82_FR_17781 82 FR 17712 - Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Order Approving and Declaring Effective a Proposed Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and BOX Options Exchange LLC

82 FR 17712 - Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Order Approving and Declaring Effective a Proposed Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and BOX Options Exchange LLC

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 69 (April 12, 2017)

Page Range17712-17714
FR Document2017-07311

Federal Register, Volume 82 Issue 69 (Wednesday, April 12, 2017)
[Federal Register Volume 82, Number 69 (Wednesday, April 12, 2017)]
[Notices]
[Pages 17712-17714]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-07311]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80388; File No. 4-709]


Program for Allocation of Regulatory Responsibilities Pursuant to 
Rule 17d-2; Order Approving and Declaring Effective a Proposed Plan for 
the Allocation of Regulatory Responsibilities Between the Financial 
Industry Regulatory Authority, Inc. and BOX Options Exchange LLC

April 6, 2017.
    On March 3, 2017, BOX Options Exchange LLC (``BOX'') and the 
Financial Industry Regulatory Authority, Inc. (``FINRA'') 
(collectively, the ``Parties'') filed with the Securities and Exchange 
Commission (``Commission'' or ``SEC'') a plan for the allocation of 
regulatory responsibilities, dated March 2, 2017 (``17d-2 Plan'' or the 
``Plan''). The Plan was published for comment on March 21, 2017.\1\ The 
Commission received no comments on the Plan. This order approves and 
declares effective the Plan.
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    \1\ See Securities Exchange Act Release No. 80240 (March 14, 
2017), 82 FR 14560.
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I. Introduction

    Section 19(g)(1) of the Securities Exchange Act of 1934 
(``Act''),\2\ among other things, requires every self-regulatory 
organization (``SRO'') registered as either a national securities 
exchange or national securities association to examine for, and enforce 
compliance by, its members and persons associated with its members with 
the Act, the rules and regulations thereunder, and the SRO's own rules, 
unless the SRO is relieved of this responsibility pursuant to Section 
17(d) or Section 19(g)(2) of the Act.\3\ Without this relief, the 
statutory obligation of each individual SRO could result in a pattern 
of multiple examinations of broker-dealers that maintain memberships in 
more than one SRO (``Common Members''). Such regulatory duplication 
would add unnecessary expenses for common members and their SROs.
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    \2\ 15 U.S.C. 78s(g)(1).
    \3\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively.
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    Section 17(d)(1) of the Act \4\ was intended, in part, to eliminate 
unnecessary multiple examinations and regulatory duplication.\5\ With 
respect to a common member, Section 17(d)(1) authorizes the Commission, 
by rule or order, to relieve an SRO of the responsibility to receive 
regulatory reports, to examine for and enforce compliance with 
applicable statutes, rules, and regulations, or to perform other 
specified regulatory functions.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78q(d)(1).
    \5\ See Securities Act Amendments of 1975, Report of the Senate 
Committee on Banking, Housing, and Urban Affairs to Accompany S. 
249, S. Rep. No. 94-75, 94th Cong., 1st Session 32 (1975).
---------------------------------------------------------------------------

    To implement Section 17(d)(1), the Commission adopted two rules: 
Rule 17d-1 and Rule 17d-2 under the Act.\6\ Rule 17d-1 authorizes the 
Commission to name a single SRO as the designated examining authority 
(``DEA'') to examine common members for compliance with the financial 
responsibility requirements imposed by the Act, or by Commission or SRO 
rules.\7\ When an SRO has been named as a common member's DEA, all 
other SROs to which the common member belongs are relieved of the 
responsibility to examine the firm for compliance with the applicable 
financial responsibility rules. On its face, Rule 17d-1 deals only with 
an SRO's obligations to enforce member compliance with financial 
responsibility requirements. Rule 17d-1 does not relieve an SRO from 
its

[[Page 17713]]

obligation to examine a common member for compliance with its own rules 
and provisions of the federal securities laws governing matters other 
than financial responsibility, including sales practices and trading 
activities and practices.
---------------------------------------------------------------------------

    \6\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
    \7\ See Securities Exchange Act Release No. 12352 (April 20, 
1976), 41 FR 18808 (May 7, 1976).
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    To address regulatory duplication in these and other areas, the 
Commission adopted Rule 17d-2 under the Act.\8\ Rule 17d-2 permits SROs 
to propose joint plans for the allocation of regulatory 
responsibilities with respect to their common members. Under paragraph 
(c) of Rule 17d-2, the Commission may declare such a plan effective if, 
after providing for appropriate notice and comment, it determines that 
the plan is necessary or appropriate in the public interest and for the 
protection of investors; to foster cooperation and coordination among 
the SROs; to remove impediments to, and foster the development of, a 
national market system and a national clearance and settlement system; 
and is in conformity with the factors set forth in Section 17(d) of the 
Act. Commission approval of a plan filed pursuant to Rule 17d-2 
relieves an SRO of those regulatory responsibilities allocated by the 
plan to another SRO.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 12935 (October 28, 
1976), 41 FR 49091 (November 8, 1976).
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II. Proposed Plan

    The proposed 17d-2 Plan is intended to reduce regulatory 
duplication for firms that are common members of both BOX and FINRA.\9\ 
Pursuant to the proposed 17d-2 Plan, FINRA would assume certain 
examination and enforcement responsibilities for common members with 
respect to certain applicable laws, rules, and regulations.
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    \9\ The proposed 17d-2 Plan refers to these common members as 
``Dual Members.'' See Paragraph 1(c) of the proposed 17d-2 Plan.
---------------------------------------------------------------------------

    The text of the Plan delineates the proposed regulatory 
responsibilities with respect to the Parties. Included in the proposed 
Plan is an exhibit (the ``BOX Options Exchange LLC Rules Certification 
for 17d-2 Agreement with FINRA,'' referred to herein as the 
``Certification'') that lists every BOX rule for which FINRA would bear 
responsibility under the Plan for overseeing and enforcing with respect 
to BOX members that are also members of FINRA and the associated 
persons therewith (``Dual Members'').
    Specifically, under the 17d-2 Plan, FINRA would assume examination 
and enforcement responsibility relating to compliance by Dual Members 
with the rules of BOX that are substantially similar to the applicable 
rules of FINRA \10\ delineated in the Certification (``Common Rules''). 
In the event that a Dual Member is the subject of an investigation 
relating to a transaction on BOX, the plan acknowledges that BOX may, 
in its discretion, exercise concurrent jurisdiction and responsibility 
for such matter.\11\
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    \10\ See paragraph 1(b) of the proposed 17d-2 Plan (defining 
Common Rules). See also paragraph 1(f) of the proposed 17d-2 Plan 
(defining Regulatory Responsibilities). Paragraph 2 of the Plan 
provides that annually, or more frequently as required by changes in 
either BOX rules or FINRA rules, the parties shall review and 
update, if necessary, the list of Common Rules. Further, paragraph 3 
of the Plan provides that BOX shall furnish FINRA with a list of 
Dual Members, and shall update the list no less frequently than once 
each calendar quarter.
    \11\ See paragraph 6 of the proposed 17d-2 Plan.
---------------------------------------------------------------------------

    Under the Plan, BOX would retain full responsibility for 
surveillance, examination, investigation, and enforcement with respect 
to trading activities or practices involving BOX's own marketplace, 
including, without limitation, registration pursuant to its applicable 
rules of associated persons (i.e., registration rules that are not 
Common Rules); its duties as a DEA pursuant to Rule 17d-1 under the 
Act; and any BOX rules that are not Common Rules.\12\
---------------------------------------------------------------------------

    \12\ See paragraph 2 of the proposed 17d-2 Plan.
---------------------------------------------------------------------------

III. Discussion

    The Commission finds that the proposed Plan is consistent with the 
factors set forth in Section 17(d) of the Act \13\ and Rule 17d-2(c) 
thereunder \14\ in that the proposed Plan is necessary or appropriate 
in the public interest and for the protection of investors, fosters 
cooperation and coordination among SROs, and removes impediments to and 
fosters the development of the national market system. In particular, 
the Commission believes that the proposed Plan should reduce 
unnecessary regulatory duplication by allocating to FINRA certain 
examination and enforcement responsibilities for Dual Members that 
would otherwise be performed by BOX and FINRA. Accordingly, the 
proposed Plan promotes efficiency by reducing costs to Dual Members. 
Furthermore, because BOX and FINRA will coordinate their regulatory 
functions in accordance with the Plan, the Plan should promote investor 
protection.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78q(d).
    \14\ 17 CFR 240.17d-2(c).
---------------------------------------------------------------------------

    The Commission notes that, under the Plan, BOX and FINRA have 
allocated regulatory responsibility for those BOX rules, set forth in 
the Certification, that are substantially similar to the applicable 
FINRA rules in that examination for compliance with such provisions and 
rules would not require FINRA to develop one or more new examination 
standards, modules, procedures, or criteria in order to analyze the 
application of the rule, or a Dual Member's activity, conduct, or 
output in relation to such rule. The Common Rules covered by the Plan 
are specifically listed in the Certification, as may be amended by the 
Parties from time to time.
    According to the Plan, BOX will review the Certification, at least 
annually, or more frequently if required by changes in either the rules 
of BOX or FINRA, and, if necessary, submit to FINRA an updated list of 
Common Rules to add BOX rules not included on the then-current list of 
Common Rules that are substantially similar to FINRA rules; delete BOX 
rules included in the then-current list of Common Rules that are no 
longer substantially similar to FINRA rules; and confirm that the 
remaining rules on the list of Common Rules continue to be BOX rules 
that are substantially similar to FINRA rules.\15\ FINRA will then 
confirm in writing whether the rules listed in any updated list are 
Common Rules as defined in the Plan. Under the Plan, BOX will also 
provide FINRA with a current list of Dual Members and shall update the 
list no less frequently than once each quarter.\16\ The Commission 
believes that these provisions are designed to provide for continuing 
communication between the Parties to ensure the continued accuracy of 
the scope of the proposed allocation of regulatory responsibility.
---------------------------------------------------------------------------

    \15\ See paragraph 2 of the Plan.
    \16\ See paragraph 3 of the Plan.
---------------------------------------------------------------------------

    The Commission is hereby declaring effective a Plan that, among 
other things, allocates regulatory responsibility to FINRA for the 
oversight and enforcement of all BOX rules that are substantially 
similar to the rules of FINRA for Dual Members of BOX and FINRA. 
Therefore, modifications to the Certification need not be filed with 
the Commission as an amendment to the Plan, provided that the Parties 
are only adding to, deleting from, or confirming changes to BOX rules 
in the Certification in conformance with the definition of Common Rules 
provided in the Plan. However, should the Parties decide to add a BOX 
rule to the Certification that is not substantially similar to a FINRA 
rule; delete a BOX rule from the Certification that is substantially 
similar to a FINRA rule; or leave on the Certification a BOX rule that 
is no longer substantially similar to a FINRA rule, then such a change 
would constitute an amendment to the Plan,

[[Page 17714]]

which must be filed with the Commission pursuant to Rule 17d-2 under 
the Act.\17\
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    \17\ The Commission also notes that the addition to or deletion 
from the Certification of any federal securities laws, rules, and 
regulations for which FINRA would bear responsibility under the Plan 
for examining, and enforcing compliance by, Dual Members, also would 
constitute an amendment to the Plan.
---------------------------------------------------------------------------

IV. Conclusion

    This Order gives effect to the Plan filed with the Commission in 
File No. 4-709. The Parties shall notify all members affected by the 
Plan of their rights and obligations under the Plan.
    It is therefore ordered, pursuant to Section 17(d) of the Act, that 
the Plan in File No. 4-709, between FINRA and BOX, filed pursuant to 
Rule 17d-2 under the Act, is approved and declared effective.
    It is further ordered, that BOX is relieved of those 
responsibilities allocated to FINRA under the Plan in File No. 4-709.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(34).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-07311 Filed 4-11-17; 8:45 am]
 BILLING CODE 8011-01-P



                                                  17712                        Federal Register / Vol. 82, No. 69 / Wednesday, April 12, 2017 / Notices

                                                  31, 2017.12 The Exchange now proposes                   change that are filed with the                        I. Introduction
                                                  to delay the implementation date to no                  Commission, and all written                              Section 19(g)(1) of the Securities
                                                  later than May 31, 2017. Waiver of the                  communications relating to the                        Exchange Act of 1934 (‘‘Act’’),2 among
                                                  30-day operative delay would allow the                  proposed rule change between the                      other things, requires every self-
                                                  Exchange to immediately extend the                      Commission and any person, other than                 regulatory organization (‘‘SRO’’)
                                                  implementation date and provide                         those that may be withheld from the                   registered as either a national securities
                                                  additional time for systems testing. The                public in accordance with the                         exchange or national securities
                                                  Commission believes that waiving the                    provisions of 5 U.S.C. 552, will be                   association to examine for, and enforce
                                                  30-day operative delay is consistent                    available for Web site viewing and                    compliance by, its members and persons
                                                  with the protection of investors and the                printing in the Commission’s Public                   associated with its members with the
                                                  public interest. Therefore, the                         Reference Room, 100 F Street NE.,                     Act, the rules and regulations
                                                  Commission hereby waives the 30-day                     Washington, DC 20549, on official                     thereunder, and the SRO’s own rules,
                                                  operative delay and designates the                      business days between the hours of                    unless the SRO is relieved of this
                                                  proposal operative upon filing.13                       10:00 a.m. and 3:00 p.m. Copies of the                responsibility pursuant to Section 17(d)
                                                     At any time within 60 days of the                    filing also will be available for                     or Section 19(g)(2) of the Act.3 Without
                                                  filing of the proposed rule change, the                 inspection and copying at the principal               this relief, the statutory obligation of
                                                  Commission summarily may                                office of the Exchange. All comments                  each individual SRO could result in a
                                                  temporarily suspend such rule change if                 received will be posted without change;               pattern of multiple examinations of
                                                  it appears to the Commission that such                  the Commission does not edit personal                 broker-dealers that maintain
                                                  action is necessary or appropriate in the               identifying information from                          memberships in more than one SRO
                                                  public interest, for the protection of                  submissions. You should submit only                   (‘‘Common Members’’). Such regulatory
                                                  investors, or otherwise in furtherance of               information that you wish to make                     duplication would add unnecessary
                                                  the purposes of the Act. If the                         available publicly. All submissions                   expenses for common members and
                                                  Commission takes such action, the                       should refer to File Number SR–BX–                    their SROs.
                                                  Commission shall institute proceedings                  2017–018 and should be submitted on                      Section 17(d)(1) of the Act 4 was
                                                  to determine whether the proposed rule                  or before May 3, 2017.                                intended, in part, to eliminate
                                                  change should be approved or                                                                                  unnecessary multiple examinations and
                                                  disapproved.                                              For the Commission, by the Division of
                                                                                                          Trading and Markets, pursuant to delegated            regulatory duplication.5 With respect to
                                                  IV. Solicitation of Comments                            authority.14                                          a common member, Section 17(d)(1)
                                                    Interested persons are invited to                     Eduardo A. Aleman,                                    authorizes the Commission, by rule or
                                                  submit written data, views, and                         Assistant Secretary.                                  order, to relieve an SRO of the
                                                  arguments concerning the foregoing,                     [FR Doc. 2017–07309 Filed 4–11–17; 8:45 am]
                                                                                                                                                                responsibility to receive regulatory
                                                  including whether the proposed rule                                                                           reports, to examine for and enforce
                                                                                                          BILLING CODE 8011–01–P
                                                  change is consistent with the Act.                                                                            compliance with applicable statutes,
                                                  Comments may be submitted by any of                                                                           rules, and regulations, or to perform
                                                  the following methods:                                  SECURITIES AND EXCHANGE                               other specified regulatory functions.
                                                                                                          COMMISSION                                               To implement Section 17(d)(1), the
                                                  Electronic Comments                                                                                           Commission adopted two rules: Rule
                                                    • Use the Commission’s Internet                                                                             17d–1 and Rule 17d–2 under the Act.6
                                                                                                          [Release No. 34–80388; File No. 4–709]                Rule 17d–1 authorizes the Commission
                                                  comment form (http://www.sec.gov/
                                                  rules/sro.shtml); or                                    Program for Allocation of Regulatory                  to name a single SRO as the designated
                                                    • Send an email to rule-comments@                     Responsibilities Pursuant to Rule 17d–                examining authority (‘‘DEA’’) to
                                                  sec.gov. Please include File Number SR–                 2; Order Approving and Declaring                      examine common members for
                                                  BX–2017–018 on the subject line.                        Effective a Proposed Plan for the                     compliance with the financial
                                                                                                          Allocation of Regulatory                              responsibility requirements imposed by
                                                  Paper Comments                                                                                                the Act, or by Commission or SRO
                                                                                                          Responsibilities Between the Financial
                                                    • Send paper comments in triplicate                                                                         rules.7 When an SRO has been named as
                                                                                                          Industry Regulatory Authority, Inc. and
                                                  to Brent J. Fields, Secretary, Securities                                                                     a common member’s DEA, all other
                                                                                                          BOX Options Exchange LLC
                                                  and Exchange Commission, 100 F Street                                                                         SROs to which the common member
                                                  NE., Washington, DC 20549–1090.                         April 6, 2017.                                        belongs are relieved of the responsibility
                                                  All submissions should refer to File                                                                          to examine the firm for compliance with
                                                                                                             On March 3, 2017, BOX Options
                                                  Number SR–BX–2017–018. This file                                                                              the applicable financial responsibility
                                                                                                          Exchange LLC (‘‘BOX’’) and the
                                                  number should be included on the                                                                              rules. On its face, Rule 17d–1 deals only
                                                                                                          Financial Industry Regulatory
                                                  subject line if email is used. To help the                                                                    with an SRO’s obligations to enforce
                                                                                                          Authority, Inc. (‘‘FINRA’’) (collectively,
                                                  Commission process and review your                                                                            member compliance with financial
                                                                                                          the ‘‘Parties’’) filed with the Securities
                                                  comments more efficiently, please use                                                                         responsibility requirements. Rule 17d–1
                                                                                                          and Exchange Commission
                                                  only one method. The Commission will                                                                          does not relieve an SRO from its
                                                                                                          (‘‘Commission’’ or ‘‘SEC’’) a plan for the
                                                  post all comments on the Commission’s
                                                                                                          allocation of regulatory responsibilities,
                                                  Internet Web site (http://www.sec.gov/                                                                          2 15 U.S.C. 78s(g)(1).
                                                                                                          dated March 2, 2017 (‘‘17d–2 Plan’’ or                  3 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2),
                                                  rules/sro.shtml). Copies of the
                                                                                                          the ‘‘Plan’’). The Plan was published for             respectively.
                                                  submission, all subsequent
                                                                                                          comment on March 21, 2017.1 The
mstockstill on DSK30JT082PROD with NOTICES




                                                                                                                                                                  4 15 U.S.C. 78q(d)(1).
                                                  amendments, all written statements
                                                                                                          Commission received no comments on                      5 See Securities Act Amendments of 1975, Report
                                                  with respect to the proposed rule                                                                             of the Senate Committee on Banking, Housing, and
                                                                                                          the Plan. This order approves and
                                                                                                                                                                Urban Affairs to Accompany S. 249, S. Rep. No. 94–
                                                    12 See
                                                                                                          declares effective the Plan.                          75, 94th Cong., 1st Session 32 (1975).
                                                          supra note 6.
                                                    13 For                                                                                                        6 17 CFR 240.17d–1 and 17 CFR 240.17d–2,
                                                          purposes only of waiving the 30-day
                                                                                                            14 17CFR 200.30–3(a)(12).                           respectively.
                                                  operative delay, the Commission has considered the
                                                  proposed rule’s impact on efficiency, competition,        1 SeeSecurities Exchange Act Release No. 80240        7 See Securities Exchange Act Release No. 12352

                                                  and capital formation. See 15 U.S.C. 78c(f).            (March 14, 2017), 82 FR 14560.                        (April 20, 1976), 41 FR 18808 (May 7, 1976).



                                             VerDate Sep<11>2014   18:45 Apr 11, 2017   Jkt 241001   PO 00000   Frm 00088   Fmt 4703   Sfmt 4703   E:\FR\FM\12APN1.SGM   12APN1


                                                                               Federal Register / Vol. 82, No. 69 / Wednesday, April 12, 2017 / Notices                                               17713

                                                  obligation to examine a common                          similar to the applicable rules of                     examination for compliance with such
                                                  member for compliance with its own                      FINRA 10 delineated in the Certification               provisions and rules would not require
                                                  rules and provisions of the federal                     (‘‘Common Rules’’). In the event that a                FINRA to develop one or more new
                                                  securities laws governing matters other                 Dual Member is the subject of an                       examination standards, modules,
                                                  than financial responsibility, including                investigation relating to a transaction on             procedures, or criteria in order to
                                                  sales practices and trading activities and              BOX, the plan acknowledges that BOX                    analyze the application of the rule, or a
                                                  practices.                                              may, in its discretion, exercise                       Dual Member’s activity, conduct, or
                                                    To address regulatory duplication in                  concurrent jurisdiction and                            output in relation to such rule. The
                                                  these and other areas, the Commission                   responsibility for such matter.11                      Common Rules covered by the Plan are
                                                  adopted Rule 17d–2 under the Act.8                         Under the Plan, BOX would retain                    specifically listed in the Certification, as
                                                  Rule 17d–2 permits SROs to propose                      full responsibility for surveillance,                  may be amended by the Parties from
                                                  joint plans for the allocation of                       examination, investigation, and                        time to time.
                                                  regulatory responsibilities with respect                enforcement with respect to trading                       According to the Plan, BOX will
                                                  to their common members. Under                          activities or practices involving BOX’s                review the Certification, at least
                                                  paragraph (c) of Rule 17d–2, the                        own marketplace, including, without                    annually, or more frequently if required
                                                  Commission may declare such a plan                      limitation, registration pursuant to its               by changes in either the rules of BOX or
                                                  effective if, after providing for                       applicable rules of associated persons                 FINRA, and, if necessary, submit to
                                                  appropriate notice and comment, it                      (i.e., registration rules that are not                 FINRA an updated list of Common
                                                  determines that the plan is necessary or                Common Rules); its duties as a DEA                     Rules to add BOX rules not included on
                                                  appropriate in the public interest and                  pursuant to Rule 17d–1 under the Act;                  the then-current list of Common Rules
                                                  for the protection of investors; to foster              and any BOX rules that are not Common                  that are substantially similar to FINRA
                                                  cooperation and coordination among the                  Rules.12                                               rules; delete BOX rules included in the
                                                  SROs; to remove impediments to, and                                                                            then-current list of Common Rules that
                                                  foster the development of, a national                   III. Discussion                                        are no longer substantially similar to
                                                  market system and a national clearance                     The Commission finds that the                       FINRA rules; and confirm that the
                                                  and settlement system; and is in                        proposed Plan is consistent with the                   remaining rules on the list of Common
                                                  conformity with the factors set forth in                factors set forth in Section 17(d) of the              Rules continue to be BOX rules that are
                                                  Section 17(d) of the Act. Commission                    Act 13 and Rule 17d–2(c) thereunder 14                 substantially similar to FINRA rules.15
                                                  approval of a plan filed pursuant to Rule               in that the proposed Plan is necessary                 FINRA will then confirm in writing
                                                  17d–2 relieves an SRO of those                          or appropriate in the public interest and              whether the rules listed in any updated
                                                  regulatory responsibilities allocated by                for the protection of investors, fosters               list are Common Rules as defined in the
                                                  the plan to another SRO.                                cooperation and coordination among                     Plan. Under the Plan, BOX will also
                                                                                                          SROs, and removes impediments to and                   provide FINRA with a current list of
                                                  II. Proposed Plan
                                                                                                          fosters the development of the national                Dual Members and shall update the list
                                                     The proposed 17d–2 Plan is intended                  market system. In particular, the                      no less frequently than once each
                                                  to reduce regulatory duplication for                    Commission believes that the proposed                  quarter.16 The Commission believes that
                                                  firms that are common members of both                   Plan should reduce unnecessary                         these provisions are designed to provide
                                                  BOX and FINRA.9 Pursuant to the                         regulatory duplication by allocating to                for continuing communication between
                                                  proposed 17d–2 Plan, FINRA would                        FINRA certain examination and                          the Parties to ensure the continued
                                                  assume certain examination and                          enforcement responsibilities for Dual                  accuracy of the scope of the proposed
                                                  enforcement responsibilities for                        Members that would otherwise be                        allocation of regulatory responsibility.
                                                  common members with respect to                          performed by BOX and FINRA.                               The Commission is hereby declaring
                                                  certain applicable laws, rules, and                     Accordingly, the proposed Plan                         effective a Plan that, among other
                                                  regulations.                                            promotes efficiency by reducing costs to               things, allocates regulatory
                                                     The text of the Plan delineates the                                                                         responsibility to FINRA for the
                                                                                                          Dual Members. Furthermore, because
                                                  proposed regulatory responsibilities                                                                           oversight and enforcement of all BOX
                                                                                                          BOX and FINRA will coordinate their
                                                  with respect to the Parties. Included in                                                                       rules that are substantially similar to the
                                                                                                          regulatory functions in accordance with
                                                  the proposed Plan is an exhibit (the                                                                           rules of FINRA for Dual Members of
                                                                                                          the Plan, the Plan should promote
                                                  ‘‘BOX Options Exchange LLC Rules                                                                               BOX and FINRA. Therefore,
                                                                                                          investor protection.
                                                  Certification for 17d–2 Agreement with                     The Commission notes that, under the                modifications to the Certification need
                                                  FINRA,’’ referred to herein as the                      Plan, BOX and FINRA have allocated                     not be filed with the Commission as an
                                                  ‘‘Certification’’) that lists every BOX                 regulatory responsibility for those BOX                amendment to the Plan, provided that
                                                  rule for which FINRA would bear                         rules, set forth in the Certification, that            the Parties are only adding to, deleting
                                                  responsibility under the Plan for                       are substantially similar to the                       from, or confirming changes to BOX
                                                  overseeing and enforcing with respect to                applicable FINRA rules in that                         rules in the Certification in conformance
                                                  BOX members that are also members of                                                                           with the definition of Common Rules
                                                  FINRA and the associated persons                           10 See paragraph 1(b) of the proposed 17d–2 Plan    provided in the Plan. However, should
                                                  therewith (‘‘Dual Members’’).                           (defining Common Rules). See also paragraph 1(f)       the Parties decide to add a BOX rule to
                                                     Specifically, under the 17d–2 Plan,                  of the proposed 17d–2 Plan (defining Regulatory        the Certification that is not substantially
                                                  FINRA would assume examination and                      Responsibilities). Paragraph 2 of the Plan provides
                                                                                                          that annually, or more frequently as required by
                                                                                                                                                                 similar to a FINRA rule; delete a BOX
                                                  enforcement responsibility relating to                  changes in either BOX rules or FINRA rules, the        rule from the Certification that is
                                                  compliance by Dual Members with the                                                                            substantially similar to a FINRA rule; or
mstockstill on DSK30JT082PROD with NOTICES




                                                                                                          parties shall review and update, if necessary, the
                                                  rules of BOX that are substantially                     list of Common Rules. Further, paragraph 3 of the      leave on the Certification a BOX rule
                                                                                                          Plan provides that BOX shall furnish FINRA with
                                                                                                          a list of Dual Members, and shall update the list no
                                                                                                                                                                 that is no longer substantially similar to
                                                    8 See Securities Exchange Act Release No. 12935
                                                                                                          less frequently than once each calendar quarter.       a FINRA rule, then such a change would
                                                  (October 28, 1976), 41 FR 49091 (November 8,
                                                  1976).
                                                                                                             11 See paragraph 6 of the proposed 17d–2 Plan.      constitute an amendment to the Plan,
                                                    9 The proposed 17d–2 Plan refers to these                12 See paragraph 2 of the proposed 17d–2 Plan.
                                                                                                             13 15 U.S.C. 78q(d).                                 15 See   paragraph 2 of the Plan.
                                                  common members as ‘‘Dual Members.’’ See
                                                  Paragraph 1(c) of the proposed 17d–2 Plan.                 14 17 CFR 240.17d–2(c).                              16 See   paragraph 3 of the Plan.



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                                                  17714                        Federal Register / Vol. 82, No. 69 / Wednesday, April 12, 2017 / Notices

                                                  which must be filed with the                            connection with business combination                  SECURITIES AND EXCHANGE
                                                  Commission pursuant to Rule 17d–2                       transactions. The purpose of the rule is              COMMISSION
                                                  under the Act.17                                        to permit more oral and written
                                                                                                                                                                [Release No. 34–80391; File No. SR–
                                                  IV. Conclusion                                          communications with shareholders                      NASDAQ–2017–034]
                                                                                                          about tender offers, mergers and other
                                                     This Order gives effect to the Plan                  business combination transactions on a                Self-Regulatory Organizations; The
                                                  filed with the Commission in File No.                   more timely basis, so long as the written             NASDAQ Stock Market LLC; Notice of
                                                  4–709. The Parties shall notify all                                                                           Filing and Immediate Effectiveness of
                                                                                                          communications are filed on the date of
                                                  members affected by the Plan of their                                                                         Proposed Rule Change To Extend the
                                                                                                          first use. Approximately 7,160 issuers
                                                  rights and obligations under the Plan.                                                                        Implementation Date of Its
                                                     It is therefore ordered, pursuant to                 file communications under Rule 425 at
                                                                                                          an estimated 0.25 hours per response for              Functionality Relating to Midpoint Peg
                                                  Section 17(d) of the Act, that the Plan                                                                       Post-Only Orders and Orders With
                                                  in File No. 4–709, between FINRA and                    a total of 1,790 annual burden hours
                                                                                                          (0.25 hours per response × 7,160                      Midpoint Pegging
                                                  BOX, filed pursuant to Rule 17d–2
                                                  under the Act, is approved and declared                 responses).                                           April 6, 2017.
                                                  effective.                                                 Written comments are invited on: (a)                  Pursuant to Section 19(b)(1) of the
                                                     It is further ordered, that BOX is                   Whether the collection of information is              Securities Exchange Act of 1934
                                                  relieved of those responsibilities                      necessary for the proper performance of               (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                  allocated to FINRA under the Plan in                    the functions of the agency, including                notice is hereby given that on March 31,
                                                  File No. 4–709.                                         whether the information will have                     2017, The NASDAQ Stock Market LLC
                                                    For the Commission, by the Division of                practical utility; (b) the accuracy of the            (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
                                                  Trading and Markets, pursuant to delegated              agency’s estimate of the burden imposed               Securities and Exchange Commission
                                                  authority.18                                                                                                  (‘‘SEC’’ or ‘‘Commission’’) the proposed
                                                                                                          by the collection of information; (c)
                                                                                                                                                                rule change as described in Items I and
                                                                                                          ways to enhance the quality, utility, and
                                                  Eduardo A. Aleman,                                                                                            II below, which Items have been
                                                                                                          clarity of the information collected; and             prepared by the Exchange. The
                                                  Assistant Secretary.                                    (d) ways to minimize the burden of the
                                                  [FR Doc. 2017–07311 Filed 4–11–17; 8:45 am]                                                                   Commission is publishing this notice to
                                                                                                          collection of information on                          solicit comments on the proposed rule
                                                  BILLING CODE 8011–01–P                                  respondents, including through the use                change from interested persons.
                                                                                                          of automated collection techniques or
                                                                                                          other forms of information technology.                I. Self-Regulatory Organization’s
                                                  SECURITIES AND EXCHANGE                                                                                       Statement of the Terms of Substance of
                                                  COMMISSION                                              Consideration will be given to
                                                                                                          comments and suggestions submitted in                 the Proposed Rule Change
                                                  Proposed Collection; Comment                            writing within 60 days of this                           The Exchange proposes to extend the
                                                  Request                                                 publication.                                          implementation date of its functionality
                                                                                                                                                                relating to Midpoint Peg Post-Only
                                                  Upon Written Request Copies Available                      An agency may not conduct or
                                                                                                                                                                Orders and Orders with Midpoint
                                                   From: Securities and Exchange                          sponsor, and a person is not required to              Pegging.
                                                   Commission, Office of FOIA Services,                   respond to, a collection of information                  There is no rule text for this proposed
                                                   100 F Street NE., Washington, DC                       unless it displays a currently valid                  rule change.
                                                   20549–2736                                             control number.
                                                                                                                                                                II. Self-Regulatory Organization’s
                                                  Extension:                                                 Please direct your written comment to              Statement of the Purpose of, and
                                                    Rule 425, [OMB Control No. 3235–0521,                 Pamela Dyson, Director/Chief                          Statutory Basis for, the Proposed Rule
                                                      SEC File No. 270–462]                               Information Officer, Securities and                   Change
                                                     Notice is hereby given, that pursuant                Exchange Commission, c/o Remi Pavlik-
                                                                                                                                                                   In its filing with the Commission, the
                                                  to the Paperwork Reduction Act of 1995                  Simon, 100 F Street NE., Washington,
                                                                                                                                                                Exchange included statements
                                                  (44 U.S.C. 3501 et seq.), the Securities                DC 20549 or send an email to: PRA_
                                                                                                                                                                concerning the purpose of and basis for
                                                  and Exchange Commission                                 Mailbox@sec.gov.
                                                                                                                                                                the proposed rule change and discussed
                                                  (‘‘Commission’’) is soliciting comments                   Dated: April 6, 2017.                               any comments it received on the
                                                  on the collection of information                                                                              proposed rule change. The text of these
                                                                                                          Eduardo A. Aleman,
                                                  summarized below. The Commission                                                                              statements may be examined at the
                                                  plans to submit this existing collection                Assistant Secretary.
                                                                                                          [FR Doc. 2017–07301 Filed 4–11–17; 8:45 am]
                                                                                                                                                                places specified in Item IV below. The
                                                  of information to the Office of                                                                               Exchange has prepared summaries, set
                                                  Management and Budget for extension                     BILLING CODE 8011–01–P
                                                                                                                                                                forth in sections A, B, and C below, of
                                                  and approval.                                                                                                 the most significant aspects of such
                                                     Rule 425 (17 CFR 230.425) under the
                                                                                                                                                                statements.
                                                  Securities Act of 1933 (15 U.S.C. 77a et
                                                  seq.) requires the filing of certain                                                                          A. Self-Regulatory Organization’s
                                                  prospectuses and communications                                                                               Statement of the Purpose of, and
                                                  under Rule 135 (17 CFR 230.135) and                                                                           Statutory Basis for, the Proposed Rule
                                                  Rule 165 (17 CFR 230.165) in                                                                                  Change
mstockstill on DSK30JT082PROD with NOTICES




                                                    17 The Commission also notes that the addition to
                                                                                                                                                                1. Purpose
                                                  or deletion from the Certification of any federal                                                                Nasdaq is filing this proposal to
                                                  securities laws, rules, and regulations for which                                                             extend the implementation date of its
                                                  FINRA would bear responsibility under the Plan for
                                                  examining, and enforcing compliance by, Dual                                                                  functionality relating to Midpoint Peg
                                                  Members, also would constitute an amendment to
                                                  the Plan.                                                                                                       1 15   U.S.C. 78s(b)(1).
                                                    18 17 CFR 200.30–3(a)(34).                                                                                    2 17   CFR 240.19b–4.



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Document Created: 2017-04-12 00:23:34
Document Modified: 2017-04-12 00:23:34
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 Citation82 FR 17712 

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