82 FR 9814 - Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing and Order Approving and Declaring Effective an Amendment to the Plan for the Allocation of Regulatory Responsibilities Between Bats BZX Exchange, Inc., Bats BYX Exchange, Inc., BOX Options Exchange LLC, Chicago Board Options Exchange, Incorporated, C2 Options Exchange, Incorporated, Chicago Stock Exchange, Inc., Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., International Securities Exchange, LLC, Investors Exchange LLC, ISE Gemini, LLC, ISE Mercury, LLC, Miami International Securities Exchange, LLC, MIAX PEARL, LLC, The NASDAQ Stock Market LLC, NASDAQ BX, Inc., NASDAQ PHLX, Inc., National Stock Exchange, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc.
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 25 (February 8, 2017)
Federal Register Volume 82, Issue 25 (February 8, 2017)
| Page Range | 9814-9819 | |
| FR Document | 2017-02546 |
[Federal Register Volume 82, Number 25 (Wednesday, February 8, 2017)] [Notices] [Pages 9814-9819] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-02546] [[Page 9814]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79928; File No. 4-618] Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing and Order Approving and Declaring Effective an Amendment to the Plan for the Allocation of Regulatory Responsibilities Between Bats BZX Exchange, Inc., Bats BYX Exchange, Inc., BOX Options Exchange LLC, Chicago Board Options Exchange, Incorporated, C2 Options Exchange, Incorporated, Chicago Stock Exchange, Inc., Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., International Securities Exchange, LLC, Investors Exchange LLC, ISE Gemini, LLC, ISE Mercury, LLC, Miami International Securities Exchange, LLC, MIAX PEARL, LLC, The NASDAQ Stock Market LLC, NASDAQ BX, Inc., NASDAQ PHLX, Inc., National Stock Exchange, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc. February 2, 2017. Notice is hereby given that the Securities and Exchange Commission (``Commission'') has issued an Order, pursuant to Section 17(d) of the Securities Exchange Act of 1934 (``Act''),\1\ approving and declaring effective an amendment to the plan for allocating regulatory responsibility (``Plan'') filed on January 25, 2017, pursuant to Rule 17d-2 of the Act,\2\ by Bats BZX Exchange, Inc. (``BATS''), Bats BYX Exchange, Inc. (``BATS Y''), BOX Options Exchange LLC (``BOX''), Chicago Board Options Exchange, Incorporated (``CBOE''), C2 Options Exchange, Incorporated (``C2''), Chicago Stock Exchange, Inc. (``CHX''), Bats EDGA Exchange, Inc. (``EDGA''), Bats EDGX Exchange, Inc. (``EDGX''), Financial Industry Regulatory Authority, Inc. (``FINRA''), International Securities Exchange, LLC (``ISE''), Investors Exchange LLC (``IEX''), ISE Gemini, LLC (``ISE Gemini''), ISE Mercury, LLC (``ISE Mercury''), Miami International Securities Exchange, LLC (``MIAX''), MIAX PEARL, LLC (``MIAX PEARL''), The NASDAQ Stock Market LLC (``NASDAQ''), NASDAQ BX, Inc. (``BX''), NASDAQ PHLX, Inc. (``Phlx''), National Stock Exchange, Inc. (``NSX''), New York Stock Exchange LLC (``NYSE''), NYSE MKT LLC (``NYSE MKT''), and NYSE Arca, Inc. (``NYSE Arca'') (each, a ``Participating Organization,'' and, together, the ``Participating Organizations'' or the ``Parties''). As further discussed in Section III, below, this Agreement amends and restates the agreement by and among the Participating Organizations approved by the Commission on August 11, 2016.\3\ --------------------------------------------------------------------------- \1\ 15 U.S.C. 78q(d). \2\ 17 CFR 240.17d-2. \3\ See Securities Exchange Act Release No. 78552, 81 FR 54905 (August 17, 2016). --------------------------------------------------------------------------- I. Introduction Section 19(g)(1) of the Act,\4\ 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.\5\ 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. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78s(g)(1). \5\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively. --------------------------------------------------------------------------- Section 17(d)(1) of the Act \6\ was intended, in part, to eliminate unnecessary multiple examinations and regulatory duplication.\7\ 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. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78q(d)(1). \7\ 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.\8\ 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.\9\ 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 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. --------------------------------------------------------------------------- \8\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively. \9\ See Securities Exchange Act Release No. 12352 (April 20, 1976), 41 FR 18808 (May 7, 1976). --------------------------------------------------------------------------- To address regulatory duplication in these and other areas, the Commission adopted Rule 17d-2 under the Act.\10\ 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. --------------------------------------------------------------------------- \10\ See Securities Exchange Act Release No. 12935 (October 28, 1976), 41 FR 49091 (November 8, 1976). --------------------------------------------------------------------------- II. The Plan On December 3, 2010, the Commission approved the SRO participants' plan for allocating regulatory responsibilities pursuant to Rule 17d- 2.\11\ On October 29, 2015, the Commission approved an amended plan that added Regulation NMS Rules 606, 607, and 611(c) and (d) and added additional Participating Organizations that are options markets to the Plan.\12\ On August 11, 2016, the Commission approved an amended plan that added IEX and ISE Mercury as Participants to the Plan.\13\ --------------------------------------------------------------------------- \11\ See Securities Exchange Act Release No. 63430, 75 FR 76758 (December 9, 2010). \12\ See Securities Exchange Act Release No. 76311, 80 FR 68377 (November 4, 2015). \13\ See Securities Exchange Act Release No. 78552, 81 FR 54905 (August 17, 2016). --------------------------------------------------------------------------- The proposed 17d-2 Plan is intended to reduce regulatory duplication for firms that are members of more than one [[Page 9815]] Participating Organization.\14\ The Plan provides for the allocation of regulatory responsibility according to whether the covered rule pertains to NMS stocks or NMS securities. For covered rules that pertain to NMS stocks (i.e., Rules 607, 611, and 612), FINRA serves as the ``Designated Regulation NMS Examining Authority'' (``DREA'') for common members that are members of FINRA, and assumes certain examination and enforcement responsibilities for those members with respect to specified Regulation NMS rules. For common members that are not members of FINRA, the member's DEA serves as the DREA, provided that the DEA exchange operates a national securities exchange or facility that trades NMS stocks and the common member is a member of such exchange or facility. Section 1(c) of the Plan contains a list of principles that are applicable to the allocation of common members in cases not specifically addressed in the Plan. An exchange that does not trade NMS stocks would have no regulatory authority for covered Regulation NMS rules pertaining to NMS stocks. For covered rules that pertain to NMS securities, and thus include options (i.e., Rule 606), the Plan provides that the DREA will be the same as the DREA for the rules pertaining to NMS stocks. For common members that are not members of an exchange that trades NMS stocks, the common member would be allocated according to the principles set forth in Section 1(c) of the Plan. --------------------------------------------------------------------------- \14\ The proposed 17d-2 Plan refers to these members as ``Common Members.'' --------------------------------------------------------------------------- The text of the Plan delineates the proposed regulatory responsibilities with respect to the Parties. Included in the proposed Plan is an exhibit (the ``Covered Regulation NMS Rules'') that lists the federal securities laws, rules, and regulations, for which the applicable DREA would bear examination and enforcement responsibility under the Plan for common members of the Participating Organization and their associated persons. Specifically, the applicable DREA assumes examination and enforcement responsibility relating to compliance by common members with the Covered Regulation NMS Rules. Covered Regulation NMS Rules do not include the application of any rule of a Participating Organization, or any rule or regulation under the Act, to the extent that it pertains to violations of insider trading activities, because such matters are covered by a separate multiparty agreement under Rule 17d-2.\15\ Under the Plan, Participating Organizations retain full responsibility for surveillance and enforcement with respect to trading activities or practices involving their own marketplace.\16\ --------------------------------------------------------------------------- \15\ See Securities Exchange Act Release No. 58350 (August 13, 2008), 73 FR 48247 (August 18, 2008) (File No. 4-566) (notice of filing of proposed plan). See also Securities Exchange Act Release No. 58536 (September 12, 2008), 73 FR 54646 (September 22, 2008) (File No. 4-566) (order approving and declaring effective the plan). \16\ See paragraph 1(d) of the proposed 17d-2 Plan. --------------------------------------------------------------------------- III. Proposed Amendment to the Plan On January 25, 2017, the parties submitted a proposed amendment to the Plan. The primary purpose of the amendment is to add MIAX PEARL as a Participant to the Plan. The text of the proposed amended 17d-2 Plan is as follows (additions in italics; deletions are in brackets): * * * * * Agreement for the Allocation of Regulatory Responsibility for the Covered Regulation NMS Rules Pursuant to Sec. 17(d) of the Securities Exchange Act of 1934, 15 U.S.C. 78q(d), and Rule 17d-2 Thereunder This agreement (the ``Agreement'') by and among Bats BZX Exchange, Inc. (``BATS''), Bats BYX Exchange, Inc. (``BATS Y''), BOX Options Exchange LLC (``BOX''), Chicago Board Options Exchange, Incorporated (``CBOE''), C2 Options Exchange, Incorporated (``C2''), Chicago Stock Exchange, Inc. (``CHX''), Bats EDGA Exchange, Inc. (``EDGA''), Bats EDGX Exchange, Inc. (``EDGX''), Financial Industry Regulatory Authority, Inc. (``FINRA''), International Securities Exchange, LLC (``ISE''), ISE Gemini, LLC (``ISE Gemini''), ISE Mercury, LLC (``ISE Mercury''), Investors Exchange LLC (``IEX''), Miami International Securities Exchange, LLC (``MIAX''), MIAX PEARL, LLC (``MIAX PEARL''), The NASDAQ Stock Market LLC (``NASDAQ''), NASDAQ BX, Inc. (``BX''), NASDAQ PHLX, Inc. (``PHLX''), National Stock Exchange, Inc. (``NSX''), New York Stock Exchange LLC (``NYSE''), NYSE MKT LLC (``NYSE MKT''), and NYSE Arca, Inc. (``NYSE Arca'') (each, a ``Participating Organization,'' and, together, the ``Participating Organizations''), is made pursuant to Sec. 17(d) of the Securities Exchange Act of 1934 (the ``Act'' or ``SEA''), 15 U.S.C. 78q(d), and Rule 17d-2 thereunder, which allow for plans to allocate regulatory responsibility among self- regulatory organizations (``SROs''). Upon approval by the Securities and Exchange Commission (``Commission'' or ``SEC''), this Agreement shall amend and restate the agreement by and among the Participating Organizations approved by the SEC on [October 29, 2015] August 11, 2016. Whereas, the Participating Organizations desire to: (a) Foster cooperation and coordination among the SROs; (b) remove impediments to, and foster the development of, a national market system; (c) strive to protect the interest of investors; and (d) eliminate duplication in their examination and enforcement of SEA Rules 606, 607, 611 and 612 (the ``Covered Regulation NMS Rules''); Whereas, the Participating Organizations are interested in allocating regulatory responsibilities with respect to broker-dealers that are members of more than one Participating Organization (the ``Common Members'') relating to the examination and enforcement of the Covered Regulation NMS Rules; and Whereas, the Participating Organizations will request regulatory allocation of these regulatory responsibilities by executing and filing with the SEC this plan for the above stated purposes pursuant to the provisions of Sec. 17(d) of the Act, and Rule 17d-2 thereunder, as described below. Now, therefore, in consideration of the mutual covenants contained hereafter, and other valuable consideration to be mutually exchanged, the Participating Organizations hereby agree as follows: 1. Assumption of Regulatory Responsibility. The Designated Regulation NMS Examining Authority (the ``DREA'') shall assume examination and enforcement responsibilities relating to compliance by Common Members with the Covered Regulation NMS Rules to which the DREA is allocated responsibility (``Regulatory Responsibility''). A list of the Covered Regulation NMS Rules is attached hereto as Exhibit A. a. For Covered Regulation NMS Rules Pertaining to ``NMS stocks'' (as defined in Regulation NMS) (i.e., Rules 607, 611 and 612): FINRA shall serve as DREA for Common Members that are members of FINRA. The Designated Examining Authority (``DEA'') pursuant to SEA Rule 17d-1 shall serve as DREA for Common Members that are not members of FINRA, provided that the DEA operates a national securities exchange or facility that trades NMS stocks and the Common Member is a member of such exchange or facility. For all other Common Members, the Participating Organizations shall allocate Common Members among the Participating Organizations (other than FINRA) that [[Page 9816]] operate a national securities exchange that trades NMS stocks based on the principles outlined below and the Participating Organization to which such a Common Member is allocated shall serve as the DREA for that Common Member. (A Participating Organization that operates a national securities exchange that does not trade NMS stocks has no regulatory responsibilities related to Covered Regulation NMS Rules pertainining to NMS stocks and will not serve as DREA for such Covered Regulation NMS Rules.) b. For Covered Regulation NMS Rules Pertaining to ``NMS securities'' (as defined in Regulation NMS) (i.e., Rule 606), the DREA shall be same as the DREA for Covered Regulation NMS Rules pertaining to NMS stocks. For Common Members that are not members of a national securities exchange that trades NMS stocks and thus have not been appointed a DREA under paragraph a., the Participating Organizations shall allocate the Common Members among the Participating Organizations (other than FINRA) that operate a national securities exchange that trades NMS securities based on the principles outlined below and the Participating Organization to which such a Common Member is allocated shall serve as the DREA for that Common Member with respect to Covered Regulation NMS Rules pertaining to NMS securities. The allocation of Common Members to DREAs (including FINRA) for all Covered Regulation NMS Rules is provided in Exhibit B. c. For purposes of this paragraph 1, any allocation of a Common Member to a Participating Organization other than as specified in paragraphs a. and b. above shall be based on the following principles, except to the extent all affected Participating Organizations consent to one or more different principles and any such agreement to different principles would be deemed an amendment to this Agreement as provided in paragraph 22: i. The Participating Organizations shall not allocate a Common Member to a Participating Organization unless the Common Member is a member of that Participating Organization. ii. To the extent practicable, Common Members shall be allocated among the Participating Organizations of which they are members in such a manner as to equalize, as nearly as possible, the allocation among such Participating Organizations. iii. To the extent practicable, the allocation will take into account the amount of NMS stock activity (or NMS security activity, as applicable) conducted by each Common Member in order to most evenly divide the Common Members with the largest amount of activity among the Participating Organizations of which they are a members. The allocation will also take into account similar allocations pursuant to other plans or agreements to which the Participating Organizations are party to maintain consistency in oversight of the Common Members.\1\ --------------------------------------------------------------------------- \1\ For example, if one Participating Organization was allocated responsibility for a particular Common Member pursuant to a separate Rule 17d-2 Agreement, that Participant Organization would be assigned to be the DREA of that Common Member, unless there is good cause not to make that assignment. --------------------------------------------------------------------------- iv. The Participating Organizations may reallocate Common Members from time-to-time and in such manner as they deem appropriate consistent with the terms of this Agreement. v. Whenever a Common Member ceases to be a member of its DREA (including FINRA), the DREA shall promptly inform the Participating Organizations, who shall review the matter and reallocate the Common Member to another Participating Organization. vi. The DEA or DREA (including FINRA) may request that a Common Member be reallocated to another Participating Organization (including the DEA or DREA (including FINRA)) by giving 30 days written notice to the Participating Organizations. The Participating Organizations shall promptly consider such request and, in their discretion, may approve or disapprove such request and if approved, reallocate the Common Member to such Participating Organization. vii. All determinations by the Participating Organizations with respect to allocations shall be by the affirmative vote of a majority of the Participating Organizations that, at the time of such determination, share the applicable Common Member being allocated; a Participating Organization shall not be entitled to vote on any allocation related to a Common Member unless the Common Member is a member of such Participating Organization. d. The Participating Organizations agree that they shall conduct meetings among them as needed for the purposes of ensuring proper allocation of Common Members and identifying issues or concerns with respect to the regulation of Common Members. Notwithstanding anything herein to the contrary, it is explicitly understood that the term ``Regulatory Responsibility'' does not include, and each of the Participating Organizations shall retain full responsibility for, examination, surveillance and enforcement with respect to trading activities or practices involving its own marketplace unless otherwise allocated pursuant to a separate Rule 17d- 2 Agreement. 2. No Retention of Regulatory Responsibility. The Participating Organizations do not contemplate the retention of any responsibilities with respect to the regulatory activities being assumed by the DREA under the terms of this Agreement. Nothing in this Agreement will be interpreted to prevent a DREA from entering into Regulatory Services Agreement(s) to perform its Regulatory Responsibility. 3. No Charge. A DREA shall not charge Participating Organizations for performing the Regulatory Responsibility under this Agreement. 4. Applicability of Certain Laws, Rules, Regulations or Orders. Notwithstanding any provision hereof, this Agreement shall be subject to any statute, or any rule or order of the SEC. To the extent such statute, rule, or order is inconsistent with one or more provisions of this Agreement, the statute, rule, or order shall supersede the provision(s) hereof to the extent necessary to be properly effectuated and the provision(s) hereof in that respect shall be null and void. 5. Customer Complaints. If a Participating Organization receives a copy of a customer complaint relating to a DREA's Regulatory Responsibility as set forth in this Agreement, the Participating Organization shall promptly forward to such DREA a copy of such customer complaint. It shall be such DREA's responsibility to review and take appropriate action in respect to such complaint. 6. Parties to Make Personnel Available as Witnesses. Each Participating Organization shall make its personnel available to the DREA to serve as testimonial or non-testimonial witnesses as necessary to assist the DREA in fulfilling the Regulatory Responsibility allocated under this Agreement. The DREA shall provide reasonable advance notice when practicable and shall work with a Participating Organization to accommodate reasonable scheduling conflicts within the context and demands as the entity with ultimate regulatory responsibility. The Participating Organization shall pay all reasonable travel and other expenses incurred by its employees to the extent that the DREA requires such employees to serve as witnesses, and provide information or other assistance pursuant to this Agreement. [[Page 9817]] 7. Sharing of Work-Papers, Data and Related Information. a. Sharing. A Participating Organization shall make available to the DREA information necessary to assist the DREA in fulfilling the Regulatory Responsibility assumed under the terms of this Agreement. Such information shall include any information collected by a Participating Organization in the course of performing its regulatory obligations under the Act, including information relating to an on- going disciplinary investigation or action against a member, the amount of a fine imposed on a member, financial information, or information regarding proprietary trading systems gained in the course of examining a member (``Regulatory Information''). This Regulatory Information shall be used by the DREA solely for the purposes of fulfilling the DREA's Regulatory Responsibility. b. No Waiver of Privilege. The sharing of documents or information between the parties pursuant to this Agreement shall not be deemed a waiver as against third parties of regulatory or other privileges relating to the discovery of documents or information. 8. Special or Cause Examinations and Enforcement Proceedings. Nothing in this Agreement shall restrict or in any way encumber the right of a Participating Organization to conduct special or cause examinations of a Common Member, or take enforcement proceedings against a Common Member as a Participating Organization, in its sole discretion, shall deem appropriate or necessary. 9. Dispute Resolution Under this Agreement. a. Negotiation. The Participating Organizations will attempt to resolve any disputes through good faith negotiation and discussion, escalating such discussion up through the appropriate management levels until reaching the executive management level. In the event a dispute cannot be settled through these means, the Participating Organizations shall refer the dispute to binding arbitration. b. Binding Arbitration. All claims, disputes, controversies, and other matters in question between the Participating Organizations to this Agreement arising out of or relating to this Agreement or the breach thereof that cannot be resolved by the Participating Organizations will be resolved through binding arbitration. Unless otherwise agreed by the Participating Organizations, a dispute submitted to binding arbitration pursuant to this paragraph shall be resolved using the following procedures: (i) The arbitration shall be conducted in a city selected by the DREA in which it maintains a principal office or where otherwise agreed to by the Participating Organizations in accordance with the Commercial Arbitration Rules of the American Arbitration Association and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof; and (ii) There shall be three arbitrators, and the chairperson of the arbitration panel shall be an attorney. The arbitrators shall be appointed in accordance with the Commercial Arbitration Rules of the American Arbitration Association. 10. Limitation of Liability. As between the Participating Organizations, no Participating Organization, including its respective directors, governors, officers, employees and agents, will be liable to any other Participating Organization, or its directors, governors, officers, employees and agents, for any liability, loss or damage resulting from any delays, inaccuracies, errors or omissions with respect to its performing or failing to perform regulatory responsibilities, obligations, or functions, except: (a) As otherwise provided for under the Act; (b) in instances of a Participating Organization's gross negligence, willful misconduct or reckless disregard with respect to another Participating Organization; or (c) in instances of a breach of confidentiality obligations owed to another Participating Organization. The Participating Organizations understand and agree that the regulatory responsibilities are being performed on a good faith and best effort basis and no warranties, express or implied, are made by any Participating Organization to any other Participating Organization with respect to any of the responsibilities to be performed hereunder. This paragraph is not intended to create liability of any Participating Organization to any third party. 11. SEC Approval. a. The Participating Organizations agree to file promptly this Agreement with the SEC for its review and approval. FINRA shall file this Agreement on behalf, and with the explicit consent, of all Participating Organizations. b. If approved by the SEC, the Participating Organizations will notify their members of the general terms of the Agreement and of its impact on their members. 12. Subsequent Parties; Limited Relationship. This Agreement shall inure to the benefit of and shall be binding upon the Participating Organizations hereto and their respective legal representatives, successors, and assigns. Nothing in this Agreement, expressed or implied, is intended or shall: (a) Confer on any person other than the Participating Organizations hereto, or their respective legal representatives, successors, and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, (b) constitute the Participating Organizations hereto partners or participants in a joint venture, or (c) appoint one Participating Organization the agent of the other. 13. Assignment. No Participating Organization may assign this Agreement without the prior written consent of the DREAs performing Regulatory Responsibility on behalf of such Participating Organization, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that any Participating Organization may assign the Agreement to a corporation controlling, controlled by or under common control with the Participating Organization without the prior written consent of such Participating Organization's DREAs. No assignment shall be effective without Commission approval. 14. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. 15. Termination. Any Participating Organization may cancel its participation in the Agreement at any time upon the approval of the Commission after 180 days written notice to the other Participating Organizations (or in the case of a change of control in ownership of a Participating Organization, such other notice time period as that Participating Organization may choose). The cancellation of its participation in this Agreement by any Participating Organization shall not terminate this Agreement as to the remaining Participating Organizations. 16. General. The Participating Organizations agree to perform all acts and execute all supplementary instruments or documents that may be reasonably necessary or desirable to carry out the provisions of this Agreement. [[Page 9818]] 17. Written Notice. Any written notice required or permitted to be given under this Agreement shall be deemed given if sent by certified mail, return receipt requested, or by a comparable means of electronic communication to each Participating Organization entitled to receipt thereof, to the attention of the Participating Organization's representative at the Participating Organization's then principal office or by email. 18. Confidentiality. The Participating Organizations agree that documents or information shared shall be held in confidence, and used only for the purposes of carrying out their respective regulatory obligations under this Agreement, provided, however, that each Participating Organization may disclose such documents or information as may be required to comply with applicable requlatory requirements or requests for information from the SEC. Any Participating Organization disclosing confidential documents or information in compliance with applicable regulatory or oversight requirements will request confidential treatment of such information. No Participating Organization shall assert regulatory or other privileges as against the other with respect to Regulatory Information that is required to be shared pursuant to this Agreement. 19. Regulatory Responsibility. Pursuant to Section 17(d)(1)(A) of the Act, and Rule 17d-2 thereunder, the Participating Organizations request the SEC, upon its approval of this Agreement, to relieve the Participating Organizations which are participants in this Agreement that are not the DREA as to a Common Member of any and all responsibilities with respect to the matters allocated to the DREA pursuant to this Agreement for purposes of Sec. Sec. 17(d) and 19(g) of the Act. 20. Governing Law. This Agreement shall be deemed to have been made in the State of New York, and shall be construed and enforced in accordance with the law of the State of New York, without reference to principles of conflicts of laws thereof. Each of the Participating Organizations hereby consents to submit to the jurisdiction of the courts of the State of New York in connection with any action or proceeding relating to this Agreement. 21. Survival of Provisions. Provisions intended by their terms or context to survive and continue notwithstanding delivery of the regulatory services by the DREA and any expiration of this Agreement shall survive and continue. 22. Amendment. a. This Agreement may be amended to add a new Participating Organization, provided that such Participating Organization does not assume regulatory responsibility, by an amendment executed by all applicable DREAs and such new Participating Organization. All other Participating Organizations expressly consent to allow such DREAs to jointly add new Participating Organizations to the Agreement as provided above. Such DREAs will promptly notify all Participating Organizations of any such amendments to add a new Participating Organization. b. All other amendments must be approved by each Participating Organization. All amendments, including adding a new Participating Organization but excluding changes to Exhibit B, must be filed with and approved by the Commission before they become effective. 23. Effective Date. The Effective Date of this Agreement will be the date the SEC declares this Agreement to be effective pursuant to authority conferred by Sec. 17(d) of the Act, and Rule 17d-2 thereunder. 24. Counterparts. This Agreement may be executed in any number of counterparts, including facsimile, each of which will be deemed an original, but all of which taken together shall constitute one single agreement among the Participating Organizations. * * * * * Exhibit A Covered Regulation NMS Rules SEA Rule 606--Disclosure of Order Routing Information.* SEA Rule 607--Customer Account Statements. SEA Rule 611--Order Protection Rule. SEA Rule 612--Minimum Pricing Increment. * Covered Regulation NMS Rules with asterisks (*) pertain to NMS securities. Covered Regulation NMS Rules without asterisks pertain to NMS stocks IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number 4-618 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number 4-618. 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 plan that are filed with the Commission, and all written communications relating to the proposed plan between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the plan also will be available for inspection and copying at the principal offices of the Participating Organizations. 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 4-618 and should be submitted on or before March 1, 2017. V. Discussion The Commission finds that the Plan, as amended, is consistent with the factors set forth in Section 17(d) of the Act \17\ and Rule 17d- 2(c) thereunder \18\ in that the proposed amended 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 amended Plan should reduce unnecessary regulatory duplication by allocating to the applicable DREA certain examination and enforcement responsibilities for Common Members that would otherwise be performed by multiple Parties. Accordingly, the proposed amended Plan promotes efficiency by reducing costs to Common Members. Furthermore, because the Parties will coordinate their regulatory functions in accordance with the [[Page 9819]] proposed amended Plan, the amended Plan should promote investor protection. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78q(d). \18\ 17 CFR 240.17d-2(c). --------------------------------------------------------------------------- The Commission is hereby declaring effective a plan that allocates regulatory responsibility for certain provisions of the federal securities laws, rules, and regulations as set forth in Exhibit A to the Plan. The Commission notes that any amendment to the Plan must be approved by the relevant Parties as set forth in Paragraph 22 of the Plan and must be filed with and approved by the Commission before it may become effective.\19\ --------------------------------------------------------------------------- \19\ See Paragraph 22 of the Plan. The Commission notes, however, that changes to Exhibit B to the Plan (the allocation of Common Members to DREAs) are not required to be filed with, and approved by, the Commission before they become effective. --------------------------------------------------------------------------- Under paragraph (c) of Rule 17d-2, the Commission may, after appropriate notice and comment, declare a plan, or any part of a plan, effective. In this instance, the Commission believes that appropriate notice and comment can take place after the proposed amendment is effective. In particular, the purpose of the amendment is to add MIAX PEARL as a Participating Organization. The Commission notes that the most recent prior amendment to the Plan was published for comment and the Commission did not receive any comments thereon.\20\ The Commission believes that the current amendment to the Plan does not raise any new regulatory issues that the Commission has not previously considered, and therefore believes that the amended Plan should become effective without any undue delay. --------------------------------------------------------------------------- \20\ See Securities Exchange Act Release No. 78552 (August 11, 2016), 81 FR 54905 (August 17, 2016). --------------------------------------------------------------------------- VI. Conclusion This order gives effect to the amended Plan filed with the Commission that is contained in File No. 4-618. It is therefore ordered, pursuant to Section 17(d) of the Act, that the Plan, as amended, filed with the Commission pursuant to Rule 17d-2 on January 25, 2017, is hereby approved and declared effective. It is further ordered that those SRO participants that are not the DREA as to a particular common member are relieved of those regulatory responsibilities allocated to the common member's DREA under the amended Plan to the extent of such allocation. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\21\ --------------------------------------------------------------------------- \21\ 17 CFR 200.30-3(a)(34). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2017-02546 Filed 2-7-17; 8:45 am] BILLING CODE 8011-01-P
![9814 Federal Register / Vol. 82, No. 25 / Wednesday, February 8, 2017 / Notices
SECURITIES AND EXCHANGE Organization,’’ and, together, the SROs to which the common member
COMMISSION ‘‘Participating Organizations’’ or the belongs are relieved of the responsibility
‘‘Parties’’). As further discussed in to examine the firm for compliance with
[Release No. 34–79928; File No. 4–618]
Section III, below, this Agreement the applicable financial responsibility
Program for Allocation of Regulatory amends and restates the agreement by rules. On its face, Rule 17d–1 deals only
Responsibilities Pursuant to Rule 17d– and among the Participating with an SRO’s obligations to enforce
2; Notice of Filing and Order Organizations approved by the member compliance with financial
Approving and Declaring Effective an Commission on August 11, 2016.3 responsibility requirements. Rule 17d–1
Amendment to the Plan for the does not relieve an SRO from its
I. Introduction
Allocation of Regulatory obligation to examine a common
Section 19(g)(1) of the Act,4 among member for compliance with its own
Responsibilities Between Bats BZX
other things, requires every self- rules and provisions of the federal
Exchange, Inc., Bats BYX Exchange,
regulatory organization (‘‘SRO’’) securities laws governing matters other
Inc., BOX Options Exchange LLC,
registered as either a national securities than financial responsibility, including
Chicago Board Options Exchange,
exchange or national securities sales practices and trading activities and
Incorporated, C2 Options Exchange,
association to examine for, and enforce practices.
Incorporated, Chicago Stock
compliance by, its members and persons To address regulatory duplication in
Exchange, Inc., Bats EDGA Exchange,
associated with its members with the these and other areas, the Commission
Inc., Bats EDGX Exchange, Inc.,
Act, the rules and regulations adopted Rule 17d–2 under the Act.10
Financial Industry Regulatory
thereunder, and the SRO’s own rules, Rule 17d–2 permits SROs to propose
Authority, Inc., International Securities
unless the SRO is relieved of this joint plans for the allocation of
Exchange, LLC, Investors Exchange
responsibility pursuant to Section 17(d) regulatory responsibilities with respect
LLC, ISE Gemini, LLC, ISE Mercury,
or Section 19(g)(2) of the Act.5 Without to their common members. Under
LLC, Miami International Securities
this relief, the statutory obligation of paragraph (c) of Rule 17d–2, the
Exchange, LLC, MIAX PEARL, LLC,
each individual SRO could result in a Commission may declare such a plan
The NASDAQ Stock Market LLC,
pattern of multiple examinations of effective if, after providing for
NASDAQ BX, Inc., NASDAQ PHLX, Inc.,
broker-dealers that maintain appropriate notice and comment, it
National Stock Exchange, Inc., New
memberships in more than one SRO determines that the plan is necessary or
York Stock Exchange LLC, NYSE MKT
(‘‘common members’’). Such regulatory appropriate in the public interest and
LLC, and NYSE Arca, Inc.
duplication would add unnecessary for the protection of investors; to foster
February 2, 2017. expenses for common members and cooperation and coordination among the
Notice is hereby given that the their SROs. SROs; to remove impediments to, and
Securities and Exchange Commission Section 17(d)(1) of the Act 6 was foster the development of, a national
(‘‘Commission’’) has issued an Order, intended, in part, to eliminate market system and a national clearance
pursuant to Section 17(d) of the unnecessary multiple examinations and and settlement system; and is in
Securities Exchange Act of 1934 regulatory duplication.7 With respect to conformity with the factors set forth in
(‘‘Act’’),1 approving and declaring a common member, Section 17(d)(1) Section 17(d) of the Act. Commission
effective an amendment to the plan for authorizes the Commission, by rule or approval of a plan filed pursuant to Rule
allocating regulatory responsibility order, to relieve an SRO of the 17d–2 relieves an SRO of those
(‘‘Plan’’) filed on January 25, 2017, responsibility to receive regulatory
regulatory responsibilities allocated by
pursuant to Rule 17d–2 of the Act,2 by reports, to examine for and enforce
the plan to another SRO.
Bats BZX Exchange, Inc. (‘‘BATS’’), Bats compliance with applicable statutes,
BYX Exchange, Inc. (‘‘BATS Y’’), BOX rules, and regulations, or to perform II. The Plan
Options Exchange LLC (‘‘BOX’’), other specified regulatory functions. On December 3, 2010, the
Chicago Board Options Exchange, To implement Section 17(d)(1), the Commission approved the SRO
Incorporated (‘‘CBOE’’), C2 Options Commission adopted two rules: Rule participants’ plan for allocating
Exchange, Incorporated (‘‘C2’’), Chicago 17d–1 and Rule 17d–2 under the Act.8 regulatory responsibilities pursuant to
Stock Exchange, Inc. (‘‘CHX’’), Bats Rule 17d–1 authorizes the Commission Rule 17d–2.11 On October 29, 2015, the
EDGA Exchange, Inc. (‘‘EDGA’’), Bats to name a single SRO as the designated Commission approved an amended plan
EDGX Exchange, Inc. (‘‘EDGX’’), examining authority (‘‘DEA’’) to that added Regulation NMS Rules 606,
Financial Industry Regulatory examine common members for 607, and 611(c) and (d) and added
Authority, Inc. (‘‘FINRA’’), International compliance with the financial additional Participating Organizations
Securities Exchange, LLC (‘‘ISE’’), responsibility requirements imposed by that are options markets to the Plan.12
Investors Exchange LLC (‘‘IEX’’), ISE the Act, or by Commission or SRO On August 11, 2016, the Commission
Gemini, LLC (‘‘ISE Gemini’’), ISE rules.9 When an SRO has been named as approved an amended plan that added
Mercury, LLC (‘‘ISE Mercury’’), Miami a common member’s DEA, all other IEX and ISE Mercury as Participants to
International Securities Exchange, LLC the Plan.13
3 See Securities Exchange Act Release No. 78552,
(‘‘MIAX’’), MIAX PEARL, LLC (‘‘MIAX The proposed 17d–2 Plan is intended
81 FR 54905 (August 17, 2016).
PEARL’’), The NASDAQ Stock Market 4 15 U.S.C. 78s(g)(1). to reduce regulatory duplication for
LLC (‘‘NASDAQ’’), NASDAQ BX, Inc. 5 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), firms that are members of more than one
asabaliauskas on DSK3SPTVN1PROD with NOTICES
(‘‘BX’’), NASDAQ PHLX, Inc. (‘‘Phlx’’), respectively.
National Stock Exchange, Inc. (‘‘NSX’’), 6 15 U.S.C. 78q(d)(1). 10 See Securities Exchange Act Release No. 12935
New York Stock Exchange LLC 7 See Securities Act Amendments of 1975, Report (October 28, 1976), 41 FR 49091 (November 8,
(‘‘NYSE’’), NYSE MKT LLC (‘‘NYSE of the Senate Committee on Banking, Housing, and 1976).
Urban Affairs to Accompany S. 249, S. Rep. No. 94– 11 See Securities Exchange Act Release No. 63430,
MKT’’), and NYSE Arca, Inc. (‘‘NYSE 75, 94th Cong., 1st Session 32 (1975). 75 FR 76758 (December 9, 2010).
Arca’’) (each, a ‘‘Participating 8 17 CFR 240.17d–1 and 17 CFR 240.17d–2, 12 See Securities Exchange Act Release No. 76311,
respectively. 80 FR 68377 (November 4, 2015).
1 15 U.S.C. 78q(d). 9 See Securities Exchange Act Release No. 12352 13 See Securities Exchange Act Release No. 78552,
2 17 CFR 240.17d–2. (April 20, 1976), 41 FR 18808 (May 7, 1976). 81 FR 54905 (August 17, 2016).
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![Federal Register / Vol. 82, No. 25 / Wednesday, February 8, 2017 / Notices 9815
Participating Organization.14 The Plan 2.15 Under the Plan, Participating the agreement by and among the
provides for the allocation of regulatory Organizations retain full responsibility Participating Organizations approved by
responsibility according to whether the for surveillance and enforcement with the SEC on [October 29, 2015] August
covered rule pertains to NMS stocks or respect to trading activities or practices 11, 2016.
NMS securities. For covered rules that involving their own marketplace.16 Whereas, the Participating
pertain to NMS stocks (i.e., Rules 607, Organizations desire to: (a) Foster
III. Proposed Amendment to the Plan cooperation and coordination among the
611, and 612), FINRA serves as the
‘‘Designated Regulation NMS Examining On January 25, 2017, the parties SROs; (b) remove impediments to, and
Authority’’ (‘‘DREA’’) for common submitted a proposed amendment to the foster the development of, a national
members that are members of FINRA, Plan. The primary purpose of the market system; (c) strive to protect the
and assumes certain examination and amendment is to add MIAX PEARL as interest of investors; and (d) eliminate
enforcement responsibilities for those a Participant to the Plan. duplication in their examination and
members with respect to specified The text of the proposed amended enforcement of SEA Rules 606, 607, 611
Regulation NMS rules. For common 17d–2 Plan is as follows (additions in and 612 (the ‘‘Covered Regulation NMS
members that are not members of italics; deletions are in brackets): Rules’’);
FINRA, the member’s DEA serves as the * * * * * Whereas, the Participating
DREA, provided that the DEA exchange Organizations are interested in
Agreement for the Allocation of allocating regulatory responsibilities
operates a national securities exchange Regulatory Responsibility for the
or facility that trades NMS stocks and with respect to broker-dealers that are
Covered Regulation NMS Rules members of more than one Participating
the common member is a member of Pursuant to § 17(d) of the Securities
such exchange or facility. Section 1(c) of Organization (the ‘‘Common Members’’)
Exchange Act of 1934, 15 U.S.C. 78q(d), relating to the examination and
the Plan contains a list of principles that and Rule 17d–2 Thereunder
are applicable to the allocation of enforcement of the Covered Regulation
common members in cases not This agreement (the ‘‘Agreement’’) by NMS Rules; and
specifically addressed in the Plan. An and among Bats BZX Exchange, Inc. Whereas, the Participating
exchange that does not trade NMS (‘‘BATS’’), Bats BYX Exchange, Inc. Organizations will request regulatory
stocks would have no regulatory (‘‘BATS Y’’), BOX Options Exchange allocation of these regulatory
authority for covered Regulation NMS LLC (‘‘BOX’’), Chicago Board Options responsibilities by executing and filing
rules pertaining to NMS stocks. For Exchange, Incorporated (‘‘CBOE’’), C2 with the SEC this plan for the above
covered rules that pertain to NMS Options Exchange, Incorporated (‘‘C2’’), stated purposes pursuant to the
securities, and thus include options Chicago Stock Exchange, Inc. (‘‘CHX’’), provisions of § 17(d) of the Act, and
(i.e., Rule 606), the Plan provides that Bats EDGA Exchange, Inc. (‘‘EDGA’’), Rule 17d–2 thereunder, as described
the DREA will be the same as the DREA Bats EDGX Exchange, Inc. (‘‘EDGX’’), below.
for the rules pertaining to NMS stocks. Financial Industry Regulatory Now, therefore, in consideration of
For common members that are not Authority, Inc. (‘‘FINRA’’), International the mutual covenants contained
members of an exchange that trades Securities Exchange, LLC (‘‘ISE’’), ISE hereafter, and other valuable
NMS stocks, the common member Gemini, LLC (‘‘ISE Gemini’’), ISE consideration to be mutually exchanged,
would be allocated according to the Mercury, LLC (‘‘ISE Mercury’’), the Participating Organizations hereby
principles set forth in Section 1(c) of the Investors Exchange LLC (‘‘IEX’’), Miami agree as follows:
Plan. International Securities Exchange, LLC 1. Assumption of Regulatory
The text of the Plan delineates the (‘‘MIAX’’), MIAX PEARL, LLC (‘‘MIAX Responsibility. The Designated
proposed regulatory responsibilities PEARL’’), The NASDAQ Stock Market Regulation NMS Examining Authority
with respect to the Parties. Included in LLC (‘‘NASDAQ’’), NASDAQ BX, Inc. (the ‘‘DREA’’) shall assume examination
the proposed Plan is an exhibit (the (‘‘BX’’), NASDAQ PHLX, Inc. (‘‘PHLX’’), and enforcement responsibilities
‘‘Covered Regulation NMS Rules’’) that National Stock Exchange, Inc. (‘‘NSX’’), relating to compliance by Common
lists the federal securities laws, rules, New York Stock Exchange LLC Members with the Covered Regulation
and regulations, for which the (‘‘NYSE’’), NYSE MKT LLC (‘‘NYSE NMS Rules to which the DREA is
applicable DREA would bear MKT’’), and NYSE Arca, Inc. (‘‘NYSE allocated responsibility (‘‘Regulatory
examination and enforcement Arca’’) (each, a ‘‘Participating Responsibility’’). A list of the Covered
responsibility under the Plan for Organization,’’ and, together, the Regulation NMS Rules is attached
common members of the Participating ‘‘Participating Organizations’’), is made hereto as Exhibit A.
Organization and their associated pursuant to § 17(d) of the Securities a. For Covered Regulation NMS Rules
persons. Exchange Act of 1934 (the ‘‘Act’’ or Pertaining to ‘‘NMS stocks’’ (as defined
Specifically, the applicable DREA ‘‘SEA’’), 15 U.S.C. 78q(d), and Rule in Regulation NMS) (i.e., Rules 607, 611
assumes examination and enforcement 17d–2 thereunder, which allow for and 612): FINRA shall serve as DREA
responsibility relating to compliance by plans to allocate regulatory for Common Members that are members
common members with the Covered responsibility among self-regulatory of FINRA. The Designated Examining
Regulation NMS Rules. Covered organizations (‘‘SROs’’). Upon approval Authority (‘‘DEA’’) pursuant to SEA
Regulation NMS Rules do not include by the Securities and Exchange Rule 17d–1 shall serve as DREA for
the application of any rule of a Commission (‘‘Commission’’ or ‘‘SEC’’), Common Members that are not members
of FINRA, provided that the DEA
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Participating Organization, or any rule this Agreement shall amend and restate
or regulation under the Act, to the operates a national securities exchange
extent that it pertains to violations of 15 See Securities Exchange Act Release No. 58350 or facility that trades NMS stocks and
insider trading activities, because such (August 13, 2008), 73 FR 48247 (August 18, 2008) the Common Member is a member of
matters are covered by a separate (File No. 4–566) (notice of filing of proposed plan). such exchange or facility. For all other
See also Securities Exchange Act Release No. 58536 Common Members, the Participating
multiparty agreement under Rule 17d– (September 12, 2008), 73 FR 54646 (September 22,
2008) (File No. 4–566) (order approving and Organizations shall allocate Common
14 The proposed 17d–2 Plan refers to these declaring effective the plan). Members among the Participating
members as ‘‘Common Members.’’ 16 See paragraph 1(d) of the proposed 17d–2 Plan. Organizations (other than FINRA) that
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![Federal Register / Vol. 82, No. 25 / Wednesday, February 8, 2017 / Notices 9819
proposed amended Plan, the amended For the Commission, by the Division of II. Self-Regulatory Organization’s
Plan should promote investor Trading and Markets, pursuant to delegated Statement of the Purpose of, and
protection. authority.21 Statutory Basis for, the Proposed Rule
The Commission is hereby declaring Robert W. Errett, Change
effective a plan that allocates regulatory Deputy Secretary. In its filing with the Commission, the
responsibility for certain provisions of [FR Doc. 2017–02546 Filed 2–7–17; 8:45 am] self-regulatory organization included
the federal securities laws, rules, and BILLING CODE 8011–01–P statements concerning the purpose of,
regulations as set forth in Exhibit A to and basis for, the proposed rule change
the Plan. The Commission notes that and discussed any comments it received
any amendment to the Plan must be SECURITIES AND EXCHANGE on the proposed rule change. The text
approved by the relevant Parties as set COMMISSION of these statements may be examined at
forth in Paragraph 22 of the Plan and the places specified in Item IV below.
must be filed with and approved by the [Release No. 34–79932; File No. SR–BOX– The self-regulatory organization has
Commission before it may become 2017–07] prepared summaries, set forth in
Sections A, B, and C below, of the most
effective.19
Self-Regulatory Organizations; BOX significant aspects of such statements.
Under paragraph (c) of Rule 17d–2, Options Exchange LLC; Notice of
the Commission may, after appropriate A. Self-Regulatory Organization’s
Filing of a Proposed Rule Change To Statement of the Purpose of, and
notice and comment, declare a plan, or Adopt the Rule 16000 Series To
any part of a plan, effective. In this Statutory Basis for, the Proposed Rule
Implement the Compliance Rule Change
instance, the Commission believes that Regarding the National Market System
appropriate notice and comment can Plan Governing the Consolidated Audit 1. Purpose
take place after the proposed Trail Bats BYX Exchange, Inc., Bats BZX
amendment is effective. In particular, Exchange, Inc., Bats EDGA Exchange,
the purpose of the amendment is to add February 2, 2017. Inc., Bats EDGX Exchange, Inc., BOX
MIAX PEARL as a Participating Pursuant to Section 19(b)(1) of the Options Exchange LLC, C2 Options
Organization. The Commission notes Securities Exchange Act of 1934 Exchange, Incorporated, Chicago Board
that the most recent prior amendment to (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Options Exchange, Incorporated,
the Plan was published for comment notice is hereby given that on January Chicago Stock Exchange, Inc., Financial
and the Commission did not receive any 31, 2017, BOX Options Exchange LLC Industry Regulatory Authority, Inc.,
comments thereon.20 The Commission (‘‘SRO’’ or the ‘‘Exchange’’) filed with International Securities Exchange, LLC,
believes that the current amendment to Investors’ Exchange LLC, ISE Gemini,
the Securities and Exchange
the Plan does not raise any new LLC, ISE Mercury, LLC, Miami
Commission (‘‘Commission’’) the
regulatory issues that the Commission International Securities Exchange LLC,
proposed rule change as described in
has not previously considered, and MIAX PEARL, LLC, NASDAQ BX, Inc.,
Items I and II below, which Items have NASDAQ PHLX LLC, The NASDAQ
therefore believes that the amended been prepared by the self-regulatory
Plan should become effective without Stock Market LLC, National Stock
organization.3 The Commission is Exchange, Inc., New York Stock
any undue delay. publishing this notice to solicit Exchange LLC, NYSE MKT LLC, and
VI. Conclusion comments on the proposed rule change NYSE Arca, Inc. (collectively, the
from interested persons. ‘‘Participants’’) filed with the
This order gives effect to the amended Commission, pursuant to Section 11A of
Plan filed with the Commission that is I. Self-Regulatory Organization’s
Statement of the Terms of Substance of the Exchange Act 4 and Rule 608 of
contained in File No. 4–618. Regulation NMS thereunder,5 the CAT
the Proposed Rule Change
It is therefore ordered, pursuant to NMS Plan.6 The Participants filed the
Section 17(d) of the Act, that the Plan, The Exchange proposes to adopt Rule Plan to comply with Rule 613 of
as amended, filed with the Commission 16000 Series to implement the Regulation NMS under the Exchange
pursuant to Rule 17d–2 on January 25, compliance rule (‘‘Compliance Rule’’) Act. The Plan was published for
2017, is hereby approved and declared regarding the National Market System comment in the Federal Register on
effective. Plan Governing the Consolidated Audit May 17, 2016,7 and approved by the
Trail (the ‘‘CAT NMS Plan’’ or ‘‘Plan’’). Commission, as modified, on November
It is further ordered that those SRO
The text of the proposed rule change is 15, 2016.8
participants that are not the DREA as to The Plan is designed to create,
a particular common member are available from the principal office of the
implement and maintain a consolidated
relieved of those regulatory Exchange, at the Commission’s Public
responsibilities allocated to the common Reference Room and also on the 4 15 U.S.C. 78k–1.
member’s DREA under the amended Exchange’s Internet Web site at http:// 5 17 CFR 242.608.
Plan to the extent of such allocation. boxexchange.com. 6 See Letter from the Participants to Brent J.
Fields, Secretary, Commission, dated September 30,
2014; and Letter from Participants to Brent J. Fields,
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Secretary, Commission, dated February 27, 2015.
19 See Paragraph 22 of the Plan. The Commission 21 17 CFR 200.30–3(a)(34). On December 24, 2015, the Participants submitted
1 15 U.S.C. 78s(b)(1). an amendment to the CAT NMS Plan. See Letter
notes, however, that changes to Exhibit B to the
from Participants to Brent J. Fields, Secretary,
Plan (the allocation of Common Members to 2 17 CFR 240.19b–4.
Commission, dated December 23, 2015.
DREAs) are not required to be filed with, and 3 The Exchange originally filed this proposed rule 7 Securities Exchange Act Rel. No. 77724 (Apr.
approved by, the Commission before they become change on January 17, 2017 under File No. SR– 27, 2016), 81 FR 30614 (May 17, 2016).
effective. BOX–2017–04, and the Exchange subsequently 8 Securities Exchange Act Rel. No. 79318 (Nov.
20 See Securities Exchange Act Release No. 78552 withdrew that filing on January 31, 2017 and filed 15, 2016), 81 FR 84696 (Nov. 23, 2016) (‘‘Approval
(August 11, 2016), 81 FR 54905 (August 17, 2016). this proposed rule change. Order’’).
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Document Created: 2017-02-08 02:59:23
Document Modified: 2017-02-08 02:59:23
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 82 FR 9814 |
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