82_FR_31040 82 FR 30914 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Implementation of FINRA Rule 4240 (Margin Requirements for Credit Default Swaps)

82 FR 30914 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Implementation of FINRA Rule 4240 (Margin Requirements for Credit Default Swaps)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 126 (July 3, 2017)

Page Range30914-30916
FR Document2017-13903

Federal Register, Volume 82 Issue 126 (Monday, July 3, 2017)
[Federal Register Volume 82, Number 126 (Monday, July 3, 2017)]
[Notices]
[Pages 30914-30916]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-13903]


=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81035; File No. SR-FINRA-2017-019]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Extend the Implementation of FINRA Rule 4240 
(Margin Requirements for Credit Default Swaps)

June 27, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 14, 2017, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') filed with the Securities and Exchange Commission (``SEC'' 
or ``Commission'') the proposed rule change as described in Items I, 
II, and III below, which Items have been prepared by FINRA. FINRA has 
designated the proposed rule change as constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under 
the Act,\3\ which renders the proposal effective upon receipt of this 
filing by the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to extend to July 18, 2018 the implementation of 
FINRA Rule 4240. FINRA Rule 4240 implements an interim pilot program 
with respect to margin requirements for certain transactions in credit 
default swaps that are security-based swaps.
    The text of the proposed rule change is available on FINRA's Web 
site at http://www.finra.org, at the principal office of FINRA and at 
the Commission's Public Reference Room.

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

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

[[Page 30915]]

and C below, of the most significant aspects of such statements.

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

1. Purpose
    On May 22, 2009, the Commission approved FINRA Rule 4240,\4\ which 
implements an interim pilot program (the ``Interim Pilot Program'') 
with respect to margin requirements for certain transactions in credit 
default swaps (``CDS'').\5\ On June 15, 2016, FINRA filed a proposed 
rule change for immediate effectiveness extending the implementation of 
FINRA Rule 4240 to July 18, 2017.\6\
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    \4\ See Securities Exchange Act Release No. 59955 (May 22, 
2009), 74 FR 25586 (May 28, 2009) (Order Approving File No. SR-
FINRA-2009-012) (``Approval Order'').
    \5\ In March 2012, the SEC approved amendments to FINRA Rule 
4240 that, among other things, limit at this time the rule's 
application to credit default swaps that are security-based swaps. 
See Securities Exchange Act Release No. 66527 (March 7, 2012), 77 FR 
14850 (March 13, 2012) (Order Approving File No. SR-FINRA-2012-015).
    \6\ See Securities Exchange Act Release No. 78182 (June 28, 
2016), 81 FR 43690 (July 5, 2016) (Notice of Filing and Immediate 
Effectiveness of File No. SR-FINRA-2016-020).
---------------------------------------------------------------------------

    As explained in the Approval Order, FINRA Rule 4240, coterminous 
with certain Commission actions, was intended to address concerns 
arising from systemic risk posed by CDS, including, among other things, 
risks to the financial system arising from the lack of a central 
clearing counterparty to clear and settle CDS.\7\ On July 21, 2010, the 
Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-
Frank Act'') was signed into law.\8\ Title VII of the Dodd-Frank Act 
established a comprehensive new regulatory framework for swaps and 
security-based swaps,\9\ including certain CDS. The legislation was 
intended, among other things, to enhance the authority of regulators to 
implement new rules designed to reduce risk, increase transparency, and 
promote market integrity with respect to such products.
---------------------------------------------------------------------------

    \7\ See Approval Order, 74 FR at 25588-89.
    \8\ See Dodd-Frank Wall Street Reform and Consumer Protection 
Act, Public Law 111-203, 124 Stat. 1376 (2010).
    \9\ The terms ``swap'' and ``security-based swap'' are defined 
in Sections 721 and 761 of the Dodd-Frank Act. The Commodity Futures 
Trading Commission (``CFTC'') and the Commission jointly have 
approved rules to further define these terms. See Securities 
Exchange Act Release No. 67453 (July 18, 2012), 77 FR 48208 (August 
13, 2012) (Joint Final Rule; Interpretations; Request for Comment on 
an Interpretation: Further Definition of ``Swap,'' ``Security-Based 
Swap,'' and ``Security-Based Swap Agreement''; Mixed Swaps; 
Security-Based Swap Agreement Recordkeeping). See also Securities 
Exchange Act Release No. 66868 (April 27, 2012), 77 FR 30596 (May 
23, 2012) (Joint Final Rule; Joint Interim Final Rule; 
Interpretations: Further Definition of ``Swap Dealer,'' ``Security-
Based Swap Dealer,'' ``Major Swap Participant,'' ``Major Security-
Based Swap Participant'' and ``Eligible Contract Participant'').
---------------------------------------------------------------------------

    The Commission and the CFTC have proposed or adopted rules with 
respect to swaps and security-based swaps pursuant to Title VII of the 
Dodd-Frank Act.\10\ FINRA believes it is appropriate to extend the 
Interim Pilot Program for a limited period, to July 18, 2018, in light 
of the continuing development of the CDS business and ongoing 
regulatory developments. FINRA is considering proposing additional 
amendments to the Interim Pilot Program.
---------------------------------------------------------------------------

    \10\ See, e.g., Securities Exchange Act Release No. 79833 
(January 18, 2017), 82 FR 8467 (January 25, 2017) (Order Extending 
Certain Temporary Exemptions Under the Securities Exchange Act of 
1934 in Connection With the Revision of the Definition of 
``Security'' To Encompass Security-Based Swaps and Request for 
Comment); Securities Exchange Act Release No. 67177 (June 11, 2012), 
77 FR 35625 (June 14, 2012) (Notice of Statement of General Policy 
with Request for Public Comment: Statement of General Policy on the 
Sequencing of the Compliance Dates for Final Rules Applicable to 
Security-Based Swaps Adopted Pursuant to the Securities Exchange Act 
of 1934 and the Dodd-Frank Wall Street Reform and Consumer 
Protection Act); Securities Exchange Act Release No. 68071 (October 
18, 2012), 77 FR 70214 (November 23, 2012) (Proposed Rule: Capital, 
Margin, and Segregation Requirements for Security-Based Swap Dealers 
and Major Security-Based Swap Participants and Capital Requirements 
for Broker-Dealers). See also Securities Exchange Act Release No. 
71958 (April 17, 2014), 79 FR 25194 (May 2, 2014) (Proposed Rule: 
Recordkeeping and Reporting Requirements for Security-Based Swap 
Dealers, Major Security-Based Swap Participants, and Broker-Dealers; 
Capital Rule for Certain Security-Based Swap Dealers).
---------------------------------------------------------------------------

    FINRA has filed the proposed rule change for immediate 
effectiveness. FINRA is proposing that the implementation date of the 
proposed rule change will be July 18, 2017. The proposed rule change 
will expire on July 18, 2018.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\11\ which requires, among 
other things, that FINRA rules must be designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest. FINRA believes that the proposed rule change is 
consistent with the Act because, in light of the continuing development 
of the CDS business and ongoing regulatory developments, extending the 
implementation of the margin requirements as set forth by FINRA Rule 
4240 will help to stabilize the financial markets.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. FINRA believes that extending 
the implementation of FINRA Rule 4240 for a limited period, to July 18, 
2018, in light of the continuing development of the CDS business and 
ongoing regulatory developments, helps to promote stability in the 
financial markets and regulatory certainty for members.

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

    Written comments were neither solicited nor received.

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

    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 \12\ and Rule 19b-
4(f)(6) thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

[[Page 30916]]

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-FINRA-2017-019 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2017-019. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of FINRA. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-FINRA-2017-019 and should be 
submitted on or before July 24, 2017.
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-13903 Filed 6-30-17; 8:45 am]
 BILLING CODE 8011-01-P



                                                30914                           Federal Register / Vol. 82, No. 126 / Monday, July 3, 2017 / Notices

                                                (ADAMS): You may obtain publicly-                          This RIS is intended to clarify the                 SECURITIES AND EXCHANGE
                                                available documents online in the                       endorsed NEI 01–01 guidance regarding                  COMMISSION
                                                ADAMS Public Documents collection at                    licensee upgrades to digital
                                                                                                                                                               [Release No. 34–81035; File No. SR–FINRA–
                                                http://www.nrc.gov/reading-rm/                          instrumentation and control systems.                   2017–019]
                                                adams.html. To begin the search, select                 Specifically, this RIS clarifies the
                                                ‘‘ADAMS Public Documents’’ and then                     guidance in NEI 01–01 pertaining to the                Self-Regulatory Organizations;
                                                select ‘‘Begin Web-based ADAMS                          performance and documentation of                       Financial Industry Regulatory
                                                Search.’’ For problems with ADAMS,                      adequate technical evaluations and                     Authority, Inc.; Notice of Filing and
                                                please contact the NRC’s Public                         adequately documented qualitative                      Immediate Effectiveness of a Proposed
                                                Document Room (PDR) reference staff at                  assessments to meet the requirements of                Rule Change To Extend the
                                                1–800–397–4209, 301–415–4737, or by                                                                            Implementation of FINRA Rule 4240
                                                                                                        10 CFR 50.59 ‘‘Changes, tests and
                                                email to pdr.resource@nrc.gov. The draft                                                                       (Margin Requirements for Credit
                                                RIS, ‘‘NRC Draft Regulatory Issue                       experiments.’’ The attachment to this
                                                                                                        RIS provides a framework for preparing                 Default Swaps)
                                                Summary 2017–XX Supplement to RIS
                                                2002–22,’’ is available in ADAMS under                  and documenting qualitative                            June 27, 2017.
                                                Accession No. ML17102B507.                              assessments considered acceptable to                      Pursuant to Section 19(b)(1) of the
                                                   • NRC’s PDR: You may examine and                     serve as a technical basis supporting the              Securities Exchange Act of 1934
                                                purchase copies of public documents at                  responses to key 10 CFR 50.59(c)(2)                    (‘‘Act’’) 1 and Rule 19b–4 thereunder,2
                                                the NRC’s PDR, Room O1–F21, One                         evaluations.                                           notice is hereby given that on June 14,
                                                White Flint North, 11555 Rockville                         The NRC issues RISs to communicate                  2017, Financial Industry Regulatory
                                                Pike, Rockville, Maryland 20852.                        with stakeholders on a broad range of                  Authority, Inc. (‘‘FINRA’’) filed with the
                                                B. Submitting Comments                                  matters. This may include                              Securities and Exchange Commission
                                                                                                        communicating and clarifying NRC                       (‘‘SEC’’ or ‘‘Commission’’) the proposed
                                                  Please include Docket ID NRC–2017–                                                                           rule change as described in Items I, II,
                                                0154 in your comment submission.                        technical or policy positions on
                                                                                                        regulatory matters that have not been                  and III below, which Items have been
                                                  The NRC cautions you not to include                                                                          prepared by FINRA. FINRA has
                                                identifying or contact information that                 communicated to or are not broadly
                                                                                                        understood by the nuclear industry.                    designated the proposed rule change as
                                                you do not want to be publicly                                                                                 constituting a ‘‘non-controversial’’ rule
                                                disclosed in your comment submission.                   Proposed Action                                        change under paragraph (f)(6) of Rule
                                                The NRC will post all comment                                                                                  19b–4 under the Act,3 which renders
                                                submissions at http://                                     The NRC is requesting public                        the proposal effective upon receipt of
                                                www.regulations.gov as well as enter the                comments on the draft RIS. The NRC                     this filing by the Commission. The
                                                comment submissions into ADAMS.                         plans to hold a public meeting to                      Commission is publishing this notice to
                                                The NRC does not routinely edit                         discuss this RIS and the issues                        solicit comments on the proposed rule
                                                comment submissions to remove                           associated with clarification of the                   change from interested persons.
                                                identifying or contact information.                     applicability of the endorsed NEI 01–01
                                                  If you are requesting or aggregating                                                                         I. Self-Regulatory Organization’s
                                                                                                        guidance. All comments that are to
                                                comments from other persons for                                                                                Statement of the Terms of Substance of
                                                                                                        receive consideration in the final RIS
                                                submission to the NRC, then you should                                                                         the Proposed Rule Change
                                                                                                        must still be submitted electronically or
                                                inform those persons not to include                                                                               FINRA is proposing to extend to July
                                                identifying or contact information that                 in writing as indicated in the ADDRESSES
                                                                                                        section of this document. Additional                   18, 2018 the implementation of FINRA
                                                they do not want to be publicly                                                                                Rule 4240. FINRA Rule 4240
                                                disclosed in their comment submission.                  details regarding the meeting will be
                                                                                                        posted at least 10 days prior to the                   implements an interim pilot program
                                                Your request should state that the NRC                                                                         with respect to margin requirements for
                                                does not routinely edit comment                         public meeting on the NRC’s Public
                                                                                                                                                               certain transactions in credit default
                                                submissions to remove such information                  Meeting Schedule Web site at http://
                                                                                                                                                               swaps that are security-based swaps.
                                                before making the comment                               www.nrc.gov/public-involve/public-                        The text of the proposed rule change
                                                submissions available to the public or                  meetings/index.cfm. The NRC staff will                 is available on FINRA’s Web site at
                                                entering the comment into ADAMS.                        make a final determination regarding                   http://www.finra.org, at the principal
                                                                                                        issuance of the RIS after it considers any             office of FINRA and at the
                                                II. Background
                                                                                                        public comments received in response                   Commission’s Public Reference Room.
                                                   The RIS is intended for all holders of               to this request.
                                                and applicants for power reactor                                                                               II. Self-Regulatory Organization’s
                                                                                                           Dated at Rockville, Maryland, this 28th day         Statement of the Purpose of, and
                                                operating licenses or construction
                                                                                                        of June 2017.                                          Statutory Basis for, the Proposed Rule
                                                permits under part 50 of title 10 of the
                                                Code of Federal Regulations (10 CFR),                      For the Nuclear Regulatory Commission.              Change
                                                ‘‘Domestic Licensing of Production and                  Alexander D. Garmoe,                                      In its filing with the Commission,
                                                Utilization Facilities,’’ except those who              Chief, Generic Communications Branch,                  FINRA included statements concerning
                                                have permanently ceased operations                      Division of Policy and Rulemaking, Office              the purpose of and basis for the
                                                and have certified that fuel has been                   of Nuclear Reactor Regulation.                         proposed rule change and discussed any
                                                permanently removed from the reactor                    [FR Doc. 2017–13918 Filed 6–30–17; 8:45 am]            comments it received on the proposed
                                                vessel and all holders of, and applicants
sradovich on DSK3GMQ082PROD with NOTICES




                                                                                                        BILLING CODE 7590–01–P                                 rule change. The text of these statements
                                                for, a power reactor combined license,                                                                         may be examined at the places specified
                                                standard design approval, or                                                                                   in Item IV below. FINRA has prepared
                                                manufacturing license, and all                                                                                 summaries, set forth in sections A, B,
                                                applicants for a standard design
                                                certification, under 10 CFR part 52,                                                                             1 15 U.S.C. 78s(b)(1).
                                                ‘‘Licenses, Certifications, and Approvals                                                                        2 17 CFR 240.19b–4.
                                                for Nuclear Power Plants.’’                                                                                      3 17 CFR 240.19b–4(f)(6).




                                           VerDate Sep<11>2014   17:53 Jun 30, 2017   Jkt 241001   PO 00000   Frm 00099   Fmt 4703   Sfmt 4703   E:\FR\FM\03JYN1.SGM    03JYN1


                                                                                Federal Register / Vol. 82, No. 126 / Monday, July 3, 2017 / Notices                                             30915

                                                and C below, of the most significant                    things, to enhance the authority of                    4240 will help to stabilize the financial
                                                aspects of such statements.                             regulators to implement new rules                      markets.
                                                                                                        designed to reduce risk, increase
                                                A. Self-Regulatory Organization’s                                                                              B. Self-Regulatory Organization’s
                                                                                                        transparency, and promote market
                                                Statement of the Purpose of, and                                                                               Statement on Burden on Competition
                                                                                                        integrity with respect to such products.
                                                Statutory Basis for, the Proposed Rule
                                                                                                           The Commission and the CFTC have                       FINRA does not believe that the
                                                Change
                                                                                                        proposed or adopted rules with respect                 proposed rule change will result in any
                                                1. Purpose                                              to swaps and security-based swaps                      burden on competition that is not
                                                   On May 22, 2009, the Commission                      pursuant to Title VII of the Dodd-Frank                necessary or appropriate in furtherance
                                                approved FINRA Rule 4240,4 which                        Act.10 FINRA believes it is appropriate
                                                                                                                                                               of the purposes of the Act. FINRA
                                                implements an interim pilot program                     to extend the Interim Pilot Program for
                                                                                                                                                               believes that extending the
                                                (the ‘‘Interim Pilot Program’’) with                    a limited period, to July 18, 2018, in
                                                                                                                                                               implementation of FINRA Rule 4240 for
                                                respect to margin requirements for                      light of the continuing development of
                                                                                                                                                               a limited period, to July 18, 2018, in
                                                certain transactions in credit default                  the CDS business and ongoing
                                                                                                                                                               light of the continuing development of
                                                swaps (‘‘CDS’’).5 On June 15, 2016,                     regulatory developments. FINRA is
                                                                                                        considering proposing additional                       the CDS business and ongoing
                                                FINRA filed a proposed rule change for                                                                         regulatory developments, helps to
                                                immediate effectiveness extending the                   amendments to the Interim Pilot
                                                                                                        Program.                                               promote stability in the financial
                                                implementation of FINRA Rule 4240 to                                                                           markets and regulatory certainty for
                                                July 18, 2017.6                                            FINRA has filed the proposed rule
                                                                                                        change for immediate effectiveness.                    members.
                                                   As explained in the Approval Order,
                                                FINRA Rule 4240, coterminous with                       FINRA is proposing that the                            C. Self-Regulatory Organization’s
                                                certain Commission actions, was                         implementation date of the proposed                    Statement on Comments on the
                                                intended to address concerns arising                    rule change will be July 18, 2017. The                 Proposed Rule Change Received From
                                                from systemic risk posed by CDS,                        proposed rule change will expire on                    Members, Participants, or Others
                                                including, among other things, risks to                 July 18, 2018.
                                                the financial system arising from the                   2. Statutory Basis                                       Written comments were neither
                                                lack of a central clearing counterparty to                                                                     solicited nor received.
                                                clear and settle CDS.7 On July 21, 2010,                   FINRA believes that the proposed rule
                                                                                                        change is consistent with the provisions               III. Date of Effectiveness of the
                                                the Dodd-Frank Wall Street Reform and                                                                          Proposed Rule Change and Timing for
                                                Consumer Protection Act (the ‘‘Dodd-                    of Section 15A(b)(6) of the Act,11 which
                                                                                                        requires, among other things, that                     Commission Action
                                                Frank Act’’) was signed into law.8 Title
                                                VII of the Dodd-Frank Act established a                 FINRA rules must be designed to
                                                                                                                                                                  Because the foregoing proposed rule
                                                comprehensive new regulatory                            prevent fraudulent and manipulative
                                                                                                        acts and practices, to promote just and                change does not: (i) Significantly affect
                                                framework for swaps and security-based                                                                         the protection of investors or the public
                                                swaps,9 including certain CDS. The                      equitable principles of trade, and, in
                                                                                                        general, to protect investors and the                  interest; (ii) impose any significant
                                                legislation was intended, among other                                                                          burden on competition; and (iii) become
                                                                                                        public interest. FINRA believes that the
                                                                                                        proposed rule change is consistent with                operative for 30 days from the date on
                                                   4 See Securities Exchange Act Release No. 59955
                                                                                                        the Act because, in light of the                       which it was filed, or such shorter time
                                                (May 22, 2009), 74 FR 25586 (May 28, 2009) (Order
                                                Approving File No. SR–FINRA–2009–012)                   continuing development of the CDS                      as the Commission may designate, it has
                                                (‘‘Approval Order’’).                                   business and ongoing regulatory                        become effective pursuant to Section
                                                   5 In March 2012, the SEC approved amendments
                                                                                                        developments, extending the                            19(b)(3)(A) of the Act 12 and Rule 19b–
                                                to FINRA Rule 4240 that, among other things, limit                                                             4(f)(6) thereunder.13
                                                at this time the rule’s application to credit default   implementation of the margin
                                                swaps that are security-based swaps. See Securities     requirements as set forth by FINRA Rule                   At any time within 60 days of the
                                                Exchange Act Release No. 66527 (March 7, 2012),                                                                filing of the proposed rule change, the
                                                77 FR 14850 (March 13, 2012) (Order Approving             10 See, e.g., Securities Exchange Act Release No.
                                                                                                                                                               Commission summarily may
                                                File No. SR–FINRA–2012–015).                            79833 (January 18, 2017), 82 FR 8467 (January 25,
                                                   6 See Securities Exchange Act Release No. 78182                                                             temporarily suspend such rule change if
                                                                                                        2017) (Order Extending Certain Temporary
                                                (June 28, 2016), 81 FR 43690 (July 5, 2016) (Notice     Exemptions Under the Securities Exchange Act of        it appears to the Commission that such
                                                of Filing and Immediate Effectiveness of File No.       1934 in Connection With the Revision of the            action is necessary or appropriate in the
                                                SR–FINRA–2016–020).                                     Definition of ‘‘Security’’ To Encompass Security-      public interest, for the protection of
                                                   7 See Approval Order, 74 FR at 25588–89.
                                                                                                        Based Swaps and Request for Comment); Securities       investors, or otherwise in furtherance of
                                                   8 See Dodd-Frank Wall Street Reform and              Exchange Act Release No. 67177 (June 11, 2012), 77
                                                Consumer Protection Act, Public Law 111–203, 124        FR 35625 (June 14, 2012) (Notice of Statement of       the purposes of the Act. If the
                                                Stat. 1376 (2010).                                      General Policy with Request for Public Comment:        Commission takes such action, the
                                                   9 The terms ‘‘swap’’ and ‘‘security-based swap’’     Statement of General Policy on the Sequencing of       Commission shall institute proceedings
                                                are defined in Sections 721 and 761 of the Dodd-        the Compliance Dates for Final Rules Applicable to     to determine whether the proposed rule
                                                Frank Act. The Commodity Futures Trading                Security-Based Swaps Adopted Pursuant to the
                                                Commission (‘‘CFTC’’) and the Commission jointly        Securities Exchange Act of 1934 and the Dodd-          should be approved or disapproved.
                                                have approved rules to further define these terms.      Frank Wall Street Reform and Consumer Protection
                                                See Securities Exchange Act Release No. 67453           Act); Securities Exchange Act Release No. 68071        IV. Solicitation of Comments
                                                (July 18, 2012), 77 FR 48208 (August 13, 2012)          (October 18, 2012), 77 FR 70214 (November 23,
                                                (Joint Final Rule; Interpretations; Request for         2012) (Proposed Rule: Capital, Margin, and               Interested persons are invited to
                                                Comment on an Interpretation: Further Definition of     Segregation Requirements for Security-Based Swap       submit written data, views and
                                                ‘‘Swap,’’ ‘‘Security-Based Swap,’’ and ‘‘Security-      Dealers and Major Security-Based Swap                  arguments concerning the foregoing,
sradovich on DSK3GMQ082PROD with NOTICES




                                                Based Swap Agreement’’; Mixed Swaps; Security-          Participants and Capital Requirements for Broker-
                                                Based Swap Agreement Recordkeeping). See also           Dealers). See also Securities Exchange Act Release     including whether the proposed rule
                                                Securities Exchange Act Release No. 66868 (April        No. 71958 (April 17, 2014), 79 FR 25194 (May 2,        change is consistent with the Act.
                                                27, 2012), 77 FR 30596 (May 23, 2012) (Joint Final      2014) (Proposed Rule: Recordkeeping and Reporting      Comments may be submitted by any of
                                                Rule; Joint Interim Final Rule; Interpretations:        Requirements for Security-Based Swap Dealers,          the following methods:
                                                Further Definition of ‘‘Swap Dealer,’’ ‘‘Security-      Major Security-Based Swap Participants, and
                                                Based Swap Dealer,’’ ‘‘Major Swap Participant,’’        Broker-Dealers; Capital Rule for Certain Security-
                                                                                                        Based Swap Dealers).                                     12 15   U.S.C. 78s(b)(3)(A).
                                                ‘‘Major Security-Based Swap Participant’’ and
                                                ‘‘Eligible Contract Participant’’).                       11 15 U.S.C. 78o–3(b)(6).                              13 17   CFR 240.19b–4(f)(6).



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                                                30916                             Federal Register / Vol. 82, No. 126 / Monday, July 3, 2017 / Notices

                                                Electronic Comments                                       SECURITIES AND EXCHANGE                                places specified in Item IV below. The
                                                                                                          COMMISSION                                             Exchange has prepared summaries, set
                                                  • Use the Commission’s Internet                                                                                forth in Sections A, B, and C below, of
                                                comment form (http://www.sec.gov/                         [Release No. 34–81032; File No. SR–
                                                                                                          BatsBZX–2017–43]
                                                                                                                                                                 the most significant parts of such
                                                rules/sro.shtml); or                                                                                             statements.
                                                  • Send an email to rule-comments@                       Self-Regulatory Organizations; Bats                    (A) Self-Regulatory Organization’s
                                                sec.gov. Please include File Number SR–                   BZX Exchange, Inc.; Notice of Filing                   Statement of the Purpose of, and
                                                FINRA–2017–019 on the subject line.                       and Immediate Effectiveness of a                       Statutory Basis for, the Proposed Rule
                                                                                                          Proposed Rule Change Related to Fees                   Change
                                                Paper Comments                                            for Logical Ports on the Bats Equity
                                                                                                          Options Platform                                       1. Purpose
                                                  • Send paper comments in triplicate
                                                to Robert W. Errett, Deputy Secretary,                    June 27, 2017.
                                                                                                                                                                    The Exchange proposes to modify the
                                                Securities and Exchange Commission,                          Pursuant to Section 19(b)(1) of the                 fee schedule applicable to the
                                                100 F Street NE., Washington, DC                          Securities Exchange Act of 1934 (the                   Exchange’s options platform (‘‘BZX
                                                20549–1090.                                               ‘‘Act’’),1 and Rule 19b–4 thereunder,2                 Options’’) to amend the fees for logical
                                                                                                          notice is hereby given that on June 16,                ports. A logical port represents a port
                                                All submissions should refer to File                                                                             established by the Exchange within the
                                                                                                          2017 Bats BZX Exchange, Inc. (the
                                                Number SR–FINRA–2017–019. This file                                                                              Exchange’s system for trading and
                                                                                                          ‘‘Exchange’’ or ‘‘BZX’’) filed with the
                                                number should be included on the                          Securities and Exchange Commission                     billing purposes. Each logical port
                                                subject line if email is used. To help the                (‘‘Commission’’) the proposed rule                     established is specific to a Member or
                                                Commission process and review your                        change as described in Items I, II and III             non-Member and grants that Member or
                                                comments more efficiently, please use                     below, which Items have been prepared                  non-Member the ability to operate a
                                                only one method. The Commission will                      by the Exchange. The Exchange has                      specific application, such as FIX order
                                                post all comments on the Commission’s                     designated the proposed rule change as                 entry or PITCH data receipt. The
                                                Internet Web site (http://www.sec.gov/                    one establishing or changing a member                  Exchange’s Multicast PITCH data feed is
                                                rules/sro.shtml). Copies of the                           due, fee, or other charge imposed by the               available from two primary feeds,
                                                submission, all subsequent                                Exchange under Section 19(b)(3)(A)(ii)                 identified as the ‘‘A feed’’ and the ‘‘C
                                                amendments, all written statements                        of the Act 3 and Rule 19b–4(f)(2)                      feed’’, which contain the same
                                                with respect to the proposed rule                         thereunder,4 which renders the                         information but differ only in the way
                                                change that are filed with the                            proposed rule change effective upon                    such feeds are received. The Exchange
                                                Commission, and all written                               filing with the Commission. The                        also offers two redundant fees,
                                                                                                          Commission is publishing this notice to                identified as the ‘‘B feed’’ and the ‘‘D
                                                communications relating to the
                                                                                                          solicit comments on the proposed rule                  feed.’’ The Exchange also offers a bulk-
                                                proposed rule change between the
                                                                                                          change from interested persons.                        quoting interface which allows Users 6
                                                Commission and any person, other than
                                                                                                                                                                 of BZX Options to submit and update
                                                those that may be withheld from the                       I. Self-Regulatory Organization’s                      multiple bids and offers in one message
                                                public in accordance with the                             Statement of the Terms of Substance of                 through logical ports enabled for bulk-
                                                provisions of 5 U.S.C. 552, will be                       the Proposed Rule Change                               quoting.7 The bulk-quoting application
                                                available for Web site viewing and                           The Exchange filed a proposal to                    for BZX Options is a particularly useful
                                                printing in the Commission’s Public                       amend its fees and rebates applicable to               feature for Users that provide quotations
                                                Reference Room, 100 F Street NE.,                         Members 5 and non-Members of the                       in many different options. Logical port
                                                Washington, DC 20549, on official                         Exchange pursuant to BZX Rules 15.1(a)                 fees are limited to logical ports in the
                                                business days between the hours of 10                     and (c).                                               Exchange’s primary data center and no
                                                a.m. and 3 p.m. Copies of such filing                        The text of the proposed rule change                logical port fees are assessed for
                                                also will be available for inspection and                 is available at the Exchange’s Web site                redundant secondary data center ports.
                                                copying at the principal office of                        at www.batstrading.com, at the                         The Exchange assesses the monthly per
                                                FINRA. All comments received will be                      principal office of the Exchange, and at               logical port fees for all of a Member and
                                                posted without change; the Commission                     the Commission’s Public Reference                      non-Member logical ports.
                                                does not edit personal identifying                        Room.                                                     The Exchange currently charges for
                                                information from submissions. You                                                                                logical ports (including Multicast PITCH
                                                                                                          II. Self-Regulatory Organization’s
                                                should submit only information that                                                                              Spin Server and GRP ports) a fee $650
                                                                                                          Statement of the Purpose of, and
                                                you wish to make available publicly. All                                                                         per port per month. The Exchange now
                                                                                                          Statutory Basis for, the Proposed Rule
                                                submissions should refer to File                                                                                 proposes to amend the fees for logical
                                                                                                          Change
                                                Number SR–FINRA–2017–019 and                                                                                     ports, Multicast PITCH Spin Server
                                                                                                             In its filing with the Commission, the              Ports for a set of primary ports (A or C
                                                should be submitted on or before July                     Exchange included statements                           feed), and GRP Ports for a set of primary
                                                24, 2017.                                                 concerning the purpose of and basis for                ports (A or C feed) to $750 per month.8
                                                  For the Commission, by the Division of                  the proposed rule change and discussed
                                                Trading and Markets, pursuant to delegated                any comments it received on the                          6 A User on BZX Options is either a member of

                                                authority.14                                              proposed rule change. The text of these                BZX Options or a sponsored participant who is
                                                                                                          statements may be examined at the                      authorized to obtain access to the Exchange’s
sradovich on DSK3GMQ082PROD with NOTICES




                                                Robert W. Errett,                                                                                                system pursuant to BZX Rule 11.3. See Exchange
                                                Deputy Secretary.                                                                                                Rule 16.1(a)(63).
                                                                                                            1 15 U.S.C. 78s(b)(1).                                 7 See Securities Exchange Act Release Nos. 65133
                                                [FR Doc. 2017–13903 Filed 6–30–17; 8:45 am]                 2 17 CFR 240.19b–4.                                  (August 15, 2011), 76 FR 52032 (August 19, 2011)
                                                BILLING CODE 8011–01–P                                      3 15 U.S.C. 78s(b)(3)(A)(ii).
                                                                                                                                                                 (SR–BATS–2011–029) and 65307 (September 9,
                                                                                                            4 17 CFR 240.19b–4(f)(2).                            2011), 76 FR 57092 (September 15, 2011) (SR–
                                                                                                            5 A Member is defined as ‘‘any registered broker     BATS–2011–034).
                                                                                                          or dealer that has been admitted to membership in        8 The Exchange does not propose to amend the
                                                  14 17   CFR 200.30–3(a)(12).                            the Exchange.’’ See Exchange Rule 1.5(n).              monthly fee for purge ports.



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Document Created: 2018-11-14 10:19:10
Document Modified: 2018-11-14 10:19:10
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 30914 

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