81_FR_84878 81 FR 84652 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of an Amendment to Rule 8.11, Effective Date of Judgment and the Adoption of Rule 8.18, Release of Disciplinary Complaints, Decisions and Other Information

81 FR 84652 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of an Amendment to Rule 8.11, Effective Date of Judgment and the Adoption of Rule 8.18, Release of Disciplinary Complaints, Decisions and Other Information

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 226 (November 23, 2016)

Page Range84652-84655
FR Document2016-28188

Federal Register, Volume 81 Issue 226 (Wednesday, November 23, 2016)
[Federal Register Volume 81, Number 226 (Wednesday, November 23, 2016)]
[Notices]
[Pages 84652-84655]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-28188]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79344; File No. SR-BatsEDGX-2016-64]


Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of an Amendment to Rule 8.11, 
Effective Date of Judgment and the Adoption of Rule 8.18, Release of 
Disciplinary Complaints, Decisions and Other Information

November 17, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on November 3, 2016, Bats EDGX Exchange, Inc. (the ``Exchange'' or 
``EDGX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The Exchange 
has designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with 
the Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to add proposed Rule 8.18 to require 
the publication of the Exchange's disciplinary complaints and 
disciplinary decisions issued and to remove the part of Interpretation 
and Policy .01 to Rule 8.11 that currently governs the publication of 
disciplinary complaints and information related to disciplinary 
complaints.
    The text of the proposed rule change is available at the Exchange's 
Web site at www.batstrading.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
Proposed Rule Change
Reorganization of Exchange Rules Governing Release of Disciplinary 
Complaints, Decisions and Other Information Based on FINRA Rule 8313
    Interpretation and Policy .01 to Rule 8.11 currently provides, in 
part, that the Exchange shall cause details regarding all formal 
disciplinary actions where a final decision has been issued, except as 
provided in Rule 8.15(a), to be published on its Web site. 
Interpretation and Policy .01 also provides that the Exchange shall not 
issue any press release or other statement to the press concerning any 
formal or informal disciplinary matter unless the Chief Regulatory 
Officer recommends a press release to the Executive Committee or the 
Board of the Exchange and either body determines that such a press 
release is warranted. The Exchange proposes to remove parts of 
Interpretation and Policy .01 to Rule 8.11 described above and to add

[[Page 84653]]

proposed Rule 8.18 modeled after FINRA Rule 8313,\5\ as described 
below, to govern the publication of disciplinary information. The scope 
of proposed Rule 8.18 would be limited to publication of materials 
relating to the disciplinary process set forth in Chapter VIII because 
the Exchange seeks to provide prompt access to more information 
regarding its disciplinary actions to Members and associated persons. 
By providing more information regarding the Exchange's disciplinary 
process, including publishing disciplinary complaints at the time they 
are filed, Members and associated persons will be able to sooner 
identify conduct that the Exchange views as problematic and have will 
[sic] the ability to take corrective steps sooner than they can under 
the current rules that provide only for the publication of disciplinary 
decisions after they become final. In that regard, the Exchange has 
determined not to adopt FINRA Rule 8313 in all respects at this 
time.\6\
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    \5\ New York Stock Exchange, LLC (``NYSE'') similarly adopted 
rules modeled after FINRA Rule 8313. See Securities Exchange Act 
Release No. 78664 (August 24, 2016), 81 FR 59678, 59679 (August 30, 
2016) (SR-NYSE-2016-40).
    \6\ NYSE similarly declined to adopt all provisions of FINRA 
Rule 8313 insofar as the FINRA rule related to information beyond 
the formal disciplinary process. See id. at 59679.
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General Standards
    The Exchange proposes Rule 8.18(a) to be entitled ``General 
Standards.'' The text would set forth general standards for the release 
to the public of disciplinary complaints, decisions, or information.
    Proposed Rule 8.18(a)(1) would, in part, essentially replace the 
part of Interpretation and Policy .01 to Rule 8.11 that addresses the 
publication of disciplinary decisions and conform [sic] to FINRA Rule 
8313. The proposed rule would provide that the Exchange shall release 
to the public a copy of and, at the Exchange's discretion, information 
with respect to, any disciplinary decision issued by the Exchange, as 
defined in proposed Rule 8.18(e). Additionally, the proposed rule would 
provide that the Exchange would release to the public copies of 
disciplinary complaints as defined in proposed Rule 8.18(e). Also, the 
decision to issue other related information, including a press release, 
under proposed Rule 8.18(a)(1) would be in the discretion of the 
Exchange generally instead of requiring Executive Committee or Exchange 
Board approval as currently required in Interpretation and Policy .01 
to Rule 8.11. Proposed Rule 8.18(a)(1) would also provide that, in 
response to a request, the Exchange shall also release to the 
requesting party a copy of any identified disciplinary complaint or 
disciplinary decision issued by the Exchange, as defined in proposed 
Rule 8.18(e). These proposed amendments are modeled after FINRA Rule 
8313(a)(1) and would be substantially similar to the FINRA rule.
    The Exchange does not propose to incorporate subsections (2), (3), 
(4) and (6) of FINRA Rule 8313(a) because the Exchange proposes to 
limit the scope of proposed Rule 8.18 to the publication of materials 
relating to the disciplinary process set forth in Chapter VIII at this 
time.\7\ The Exchange, however, notes that although Exchange Rules do 
not provide for temporary cease and desist orders as provided for in 
FINRA Rule 9800, the Exchange's Client Suspension Rule--Rule 8.17--is 
similar in its procedure and purpose. The Exchange proposes to include 
a client suspension order issued pursuant to Rule 8.17 in the 
definition of ``disciplinary decision'' under proposed Rule 8.18(e)(2) 
consistent with FINRA's inclusion of its temporary cease and desist 
orders for publication because the Exchange views client suspension 
proceedings as disciplinary in nature. For the same reason, the 
Exchange proposes to include a notice of the initiation of a client 
suspension proceeding in the definition of ``disciplinary complaint'' 
under proposed Rule 8.18(e)(1).
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    \7\ Subsection (2) of FINRA Rule 8313(a) provides for the 
publication of statutory disqualification decisions and temporary 
cease and desist orders.
    Subsection (3) provides for the publication of any suspension, 
cancellation, expulsion, or bar for: Failing to keep information 
current; failing to pay dues; failing to comply with an arbitration 
award or related settlement or an order of restitution or settlement 
providing for restitution; failing to meet the eligibility or 
qualification standards or prerequisites for access to services; or 
experiencing financial or operational difficulties. Additionally, 
subsection (3) provides for the publication of any suspension, 
cancellation, expulsion, or bar imposed as the result of a summary 
proceeding for actions authorized by Section 15A(h)(3) of the Act.
    Subsection (4) addresses procedures for membership proceedings.
    The Exchange does not propose to adopt subsections (2), (3), and 
(4) because, as discussed above, the Exchange's proposal is intended 
to provide more information regarding the Exchange's disciplinary 
process to the public so that Members and associated persons will be 
able to identify conduct that the Exchange views as problematic and 
will have the ability to take corrective steps sooner. Subsections 
(2), (3), and (4) to the FINRA rule would not further that purpose 
because those subsections would require the publication of 
information generally relating to membership eligibility or failure 
to satisfy one's membership obligations rather than discipline. 
Subsection (2) additionally addresses temporary cease and desist 
proceedings, which the Exchange does not have, and Subsection (3) 
additionally addresses Section 15A(h)(3) of the Act, which applies 
only to registered securities associations.
    Subsection (6) permits discretionary release of a complaint, 
decision, order, notification, or notice issued under FINRA rules, 
where the release of such information is deemed by FINRA's Chief 
Executive Officer (or such other senior officer as the Chief 
Executive Officer may designate) to be in the public interest. The 
Exchange does not propose to adopt this open-ended subsection 
because [sic] Exchange intends for the proposed rule to instead be 
limited to disciplinary information for the reasons discussed above.
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    The Exchange does not propose to incorporate subsection (5) of 
FINRA Rule 8313(a) because the Exchange does not have at this time 
provisions analogous to FINRA Rule 6490 \8\ and the FINRA Rule 9700 
Series.\9\ Additionally, the Exchange does not propose to include its 
procedures for exemptive relief analogous to the FINRA Rule 9600 Series 
because the Exchange proposes to limit scope of proposed Rule 8.18 to 
the publication of disciplinary materials.
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    \8\ ``Processing of Company-Related Actions.''
    \9\ ``Procedure For Grievances Concerning the Automated 
Systems.''
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Release Specifications
    The Exchange proposes to include subsection (b) to proposed Rule 
8.18 entitled ``Release Specifications'' modeled after FINRA Rule 
8313(b). Proposed Rule 8.18(b)(1) provides that copies of, and 
information with respect to, any disciplinary complaint released to the 
public pursuant to paragraph (a) of the proposed rule shall indicate 
that a disciplinary complaint represents the initiation of a formal 
proceeding by the Exchange in which findings as to the allegations in 
the complaint have not been made and does not represent a decision as 
to any of the allegations contained in the complaint. The proposed rule 
would be the same as FINRA Rule 8313(b)(1) except that the proposed 
rule would substitute the term ``Exchange'' for ``FINRA.''
    Proposed Rule 8.18(b)(2) provides that copies of, and information 
with respect to, any disciplinary decision released to the public 
pursuant to paragraph (a) of the proposed rule prior to the expiration 
of the time period provided for an appeal or call for review as 
permitted under Exchange Rules or the Act, or while such an appeal or 
call for review is pending, shall indicate that the findings and 
sanctions imposed therein are subject to review and modification by the 
Exchange or the Commission. The proposed rule would be substantially 
similar to FINRA Rule 8313(b)(2). The proposed rule would substitute 
the term ``Exchange'' for ``FINRA'' and would not include a provision 
relating to the release specifications for an ``other decision, order, 
notification, or notice'' because, as noted above, the Exchange 
proposes

[[Page 84654]]

to limit the rule only to disciplinary complaints and disciplinary 
decisions.
Discretion To Redact Certain Information or Waive Publication
    The Exchange has determined that, subject to limited exceptions, 
disciplinary information should be released to the public in unredacted 
form. To provide the standard for such limited exceptions, the Exchange 
proposes subsection (c) of proposed Rule 8.18 entitled ``Discretion to 
Redact Certain Information or Waive Publication,'' modeled after FINRA 
Rule 8313(c).
    Proposed Rule 8.18(c)(1) would provide that the Exchange reserves 
the right to redact, on a case-by-case basis, information that contains 
confidential customer information, including customer identities, or 
information that raises significant identity theft, personal safety, or 
privacy concerns that are not outweighed by investor protection 
concerns. The proposed rule would be the same as FINRA Rule 8313(c)(1) 
except that the proposed rule would substitute the term ``Exchange'' 
for ``FINRA.''
    Similarly, proposed Rule 8.18(c)(2) provides that, notwithstanding 
paragraph (a) of the proposed rule, the Exchange may determine, in its 
discretion, to waive the requirement to release a copy of, or 
information with respect to, any disciplinary complaint or disciplinary 
decision under those extraordinary circumstances where the release of 
such information would violate fundamental notions of fairness or work 
an injustice. The proposed rule would be the same as FINRA Rule 
8313(c)(2) except that the proposed rule would substitute the term 
``Exchange'' for ``FINRA'' and would not include a provision relating 
to the waiver of the release of an ``other decision, order, 
notification, or notice'' because, as noted above, the Exchange 
proposes to limit the rule only to disciplinary complaints and 
disciplinary decisions.
Notice of Appeals of Exchange Decisions
    The Exchange proposes to include subsection (d) to proposed Rule 
8.18 entitled ``Notice of Appeals of Exchange Decisions to the SEC'' 
modeled on FINRA Rule 8313(d). Proposed Rule 8.18(d) provides that the 
Exchange must provide notice to the public when a disciplinary decision 
of the Exchange is appealed to the Commission and the notice shall 
state whether the effectiveness of the decision has been stayed pending 
the outcome of proceedings before the Commission. The proposed rule 
would be the same as FINRA Rule 8313(d) except that the proposed Rule 
would substitute the term ``Exchange'' for ``FINRA.''
Definitions
    Finally, the Exchange proposes subsection (e) of proposed Rule 8.18 
entitled ``Definitions.'' Proposed Rule 8.18(e) would set forth 
definitions of the terms ``disciplinary complaint'' and ``disciplinary 
decision'' as used in the rule, modeled after the definitions contained 
in FINRA Rule 8313(e).
    First, proposed Rule 8.18(e)(1) would define the term 
``disciplinary complaint'' to mean any statement of charges issued 
pursuant to Rule 8.4 or any notice served pursuant to Rule 8.17. This 
proposed rule is based on FINRA Rule 8313(e)(1) except that it replaces 
the term ``complaint pursuant to the Rule 9200 Series'' with 
``statement of charges pursuant to Rule 8.4'' and it includes a notice 
of the initiation of a client suspension proceeding issued pursuant to 
Rule 8.17 in the definition of ``disciplinary complaint.''
    Second, proposed Rule 8.18(e)(2) would define the term 
``disciplinary decision'' to mean any decision issued pursuant to the 
Chapter VIII, including, decisions issued by a Hearing Panel or the 
Appeals Committee and accepted offers of settlement. The Exchange 
additionally proposes to include suspension orders issued pursuant to 
Rule 8.17 in the definition of ``disciplinary decision.'' The Exchange 
does not propose to adopt the part of FINRA Rule 8313(e)(2) that 
discusses decisions issued pursuant to the FINRA Rule 9550 Series, 
FINRA Rule 9600 Series, FINRA Rule 9700 Series, or FINRA Rule 9800 
Series, or decisions, notifications, or notices issued pursuant to the 
FINRA Rule 9520 Series because, as explained above, the Exchange does 
not propose to adopt the provisions of the FINRA Rule providing for the 
publication of such information. Finally, proposed Rule 8.18(e)(2) 
would provide that minor rule violation plan letters issued pursuant to 
Rules 8.15 and 25.3 are not subject to the proposed rule.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
are applicable to a national securities exchange, and, in particular, 
with the requirements of Section 6(b) of the Act.\10\ In particular, 
the proposal is consistent with Section 6(b)(1) \11\ in that it enables 
the Exchange to be so organized as to have the capacity to be able to 
carry out the purposes of the Act and to comply, and to enforce 
compliance by its exchange members and persons associated with its 
exchange members, with the provisions of the Act, the rules and 
regulations thereunder, and the rules of the Exchange. In particular, 
the Exchange believes that the proposed addition of Rule 8.18 regarding 
release of disciplinary complaints, decisions and other information are 
[sic] consistent with Section 6(b)(1) of the Act because it would 
establish general standards for the release of disciplinary information 
to the public to provide greater access to information regarding the 
Exchange's disciplinary actions.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(1).
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    For the same reasons, the Exchange believes that proposed Rule 8.18 
furthers the objectives of Section 6(b)(5) of the Act \12\ because the 
proposed rule is designed to promote just and equitable principles of 
trade, to foster cooperation and coordination with persons engaged in 
facilitating transactions in securities, and to remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system. In particular, proposed Rule 8.18 furthers the 
objectives of Section 6(b)(5) of the Act by providing greater clarity, 
consistency, and transparency regarding the release of disciplinary 
complaints, decisions and other information to the public. By adopting 
the proposed Rule 8.18 modeled after FINRA Rule 8313, the Exchange 
would establish standards for the release of disciplinary information 
to the public in line with those in effect at FINRA that provide 
greater access to information regarding the Exchange's disciplinary 
actions and describe the scope of information subject to proposed Rule 
8.18. The Exchange believes that this proposed rule change promotes 
greater transparency to the Exchange's disciplinary process, and that 
the proposed rule change provides greater access to information 
regarding its disciplinary actions, and also provides valuable guidance 
and information to Members, associated persons, other regulators, and 
the investing public.
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    \12\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change is 
not intended to

[[Page 84655]]

address competitive issues, but rather it is designed to enhance the 
Exchange's rules governing the release of disciplinary complaints, 
decisions and other information to the public, thereby providing 
greater clarity and consistency and resulting in less burdensome and 
more efficient regulatory compliance and facilitating performance of 
regulatory functions.

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

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any written comments from members or other interested parties.

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

    Because the foregoing 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 from the date on which it was filed or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and paragraph 
(f)(6) of Rule 19b-4 thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii)\15\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. In its filing with the Commission, 
the Exchange requests that the Commission waive the 30-day operative 
delay. The Exchange states that FINRA performs services for it under a 
Regulatory Services Agreement (``RSA''), including the filing and 
prosecution of disciplinary complaints on the Exchange's behalf. FINRA 
also files and prosecutes disciplinary complaints on its own behalf, 
sometimes on cases involving identical or similar conduct to the cases 
it brings on the Exchange's behalf. Without the waiver, the Exchange is 
concerned that FINRA might publish a complaint during the 30-day 
operative delay, and that the Exchange would not be permitted to 
publish its own complaint, prepared by FINRA, regarding the same 
conduct. According to the Exchange, this would supply the public with 
an incomplete picture of the disciplinary proceedings, the full nature 
of which could not be disclosed until much later when a final 
disciplinary decision is issued. The Exchange, therefore, believes that 
waiver of the operative delay is consistent with the protection of 
investors and the public interest, as it will allow the Exchange to 
immediately publish any disciplinary complaints or decisions that are 
filed or issued after the proposal is filed. The Commission believes 
that waiver of the 30-day operative delay is consistent with the 
protection of investors and the public interest because it will allow 
EDGX to publish disciplinary complaints or decisions that have been 
filed or issued without delay. Therefore, the Commission designates the 
proposed rule change to be operative upon filing.\16\
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    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ For purposes only of waiving the 30-day operative delay, 
the Commission also has 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: (1) 
Necessary or appropriate in the public interest; (2) for the protection 
of investors; or (3) 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 rule-comments@sec.gov. Please include 
File Number SR-BatsEDGX-2016-64 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BatsEDGX-2016-64. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BatsEDGX-2016-64 and should 
be submitted on or before December 14, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Brent J. Fields,
Secretary.
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    \17\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2016-28188 Filed 11-22-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                  84652                    Federal Register / Vol. 81, No. 226 / Wednesday, November 23, 2016 / Notices

                                                  spread relied upon for tax-exempt                        rule change, as modified by Amendment                 I. Self-Regulatory Organization’s
                                                  municipal securities; and (5) extend the                 No. 1, concurrently. Accordingly, the                 Statement of the Terms of Substance of
                                                  implementation period of the proposed                    Commission finds good cause, pursuant                 the Proposed Rule Change
                                                  rule change from no later than one year                  to Section 19(b)(2) of the Exchange                      The Exchange filed a proposal to add
                                                  to no later than 18 months.                              Act,264 to approve the proposed rule                  proposed Rule 8.18 to require the
                                                     According to the MSRB, it has                         change, as modified by Amendment No.                  publication of the Exchange’s
                                                  proposed the revisions included in                       1, on an accelerated basis.                           disciplinary complaints and
                                                  Amendment No. 1 in response to
                                                                                                                                                                 disciplinary decisions issued and to
                                                  specific commenter suggestions and                       VII. Conclusion
                                                                                                                                                                 remove the part of Interpretation and
                                                  commenters’ general preference for the
                                                                                                              It is therefore ordered, pursuant to               Policy .01 to Rule 8.11 that currently
                                                  MSRB and FINRA to adopt harmonized
                                                                                                           Section 19(b)(2) of the Act,265 that the              governs the publication of disciplinary
                                                  mark-up disclosure rules and prevailing
                                                                                                           proposed rule change (SR–MSRB–2016–                   complaints and information related to
                                                  market price guidance. The Commission
                                                                                                           12), as modified by Amendment No. 1,                  disciplinary complaints.
                                                  notes that the addition of the terms ‘‘off-                                                                       The text of the proposed rule change
                                                  setting’’ and ‘‘an applicable index’’ to                 is approved on an accelerated basis.
                                                                                                                                                                 is available at the Exchange’s Web site
                                                  the proposed rule change is solely a                       For the Commission, pursuant to delegated           at www.batstrading.com, at the
                                                  clarification amendment for the                          authority.266                                         principal office of the Exchange, and at
                                                  avoidance of doubt and that the
                                                                                                           Brent J. Fields,                                      the Commission’s Public Reference
                                                  amendment does not alter the substance
                                                                                                           Secretary.                                            Room.
                                                  of the rule. Furthermore, extension of
                                                  the implementation period of the                         [FR Doc. 2016–28197 Filed 11–22–16; 8:45 am]          II. Self-Regulatory Organization’s
                                                  proposal from no later than one year to                  BILLING CODE 8011–01–P                                Statement of the Purpose of, and
                                                  no later than 18 months is appropriate                                                                         Statutory Basis for, the Proposed Rule
                                                  and responsive to the operational and                                                                          Change
                                                  implementation concerns raised by                        SECURITIES AND EXCHANGE
                                                                                                                                                                    In its filing with the Commission, the
                                                  commenters. The Commission also                          COMMISSION                                            Exchange included statements
                                                  notes that after consideration of the                                                                          concerning the purpose of and basis for
                                                  comments the MSRB received on its                        [Release No. 34–79344; File No. SR–                   the proposed rule change and discussed
                                                  proposal to require a security-specific                  BatsEDGX–2016–64]                                     any comments it received on the
                                                  hyperlink to EMMA and the execution                                                                            proposed rule change. The text of these
                                                  time of the transaction, the MSRB                        Self-Regulatory Organizations; Bats                   statements may be examined at the
                                                  amended its proposal in a manner that                    EDGX Exchange, Inc.; Notice of Filing                 places specified in Item IV below. The
                                                  is identical to the Amendment No. 1                      and Immediate Effectiveness of an                     Exchange has prepared summaries, set
                                                  that FINRA has filed.262 Based on the                    Amendment to Rule 8.11, Effective                     forth in Sections A, B, and C below, of
                                                  foregoing, the Commission finds that the                 Date of Judgment and the Adoption of                  the most significant parts of such
                                                  proposed rule change, as modified by                     Rule 8.18, Release of Disciplinary                    statements.
                                                  Amendment No. 1, is consistent with                      Complaints, Decisions and Other
                                                  Section 15B(b)(2)(C) of the Act, which                                                                         A. Self-Regulatory Organization’s
                                                                                                           Information
                                                  requires, among other things, that the                                                                         Statement of the Purpose of, and
                                                  MSRB’s rules be designed to prevent                      November 17, 2016.                                    Statutory Basis for, the Proposed Rule
                                                  fraudulent and manipulative acts and                                                                           Change
                                                  practices, to promote just and equitable                    Pursuant to Section 19(b)(1) of the
                                                  principles of trade, to foster cooperation               Securities Exchange Act of 1934 (the                  1. Purpose
                                                  and coordination with persons engaged                    ‘‘Act’’),1 and Rule 19b–4 thereunder,2                Proposed Rule Change
                                                  in regulating, clearing, settling,                       notice is hereby given that on November
                                                                                                           3, 2016, Bats EDGX Exchange, Inc. (the                Reorganization of Exchange Rules
                                                  processing information with respect to,                                                                        Governing Release of Disciplinary
                                                  and facilitating transactions in                         ‘‘Exchange’’ or ‘‘EDGX’’) filed with the
                                                                                                           Securities and Exchange Commission                    Complaints, Decisions and Other
                                                  municipal securities and municipal                                                                             Information Based on FINRA Rule 8313
                                                  financial products, to remove                            (‘‘Commission’’) the proposed rule
                                                  impediments to and perfect the                           change as described in Items I and II                    Interpretation and Policy .01 to Rule
                                                  mechanism of a free and open market in                   below, which Items have been prepared                 8.11 currently provides, in part, that the
                                                  municipal securities and municipal                       by the Exchange. The Exchange has                     Exchange shall cause details regarding
                                                  financial products, and, in general, to                  designated this proposal as a ‘‘non-                  all formal disciplinary actions where a
                                                  protect investors, municipal entities,                   controversial’’ proposed rule change                  final decision has been issued, except as
                                                  obligated persons, and the public                        pursuant to Section 19(b)(3)(A) of the                provided in Rule 8.15(a), to be
                                                  interest, and not be designed to impose                  Act 3 and Rule 19b–4(f)(6)(iii)                       published on its Web site. Interpretation
                                                  any burden on competition not                            thereunder,4 which renders it effective               and Policy .01 also provides that the
                                                  necessary or appropriate in furtherance                  upon filing with the Commission. The                  Exchange shall not issue any press
                                                  of the purposes of the Act.263                           Commission is publishing this notice to               release or other statement to the press
                                                     The Commission notes that it today                                                                          concerning any formal or informal
                                                                                                           solicit comments on the proposed rule
                                                  has approved the FINRA Proposal, as                                                                            disciplinary matter unless the Chief
                                                                                                           change from interested persons.
                                                                                                                                                                 Regulatory Officer recommends a press
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                                                  modified by FINRA Amendment No. 1,
                                                  and believes that in the interests of                      264 15
                                                                                                                                                                 release to the Executive Committee or
                                                                                                                    U.S.C. 78s(b)(2).
                                                  promoting efficiency in the                                265 15
                                                                                                                                                                 the Board of the Exchange and either
                                                                                                                    U.S.C. 78s(b)(2).
                                                  implementation of both proposals, it is                    266 17 CFR 200.30–3(a)(12).                         body determines that such a press
                                                  appropriate to approve the proposed                        1 15 U.S.C. 78s(b)(1).                              release is warranted. The Exchange
                                                                                                             2 17 CFR 240.19b–4.                                 proposes to remove parts of
                                                    262 See   FINRA Amendment No. 1, supra note 11.          3 15 U.S.C. 78s(b)(3)(A).                           Interpretation and Policy .01 to Rule
                                                    263 15   U.S.C. 78o–4(b)(2)(C).                          4 17 CFR 240.19b–4(f)(6)(iii).                      8.11 described above and to add


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                                                                          Federal Register / Vol. 81, No. 226 / Wednesday, November 23, 2016 / Notices                                                    84653

                                                  proposed Rule 8.18 modeled after                        request, the Exchange shall also release                 publication because the Exchange views
                                                  FINRA Rule 8313,5 as described below,                   to the requesting party a copy of any                    client suspension proceedings as
                                                  to govern the publication of disciplinary               identified disciplinary complaint or                     disciplinary in nature. For the same
                                                  information. The scope of proposed                      disciplinary decision issued by the                      reason, the Exchange proposes to
                                                  Rule 8.18 would be limited to                           Exchange, as defined in proposed Rule                    include a notice of the initiation of a
                                                  publication of materials relating to the                8.18(e). These proposed amendments                       client suspension proceeding in the
                                                  disciplinary process set forth in Chapter               are modeled after FINRA Rule                             definition of ‘‘disciplinary complaint’’
                                                  VIII because the Exchange seeks to                      8313(a)(1) and would be substantially                    under proposed Rule 8.18(e)(1).
                                                  provide prompt access to more                           similar to the FINRA rule.                                  The Exchange does not propose to
                                                  information regarding its disciplinary                    The Exchange does not propose to                       incorporate subsection (5) of FINRA
                                                  actions to Members and associated                       incorporate subsections (2), (3), (4) and                Rule 8313(a) because the Exchange does
                                                  persons. By providing more information                  (6) of FINRA Rule 8313(a) because the                    not have at this time provisions
                                                  regarding the Exchange’s disciplinary                   Exchange proposes to limit the scope of                  analogous to FINRA Rule 6490 8 and the
                                                  process, including publishing                           proposed Rule 8.18 to the publication of                 FINRA Rule 9700 Series.9 Additionally,
                                                  disciplinary complaints at the time they                materials relating to the disciplinary                   the Exchange does not propose to
                                                  are filed, Members and associated                       process set forth in Chapter VIII at this                include its procedures for exemptive
                                                  persons will be able to sooner identify                 time.7 The Exchange, however, notes                      relief analogous to the FINRA Rule 9600
                                                  conduct that the Exchange views as                      that although Exchange Rules do not                      Series because the Exchange proposes to
                                                  problematic and have will [sic] the                     provide for temporary cease and desist                   limit scope of proposed Rule 8.18 to the
                                                  ability to take corrective steps sooner                 orders as provided for in FINRA Rule                     publication of disciplinary materials.
                                                  than they can under the current rules                   9800, the Exchange’s Client Suspension
                                                  that provide only for the publication of                Rule—Rule 8.17—is similar in its                         Release Specifications
                                                  disciplinary decisions after they become                procedure and purpose. The Exchange
                                                                                                                                                                      The Exchange proposes to include
                                                  final. In that regard, the Exchange has                 proposes to include a client suspension
                                                                                                                                                                   subsection (b) to proposed Rule 8.18
                                                  determined not to adopt FINRA Rule                      order issued pursuant to Rule 8.17 in
                                                                                                          the definition of ‘‘disciplinary decision’’              entitled ‘‘Release Specifications’’
                                                  8313 in all respects at this time.6                                                                              modeled after FINRA Rule 8313(b).
                                                                                                          under proposed Rule 8.18(e)(2)
                                                  General Standards                                       consistent with FINRA’s inclusion of its                 Proposed Rule 8.18(b)(1) provides that
                                                                                                          temporary cease and desist orders for                    copies of, and information with respect
                                                    The Exchange proposes Rule 8.18(a)                                                                             to, any disciplinary complaint released
                                                  to be entitled ‘‘General Standards.’’ The                                                                        to the public pursuant to paragraph (a)
                                                                                                             7 Subsection (2) of FINRA Rule 8313(a) provides
                                                  text would set forth general standards                                                                           of the proposed rule shall indicate that
                                                                                                          for the publication of statutory disqualification
                                                  for the release to the public of                        decisions and temporary cease and desist orders.         a disciplinary complaint represents the
                                                  disciplinary complaints, decisions, or                     Subsection (3) provides for the publication of any    initiation of a formal proceeding by the
                                                  information.                                            suspension, cancellation, expulsion, or bar for:
                                                                                                                                                                   Exchange in which findings as to the
                                                    Proposed Rule 8.18(a)(1) would, in                    Failing to keep information current; failing to pay
                                                                                                          dues; failing to comply with an arbitration award        allegations in the complaint have not
                                                  part, essentially replace the part of
                                                                                                          or related settlement or an order of restitution or      been made and does not represent a
                                                  Interpretation and Policy .01 to Rule                   settlement providing for restitution; failing to meet    decision as to any of the allegations
                                                  8.11 that addresses the publication of                  the eligibility or qualification standards or
                                                                                                          prerequisites for access to services; or experiencing
                                                                                                                                                                   contained in the complaint. The
                                                  disciplinary decisions and conform [sic]
                                                                                                          financial or operational difficulties. Additionally,     proposed rule would be the same as
                                                  to FINRA Rule 8313. The proposed rule                   subsection (3) provides for the publication of any       FINRA Rule 8313(b)(1) except that the
                                                  would provide that the Exchange shall                   suspension, cancellation, expulsion, or bar imposed      proposed rule would substitute the term
                                                  release to the public a copy of and, at                 as the result of a summary proceeding for actions
                                                                                                          authorized by Section 15A(h)(3) of the Act.              ‘‘Exchange’’ for ‘‘FINRA.’’
                                                  the Exchange’s discretion, information
                                                  with respect to, any disciplinary                          Subsection (4) addresses procedures for                  Proposed Rule 8.18(b)(2) provides that
                                                                                                          membership proceedings.                                  copies of, and information with respect
                                                  decision issued by the Exchange, as                        The Exchange does not propose to adopt
                                                  defined in proposed Rule 8.18(e).                                                                                to, any disciplinary decision released to
                                                                                                          subsections (2), (3), and (4) because, as discussed
                                                  Additionally, the proposed rule would                   above, the Exchange’s proposal is intended to            the public pursuant to paragraph (a) of
                                                  provide that the Exchange would release                 provide more information regarding the Exchange’s        the proposed rule prior to the expiration
                                                  to the public copies of disciplinary
                                                                                                          disciplinary process to the public so that Members       of the time period provided for an
                                                                                                          and associated persons will be able to identify          appeal or call for review as permitted
                                                  complaints as defined in proposed Rule                  conduct that the Exchange views as problematic
                                                  8.18(e). Also, the decision to issue other              and will have the ability to take corrective steps       under Exchange Rules or the Act, or
                                                  related information, including a press                  sooner. Subsections (2), (3), and (4) to the FINRA       while such an appeal or call for review
                                                                                                          rule would not further that purpose because those        is pending, shall indicate that the
                                                  release, under proposed Rule 8.18(a)(1)                 subsections would require the publication of
                                                  would be in the discretion of the                       information generally relating to membership
                                                                                                                                                                   findings and sanctions imposed therein
                                                  Exchange generally instead of requiring                 eligibility or failure to satisfy one’s membership       are subject to review and modification
                                                  Executive Committee or Exchange Board                   obligations rather than discipline. Subsection (2)       by the Exchange or the Commission.
                                                                                                          additionally addresses temporary cease and desist        The proposed rule would be
                                                  approval as currently required in                       proceedings, which the Exchange does not have,
                                                  Interpretation and Policy .01 to Rule                   and Subsection (3) additionally addresses Section
                                                                                                                                                                   substantially similar to FINRA Rule
                                                  8.11. Proposed Rule 8.18(a)(1) would                    15A(h)(3) of the Act, which applies only to              8313(b)(2). The proposed rule would
                                                  also provide that, in response to a                     registered securities associations.                      substitute the term ‘‘Exchange’’ for
                                                                                                             Subsection (6) permits discretionary release of a     ‘‘FINRA’’ and would not include a
                                                                                                          complaint, decision, order, notification, or notice
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                                                    5 New York Stock Exchange, LLC (‘‘NYSE’’)
                                                                                                          issued under FINRA rules, where the release of
                                                                                                                                                                   provision relating to the release
                                                  similarly adopted rules modeled after FINRA Rule        such information is deemed by FINRA’s Chief              specifications for an ‘‘other decision,
                                                  8313. See Securities Exchange Act Release No.           Executive Officer (or such other senior officer as the   order, notification, or notice’’ because,
                                                  78664 (August 24, 2016), 81 FR 59678, 59679             Chief Executive Officer may designate) to be in the      as noted above, the Exchange proposes
                                                  (August 30, 2016) (SR–NYSE–2016–40).                    public interest. The Exchange does not propose to
                                                    6 NYSE similarly declined to adopt all provisions     adopt this open-ended subsection because [sic]
                                                                                                                                                                     8 ‘‘Processing
                                                                                                                                                                                 of Company-Related Actions.’’
                                                  of FINRA Rule 8313 insofar as the FINRA rule            Exchange intends for the proposed rule to instead
                                                  related to information beyond the formal                be limited to disciplinary information for the             9 ‘‘Procedure
                                                                                                                                                                                For Grievances Concerning the
                                                  disciplinary process. See id. at 59679.                 reasons discussed above.                                 Automated Systems.’’



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                                                  84654                   Federal Register / Vol. 81, No. 226 / Wednesday, November 23, 2016 / Notices

                                                  to limit the rule only to disciplinary                  FINRA Rule 8313(d) except that the                      it enables the Exchange to be so
                                                  complaints and disciplinary decisions.                  proposed Rule would substitute the                      organized as to have the capacity to be
                                                                                                          term ‘‘Exchange’’ for ‘‘FINRA.’’                        able to carry out the purposes of the Act
                                                  Discretion To Redact Certain
                                                                                                                                                                  and to comply, and to enforce
                                                  Information or Waive Publication                        Definitions
                                                                                                                                                                  compliance by its exchange members
                                                     The Exchange has determined that,                       Finally, the Exchange proposes                       and persons associated with its
                                                  subject to limited exceptions,                          subsection (e) of proposed Rule 8.18                    exchange members, with the provisions
                                                  disciplinary information should be                      entitled ‘‘Definitions.’’ Proposed Rule                 of the Act, the rules and regulations
                                                  released to the public in unredacted                    8.18(e) would set forth definitions of the              thereunder, and the rules of the
                                                  form. To provide the standard for such                  terms ‘‘disciplinary complaint’’ and                    Exchange. In particular, the Exchange
                                                  limited exceptions, the Exchange                        ‘‘disciplinary decision’’ as used in the                believes that the proposed addition of
                                                  proposes subsection (c) of proposed                     rule, modeled after the definitions                     Rule 8.18 regarding release of
                                                  Rule 8.18 entitled ‘‘Discretion to Redact               contained in FINRA Rule 8313(e).                        disciplinary complaints, decisions and
                                                  Certain Information or Waive                               First, proposed Rule 8.18(e)(1) would                other information are [sic] consistent
                                                  Publication,’’ modeled after FINRA Rule                 define the term ‘‘disciplinary                          with Section 6(b)(1) of the Act because
                                                  8313(c).                                                complaint’’ to mean any statement of                    it would establish general standards for
                                                     Proposed Rule 8.18(c)(1) would                       charges issued pursuant to Rule 8.4 or                  the release of disciplinary information
                                                  provide that the Exchange reserves the                  any notice served pursuant to Rule 8.17.                to the public to provide greater access
                                                  right to redact, on a case-by-case basis,               This proposed rule is based on FINRA                    to information regarding the Exchange’s
                                                  information that contains confidential                  Rule 8313(e)(1) except that it replaces                 disciplinary actions.
                                                  customer information, including                         the term ‘‘complaint pursuant to the                       For the same reasons, the Exchange
                                                  customer identities, or information that                Rule 9200 Series’’ with ‘‘statement of                  believes that proposed Rule 8.18
                                                  raises significant identity theft, personal             charges pursuant to Rule 8.4’’ and it                   furthers the objectives of Section 6(b)(5)
                                                  safety, or privacy concerns that are not                includes a notice of the initiation of a                of the Act 12 because the proposed rule
                                                  outweighed by investor protection                       client suspension proceeding issued                     is designed to promote just and
                                                  concerns. The proposed rule would be                    pursuant to Rule 8.17 in the definition                 equitable principles of trade, to foster
                                                  the same as FINRA Rule 8313(c)(1)                       of ‘‘disciplinary complaint.’’                          cooperation and coordination with
                                                  except that the proposed rule would                        Second, proposed Rule 8.18(e)(2)                     persons engaged in facilitating
                                                  substitute the term ‘‘Exchange’’ for                    would define the term ‘‘disciplinary                    transactions in securities, and to remove
                                                  ‘‘FINRA.’’                                              decision’’ to mean any decision issued                  impediments to and perfect the
                                                     Similarly, proposed Rule 8.18(c)(2)                  pursuant to the Chapter VIII, including,                mechanism of a free and open market
                                                  provides that, notwithstanding                          decisions issued by a Hearing Panel or                  and a national market system. In
                                                  paragraph (a) of the proposed rule, the                 the Appeals Committee and accepted                      particular, proposed Rule 8.18 furthers
                                                  Exchange may determine, in its                          offers of settlement. The Exchange                      the objectives of Section 6(b)(5) of the
                                                  discretion, to waive the requirement to                 additionally proposes to include                        Act by providing greater clarity,
                                                  release a copy of, or information with                  suspension orders issued pursuant to                    consistency, and transparency regarding
                                                  respect to, any disciplinary complaint or               Rule 8.17 in the definition of                          the release of disciplinary complaints,
                                                  disciplinary decision under those                       ‘‘disciplinary decision.’’ The Exchange                 decisions and other information to the
                                                  extraordinary circumstances where the                   does not propose to adopt the part of                   public. By adopting the proposed Rule
                                                  release of such information would                       FINRA Rule 8313(e)(2) that discusses                    8.18 modeled after FINRA Rule 8313,
                                                  violate fundamental notions of fairness                 decisions issued pursuant to the FINRA                  the Exchange would establish standards
                                                  or work an injustice. The proposed rule                 Rule 9550 Series, FINRA Rule 9600                       for the release of disciplinary
                                                  would be the same as FINRA Rule                         Series, FINRA Rule 9700 Series, or                      information to the public in line with
                                                  8313(c)(2) except that the proposed rule                FINRA Rule 9800 Series, or decisions,                   those in effect at FINRA that provide
                                                  would substitute the term ‘‘Exchange’’                  notifications, or notices issued pursuant               greater access to information regarding
                                                  for ‘‘FINRA’’ and would not include a                   to the FINRA Rule 9520 Series because,                  the Exchange’s disciplinary actions and
                                                  provision relating to the waiver of the                 as explained above, the Exchange does                   describe the scope of information
                                                  release of an ‘‘other decision, order,                  not propose to adopt the provisions of                  subject to proposed Rule 8.18. The
                                                  notification, or notice’’ because, as                   the FINRA Rule providing for the                        Exchange believes that this proposed
                                                  noted above, the Exchange proposes to                   publication of such information.                        rule change promotes greater
                                                  limit the rule only to disciplinary                     Finally, proposed Rule 8.18(e)(2) would                 transparency to the Exchange’s
                                                  complaints and disciplinary decisions.                  provide that minor rule violation plan                  disciplinary process, and that the
                                                  Notice of Appeals of Exchange                           letters issued pursuant to Rules 8.15 and               proposed rule change provides greater
                                                  Decisions                                               25.3 are not subject to the proposed                    access to information regarding its
                                                                                                          rule.                                                   disciplinary actions, and also provides
                                                     The Exchange proposes to include                                                                             valuable guidance and information to
                                                  subsection (d) to proposed Rule 8.18                    2. Statutory Basis                                      Members, associated persons, other
                                                  entitled ‘‘Notice of Appeals of Exchange                   The Exchange believes that its                       regulators, and the investing public.
                                                  Decisions to the SEC’’ modeled on                       proposal is consistent with the
                                                  FINRA Rule 8313(d). Proposed Rule                       requirements of the Act and the rules                   B. Self-Regulatory Organization’s
                                                  8.18(d) provides that the Exchange must                 and regulations thereunder that are                     Statement on Burden on Competition
                                                  provide notice to the public when a                                                                               The Exchange does not believe that
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                                                                                                          applicable to a national securities
                                                  disciplinary decision of the Exchange is                exchange, and, in particular, with the                  the proposed rule change will impose
                                                  appealed to the Commission and the                      requirements of Section 6(b) of the                     any burden on competition that is not
                                                  notice shall state whether the                          Act.10 In particular, the proposal is                   necessary or appropriate in furtherance
                                                  effectiveness of the decision has been                  consistent with Section 6(b)(1) 11 in that              of the purposes of the Act. The
                                                  stayed pending the outcome of                                                                                   proposed rule change is not intended to
                                                  proceedings before the Commission.                        10 15   U.S.C. 78f(b).
                                                  The proposed rule would be the same as                    11 15   U.S.C. 78f(b)(1).                               12 15   U.S.C. 78f(b)(5).



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                                                                           Federal Register / Vol. 81, No. 226 / Wednesday, November 23, 2016 / Notices                                                84655

                                                  address competitive issues, but rather it               supply the public with an incomplete                  comments more efficiently, please use
                                                  is designed to enhance the Exchange’s                   picture of the disciplinary proceedings,              only one method. The Commission will
                                                  rules governing the release of                          the full nature of which could not be                 post all comments on the Commission’s
                                                  disciplinary complaints, decisions and                  disclosed until much later when a final               Internet Web site (http://www.sec.gov/
                                                  other information to the public, thereby                disciplinary decision is issued. The                  rules/sro.shtml). Copies of the
                                                  providing greater clarity and                           Exchange, therefore, believes that                    submission, all subsequent
                                                  consistency and resulting in less                       waiver of the operative delay is                      amendments, all written statements
                                                  burdensome and more efficient                           consistent with the protection of                     with respect to the proposed rule
                                                  regulatory compliance and facilitating                  investors and the public interest, as it              change that are filed with the
                                                  performance of regulatory functions.                    will allow the Exchange to immediately                Commission, and all written
                                                                                                          publish any disciplinary complaints or                communications relating to the
                                                  C. Self-Regulatory Organization’s
                                                                                                          decisions that are filed or issued after              proposed rule change between the
                                                  Statement on Comments on the
                                                                                                          the proposal is filed. The Commission                 Commission and any person, other than
                                                  Proposed Rule Change Received From
                                                                                                          believes that waiver of the 30-day                    those that may be withheld from the
                                                  Members, Participants or Others                         operative delay is consistent with the                public in accordance with the
                                                    The Exchange has not solicited, and                   protection of investors and the public                provisions of 5 U.S.C. 552, will be
                                                  does not intend to solicit, comments on                 interest because it will allow EDGX to                available for Web site viewing and
                                                  this proposed rule change. The                          publish disciplinary complaints or                    printing in the Commission’s Public
                                                  Exchange has not received any written                   decisions that have been filed or issued              Reference Room, 100 F Street NE.,
                                                  comments from members or other                          without delay. Therefore, the                         Washington, DC 20549 on official
                                                  interested parties.                                     Commission designates the proposed                    business days between the hours of
                                                  III. Date of Effectiveness of the                       rule change to be operative upon                      10:00 a.m. and 3:00 p.m. Copies of such
                                                  Proposed Rule Change and Timing for                     filing.16                                             filing also will be available for
                                                                                                             At any time within 60 days of the                  inspection and copying at the principal
                                                  Commission Action
                                                                                                          filing of the proposed rule change, the               office of the Exchange. All comments
                                                     Because the foregoing proposed rule                  Commission summarily may                              received will be posted without change;
                                                  change does not: (i) Significantly affect               temporarily suspend such rule change if               the Commission does not edit personal
                                                  the protection of investors or the public               it appears to the Commission that such                identifying information from
                                                  interest; (ii) impose any significant                   action is: (1) Necessary or appropriate in            submissions. You should submit only
                                                  burden on competition; and (iii) become                 the public interest; (2) for the protection           information that you wish to make
                                                  operative for 30 days from the date on                  of investors; or (3) otherwise in                     available publicly. All submissions
                                                  which it was filed or such shorter time                 furtherance of the purposes of the Act.               should refer to File Number SR–
                                                  as the Commission may designate, it has                 If the Commission takes such action, the              BatsEDGX–2016–64 and should be
                                                  become effective pursuant to Section                    Commission shall institute proceedings                submitted on or before December 14,
                                                  19(b)(3)(A) of the Act 13 and paragraph                 to determine whether the proposed rule                2016.
                                                  (f)(6) of Rule 19b–4 thereunder.14                      should be approved or disapproved.                      For the Commission, by the Division of
                                                     A proposed rule change filed under                                                                         Trading and Markets, pursuant to delegated
                                                  Rule 19b–4(f)(6) normally does not                      IV. Solicitation of Comments
                                                                                                                                                                authority.17
                                                  become operative prior to 30 days after                   Interested persons are invited to                   Brent J. Fields,
                                                  the date of filing. However, Rule 19b–                  submit written data, views and
                                                                                                                                                                Secretary.
                                                  4(f)(6)(iii)15 permits the Commission to                arguments concerning the foregoing,
                                                                                                                                                                [FR Doc. 2016–28188 Filed 11–22–16; 8:45 am]
                                                  designate a shorter time if such action                 including whether the proposed rule
                                                                                                                                                                BILLING CODE 8011–01–P
                                                  is consistent with the protection of                    change is consistent with the Act.
                                                  investors and the public interest. In its               Comments may be submitted by any of
                                                  filing with the Commission, the                         the following methods:                                SECURITIES AND EXCHANGE
                                                  Exchange requests that the Commission                   Electronic Comments                                   COMMISSION
                                                  waive the 30-day operative delay. The
                                                  Exchange states that FINRA performs                       • Use the Commission’s Internet                     [Release No. 34–79341; File No. SR–
                                                  services for it under a Regulatory                      comment form (http://www.sec.gov/                     BatsBYX–2016–32]
                                                  Services Agreement (‘‘RSA’’), including                 rules/sro.shtml); or
                                                  the filing and prosecution of                             • Send an email to rule-comments@                   Self-Regulatory Organizations; Bats
                                                                                                          sec.gov. Please include File Number SR–               BYX Exchange, Inc.; Notice of Filing
                                                  disciplinary complaints on the
                                                                                                          BatsEDGX–2016–64 on the subject line.                 and Immediate Effectiveness of an
                                                  Exchange’s behalf. FINRA also files and
                                                                                                                                                                Amendment to Rule 8.11, Effective
                                                  prosecutes disciplinary complaints on                   Paper Comments                                        Date of Judgement and the Adoption
                                                  its own behalf, sometimes on cases
                                                                                                             • Send paper comments in triplicate                of Rule 8.18, Release of Disciplinary
                                                  involving identical or similar conduct to                                                                     Complaints, Decisions and Other
                                                                                                          to Secretary, Securities and Exchange
                                                  the cases it brings on the Exchange’s                                                                         Information
                                                                                                          Commission, 100 F Street NE.,
                                                  behalf. Without the waiver, the
                                                                                                          Washington, DC 20549–1090.
                                                  Exchange is concerned that FINRA                                                                              November 17, 2016
                                                  might publish a complaint during the                    All submissions should refer to File                     Pursuant to Section 19(b)(1) of the
                                                  30-day operative delay, and that the                    Number SR–BatsEDGX–2016–64. This                      Securities Exchange Act of 1934 (the
                                                                                                          file number should be included on the
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                                                  Exchange would not be permitted to                                                                            ‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                  publish its own complaint, prepared by                  subject line if email is used. To help the            notice is hereby given that on November
                                                  FINRA, regarding the same conduct.                      Commission process and review your                    3, 2016, Bats BYX Exchange, Inc. (the
                                                  According to the Exchange, this would                      16 For purposes only of waiving the 30-day
                                                                                                                                                                ‘‘Exchange’’ or ‘‘BYX’’) filed with the
                                                                                                          operative delay, the Commission also has
                                                    13 15 U.S.C. 78s(b)(3)(A).                                                                                    17 17 CFR 200.30–3(a)(12).
                                                                                                          considered the proposed rule’s impact on
                                                    14 17 CFR 240.19b–4(f)(6).                                                                                    1 15 U.S.C. 78s(b)(1).
                                                                                                          efficiency, competition, and capital formation. See
                                                    15 17 CFR 240.19b–4(f)(6)(iii).                       15 U.S.C. 78c(f).                                       2 17 CFR 240.19b–4.




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Document Created: 2016-11-23 05:29:44
Document Modified: 2016-11-23 05:29:44
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 Citation81 FR 84652 

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