80_FR_69951 80 FR 69734 - Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt Business and Disaster Recovery Plans Testing Requirements for Certain Participants in Connection With Regulation Systems Compliance and Integrity

80 FR 69734 - Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt Business and Disaster Recovery Plans Testing Requirements for Certain Participants in Connection With Regulation Systems Compliance and Integrity

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 217 (November 10, 2015)

Page Range69734-69736
FR Document2015-28514

Federal Register, Volume 80 Issue 217 (Tuesday, November 10, 2015)
[Federal Register Volume 80, Number 217 (Tuesday, November 10, 2015)]
[Notices]
[Pages 69734-69736]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-28514]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76351; File No. SR-CHX-2015-09]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Adopt Business and Disaster Recovery Plans Testing Requirements for 
Certain Participants in Connection With Regulation Systems Compliance 
and Integrity

November 4, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\, and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on October 29, 2015, the Chicago Stock Exchange, Inc. (``CHX'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CHX proposes to adopt business continuity and disaster recovery 
plans (``BC/DR plans'') testing requirements for certain Participants 
\3\ in connection with Regulation Systems Compliance and Integrity 
(``Regulation SCI'').\4\ CHX has designated this proposed rule change 
as non-controversial pursuant to Section 19(b)(3)(A) \5\ of the Act and 
Rule 19b-4(f)(6) \6\ thereunder and has provided the Commission with 
the notice required by Rule 19b-4(f)(6)(iii).\7\
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    \3\ Pursuant to CHX Article 1, Rule 1(s), a Participant is 
considered a ``member'' of the Exchange for the purposes of the Act.
    \4\ See Securities Exchange Act Release No. 73639 (November 19, 
2014), 79 FR 72252 (December 5, 2014) (``SCI Adopting Release'').
    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(6).
    \7\ 17 CFR 240.19b-4(f)(6)(iii).
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    The text of this proposed rule change is available on the 
Exchange's Web site at (www.chx.com) and in the Commission's Public 
Reference Room.

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

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

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

1. Purpose
    As adopted by the Commission, Regulation SCI applies to certain 
self-regulatory organizations (including the Exchange), alternative 
trading systems (``ATSs''), plan processors, and exempt clearing 
agencies (collectively, ``SCI entities''), and will require these SCI 
entities to comply with requirements with respect to the automated 
systems central to the performance of their regulated activities. Among 
the requirements of Regulation SCI is Rule 1001(a)(2)(v), which 
requires the Exchange and other SCI entities to maintain ``[b]usiness 
continuity and disaster recovery plans that include maintaining backup 
and recovery capabilities sufficiently resilient and geographically 
diverse and that are reasonably designed to achieve next business day 
resumption of trading and two-hour resumption of critical SCI systems 
following a wide-scale disruption.'' \8\ The Exchange has put extensive 
time and resources toward planning for system failures and already 
maintains robust BC/DR plans consistent with the Rule.\9\ As set forth 
below, in connection with Regulation SCI, the Exchange is proposing to 
require certain Participants to participate in testing of the operation 
of the Exchange's BC/DR plans.
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    \8\ 17 CFR 242.1001(a)(2)(v).
    \9\ The Exchange notes that it permits the trading of securities 
at two separate data centers; one in Secaucus, New Jersey (NY4) and 
the other in Chicago (CH2). Each location serves as the primary 
matching location for a security traded on the Exchange and no 
single security is simultaneously traded at both locations, as the 
Exchange maintains only one book. In the event trading cannot occur 
at one location, the Exchange may move trading in affected 
securities to the other location, pursuant to its BC/DR plans.
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    With respect to an SCI entity's BC/DR plans, including its backup 
systems, paragraph (a) of Rule 1004 of Regulation SCI requires each SCI 
entity to: ``[e]stablish standards for the designation of those members 
or participants that the SCI entity reasonably determines are, taken as 
a whole, the minimum necessary for the maintenance of fair and orderly 
markets in the event of the activation of such plans.'' \10\ Paragraph 
(b) of Rule 1004 further requires each SCI entity to ``[d]esignate 
members or participants pursuant to the standards established in 
paragraph (a) of [Rule 1004] and require participation by such 
designated members or participants in scheduled functional and 
performance testing of the operation of such plans, in the manner and 
frequency specified by the SCI entity, provided that such frequency 
shall not be less than once every 12 months.'' \11\ In order to comply 
with Rule 1004 of Regulation SCI, the Exchange proposes to adopt 
Article 3, Rule 21 (Mandatory Participation Testing of Backup Systems) 
requiring mandatory participation in testing of Exchange backup 
systems, as described below.
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    \10\ 17 CFR 242.1004(a).
    \11\ 17 CFR 242.1004(b).
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    First, in paragraph (a) of Rule 21, the Exchange proposes to 
include language from paragraph (a) of Rule 1004 of Regulation SCI to 
summarize the Exchange's obligation pursuant to such rule. 
Specifically, the Exchange proposes to state that ``[p]ursuant to 
Regulation SCI and with respect to the Exchange's business continuity 
and disaster recovery plans, including its backup systems, the Exchange 
is required to establish standards for the designation of Participants 
that the Exchange reasonably determines are, taken as a whole, the 
minimum necessary for the maintenance of fair and orderly markets in 
the event of the

[[Page 69735]]

activation of such plans.'' The Exchange further proposes that 
paragraph (a) indicate that the ``Exchange has established standards 
and will designate Participants according to those standards'' as set 
forth in the proposed Rule. In addition, the Exchange proposes to make 
clear that all Participants are permitted to connect to the Exchange's 
backup systems as well as to participate in testing of such systems. 
Proposed paragraph (a) is consistent with the Commission's adoption of 
Regulation SCI, which encouraged ``SCI entities to permit non-
designated members or participants to participate in the testing of the 
SCI entity's BC/DR plans if they request to do so.'' \12\
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    \12\ See SCI Adopting Release, supra note 4 at 72350.
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    Second, in paragraph (b) of Rule 21, the Exchange proposes to 
specify the criteria that will result in a Participant receiving a 
designation requiring it to connect to the Exchange's backup systems 
and to participate in functional and performance testing as announced 
by the Exchange, which shall occur at least once every 12 months. 
Specifically, proposed paragraph (b)(1) would require all Participants 
that account for a meaningful percentage of the Exchange's overall 
trades or volume to connect to the Exchange's backup systems and to 
participate in functional and performance testing.
    The Exchange notes that it encourages all Participants to connect 
to the Exchange's backup systems and to participate in testing of such 
systems. In fact, if a Participant executes an average daily volume of 
1 million or more provide shares in the Matching System during the 
month, CHX will impose a cap on logical port charges equal to the 
greatest number of ports attributable to that Participant in either of 
CHX's data centers which helps reduce the economic burden of 
maintaining connectivity to Exchange's data centers.\13\ However, in 
adopting the requirements of proposed Rule 21(b), including both the 
requirement to maintain connectivity to Exchange backup systems and to 
participate in mandatory testing of such systems, the Exchange intends 
to subject to the Rule only those Participants that the Exchange 
believes are necessary to maintain fair and orderly markets at the 
Exchange. The Exchange believes that designating Participants to 
participate in mandatory testing because they account for a meaningful 
percentage of the Exchange's overall trades or volume is a reasonable 
means to ensure the maintenance of a fair and orderly market on the 
Exchange.
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    \13\ See Section D.1 of the CHX Fee Schedule.
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    In addition to paragraphs (a) and (b) described above, the Exchange 
also proposes to adopt Interpretation and Policy .01, which would 
provide additional detail regarding the notice that will be provided to 
Participants that have been designated pursuant to subparagraph (b) of 
the Rule as well as the Exchange's method for measuring the trades and 
volume thresholds. As proposed, Interpretation and Policy .01 would 
state that for purposes of identifying Participants that account for a 
meaningful percentage of the Exchange's overall trades or volume, the 
Exchange will measure trades and volume executed on the Exchange on a 
quarterly basis. The percentage of trades and volume that the Exchange 
considers to be meaningful for purposes of this Interpretation and 
Policy .01 will be determined by the Exchange and will be published in 
a circular distributed to Participants. The Exchange will publish the 
first circular consistent with this proposal prior to the Regulation 
SCI compliance date of November 3, 2015. The proposed Interpretation 
and Policy would also require the Exchange to notify individual 
Participants quarterly that are subject to proposed paragraph (b) based 
on the prior calendar quarter's trades and volume. Finally, as 
proposed, if a Participant has not previously been subject to the 
requirements of proposed paragraph (b), then such Participant would 
have until the next calendar quarter before such requirements are 
applicable. The Exchange believes the proposed notice requirements are 
necessary to provide Participants with proper advance notice in the 
event they become subject to proposed Rule 21(b). The proposed 
timeframes would also provide Participants with adequate time to become 
compliant with such Rule due to the necessary infrastructure changes it 
may take to connect to the Exchange's backup systems for a Participant 
that is not already connected.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \14\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \15\ in particular, in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general to protect investors and the public 
interest. The proposal will ensure that the Participants necessary to 
ensure the maintenance of a fair an orderly market are properly 
designated consistent with Rule 1004 of Regulation SCI. Specifically, 
the proposal will adopt criteria with respect to the designation of 
Participants that are required to participate in the testing of the 
Exchange's BC/DR plans, as well as appropriate notification regarding 
such designation. As set forth in the SCI Adopting Release, ``SROs have 
the authority, and legal responsibility, under Section 6 of the 
Exchange Act, to adopt and enforce rules (including rules to comply 
with Regulation SCI's requirements relating to BC/DR testing) 
applicable to their members or participants that are designed to, among 
other things, foster cooperation and coordination with persons engaged 
in regulating, clearing, settling, processing information with respect 
to, and facilitating transactions in securities, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general, to protect investors and the public 
interest.'' \16\ The Exchange believes that this proposal is consistent 
with such authority and legal responsibility.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
    \16\ See SCI Adopting Release, supra note 4 at 72350.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. To the contrary, the proposal 
is not a competitive proposal but rather is necessary for the 
Exchange's compliance with Regulation SCI.

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

    No written comments were either solicited or received.

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

    Because the proposed rule change does not: (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days after the date of the filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to 
19(b)(3)(A)

[[Page 69736]]

of the Act \17\ and Rule 19b-4(f)(6) \18\ thereunder.
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \19\ normally 
does not become operative for 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii) \20\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
---------------------------------------------------------------------------

    \19\ 17 CFR 240.19b-4(f)(6).
    \20\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Commission believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest 
as it will allow the Exchange to incorporate changes required under 
Regulation SCI, such as establishing standards for designating business 
continuity and disaster recovery plan participants, prior to the 
November 3, 2015 compliance date. Therefore, the Commission designates 
the proposed rule change to be operative upon filing.\21\
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    \21\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File No. SR-CHX-2015-09 on the subject line.

Paper Comments

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

All submissions should refer to File No. SR-CHX-2015-09. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml).
    Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing will also be available for inspection 
and copying at the principal office of the CHX. All comments received 
will be posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly.
All submissions should refer to File No. SR-CHX-2015-09 and should be 
submitted on or before December 1, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-28514 Filed 11-9-15; 8:45 am]
 BILLING CODE 8011-01-P



                                                    69734                      Federal Register / Vol. 80, No. 217 / Tuesday, November 10, 2015 / Notices

                                                    provisions of 5 U.S.C. 552, will be                     for certain Participants 3 in connection              extensive time and resources toward
                                                    available for Web site viewing and                      with Regulation Systems Compliance                    planning for system failures and already
                                                    printing in the Commission’s Public                     and Integrity (‘‘Regulation SCI’’).4 CHX              maintains robust BC/DR plans
                                                    Reference Section, 100 F Street NE.,                    has designated this proposed rule                     consistent with the Rule.9 As set forth
                                                    Washington, DC 20549–1090. Copies of                    change as non-controversial pursuant to               below, in connection with Regulation
                                                    the filing will also be available for                   Section 19(b)(3)(A) 5 of the Act and Rule             SCI, the Exchange is proposing to
                                                    inspection and copying at the NYSE’s                    19b–4(f)(6) 6 thereunder and has                      require certain Participants to
                                                    principal office and on its Internet Web                provided the Commission with the                      participate in testing of the operation of
                                                    site at www.nyse.com. All comments                      notice required by Rule 19b–4(f)(6)(iii).7            the Exchange’s BC/DR plans.
                                                    received will be posted without change;                    The text of this proposed rule change                 With respect to an SCI entity’s BC/DR
                                                    the Commission does not edit personal                   is available on the Exchange’s Web site               plans, including its backup systems,
                                                    identifying information from                            at (www.chx.com) and in the                           paragraph (a) of Rule 1004 of Regulation
                                                    submissions. You should submit only                     Commission’s Public Reference Room.                   SCI requires each SCI entity to:
                                                    information that you wish to make                                                                             ‘‘[e]stablish standards for the
                                                                                                            II. Self-Regulatory Organization’s
                                                    available publicly. All submissions                                                                           designation of those members or
                                                                                                            Statement of the Purpose of, and
                                                    should refer to File Number SR–                                                                               participants that the SCI entity
                                                                                                            Statutory Basis for, the Proposed Rule
                                                    NYSEARCA–2015–97 and should be                                                                                reasonably determines are, taken as a
                                                                                                            Change
                                                    submitted on or before December 1,                                                                            whole, the minimum necessary for the
                                                    2015.                                                      In its filing with the Commission, the             maintenance of fair and orderly markets
                                                                                                            CHX included statements concerning                    in the event of the activation of such
                                                      For the Commission, by the Division of
                                                    Trading and Markets, pursuant to delegated
                                                                                                            the purpose of and basis for the                      plans.’’ 10 Paragraph (b) of Rule 1004
                                                    authority.21                                            proposed rule change and discussed any                further requires each SCI entity to
                                                    Brent J. Fields,
                                                                                                            comments it received on the proposed                  ‘‘[d]esignate members or participants
                                                                                                            rule change. The text of these statements             pursuant to the standards established in
                                                    Secretary.
                                                                                                            may be examined at the places specified               paragraph (a) of [Rule 1004] and require
                                                    [FR Doc. 2015–28513 Filed 11–9–15; 8:45 am]
                                                                                                            in Item IV below. The Exchange has                    participation by such designated
                                                    BILLING CODE 8011–01–P                                  prepared summaries, set forth in                      members or participants in scheduled
                                                                                                            Sections A, B, and C below, of the most               functional and performance testing of
                                                                                                            significant aspects of such statements.               the operation of such plans, in the
                                                    SECURITIES AND EXCHANGE
                                                    COMMISSION                                              A. Self-Regulatory Organization's                     manner and frequency specified by the
                                                                                                            Statement of the Purpose of, and                      SCI entity, provided that such frequency
                                                    [Release No. 34–76351; File No. SR–CHX–                                                                       shall not be less than once every 12
                                                    2015–09]                                                Statutory Basis for, the Proposed Rule
                                                                                                            Change                                                months.’’ 11 In order to comply with
                                                                                                                                                                  Rule 1004 of Regulation SCI, the
                                                    Self-Regulatory Organizations;                          1. Purpose                                            Exchange proposes to adopt Article 3,
                                                    Chicago Stock Exchange, Inc.; Notice
                                                                                                               As adopted by the Commission,                      Rule 21 (Mandatory Participation
                                                    of Filing and Immediate Effectiveness
                                                                                                            Regulation SCI applies to certain self-               Testing of Backup Systems) requiring
                                                    of Proposed Rule Change To Adopt
                                                                                                            regulatory organizations (including the               mandatory participation in testing of
                                                    Business and Disaster Recovery Plans
                                                                                                            Exchange), alternative trading systems                Exchange backup systems, as described
                                                    Testing Requirements for Certain
                                                                                                            (‘‘ATSs’’), plan processors, and exempt               below.
                                                    Participants in Connection With                                                                                  First, in paragraph (a) of Rule 21, the
                                                    Regulation Systems Compliance and                       clearing agencies (collectively, ‘‘SCI
                                                                                                            entities’’), and will require these SCI               Exchange proposes to include language
                                                    Integrity                                                                                                     from paragraph (a) of Rule 1004 of
                                                                                                            entities to comply with requirements
                                                    November 4, 2015.                                       with respect to the automated systems                 Regulation SCI to summarize the
                                                       Pursuant to Section 19(b)(1) of the                  central to the performance of their                   Exchange’s obligation pursuant to such
                                                    Securities Exchange Act of 1934                         regulated activities. Among the                       rule. Specifically, the Exchange
                                                    (‘‘Act’’),1, and Rule 19b–4 2 thereunder,               requirements of Regulation SCI is Rule                proposes to state that ‘‘[p]ursuant to
                                                    notice is hereby given that on October                  1001(a)(2)(v), which requires the                     Regulation SCI and with respect to the
                                                    29, 2015, the Chicago Stock Exchange,                   Exchange and other SCI entities to                    Exchange’s business continuity and
                                                    Inc. (‘‘CHX’’ or the ‘‘Exchange’’) filed                maintain ‘‘[b]usiness continuity and                  disaster recovery plans, including its
                                                    with the Securities and Exchange                        disaster recovery plans that include                  backup systems, the Exchange is
                                                    Commission (‘‘Commission’’) the                         maintaining backup and recovery                       required to establish standards for the
                                                    proposed rule change as described in                    capabilities sufficiently resilient and               designation of Participants that the
                                                    Items I and II below, which Items have                  geographically diverse and that are                   Exchange reasonably determines are,
                                                    been prepared by the Exchange. The                      reasonably designed to achieve next                   taken as a whole, the minimum
                                                    Commission is publishing this notice to                 business day resumption of trading and                necessary for the maintenance of fair
                                                    solicit comments on the proposed rule                   two-hour resumption of critical SCI                   and orderly markets in the event of the
                                                    change from interested persons.                         systems following a wide-scale
                                                                                                                                                                     9 The Exchange notes that it permits the trading
                                                                                                            disruption.’’ 8 The Exchange has put
                                                    I. Self-Regulatory Organization’s                                                                             of securities at two separate data centers; one in
                                                    Statement of the Terms of Substance of                                                                        Secaucus, New Jersey (NY4) and the other in
asabaliauskas on DSK5VPTVN1PROD with NOTICES




                                                                                                              3 Pursuant to CHX Article 1, Rule 1(s), a
                                                    the Proposed Rule Change                                                                                      Chicago (CH2). Each location serves as the primary
                                                                                                            Participant is considered a ‘‘member’’ of the         matching location for a security traded on the
                                                                                                            Exchange for the purposes of the Act.
                                                       CHX proposes to adopt business                         4 See Securities Exchange Act Release No. 73639
                                                                                                                                                                  Exchange and no single security is simultaneously
                                                    continuity and disaster recovery plans                                                                        traded at both locations, as the Exchange maintains
                                                                                                            (November 19, 2014), 79 FR 72252 (December 5,         only one book. In the event trading cannot occur at
                                                    (‘‘BC/DR plans’’) testing requirements                  2014) (‘‘SCI Adopting Release’’).                     one location, the Exchange may move trading in
                                                                                                              5 15 U.S.C. 78s(b)(3)(A).
                                                                                                                                                                  affected securities to the other location, pursuant to
                                                      21 17 CFR 200.30–3(a)(12).                              6 17 CFR 240.19b–4(f)(6).                           its BC/DR plans.
                                                      1 15 U.S.C. 78s(b)(1).                                  7 17 CFR 240.19b–4(f)(6)(iii).                         10 17 CFR 242.1004(a).
                                                      2 17 CFR 240.19b–4.                                     8 17 CFR 242.1001(a)(2)(v).                            11 17 CFR 242.1004(b).




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                                                                               Federal Register / Vol. 80, No. 217 / Tuesday, November 10, 2015 / Notices                                                     69735

                                                    activation of such plans.’’ The Exchange                maintenance of a fair and orderly                       proposal will ensure that the
                                                    further proposes that paragraph (a)                     market on the Exchange.                                 Participants necessary to ensure the
                                                    indicate that the ‘‘Exchange has                           In addition to paragraphs (a) and (b)                maintenance of a fair an orderly market
                                                    established standards and will designate                described above, the Exchange also                      are properly designated consistent with
                                                    Participants according to those                         proposes to adopt Interpretation and                    Rule 1004 of Regulation SCI.
                                                    standards’’ as set forth in the proposed                Policy .01, which would provide                         Specifically, the proposal will adopt
                                                    Rule. In addition, the Exchange                         additional detail regarding the notice                  criteria with respect to the designation
                                                    proposes to make clear that all                         that will be provided to Participants that              of Participants that are required to
                                                    Participants are permitted to connect to                have been designated pursuant to                        participate in the testing of the
                                                    the Exchange’s backup systems as well                   subparagraph (b) of the Rule as well as                 Exchange’s BC/DR plans, as well as
                                                    as to participate in testing of such                    the Exchange’s method for measuring                     appropriate notification regarding such
                                                    systems. Proposed paragraph (a) is                      the trades and volume thresholds. As                    designation. As set forth in the SCI
                                                    consistent with the Commission’s                        proposed, Interpretation and Policy .01                 Adopting Release, ‘‘SROs have the
                                                    adoption of Regulation SCI, which                       would state that for purposes of                        authority, and legal responsibility,
                                                    encouraged ‘‘SCI entities to permit non-                identifying Participants that account for               under Section 6 of the Exchange Act, to
                                                    designated members or participants to                   a meaningful percentage of the                          adopt and enforce rules (including rules
                                                    participate in the testing of the SCI                   Exchange’s overall trades or volume, the                to comply with Regulation SCI’s
                                                    entity’s BC/DR plans if they request to                 Exchange will measure trades and                        requirements relating to BC/DR testing)
                                                    do so.’’ 12                                             volume executed on the Exchange on a                    applicable to their members or
                                                       Second, in paragraph (b) of Rule 21,                 quarterly basis. The percentage of trades               participants that are designed to, among
                                                    the Exchange proposes to specify the                    and volume that the Exchange considers                  other things, foster cooperation and
                                                    criteria that will result in a Participant              to be meaningful for purposes of this                   coordination with persons engaged in
                                                    receiving a designation requiring it to                 Interpretation and Policy .01 will be                   regulating, clearing, settling, processing
                                                    connect to the Exchange’s backup                        determined by the Exchange and will be                  information with respect to, and
                                                    systems and to participate in functional                published in a circular distributed to                  facilitating transactions in securities, to
                                                    and performance testing as announced                    Participants. The Exchange will publish                 remove impediments to and perfect the
                                                    by the Exchange, which shall occur at                   the first circular consistent with this                 mechanism of a free and open market
                                                    least once every 12 months.                             proposal prior to the Regulation SCI                    and a national market system, and, in
                                                    Specifically, proposed paragraph (b)(1)                 compliance date of November 3, 2015.                    general, to protect investors and the
                                                    would require all Participants that                     The proposed Interpretation and Policy                  public interest.’’ 16 The Exchange
                                                    account for a meaningful percentage of                  would also require the Exchange to                      believes that this proposal is consistent
                                                    the Exchange’s overall trades or volume                 notify individual Participants quarterly                with such authority and legal
                                                    to connect to the Exchange’s backup                     that are subject to proposed paragraph                  responsibility.
                                                    systems and to participate in functional                (b) based on the prior calendar quarter’s
                                                    and performance testing.                                trades and volume. Finally, as proposed,                B. Self-Regulatory Organization's
                                                       The Exchange notes that it encourages                if a Participant has not previously been                Statement on Burden on Competition
                                                    all Participants to connect to the                      subject to the requirements of proposed
                                                    Exchange’s backup systems and to                                                                                  The Exchange does not believe that
                                                                                                            paragraph (b), then such Participant
                                                    participate in testing of such systems. In              would have until the next calendar                      the proposed rule change will impose
                                                    fact, if a Participant executes an average              quarter before such requirements are                    any burden on competition not
                                                    daily volume of 1 million or more                       applicable. The Exchange believes the                   necessary or appropriate in furtherance
                                                    provide shares in the Matching System                   proposed notice requirements are                        of the purposes of the Act. To the
                                                    during the month, CHX will impose a                     necessary to provide Participants with                  contrary, the proposal is not a
                                                    cap on logical port charges equal to the                proper advance notice in the event they                 competitive proposal but rather is
                                                    greatest number of ports attributable to                become subject to proposed Rule 21(b).                  necessary for the Exchange’s
                                                    that Participant in either of CHX’s data                The proposed timeframes would also                      compliance with Regulation SCI.
                                                    centers which helps reduce the                          provide Participants with adequate time                 C. Self-Regulatory Organization's
                                                    economic burden of maintaining                          to become compliant with such Rule                      Statement on Comments Regarding the
                                                    connectivity to Exchange’s data                         due to the necessary infrastructure                     Proposed Rule Changes Received From
                                                    centers.13 However, in adopting the                     changes it may take to connect to the                   Members, Participants or Others
                                                    requirements of proposed Rule 21(b),                    Exchange’s backup systems for a
                                                    including both the requirement to                       Participant that is not already                           No written comments were either
                                                    maintain connectivity to Exchange                       connected.                                              solicited or received.
                                                    backup systems and to participate in                                                                            III. Date of Effectiveness of the
                                                                                                            2. Statutory Basis
                                                    mandatory testing of such systems, the                                                                          Proposed Rule Change and Timing for
                                                    Exchange intends to subject to the Rule                    The Exchange believes that its                       Commission Action
                                                    only those Participants that the                        proposal is consistent with Section 6(b)
                                                    Exchange believes are necessary to                      of the Act 14 in general, and furthers the                Because the proposed rule change
                                                    maintain fair and orderly markets at the                objectives of Section 6(b)(5) of the Act 15             does not: (i) Significantly affect the
                                                    Exchange. The Exchange believes that                    in particular, in that it is designed to                protection of investors or the public
asabaliauskas on DSK5VPTVN1PROD with NOTICES




                                                    designating Participants to participate in              promote just and equitable principles of                interest; (ii) impose any significant
                                                    mandatory testing because they account                  trade, to remove impediments to and                     burden on competition; and (iii) become
                                                    for a meaningful percentage of the                      perfect the mechanism of a free and                     operative for 30 days after the date of
                                                    Exchange’s overall trades or volume is                  open market and a national market                       the filing, or such shorter time as the
                                                    a reasonable means to ensure the                        system, and, in general to protect                      Commission may designate, it has
                                                                                                            investors and the public interest. The                  become effective pursuant to 19(b)(3)(A)
                                                      12 See SCI Adopting Release, supra note 4 at

                                                    72350.                                                    14 15   U.S.C. 78f(b).                                  16 See SCI Adopting Release, supra note 4 at
                                                      13 See Section D.1 of the CHX Fee Schedule.             15 15   U.S.C. 78f(b)(5).                             72350.



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                                                    69736                       Federal Register / Vol. 80, No. 217 / Tuesday, November 10, 2015 / Notices

                                                    of the Act 17 and Rule 19b–4(f)(6) 18                     Paper Comments                                         concerning the securities of Inelco Corp.
                                                    thereunder.                                                  • Send paper comments in triplicate                 (CIK No. 1427352), a revoked Nevada
                                                       A proposed rule change filed under                     to Brent J. Fields, Secretary, Securities              corporation with its principal place of
                                                    Rule 19b–4(f)(6) 19 normally does not                     and Exchange Commission, 100 F Street                  business listed as Coral Springs, Florida
                                                    become operative for 30 days after the                    NE., Washington, DC 20549.                             with stock quoted on OTC Link under
                                                    date of filing. However, pursuant to                                                                             the ticker symbol INLC, because it has
                                                                                                              All submissions should refer to File No.
                                                    Rule 19b–4(f)(6)(iii) 20 the Commission                                                                          not filed any periodic reports since the
                                                                                                              SR–CHX–2015–09. This file number
                                                    may designate a shorter time if such                                                                             period ended June 30, 2013. On January
                                                                                                              should be included on the subject line
                                                    action is consistent with the protection
                                                                                                              if email is used. To help the                          14, 2015, a delinquency letter was sent
                                                    of investors and the public interest.
                                                       The Exchange has asked the                             Commission process and review your                     by the Division of Corporation Finance
                                                    Commission to waive the 30-day                            comments more efficiently, please use                  to Inelco requesting compliance with
                                                    operative delay so that the proposal may                  only one method. The Commission will                   their periodic filing obligations, but
                                                    become operative immediately upon                         post all comments on the Commission’s                  Inelco did not receive the delinquency
                                                    filing. The Commission believes that                      Internet Web site (http://www.sec.gov/                 letter due to its failure to maintain a
                                                    waiving the 30-day operative delay is                     rules/sro.shtml).                                      valid address on file with the
                                                    consistent with the protection of                            Copies of the submission, all                       Commission as required by Commission
                                                    investors and the public interest as it                   subsequent amendments, all written                     Rules (Rule 301 of Regulation S–T, 17
                                                    will allow the Exchange to incorporate                    statements with respect to the proposed                CFR 232.301 and Section 5.4 of EDGAR
                                                    changes required under Regulation SCI,                    rule change that are filed with the                    Filer Manual).
                                                    such as establishing standards for                        Commission, and all written
                                                                                                              communications relating to the                            It appears to the Securities and
                                                    designating business continuity and                                                                              Exchange Commission that there is a
                                                    disaster recovery plan participants,                      proposed rule change between the
                                                                                                              Commission and any person, other than                  lack of current and accurate information
                                                    prior to the November 3, 2015
                                                                                                              those that may be withheld from the                    concerning the securities of Teliphone
                                                    compliance date. Therefore, the
                                                    Commission designates the proposed                        public in accordance with the                          Corp. (CIK No. 1101783), a Nevada
                                                    rule change to be operative upon                          provisions of 5 U.S.C. 552, will be                    corporation with its principal place of
                                                    filing.21                                                 available for Web site viewing and                     business listed as Vancouver, British
                                                       At any time within 60 days of the                      printing in the Commission’s Public                    Columbia, Canada with stock quoted on
                                                    filing of the proposed rule change, the                   Reference Room, 100 F Street NE.,                      OTC Link under the ticker symbol
                                                    Commission summarily may                                  Washington, DC 20549, on official                      TLPH, because it has not filed any
                                                    temporarily suspend such rule change if                   business days between the hours of                     periodic reports since the period ended
                                                    it appears to the Commission that such                    10:00 a.m. and 3:00 p.m. Copies of the                 March 31, 2013. On January 14, 2015, a
                                                    action is necessary or appropriate in the                 filing will also be available for                      delinquency letter was sent by the
                                                    public interest, for the protection of                    inspection and copying at the principal                Division of Corporation Finance to
                                                    investors, or otherwise in furtherance of                 office of the CHX. All comments                        Teliphone requesting compliance with
                                                    the purposes of the Act.                                  received will be posted without change;                their periodic filing obligations, and
                                                                                                              the Commission does not edit personal                  Teliphone received the delinquency
                                                    IV. Solicitation of Comments                              identifying information from                           letter on February 6, 2015, but failed to
                                                      Interested persons are invited to                       submissions. You should submit only
                                                    submit written data, views and                                                                                   cure its delinquencies.
                                                                                                              information that you wish to make
                                                    arguments concerning the foregoing,                       available publicly.                                       The Commission is of the opinion that
                                                    including whether the proposal is                         All submissions should refer to File No.               the public interest and the protection of
                                                    consistent with the Act. Comments may                     SR–CHX–2015–09 and should be                           investors require a suspension of trading
                                                    be submitted by any of the following                      submitted on or before December 1,                     in the securities of the above-listed
                                                    methods:                                                  2015.                                                  companies.
                                                    Electronic Comments                                         For the Commission, by the Division of                  Therefore, it is ordered, pursuant to
                                                                                                              Trading and Markets, pursuant to delegated             Section 12(k) of the Securities Exchange
                                                       • Use the Commission’s Internet                        authority.22
                                                    comment form (http://www.sec.gov/                                                                                Act of 1934, that trading in the
                                                                                                              Brent J. Fields,                                       securities of the above-listed companies
                                                    rules/sro.shtml); or
                                                                                                              Secretary.
                                                       • Send an email to rule-                                                                                      is suspended for the period from 9:30
                                                    comments@sec.gov. Please include File                     [FR Doc. 2015–28514 Filed 11–9–15; 8:45 am]            a.m. EST on November 6, 2015, through
                                                    No. SR–CHX–2015–09 on the subject                         BILLING CODE 8011–01–P                                 11:59 p.m. EST on November 19, 2015.
                                                    line.                                                                                                               By the Commission.
                                                      17 15                                                   SECURITIES AND EXCHANGE                                Jill M. Peterson,
                                                             U.S.C. 78s(b)(3)(A).
                                                      18 17  CFR 240.19b–4(f)(6). In addition, Rule 19b–      COMMISSION                                             Assistant Secretary.
                                                    4(f)(6) requires a self-regulatory organization to give                                                          [FR Doc. 2015–28706 Filed 11–6–15; 11:15 am]
                                                                                                              [File No. 500–1]
                                                    the Commission written notice of its intent to file
                                                    the proposed rule change at least five business days                                                             BILLING CODE 8011–01–P
                                                    prior to the date of filing of the proposed rule          In the Matter of Inelco Corp., and
asabaliauskas on DSK5VPTVN1PROD with NOTICES




                                                    change, or such shorter time as designated by the         Teliphone Corp.; Order of Suspension
                                                    Commission. The Exchange has satisfied this               of Trading
                                                    requirement.
                                                       19 17 CFR 240.19b–4(f)(6).                             November 6, 2015.
                                                       20 17 CFR 240.19b–4(f)(6)(iii).
                                                                                                                It appears to the Securities and
                                                       21 For purposes only of waiving the 30-day
                                                                                                              Exchange Commission that there is a
                                                    operative delay, the Commission has also
                                                    considered the proposed rule’s impact on                  lack of current and accurate information
                                                    efficiency, competition, and capital formation. See
                                                    15 U.S.C. 78c(f).                                           22 17   CFR 200.30–3(a)(12).



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Document Created: 2018-03-01 11:25:42
Document Modified: 2018-03-01 11:25:42
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 69734 

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