83_FR_35827 83 FR 35682 - Program for Allocation of Regulatory Responsibilities Pursuant to Rule17d-2; Notice of Filing and Order Approving and Declaring Effective an Amended Plan for the Allocation of Regulatory Responsibilities Among the Financial Industry Regulatory Authority, Inc., Miami International Securities Exchange, LLC, and MIAX PEARL, LLC

83 FR 35682 - Program for Allocation of Regulatory Responsibilities Pursuant to Rule17d-2; Notice of Filing and Order Approving and Declaring Effective an Amended Plan for the Allocation of Regulatory Responsibilities Among the Financial Industry Regulatory Authority, Inc., Miami International Securities Exchange, LLC, and MIAX PEARL, LLC

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 145 (July 27, 2018)

Page Range35682-35696
FR Document2018-16110

Federal Register, Volume 83 Issue 145 (Friday, July 27, 2018) 
[Federal Register Volume 83, Number 145 (Friday, July 27, 2018)]
[Notices]
[Pages 35682-35696]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-16110]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83696; File No. 4-678]


Program for Allocation of Regulatory Responsibilities Pursuant to 
Rule 17d-2; Notice of Filing and Order Approving and Declaring 
Effective an Amended Plan for the Allocation of Regulatory 
Responsibilities Among the Financial Industry Regulatory Authority, 
Inc., Miami International Securities Exchange, LLC, and MIAX PEARL, LLC

July 24, 2018.
    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 June 28, 2018, pursuant to Rule 17d-
2 of the Act,\2\ by the Miami International Securities Exchange, LLC 
(``MIAX''), MIAX PEARL, LLC (``MIAX PEARL''), and the Financial 
Industry Regulatory Authority, Inc. (``FINRA'') (collectively, 
``Participating Organizations'' or ``parties''). This agreement amends 
and restates the agreement entered into between FINRA, MIAX, and MIAX 
PEARL on June 27, 2018, entitled ``Agreement between Financial Industry 
Regulatory Authority, Inc., Miami International Securities Exchange, 
LLC and MIAX PEARL, LLC Pursuant to Rule 17d-2 under the Securities 
Exchange Act of 1934,'' and any subsequent amendments thereafter.
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    \1\ 15 U.S.C. 78q(d).
    \2\ 17 CFR 240.17d-2.
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I. Introduction

    Section 19(g)(1) of the Act,\3\ 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) \4\ or Section 19(g)(2) \5\ of the Act. 
Without this relief, the statutory obligation of each individual SRO 
could result in a pattern of multiple examinations of broker-dealers 
that maintain memberships in more than one SRO (``common members''). 
Such regulatory duplication would add unnecessary expenses for common 
members and their SROs.
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    \3\ 15 U.S.C. 78s(g)(1).
    \4\ 15 U.S.C. 78q(d).
    \5\ 15 U.S.C. 78s(g)(2).
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    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.
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    \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).
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    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.
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    \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).
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    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 opportunity for 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.
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    \10\ See Securities Exchange Act Release No. 12935 (October 28, 
1976), 41 FR 49091 (November 8, 1976).
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II. The Plan

    On November 19, 2014, the Commission declared effective the Plan 
entered into between FINRA and MIAX for allocating regulatory 
responsibility pursuant to Rule 17d-2.\11\ The Plan is intended to 
reduce regulatory duplication for firms that are common members of both 
MIAX and FINRA. The plan reduces regulatory duplication for firms that 
are members of MIAX and FINRA by allocating regulatory responsibility 
with respect to certain applicable laws, rules, and regulations. 
Included in the Plan is an exhibit that lists every MIAX rule for which 
FINRA bears responsibility under the Plan for overseeing and enforcing 
with respect to MIAX members that are also members of FINRA and the 
associated persons therewith (``Certification''). On January 12, 2017, 
the parties submitted a proposed amendment to the Plan to add MIAX 
PEARL as a Participant to the Plan.\12\
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    \11\ See Securities Exchange Act Release No. 73641 (November 19, 
2014), 79 FR 70230 (November 25, 2014).
    \12\ See Securities Exchange Act Release No. 79974 (February 6, 
2017), 82 FR 10417 (February 10, 2017).
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III. Proposed Amendment to the Plan

    On June 28, 2018, the parties submitted a proposed amendment to the 
Plan (``Amended Plan''). The primary purpose of the Amended Plan is to 
allocate surveillance, investigation, and enforcement responsibilities 
for Rule 14e-4 under the Act, as well as certain provisions of 
Regulation SHO. The text of the proposed Amended Plan is as follows 
(additions are underlined; deletions are [bracketed]):
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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 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 4-678 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 4-678. 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 website (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 website 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 FINRA, MIAX, and MIAX PEARL. All 
comments received will be posted without change. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number 4-678 and should be submitted 
on or before August 17, 2018.

V. Discussion

    The Commission finds that the proposed Amended Plan is consistent 
with the factors set forth in Section 17(d) of the Act \14\ and Rule 
17d-2(c) thereunder \15\ 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 FINRA certain examination and enforcement 
responsibilities for Common Members that would otherwise be performed 
by FINRA and MIAX or MIAX PEARL. Accordingly, the proposed Amended Plan 
promotes efficiency by reducing costs to Common Members. Furthermore, 
because MIAX, MIAX PEARL, and FINRA will coordinate their regulatory 
functions in accordance with the Amended Plan, the Amended Plan should 
promote investor protection.
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    \14\ 15 U.S.C. 78q(d).
    \15\ 17 CFR 240.17d-2(c).
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    The Commission notes that, under the Amended Plan, MIAX, MIAX 
PEARL, and FINRA have allocated regulatory responsibility for those 
MIAX and MIAX PEARL rules, set forth in the Certification, that are 
substantially similar to the applicable FINRA rules in that examination 
for compliance with such provisions and rules would not require FINRA 
to develop one or more new examination standards, modules, procedures, 
or criteria in order to analyze the application of the rule, or a 
Common Member's activity, conduct, or output in relation to such rule. 
In addition, under the Amended Plan, FINRA would assume regulatory 
responsibility for certain provisions of the federal securities laws 
and the rules and regulations thereunder that are set forth in the 
Certification. The Common Rules covered by the Amended Plan are 
specifically listed in the Certification, as may be amended by the 
parties from time to time.
    According to the Amended Plan, MIAX and MIAX PEARL will review the 
Certification at least annually, or more frequently if required by 
changes in either the rules of MIAX, MIAX PEARL or FINRA, and, if 
necessary, submit to FINRA an updated list of Common Rules to add MIAX 
or MIAX PEARL rules not included on the then-current list of Common 
Rules that are substantially similar to FINRA rules; delete MIAX or 
MIAX PEARL rules included in the then-current list of Common Rules that 
no longer qualify as common rules; and confirm that the remaining rules 
on the list of Common Rules continue to be MIAX or MIAX PEARL rules 
that qualify as common rules.\16\ FINRA will then confirm in writing 
whether the rules listed in any updated list are Common Rules as 
defined in the Amended Plan. Under the Amended Plan, MIAX and MIAX 
PEARL also will provide FINRA with a current list of Common Members and 
shall update the list no less frequently than once each quarter.\17\ 
The Commission believes that these provisions are designed to provide 
for continuing communication between the parties to ensure the 
continued accuracy of the scope of the proposed allocation of 
regulatory responsibility.
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    \16\ See paragraph 2 of the Amended Plan.
    \17\ See paragraph 3 of the Amended Plan.
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    The Commission is hereby declaring effective an Amended Plan that, 
among other things, allocates regulatory responsibility to FINRA for 
the oversight and enforcement of all MIAX and MIAX PEARL rules that are 
substantially similar to the rules of FINRA for Common Members of FINRA 
and MIAX, and FINRA and MIAX PEARL. Therefore, modifications to the 
Certification need not be filed with the Commission as an amendment to 
the Amended Plan, provided that the parties are only adding to, 
deleting from, or confirming changes to MIAX or MIAX PEARL rules in the 
Certification in conformance with the definition of Common Rules 
provided in the Amended Plan. However, should the parties decide to add 
a MIAX or MIAX PEARL rule to the Certification that is not 
substantially similar to a FINRA rule; delete a MIAX or MIAX PEARL rule 
from the Certification that is substantially similar to a FINRA rule; 
or leave on the Certification a MIAX or MIAX PEARL rule that is no 
longer substantially similar to a FINRA rule, then such a change would 
constitute an amendment to the Amended Plan, which must be filed with 
the Commission pursuant to Rule 17d-2 under the Act.\18\
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    \18\ The addition to or deletion from the Certification of any 
federal securities laws, rules, and regulations for which FINRA 
would bear responsibility under the Amended Plan for examining, and 
enforcing compliance by, Common Members, also would constitute an 
amendment to the Amended Plan.
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    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. The primary purpose of the amendment is to allocate 
surveillance, investigation, and enforcement responsibilities for Rule 
14e-4 under the Act, as well as certain provisions of Regulation SHO. 
By declaring it effective today, the Amended Plan can become effective 
and

[[Page 35696]]

be implemented without undue delay. The Commission notes that the prior 
version of this plan immediately prior to this proposed amendment was 
published for comment and the Commission did not receive any comments 
thereon.\19\ Furthermore, the Commission does not believe that the 
amendment to the plan raises any new regulatory issues that the 
Commission has not previously considered.
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    \19\ See supra note 12 (citing to Securities Exchange Act 
Release No. 79974).
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VI. Conclusion

    This order gives effect to the Amended Plan filed with the 
Commission in File No. 4-678. The parties shall notify all members 
affected by the Amended Plan of their rights and obligations under the 
Amended Plan.
    It is therefore ordered, pursuant to Section 17(d) of the Act, that 
the Amended Plan in File No. 4-678, between the FINRA, MIAX, and MIAX 
PEARL, filed pursuant to Rule 17d-2 under the Act, hereby is approved 
and declared effective.
    It is further ordered that MIAX and MIAX PEARL are each relieved of 
those responsibilities allocated to FINRA under the Amended Plan in 
File No. 4-678.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(34).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-16110 Filed 7-26-18; 8:45 am]
 BILLING CODE 8011-01-P

35682 Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices SECURITIES AND EXCHANGE examinations of broker-dealers that appropriate notice and opportunity for COMMISSION maintain memberships in more than one comment, it determines that the plan is SRO (‘‘common members’’). Such necessary or appropriate in the public [Release No. 34–83696; File No. 4–678] regulatory duplication would add interest and for the protection of unnecessary expenses for common investors, to foster cooperation and Program for Allocation of Regulatory members and their SROs. Responsibilities Pursuant to Rule coordination among the SROs, to Section 17(d)(1) of the Act 6 was remove impediments to, and foster the 17d–2; Notice of Filing and Order intended, in part, to eliminate Approving and Declaring Effective an development of, a national market unnecessary multiple examinations and system and a national clearance and Amended Plan for the Allocation of regulatory duplication.7 With respect to Regulatory Responsibilities Among the settlement system, and is in conformity a common member, Section 17(d)(1) Financial Industry Regulatory with the factors set forth in Section authorizes the Commission, by rule or Authority, Inc., Miami International order, to relieve an SRO of the 17(d) of the Act. Commission approval Securities Exchange, LLC, and MIAX responsibility to receive regulatory of a plan filed pursuant to Rule 17d–2 PEARL, LLC reports, to examine for and enforce relieves an SRO of those regulatory compliance with applicable statutes, responsibilities allocated by the plan to July 24, 2018. rules, and regulations, or to perform another SRO. Notice is hereby given that the other specified regulatory functions. II. The Plan Securities and Exchange Commission To implement Section 17(d)(1), the (‘‘Commission’’) has issued an Order, Commission adopted two rules: Rule On November 19, 2014, the pursuant to Section 17(d) of the 17d–1 and Rule 17d–2 under the Act.8 Commission declared effective the Plan Securities Exchange Act of 1934 Rule 17d–1 authorizes the Commission entered into between FINRA and MIAX (‘‘Act’’),1 approving and declaring to name a single SRO as the designated for allocating regulatory responsibility effective an amendment to the plan for examining authority (‘‘DEA’’) to allocating regulatory responsibility pursuant to Rule 17d–2.11 The Plan is examine common members for intended to reduce regulatory (‘‘Plan’’) filed on June 28, 2018, compliance with the financial pursuant to Rule 17d–2 of the Act,2 by duplication for firms that are common responsibility requirements imposed by the Miami International Securities members of both MIAX and FINRA. The the Act, or by Commission or SRO Exchange, LLC (‘‘MIAX’’), MIAX plan reduces regulatory duplication for rules.9 When an SRO has been named as PEARL, LLC (‘‘MIAX PEARL’’), and the a common member’s DEA, all other firms that are members of MIAX and Financial Industry Regulatory SROs to which the common member FINRA by allocating regulatory Authority, Inc. (‘‘FINRA’’) (collectively, belongs are relieved of the responsibility responsibility with respect to certain ‘‘Participating Organizations’’ or to examine the firm for compliance with applicable laws, rules, and regulations. ‘‘parties’’). This agreement amends and the applicable financial responsibility Included in the Plan is an exhibit that restates the agreement entered into rules. On its face, Rule 17d–1 deals only lists every MIAX rule for which FINRA between FINRA, MIAX, and MIAX with an SRO’s obligations to enforce bears responsibility under the Plan for PEARL on June 27, 2018, entitled member compliance with financial overseeing and enforcing with respect to ‘‘Agreement between Financial Industry responsibility requirements. Rule 17d–1 MIAX members that are also members of Regulatory Authority, Inc., Miami does not relieve an SRO from its FINRA and the associated persons International Securities Exchange, LLC obligation to examine a common therewith (‘‘Certification’’). On January and MIAX PEARL, LLC Pursuant to member for compliance with its own 12, 2017, the parties submitted a Rule 17d–2 under the Securities rules and provisions of the federal proposed amendment to the Plan to add Exchange Act of 1934,’’ and any securities laws governing matters other MIAX PEARL as a Participant to the subsequent amendments thereafter. than financial responsibility, including Plan.12 I. Introduction sales practices and trading activities and practices. III. Proposed Amendment to the Plan Section 19(g)(1) of the Act,3 among To address regulatory duplication in other things, requires every self- these and other areas, the Commission On June 28, 2018, the parties regulatory organization (‘‘SRO’’) adopted Rule 17d–2 under the Act.10 submitted a proposed amendment to the registered as either a national securities Rule 17d–2 permits SROs to propose Plan (‘‘Amended Plan’’). The primary exchange or national securities joint plans for the allocation of purpose of the Amended Plan is to association to examine for, and enforce regulatory responsibilities with respect allocate surveillance, investigation, and compliance by, its members and persons to their common members. Under enforcement responsibilities for Rule associated with its members with the paragraph (c) of Rule 17d–2, the 14e–4 under the Act, as well as certain Act, the rules and regulations Commission may declare such a plan provisions of Regulation SHO. The text thereunder, and the SRO’s own rules, effective if, after providing for of the proposed Amended Plan is as unless the SRO is relieved of this follows (additions are underlined; responsibility pursuant to Section 6 15 U.S.C. 78q(d)(1). deletions are [bracketed]): 17(d) 4 or Section 19(g)(2) 5 of the Act. 7 See Securities Act Amendments of 1975, Report Without this relief, the statutory of the Senate Committee on Banking, Housing, and * * * * * obligation of each individual SRO could Urban Affairs to Accompany S. 249, S. Rep. No. 94– amozie on DSK3GDR082PROD with NOTICES1 75, 94th Cong., 1st Session 32 (1975). result in a pattern of multiple 8 17 CFR 240.17d–1 and 17 CFR 240.17d–2, 11 See Securities Exchange Act Release No. 73641 respectively. 1 15 U.S.C. 78q(d). 9 See Securities Exchange Act Release No. 12352 (November 19, 2014), 79 FR 70230 (November 25, 2 17 CFR 240.17d–2. (April 20, 1976), 41 FR 18808 (May 7, 1976). 2014). 3 15 U.S.C. 78s(g)(1). 10 See Securities Exchange Act Release No. 12935 12 See Securities Exchange Act Release No. 79974 4 15 U.S.C. 78q(d). (October 28, 1976), 41 FR 49091 (November 8, (February 6, 2017), 82 FR 10417 (February 10, 5 15 U.S.C. 78s(g)(2). 1976). 2017). VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 E:\FR\FM\27JYN1.SGM 27JYN1

Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices 35683 AGREEMENT AMONG FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC., MIAMI INTERNATIONAL SECURITIES EXCHANGE, LLC AND MIAX PEARL, LLC PURSUANT TO RULE 17d-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934 This Agreement, by and among the Financial Industry Regulatory Authority, Inc. ("FINRA"), Miami International Securities Exchange, LLC ("MIAX") and MIAX PEARL, LLC ("MIAX PEARL"), is made this [11 1h]27th day of [January, 2017]June, 2018 (the "Agreement"), pursuant to Section 17(d) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 17d-2 thereunder, which permits agreements between self-regulatory organizations to allocate regulatory responsibility to eliminate regulatory duplication. FINRA, MIAX and MIAX PEARL may be referred to individually as a "party" and together as the "parties." This Agreement amends and restates the agreement entered into between FINRA_, [and] MIAX and MIAX PEARL on [October 13, 2014] January 11, 2017, entitled "Agreement between Financial Industry Regulatory Authority, Inc._, [and] Miami International Securities Exchange, LLC and MIAX PEARL, LLC Pursuant to Rule 17d-2 under the Securities Exchange Act of 1934," and any subsequent amendments thereafter. WHEREAS, the parties desire to reduce duplication in the examination of their Common Members (as defined herein) and in the filing and processing of certain registration and membership records; and WHEREAS, the parties desire to execute an agreement covering such subjects pursuant to the provisions of Rule 17d-2 under the Exchange Act and to file such agreement with the Securities amozie on DSK3GDR082PROD with NOTICES1 and Exchange Commission (the "SEC" or "Commission") for its approval. EN27JY18.330</GPH> VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00080 Fmt 4703 Sfmt 4725 E:\FR\FM\27JYN1.SGM 27JYN1

35684 Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices NOW, THEREFORE, in consideration of the mutual covenants contained hereinafter, the parties hereby agree as follows: 1. Definitions. Unless otherwise defined in this Agreement or the context otherwise requires, the terms used in this Agreement shall have the same meaning as they have under the Exchange Act and the rules and regulations thereunder. As used in this Agreement, the following terms shall have the following meanings: (a) "MIAX Rules," "MIAX PEARL Rules or "FINRA Rules" shall mean: (i) the rules ofMIAX or MIAX PEARL, respectively, or (ii) the rules ofFINRA, respectively, as the rules of an exchange or association are defined in Exchange Act Section 3(a)(27). (b) "Common Rules" shall mean MIAX Rules and MIAX PEARL Rules that are substantially similar to the applicable FINRA Rules and certain provisions of the Exchange Act and SEC rules set forth on Exhibit 1 in that examination for compliance with such provisions and rules would not require FINRA to develop one or more new examination standards, modules, procedures, or criteria in order to analyze the application of the provision or rule, or a Common Member's activity, conduct, or output in relation to such provision or rule. Common Rules shall not include any provisions regarding (i) notice, reporting or any other filings made directly to or from MIAX or MIAX PEARL, (ii) [compliance with other referenced]incorporation by reference of MIAX or MIAX PEARL Rules that are not Common Rules, (iii) exercise of discretion in a manner that differs from FINRA' s exercise of discretion including, but not limited to exercise of exemptive amozie on DSK3GDR082PROD with NOTICES1 EN27JY18.331</GPH> VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00081 Fmt 4703 Sfmt 4725 E:\FR\FM\27JYN1.SGM 27JYN1

Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices 35685 authority, by MIAX or MIAX PEARL, (iv) prior written approval ofMIAX or MIAX PEARL and (v) payment of fees or fines to MIAX or MIAX PEARL. (c) "Common Members" shall mean members ofFINRA and at least one ofMIAX or MIAXPEARL. (d) "Effective Date" shall be the date this Agreement is approved by the Commission. (e) "Enforcement Responsibilities" shall mean the conduct of appropriate proceedings, in accordance with FINRA's Code of Procedure (the Rule 9000 Series) and other applicable FINRA procedural rules, to determine whether violations of Common Rules have occurred, and if such violations are deemed to have occurred, the imposition of appropriate sanctions as specified under FINRA's Code ofProcedure and sanctions guidelines. (f) "Regulatory Responsibilities" shall mean the examination responsibilities and Enforcement Responsibilities relating to compliance by the Common Members with the Common Rules and the provisions of the Exchange Act and the rules and regulations thereunder, and other applicable laws, rules and regulations, each as set forth on Exhibit 1 attached hereto. The term "Regulatory Responsibilities" shall also include the surveillance, investigation and Enforcement Responsibilities relating to compliance by Common Members with Rule 14e-4 of the Securities Exchange Act ("Rule 14e-4"), with a focus on the standardized call option provision ofRule 14e-4(a)(l)(ii)(D). 2. Regulatory and Enforcement Responsibilities. FINRA shall assume Regulatory amozie on DSK3GDR082PROD with NOTICES1 Responsibilities and Enforcement Responsibilities for Common Members. Attached as EN27JY18.332</GPH> VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00082 Fmt 4703 Sfmt 4725 E:\FR\FM\27JYN1.SGM 27JYN1

35686 Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices Exhibit 1 to this Agreement and made part hereof, MIAX and MIAX PEARL furnished FINRA with a current list of Common Rules and certified to FINRA that such rules that are MIAX Rules and MIAX PEARL Rules are substantially similar to the corresponding FINRA Rules (the "Certification"). FINRA hereby agrees that the rules listed in the Certification are Common Rules as defined in this Agreement. Each year following the Effective Date of this Agreement, or more frequently if required by changes in the rules of the parties, MIAX and MIAX PEARL shall submit an updated list of Common Rules to FINRA for review which shall add MIAX Rules or MIAX PEARL Rules not included in the current list of Common Rules that qualify as Common Rules as defined in this Agreement; delete MIAX Rules or MIAX PEARL Rules included in the current list of Common Rules that no longer qualify as Common Rules as defined in this Agreement; and confirm that the remaining rules on the current list of Common Rules continue to be MIAX Rules or MIAX PEARL Rules that qualify as Common Rules as defined in this Agreement. Within 30 days of receipt of such updated list, FINRA shall confirm in writing whether the rules listed in any updated list are Common Rules as defined in this Agreement. Notwithstanding anything herein to the contrary, it is explicitly understood that the term "Regulatory Responsibilities" does not include, and MIAX and MIAX PEARL shall retain full responsibility for (unless otherwise addressed by separate agreement or rule) (collectively, the "Retained Responsibilities") the following: (a) surveillance, examination, investigation and enforcement with respect to trading activities or practices involving MIAX's and MIAX PEARL's own marketplace; (b) registration pursuant to their applicable rules of associated persons (i.e., amozie on DSK3GDR082PROD with NOTICES1 registration rules that are not Common Rules); EN27JY18.333</GPH> VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00083 Fmt 4703 Sfmt 4725 E:\FR\FM\27JYN1.SGM 27JYN1

Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices 35687 (c) discharge of their duties and obligations as a Designated Examining Authority pursuant to Rule 17d-l under the Exchange Act; and (d) any MIAX Rules and MIAX PEARL Rules that are not Common Rules as provided in paragraph 6. 3. Common Members. Prior to the Effective Date, MIAX and MIAX PEARL shall furnish FINRA with a current list of Common Members, which shall be updated no less frequently than once each quarter. 4. No Charge. There shall be no charge to MIAX and MIAX PEARL by FINRA for performing the Regulatory Responsibilities and Enforcement Responsibilities under this Agreement except as hereinafter provided. FINRA shall provide MIAX and MIAX PEARL with ninety (90) days advance written notice in the event FINRA decides to impose any charges to MIAX and MIAX PEARL for performing the Regulatory Responsibilities under this Agreement. IfFINRA determines to impose a charge, MIAX and MIAX PEARL shall have the right at the time of the imposition of such charge to terminate this Agreement; provided, however, that FINRA' s Regulatory Responsibilities under this Agreement shall continue until the Commission approves the termination of this Agreement. 5. 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. amozie on DSK3GDR082PROD with NOTICES1 EN27JY18.334</GPH> VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00084 Fmt 4703 Sfmt 4725 E:\FR\FM\27JYN1.SGM 27JYN1

35688 Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices 6. Notification of Violations. In the event that FINRA becomes aware of apparent violations of any MIAX Rules or MIAX PEARL Rules, which are not listed as Common Rules, discovered pursuant to the performance of the Regulatory Responsibilities assumed hereunder, FINRA shall notify MIAX and MIAX PEARL of those apparent violations for such response as MIAX and MIAX PEARL deem appropriate. In the event that MIAX or MIAX PEARL becomes aware of apparent violations of any Common Rules, discovered pursuant to the performance of the Retained Responsibilities, MIAX and MIAX PEARL shall notify FINRA of those apparent violations and such matters shall be handled by FINRA as provided in this Agreement. Apparent violations of Common Rules shall be processed by, and enforcement proceedings in respect thereto shall be conducted by FINRA as provided hereinbefore; provided, however, that in the event a Common Member is the subject of an investigation relating to a transaction on MIAX or MIAX PEARL, MIAX and MIAX PEARL may in their discretion assume concurrent jurisdiction and responsibility. Each party agrees to make available promptly all files, records and witnesses necessary to assist the other in its investigation or proceedings. 7. Continued Assistance. (a) FINRA shall make available to MIAX and MIAX PEARL all information obtained by FINRA in the performance by it of the Regulatory Responsibilities hereunder with respect to the Common Members subject to this Agreement. In particular, and not in limitation of the foregoing, FINRA shall furnish MIAX and MIAX PEARL any information it obtains about Common Members which reflects adversely on their financial condition. MIAX and MIAX PEARL shall amozie on DSK3GDR082PROD with NOTICES1 make available to FINRA any information coming to its attention that reflects EN27JY18.335</GPH> VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00085 Fmt 4703 Sfmt 4725 E:\FR\FM\27JYN1.SGM 27JYN1

Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices 35689 adversely on the financial condition of Common Members or indicates possible violations of applicable laws, rules or regulations by such firms. (b) The parties agree that documents or information shared shall be held in confidence, and used only for the purposes of carrying out their respective regulatory obligations. No party shall assert regulatory or other privileges as against any other with respect to documents or information that is required to be shared pursuant to this Agreement. (c) The sharing of documents or information among 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. Statutory Disqualifications. When FINRA becomes aware of a statutory disqualification as defined in the Exchange Act with respect to a Common Member, FINRA shall determine pursuant to Sections 15A(g) and/or Section 6(c) of the Exchange Act the acceptability or continued applicability of the person to whom such disqualification applies and keep MIAX and MIAX PEARL advised of its actions in this regard for such subsequent proceedings as MIAX and MIAX PEARL may initiate. 9. Customer Complaints. MIAX and MIAX PEARL shall forward to FINRA copies of all customer complaints involving Common Members received by MIAX and MIAX PEARL relating to FINRA' s Regulatory Responsibilities under this Agreement. It shall be FINRA' s responsibility to review and take appropriate action in respect to such complaints. 10. Advertising. FINRA shall assume responsibility to review the advertising of Common Members subject to the Agreement, provided that such material is filed with FINRA in amozie on DSK3GDR082PROD with NOTICES1 EN27JY18.336</GPH> VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00086 Fmt 4703 Sfmt 4725 E:\FR\FM\27JYN1.SGM 27JYN1

35690 Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices accordance with FINRA' s filing procedures and is accompanied with any applicable filing fees set forth in FINRA Rules. 11. No Restrictions on Regulatory Action. Nothing contained in this Agreement shall restrict or in any way encumber the right of any party to conduct its own independent or concurrent investigation, examination or enforcement proceeding of or against Common Members, as any party, in its sole discretion, shall deem appropriate or necessary. 12. Termination. This Agreement may be terminated by any party at any time upon the approval of the Commission after one (1) year's written notice to the other parties (or such shorter time as agreed by the parties), except as provided in paragraph 4. 13. Arbitration. In the event of a dispute among the parties as to the operation of this Agreement, the parties hereby agree that any such dispute shall be settled by arbitration in Washington, D.C. in accordance with the rules of the American Arbitration Association then in effect, or such other procedures as the parties may mutually agree upon. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction. Each party acknowledges that the timely and complete performance of its obligations pursuant to this Agreement is critical to the business and operations of the other parties. In the event of a dispute among the parties, the parties shall continue to perform their respective obligations under this Agreement in good faith during the resolution of such dispute unless and until this Agreement is terminated in accordance with its provisions. Nothing in this Section 13 shall interfere with a party's right to terminate this Agreement as set forth herein. 14. Separate Agreement. This Agreement is wholly separate from the following agreement: (1) the multiparty Agreement made pursuant to Rule 17d-2 of the Exchange Act among BATS amozie on DSK3GDR082PROD with NOTICES1 Exchange, Inc., BOX Options Exchange, LLC, Chicago Board Options Exchange, EN27JY18.337</GPH> VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4725 E:\FR\FM\27JYN1.SGM 27JYN1

Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices 35691 Incorporated, C2 Options Exchange, Incorporated, the International Securities Exchange, LLC, FINRA, MIAX, NYSE MKT LLC, the NYSE Area, Inc., The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, ISE Gemini, LLC, EDGX Exchange, Inc.,_[ and] ISE Mercury, LLC and MIAX PEARL, LLC involving the allocation of regulatory responsibilities with respect to common members for compliance with common rules relating to the conduct by broker-dealers of accounts for listed options or index warrants entered as approved by the SEC on [February 16, 2016]February 2, 2017, and as may be amended from time to time; and (2) the multiparty Agreement made pursuant to Rule 17d-2 of the Exchange Act among NYSE MKT LLC, BATS Exchange, Inc., EDGX Exchange, Inc., BOX Options Exchange LLC, NASDAQ OMX BX, Inc., C2 Options Exchange, Incorporated, Chicago Board Options Exchange, Incorporated, International Securities Exchange LLC, ISE Gemini, LLC, ISE Mercury, LLC, FINRA, NYSE Area, Inc., The NASDAQ Stock Market LLC, NASDAQ OMX PHLX, Inc., [and] MIAX and MIAX PEARL, LLC involving the allocation of regulatory responsibilities with respect to SRO market surveillance of common members activities with regard to certain common rules relating to listed options approved by the SEC on [February 16, 2016] February 2, 2017, and as may be amended from time to time. 15. Notification of Members. The parties shall notify Common Members of this Agreement after the Effective Date by means of a uniform joint notice. 16. Amendment. This Agreement may be amended in writing provided that the changes are approved by each party. All such amendments must be filed with and approved by the Commission before they become effective. amozie on DSK3GDR082PROD with NOTICES1 EN27JY18.338</GPH> VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4725 E:\FR\FM\27JYN1.SGM 27JYN1

35692 Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices 17. Limitation of Liability. None of the parties nor any of their respective directors, governors, officers or employees shall be liable to any other party to this Agreement for any liability, loss or damage resulting from or claimed to have resulted from any delays, inaccuracies, errors or omissions with respect to the provision of Regulatory Responsibilities as provided hereby or for the failure to provide any such responsibility, except with respect to such liability, loss or damages as shall have been suffered by any party and caused by the willful misconduct of another party or their respective directors, governors, officers or employees. No warranties, express or implied, are made by any party hereto with respect to any of the responsibilities to be performed by them hereunder. 18. Relief from Responsibility. Pursuant to Sections 17(d)(1 )(A) and 19(g) of the Exchange Act and Rule 17d-2 thereunder, FINRA, MIAX and MIAX PEARL join in requesting the Commission, upon its approval of this Agreement or any part thereof, to relieve MIAX and MIAX PEARL of any and all responsibilities with respect to matters allocated to FINRA pursuant to this Agreement; provided, however, that this Agreement shall not be effective until the Effective Date. 19. 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. 20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and such counterparts together shall constitute one and the same amozie on DSK3GDR082PROD with NOTICES1 instrument. EN27JY18.339</GPH> VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00089 Fmt 4703 Sfmt 4725 E:\FR\FM\27JYN1.SGM 27JYN1

Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices 35693 ***** EXHIBIT 1 Miami International Securities Exchange, LLC and MIAX PEARL, LLC Rules Certification for 17d-2 Agreement with FINRA Miami International Securities Exchange, LLC ("MIAX") and MIAX PEARL, LLC ("MIAX PEARL") hereby certify that the requirements contained in the rules listed below are identical to, or substantially similar to, the comparable FINRA (NASD) Rule, Exchange Act provision or SEC rule identified ("Common Rules"). #Common Rules shall not include any provisions regarding (i) notice, reporting or any other filings made directly to or from MIAX or MIAX PEARL, (ii) incorporation by reference of MIAX or MIAX PEARL Rules that are not Common Rules, (iii) exercise of discretion in a manner that differs from FINRA' s exercise of discretion including, but not limited to exercise of exemptive authority by MIAX or MIAX PEARL, (iv) prior written approval ofMIAX or MIAX PEARL and (v) payment of fees or fines to MIAX or MIAX PEARL. MIAXRULES MIAX PEARL RULES FINRA (NASD) RULES, EXCHANGE ACT PROVISION OR SEC RULE Rule 301 Rule 301 FINRA Rule 2010 Standards of Just and Equitable Just and Equitable Commercial Honor and Principles Principles of Trade 13 Principles of Trade 1 of Trade[*] Rule 303 Prevention of Rule 303 Prevention ofthe Section 15(g) of the Exchange Act the Misuse of Material Misuse ofMaterial and FINRA Rule 311 O(b )(1) Nonpublic Information 1'# Nonpublic Information 1• # Supervision Rule 315 Rule 315 Anti-Money Laundering Anti-Money Laundering FINRA Rule 3310 Anti-Money Compliance Program# Compliance Program# Laundering Compliance Program Rule 318(a) Rule 318(a) FINRA Rule 2020 Use of Manipulation Manipulation Manipulative, Deceptive or other Fraudulent Devices[*] Rule318(b) Rule318(b) FINRA Rule 6140@ Other Manipulation Manipulation Trading Practices Rule 319 Rule 319 FINRA Rule 2251 Processing and Forwarding of Proxy and Forwarding of Proxy and Forwarding of Proxy and Other Other Issuer-Related Other Issuer-Related Issuer-Related Materials Materials Materials amozie on DSK3GDR082PROD with NOTICES1 13 FINRA shall only have Regulatory Responsibilities regarding the rule and not the interpretations and policies. EN27JY18.340</GPH> VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00090 Fmt 4703 Sfmt 4725 E:\FR\FM\27JYN1.SGM 27JYN1

35694 Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices Rule 320 Rule 320 FINRA Rule 5280 Trading Ahead Trading Ahead of Trading Ahead of Research of Research Reports Research Reports Reports Rule 800(a), (b) and (d) Rule 800(a), (b) and (d) Maintenance, Retention Maintenance, Retention and FINRA Rule 4511 General and Furnishing of Books, Furnishing ofBooks, Requirements* and Section 17 of Records and Other Records and Other the Exchange Act and the rules Information 1# Information 1·# thereunder# Rule 1304 Rule 1304 Continuing Education for Continuing Education for FINRARule 1250(a)(1)-(4), (6) Registered Persons# Registered Persons# and (b) Continuing Education R eqmrements . # Rule 1321 Rule 1321 FINRA Rule 11870 Customer Transfer of Accounts Transfer of Accounts Account Transfer Contracts Rule 1325 Rule 1325 FINRA Rule 3230 Telemarketing Telemarketing Telemarketing In addition, the following provisions shall be part of this 17d-2 Agreement: SEA Rule 200 of Regulation SHO- Definition of"Short Sale" and Marking Requirements and SEA Rule 201 of Regulation SHO- Circuit Breaker SEA Rule 203 of Regulation SHO- Borrowing and Delivery Requirements SEA Rule 204 of Regulation SHO - Close-Out Requirement SEA Rule 14e-4 -Prohibited Transactions in Connection with Partial Tender Offers/\ AFINRA shall perform surveillance, investigation, and Enforcement Responsibilities for SEA Rule 14e-4(a) l)(ii)(D). [* FINRA shall not have Regulatory Responsibilities for these rules as they pertain to violations of insider trading activities, which is covered by a separate 17d-2 Agreement by and among BATS Exchange, Inc., BATS Y-Exchange, Inc., Chicago Board Options Exchange, Inc., Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, the NASDAQ Stock Market LLC, National Stock Exchange, Inc., New York Stock Exchange LLC, NYSE Amex LLC, and NYSE Area Inc., effective December 16, 2011, as may be amended from time to time.] [#FINRA shall not have Regulatory Responsibilities regarding (i) notice, reporting or any other filings made directly to or from MIAX or MIAX PEARL, (ii) compliance with other referenced MIAX or MIAX PEARL Rules that are not Common Rules, (iii) exercise of discretion including, but not limited to exercise of exemptive authority, by MIAX or MIAX PEARL, (iv) prior written approval ofMIAX or MIAX PEARL and (v) payment of fees or fines to MIAX or MIAX PEARL.] amozie on DSK3GDR082PROD with NOTICES1 EN27JY18.341</GPH> VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00091 Fmt 4703 Sfmt 4725 E:\FR\FM\27JYN1.SGM 27JYN1

Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices 35695 IV. Solicitation of Comments appropriate in the public interest and updated list are Common Rules as Interested persons are invited to for the protection of investors, fosters defined in the Amended Plan. Under submit written data, views, and cooperation and coordination among the Amended Plan, MIAX and MIAX arguments concerning the foregoing. SROs, and removes impediments to and PEARL also will provide FINRA with a Comments may be submitted by any of fosters the development of the national current list of Common Members and the following methods: market system. In particular, the shall update the list no less frequently Commission believes that the proposed than once each quarter.17 The Electronic Comments Amended Plan should reduce Commission believes that these • Use the Commission’s internet unnecessary regulatory duplication by provisions are designed to provide for comment form (http://www.sec.gov/ allocating to FINRA certain examination continuing communication between the rules/sro.shtml); or and enforcement responsibilities for parties to ensure the continued accuracy • Send an email to rule-comments@ Common Members that would of the scope of the proposed allocation sec.gov. Please include File Number 4– otherwise be performed by FINRA and of regulatory responsibility. 678 on the subject line. MIAX or MIAX PEARL. Accordingly, The Commission is hereby declaring the proposed Amended Plan promotes effective an Amended Plan that, among Paper Comments efficiency by reducing costs to Common other things, allocates regulatory • Send paper comments in triplicate Members. Furthermore, because MIAX, responsibility to FINRA for the to Secretary, Securities and Exchange MIAX PEARL, and FINRA will oversight and enforcement of all MIAX Commission, 100 F Street NE, coordinate their regulatory functions in and MIAX PEARL rules that are Washington, DC 20549–1090. accordance with the Amended Plan, the substantially similar to the rules of All submissions should refer to File Amended Plan should promote investor FINRA for Common Members of FINRA Number 4–678. This file number should protection. and MIAX, and FINRA and MIAX be included on the subject line if email The Commission notes that, under the PEARL. Therefore, modifications to the is used. To help the Commission Amended Plan, MIAX, MIAX PEARL, Certification need not be filed with the process and review your comments and FINRA have allocated regulatory Commission as an amendment to the more efficiently, please use only one responsibility for those MIAX and Amended Plan, provided that the method. The Commission will post all MIAX PEARL rules, set forth in the parties are only adding to, deleting comments on the Commission’s internet Certification, that are substantially from, or confirming changes to MIAX or website (http://www.sec.gov/rules/ similar to the applicable FINRA rules in MIAX PEARL rules in the Certification sro.shtml). Copies of the submission, all that examination for compliance with in conformance with the definition of subsequent amendments, all written such provisions and rules would not Common Rules provided in the statements with respect to the proposed require FINRA to develop one or more Amended Plan. However, should the plan that are filed with the Commission, new examination standards, modules, parties decide to add a MIAX or MIAX and all written communications relating procedures, or criteria in order to PEARL rule to the Certification that is to the proposed plan between the analyze the application of the rule, or a not substantially similar to a FINRA Commission and any person, other than Common Member’s activity, conduct, or rule; delete a MIAX or MIAX PEARL those that may be withheld from the output in relation to such rule. In rule from the Certification that is public in accordance with the addition, under the Amended Plan, substantially similar to a FINRA rule; or provisions of 5 U.S.C. 552, will be FINRA would assume regulatory leave on the Certification a MIAX or available for website viewing and responsibility for certain provisions of MIAX PEARL rule that is no longer printing in the Commission’s Public the federal securities laws and the rules substantially similar to a FINRA rule, Reference Room, 100 F Street NE, and regulations thereunder that are set then such a change would constitute an Washington, DC 20549, on official forth in the Certification. The Common amendment to the Amended Plan, business days between the hours of Rules covered by the Amended Plan are which must be filed with the 10:00 a.m. and 3:00 p.m. Copies of the specifically listed in the Certification, as Commission pursuant to Rule 17d–2 plan also will be available for inspection may be amended by the parties from under the Act.18 and copying at the principal offices of time to time. Under paragraph (c) of Rule 17d–2, FINRA, MIAX, and MIAX PEARL. All According to the Amended Plan, the Commission may, after appropriate comments received will be posted MIAX and MIAX PEARL will review the notice and comment, declare a plan, or without change. Persons submitting Certification at least annually, or more any part of a plan, effective. In this comments are cautioned that we do not frequently if required by changes in instance, the Commission believes that redact or edit personal identifying either the rules of MIAX, MIAX PEARL appropriate notice and comment can information from comment submissions. or FINRA, and, if necessary, submit to take place after the proposed You should submit only information FINRA an updated list of Common amendment is effective. The primary that you wish to make available Rules to add MIAX or MIAX PEARL purpose of the amendment is to allocate publicly. All submissions should refer rules not included on the then-current surveillance, investigation, and to File Number 4–678 and should be list of Common Rules that are enforcement responsibilities for Rule submitted on or before August 17, 2018. substantially similar to FINRA rules; 14e–4 under the Act, as well as certain delete MIAX or MIAX PEARL rules provisions of Regulation SHO. By V. Discussion included in the then-current list of declaring it effective today, the The Commission finds that the Common Rules that no longer qualify as Amended Plan can become effective and proposed Amended Plan is consistent common rules; and confirm that the amozie on DSK3GDR082PROD with NOTICES1 with the factors set forth in Section remaining rules on the list of Common 17 See paragraph 3 of the Amended Plan. 17(d) of the Act 14 and Rule 17d–2(c) Rules continue to be MIAX or MIAX 18 The addition to or deletion from the thereunder 15 in that the proposed PEARL rules that qualify as common Certification of any federal securities laws, rules, rules.16 FINRA will then confirm in and regulations for which FINRA would bear Amended Plan is necessary or responsibility under the Amended Plan for writing whether the rules listed in any examining, and enforcing compliance by, Common 14 15 U.S.C. 78q(d). Members, also would constitute an amendment to 15 17 CFR 240.17d–2(c). 16 See paragraph 2 of the Amended Plan. the Amended Plan. VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 E:\FR\FM\27JYN1.SGM 27JYN1

35696 Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices be implemented without undue delay. (‘‘Commission’’) the proposed rule Adding Tier would be re-named The Commission notes that the prior change as described in Items I, II, and ‘‘Adding Tier 1.’’ version of this plan immediately prior to III below, which Items have been Adding Tier 2 this proposed amendment was prepared by the self-regulatory published for comment and the organization. The Commission is Under proposed Adding Tier 2, the Commission did not receive any publishing this notice to solicit Exchange would offer the following fees comments thereon.19 Furthermore, the comments on the proposed rule change for transactions in stocks with a per Commission does not believe that the from interested persons. share price of $1.00 or more when amendment to the plan raises any new adding liquidity to the Exchange if the I. Self-Regulatory Organization’s ETP Holder quotes at least 5% of the regulatory issues that the Commission Statement of the Terms of Substance of NBBO 5 in 1,000 or more symbols on an has not previously considered. the Proposed Rule Change average daily basis, calculated monthly: VI. Conclusion The Exchange proposes to amend its • $0.0005 per share for adding This order gives effect to the Schedule of Fees and Rebates to adopt displayed orders; Amended Plan filed with the (1) two new adding tiers, and (2) • $0.0005 per share for orders that set Commission in File No. 4–678. The regulatory fees in connection with use a new Exchange BBO; parties shall notify all members affected of the Central Registration Depository • $0.0007 per share for adding non- by the Amended Plan of their rights and (‘‘CRD’’) by Exchange ETP Holders that displayed orders; and obligations under the Amended Plan. are not also members of the Financial • $0.0005 per share for MPL orders. It is therefore ordered, pursuant to Industry Regulatory Authority, Inc. For example, in a given month, if an Section 17(d) of the Act, that the (‘‘FINRA’’). The Exchange proposes to ETP Holder quotes at least 5% of the Amended Plan in File No. 4–678, implement the rule change on July 9, NBBO in 800 symbols in round lots on between the FINRA, MIAX, and MIAX 2018.4 The proposed rule change is the first day of the month and 1,400 PEARL, filed pursuant to Rule 17d–2 available on the Exchange’s website at symbols on the second day of the under the Act, hereby is approved and www.nyse.com, at the principal office of month, the ETP Holder would have declared effective. the Exchange, and at the Commission’s 1,100 securities on average daily basis It is further ordered that MIAX and Public Reference Room. that meet the 5% NBBO requirement MIAX PEARL are each relieved of those after the second day, and would qualify responsibilities allocated to FINRA II. Self-Regulatory Organization’s for the proposed Adding Tier 2 after the under the Amended Plan in File No. 4– Statement of the Purpose of, and second day. Further, in a given symbol 678. Statutory Basis for, the Proposed Rule on a given day, if the ETP Holder Change maintains a bid at the NBB for 4% of the For the Commission, by the Division of Trading and Markets, pursuant to delegated In its filing with the Commission, the trading day and an offer at the NBO for authority.20 self-regulatory organization included 8% of the trading day, that would result Eduardo A. Aleman, statements concerning the purpose of, in the ETP Holder quoting 6% of the Assistant Secretary. and basis for, the proposed rule change NBBO in that symbol for that day and and discussed any comments it received that symbol meeting the 5% NBBO [FR Doc. 2018–16110 Filed 7–26–18; 8:45 am] on the proposed rule change. The text requirement for that day. BILLING CODE 8011–01–P of those statements may be examined at Adding Tier 3 the places specified in Item IV below. The Exchange has prepared summaries, Under proposed Adding Tier 3, the SECURITIES AND EXCHANGE set forth in sections A, B, and C below, Exchange would offer the following fees COMMISSION of the most significant parts of such for transactions in stocks with a per [Release No. 34–83687; File No. SR– statements. share price of $1.00 or more when NYSENAT–2018–16] adding liquidity to the Exchange if the A. Self-Regulatory Organization’s ETP Holder quotes at least 5% of the Self-Regulatory Organizations; NYSE Statement of the Purpose of, and the NBBO 6 in 600 or more symbols on an National, Inc.; Notice of Filing and Statutory Basis for, the Proposed Rule average daily basis, calculated monthly: Immediate Effectiveness of Proposed Change • $0.0012 per share for adding Rule Change To Amend Its Schedule of displayed orders; 1. Purpose Fees and Rebates To Adopt Two New • $0.0012 per share for orders that set Adding Tiers and Regulatory Fees in The Exchange proposes to amend its a new Exchange BBO; Connection With Use of the Central Schedule of Fees and Rebates to adopt • $0.0014 per share for adding non- Registration Depository (1) two new adding tiers, and (2) displayed orders; and July 23, 2018. regulatory fees in connection with use • $0.0005 per share for MPL orders. of CRD. Finally, as reflected in footnote * of Pursuant to Section 19(b)(1) 1 of the The Exchange proposes to implement the Schedule of Fees and Rebates, the Securities Exchange Act of 1934 (the the rule change on July 9, 2018. volume requirements for the current ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on July 9, Proposed Adding Tiers 5 The Exchange would explain the proposed 5% 2018, NYSE National, Inc. (‘‘Exchange’’ The Exchange proposes two new requirement in a new footnote **. As proposed, or ‘‘NYSE National’’) filed with the adding tiers for displayed and non- ETP Holders would have to maintain a bid or an amozie on DSK3GDR082PROD with NOTICES1 Securities and Exchange Commission offer at the NBB or the NBO for at least 5% of the displayed orders in securities priced at trading day in round lots in a security for that or above $1.00, as follows. Current security to count toward the tier requirement. The 19 See supra note 12 (citing to Securities terms ‘‘NBB,’’ ‘‘NBO,’’ ‘‘NBBO,’’ and ‘‘BBO’’ are Exchange Act Release No. 79974). 4 The Exchange originally filed to amend the Fee defined in NYSE National Rule 1.1. The Exchange 20 17 CFR 200.30–3(a)(34). Schedule on June 27, 2018 (SR–NYSENAT–2018– believes that the proposed 5% threshold is 1 15 U.S.C. 78s(b)(1). 14) and withdrew such filing on July 9, 2018. This appropriate for a market of NYSE National’s size 2 15 U.S.C. 78a. and trading volume. filing replaces SR–NYSENAT–2018–14 in its 3 17 CFR 240.19b–4. entirety. 6 See note 5, supra. VerDate Sep<11>2014 17:38 Jul 26, 2018 Jkt 244001 PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 E:\FR\FM\27JYN1.SGM 27JYN1


Document Created: 2018-07-27 04:05:15
Document Modified: 2018-07-27 04:05:15
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 Citation83 FR 35682 
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