82_FR_19019 82 FR 18942 - Self-Regulatory Organizations; ISE Mercury, LLC; Order Declaring Effective a Minor Rule Violation Plan

82 FR 18942 - Self-Regulatory Organizations; ISE Mercury, LLC; Order Declaring Effective a Minor Rule Violation Plan

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 77 (April 24, 2017)

Page Range18942-18943
FR Document2017-08162

Federal Register, Volume 82 Issue 77 (Monday, April 24, 2017) 
[Federal Register Volume 82, Number 77 (Monday, April 24, 2017)]
[Notices]
[Pages 18942-18943]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-08162]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80477; File No. 4-707]


Self-Regulatory Organizations; ISE Mercury, LLC; Order Declaring 
Effective a Minor Rule Violation Plan

April 18, 2017.
    On March 9, 2017, ISE Mercury, LLC (``Exchange'') filed with the 
Securities and Exchange Commission (``Commission'') a proposed minor 
rule violation plan (``MRVP'' or ``Plan'') pursuant to Section 19(d)(1) 
of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19d-
1(c)(2) thereunder.\2\ The proposed MRVP was published for public 
comment on March 21, 2017.\3\ The Commission received no comments on 
the proposal. This order declares the Exchange's proposed MRVP 
effective.
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    \1\ 15 U.S.C. 78s(d)(1).
    \2\ 17 CFR 240.19d-1(c)(2).
    \3\ See Securities Exchange Act Release No. 80259 (March 16, 
2017), 82 FR 14556 (``Notice'').
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    The Exchange's MRVP specifies the rule violations which will be 
included in the Plan and will have sanctions not exceeding $2,500. Any 
violations which are resolved under the MRVP would not be subject to 
the provisions of Rule 19d-1(c)(1) of the Act,\4\ which requires that a 
self-regulatory organization (``SRO'') promptly file notice with the 
Commission of any final disciplinary action taken with respect to any 
person or organization.\5\ In accordance with Rule 19d-1(c)(2) under 
the Act,\6\ the Exchange proposed to designate certain specified rule 
violations as minor rule violations, and requested that it be relieved 
of the prompt reporting requirements regarding such violations, 
provided it gives notice of such violations to the Commission on a 
quarterly basis.
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    \4\ 17 CFR 240.19d-1(c)(1).
    \5\ The Commission adopted amendments to paragraph (c) of Rule 
19d-1 to allow SROs to submit for Commission approval plans for the 
abbreviated reporting of minor disciplinary infractions. See 
Securities Exchange Act Release No. 21013 (June 1, 1984), 49 FR 
23828 (June 8, 1984). Any disciplinary action taken by an SRO 
against any person for violation of a rule of the SRO which has been 
designated as a minor rule violation pursuant to such a plan filed 
with and declared effective by the Commission is not considered 
``final'' for purposes of Section 19(d)(1) of the Act if the 
sanction imposed consists of a fine not exceeding $2,500 and the 
sanctioned person has not sought an adjudication, including a 
hearing, or otherwise exhausted his administrative remedies.
    \6\ 17 CFR 240.19d-1(c)(2).
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    The Exchange proposed to include in its MRVP the procedures and 
violations currently included in Exchange Rule 1614 (``Imposition of 
Fines for Minor Rule Violations''), which had been incorporated by 
reference from the International Securities Exchange's rule book.\7\ 
According to the Exchange's proposed MRVP, under Exchange Rule 1614, 
the Exchange may impose a fine (not to exceed $2,500) on any Member, or 
person associated with or employed by a Member, for any rule listed in 
Rule 1614(d).\8\ The Exchange shall serve the person against whom a 
fine is imposed with a written statement setting forth the rule or 
rules violated, the act or omission constituting each such violation, 
the fine imposed, and the date by which such determination becomes 
final or by which such determination must be contested. If the person 
against whom the fine is imposed pays the fine, such payment shall be 
deemed to be a waiver of such person's right to a disciplinary 
proceeding and any review of the matter under the Exchange rules. Any 
person against whom a fine is imposed may contest the Exchange's 
determination by filing with the Exchange a written answer, at which 
point the matter shall become a disciplinary proceeding.
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    \7\ The Exchange received its grant of registration on January 
29, 2016, which included approving the rules that govern the 
Exchange. See Securities Exchange Act Release No. 76998 (Jan. 29, 
2016), 81 FR 6066 (Feb. 4, 2016).
    \8\ Under the proposed MRVP, violations of the following rules 
would be appropriate for disposition under the MRVP: Rule 412 
(Position Limits); Rule 1403 (Focus Reports); Rule 1404 (Requests 
for Trade Data); Rule 723 (Price Improvement Mechanism for Crossing 
Transactions); Rule 717 (Order Entry); Rule 803 (Quotation 
Parameters); Rule 805 (Execution of Orders in Appointed Options); 
Rule 419 (Mandatory Systems Testing); Rule 1100 (Exercise of Options 
Contracts); Rule 415 (Reports Related to Position Limits); and Rule 
804(e) (Continuous Quotes). See Notice, supra note 3.
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    Once the Exchange's MRVP is effective, the Exchange will provide to 
the Commission a quarterly report for any actions taken on minor rule 
violations under the MRVP. The quarterly report will include: The 
Exchange's internal file number for the case, the name of the 
individual and/or organization, the nature of the violation, the 
specific rule provision violated, the sanction imposed, the number of 
times the rule violation occurred, and the date of the disposition.\9\
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    \9\ The Exchange attached a sample form of the quarterly report 
with its submission to the Commission.
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    The Commission finds that the proposal is consistent with the 
public interest, the protection of investors, or otherwise in 
furtherance of the purposes of the Act, as required by Rule 19d-1(c)(2) 
under the Act,\10\ because the MRVP will permit the Exchange to carry 
out its oversight and enforcement responsibilities as an SRO more 
efficiently in cases where full disciplinary proceedings are not 
necessary due to the minor nature of the particular violation.
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    \10\ 17 CFR 240.19d-1(c)(2).
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    In declaring the Exchange's MRVP effective, the Commission in no 
way minimizes the importance of compliance with Exchange rules and all 
other rules subject to the imposition of sanctions under Exchange Rule 
1614. The Commission believes that the violation of an SRO's rules, as 
well as Commission rules, is a serious matter. However, Exchange Rule 
1614 provides a reasonable means of addressing violations that do not 
rise to the level of requiring formal disciplinary proceedings, while 
providing greater flexibility in handling certain violations. The 
Commission expects that the Exchange will continue to conduct 
surveillance and make determinations based on its findings, on a case-
by-case basis, regarding whether a sanction under the MRVP is 
appropriate, or whether a violation requires formal disciplinary 
action.
    It is therefore ordered, pursuant to Rule 19d-1(c)(2) under the 
Act,\11\ that the proposed MRVP for ISE Mercury, LLC, File No. 4-707, 
be, and hereby is, declared effective.
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    \11\ Id.


[[Page 18943]]


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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(44).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-08162 Filed 4-21-17; 8:45 am]
BILLING CODE 8011-01-P

18942 Federal Register / Vol. 82, No. 77 / Monday, April 24, 2017 / Notices proposed rule change is April 20, 2017. or organization.5 In accordance with determination by filing with the The Commission is hereby extending Rule 19d–1(c)(2) under the Act,6 the Exchange a written answer, at which this 45-day time period. Exchange proposed to designate certain point the matter shall become a The Commission finds that it is specified rule violations as minor rule disciplinary proceeding. appropriate to designate a longer period violations, and requested that it be Once the Exchange’s MRVP is within which to take action on the relieved of the prompt reporting effective, the Exchange will provide to proposed rule change so that it has requirements regarding such violations, provided it gives notice of such the Commission a quarterly report for sufficient time to consider the proposed rule change. Accordingly, the violations to the Commission on a any actions taken on minor rule Commission, pursuant to Section quarterly basis. violations under the MRVP. The 19(b)(2) of the Act,5 designates June 4, The Exchange proposed to include in quarterly report will include: The 2017, as the date by which the its MRVP the procedures and violations Exchange’s internal file number for the Commission should either approve or currently included in Exchange Rule case, the name of the individual and/or disapprove or institute proceedings to 1614 (‘‘Imposition of Fines for Minor organization, the nature of the violation, determine whether to disapprove the Rule Violations’’), which had been the specific rule provision violated, the proposed rule change (File Number SR– incorporated by reference from the sanction imposed, the number of times CBOE–2017–010). International Securities Exchange’s rule the rule violation occurred, and the date book.7 According to the Exchange’s of the disposition.9 For the Commission, by the Division of proposed MRVP, under Exchange Rule Trading and Markets, pursuant to delegated The Commission finds that the authority.6 1614, the Exchange may impose a fine proposal is consistent with the public (not to exceed $2,500) on any Member, Eduardo A. Aleman, interest, the protection of investors, or or person associated with or employed Assistant Secretary. by a Member, for any rule listed in Rule otherwise in furtherance of the purposes [FR Doc. 2017–08164 Filed 4–21–17; 8:45 am] 1614(d).8 The Exchange shall serve the of the Act, as required by Rule 19d– BILLING CODE 8011–01–P person against whom a fine is imposed 1(c)(2) under the Act,10 because the with a written statement setting forth MRVP will permit the Exchange to carry the rule or rules violated, the act or out its oversight and enforcement SECURITIES AND EXCHANGE omission constituting each such responsibilities as an SRO more COMMISSION violation, the fine imposed, and the date efficiently in cases where full by which such determination becomes disciplinary proceedings are not [Release No. 34–80477; File No. 4–707] necessary due to the minor nature of the final or by which such determination Self-Regulatory Organizations; ISE must be contested. If the person against particular violation. Mercury, LLC; Order Declaring whom the fine is imposed pays the fine, In declaring the Exchange’s MRVP Effective a Minor Rule Violation Plan such payment shall be deemed to be a effective, the Commission in no way waiver of such person’s right to a minimizes the importance of April 18, 2017. disciplinary proceeding and any review compliance with Exchange rules and all On March 9, 2017, ISE Mercury, LLC of the matter under the Exchange rules. other rules subject to the imposition of (‘‘Exchange’’) filed with the Securities Any person against whom a fine is sanctions under Exchange Rule 1614. and Exchange Commission imposed may contest the Exchange’s The Commission believes that the (‘‘Commission’’) a proposed minor rule violation of an SRO’s rules, as well as violation plan (‘‘MRVP’’ or ‘‘Plan’’) 5 The Commission adopted amendments to pursuant to Section 19(d)(1) of the paragraph (c) of Rule 19d–1 to allow SROs to Commission rules, is a serious matter. Securities Exchange Act of 1934 submit for Commission approval plans for the However, Exchange Rule 1614 provides abbreviated reporting of minor disciplinary (‘‘Act’’) 1 and Rule 19d–1(c)(2) infractions. See Securities Exchange Act Release a reasonable means of addressing thereunder.2 The proposed MRVP was No. 21013 (June 1, 1984), 49 FR 23828 (June 8, violations that do not rise to the level of published for public comment on March 1984). Any disciplinary action taken by an SRO requiring formal disciplinary against any person for violation of a rule of the SRO proceedings, while providing greater 21, 2017.3 The Commission received no which has been designated as a minor rule violation comments on the proposal. This order pursuant to such a plan filed with and declared flexibility in handling certain violations. declares the Exchange’s proposed MRVP effective by the Commission is not considered The Commission expects that the effective. ‘‘final’’ for purposes of Section 19(d)(1) of the Act Exchange will continue to conduct if the sanction imposed consists of a fine not The Exchange’s MRVP specifies the exceeding $2,500 and the sanctioned person has not surveillance and make determinations rule violations which will be included sought an adjudication, including a hearing, or based on its findings, on a case-by-case in the Plan and will have sanctions not otherwise exhausted his administrative remedies. basis, regarding whether a sanction 6 17 CFR 240.19d–1(c)(2). exceeding $2,500. Any violations which under the MRVP is appropriate, or 7 The Exchange received its grant of registration are resolved under the MRVP would not whether a violation requires formal on January 29, 2016, which included approving the be subject to the provisions of Rule 19d– rules that govern the Exchange. See Securities disciplinary action. 1(c)(1) of the Act,4 which requires that Exchange Act Release No. 76998 (Jan. 29, 2016), 81 It is therefore ordered, pursuant to a self-regulatory organization (‘‘SRO’’) FR 6066 (Feb. 4, 2016). 8 Under the proposed MRVP, violations of the Rule 19d–1(c)(2) under the Act,11 that promptly file notice with the following rules would be appropriate for the proposed MRVP for ISE Mercury, Commission of any final disciplinary disposition under the MRVP: Rule 412 (Position action taken with respect to any person LLC, File No. 4–707, be, and hereby is, Limits); Rule 1403 (Focus Reports); Rule 1404 jstallworth on DSK7TPTVN1PROD with NOTICES (Requests for Trade Data); Rule 723 (Price declared effective. 5 Id. Improvement Mechanism for Crossing 6 17 Transactions); Rule 717 (Order Entry); Rule 803 CFR 200.30–3(a)(31). 1 15 (Quotation Parameters); Rule 805 (Execution of 9 The Exchange attached a sample form of the U.S.C. 78s(d)(1). Orders in Appointed Options); Rule 419 2 17 CFR 240.19d–1(c)(2). quarterly report with its submission to the (Mandatory Systems Testing); Rule 1100 (Exercise 3 See Securities Exchange Act Release No. 80259 Commission. of Options Contracts); Rule 415 (Reports Related to 10 17 CFR 240.19d–1(c)(2). (March 16, 2017), 82 FR 14556 (‘‘Notice’’). Position Limits); and Rule 804(e) (Continuous 4 17 CFR 240.19d–1(c)(1). Quotes). See Notice, supra note 3. 11 Id. VerDate Sep<11>2014 13:48 Apr 21, 2017 Jkt 241001 PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 E:\FR\FM\24APN1.SGM 24APN1

Federal Register / Vol. 82, No. 77 / Monday, April 24, 2017 / Notices 18943 For the Commission, by the Division of II. Self-Regulatory Organization’s Single MPID Investor Tier Under Trading and Markets, pursuant to delegated Statement of the Purpose of, and Footnote 4 authority.12 Statutory Basis for, the Proposed Rule The Exchange currently offers one Eduardo A. Aleman, Change Single MPID Investor Tier under Assistant Secretary. footnote 4, which provides an enhanced In its filing with the Commission, the [FR Doc. 2017–08162 Filed 4–21–17; 8:45 am] Exchange included statements rebate of $0.0031 per share for BILLING CODE 8011–01–P concerning the purpose of and basis for qualifying orders which yield fee codes the proposed rule change and discussed B, V, or Y. The distinction between the any comments it received on the existing tier under footnote 4 and other SECURITIES AND EXCHANGE proposed rule change. The text of these tiers offered by the Exchange, is that the COMMISSION statements may be examined at the volume measured to determine whether places specified in Item IV below. The a Member qualifies is performed on an [Release No. 34–80478; File No. SR– Exchange has prepared summaries, set MPID by MPID basis. The Exchange BatsBZX–2017–22] forth in Sections A, B, and C below, of now proposes to add an additional the most significant parts of such single MPID tier which will provide an Self-Regulatory Organizations; Bats statements. enhanced rebate per share for qualifying BZX Exchange, Inc.; Notice of Filing orders which yield fee codes B, V, or Y. and Immediate Effectiveness of a A. Self-Regulatory Organization’s Under the proposed Step-Up Add Tier Proposed Rule Change Related to Fees Statement of the Purpose of, and the under footnote 4, a Member may receive for Use on Bats BZX Exchange, Inc. Statutory Basis for, the Proposed Rule an enhanced rebate of $0.0027 per share Change where the MPID has a Step-Up ADAV April 18, 2017. from November 2016, greater than or 1. Purpose Pursuant to Section 19(b)(1) of the equal to 500,000 shares. Securities Exchange Act of 1934 (the The Exchange proposes to amend its Eliminate Tier 4 Under Footnote 3 ‘‘Act’’),1 and Rule 19b–4 thereunder,2 fee schedule applicable to its equities notice is hereby given that on April 12, trading platform (‘‘BZX Equities’’) to: (i) The Exchange currently offers five 2017, Bats BZX Exchange, Inc. (the Add new tiers under footnotes 1 and 4; Cross-Asset Step-Up Tiers under ‘‘Exchange’’ or ‘‘BZX’’) filed with the and (ii) eliminate tier 4 under footnote footnote 3, which provide an enhanced Securities and Exchange Commission 3. rebate per contract ranging from $0.0027 (‘‘Commission’’) the proposed rule to $0.0032 per share for qualifying Add Volume Tiers Under Footnote 1 orders. Tiers 1 through 4 apply to orders change as described in Items I, II and III below, which Items have been prepared which yield fee codes B, V, or Y. Tier The Exchange currently offers nine by the Exchange. The Exchange has 5 applies to orders which yield fee Add Volume Tiers under footnote 1, designated the proposed rule change as codes BB, N, or W.9 The Exchange now which provide an enhanced rebate of one establishing or changing a member proposes to eliminate Tier 4 under $0.0025 to $0.0032 per share for due, fee, or other charge imposed by the footnote 3, which provides a rebate of qualifying orders which yield fee codes Exchange under Section 19(b)(3)(A)(ii) $0.0032 per share for Members that have B, V, or Y.6 The Exchange now proposes of the Act 3 and Rule 19b–4(f)(2) an Options Step-Up Add TCV in to add two additional tiers which will thereunder,4 which renders the Customer orders from October 2016 provide an enhanced rebate per share proposed rule change effective upon baseline greater than or equal to for qualifying orders which yield fee filing with the Commission. The 0.35%.10 code HA.7 8 Commission is publishing this notice to • Under the proposed Non-Displayed Implementation Date solicit comments on the proposed rule Add Volume Tier 1, a Member may The Exchange proposes to implement change from interested persons. receive an enhanced rebate of $0.0020 these amendments to its fee schedule I. Self-Regulatory Organization’s per share where they add an ADV immediately.11 Statement of the Terms of Substance of greater than or equal to 0.09% of the 2. Statutory Basis the Proposed Rule Change TCV, as Non-Displayed orders that yield fee codes HA or HI. The Exchange believes that the The Exchange filed a proposal to • Under the proposed Non-Displayed proposed rule changes are consistent amend the fee schedule applicable to Add Volume Tier 2, a Member may with the objectives of Section 6 of the Members 5 and non-members of the receive an enhanced rebate of $0.0025 Act,12 in general, and furthers the Exchange pursuant to BZX Rules 15.1(a) per share where they add an ADV objectives of Section 6(b)(4),13 in and (c). greater than or equal to 0.18% of the particular, as it is designed to provide The text of the proposed rule change TCV, as Non-Displayed orders that yield 9 Fee codes BB, N, and W are appended to orders is available at the Exchange’s Web site fee codes HA or HI. that remove liquidity in tape B, C, or A, at www.bats.com, at the principal office respectively. See the Exchange’s fee schedule of the Exchange, and at the 6 Fee codes B, V, and Y are appended to displayed available at http://www.bats.com/us/equities/ Commission’s Public Reference Room. orders that add liquidity in tape B, A, or C, membership/fee_schedule/bzx/. 10 In connection with the elimination of Tier 4, respectively. See the Exchange’s fee schedule available at http://www.bats.com/us/equities/ the Exchange proposes that Tier 5 be renamed to jstallworth on DSK7TPTVN1PROD with NOTICES 12 17 CFR 200.30–3(a)(44). membership/fee_schedule/bzx/. Tier 4. 1 15 U.S.C. 78s(b)(1). 11 The Exchange initially filed the proposed 7 Fee code HA is appended to non-displayed 2 17 CFR 240.19b–4. orders which add liquidity. Id. amendments to its fee schedule on March 31, 2017 3 15 U.S.C. 78s(b)(3)(A)(ii). 8 The Exchange proposes to add additional labels (SR–BatsBZX–2017–21). On April 12, 2017, the 4 17 CFR 240.19b–4(f)(2). to the table in footnote 1 to further clarify which Exchange withdrew SR–BatsBZX–2017–21 and then 5 The term ‘‘Member’’ is defined as ‘‘any tiers apply to orders yielding the differentiating fee subsequently submitted this filing (SR–BatsBZX– registered broker or dealer that has been admitted codes. The Exchange also proposes to append 2017–22). 12 15 U.S.C. 78f. to membership in the Exchange.’’ See Exchange footnote 1 to fee code HA in connection with this Rule 1.5(n). change. 13 15 U.S.C. 78f(b)(4). VerDate Sep<11>2014 13:48 Apr 21, 2017 Jkt 241001 PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 E:\FR\FM\24APN1.SGM 24APN1


Document Created: 2017-04-22 00:11:38
Document Modified: 2017-04-22 00:11:38
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 18942 
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