80_FR_70260 80 FR 70042 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Mandatory Participation in Business Continuity and Disaster Recovery Testing Under Regulation SCI

80 FR 70042 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Mandatory Participation in Business Continuity and Disaster Recovery Testing Under Regulation SCI

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 218 (November 12, 2015)

Page Range70042-70044
FR Document2015-28681

Federal Register, Volume 80 Issue 218 (Thursday, November 12, 2015) 
[Federal Register Volume 80, Number 218 (Thursday, November 12, 2015)]
[Notices]
[Pages 70042-70044]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-28681]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76360; File No. SR-FINRA-2015-046]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to Mandatory Participation in Business 
Continuity and Disaster Recovery Testing Under Regulation SCI

November 5, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 30, 2015, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') filed with the Securities and Exchange Commission (``SEC'' 
or ``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by FINRA. FINRA has designated 
the proposed rule change as constituting a ``non-controversial'' rule 
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which 
renders the proposal effective upon receipt of this filing by the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to adopt FINRA Rule 4380 related to mandatory 
participation in business continuity and disaster recovery (``BC/DR'') 
testing under Regulation Systems Compliance and Integrity (``Regulation 
SCI'').
    The text of the proposed rule change is available on FINRA's Web 
site at http://www.finra.org, at the principal office of FINRA and at 
the Commission's Public Reference Room.

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

    In its filing with the Commission, FINRA 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. FINRA 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
    Regulation SCI was adopted by the Commission on November 19, 2014, 
with the objective of strengthening the technology infrastructure of 
the U.S. securities markets.\4\ The regulation applies to ``SCI 
entities,'' which includes FINRA, the national securities exchanges and 
equity alternative trading systems (``ATSs'') that meet specified 
volume thresholds.\5\ One topic of several Regulation SCI rule 
requirements is BC/DR testing.
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    \4\ See Securities Exchange Act Release No. 73639 (November 19, 
2014), 79 FR 72252, 72254 (December 5, 2014) (``SCI Adopting 
Release'').
    \5\ Rule 1000 of SEC Regulation SCI.
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    Rule 1004 of SEC Regulation SCI requires FINRA, as an SCI entity, 
to do the following with respect to its BC/DR plan: (1) Establish 
standards to designate the members that FINRA 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 its BC/DR 
plan; (2) designate members pursuant to its established standards and 
require them to participate in scheduled functional and performance 
testing of the operation of FINRA's BC/DR plan, in the manner and 
frequency specified by FINRA, provided the frequency is no less than 
once every 12 months; and (3) coordinate the testing of FINRA's BC/DR 
plan on an industry- or sector-wide basis with other SCI entities.
    Consistent with Regulation SCI, FINRA proposes to adopt Rule 4380 
to establish authority to designate members for mandatory participation 
in its BC/DR testing. As noted in proposed Rule 4380(a), FINRA will 
designate members according to established criteria that are designed 
to ensure participation by those members that FINRA 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 its BC/DR plan. As further noted in proposed Rule 4380(a), FINRA's 
criteria will consider volume of activity on a FINRA market system over 
a specified period of time.\6\ FINRA will communicate to members its 
criteria for designation under this Rule, and any

[[Page 70043]]

changes to such criteria, on a prospective basis \7\ by Regulatory 
Notice.
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    \6\ Volume-based criteria may contemplate quoting, trading, or 
reportable order events, depending on the type of activity conducted 
on a FINRA system.
    \7\ For example, should FINRA change its volume-based criteria, 
or the specified period of time over which such volume is measured 
(i.e., the look-back period), it would not apply any of those 
changes retroactively. Instead, it would only apply such changes, 
after notice, to the next testing cycle with a full look-back 
period.
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    Proposed Rule 4380(b) would reiterate several important points from 
Regulation SCI with respect to BC/DR plan testing. Specifically, the 
rule would note that Regulation SCI requires BC/DR testing to include 
functional and performance testing, rather than simple connectivity 
testing, and that such testing must occur at least once per 12 
months.\8\ Proposed Rule 4380(b) would further state that FINRA will 
notify members that are designated to participate in the BC/DR test at 
least 90 days prior to the scheduled testing date.\9\
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    \8\ See SCI Adopting Release, 79 FR at 72351-52.
    \9\ FINRA believes, based on preliminary discussions among SCI 
entities that the yearly testing contemplated by this proposal would 
likely take the place of the current industry test facilitated by 
the Securities Industry and Financial Markets Association 
(``SIFMA'') each October. This would be consistent with Commission 
guidance--Regulation SCI recognized that the existing SIFMA test 
could provide a foundation for the regulation's mandatory testing 
requirements. See SCI Adopting Release, 79 FR at 72349.
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    Finally, proposed Rule 4380(c) would state the obligations of 
member firms that are designated for mandatory participation in BC/DR 
testing. As noted in the rule, designated members would be required to 
fulfill, within the time frames established by FINRA, certain testing 
requirements that FINRA determines are necessary and appropriate. These 
requirements could include, for example, bringing up their systems on 
the designated testing day and processing test scripts to simulate 
trading activity. Designated members may also be required to satisfy 
related reporting requirements, for example, reporting the member's 
testing results, so that FINRA may evaluate the efficacy of the test 
and, correspondingly, its BC/DR plan.\10\
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    \10\ FINRA anticipates that compliance with this proposal would 
be enforced consistent with existing FINRA rules and practice, and 
that a designated firm's failure to participate in mandatory testing 
could result in possible sanctions, including fines, under FINRA 
Rule 8310.
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    FINRA recognizes that there may be additional market participants 
that wish to participate on a voluntary basis in FINRA's annual BC/DR 
test, beyond those that are designated under Rule 4380. For example, 
certain system participants may wish to test their backup capabilities 
even if they do not exceed the system's threshold cutoff. Additionally, 
third party service providers, like service bureaus that transmit 
information to FINRA systems on behalf of FINRA members, may also wish 
to ensure their ability to function in FINRA's backup environment, even 
though the service providers are not themselves FINRA members subject 
to Rule 4380. FINRA will encourage any such market participant to 
consider voluntary participation in FINRA's BC/DR test, consistent with 
Commission guidance.\11\
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    \11\ See SCI Adopting Release, 79 FR at 72351 n.1170 
(encouraging SCI entities to permit voluntary participation).
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    FINRA has filed the proposed rule change for immediate 
effectiveness. FINRA will announce its criteria for designated members 
for mandatory test participation in a Regulatory Notice by November 3, 
2015, the general compliance date for Regulation SCI. FINRA anticipates 
that the first BC/DR test that will include designated members' 
mandatory participation will occur in October, 2016.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\12\ which requires that 
FINRA rules must be 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.
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    \12\ 15 U.S.C. 78o-3(b)(6).
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    FINRA believes that the proposal, which would authorize FINRA to 
compel participation by certain designated members in FINRA's BC/DR 
testing, is consistent with these provisions of the Act for the reasons 
articulated by the Commission when it adopted Regulation SCI. As the 
Commission stated, ``unless there is effective participation by certain 
of its members or participants in the testing of [BC/DR] plans, the 
objective of ensuring resilient and available markets in general, and 
the maintenance of fair and orderly markets in particular, would not be 
achieved.'' \13\
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    \13\ SCI Adopting Release, 79 FR at 72351 (internal citations 
omitted).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The proposal is intended to 
carry out the requirements imposed by Regulation SCI with respect to 
FINRA's BC/DR testing. When the Commission adopted the mandatory backup 
testing requirements of Regulation SCI, the Commission recognized that 
the requirements could have some cost impact on designated firms. It 
concluded, however, that such costs were justified by the need for SCI 
entities to prepare for the possibility of wide-scale disruptions in 
the securities markets.\14\
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    \14\ See SCI Adopting Release, 79 FR at 72348-49. The Commission 
explained that the designation of larger firms may result in minimal 
or relatively modest administrative costs because such firms are 
likely to already have established connectivity to backup sites and 
to monitor and maintain such connectivity. See id., 79 FR at 72341.
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    FINRA recognizes that the criteria it announces in its Regulatory 
Notice may impose costs, particularly on those members designated 
pursuant to the established criteria. However, the Commission noted its 
belief that the costs of this requirement could be mitigated by the 
fact that designated members are likely to be larger firms with greater 
resources.\15\ Consistent with the Commission's guidance, FINRA expects 
that its criteria will mitigate costs by designating larger firms that 
have greater resources, and likely have experience with the current 
SIFMA-facilitated industry test, and therefore are more likely to have 
existing connections to FINRA's backup systems. Moreover, other firms 
who may anticipate some competitive advantage to participating in the 
SCI testing are not precluded from doing so by this rule, further 
mitigating any competitive effects of the rule.
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    \15\ See SCI Adopting Release, 79 FR at 72351.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \16\ and Rule 19b-4(f)(6) thereunder.\17\ 
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 prior to 
30 days from the date on which

[[Page 70044]]

it was filed, or such shorter time as the Commission may designate, if 
consistent with the protection of investors and the public interest, 
the proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act and Rule 19b-4(f)(6)(iii) thereunder. A proposed 
rule change filed under Rule 19b-4(f)(6) \18\ normally does not become 
operative prior to 30 days after the date of the filing. However, 
pursuant to Rule 19b-4(f)(6)(iii),\19\ the Commission may designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest.
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    \16\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ 17 CFR 240.19b-4(f)(6).
    \19\ 17 CFR 240.19b-4(f)(6)(iii).
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    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 BC/DR 
participants, prior to the November 3, 2015 compliance date. 
Accordingly, the Commission designates the proposed rule change to be 
operative upon filing.\20\
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    \20\ 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).
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    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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic 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 Number SR-FINRA-2015-046 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 20549-1090.

All submissions should refer to File Number SR-FINRA-2015-046. 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 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of FINRA. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-FINRA-2015-046 and should be 
submitted on or before December 3, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-28681 Filed 11-10-15; 8:45 am]
 BILLING CODE 8011-01-P

70042 Federal Register / Vol. 80, No. 218 / Thursday, November 12, 2015 / Notices change is consistent with the Act. SECURITIES AND EXCHANGE and C below, of the most significant Comments may be submitted by any of COMMISSION aspects of such statements. the following methods: A. Self-Regulatory Organization's [Release No. 34–76360; File No. SR–FINRA– Statement of the Purpose of, and Electronic Comments 2015–046] Statutory Basis for, the Proposed Rule • Use the Commission’s Internet Change comment form (http://www.sec.gov/ Self-Regulatory Organizations; rules/sro.shtml); or Financial Industry Regulatory 1. Purpose • Send an email to rule-comments@ Authority, Inc.; Notice of Filing and Regulation SCI was adopted by the sec.gov. Please include File No. SR– Immediate Effectiveness of a Proposed Commission on November 19, 2014, NYSEARCA–2015–105 on the subject Rule Change Relating to Mandatory with the objective of strengthening the line. Participation in Business Continuity technology infrastructure of the U.S. and Disaster Recovery Testing Under Paper Comments securities markets.4 The regulation Regulation SCI applies to ‘‘SCI entities,’’ which • Send paper comments in triplicate November 5, 2015. includes FINRA, the national securities to Secretary, Securities and Exchange Pursuant to Section 19(b)(1) of the exchanges and equity alternative trading Commission, 100 F Street NE., Securities Exchange Act of 1934 systems (‘‘ATSs’’) that meet specified Washington, DC 20549–1090. (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 volume thresholds.5 One topic of All submissions should refer to File No. notice is hereby given that on October several Regulation SCI rule SR–NYSEARCA–2015–105. This file 30, 2015, Financial Industry Regulatory requirements is BC/DR testing. number should be included on the Authority, Inc. (‘‘FINRA’’) filed with the Rule 1004 of SEC Regulation SCI subject line if email is used. To help the Securities and Exchange Commission requires FINRA, as an SCI entity, to do Commission process and review your (‘‘SEC’’ or ‘‘Commission’’) the proposed the following with respect to its BC/DR comments more efficiently, please use rule change as described in Items I and plan: (1) Establish standards to only one method. The Commission will II below, which Items have been designate the members that FINRA post all comments on the Commission’s prepared by FINRA. FINRA has reasonably determines are, taken as a Internet Web site (http://www.sec.gov/ designated the proposed rule change as whole, the minimum necessary for the rules/sro.shtml). Copies of the constituting a ‘‘non-controversial’’ rule maintenance of fair and orderly markets submission, all subsequent change under paragraph (f)(6) of Rule in the event of the activation of its BC/ amendments, all written statements 19b–4 under the Act,3 which renders DR plan; (2) designate members with respect to the proposed rule the proposal effective upon receipt of pursuant to its established standards change that are filed with the this filing by the Commission. The and require them to participate in Commission, and all written Commission is publishing this notice to scheduled functional and performance communications relating to the solicit comments on the proposed rule testing of the operation of FINRA’s BC/ proposed rule change between the change from interested persons. DR plan, in the manner and frequency Commission and any person, other than specified by FINRA, provided the I. Self-Regulatory Organization’s frequency is no less than once every 12 those that may be withheld from the Statement of the Terms of Substance of public in accordance with the months; and (3) coordinate the testing of the Proposed Rule Change FINRA’s BC/DR plan on an industry- or provisions of 5 U.S.C. 552, will be available for Web site viewing and FINRA is proposing to adopt FINRA sector-wide basis with other SCI printing in the Commission’s Public Rule 4380 related to mandatory entities. Reference Room, 100 F Street NE., participation in business continuity and Consistent with Regulation SCI, Washington, DC 20549 on official disaster recovery (‘‘BC/DR’’) testing FINRA proposes to adopt Rule 4380 to business days between the hours of under Regulation Systems Compliance establish authority to designate 10:00 a.m. and 3:00 p.m. Copies of such and Integrity (‘‘Regulation SCI’’). members for mandatory participation in filing also will be available for The text of the proposed rule change its BC/DR testing. As noted in proposed inspection and copying at the principal is available on FINRA’s Web site at Rule 4380(a), FINRA will designate office of the Exchange. All comments http://www.finra.org, at the principal members according to established received will be posted without change; office of FINRA and at the criteria that are designed to ensure the Commission does not edit personal Commission’s Public Reference Room. participation by those members that identifying information from FINRA reasonably determines are, taken II. Self-Regulatory Organization’s as a whole, the minimum necessary for submissions. You should submit only Statement of the Purpose of, and information that you wish to make the maintenance of fair and orderly Statutory Basis for, the Proposed Rule markets in the event of the activation of available publicly. All submissions Change should refer to File No. SR– its BC/DR plan. As further noted in NYSEARCA–2015–105, and should be In its filing with the Commission, proposed Rule 4380(a), FINRA’s criteria submitted on or before December 3, FINRA included statements concerning will consider volume of activity on a 2015. the purpose of and basis for the FINRA market system over a specified proposed rule change and discussed any period of time.6 FINRA will For the Commission, by the Division of comments it received on the proposed communicate to members its criteria for Trading and Markets, pursuant to delegated mstockstill on DSK4VPTVN1PROD with NOTICES rule change. The text of these statements designation under this Rule, and any authority.20 may be examined at the places specified Robert W. Errett, in Item IV below. FINRA has prepared 4 See Securities Exchange Act Release No. 73639 Deputy Secretary. summaries, set forth in sections A, B, (November 19, 2014), 79 FR 72252, 72254 [FR Doc. 2015–28689 Filed 11–10–15; 8:45 am] (December 5, 2014) (‘‘SCI Adopting Release’’). 5 Rule 1000 of SEC Regulation SCI. BILLING CODE 8011–01–P 1 15 U.S.C. 78s(b)(1). 6 Volume-based criteria may contemplate quoting, 2 17 CFR 240.19b–4. trading, or reportable order events, depending on 20 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4(f)(6). the type of activity conducted on a FINRA system. VerDate Sep<11>2014 18:15 Nov 10, 2015 Jkt 238001 PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 E:\FR\FM\12NON1.SGM 12NON1

Federal Register / Vol. 80, No. 218 / Thursday, November 12, 2015 / Notices 70043 changes to such criteria, on a providers, like service bureaus that is intended to carry out the prospective basis 7 by Regulatory Notice. transmit information to FINRA systems requirements imposed by Regulation Proposed Rule 4380(b) would reiterate on behalf of FINRA members, may also SCI with respect to FINRA’s BC/DR several important points from wish to ensure their ability to function testing. When the Commission adopted Regulation SCI with respect to BC/DR in FINRA’s backup environment, even the mandatory backup testing plan testing. Specifically, the rule though the service providers are not requirements of Regulation SCI, the would note that Regulation SCI requires themselves FINRA members subject to Commission recognized that the BC/DR testing to include functional and Rule 4380. FINRA will encourage any requirements could have some cost performance testing, rather than simple such market participant to consider impact on designated firms. It connectivity testing, and that such voluntary participation in FINRA’s BC/ concluded, however, that such costs testing must occur at least once per 12 DR test, consistent with Commission were justified by the need for SCI months.8 Proposed Rule 4380(b) would guidance.11 entities to prepare for the possibility of further state that FINRA will notify FINRA has filed the proposed rule wide-scale disruptions in the securities members that are designated to change for immediate effectiveness. markets.14 participate in the BC/DR test at least 90 FINRA will announce its criteria for FINRA recognizes that the criteria it days prior to the scheduled testing designated members for mandatory test announces in its Regulatory Notice may date.9 participation in a Regulatory Notice by impose costs, particularly on those Finally, proposed Rule 4380(c) would November 3, 2015, the general members designated pursuant to the state the obligations of member firms compliance date for Regulation SCI. established criteria. However, the that are designated for mandatory FINRA anticipates that the first BC/DR Commission noted its belief that the participation in BC/DR testing. As noted test that will include designated costs of this requirement could be in the rule, designated members would members’ mandatory participation will mitigated by the fact that designated be required to fulfill, within the time occur in October, 2016. members are likely to be larger firms frames established by FINRA, certain 2. Statutory Basis with greater resources.15 Consistent testing requirements that FINRA with the Commission’s guidance, determines are necessary and FINRA believes that the proposed rule FINRA expects that its criteria will appropriate. These requirements could change is consistent with the provisions mitigate costs by designating larger include, for example, bringing up their of Section 15A(b)(6) of the Act,12 which firms that have greater resources, and systems on the designated testing day requires that FINRA rules must be likely have experience with the current and processing test scripts to simulate designed to, among other things, foster SIFMA-facilitated industry test, and trading activity. Designated members cooperation and coordination with therefore are more likely to have may also be required to satisfy related persons engaged in regulating, clearing, settling, processing information with existing connections to FINRA’s backup reporting requirements, for example, systems. Moreover, other firms who may reporting the member’s testing results, respect to, and facilitating transactions in securities, to remove impediments to anticipate some competitive advantage so that FINRA may evaluate the efficacy to participating in the SCI testing are not of the test and, correspondingly, its BC/ and perfect the mechanism of a free and open market and a national market precluded from doing so by this rule, DR plan.10 further mitigating any competitive FINRA recognizes that there may be system, and, in general, to protect investors and the public interest. effects of the rule. additional market participants that wish to participate on a voluntary basis in FINRA believes that the proposal, C. Self-Regulatory Organization's which would authorize FINRA to Statement on Comments on the FINRA’s annual BC/DR test, beyond compel participation by certain Proposed Rule Change Received From those that are designated under Rule designated members in FINRA’s BC/DR Members, Participants, or Others 4380. For example, certain system testing, is consistent with these participants may wish to test their Written comments were neither provisions of the Act for the reasons backup capabilities even if they do not solicited nor received. articulated by the Commission when it exceed the system’s threshold cutoff. adopted Regulation SCI. As the III. Date of Effectiveness of the Additionally, third party service Commission stated, ‘‘unless there is Proposed Rule Change and Timing for 7 For example, should FINRA change its volume- effective participation by certain of its Commission Action based criteria, or the specified period of time over members or participants in the testing of [BC/DR] plans, the objective of ensuring The Exchange has filed the proposed which such volume is measured (i.e., the look-back period), it would not apply any of those changes resilient and available markets in rule change pursuant to Section retroactively. Instead, it would only apply such general, and the maintenance of fair and 19(b)(3)(A)(iii) of the Act 16 and Rule changes, after notice, to the next testing cycle with orderly markets in particular, would not 19b–4(f)(6) thereunder.17 Because the a full look-back period. proposed rule change does not: (i) 8 See SCI Adopting Release, 79 FR at 72351–52. be achieved.’’ 13 9 FINRA believes, based on preliminary Significantly affect the protection of discussions among SCI entities that the yearly B. Self-Regulatory Organization's investors or the public interest; (ii) testing contemplated by this proposal would likely Statement on Burden on Competition impose any significant burden on take the place of the current industry test facilitated FINRA does not believe that the competition; and (iii) become operative by the Securities Industry and Financial Markets prior to 30 days from the date on which Association (‘‘SIFMA’’) each October. This would proposed rule change will result in any be consistent with Commission guidance— burden on competition that is not 14 See SCI Adopting Release, 79 FR at 72348–49. Regulation SCI recognized that the existing SIFMA necessary or appropriate in furtherance mstockstill on DSK4VPTVN1PROD with NOTICES test could provide a foundation for the regulation’s The Commission explained that the designation of mandatory testing requirements. See SCI Adopting of the purposes of the Act. The proposal larger firms may result in minimal or relatively Release, 79 FR at 72349. modest administrative costs because such firms are 10 FINRA anticipates that compliance with this 11 See SCI Adopting Release, 79 FR at 72351 likely to already have established connectivity to proposal would be enforced consistent with n.1170 (encouraging SCI entities to permit backup sites and to monitor and maintain such existing FINRA rules and practice, and that a voluntary participation). connectivity. See id., 79 FR at 72341. 12 15 U.S.C. 78o–3(b)(6). 15 See SCI Adopting Release, 79 FR at 72351. designated firm’s failure to participate in mandatory 16 15 U.S.C. 78s(b)(3)(A)(iii). testing could result in possible sanctions, including 13 SCI Adopting Release, 79 FR at 72351 (internal fines, under FINRA Rule 8310. citations omitted). 17 17 CFR 240.19b–4(f)(6). VerDate Sep<11>2014 18:15 Nov 10, 2015 Jkt 238001 PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 E:\FR\FM\12NON1.SGM 12NON1

70044 Federal Register / Vol. 80, No. 218 / Thursday, November 12, 2015 / Notices it was filed, or such shorter time as the Paper Comments SECURITIES AND EXCHANGE Commission may designate, if COMMISSION consistent with the protection of • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities [Release No. 34–76362; File No. SR– investors and the public interest, the NYSEArca–2015–73] proposed rule change has become and Exchange Commission, 100 F Street effective pursuant to Section 19(b)(3)(A) NE., Washington, DC 20549–1090. Self-Regulatory Organizations; NYSE of the Act and Rule 19b–4(f)(6)(iii) All submissions should refer to File Arca, Inc.; Notice of Designation of a thereunder. A proposed rule change Longer Period for Commission Action Number SR–FINRA–2015–046. This file filed under Rule 19b–4(f)(6) 18 normally on a Proposed Rule Change, as number should be included on the does not become operative prior to 30 Modified by Amendments No. 1 and 3, days after the date of the filing. subject line if email is used. To help the Commission process and review your Relating to Listing and Trading of However, pursuant to Rule 19b– Shares of the Guggenheim Total 4(f)(6)(iii),19 the Commission may comments more efficiently, please use Return Bond ETF Under NYSE Arca designate a shorter time if such action only one method. The Commission will Equities Rule 8.600 is consistent with the protection of post all comments on the Commission’s investors and the public interest. Internet Web site (http://www.sec.gov/ November 5, 2015. The Exchange has asked the rules/sro.shtml). Copies of the On September 1, 2015, NYSE Arca, Commission to waive the 30-day submission, all subsequent Inc. (‘‘Exchange’’) filed with the operative delay so that the proposal may amendments, all written statements Securities and Exchange Commission become operative immediately upon with respect to the proposed rule (‘‘Commission’’), pursuant to Section filing. The Commission believes that change that are filed with the 19(b)(1) of the Securities Exchange Act waiving the 30-day operative delay is Commission, and all written of 1934 (‘‘Act’’) 1 and Rule 19b–4 consistent with the protection of communications relating to the thereunder,2 a proposed rule change to investors and the public interest as it proposed rule change between the list and trade shares (‘‘Shares’’) of the will allow the Exchange to incorporate Commission and any person, other than Guggenheim Total Return Bond ETF changes required under Regulation SCI, (‘‘Fund’’). On September 15, 2015, the those that may be withheld from the such as establishing standards for Exchange submitted Amendment No. 1 public in accordance with the designating BC/DR participants, prior to to the proposal. The proposed rule provisions of 5 U.S.C. 552, will be change, as modified by Amendment No. the November 3, 2015 compliance date. available for Web site viewing and Accordingly, the Commission 1, was published for comment in the printing in the Commission’s Public Federal Register on September 22, designates the proposed rule change to Reference Room, 100 F Street NE., 2015.3 On September 22, 2015, the be operative upon filing.20 At any time within 60 days of the Washington, DC 20549, on official Exchange submitted Amendment No. 3 filing of the proposed rule change, the business days between the hours of 10 to the proposed rule change.4 The Commission summarily may a.m. and 3 p.m. Copies of such filing Commission received no comment temporarily suspend such rule change if also will be available for inspection and letters on the proposed rule change, as it appears to the Commission that such copying at the principal office of modified by Amendment No. 1. action is necessary or appropriate in the FINRA. All comments received will be Section 19(b)(2) of the Act 5 provides public interest, for the protection of posted without change; the Commission that, within 45 days of the publication investors, or otherwise in furtherance of does not edit personal identifying of notice of the filing of a proposed rule the purposes of the Act. If the information from submissions. You change, or within such longer period up Commission takes such action, the should submit only information that to 90 days as the Commission may Commission shall institute proceedings you wish to make available publicly. All designate if it finds such longer period to determine whether the proposed rule submissions should refer to File to be appropriate and publishes its should be approved or disapproved. Number SR–FINRA–2015–046 and reasons for so finding or as to which the should be submitted on or before self-regulatory organization consents, IV. Solicitation of Comments the Commission shall either approve the December 3, 2015. Interested persons are invited to proposed rule change, disapprove the submit written data, views and For the Commission, by the Division of proposed rule change, or institute arguments concerning the foregoing, Trading and Markets, pursuant to delegated proceedings to determine whether the including whether the proposed rule authority.21 proposed rule change should be change is consistent with the Act. Robert W. Errett, disapproved. The Commission is Comments may be submitted by any of Deputy Secretary. extending this 45-day time period. the following methods: [FR Doc. 2015–28681 Filed 11–10–15; 8:45 am] The Commission finds that it is appropriate to designate a longer period Electronic Comments BILLING CODE 8011–01–P within which to take action on the • Use the Commission’s Internet comment form (http://www.sec.gov/ 1 15 U.S.C. 78s(b)(1). rules/sro.shtml); or 2 17 CFR 240.19b–4. • Send an email to rule-comments@ 3 See Securities Exchange Act Release No. 75930 sec.gov. Please include File Number SR– (September 16, 2015), 80 FR 57251. 4 On September 21, 2015, the Exchange submitted mstockstill on DSK4VPTVN1PROD with NOTICES FINRA–2015–046 on the subject line. and withdrew Amendment No. 2 to the proposal. In Amendment No. 3, the Exchange clarified certain 18 17 CFR 240.19b–4(f)(6). representations regarding the availability of 19 17 CFR 240.19b–4(f)(6)(iii). quotation, last sale, and pricing information for the 20 For purposes only of waiving the 30-day Shares and the instruments in which the Fund may operative delay, the Commission has also invest. Amendment No. 3 is available at http:// considered the proposed rule’s impact on www.sec.gov/comments/sr-nysearca-2015-73/ efficiency, competition, and capital formation. See nysearca201573-2.pdf. 15 U.S.C. 78c(f). 21 17 CFR 200.30–3(a)(12). 5 15 U.S.C. 78s(b)(2). VerDate Sep<11>2014 18:15 Nov 10, 2015 Jkt 238001 PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 E:\FR\FM\12NON1.SGM 12NON1


Document Created: 2015-12-14 14:53:40
Document Modified: 2015-12-14 14:53:40
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 70042 
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