Covered Securities-related customer complaint \2\ unless such complaint is uniquely related to another Participant's market. In the latter instance, the DOEA shall forward the matter to that Participant to whose market the matter relates, and the latter shall discharge Regulatory Responsibility with respect thereto. If a Participant receives a customer complaint for a Common Member related to a Covered Security for which the Participant is not the DOEA, the Participant shall promptly forward a copy of such complaint to the DOEA. --------------------------------------------------------------------------- \2\ For purposes of complaints, they can be reported pursuant to Form U4, Form U5 or RE-3 and any amendments thereto. --------------------------------------------------------------------------- XI. 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 Participant entitled to receipt thereof, to the attention of the Participant's representative on the Council at the Participant's then principal office or by email at such address as the representative shall have filed in writing with the Chair. XII. The Participants shall notify the Common Members of this Agreement by means of a uniform joint notice approved by the Council. XIII. This Agreement may be amended to add a new Participant provided that such Participant does not assume Regulatory Responsibility, solely by an amendment by FINRA and such new Participant. All other Participants expressly consent to allow FINRA to add new Participants to this Agreement as provided above. FINRA will promptly notify all Participants of any such amendments to add new Participants. All other amendments to this Agreement must be approved in writing by each Participant. All amendments, including adding a new Participant, must be filed with and approved by the SEC before they become effective. XIV. Any of the Participants may manifest its intention to cancel its participation in this Agreement at any time by giving the Council written notice thereof at least 90 days prior to the effective date of such cancellation. Upon receipt of such notice the Council shall allocate, in accordance with the provisions of this Agreement, any Common Members for which the petitioning party was the DOEA. Until such time as the Council has completed the reallocation described above; the petitioning Participant shall retain all its rights, privileges, duties and obligations hereunder. XV. The cancellation of its participation in this Agreement by any Participant shall not terminate this Agreement as to the remaining Participants. This Agreement will only terminate following notice to the Commission, in writing, by the then Participants that they intend to terminate the Agreement and the expiration of the applicable notice period. Such notice shall be given at least six months prior to the intended date of termination, provided that in the event a notice of cancellation is received from a Participant that, assuming the effectiveness thereof, would result in there being just one remaining member of the Council, notice to the Commission of termination of this Agreement shall be given promptly upon the receipt of such notice of cancellation, which termination shall be effective upon the effectiveness of the cancellation that triggered the notice of termination to the Commission. XVI. No Participant nor the Council nor any of their respective directors, governors, officers, employees or representatives shall be liable to any other Participant in this Agreement for any liability, loss or damage resulting from or claimed to have resulted from any delays, inaccuracies, errors or omissions with respect to the provision of Regulatory Responsibility as provided hereby or for the failure to provide any such Responsibility, except with respect to such liability, loss or damages as shall have been suffered by one or more of the Participants and caused by the willful misconduct of one or more of the other participants or their respective directors, governors, officers, employees or representatives. No warranties, express or implied, are made by any or all of the Participants or the Council with respect to any Regulatory Responsibility to be performed by each of them hereunder. XVII. Pursuant to Section 17(d)(1)(A) of the Securities Exchange Act of 1934 and Rule 17d-2 promulgated pursuant thereto, the Participants join in requesting the Securities and Exchange Commission, upon its approval of this Agreement or any part thereof, to relieve those Participants which are from time to time participants in this Agreement which are not the DOEA as to a Common Member of any and all Regulatory Responsibility with respect to the matters allocated to the DOEA. * * * * * REVISED [June 21, 2013]October 8, 2015 EXHIBIT A RULES ENFORCED UNDER 17d-2 AGREEMENT Pursuant to Section II of the Agreement by and among BATS Exchange, Inc. (``BATS''), BOX Options Exchange, LLC (``BOX''), the Chicago Board Options Exchange, Incorporated (``CBOE''), C2 Options Exchange, Incorporated (``C2''), the International Securities Exchange, LLC (``ISE''), Financial Industry Regulatory Authority, Inc. (``FINRA''), Miami International Securities Exchange, LLC (``MIAX''), The NASDAQ Stock Market LLC (``NASDAQ''), NASDAQ OMX BX, Inc. (``BX''), the New York Stock Exchange LLC (``NYSE''), the NYSE MKT LLC (``NYSE MKT''), the NYSE Arca, Inc. (``NYSE ARCA''), the NASDAQ OMX PHLX LLC (``PHLX''), [and Topaz Exchange, LLC (``Topaz'')] ISE Gemini, LLC (``ISE Gemini'') and EDGX Exchange, Inc. (``EDGX'') pursuant to Rule 17d-2 under the Securities Exchange Act of 1934 dated [June 21, 2013] October 8, 2015 (the [[Page 68365]] ``Agreement''), a revised list of the current Common Rules of each Participant, as compared to those of FINRA, applicable to the conduct of accounts for Covered Securities is set forth in this Exhibit A. Opening of Accounts ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rules 411, 921 and 1101. BATS................................... Rule 26.2. BOX.................................... Rule 4020. \[1]\ CBOE................................... Rule 9.7. C2*.................................... CBOE Rule 9.7. EDGX................................... Rule 26.2. ISE.................................... Rule 608. FINRA.................................. Rules 2360(b)(16) and 2352. MIAX................................... Rule 1307. NYSE................................... [Rule 721 \2\]N/A. [Topaz]ISE Gemini...................... Rule 608. PHLX................................... Rule 1024(b) and (c).\1\[3] NYSE ARCA.............................. Options Rules 9.2(a) and 9.18(b) and Equities Rules 9.18(b) and 8.4. BX..................................... Chapter XI, Section [9]7. NASDAQ................................. Chapter XI, Section 7. ------------------------------------------------------------------------ 1 [3] FINRA shall not have any Regulatory Responsibility regarding foreign currency option requirements specificed in any of the PHLX rules in this Exhibit A. [\1\ FINRA shall not have any Regulatory Responsibility regarding the requirement for designation of Senior Options Principal and Compliance Options Principal.] [\2\ FINRA shall not have any Regulatory Responsibility regarding opening short uncovered option accounts requirements.] Supervision ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rules 411, 922 and 1104. BATS................................... Rule 26.3. BOX.................................... Rule 4030. CBOE................................... Rule 9.8.\2\ C2..................................... CBOE Rule 9.8.\2\ EDGX................................... Rule 26.3. ISE.................................... Rule 609. FINRA.................................. Rules 2360(b)(20), 2360(b)(17)(B), 2360(b)(16)(E), 2355 and 2358. MIAX................................... Rule1308. [Topaz]ISE Gemini...................... Rule 609. NYSE................................... N/A. PHLX................................... Rule 1025. NYSE ARCA.............................. Options Rules 9.2(b) and 9.18(d)(2)(G) and Equities Rules 9.18(d)(2)(G) and 8.7. BX..................................... Chapter XI, Section [10]8. NASDAQ................................. Chapter XI, Section 8. ------------------------------------------------------------------------ \2\ FINRA shall not have any Regulatory Responsibility regarding receipt of written reports by April 1 of each year pursuant to CBOE Rule 9.8(g). Suitability ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rules 923 and 1102. BATS................................... Rule 26.4. BOX.................................... Rule 4040. CBOE................................... Rule 9.9. C2..................................... CBOE Rule 9.9. EDGX................................... Rule 26.4. ISE.................................... Rule 610. FINRA.................................. Rule 2360(b)(19) and 2353. MIAX................................... Rule 1309. [Topaz]ISE Gemini...................... Rule 610. NYSE................................... [Rule 723]N/A. PHLX................................... Rule 1026. NYSE ARCA.............................. Options Rule 9.18(c) and Equities Rules 9.18(c) and 8.5. BX..................................... Chapter XI, Section [11]9. NASDAQ................................. Chapter XI, Section 9. ------------------------------------------------------------------------ Discretionary Accounts ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rules 421, 924 and 1103. BATS................................... Rule 26.5.\[5]\\3\ BOX.................................... Rule 4050.\[4]\ CBOE................................... Rule 9.10. C2..................................... CBOE Rule 9.10. EDGX................................... Rule 26.5.\3\ ISE.................................... Rule 611. FINRA.................................. Rules 2360(b)(18) and 2354. MIAX................................... Rule 1310. [Topaz]ISE Gemini...................... Rule 611. NYSE................................... N/A. PHLX................................... Rule 1027. NYSE ARCA.............................. Options Rule 9.18(e) and Equities Rules 9.18(e) and 8.6. BX..................................... Chapter XI, Section [12] 10. NASDAQ................................. Chapter XI, Section 10. ------------------------------------------------------------------------ [\4\ FINRA shall not have any Regulatory Responsibility to enforce this rule as to time and price discretion in institutional accounts. In addition FINRA shall not have any Regulatory Responsibility regarding BOX Rule 4050(a)(2).] \3\\[5]\ FINRA shall not have any Regulatory Responsibility to enforce this rule as to time and price discretion in institutional accounts. [\6\ FINRA shall not have any Regulatory Responsibility regarding CBOE's and C2's requirements to the extent that a customer would meet FINRA's definition of Institutional Investor and Institutional Sales Material but would not meet the requirements for such definitions in under CBOE's and C2's rule.] [\7\ FINRA shall not have any Regulatory Responsibility regarding ISE's, and Topaz's requirements to the extent that a customer would meet FINRA's definition of Institutional Investor and Institutional Sales Material but would not meet the requirements for such definitions in under such rule. In addition, FINRA shall not have any Regulatory Responsibility regarding ISE's, and Topaz's requirements regarding approval of all market letters.] Customer Communications (Advertising) ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rules 991 and 1106. BATS................................... Rule 26.16. BOX.................................... Rule 4170. CBOE................................... Rule 9.21.\[6]\ C2..................................... CBOE Rule 9.21.\[6]\ EDGX................................... Rule 26.16. ISE.................................... Rule 623.\[7]\ FINRA.................................. Rules 2220 and 2357. MIAX................................... Rule 1322. [Topaz]ISE Gemini...................... Rule 623.\[7]\ NYSE................................... N/A. PHLX................................... N/A. NYSE ARCA.............................. Options Rules 9.21(a) and 9.21(b). BX..................................... Chapter XI, Section [22]24. NASDAQ................................. Chapter XI, Section 22. ------------------------------------------------------------------------ Customer Complaints ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rules 932 and 1105. BATS................................... Rule 26.17. BOX.................................... Rule 4190. CBOE................................... Rule 9.23. C2..................................... CBOE Rule 9.23. EDGX................................... Rule 26.17. ISE.................................... Rule 625. FINRA.................................. FINRA Rules 2360(b)(17)(A) and 2356. MIAX................................... Rule 1324. [Topaz]ISE Gemini...................... Rule 625. NYSE................................... [Rule 732]N/A. PHLX................................... Rule 1070. NYSE ARCA.............................. Options Rule 9.18(I) and Equities Rules 9.18(l) and 8.8. BX..................................... Chapter XI, Section [26]24. NASDAQ................................. Chapter XI, Section 24. ------------------------------------------------------------------------ Customer Statements ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rules 419 and 930. BATS................................... Rule 26.7. BOX.................................... Rule 4070. CBOE................................... Rule 9.12. C2..................................... CBOE Rule 9.12. EDGX................................... Rule 26.7. ISE.................................... Rules 613. FINRA.................................. Rule 2360(b)(15). MIAX................................... Rule 1312. [Topaz]ISE Gemini...................... Rule 613. NYSE................................... [Rule 730]N/A. PHLX................................... Rule 1032. NYSE ARCA.............................. Options Rule 9.18(j) and Equities Rule 9.18(j). BX..................................... Chapter XI, Sections [14]12. NASDAQ................................. Chapter XI, Section 12. ------------------------------------------------------------------------ Confirmations ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rule 925. BATS................................... Rule 26.6. BOX.................................... Rule 4060.\[8]\ CBOE................................... Rule 9.11. C2..................................... CBOE Rule 9.11. EDGX................................... Rule 26.6. ISE.................................... Rule 612. FINRA.................................. Rule 2360(b)(12). MIAX................................... Rule 1311. [Topaz]ISE Gemini...................... Rule 612. NYSE................................... [Rules 725 \9\]N/A. PHLX................................... Rule 1028. NYSE ARCA.............................. Options Rule 9.18(f) and Equities Rule 9.18(j). BX..................................... Chapter XI, Section [13]11. [[Page 68366]] NASDAQ................................. Chapter XI, Section 11. ------------------------------------------------------------------------ [\8\ FINRA shall not have any Regulatory Responsibility regarding the requirement in confirmations to distinguish between BOX option transactions and other transactions in option contracts.] [\9\ FINRA shall not have any Regulatory Responsibility regarding the requirement in confirmations to distinguish between NYSE option transactions and other transactions in option contracts.] Allocation of Exercise Assignment Notices ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rule 981. BATS................................... Rule 23.2. BOX.................................... Rule 9010. CBOE................................... Rule 11.2. C2..................................... CBOE Rule 11.2. EDGX................................... Rule 23.2. ISE.................................... Rule 1101. FINRA.................................. Rule 2360(b)(23)(C). MIAX................................... Rule 701. [Topaz]ISE Gemini...................... Rule 1101. NYSE................................... [Rule 781]N/A. PHLX................................... Rule 1043. NYSE ARCA.............................. Options Rule 6.25(a). BX..................................... Chapter VIII, Section 2. NASDAQ................................. Chapter VIII, Section 2. ------------------------------------------------------------------------ Disclosure Documents ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rules 921 and 926. BATS................................... Rule 26.10. BOX.................................... Rule 4100. CBOE................................... Rule 9.15. C2..................................... CBOE Rule 9.15. EDGX................................... Rule 26.10. ISE.................................... Rule 616. FINRA.................................. Rule 2360(b)(11). MIAX................................... Rule 1315. [Topaz]ISE Gemini...................... Rule 616. NYSE................................... [Rule 726 (a) and (c)]N/A. PHLX................................... Rule 1024(b)(v), 1029. NYSE ARCA.............................. Options Rule 9.18(g) and Equities Rule 9.18(g). BX..................................... Chapter XI, Section [17]15. NASDAQ................................. Chapter XI, Section 15. ------------------------------------------------------------------------ Branch Offices of Member Organizations ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rule 922(d).\4[\\10]\ BOX.................................... Rule 4010(b). CBOE................................... Rule 9.6. C2..................................... CBOE Rule 9.6. ISE.................................... Rule 607. FINRA.................................. Rules 2360(b)(20)(B) and 2355. MIAX................................... Rule 1306. [Topaz]ISE Gemini...................... Rule 607. NYSE................................... N/A. PHLX................................... N/A. NYSE ARCA.............................. Options Rule 9.18(m) and Equities Rule 9.18(m). BX..................................... Chapter XI, Section [8]6. NASDAQ................................. Chapter XI, Section 6. ------------------------------------------------------------------------ \4[\\10]\ FINRA shall only have Regulatory Responsibility for the first paragraph and shall not have any Regulatory Responsibility regarding the requirements for debt options. Prohibition Against Guarantees ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rule 390. BATS................................... Rule 26.13. BOX.................................... Rule 4130. CBOE................................... Rule 9.18. C2..................................... CBOE Rule 9.18. EDGX................................... Rule 26.13. ISE.................................... Rules 619. FINRA.................................. Rule 2150(b). MIAX................................... Rule 1318. [Topaz]ISE Gemini...................... Rule 619. NYSE................................... Rule 2150(b). PHLX................................... Rule 777. NYSE ARCA.............................. Options Rule 9.1(e). BX..................................... Chapter XI, Sections [20]18 and [21]19. NASDAQ................................. Chapter XI, Sections 18 and 19. ------------------------------------------------------------------------ Sharing in Accounts ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rule 390. BATS................................... Rule 26.14.\6\ BOX.................................... Rule 4140. CBOE................................... Rule 9.18(b). C2..................................... CBOE Rule 9.18(b). EDGX................................... Rule 26.14.\6\ ISE.................................... Rule 620.\5[\\11]\ FINRA.................................. Rule 2150(c). MIAX................................... Rule 1319. [Topaz]ISE Gemini...................... Rule 620.\5\\[11]\ NYSE................................... Rules 2150(c). PHLX................................... N/A. NYSE ARCA.............................. Options Rule 9.1(f). BX..................................... Chapter XI, Section [21].19\6\ NASDAQ................................. Chapter XI, Section 19.\6\\[12]\ ------------------------------------------------------------------------ \5[\\11]\ FINRA shall not have any Regulatory Responsibility regarding ISE's and [Topaz's] ISE Gemini's requirements to the extent its rule does not contain an exception to permit sharing in the profits and losses of an account. \6\\[12]\ FINRA shall not have any Regulatory Responsibility regarding NASDAQ's BX's, BAT's, and EDGX's requirements to the extent such rules do not contain an exception addressing immediate family. Registration of ROP ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rule 920. BATS................................... Rule 17.2(g)(1), (2), (6) and (7). BOX.................................... Rule 2020(c)(1), (e)(1) and IM- 2040-4 and IM-2040-5(b). CBOE................................... Rule 9.2. C2..................................... CBOE Rule 9.2. EDGX................................... Rule 17.2(g)(1), (2), (6) and (7). ISE.................................... Rule 601. FINRA.................................. NASD Rules 1022(f) & IM-1022-1, & 1250(a)(1). MIAX................................... Rule 1301. [Topaz]ISE Gemini...................... Rule 601. NYSE................................... N/A. PHLX................................... Rule 1024(a)(i). NYSE ARCA.............................. Options Rule 9.26 and Equities Rule 9.26. BX..................................... Chapter XI, Section 2 and Chapter II, Section 2(g). NASDAQ................................. Chapter XI, Section 2 and Chapter II, Section 2(g). ------------------------------------------------------------------------ Certification of Registered Personnel \7\ ------------------------------------------------------------------------ ------------------------------------------------------------------------ NYSE MKT............................... Rule 920. BATS................................... Rule 2.5 Interpretation .01(c) and 11.4(e). BOX.................................... IM-2040-3. CBOE................................... Rule 9.3. C2..................................... CBOE Rule 9.3. EDGX................................... Rule 2.5 Interpretation .01(c) and 11.4(e). ISE.................................... Rule 602. FINRA.................................. NASD Rule 1032(d). MIAX................................... Rule 1302. [Topaz]ISE Gemini...................... Rule 602. NYSE................................... N/A. PHLX................................... Rule 1024. NYSE ARCA.............................. Options Rule 9.27(a). BX..................................... Chapter XI, Section 3 and Chapter II, Section 2(h). NASDAQ................................. Chapter XI, Section 3 and Chapter II, Section 2(h). ------------------------------------------------------------------------ \7\ FINRA shall not have Regulatory Responsibility with regard to the Series 56 Examination under any exchange rules, as this examination is not recognized by FINRA. IV. Solicitation of Comments 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to rule-comments@sec.gov. Please include File Number S7-966 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number S7-966. 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 [[Page 68367]] 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 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, 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 the plan also will be available for inspection and copying at the principal offices of FINRA and EDGX. 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 S7-966 and should be submitted on or before November 25, 2015. V. Discussion The Commission continues to believe that the proposed plan is an achievement in cooperation among the SRO participants. The Plan, as amended, will reduce unnecessary regulatory duplication by allocating to the designated SRO the responsibility for certain options-related sales practice matters that would otherwise be performed by multiple SROs. The plan promotes efficiency by reducing costs to firms that are members of more than one of the SRO participants. In addition, because the SRO participants coordinate their regulatory functions in accordance with the plan, the plan promotes, and will continue to promote, investor protection. Under paragraph (c) of Rule 17d-2, the Commission may, after appropriate notice and comment, declare a plan, or any part of a plan, effective. In this instance, the Commission believes that appropriate notice and comment can take place after the proposed amendment is effective. The primary purpose of the amendment is to add EDGX as a Participant to the Plan and to change the name of Topaz Exchange, LLC to ISE Gemini, LLC. By declaring it effective today, the amended Plan can become effective and be implemented without undue delay.\21\ The Commission notes that the prior version of this plan immediately prior to this proposed amendment was published for comment and the Commission did not receive any comments thereon.\22\ Furthermore, the Commission does not believe that the amendment to the plan raises any new regulatory issues that the Commission has not previously considered. --------------------------------------------------------------------------- \21\ On August 7, 2015, the Commission approved EDGX's rules governing options trading on the EDGX Options Market. See Securities Exchange Act Release No. 75650, 80 FR 48600 (August 13, 2015). \22\ See supra note 20 (citing to Securities Exchange Act Release No. 70051). --------------------------------------------------------------------------- VI. Conclusion This order gives effect to the amended Plan submitted to the Commission that is contained in File No. S7-966. It is therefore ordered, pursuant to Section 17(d) of the Act, that the Plan, as amended, filed with the Commission pursuant to Rule 17d-2 on June 21, 2013 is hereby approved and declared effective. It is further ordered that those SRO participants that are not the DOEA as to a particular common member are relieved of those regulatory responsibilities allocated to the common member's DOEA under the amended Plan to the extent of such allocation. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\23\ --------------------------------------------------------------------------- \23\ 17 CFR 200.30-3(a)(34). --------------------------------------------------------------------------- Jill M. Peterson, Assistant Secretary. [FR Doc. 2015-28066 Filed 11-3-15; 8:45 am] BILLING CODE 8011-01-P
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V. Discussion responsibilities allocated to the common NASDAQ OMX PHLX, Inc. (‘‘PHLX’’),
The Commission continues to believe member’s DOSR under the amended and Miami International Securities
that the Plan, as proposed to be Plan to the extent of such allocation. Exchange (‘‘MIAX’’) (collectively,
amended, is an achievement in For the Commission, by the Division of ‘‘Participating Organizations’’ or
cooperation among the SRO Trading and Markets, pursuant to delegated ‘‘parties’’).
participants. The Plan, as amended, will authority.19
I. Introduction
reduce unnecessary regulatory Jill M. Peterson,
Assistant Secretary. Section 19(g)(1) of the Act,3 among
duplication by allocating to the
other things, requires every self-
designated SRO the responsibility for [FR Doc. 2015–28067 Filed 11–3–15; 8:45 am]
regulatory organization (‘‘SRO’’)
certain options-related market BILLING CODE 8011–01–P
registered as either a national securities
surveillance matters that would
exchange or national securities
otherwise be performed by multiple
SECURITIES AND EXCHANGE association to examine for, and enforce
SROs. The Plan promotes efficiency by
COMMISSION compliance by, its members and persons
reducing costs to firms that are members
associated with its members with the
of more than one of the SRO [Release No. 34–76309; File No. S7–966) Act, the rules and regulations
participants. In addition, because the
thereunder, and the SRO’s own rules,
SRO participants coordinate their Program for Allocation of Regulatory
unless the SRO is relieved of this
regulatory functions in accordance with Responsibilities Pursuant to Rule
responsibility pursuant to Section
the Plan, the Plan promotes, and will 17d–2; Notice of Filing and Order
17(d) 4 or Section 19(g)(2) 5 of the Act.
continue to promote, investor Approving and Declaring Effective an
Without this relief, the statutory
protection. Under paragraph (c) of Rule Amendment to the Plan for the
Allocation of Regulatory obligation of each individual SRO could
17d–2, the Commission may, after
Responsibilities Among NYSE MKT result in a pattern of multiple
appropriate notice and comment,
LLC, BATS Exchange, Inc., BOX examinations of broker-dealers that
declare a plan, or any part of a plan,
Options Exchange LLC, C2 Options maintain memberships in more than one
effective. In this instance, the
Exchange, Incorporated, the Chicago SRO (‘‘common members’’). Such
Commission believes that appropriate
Board Options Exchange, regulatory duplication would add
notice and comment can take place after
Incorporated, the EDGX Exchange, unnecessary expenses for common
the proposed amendment is effective.
Inc., the International Securities members and their SROs.
The primary purpose of the amendment
Exchange LLC, ISE Gemini, LLC, Section 17(d)(1) of the Act 6 was
is to add EDGX as a Participant to the
Financial Industry Regulatory intended, in part, to eliminate
Plan and to change the name of Topaz
Authority, Inc., the New York Stock unnecessary multiple examinations and
Exchange, LLC to ISE Gemini, LLC. By
Exchange LLC, NYSE Arca, Inc., The regulatory duplication.7 With respect to
declaring it effective today, the
NASDAQ Stock Market LLC, NASDAQ a common member, Section 17(d)(1)
amended Plan can become effective and
OMX BX, Inc., the NASDAQ OMX PHLX, authorizes the Commission, by rule or
be implemented without undue delay.17
Inc., and Miami International Securities order, to relieve an SRO of the
In addition, the Commission notes that
Exchange, LLC Concerning Options- responsibility to receive regulatory
the prior version of this Plan was
Related Sales Practice Matters reports, to examine for and enforce
published for comment, and the
compliance with applicable statutes,
Commission did not receive any October 29, 2015. rules, and regulations, or to perform
comments thereon.18 Finally, the Notice is hereby given that the other specified regulatory functions.
Commission does not believe that the Securities and Exchange Commission To implement Section 17(d)(1), the
amendment to the Plan raises any new (‘‘Commission’’) has issued an Order, Commission adopted two rules: Rule
regulatory issues that the Commission pursuant to Section 17(d) of the 17d–1 and Rule 17d–2 under the Act.8
has not previously considered. Securities Exchange Act of 1934 Rule 17d–1 authorizes the Commission
VI. Conclusion (‘‘Act’’),1 approving and declaring to name a single SRO as the designated
effective an amendment to the plan for examining authority (‘‘DEA’’) to
This order gives effect to the amended
allocating regulatory responsibility examine common members for
Plan submitted to the Commission that
(‘‘Plan’’) filed on October 9, 2015, compliance with the financial
is contained in File No. 4–551.
pursuant to Rule 17d–2 of the Act,2 by responsibility requirements imposed by
It is therefore ordered, pursuant to
NYSE MKT LLC (‘‘MKT’’), BATS the Act, or by Commission or SRO
Section 17(d) of the Act, that the Plan,
Exchange, Inc., (‘‘BATS’’), the BOX rules.9 When an SRO has been named as
as amended by and between MKT,
Options Exchange LLC (‘‘BOX’’), C2 a common member’s DEA, all other
BATS, C2, CBOE, EDGX, Gemini, ISE,
Options Exchange, Incorporated (‘‘C2’’), SROs to which the common member
FINRA, Arca, NASDAQ, BOX, BX, Phlx,
the Chicago Board Options Exchange, belongs are relieved of the responsibility
and MIAX, filed with the Commission Incorporated (‘‘CBOE’’), the EDGX
pursuant to Rule 17d–2 on October 27, to examine the firm for compliance with
Exchange, Inc. (‘‘EDGX’’) the the applicable financial responsibility
2015 is hereby approved and declared International Securities Exchange LLC
effective. (‘‘ISE’’), ISE Gemini, LLC (‘‘Gemini’’), 3 15 U.S.C. 78s(g)(1).
It is further ordered that those SRO Financial Industry Regulatory 4 15 U.S.C. 78q(d).
participants that are not the DOSR as to
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Authority, Inc. (‘‘FINRA’’), the New 5 15 U.S.C. 78s(g)(2).
a particular common member are York Stock Exchange LLC (‘‘NYSE’’), 6 15 U.S.C. 78q(d)(1).
relieved of those regulatory NYSE Arca, Inc. (‘‘Arca’’), The 7 See Securities Act Amendments of 1975, Report
NASDAQ Stock Market LLC (‘‘Nasdaq’’), of the Senate Committee on Banking, Housing, and
17 On August 7, 2015, the Commission approved Urban Affairs to Accompany S. 249, S. Rep. No. 94–
EDGX’s rules governing options trading on the
NASDAQ OMX BX, Inc. (‘‘BX’’), 75, 94th Cong., 1st Session 32 (1975).
EDGX Options Market. See Securities Exchange Act 8 17 CFR 240.17d–1 and 17 CFR 240.17d–2,
19 17 CFR 200.30–3(a)(34).
Release No. 75650, 80 FR 48600 (August 13, 2015). respectively.
18 See supra note 17 (citing to Securities 1 15 U.S.C. 78q(d). 9 See Securities Exchange Act Release No. 12352
Exchange Act Release No. 70052). 2 17 CFR 240.17d–2. (April 20, 1976), 41 FR 18808 (May 7, 1976).
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![68362 Federal Register / Vol. 80, No. 213 / Wednesday, November 4, 2015 / Notices
rules. On its face, Rule 17d–1 deals only an SRO participant.14 On December 5, member is relieved of these
with an SRO’s obligations to enforce 2007, the parties submitted an responsibilities during the period in
member compliance with financial amendment to the plan to, among other which the firm is assigned to another
responsibility requirements. Rule 17d–1 things, provide that the National SRO acting as that firm’s DOEA.
does not relieve an SRO from its Association of Securities Dealers
III. Proposed Amendment to the Plan
obligation to examine a common (‘‘NASD’’) (n/k/a FINRA) and NYSE are
member for compliance with its own Designated Options Examining On October 9, 2015, the Parties
rules and provisions of the federal Authorities under the plan.15 On June 5, submitted a proposed amendment to the
securities laws governing matters other 2008, the parties submitted an Plan. The primary purpose of the
than financial responsibility, including amendment to the plan primarily to amendment is to add EDGX as a
sales practices and trading activities and remove the NYSE as a Designated Participant to the Plan and to change the
practices. Options Examining Authority, leaving name of Topaz Exchange, LLC to ISE
To address regulatory duplication in FINRA as the sole Designated Options Gemini, LLC. The text of the proposed
these and other areas, the Commission Examining Authority for all common amended 17d–2 plan is as follows
adopted Rule 17d–2 under the Act.10 members that are members of FINRA.16 (additions are italicized; deletions are
Rule 17d–2 permits SROs to propose On February 9, 2010, the parties [bracketed]):
joint plans for the allocation of submitted a proposed amendment to the * * * * *
regulatory responsibilities with respect plan to add BATS and C2 as SRO Agreement by and among BATS
to their common members. Under participants and to reflect the name Exchange, Inc., BOX Options Exchange,
paragraph (c) of Rule 17d–2, the changes of the American Stock LLC, the Chicago Board Options
Commission may declare such a plan Exchange LLC to the NYSE Amex LLC, Exchange, Incorporated, C2 Options
effective if, after providing for notice the Boston Stock Exchange, Inc., to the Exchange, Incorporated, the
and comment, it determines that the NASDAQ OMX BX, Inc. and the International Securities Exchange, LLC,
plan is necessary or appropriate in the Philadelphia Stock Exchange, Inc. to the Financial Industry Regulatory
public interest and for the protection of NASDAQ OMX PHLX, Inc. 17 On May Authority, Inc., Miami International
investors, to foster cooperation and 22, 2012, the parties submitted a Securities Exchange, LLC, the New York
coordination among the SROs, to proposed amendment to add BOX as an Stock Exchange LLC, the NYSE MKT
remove impediments to, and foster the SRO participant, and to amend Section LLC, the NYSE Arca, Inc., The NASDAQ
development of, a national market XIII of the plan to set forth a revised Stock Market LLC, NASDAQ OMX BX,
system and a national clearance and procedure for adding new participants Inc., the NASDAQ OMX PHLX LLC, ISE
settlement system, and is in conformity to the plan.18 On November 20, 2012, Gemini, LLC, and [Topaz Exchange,
with the factors set forth in Section the parties submitted a proposed LLC] EDGX Exchange, Inc., Pursuant to
17(d) of the Act. Commission approval amendment to add MIAX as an SRO Rule 17d–2 under the Securities
of a plan filed pursuant to Rule 17d–2 participant, and to change the name of Exchange Act of 1934.
NYSE Amex LLC to NYSE MKT LLC. 19 This agreement (‘‘Agreement’’), by
relieves an SRO of those regulatory
On June 21, 2013, the parties submitted and among BATS Exchange, Inc., BOX
responsibilities allocated by the plan to
a proposed amendment to add Topaz Options Exchange, LLC, the Chicago
another SRO.
Exchange LLC as an SRO participant. 20 Board Options Exchange, Incorporated,
II. The Plan The plan reduces regulatory C2 Options Exchange, Incorporated, the
On September 8, 1983, the duplication for a large number of firms International Securities Exchange, LLC,
Commission approved the SRO currently members of two or more of the Financial Industry Regulatory
participants’ plan for allocating SRO participants by allocating Authority, Inc. (‘‘FINRA’’), Miami
regulatory responsibilities pursuant to regulatory responsibility for certain International Securities Exchange, LLC,
Rule 17d–2.11 On May 23, 2000, the options-related sales practice matters to The NASDAQ Stock Market LLC
one of the SRO participants. Generally, (‘‘NASDAQ’’), NASDAQ OMX BX, Inc.,
Commission approved an amendment to
under the plan, the SRO participant the New York Stock Exchange LLC
the plan that added the ISE as a
responsible for conducting options- (‘‘NYSE’’), the NYSE MKT LLC, the
participant.12 On November 8, 2002, the
related sales practice examinations of a NYSE Arca, Inc., the NASDAQ OMX
Commission approved another
firm, and investigating options-related PHLX LLC, ISE Gemini, LLC [Topaz
amendment that replaced the original
customer complaints and terminations Exchange LLC] and EDGX Exchange,
plan in its entirety and, among other
for cause of associated persons of that Inc. hereinafter collectively referred to
things, allocated regulatory
firm, is known as the firm’s ‘‘Designated as the Participants, is made this
responsibilities among all the
Options Examining Authority’’ [21st]8th day of [June, 2013] October,
participants in a more equitable
(‘‘DOEA’’). Pursuant to the plan, any 2015, pursuant to the provisions of Rule
manner.13 On February 5, 2004, the 17d–2 under the Securities Exchange
other SRO of which the firm is a
parties submitted an amendment to the Act of 1934 (the ‘‘Exchange Act’’),
plan, primarily to include the BSE, 14 See Securities Exchange Act Release No. 49197 which allows for plans among self-
which was establishing a new options (February 5, 2004), 69 FR 7046 (February 12, 2004). regulatory organizations to allocate
trading facility to be known as BOX, as 15 See Securities Exchange Act Release No. 55532
regulatory responsibility. This
(March 26, 2007), 72 FR 15729 (April 2, 2007).
10 See Securities Exchange Act Release No. 12935 16 See Securities Exchange Act Release No. 57987
Agreement shall be administered by a
committee known as the Options Self-
asabaliauskas on DSK5VPTVN1PROD with NOTICES
(October 28, 1976), 41 FR 49091 (November 8, (June 18, 2008), 73 FR 36156 (June 25, 2008).
1976). 17 See Securities Exchange Act Release No. 61589 Regulatory Council (the ‘‘Council’’).
11 See Securities Exchange Act Release No. 20158 (February 25, 2012), 75 FR 9976 (March 4, 2010). This Agreement amends and restates
(September 8, 1983), 48 FR 41256 (September 14, 18 See Securities Exchange Act Release No. 66974 the agreement entered into among the
1983). (May 11, 2012), 77 FR 29705 (May 18, 2012). Participants on [November 19,
12 See Securities Exchange Act Release No. 42816 19 See Securities Exchange Act Release No. 68363
2012]June 21, 2013, entitled
(May 23, 2000), 65 FR 34759 (May 31, 2000). (December 5, 2012), 77 FR 73711 (December 11,
13 See Securities Exchange Act Release No. 46800 2012). ‘‘Agreement by and among BATS
(November 8, 2002), 67 FR 69774 (November 19, 20 See Securities Exchange Act Release No. 70051 Exchange, Inc., BOX Options Exchange,
2002). (July 26, 2013), 78 FR 46644 (August 1, 2013). LLC, the Chicago Board Options
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![Federal Register / Vol. 80, No. 213 / Wednesday, November 4, 2015 / Notices 68363
Exchange, Incorporated, C2 Options Securities is attached hereto as Exhibit files, records and/or witnesses necessary
Exchange, Incorporated, the A. Each year within 30 days of the to assist another Participant in an
International Securities Exchange, LLC, anniversary date of the commencement investigation or enforcement
Financial Industry Regulatory of operation of this Agreement, each proceeding.
Authority, Inc., Miami International Participant shall submit in writing to IV. The Council shall be composed of
Securities Exchange, LLC, the New York FINRA and each DEA performing as a one representative designated by each of
Stock Exchange LLC, NYSE MKT LLC, DOEA for any members of such the Participants. Each Participant shall
the NYSE Arca, Inc., the NASDAQ Participant any revisions to Exhibit A also designate one or more persons as its
Stock Market LLC, NASDAQ OMX BX, reflecting changes in the rules of the alternate representative(s). In the
Inc. [and], the NASDAQ OMX PHLX, Participant, and confirm that all other absence of the representative of a
Inc and Topaz Exchange, LLC, Pursuant rules of the Participant listed in Exhibit Participant, such alternate
to Rule 17d–2 under the Securities A continue to meet the definition of representative shall have the same
Exchange Act of 1934.’’ Common Rules as defined in this powers, duties and responsibilities as
WHEREAS, the Participants are Agreement. Within 30 days from the the representative. Each Participant
desirous of allocating regulatory date that FINRA and each DEA may, at any time, by notice to the then
responsibilities with respect to broker- performing as a DOEA has received Chair of the Council, replace its
dealers, and persons associated revisions and/or confirmation that no representative and/or its alternate
therewith, that are members 1 of more change has been made to Exhibit A from representative on such Council. A
than one Participant (the ‘‘Common all Participants, FINRA and each DEA majority of the Council shall constitute
Members’’) and conduct a public performing as a DOEA shall confirm in a quorum and, unless specifically
business for compliance with Common writing to each Participant whether the otherwise required, the affirmative vote
Rules (as hereinafter defined) relating to rules listed in any updated Exhibit A are of a majority of the Council members
the conduct by broker-dealers of Common Rules as defined in this present (in person, by telephone or by
accounts for listed options, index Agreement. Notwithstanding anything written consent) shall be necessary to
warrants, currency index warrants and herein to the contrary, it is explicitly constitute action by the Council. The
currency warrants (collectively, understood that the term ‘‘Regulatory representative from FINRA shall serve
‘‘Covered Securities’’); and Responsibility’’ does not include, and as Chair of the Council. All notices and
Whereas, the Participants are desirous each of the Participants shall (unless other communications for the Council
of executing a plan for this purpose allocated pursuant to Rule 17d–2 shall be sent to it in care of the Chair
pursuant to the provisions of Rule 17d– otherwise than under this Agreement) or to each of the representatives.
2 and filing such plan with the retain full responsibility for, each of the V. The Council shall determine the
Securities and Exchange Commission following: times and locations of Council meetings,
(‘‘SEC’’ or the ‘‘Commission’’) for its (a) Surveillance and enforcement with provided that the Chair, acting alone,
approval; respect to trading activities or practices may also call a meeting of the Council
Now, therefore, in consideration of involving its own marketplace, in the event the Chair determines that
the mutual covenants contained including without limitation its rules there is good cause to do so. To the
hereafter, the Participants agree as relating to the rights and obligations of extent reasonably possible, notice of any
follows: specialists and other market makers; meeting shall be given at least ten-
I. As used herein the term Designated (b) Registration pursuant to its business days prior thereto.
Options Examining Authority (‘‘DOEA’’) applicable rules of associated persons; Notwithstanding anything herein to the
shall mean: (1) FINRA insofar as it shall (c) Discharge of its duties and contrary, representatives shall always be
perform Regulatory Responsibility (as obligations as a DEA; and given the option of participating in any
hereinafter defined) for its broker-dealer (d) Evaluation of advertising, meeting telephonically at their own
members that also are members of responsibility for which shall remain expense rather than in person.
another Participant or (2) the Designated with the Participant to which a VI. FINRA shall have Regulatory
Examination Authority (‘‘DEA’’) Common Member submits same for Responsibility for all Common Members
pursuant to SEC Rule 17d–1 under the approval. that are members of FINRA. For the
Securities Exchange Act (‘‘Rule 17d–1’’) III. Apparent violations of another purpose of fulfilling the Participants’
for a broker-dealer that is a member of Participant’s rules discovered by a Regulatory Responsibilities for Common
a more than one Participant (but not a DOEA, but which rules are not within Members that are not members of
member of FINRA). the scope of the discovering DOEA’s FINRA, the Participant that is the DEA
II. As used herein, the term Regulatory Responsibility, shall be shall serve as the DOEA. All
‘‘Regulatory Responsibility’’ shall mean referred to the relevant Participant for Participants shall promptly notify the
the examination and enforcement such action as the Participant to which DOEAs no later than the next scheduled
responsibilities relating to compliance such matter has been referred deems meeting of any change in membership of
by Common Members with the rules of appropriate. Notwithstanding the Common Members. A DOEA may
the applicable Participant that are foregoing, nothing contained herein request that a Common Member that is
substantially similar to the rules of the shall preclude a DOEA in its discretion allocated to it be reallocated to another
other Participants (the ‘‘Common from requesting that another Participant DOEA by giving thirty days written
Rules’’), insofar as they apply to the conduct an enforcement proceeding on notice thereof. The DOEAs in their
conduct of accounts for Covered a matter for which the requesting DOEA discretion may approve such request
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Securities. A list of the current Common has Regulatory Responsibility. If such and reallocate such Common Member to
Rules of each Participant applicable to other Participants agree, the Regulatory another DOEA.
the conduct of accounts for Covered Responsibility in such case shall be VII. Each DOEA shall conduct an
deemed transferred to the accepting examination of each Common Member.
1 In the case of BOX Options Exchange, LLC
Participant and confirmed in writing by The Participants agree that, upon
(‘‘BOX’’), NASDAQ OMX BX, Inc. (‘‘BX’’) and
NASDAQ members are those persons who are
the Participants involved. Each request, relevant information in their
options participants (as defined in the BOX, BX and Participant agrees, upon request, to respective files relative to a Common
NASDAQ Options Market Rules). make available promptly all relevant Member will be made available to the
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![68364 Federal Register / Vol. 80, No. 213 / Wednesday, November 4, 2015 / Notices
applicable DOEA. At each meeting of Participant entitled to receipt thereof, to cancellation that triggered the notice of
the Council, each DOEA shall be the attention of the Participant’s termination to the Commission.
prepared to report on the status of its representative on the Council at the XVI. No Participant nor the Council
examination program for the previous Participant’s then principal office or by nor any of their respective directors,
quarter and any period prior thereto that email at such address as the governors, officers, employees or
has not previously been reported to the representative shall have filed in writing representatives shall be liable to any
Council. with the Chair. other Participant in this Agreement for
VIII. Each DOEA will promptly XII. The Participants shall notify the any liability, loss or damage resulting
furnish a copy of the Examination Common Members of this Agreement by from or claimed to have resulted from
report, relating to Covered Securities, of means of a uniform joint notice any delays, inaccuracies, errors or
any examination made pursuant to the approved by the Council. omissions with respect to the provision
provisions of this Agreement to each XIII. This Agreement may be amended of Regulatory Responsibility as provided
other Participant of which the Common to add a new Participant provided that hereby or for the failure to provide any
Member examined is a member. such Participant does not assume such Responsibility, except with respect
IX. Each DOEA’s Regulatory Regulatory Responsibility, solely by an to such liability, loss or damages as
Responsibility shall for each Common amendment by FINRA and such new shall have been suffered by one or more
Member allocated to it include Participant. All other Participants of the Participants and caused by the
investigations into terminations ‘‘for expressly consent to allow FINRA to willful misconduct of one or more of the
cause’’ of associated persons relating to add new Participants to this Agreement other participants or their respective
Covered Securities, unless such as provided above. FINRA will directors, governors, officers, employees
termination is related solely to another promptly notify all Participants of any or representatives. No warranties,
Participant’s market. In the latter such amendments to add new express or implied, are made by any or
instance, that Participant to whose Participants. All other amendments to all of the Participants or the Council
market the termination for cause relates this Agreement must be approved in with respect to any Regulatory
shall discharge Regulatory writing by each Participant. All Responsibility to be performed by each
Responsibility with respect to such amendments, including adding a new of them hereunder.
termination for cause. In connection Participant, must be filed with and XVII. Pursuant to Section 17(d)(1)(A)
with a DOEA’s examination, approved by the SEC before they of the Securities Exchange Act of 1934
investigation and/or enforcement become effective. and Rule 17d–2 promulgated pursuant
proceeding regarding a Covered XIV. Any of the Participants may thereto, the Participants join in
Security-related termination for cause, manifest its intention to cancel its requesting the Securities and Exchange
the other Participants of which the participation in this Agreement at any Commission, upon its approval of this
Common Member is a member shall time by giving the Council written Agreement or any part thereof, to relieve
furnish, upon request, copies of all notice thereof at least 90 days prior to those Participants which are from time
pertinent materials related thereto in the effective date of such cancellation. to time participants in this Agreement
their possession. As used in this Upon receipt of such notice the Council which are not the DOEA as to a
Section, ‘‘for cause’’ shall include, shall allocate, in accordance with the Common Member of any and all
without limitation, terminations provisions of this Agreement, any Regulatory Responsibility with respect
characterized on Form U5 under the Common Members for which the to the matters allocated to the DOEA.
label ‘‘Permitted to Resign,’’ petitioning party was the DOEA. Until * * * * *
‘‘Discharge’’ or ‘‘Other.’’ such time as the Council has completed REVISED [June 21, 2013]October 8, 2015
X. Each DOEA shall discharge the the reallocation described above; the EXHIBIT A
Regulatory Responsibility for each petitioning Participant shall retain all its RULES ENFORCED UNDER 17d–2
Common Member allocated to it relative rights, privileges, duties and obligations AGREEMENT
to a Covered Securities-related customer hereunder. Pursuant to Section II of the
complaint 2 unless such complaint is
XV. The cancellation of its Agreement by and among BATS
uniquely related to another Participant’s
participation in this Agreement by any Exchange, Inc. (‘‘BATS’’), BOX Options
market. In the latter instance, the DOEA
Participant shall not terminate this Exchange, LLC (‘‘BOX’’), the Chicago
shall forward the matter to that
Agreement as to the remaining Board Options Exchange, Incorporated
Participant to whose market the matter
Participants. This Agreement will only (‘‘CBOE’’), C2 Options Exchange,
relates, and the latter shall discharge
terminate following notice to the Incorporated (‘‘C2’’), the International
Regulatory Responsibility with respect
Commission, in writing, by the then Securities Exchange, LLC (‘‘ISE’’),
thereto. If a Participant receives a
Participants that they intend to Financial Industry Regulatory
customer complaint for a Common
terminate the Agreement and the Authority, Inc. (‘‘FINRA’’), Miami
Member related to a Covered Security
expiration of the applicable notice International Securities Exchange, LLC
for which the Participant is not the
period. Such notice shall be given at (‘‘MIAX’’), The NASDAQ Stock Market
DOEA, the Participant shall promptly
least six months prior to the intended LLC (‘‘NASDAQ’’), NASDAQ OMX BX,
forward a copy of such complaint to the
date of termination, provided that in the Inc. (‘‘BX’’), the New York Stock
DOEA.
event a notice of cancellation is received Exchange LLC (‘‘NYSE’’), the NYSE
XI. Any written notice required or
from a Participant that, assuming the MKT LLC (‘‘NYSE MKT’’), the NYSE
asabaliauskas on DSK5VPTVN1PROD with NOTICES
permitted to be given under this
effectiveness thereof, would result in Arca, Inc. (‘‘NYSE ARCA’’), the
Agreement shall be deemed given if sent
there being just one remaining member NASDAQ OMX PHLX LLC (‘‘PHLX’’),
by certified mail, return receipt
of the Council, notice to the [and Topaz Exchange, LLC (‘‘Topaz’’)]
requested, or by a comparable means of
Commission of termination of this ISE Gemini, LLC (‘‘ISE Gemini’’) and
electronic communication to each
Agreement shall be given promptly EDGX Exchange, Inc. (‘‘EDGX’’)
2 For purposes of complaints, they can be upon the receipt of such notice of pursuant to Rule 17d–2 under the
reported pursuant to Form U4, Form U5 or RE–3 cancellation, which termination shall be Securities Exchange Act of 1934 dated
and any amendments thereto. effective upon the effectiveness of the [June 21, 2013] October 8, 2015 (the
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![Federal Register / Vol. 80, No. 213 / Wednesday, November 4, 2015 / Notices 68365
‘‘Agreement’’), a revised list of the SUITABILITY—Continued CUSTOMER COMMUNICATIONS
current Common Rules of each (ADVERTISING)—Continued
Participant, as compared to those of C2 .................. CBOE Rule 9.9.
FINRA, applicable to the conduct of EDGX ............. Rule 26.4. [Topaz]ISE Rule 623.[7]
ISE ................. Rule 610. Gemini.
accounts for Covered Securities is set FINRA ............ Rule 2360(b)(19) and 2353.
forth in this Exhibit A. NYSE ............. N/A.
MIAX .............. Rule 1309. PHLX .............. N/A.
[Topaz]ISE Rule 610. NYSE ARCA .. Options Rules 9.21(a) and
OPENING OF ACCOUNTS Gemini. 9.21(b).
NYSE ............. [Rule 723]N/A. BX .................. Chapter XI, Section [22]24.
NYSE MKT .... Rules 411, 921 and 1101. PHLX .............. Rule 1026. NASDAQ ........ Chapter XI, Section 22.
BATS .............. Rule 26.2. NYSE ARCA .. Options Rule 9.18(c) and
BOX ............... Rule 4020. [1] Equities Rules 9.18(c) and
CBOE ............. Rule 9.7. 8.5. CUSTOMER COMPLAINTS
C2* ................. CBOE Rule 9.7. BX .................. Chapter XI, Section [11]9.
EDGX ............. Rule 26.2. NASDAQ ........ Chapter XI, Section 9. NYSE MKT .... Rules 932 and 1105.
ISE ................. Rule 608. BATS .............. Rule 26.17.
FINRA ............ Rules 2360(b)(16) and 2352. BOX ............... Rule 4190.
MIAX .............. Rule 1307. DISCRETIONARY ACCOUNTS CBOE ............. Rule 9.23.
NYSE ............. [Rule 721 2]N/A. C2 .................. CBOE Rule 9.23.
[Topaz]ISE Rule 608. NYSE MKT .... Rules 421, 924 and 1103. EDGX ............. Rule 26.17.
Gemini. BATS .............. Rule 26.5.[5]3 ISE ................. Rule 625.
PHLX .............. Rule 1024(b) and (c).1[3] BOX ............... Rule 4050.[4] FINRA ............ FINRA Rules 2360(b)(17)(A)
NYSE ARCA .. Options Rules 9.2(a) and CBOE ............. Rule 9.10. and 2356.
9.18(b) and Equities Rules C2 .................. CBOE Rule 9.10. MIAX .............. Rule 1324.
9.18(b) and 8.4. EDGX ............. Rule 26.5.3 [Topaz]ISE Rule 625.
BX .................. Chapter XI, Section [9]7. ISE ................. Rule 611. Gemini.
NASDAQ ........ Chapter XI, Section 7. FINRA ............ Rules 2360(b)(18) and 2354. NYSE ............. [Rule 732]N/A.
1 [3] FINRA MIAX .............. Rule 1310. PHLX .............. Rule 1070.
shall not have any Regulatory
Responsibility regarding foreign currency op- [Topaz]ISE Rule 611. NYSE ARCA .. Options Rule 9.18(I) and Eq-
tion requirements specificed in any of the Gemini. uities Rules 9.18(l) and
PHLX rules in this Exhibit A. NYSE ............. N/A. 8.8.
[1 FINRA shall not have any Regulatory Re- PHLX .............. Rule 1027. BX .................. Chapter XI, Section [26]24.
sponsibility regarding the requirement for des- NYSE ARCA .. Options Rule 9.18(e) and
ignation of Senior Options Principal and Com- NASDAQ ........ Chapter XI, Section 24.
Equities Rules 9.18(e) and
pliance Options Principal.] 8.6.
[2 FINRA shall not have any Regulatory Re- BX .................. Chapter XI, Section [12] 10.
sponsibility regarding opening short uncovered CUSTOMER STATEMENTS
option accounts requirements.] NASDAQ ........ Chapter XI, Section 10.
[4 FINRA shall not have any Regulatory Re- NYSE MKT .... Rules 419 and 930.
SUPERVISION sponsibility to enforce this rule as to time and BATS .............. Rule 26.7.
price discretion in institutional accounts. In ad- BOX ............... Rule 4070.
dition FINRA shall not have any Regulatory CBOE ............. Rule 9.12.
NYSE MKT .... Rules 411, 922 and 1104. Responsibility regarding BOX Rule
BATS .............. Rule 26.3. C2 .................. CBOE Rule 9.12.
4050(a)(2).] EDGX ............. Rule 26.7.
BOX ............... Rule 4030. 3[5] FINRA shall not have any Regulatory
CBOE ............. Rule 9.8.2 ISE ................. Rules 613.
Responsibility to enforce this rule as to time
C2 .................. CBOE Rule 9.8.2 and price discretion in institutional accounts. FINRA ............ Rule 2360(b)(15).
EDGX ............. Rule 26.3. [6 FINRA shall not have any Regulatory Re- MIAX .............. Rule 1312.
ISE ................. Rule 609. sponsibility regarding CBOE’s and C2’s re- [Topaz]ISE Rule 613.
FINRA ............ Rules 2360(b)(20), quirements to the extent that a customer Gemini.
would meet FINRA’s definition of Institutional NYSE ............. [Rule 730]N/A.
2360(b)(17)(B), Investor and Institutional Sales Material but
2360(b)(16)(E), 2355 and PHLX .............. Rule 1032.
would not meet the requirements for such defi- NYSE ARCA .. Options Rule 9.18(j) and Eq-
2358. nitions in under CBOE’s and C2’s rule.]
MIAX .............. Rule1308. uities Rule 9.18(j).
[7 FINRA shall not have any Regulatory Re-
[Topaz]ISE Rule 609. sponsibility regarding ISE’s, and Topaz’s re- BX .................. Chapter XI, Sections [14]12.
Gemini. quirements to the extent that a customer NASDAQ ........ Chapter XI, Section 12.
NYSE ............. N/A. would meet FINRA’s definition of Institutional
PHLX .............. Rule 1025. Investor and Institutional Sales Material but
NYSE ARCA .. Options Rules 9.2(b) and
would not meet the requirements for such defi- CONFIRMATIONS
nitions in under such rule. In addition, FINRA
9.18(d)(2)(G) and Equities shall not have any Regulatory Responsibility
Rules 9.18(d)(2)(G) and NYSE MKT .... Rule 925.
regarding ISE’s, and Topaz’s requirements re-
8.7. garding approval of all market letters.] BATS .............. Rule 26.6.
BX .................. Chapter XI, Section [10]8. BOX ............... Rule 4060.[8]
NASDAQ ........ Chapter XI, Section 8. CBOE ............. Rule 9.11.
CUSTOMER COMMUNICATIONS C2 .................. CBOE Rule 9.11.
2 FINRA shall not have any Regulatory Re- (ADVERTISING) EDGX ............. Rule 26.6.
sponsibility regarding receipt of written reports ISE ................. Rule 612.
asabaliauskas on DSK5VPTVN1PROD with NOTICES
by April 1 of each year pursuant to CBOE NYSE MKT .... Rules 991 and 1106. FINRA ............ Rule 2360(b)(12).
Rule 9.8(g). BATS .............. Rule 26.16. MIAX .............. Rule 1311.
BOX ............... Rule 4170. [Topaz]ISE Rule 612.
SUITABILITY CBOE ............. Rule 9.21.[6] Gemini.
C2 .................. CBOE Rule 9.21.[6] NYSE ............. [Rules 725 9]N/A.
NYSE MKT .... Rules 923 and 1102. EDGX ............. Rule 26.16. PHLX .............. Rule 1028.
BATS .............. Rule 26.4. ISE ................. Rule 623.[7] NYSE ARCA .. Options Rule 9.18(f) and Eq-
BOX ............... Rule 4040. FINRA ............ Rules 2220 and 2357. uities Rule 9.18(j).
CBOE ............. Rule 9.9. MIAX .............. Rule 1322. BX .................. Chapter XI, Section [13]11.
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![68366 Federal Register / Vol. 80, No. 213 / Wednesday, November 4, 2015 / Notices
CONFIRMATIONS—Continued BRANCH OFFICES OF MEMBER REGISTRATION OF ROP—Continued
ORGANIZATIONS—Continued
NASDAQ ........ Chapter XI, Section 11. FINRA ............ NASD Rules 1022(f) & IM–
NASDAQ ........ Chapter XI, Section 6. 1022–1, & 1250(a)(1).
[8 FINRA shall not have any Regulatory Re- MIAX .............. Rule 1301.
sponsibility regarding the requirement in con- 4[10] FINRA shall only have Regulatory Re- [Topaz]ISE Rule 601.
firmations to distinguish between BOX option sponsibility for the first paragraph and shall
transactions and other transactions in option Gemini.
not have any Regulatory Responsibility re- NYSE ............. N/A.
contracts.] garding the requirements for debt options.
[9 FINRA shall not have any Regulatory Re- PHLX .............. Rule 1024(a)(i).
sponsibility regarding the requirement in con- NYSE ARCA .. Options Rule 9.26 and Equi-
firmations to distinguish between NYSE option PROHIBITION AGAINST GUARANTEES ties Rule 9.26.
transactions and other transactions in option BX .................. Chapter XI, Section 2 and
contracts.] NYSE MKT .... Rule 390. Chapter II, Section 2(g).
BATS .............. Rule 26.13. NASDAQ ........ Chapter XI, Section 2 and
ALLOCATION OF EXERCISE BOX ............... Rule 4130. Chapter II, Section 2(g).
ASSIGNMENT NOTICES CBOE ............. Rule 9.18.
C2 .................. CBOE Rule 9.18.
EDGX ............. Rule 26.13.
CERTIFICATION OF REGISTERED
NYSE MKT .... Rule 981.
BATS .............. Rule 23.2. ISE ................. Rules 619. PERSONNEL 7
BOX ............... Rule 9010. FINRA ............ Rule 2150(b).
CBOE ............. Rule 11.2. MIAX .............. Rule 1318. NYSE MKT .... Rule 920.
C2 .................. CBOE Rule 11.2. [Topaz]ISE Rule 619. BATS .............. Rule 2.5 Interpretation .01(c)
Gemini. and 11.4(e).
EDGX ............. Rule 23.2.
NYSE ............. Rule 2150(b). BOX ............... IM–2040–3.
ISE ................. Rule 1101.
PHLX .............. Rule 777. CBOE ............. Rule 9.3.
FINRA ............ Rule 2360(b)(23)(C).
NYSE ARCA .. Options Rule 9.1(e). C2 .................. CBOE Rule 9.3.
MIAX .............. Rule 701. EDGX ............. Rule 2.5 Interpretation .01(c)
[Topaz]ISE Rule 1101. BX .................. Chapter XI, Sections [20]18
and [21]19. and 11.4(e).
Gemini. ISE ................. Rule 602.
NYSE ............. [Rule 781]N/A. NASDAQ ........ Chapter XI, Sections 18 and
19. FINRA ............ NASD Rule 1032(d).
PHLX .............. Rule 1043. MIAX .............. Rule 1302.
NYSE ARCA .. Options Rule 6.25(a). [Topaz]ISE Rule 602.
BX .................. Chapter VIII, Section 2. Gemini.
NASDAQ ........ Chapter VIII, Section 2.
SHARING IN ACCOUNTS
NYSE ............. N/A.
PHLX .............. Rule 1024.
NYSE MKT .... Rule 390. NYSE ARCA .. Options Rule 9.27(a).
DISCLOSURE DOCUMENTS BATS .............. Rule 26.14.6 BX .................. Chapter XI, Section 3 and
BOX ............... Rule 4140. Chapter II, Section 2(h).
NYSE MKT .... Rules 921 and 926. CBOE ............. Rule 9.18(b). NASDAQ ........ Chapter XI, Section 3 and
BATS .............. Rule 26.10. C2 .................. CBOE Rule 9.18(b). Chapter II, Section 2(h).
BOX ............... Rule 4100. EDGX ............. Rule 26.14.6
7 FINRA shall not have Regulatory Respon-
CBOE ............. Rule 9.15. ISE ................. Rule 620.5[11]
FINRA ............ Rule 2150(c). sibility with regard to the Series 56 Examina-
C2 .................. CBOE Rule 9.15. tion under any exchange rules, as this exam-
EDGX ............. Rule 26.10. MIAX .............. Rule 1319.
[Topaz]ISE Rule 620.5[11] ination is not recognized by FINRA.
ISE ................. Rule 616.
Gemini. IV. Solicitation of Comments
FINRA ............ Rule 2360(b)(11).
NYSE ............. Rules 2150(c).
MIAX .............. Rule 1315. Interested persons are invited to
PHLX .............. N/A.
[Topaz]ISE Rule 616. submit written data, views, and
NYSE ARCA .. Options Rule 9.1(f).
Gemini. arguments concerning the foregoing.
BX .................. Chapter XI, Section [21].196
NYSE ............. [Rule 726 (a) and (c)]N/A.
NASDAQ ........ Chapter XI, Section 19.6[12] Comments may be submitted by any of
PHLX .............. Rule 1024(b)(v), 1029.
NYSE ARCA .. Options Rule 9.18(g) and 5[11] FINRA shall not have any Regulatory
the following methods:
Equities Rule 9.18(g). Responsibility regarding ISE’s and [Topaz’s] Electronic Comments
BX .................. Chapter XI, Section [17]15. ISE Gemini’s requirements to the extent its
NASDAQ ........ Chapter XI, Section 15. rule does not contain an exception to permit • Use the Commission’s Internet
sharing in the profits and losses of an ac- comment form (http://www.sec.gov/
count. rules/sro.shtml); or
6[12] FINRA shall not have any Regulatory
BRANCH OFFICES OF MEMBER Responsibility regarding NASDAQ’s BX’s, • Send an email to rule-comments@
ORGANIZATIONS BAT’s, and EDGX’s requirements to the extent sec.gov. Please include File Number S7–
such rules do not contain an exception ad- 966 on the subject line.
NYSE MKT .... Rule 922(d).4[10] dressing immediate family.
Paper Comments
BOX ............... Rule 4010(b).
CBOE ............. Rule 9.6. REGISTRATION OF ROP • Send paper comments in triplicate
C2 .................. CBOE Rule 9.6. to Secretary, Securities and Exchange
ISE ................. Rule 607. NYSE MKT .... Rule 920. Commission, 100 F Street NE.,
FINRA ............ Rules 2360(b)(20)(B) and BATS .............. Rule 17.2(g)(1), (2), (6) and Washington, DC 20549–1090.
asabaliauskas on DSK5VPTVN1PROD with NOTICES
2355. (7). All submissions should refer to File
MIAX .............. Rule 1306. BOX ............... Rule 2020(c)(1), (e)(1) and
Number S7–966. This file number
[Topaz]ISE Rule 607. IM–2040–4 and IM–2040–
Gemini. 5(b). should be included on the subject line
NYSE ............. N/A. CBOE ............. Rule 9.2. if email is used. To help the
PHLX .............. N/A. C2 .................. CBOE Rule 9.2. Commission process and review your
NYSE ARCA .. Options Rule 9.18(m) and EDGX ............. Rule 17.2(g)(1), (2), (6) and comments more efficiently, please use
Equities Rule 9.18(m). (7). only one method. The Commission will
BX .................. Chapter XI, Section [8]6. ISE ................. Rule 601. post all comments on the Commission’s
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![Federal Register / Vol. 80, No. 213 / Wednesday, November 4, 2015 / Notices 68367
Internet Web site (http://www.sec.gov/ Commission notes that the prior version Items I, II, and III below, which Items
rules/sro.shtml). Copies of the of this plan immediately prior to this have been prepared by the self-
submission, all subsequent proposed amendment was published for regulatory organization. The
amendments, all written statements comment and the Commission did not Commission is publishing this notice to
with respect to the proposed plan that receive any comments thereon.22 solicit comments on the proposed rule
are filed with the Commission, and all Furthermore, the Commission does not change from interested persons.
written communications relating to the believe that the amendment to the plan I. Self-Regulatory Organization’s
proposed plan between the Commission raises any new regulatory issues that the Statement of the Terms of Substance of
and any person, other than those that Commission has not previously the Proposed Rule Change
may be withheld from the public in considered.
accordance with the provisions of 5 The Exchange proposes to
VI. Conclusion discontinue the NYSE Retail Trading
U.S.C. 552, will be available for Web
site viewing and printing in the This order gives effect to the amended Product (‘‘NYSE ReTrac’’) and the NYSE
Commission’s Public Reference Room, Plan submitted to the Commission that Program Trading Product (‘‘NYSE
100 F Street NE., Washington, DC is contained in File No. S7–966. ProTrac’’) market data product offerings.
20549, on official business days It is therefore ordered, pursuant to The text of the proposed rule change is
between the hours of 10:00 a.m. and Section 17(d) of the Act, that the Plan, available on the Exchange’s Web site at
3:00 p.m. Copies of the plan also will be as amended, filed with the Commission www.nyse.com, at the principal office of
available for inspection and copying at pursuant to Rule 17d–2 on June 21, the Exchange, and at the Commission’s
the principal offices of FINRA and 2013 is hereby approved and declared Public Reference Room.
EDGX. All comments received will be effective. II. Self-Regulatory Organization’s
posted without change; the Commission It is further ordered that those SRO Statement of the Purpose of, and
does not edit personal identifying participants that are not the DOEA as to Statutory Basis for, the Proposed Rule
information from submissions. You a particular common member are Change
should submit only information that relieved of those regulatory
responsibilities allocated to the common In its filing with the Commission, the
you wish to make available publicly. All
member’s DOEA under the amended self-regulatory organization included
submissions should refer to File
Plan to the extent of such allocation. statements concerning the purpose of,
Number S7–966 and should be
and basis for, the proposed rule change
submitted on or before November 25, For the Commission, by the Division of and discussed any comments it received
2015. Trading and Markets, pursuant to delegated on the proposed rule change. The text
authority.23
V. Discussion of those statements may be examined at
Jill M. Peterson, the places specified in Item IV below.
The Commission continues to believe Assistant Secretary. The Exchange has prepared summaries,
that the proposed plan is an [FR Doc. 2015–28066 Filed 11–3–15; 8:45 am] set forth in sections A, B, and C below,
achievement in cooperation among the BILLING CODE 8011–01–P of the most significant parts of such
SRO participants. The Plan, as statements.
amended, will reduce unnecessary
regulatory duplication by allocating to SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
the designated SRO the responsibility COMMISSION Statement of the Purpose of, and the
for certain options-related sales practice Statutory Basis for, the Proposed Rule
[Release No. 34–76296; File No. SR–NYSE– Change
matters that would otherwise be
2015–47]
performed by multiple SROs. The plan 1. Purpose
promotes efficiency by reducing costs to Self-Regulatory Organizations; New
firms that are members of more than one The Exchange proposes to
York Stock Exchange LLC; Notice of discontinue the NYSE ReTrac and NYSE
of the SRO participants. In addition, Filing and Immediate Effectiveness of
because the SRO participants coordinate ProTrac market data offerings (together
Proposed Rule Change Discontinuing the ‘‘NYSE ReTrac and ProTrac
their regulatory functions in accordance the NYSE Retail Trading Product and
with the plan, the plan promotes, and Products’’). The NYSE ReTrac and
the NYSE Program Trading Product ProTrac Products supply subscribers
will continue to promote, investor Market Data Product Offerings
protection. with information on certain executions
October 29, 2015. dependent on the account type indicator
Under paragraph (c) of Rule 17d–2, associated with a trade. NYSE ReTrac is
the Commission may, after appropriate Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the a real-time datafeed of certain execution
notice and comment, declare a plan, or report information that has been
any part of a plan, effective. In this ‘‘Act’’) 2 and Rule 19b-4 thereunder,3
notice is hereby given that on October recorded as trades for accounts of
instance, the Commission believes that ‘‘individual investors’’ as well as an
appropriate notice and comment can 15, 2015, New York Stock Exchange
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed end-of-day summary. NYSE ProTrac is a
take place after the proposed real-time data feed of certain execution
amendment is effective. The primary with the Securities and Exchange
Commission (the ‘‘Commission’’) the report information that has been
purpose of the amendment is to add recorded as program trades, and an end-
proposed rule change as described in
asabaliauskas on DSK5VPTVN1PROD with NOTICES
EDGX as a Participant to the Plan and of-day summary.
to change the name of Topaz Exchange, In 2006, the Securities and Exchange
EDGX Options Market. See Securities Exchange Act
LLC to ISE Gemini, LLC. By declaring it Release No. 75650, 80 FR 48600 (August 13, 2015). Commission (‘‘Commission’’) approved
effective today, the amended Plan can 22 See supra note 20 (citing to Securities the NYSE ReTrac and ProTrac Products
become effective and be implemented Exchange Act Release No. 70051). and associated fees.4 Over the several
without undue delay.21 The 23 17 CFR 200.30–3(a)(34).
1 15 U.S.C. 78s(b)(1). 4 See Securities Exchange Act Release No. 53835
21 On 2 15 U.S.C. 78a.
August 7, 2015, the Commission approved (May 18, 2006), 71 FR 30456 (SR–NYSE–2006–31);
EDGX’s rules governing options trading on the 3 17 CFR 240.19b–4. Continued
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Document Created: 2018-03-01 11:27:41
Document Modified: 2018-03-01 11:27:41
| 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 68361 |
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