83 FR 55410 - 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 Between the Financial Industry Regulatory Authority, Inc. and NYSE National, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 214 (November 5, 2018)

Page Range		55410-55416
FR Document		2018-24070
Federal Register, Volume 83 Issue 214 (Monday, November 5, 2018)
[Federal Register Volume 83, Number 214 (Monday, November 5, 2018)]
[Notices]
[Pages 55410-55416]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-24070]


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

[Release No. 34-84502; File No. 4-694]


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 Between the Financial Industry Regulatory Authority, 
Inc. and NYSE National, Inc.

October 30, 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 September 27, 2018, pursuant to Rule 
17d-2 of the Act,\2\ by the Financial Industry Regulatory Authority, 
Inc. (``FINRA'') and NYSE National, Inc. (``NYSE National'') 
(collectively, ``Participating Organizations'' or ``parties''). This 
Agreement amends and restates the agreement entered into between the 
parties on December 22, 2015, entitled ``Agreement Among Financial 
Industry Regulatory Authority, Inc. and National Stock Exchange, Inc. 
Pursuant to Rule 17d-2 under the Securities Exchange Act of 1934,'' and 
any subsequent amendments thereafter.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78q(d).
    \2\ 17 CFR 240.17d-2.
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78s(g)(1).
    \4\ 15 U.S.C. 78q(d).
    \5\ 15 U.S.C. 78s(g)(2).
---------------------------------------------------------------------------

    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

[[Page 55411]]

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 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 February 9, 2016, the Commission declared effective the Plan 
entered into between FINRA and the National Stock Exchange, Inc. (n/k/a 
NYSE National, Inc.) for allocating regulatory responsibility pursuant 
to Rule 17d-2.\11\ The Plan is intended to reduce regulatory 
duplication for firms that are dual members of FINRA and NYSE National 
by allocating regulatory responsibility with respect to certain 
applicable laws, rules, and regulations that are common among them. 
Included in the Plan is an exhibit that lists every NYSE National rule 
for which FINRA bears responsibility under the Plan for overseeing and 
enforcing with respect to NYSE National members that are also members 
of FINRA and the associated persons therewith.
---------------------------------------------------------------------------

    \11\ See Securities Exchange Act Release No. 77089 (February 9, 
2016), 81 FR 7871 (February 16, 2016).
---------------------------------------------------------------------------

III. Proposed Amendment to the Plan

    On September 27, 2018, the parties submitted a proposed amendment 
to the Plan (``Amended Plan''). The primary purposes of the Amended 
Plan are to (1) reflect the name change of National Stock Exchange, 
Inc. to NYSE National, Inc., (2) update the SRO rules that are covered 
by the agreement, and (3) to the extent that it becomes a member of 
NYSE National, allocate regulatory responsibility to FINRA for NYSE 
National's affiliated routing broker-dealer, Archipelago Securities. 
The text of the proposed Amended Plan is as follows (additions are 
underlined; deletions are [bracketed]):
* * * * *

Agreement Between Financial Industry Regulatory Authority, Inc. and 
NYSE National [Stock Exchange], Inc. Pursuant to Rule 17d-2 Under the 
Securities Exchange Act of 1934

    This Agreement, by and between the Financial Industry Regulatory 
Authority, Inc. (``FINRA'') and the NYSE National [Stock Exchange], 
Inc. (``[[NSX]NYSE NATIONAL ]NYSE National''), is made this [22nd]26th 
day of September[December], 201[5]8 (the ``Agreement''), pursuant to 
Section 17(d) of the Securities Exchange Act of 1934, as amended (the 
``Exchange Act'') and Rule 17d-2 thereunder, which permits agreements 
between self-regulatory organizations to allocate regulatory 
responsibility to eliminate regulatory duplication. FINRA and [NSX]NYSE 
National may be referred to individually as a ``party'' and together as 
the ``parties.''
    This Agreement replaces and restates the agreement entered into 
between the parties on [June 20, 1977 as amended, entitled ``Agreement 
Between the National Association of Securities Dealers, Inc. and the 
Cincinnati Stock Exchange] December 22, 2015 entitled ``Agreement 
between Financial Industry Regulatory Authority, Inc. and National 
Stock Exchange, Inc. Pursuant to SEC Rule 17d-2 Under the Securities 
Exchange Act of 1934,'' and any subsequent amendments thereafter.
    WHEREAS, FINRA and [NSX]NYSE National desire to reduce duplication 
in the examination of their Dual Members (as defined herein) and in the 
filing and processing of certain registration and membership records; 
and
    WHEREAS, FINRA and [NSX]NYSE National 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 and Exchange Commission (the ``SEC'' or ``Commission'') for 
its approval.
    NOW, THEREFORE, in consideration of the mutual covenants contained 
hereinafter, FINRA and [NSX]NYSE National 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) ``[NSX]NYSE National Rules'' or ``FINRA Rules'' shall mean: (i) 
The rules of [NSX]NYSE National or (ii) the rules of FINRA, 
respectively, as the rules of an exchange or association are defined in 
Exchange Act Section 3(a)(27).
    (b) ``Common Rules'' shall mean [NSX]NYSE National 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 Dual Member's activity, conduct, or output 
in relation to such provision or rule; provided, however Common Rules 
shall not include the application of the SEC, [NSX]NYSE National or 
FINRA rules as they pertain to violations of insider trading 
activities, which is covered by a separate 17d-2 Agreement by and among 
the Bats BZX Exchange, Inc., Bats BYX Exchange, Inc., Chicago Stock 
Exchange, Inc., Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., 
Financial Industry Regulatory Authority, Inc., NASDAQ BX, Inc., NASDAQ 
PHLX LLC, The NASDAQ Stock Market LLC, National Stock Exchange, Inc., 
New York Stock Exchange LLC, NYSE MKT LLC, NYSE Arca, Inc., and 
Investors Exchange LLC, approved by the SEC on August 3, 2016 as the 
same may be amended from time to time. Common Rules shall not include 
provisions regarding (i) notice, reporting or any other filings made 
directly to or from NYSE National, (ii) incorporation by reference of 
other NYSE National 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 NYSE National, (iv) prior written approval of NYSE 
National, and (v) payment of fees or fines to NYSE National.
    (c) ``Dual Members'' shall mean those [NSX]NYSE National members 
that are also members of FINRA and the associated persons therewith.
    (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

[[Page 55412]]

imposition of appropriate sanctions as specified under FINRA's Code of 
Procedure and sanctions guidelines.
    (f) ``Regulatory Responsibilities'' shall mean the examination 
responsibilities and Enforcement Responsibilities relating to 
compliance by the Dual 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.
    2. Regulatory and Enforcement Responsibilities. FINRA shall assume 
Regulatory Responsibilities and Enforcement Responsibilities for Dual 
Members. Attached as Exhibit 1 to this Agreement and made part hereof, 
[NSX]NYSE National furnished FINRA with a current list of Common Rules 
and certified to FINRA that such rules that are [NSX]NYSE National 
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 either the rules of [NSX]NYSE National or FINRA, 
[NSX]NYSE National shall submit an updated list of Common Rules to 
FINRA for review which shall add [NSX]NYSE National Rules not included 
in the current list of Common Rules that qualify as Common Rules as 
defined in this Agreement; delete [NSX]NYSE National 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 [NSX]NYSE National 
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 [NSX]NYSE National 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 [NSX]NYSE 
National's own marketplace;
    (b) registration pursuant to its applicable rules of associated 
persons (i.e., registration rules that are not Common Rules);
    (c) discharge of its duties and obligations as a Designated 
Examining Authority pursuant to Rule 17d-1 under the Exchange Act; and
    (d) any [NSX]NYSE National Rules that are not Common Rules, except 
for NYSE National rules for any NYSE National affiliate that is a 
member that operates as a facility (as defined in Section 3(a)(2) of 
the Exchange Act), acts as a router for NYSE National and is a member 
of FINRA (``Router Member'') as provided in paragraph 6. As of the date 
of this Agreement, Archipelago Securities is the only Router Member.
    3. Dual Members. Prior to the Effective Date, [NSX]NYSE National 
shall furnish FINRA with a current list of Dual Members, which shall be 
updated no less frequently than once each quarter.
    4. No Charge. There shall be no charge to [NSX]NYSE National by 
FINRA for performing the Regulatory Responsibilities and Enforcement 
Responsibilities under this Agreement except as hereinafter provided. 
FINRA shall provide [NSX]NYSE National with ninety (90) days advance 
written notice in the event FINRA decides to impose any charges to 
[NSX]NYSE National for performing the Regulatory Responsibilities under 
this Agreement. If FINRA determines to impose a charge, [NSX]NYSE 
National 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 Commission. To the extent 
such statute, rule, order or action is inconsistent with this 
Agreement, the statute, rule, order or action shall supersede the 
provision(s) hereof to the extent necessary for them to be properly 
effectuated and the provision(s) hereof in that respect shall be null 
and void.
    6. Notification of Violations.
    (a) In the event that FINRA becomes aware of apparent violations of 
any [NSX]NYSE National Rules, which are not listed as Common Rules, 
discovered pursuant to the performance of the Regulatory 
Responsibilities assumed hereunder, FINRA shall notify [NSX]NYSE 
National of those apparent violations for such response as [NSX]NYSE 
National deems appropriate. With respect to apparent violations of any 
NYSE National Rules by any Router Member, FINRA shall not make 
referrals to NYSE National pursuant to this paragraph 6. Such apparent 
violations shall be processed by, and enforcement proceedings in 
respect thereto will be conducted by, FINRA as provided in this 
agreement.
    (b) In the event that [NSX]NYSE National becomes aware of apparent 
violations of any Common Rules, discovered pursuant to the performance 
of the Retained Responsibilities, [NSX]NYSE National shall notify FINRA 
of those apparent violations and such matters shall be handled by FINRA 
as provided in this Agreement.
    (c) 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 Dual 
Member is the subject of an investigation relating to a transaction on 
[NSX]NYSE National, [NSX]NYSE National may in its discretion assume 
concurrent jurisdiction and responsibility.
    (d) 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 [NSX]NYSE National all 
information obtained by FINRA in the performance by it of the 
Regulatory Responsibilities hereunder with respect to the Dual Members 
subject to this Agreement. In particular, and not in limitation of the 
foregoing, FINRA shall furnish [NSX]NYSE National any information it 
obtains about Dual Members which reflects adversely on their financial 
condition. [NSX]NYSE National shall make available to FINRA any 
information coming to its attention that reflects adversely on the 
financial condition of Dual 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. Neither party shall assert 
regulatory or other privileges as against the other with respect to 
documents or information that is required to be shared pursuant to this 
Agreement.
    (c) 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

[[Page 55413]]

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 Dual 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 [NSX]NYSE National advised of its actions in this regard for such 
subsequent proceedings as [NSX]NYSE National may initiate.
    9. Customer Complaints. [NSX]NYSE National shall forward to FINRA 
copies of all customer complaints involving Dual Members received by 
[NSX]NYSE National 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 Dual Members subject to the Agreement, provided that 
such material is filed with FINRA in 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 either 
party to conduct its own independent or concurrent investigation, 
examination or enforcement proceeding of or against Dual Members, as 
either party, in its sole discretion, shall deem appropriate or 
necessary.
    12. Termination. This Agreement may be terminated by [NSX]NYSE 
National or FINRA at any time upon the approval of the Commission after 
one (1) year's written notice to the other party, except as provided in 
paragraph 4.
    13. Arbitration. In the event of a dispute between the parties as 
to the operation of this Agreement, [NSX]NYSE National and FINRA hereby 
agree that any such dispute shall be settled by arbitration in 
Washington, DC 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 party. In the event of a dispute between 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 agreements: (1) The multiparty agreement for insider trading 
activities, which is covered by a separate 17d-2 Agreement by and among 
Bats BZX Exchange, Inc., Bats BYX Exchange, Inc., Chicago Stock 
Exchange, Inc., Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., 
Financial Industry Regulatory Authority, Inc., NASDAQ BX, Inc., NASDAQ 
PHLX LLC, The NASDAQ Stock Market LLC, National Stock Exchange, Inc., 
New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca Inc., and 
Investors Exchange LLC effective August 3, 2016, as may be amended from 
time to time and (2) the multiparty 17d-2 agreement relating to 
Regulation NMS rules by and among 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. effective February 2, 2017 as may be amended 
from time to time.
    15. Notification of Members. [NSX]NYSE National and FINRA shall 
notify Dual Members of this Agreement after the Effective Date by means 
of a uniform joint notice.
    16. Amendment. This Agreement may be amended in writing duly 
approved by each party. All such amendments must be filed with and 
approved by the Commission before they become effective.
    17. Limitation of Liability. Neither FINRA nor [NSX]NYSE National 
nor any of their respective directors, governors, officers or employees 
shall be liable to the 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 one or the other of 
FINRA or [NSX]NYSE National and caused by the willful misconduct of the 
other party or their respective directors, governors, officers or 
employees. No warranties, express or implied, are made by FINRA or 
[NSX]NYSE National with respect to any of the responsibilities to be 
performed by each of 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 and 
[NSX]NYSE National join in requesting the Commission, upon its approval 
of this Agreement or any part thereof, to relieve [NSX]NYSE National 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 instrument.
    In witness whereof, each party has executed or caused this 
Agreement to be executed on its behalf by a duly authorized officer as 
of the date first written above.
* * * * *

Exhibit 1

    Note: The entire existing table of rules should be deleted and 
replaced with the table below and for the remainder of the exhibit 
new text is italicized and deleted text is in brackets.

NYSE National [Stock Exchange] (``[NSX] NYSE National'') Rules 
Certification for 17d-2 Agreement With FINRA

[NSX]NYSE National hereby certifies that the requirements contained in 
the rules listed below are identical to, or substantially similar to, 
the comparable

[[Page 55414]]

FINRA Rule, NASD Rule, Exchange Act provision or SEC rule identified 
(``Common Rules'').
#Common Rules shall not include provisions regarding (i) notice, 
reporting or any other filings made directly to or from NYSE National, 
(ii) incorporation by reference to other NYSE National 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 NYSE National, (iv) prior written 
approval of NYSE National, and (v) payment of fees or fines to NYSE 
National.

------------------------------------------------------------------------
                                         FINRA rule, NASD rule, Exchange
          NYSE national rule:               Act provision or SEC rule:
 
------------------------------------------------------------------------
Rule 2.2(e) Obligations of ETP Holders   FINRA Rule 1250 Continuing
 and the Exchange .                      Education Requirements.
Rule 2.2 Obligations of ETP Holders and  FINRA Rule 1010(a), (c)
 the Exchange Commentary .05 .           Electronic Filing Requirements
                                          for Uniform Forms, and FINRA
                                          By-Laws Article V, Sec. 2 and
                                          Sec. 3 Registered
                                          Representatives and Associated
                                          Persons.
Rule 3.10(b) Notice of Expulsion or      FINRA Rule 4530(a)(1)(D)
 Suspension .                            Reporting Requirements.\1\
Rule 6.7410 Definitions(a)-(o).........  FINRA Rule 7410 Definitions.
Rule 6.7420 Applicability..............  FINRA Rule 7420
                                          Applicability.\2\
Rule 6.7430 Synchronization of ETP       FINRA Rule 4590 Synchronization
 Holder Business Clocks .                of member Business Clocks.\3\
Rule 6.7440 Recording of Order           FINRA Rule 7440 Recording of
 Information .                           Order Information.
Rule 6.7450 Order Data Transmission      FINRA Rule 7450 Order Data
 Requirements.                            Transmission Requirements.
Rule 6.7460 Violation of Order Audit     FINRA Rule 7460 Violation of
 Trail System Rules.                      Order Audit Trail System
                                          Rules.
Rule 6.7470 Exemption to the Order       FINRA Rule 7470 Exemption to
 Recording and Data Transmission          the Order Recording and Data
 Requirements .                          Transmission Requirements.
Rule 7.3 (b) and (c) Commissions.......  FINRA Rule 2232 Customer
                                          Confirmations and SEA Rule 10b-
                                          10 Confirmation of
                                          Transactions.
Rule 7.34(d)(3) Trading Sessions.......  FINRA Rule 2265 Extended Hours
                                          Trading Risk Disclosure.
Rule 11.2111 Suitability...............  FINRA Rule 2111 Suitability.
Rule 11.2210 Communications with the     FINRA Rule 2210 Communications
 Public.                                  with the Public.
Rule 11.2232 Customer Confirmations....  FINRA Rule 2232 Customer
                                          Confirmations and SEA Rule 10b
                                          10 Confirmation of
                                          Transactions.
Rule 11.3.1 Business Conduct of ETP      FINRA Rule 2010 Standards of
 Holders *.                               Commercial Honor and
                                          Principles of Trade.* \4\
Rule 11.3.2 Violations Prohibited * ..  FINRA Rule 2010 Standards of
                                          Commercial Honor and
                                          Principles of Trade and FINRA
                                          Rule 3110 Supervision.* \5\
Rule 11.3.3 Use of Fraudulent Devices *  FINRA Rule 2020 Use of
                                          Manipulative, Deceptive or
                                          Other Fraudulent Device.*
Rule 11.3.5(a) Advertising Practices...  FINRA Rule 2210(d)(1)(B)
                                          Communications with the
                                          Public.
Rule 11.3.5(c) Advertising Practices...  FINRA Rule 2210(d)(1)
                                          Communications with the
                                          Public.
Rule 11.3.6 Fair Dealing with Customers  FINRA Rule 2020 Use of
                                          Manipulative, Deceptive or
                                          Other Fraudulent Device, FINRA
                                          2010 Standards of Commercial
                                          Honor and Principles of Trade,
                                          and FINRA Rule 2111
                                          Suitability.\6\
Rule 11.3.8(a) The Prompt Receipt and    FINRA Rule 11860 COD Orders.
 Delivery of Securities.
Rule 11.3.9 Charges for Services         FINRA Rule 2122 Charges for
 Performed.                               Services Performed.
Rule 11.3.10 Use of Information........  FINRA Rule 2060 Use of
                                          Information Obtained in
                                          Fiduciary Capacity.
Rule 11.3.11 Publication of              FINRA Rule 5210 Publication of
 Transactions and Quotations .           Transactions and Quotations.
Rule 11.3.12 Offers at Stated Prices...  FINRA Rule 5220 Offers at
                                          Stated Prices.
Rule 11.3.13 Payment Designed to         FINRA Rule 5230 Payments
 Influence Market Prices, Other than      Involving Publications that
 Paid Advertising.                        Influence the Market Price of
                                          a Security.\7\
Rule 11.3.15 Disclosure of Control.....  FINRA Rule 2262 Disclosure of
                                          Control Relationship With
                                          Issuer.
Rule 11.3.16 Discretionary Accounts....  NASD Rule 2510 Discretionary
                                          Accounts.\8\
Rule 11.3.17 Customer's Securities or    FINRA Rule 2150(a) Customers'
 Funds.                                   Securities or Funds--Improper
                                          Use.
Rule 11.3.18 Prohibition Against         FINRA Rule 2150(b) Customers'
 Guarantees.                              Securities or Funds--
                                          Prohibition Against
                                          Guarantees.
Rule 11.3.19 Sharing in Accounts;        FINRA Rule 2150(c)(1)
 Extent Permissible.                      Customers' Securities or
                                          Funds--Sharing in Accounts;
                                          Extent Permissible.
Rule 11.3.21 Telephone Solicitation....  FINRA Rule 3230 Telemarketing.
Rule 11.3310 Anti-Money Laundering       FINRA Rule 3310 Anti-Money
 Compliance Program .                    Laundering Compliance Program.
Rule 11.4.1 Requirements * ...........  FINRA Rule 4511 General
                                          Requirements.*
Rule 11.4.3 Record of Written            FINRA Rule 4513 Records of
 Complaints.                              Written Customer Complaints.
Rule 11.5.1 Written Procedures * .....  FINRA Rule 3110(b) Supervision--
                                          Written Procedures.*
Rule 11.5.2 Responsibility of ETP        FINRA Rule 3110(a) and (b)(7)
 Holders.                                 Supervision.*
Rule 11.5.3 Records *..................  FINRA Rule 3110(a) and (b)
                                          Supervision; * and FINRA Rule
                                          4511 General Requirements.
Rule 11.5.4 Review of Activities and     FINRA Rule 3110(c) and (d)
 Annual Inspections.                      Supervision--Internal
                                          Inspections/Review of
                                          Transactions and
                                          Correspondence.* \9\
Rule 11.5.7 Annual Certification of      FINRA Rule 3130 Annual
 Compliance and Supervisory Processes .  Certification of Compliance
                                          and Supervisory Processes.
Rule 11.5220 Disruptive Quoting and      FINRA Rule 5210 .03 Disruptive
 Trading Activity Prohibited .           Quoting and Trading Activity
                                          Prohibited.
Rule 11.5320 Prohibition Against         FINRA Rule 5320 Prohibition
 Trading Ahead of Customer Orders.        Against Trading Ahead of
                                          Customer Orders.
Rule 11.12.10 Best Execution...........  FINRA Rule 5310 Best Execution
                                          and Interpositioning.\10\ROW>

[[Page 55415]]

 
Rule 11.12.3 Excessive Sales by an ETP   FINRA Rule 6140(c) Other
 Holder.                                  Trading Practices.
------------------------------------------------------------------------
* FINRA shall not have any 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 BZX Exchange,
  Inc., Bats BYX Exchange, Inc., Chicago Stock Exchange, Inc., Bats EDGA
  Exchange, Inc., Bats EDGX Exchange, Inc., Financial Industry
  Regulatory Authority, Inc., NASDAQ BX, Inc., NASDAQ PHLX LLC, The
  NASDAQ Stock Market LLC, National Stock Exchange, Inc., New York Stock
  Exchange, LLC, NYSE MKT LLC, and NYSE Arca, Inc. effective August 3,
  2016, as may be amended from time to time.
\1\ FINRA shall only have Regulatory Responsibilities to the extent NYSE
  National has adopted or accepts interpretations consistent with FINRA
  Rule 4530 regarding the specific timing and thresholds for reporting.
\2\ Applies only to NYSE National ETP Holders and their associated
  persons, as that term is defined in FINRA's By-laws Art. I(rr).
\3\ FINRA shall not have regulatory responsibilities to the extent NYSE
  National prescribes additional procedures not required by FINRA.
\4\ FINRA shall not have Regulatory Responsibilities regarding .01 of
  NYSE National Rule 11.3.1.
\5\ FINRA shall only have Regulatory Responsibilities regarding the
  first phrase of the NYSE National Rule regarding prohibitions from
  violating the Securities Exchange Act of 1934 and the rules and
  regulations thereunder; responsibility for the remainder of the Rule
  shall remain with NYSE National.
\6\ FINRA shall not have Regulatory Responsibilities regarding .01 of
  NYSE National Rule 11.3.6.
\7\ FINRA shall not have Regulatory Responsibilities with regard to the
  prohibitions set forth under subsection (a) of FINRA Rule 5230 to the
  extent subsections (b)(2) or (b)(3) of the Rule apply.
\8\ FINRA shall not have Regulatory Responsibilities for the NYSE
  National rule to the extent the exception in FINRA Rule 2510(d)(2)
  applies.
\9\ FINRA shall not have Regulatory Responsibilities regarding the NYSE
  National requirement to annually inspect each office of the ETP Holder
  (other than as required by the FINRA rule to annually inspect each OSJ
  and any branch office that supervises one or more non-branch
  locations).
\10\ FINRA shall not have Regulatory Responsibilities regarding .01 of
  NYSE National Rule 11.12.10.

[In addition, the following provisions shall be part of this 17d-2 
Agreement:]
[Securities Exchange Act of 1934:]
[Section 15(f)]

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 4-694 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 4-694. 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 a.m. and 3 
p.m. Copies of the plan also will be available for inspection and 
copying at the principal offices of FINRA and NYSE National. 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 4-694 and should be submitted 
on or before November 26, 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 \12\ and Rule 
17d-2(c) thereunder \13\ 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 Dual Members that would otherwise be performed by 
NYSE National and FINRA. Accordingly, the proposed Amended Plan 
promotes efficiency by reducing costs to Dual Members. Furthermore, 
because NYSE National and FINRA will coordinate their regulatory 
functions in accordance with the Amended Plan, the Amended Plan should 
promote investor protection.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78q(d).
    \13\ 17 CFR 240.17d-2(c).
---------------------------------------------------------------------------

    The Commission notes that, under the Amended Plan, NYSE National 
and FINRA have allocated regulatory responsibility for those NYSE 
National rules, set forth in the Certification, that are substantially 
similar to the applicable FINRA rules in that examination for 
compliance with such provisions and rules would not require FINRA to 
develop one or more new examination standards, modules, procedures, or 
criteria in order to analyze the application of the rule, or a Dual 
Member's activity, conduct, or output in relation to such rule. The 
Common Rules covered by the Amended Plan are specifically listed in the 
Certification, as may be amended by the Parties from time to time.
    According to the Amended Plan, NYSE National will review the 
Certification, at least annually, or more frequently if required by 
changes in either the rules of NYSE National or FINRA, and, if 
necessary, submit to FINRA an updated list of Common Rules to add NYSE 
National rules not included on the then-current list of Common Rules 
that are substantially similar to FINRA rules; delete NYSE National 
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 NYSE National rules that qualify as 
common rules.\14\ 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, NYSE

[[Page 55416]]

National will also provide FINRA with a current list of Dual Members 
and shall update the list no less frequently than once each 
quarter.\15\ 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.
---------------------------------------------------------------------------

    \14\ See paragraph 2 of the Amended Plan.
    \15\ See paragraph 3 of the Amended Plan.
---------------------------------------------------------------------------

    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 NYSE National rules that are 
substantially similar to the rules of FINRA for Dual Members of NYSE 
National and FINRA. 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 NYSE National rules in the Certification in 
conformance with the definition of Common Rules provided in the Amended 
Plan. However, should the Parties decide to add an NYSE National rule 
to the Certification that is not substantially similar to a FINRA rule; 
delete an NYSE National rule from the Certification that is 
substantially similar to a FINRA rule; or leave on the Certification an 
NYSE National 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.\16\
---------------------------------------------------------------------------

    \16\ The Commission also notes that the addition to or deletion 
from the Certification of any federal securities laws, rules, and 
regulations for which FINRA would bear responsibility under the 
Amended Plan for examining, and enforcing compliance by, Dual 
Members, also would constitute an amendment to the Amended Plan.
---------------------------------------------------------------------------

    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 purposes of the amendment are to (1) reflect the 
name change of National Stock Exchange, Inc. to NYSE National, Inc., 
(2) update the SRO rules that are covered by the agreement, and (3) to 
the extent that it becomes a member of NYSE National, allocate 
regulatory responsibility to FINRA for NYSE National's affiliated 
routing broker-dealer, Archipelago Securities. By declaring it 
effective today, the Amended Plan can become effective and 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.\17\ Furthermore, the Commission does not believe that the 
amendment to the plan raises any new regulatory issues that the 
Commission has not previously considered.
---------------------------------------------------------------------------

    \17\ See supra note 11 (citing to Securities Exchange Act 
Release No. 77089).
---------------------------------------------------------------------------

VI. Conclusion

    This order gives effect to the Amended Plan filed with the 
Commission in File No. 4-694. 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. 4-694, between the FINRA and NYSE 
National, filed pursuant to Rule 17d-2 under the Act, hereby is 
approved and declared effective.
    It is further ordered that NYSE National is relieved of those 
responsibilities allocated to FINRA under the Amended Plan in File No. 
4-694.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
---------------------------------------------------------------------------

    \18\ 17 CFR 200.30-3(a)(34).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-24070 Filed 11-2-18; 8:45 am]
 BILLING CODE 8011-01-P
55410 Federal Register / Vol. 83, No. 214 / Monday, November 5, 2018 / Notices

INFORMATION CONTACT section by 39 U.S.C. 3642, 39 CFR part 3015, and regulatory organization (‘‘SRO’’)
telephone for advice on filing 39 CFR part 3020, subpart B. Comment registered as either a national securities
alternatives. deadline(s) for each request appear in exchange or national securities
FOR FURTHER INFORMATION CONTACT: section II. association to examine for, and enforce
David A. Trissell, General Counsel, at compliance by, its members and persons
II. Docketed Proceeding(s)
202–789–6820. associated with its members with the
1. Docket No(s).: CP2015–61; Filing Act, the rules and regulations
SUPPLEMENTARY INFORMATION:
Title: USPS Notice of Amendment to thereunder, and the SRO’s own rules,
Table of Contents Priority Mail Express & Priority Mail unless the SRO is relieved of this
I. Introduction
Contract 18, Filed Under Seal: October responsibility pursuant to Section
II. Docketed Proceeding(s) 29, 2018; Filing Authority: 39 CFR 17(d) 4 or Section 19(g)(2) 5 of the Act.
3015.5; Public Representative: Curtis E. Without this relief, the statutory
I. Introduction Kidd; Comments Due: November 6, obligation of each individual SRO could
The Commission gives notice that the 2018. result in a pattern of multiple
Postal Service has filed request(s) for the This notice will be published in the examinations of broker-dealers that
Commission to consider matters related Federal Register. maintain memberships in more than one
to negotiated service agreement(s). The Stacy L. Ruble, SRO (‘‘common members’’). Such
requests(s) may propose the addition or Secretary. regulatory duplication would add
removal of a negotiated service unnecessary expenses for common
[FR Doc. 2018–24060 Filed 11–2–18; 8:45 am]
agreement from the market dominant or members and their SROs.
BILLING CODE 7710–FW–P
the competitive product list, or the Section 17(d)(1) of the Act 6 was
modification of an existing product intended, in part, to eliminate
currently appearing on the market unnecessary multiple examinations and
dominant or the competitive product SECURITIES AND EXCHANGE regulatory duplication.7 With respect to
list. COMMISSION a common member, Section 17(d)(1)
Section II identifies the docket [Release No. 34–84502; File No. 4–694] authorizes the Commission, by rule or
number(s) associated with each Postal order, to relieve an SRO of the
Service request, the title of each Postal Program for Allocation of Regulatory responsibility to receive regulatory
Service request, the request’s acceptance Responsibilities Pursuant to Rule 17d– reports, to examine for and enforce
date, and the authority cited by the 2; Notice of Filing and Order compliance with applicable statutes,
Postal Service for each request.1 For Approving and Declaring Effective an rules, and regulations, or to perform
each request, the Commission appoints Amended Plan for the Allocation of other specified regulatory functions.
an officer of the Commission to Regulatory Responsibilities Between To implement Section 17(d)(1), the
represent the interests of the general the Financial Industry Regulatory Commission adopted two rules: Rule
public in the proceeding, pursuant to 39 Authority, Inc. and NYSE National, Inc. 17d–1 and Rule 17d–2 under the Act.8
U.S.C. 505 (Public Representative). Rule 17d–1 authorizes the Commission
October 30, 2018. to name a single SRO as the designated
Section II also establishes comment
deadline(s) pertaining to each request. Notice is hereby given that the examining authority (‘‘DEA’’) to
The public portions of the Postal Securities and Exchange Commission examine common members for
Service’s request(s) can be accessed via (‘‘Commission’’) has issued an Order, compliance with the financial
the Commission’s website (http:// pursuant to Section 17(d) of the responsibility requirements imposed by
www.prc.gov). Non-public portions of Securities Exchange Act of 1934 the Act, or by Commission or SRO
the Postal Service’s request(s), if any, (‘‘Act’’),1 approving and declaring rules.9 When an SRO has been named as
can be accessed through compliance effective an amendment to the plan for a common member’s DEA, all other
with the requirements of 39 CFR allocating regulatory responsibility SROs to which the common member
3007.301.2 (‘‘Plan’’) filed on September 27, 2018, belongs are relieved of the responsibility
The Commission invites comments on pursuant to Rule 17d–2 of the Act,2 by to examine the firm for compliance with
whether the Postal Service’s request(s) the Financial Industry Regulatory the applicable financial responsibility
in the captioned docket(s) are consistent Authority, Inc. (‘‘FINRA’’) and NYSE rules. On its face, Rule 17d–1 deals only
with the policies of title 39. For National, Inc. (‘‘NYSE National’’) with an SRO’s obligations to enforce
request(s) that the Postal Service states (collectively, ‘‘Participating member compliance with financial
concern market dominant product(s), Organizations’’ or ‘‘parties’’). This responsibility requirements. Rule 17d–1
applicable statutory and regulatory Agreement amends and restates the does not relieve an SRO from its
requirements include 39 U.S.C. 3622, 39 agreement entered into between the obligation to examine a common
U.S.C. 3642, 39 CFR part 3010, and 39 parties on December 22, 2015, entitled member for compliance with its own
CFR part 3020, subpart B. For request(s) ‘‘Agreement Among Financial Industry rules and provisions of the federal
that the Postal Service states concern Regulatory Authority, Inc. and National securities laws governing matters other
competitive product(s), applicable Stock Exchange, Inc. Pursuant to Rule than financial responsibility, including
statutory and regulatory requirements 17d–2 under the Securities Exchange
include 39 U.S.C. 3632, 39 U.S.C. 3633, Act of 1934,’’ and any subsequent 4 15 U.S.C. 78q(d).
amendments thereafter. 5 15 U.S.C. 78s(g)(2).
1 While the Postal Service cites no specific 6 15 U.S.C. 78q(d)(1).

authority for its filing, the Commission construes
I. Introduction 7 See Securities Act Amendments of 1975, Report

the request as filed under 39 CFR 3015.5 which Section 19(g)(1) of the Act,3 among of the Senate Committee on Banking, Housing, and
governs amendments to rates or classes not of Urban Affairs to Accompany S. 249, S. Rep. No. 94–
general applicability.
other things, requires every self- 75, 94th Cong., 1st Session 32 (1975).
2 See Docket No. RM2018–3, Order Adopting 8 17 CFR 240.17d–1 and 17 CFR 240.17d–2,
1 15 U.S.C. 78q(d).
Final Rules Relating to Non-Public Information, respectively.
2 17 CFR 240.17d–2.
June 27, 2018, Attachment A at 19–22 (Order No. 9 See Securities Exchange Act Release No. 12352

4679). 3 15 U.S.C. 78s(g)(1). (April 20, 1976), 41 FR 18808 (May 7, 1976).

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Federal Register / Vol. 83, No. 214 / Monday, November 5, 2018 / Notices 55411

sales practices and trading activities and of the proposed Amended Plan is as (a) ‘‘[NSX]NYSE National Rules’’ or
practices. follows (additions are underlined; ‘‘FINRA Rules’’ shall mean: (i) The rules
To address regulatory duplication in deletions are [bracketed]): of [NSX]NYSE National or (ii) the rules
these and other areas, the Commission * * * * * of FINRA, respectively, as the rules of
adopted Rule 17d–2 under the Act.10 an exchange or association are defined
Rule 17d–2 permits SROs to propose Agreement Between Financial Industry in Exchange Act Section 3(a)(27).
joint plans for the allocation of Regulatory Authority, Inc. and NYSE (b) ‘‘Common Rules’’ shall mean
regulatory responsibilities with respect National [Stock Exchange], Inc. [NSX]NYSE National Rules that are
to their common members. Under Pursuant to Rule 17d–2 Under the substantially similar to the applicable
paragraph (c) of Rule 17d–2, the Securities Exchange Act of 1934 FINRA Rules and certain provisions of
Commission may declare such a plan This Agreement, by and between the the Exchange Act and SEC rules set
effective if, after providing for notice Financial Industry Regulatory forth on Exhibit 1 in that examination
and comment, it determines that the Authority, Inc. (‘‘FINRA’’) and the for compliance with such provisions
plan is necessary or appropriate in the NYSE National [Stock Exchange], Inc. and rules would not require FINRA to
public interest and for the protection of (‘‘[[NSX]NYSE NATIONAL ]NYSE develop one or more new examination
investors, to foster cooperation and National’’), is made this [22nd]26th day standards, modules, procedures, or
coordination among the SROs, to of September[December], 201[5]8 (the criteria in order to analyze the
remove impediments to, and foster the ‘‘Agreement’’), pursuant to Section 17(d) application of the provision or rule, or
development of, a national market of the Securities Exchange Act of 1934, a Dual Member’s activity, conduct, or
system and a national clearance and as amended (the ‘‘Exchange Act’’) and output in relation to such provision or
settlement system, and is in conformity Rule 17d–2 thereunder, which permits rule; provided, however Common Rules
with the factors set forth in Section agreements between self-regulatory shall not include the application of the
17(d) of the Act. Commission approval organizations to allocate regulatory SEC, [NSX]NYSE National or FINRA
of a plan filed pursuant to Rule 17d–2 responsibility to eliminate regulatory rules as they pertain to violations of
relieves an SRO of those regulatory duplication. FINRA and [NSX]NYSE insider trading activities, which is
responsibilities allocated by the plan to National may be referred to individually covered by a separate 17d–2 Agreement
another SRO. by and among the Bats BZX Exchange,
as a ‘‘party’’ and together as the
Inc., Bats BYX Exchange, Inc., Chicago
II. The Plan ‘‘parties.’’
Stock Exchange, Inc., Bats EDGA
On February 9, 2016, the Commission This Agreement replaces and restates
Exchange, Inc., Bats EDGX Exchange,
declared effective the Plan entered into the agreement entered into between the
Inc., Financial Industry Regulatory
between FINRA and the National Stock parties on [June 20, 1977 as amended,
Authority, Inc., NASDAQ BX, Inc.,
Exchange, Inc. (n/k/a NYSE National, entitled ‘‘Agreement Between the
NASDAQ PHLX LLC, The NASDAQ
Inc.) for allocating regulatory National Association of Securities
Stock Market LLC, National Stock
responsibility pursuant to Rule 17d–2.11 Dealers, Inc. and the Cincinnati Stock Exchange, Inc., New York Stock
The Plan is intended to reduce Exchange] December 22, 2015 entitled Exchange LLC, NYSE MKT LLC, NYSE
regulatory duplication for firms that are ‘‘Agreement between Financial Industry Arca, Inc., and Investors Exchange LLC,
dual members of FINRA and NYSE Regulatory Authority, Inc. and National approved by the SEC on August 3, 2016
National by allocating regulatory Stock Exchange, Inc. Pursuant to SEC as the same may be amended from time
responsibility with respect to certain Rule 17d–2 Under the Securities to time. Common Rules shall not
applicable laws, rules, and regulations Exchange Act of 1934,’’ and any include provisions regarding (i) notice,
that are common among them. Included subsequent amendments thereafter. reporting or any other filings made
in the Plan is an exhibit that lists every WHEREAS, FINRA and [NSX]NYSE directly to or from NYSE National, (ii)
NYSE National rule for which FINRA National desire to reduce duplication in incorporation by reference of other
bears responsibility under the Plan for the examination of their Dual Members NYSE National Rules that are not
overseeing and enforcing with respect to (as defined herein) and in the filing and Common Rules, (iii) exercise of
NYSE National members that are also processing of certain registration and discretion in a manner that differs from
members of FINRA and the associated membership records; and FINRA’s exercise of discretion,
persons therewith. WHEREAS, FINRA and [NSX]NYSE including, but not limited to exercise of
National desire to execute an agreement exemptive authority, by NYSE National,
III. Proposed Amendment to the Plan covering such subjects pursuant to the (iv) prior written approval of NYSE
On September 27, 2018, the parties provisions of Rule 17d–2 under the National, and (v) payment of fees or
submitted a proposed amendment to the Exchange Act and to file such agreement fines to NYSE National.
Plan (‘‘Amended Plan’’). The primary with the Securities and Exchange (c) ‘‘Dual Members’’ shall mean those
purposes of the Amended Plan are to (1) Commission (the ‘‘SEC’’ or [NSX]NYSE National members that are
reflect the name change of National ‘‘Commission’’) for its approval. also members of FINRA and the
Stock Exchange, Inc. to NYSE National, NOW, THEREFORE, in consideration associated persons therewith.
Inc., (2) update the SRO rules that are of the mutual covenants contained (d) ‘‘Effective Date’’ shall be the date
covered by the agreement, and (3) to the hereinafter, FINRA and [NSX]NYSE this Agreement is approved by the
extent that it becomes a member of National hereby agree as follows: Commission.
NYSE National, allocate regulatory 1. Definitions. Unless otherwise (e) ‘‘Enforcement Responsibilities’’
responsibility to FINRA for NYSE defined in this Agreement or the context shall mean the conduct of appropriate
National’s affiliated routing broker- otherwise requires, the terms used in proceedings, in accordance with
dealer, Archipelago Securities. The text this Agreement shall have the same FINRA’s Code of Procedure (the Rule
meaning as they have under the 9000 Series) and other applicable
10 See Securities Exchange Act Release No. 12935
Exchange Act and the rules and FINRA procedural rules, to determine
(October 28, 1976), 41 FR 49091 (November 8,
1976). regulations thereunder. As used in this whether violations of Common Rules
11 See Securities Exchange Act Release No. 77089 Agreement, the following terms shall have occurred, and if such violations are
(February 9, 2016), 81 FR 7871 (February 16, 2016). have the following meanings: deemed to have occurred, the

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55412 Federal Register / Vol. 83, No. 214 / Monday, November 5, 2018 / Notices

imposition of appropriate sanctions as (i.e., registration rules that are not appropriate. With respect to apparent
specified under FINRA’s Code of Common Rules); violations of any NYSE National Rules
Procedure and sanctions guidelines. (c) discharge of its duties and by any Router Member, FINRA shall not
(f) ‘‘Regulatory Responsibilities’’ shall obligations as a Designated Examining make referrals to NYSE National
mean the examination responsibilities Authority pursuant to Rule 17d–1 under pursuant to this paragraph 6. Such
and Enforcement Responsibilities the Exchange Act; and apparent violations shall be processed
relating to compliance by the Dual (d) any [NSX]NYSE National Rules by, and enforcement proceedings in
Members with the Common Rules and that are not Common Rules, except for respect thereto will be conducted by,
the provisions of the Exchange Act and NYSE National rules for any NYSE FINRA as provided in this agreement.
the rules and regulations thereunder, National affiliate that is a member that (b) In the event that [NSX]NYSE
and other applicable laws, rules and operates as a facility (as defined in National becomes aware of apparent
regulations, each as set forth on Exhibit Section 3(a)(2) of the Exchange Act), violations of any Common Rules,
1 attached hereto. acts as a router for NYSE National and discovered pursuant to the performance
2. Regulatory and Enforcement is a member of FINRA (‘‘Router of the Retained Responsibilities,
Responsibilities. FINRA shall assume Member’’) as provided in paragraph 6. [NSX]NYSE National shall notify
Regulatory Responsibilities and As of the date of this Agreement, FINRA of those apparent violations and
Enforcement Responsibilities for Dual Archipelago Securities is the only such matters shall be handled by FINRA
Members. Attached as Exhibit 1 to this Router Member. as provided in this Agreement.
3. Dual Members. Prior to the (c) Apparent violations of Common
Agreement and made part hereof,
Effective Date, [NSX]NYSE National
[NSX]NYSE National furnished FINRA Rules shall be processed by, and
shall furnish FINRA with a current list
with a current list of Common Rules and enforcement proceedings in respect
of Dual Members, which shall be
certified to FINRA that such rules that thereto shall be conducted by FINRA as
updated no less frequently than once
are [NSX]NYSE National Rules are provided hereinbefore; provided,
each quarter.
substantially similar to the 4. No Charge. There shall be no however, that in the event a Dual
corresponding FINRA Rules (the charge to [NSX]NYSE National by Member is the subject of an
‘‘Certification’’). FINRA hereby agrees FINRA for performing the Regulatory investigation relating to a transaction on
that the rules listed in the Certification Responsibilities and Enforcement [NSX]NYSE National, [NSX]NYSE
are Common Rules as defined in this Responsibilities under this Agreement National may in its discretion assume
Agreement. Each year following the except as hereinafter provided. FINRA concurrent jurisdiction and
Effective Date of this Agreement, or shall provide [NSX]NYSE National with responsibility.
more frequently if required by changes ninety (90) days advance written notice (d) Each party agrees to make
in either the rules of [NSX]NYSE in the event FINRA decides to impose available promptly all files, records and
National or FINRA, [NSX]NYSE any charges to [NSX]NYSE National for witnesses necessary to assist the other
National shall submit an updated list of performing the Regulatory in its investigation or proceedings.
Common Rules to FINRA for review Responsibilities under this Agreement. 7. Continued Assistance.
which shall add [NSX]NYSE National If FINRA determines to impose a charge, (a) FINRA shall make available to
Rules not included in the current list of [NSX]NYSE National shall have the [NSX]NYSE National all information
Common Rules that qualify as Common right at the time of the imposition of obtained by FINRA in the performance
Rules as defined in this Agreement; such charge to terminate this by it of the Regulatory Responsibilities
delete [NSX]NYSE National Rules Agreement; provided, however, that hereunder with respect to the Dual
included in the current list of Common FINRA’s Regulatory Responsibilities Members subject to this Agreement. In
Rules that no longer qualify as Common under this Agreement shall continue particular, and not in limitation of the
Rules as defined in this Agreement; and until the Commission approves the foregoing, FINRA shall furnish
confirm that the remaining rules on the termination of this Agreement. [NSX]NYSE National any information it
current list of Common Rules continue 5. Applicability of Certain Laws, obtains about Dual Members which
to be [NSX]NYSE National Rules that Rules, Regulations or Orders. reflects adversely on their financial
qualify as Common Rules as defined in Notwithstanding any provision hereof, condition. [NSX]NYSE National shall
this Agreement. Within 30 days of this Agreement shall be subject to any make available to FINRA any
receipt of such updated list, FINRA statute, or any rule or order of the information coming to its attention that
shall confirm in writing whether the Commission. To the extent such statute, reflects adversely on the financial
rules listed in any updated list are rule, order or action is inconsistent with condition of Dual Members or indicates
Common Rules as defined in this this Agreement, the statute, rule, order possible violations of applicable laws,
Agreement. Notwithstanding anything or action shall supersede the rules or regulations by such firms.
herein to the contrary, it is explicitly provision(s) hereof to the extent (b) The parties agree that documents
understood that the term ‘‘Regulatory necessary for them to be properly or information shared shall be held in
Responsibilities’’ does not include, and effectuated and the provision(s) hereof confidence, and used only for the
[NSX]NYSE National shall retain full in that respect shall be null and void. purposes of carrying out their respective
responsibility for (unless otherwise 6. Notification of Violations. regulatory obligations. Neither party
addressed by separate agreement or (a) In the event that FINRA becomes shall assert regulatory or other
rule) (collectively, the ‘‘Retained aware of apparent violations of any privileges as against the other with
Responsibilities’’) the following: [NSX]NYSE National Rules, which are respect to documents or information
(a) surveillance, examination, not listed as Common Rules, discovered that is required to be shared pursuant to
investigation and enforcement with pursuant to the performance of the this Agreement.
respect to trading activities or practices Regulatory Responsibilities assumed (c) The sharing of documents or
involving [NSX]NYSE National’s own hereunder, FINRA shall notify information between the parties
marketplace; [NSX]NYSE National of those apparent pursuant to this Agreement shall not be
(b) registration pursuant to its violations for such response as deemed a waiver as against third parties
applicable rules of associated persons [NSX]NYSE National deems of regulatory or other privileges relating

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Federal Register / Vol. 83, No. 214 / Monday, November 5, 2018 / Notices 55413

to the discovery of documents or under this Agreement in good faith respect to the provision of Regulatory
information. during the resolution of such dispute Responsibilities as provided hereby or
8. Statutory Disqualifications. When unless and until this Agreement is for the failure to provide any such
FINRA becomes aware of a statutory terminated in accordance with its responsibility, except with respect to
disqualification as defined in the provisions. Nothing in this Section 13 such liability, loss or damages as shall
Exchange Act with respect to a Dual shall interfere with a party’s right to have been suffered by one or the other
Member, FINRA shall determine terminate this Agreement as set forth of FINRA or [NSX]NYSE National and
pursuant to Sections 15A(g) and/or herein. caused by the willful misconduct of the
Section 6(c) of the Exchange Act the 14. Separate Agreement. This other party or their respective directors,
acceptability or continued applicability Agreement is wholly separate from the governors, officers or employees. No
of the person to whom such following agreements: (1) The warranties, express or implied, are made
disqualification applies and keep multiparty agreement for insider trading by FINRA or [NSX]NYSE National with
[NSX]NYSE National advised of its activities, which is covered by a respect to any of the responsibilities to
actions in this regard for such separate 17d–2 Agreement by and be performed by each of them
subsequent proceedings as [NSX]NYSE among Bats BZX Exchange, Inc., Bats hereunder.
National may initiate. BYX Exchange, Inc., Chicago Stock 18. Relief from Responsibility.
9. Customer Complaints. [NSX]NYSE Exchange, Inc., Bats EDGA Exchange, Pursuant to Sections 17(d)(1)(A) and
National shall forward to FINRA copies Inc., Bats EDGX Exchange, Inc., 19(g) of the Exchange Act and Rule 17d-
of all customer complaints involving Financial Industry Regulatory 2 thereunder, FINRA and [NSX]NYSE
Dual Members received by [NSX]NYSE Authority, Inc., NASDAQ BX, Inc., National join in requesting the
National relating to FINRA’s Regulatory NASDAQ PHLX LLC, The NASDAQ Commission, upon its approval of this
Responsibilities under this Agreement. Stock Market LLC, National Stock Agreement or any part thereof, to relieve
It shall be FINRA’s responsibility to Exchange, Inc., New York Stock [NSX]NYSE National of any and all
review and take appropriate action in Exchange LLC, NYSE MKT LLC, and responsibilities with respect to matters
respect to such complaints. NYSE Arca Inc., and Investors Exchange allocated to FINRA pursuant to this
10. Advertising. FINRA shall assume LLC effective August 3, 2016, as may be Agreement; provided, however, that this
responsibility to review the advertising amended from time to time and (2) the Agreement shall not be effective until
of Dual Members subject to the multiparty 17d–2 agreement relating to the Effective Date.
Agreement, provided that such material Regulation NMS rules by and among 19. Severability. Any term or
is filed with FINRA in accordance with Bats BZX Exchange, Inc., Bats BYX provision of this Agreement that is
FINRA’s filing procedures and is Exchange, Inc., BOX Options Exchange invalid or unenforceable in any
accompanied with any applicable filing LLC, Chicago Board Options Exchange, jurisdiction shall, as to such
fees set forth in FINRA Rules. Incorporated, C2 Options Exchange, jurisdiction, be ineffective to the extent
11. No Restrictions on Regulatory Incorporated, Chicago Stock Exchange, of such invalidity or unenforceability
Action. Nothing contained in this Inc., Bats EDGA Exchange, Inc., Bats without rendering invalid or
Agreement shall restrict or in any way EDGX Exchange, Inc., Financial
encumber the right of either party to unenforceable the remaining terms and
Industry Regulatory Authority, Inc., provisions of this Agreement or
conduct its own independent or International Securities Exchange, LLC,
concurrent investigation, examination affecting the validity or enforceability of
Investors Exchange LLC, ISE Gemini, any of the terms or provisions of this
or enforcement proceeding of or against LLC, ISE Mercury, LLC, Miami
Dual Members, as either party, in its Agreement in any other jurisdiction.
International Securities Exchange, LLC, 20. Counterparts. This Agreement
sole discretion, shall deem appropriate MIAX PEARL, LLC, The NASDAQ Stock may be executed in one or more
or necessary. Market LLC, NASDAQ BX, Inc.,
12. Termination. This Agreement may counterparts, each of which shall be
NASDAQ PHLX, Inc., National Stock deemed an original, and such
be terminated by [NSX]NYSE National Exchange, Inc., New York Stock
or FINRA at any time upon the approval counterparts together shall constitute
Exchange LLC, NYSE MKT LLC, and one and the same instrument.
of the Commission after one (1) year’s NYSE Arca, Inc. effective February 2,
written notice to the other party, except In witness whereof, each party has
2017 as may be amended from time to executed or caused this Agreement to be
as provided in paragraph 4. time.
13. Arbitration. In the event of a executed on its behalf by a duly
15. Notification of Members.
dispute between the parties as to the authorized officer as of the date first
[NSX]NYSE National and FINRA shall
operation of this Agreement, written above.
notify Dual Members of this Agreement
[NSX]NYSE National and FINRA hereby after the Effective Date by means of a * * * * *
agree that any such dispute shall be uniform joint notice. Exhibit 1
settled by arbitration in Washington, DC 16. Amendment. This Agreement may
in accordance with the rules of the be amended in writing duly approved Note: The entire existing table of rules
American Arbitration Association then by each party. All such amendments should be deleted and replaced with the table
in effect, or such other procedures as the must be filed with and approved by the below and for the remainder of the exhibit
parties may mutually agree upon. Commission before they become new text is italicized and deleted text is in
Judgment on the award rendered by the effective. brackets.
arbitrator(s) may be entered in any court 17. Limitation of Liability. Neither
having jurisdiction. Each party FINRA nor [NSX]NYSE National nor NYSE National [Stock Exchange]
acknowledges that the timely and any of their respective directors, (‘‘[NSX] NYSE National’’) Rules
complete performance of its obligations governors, officers or employees shall be Certification for 17d–2 Agreement With
pursuant to this Agreement is critical to liable to the other party to this FINRA
the business and operations of the other Agreement for any liability, loss or [NSX]NYSE National hereby certifies
party. In the event of a dispute between damage resulting from or claimed to that the requirements contained in the
the parties, the parties shall continue to have resulted from any delays, rules listed below are identical to, or
perform their respective obligations inaccuracies, errors or omissions with substantially similar to, the comparable

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55414 Federal Register / Vol. 83, No. 214 / Monday, November 5, 2018 / Notices

FINRA Rule, NASD Rule, Exchange Act from NYSE National, (ii) incorporation exercise of exemptive authority, by
provision or SEC rule identified by reference to other NYSE National NYSE National, (iv) prior written
(‘‘Common Rules’’). Rules that are not Common Rules, (iii) approval of NYSE National, and (v)
#Common Rules shall not include exercise of discretion in a manner that payment of fees or fines to NYSE
provisions regarding (i) notice, reporting differs from FINRA’s exercise of National.
or any other filings made directly to or discretion, including but not limited to

NYSE national rule: FINRA rule, NASD rule, Exchange Act provision or SEC rule:

Rule 2.2(e) Obligations of ETP Holders and the Exchange # .................. FINRA Rule 1250 Continuing Education Requirements.
Rule 2.2 Obligations of ETP Holders and the Exchange Commentary FINRA Rule 1010(a), (c) Electronic Filing Requirements for Uniform
.05 #. Forms, and FINRA By-Laws Article V, Sec. 2 and Sec. 3 Registered
Representatives and Associated Persons.
Rule 3.10(b) Notice of Expulsion or Suspension # ................................... FINRA Rule 4530(a)(1)(D) Reporting Requirements.1
Rule 6.7410 Definitions(a)–(o) ................................................................. FINRA Rule 7410 Definitions.
Rule 6.7420 Applicability .......................................................................... FINRA Rule 7420 Applicability.2
Rule 6.7430 Synchronization of ETP Holder Business Clocks # ............. FINRA Rule 4590 Synchronization of member Business Clocks.3
Rule 6.7440 Recording of Order Information # ......................................... FINRA Rule 7440 Recording of Order Information.
Rule 6.7450 Order Data Transmission Requirements ............................. FINRA Rule 7450 Order Data Transmission Requirements.
Rule 6.7460 Violation of Order Audit Trail System Rules ....................... FINRA Rule 7460 Violation of Order Audit Trail System Rules.
Rule 6.7470 Exemption to the Order Recording and Data Transmission FINRA Rule 7470 Exemption to the Order Recording and Data Trans-
Requirements #. mission Requirements.
Rule 7.3 (b) and (c) Commissions ........................................................... FINRA Rule 2232 Customer Confirmations and SEA Rule 10b–10 Con-
firmation of Transactions.
Rule 7.34(d)(3) Trading Sessions ............................................................ FINRA Rule 2265 Extended Hours Trading Risk Disclosure.
Rule 11.2111 Suitability ............................................................................ FINRA Rule 2111 Suitability.
Rule 11.2210 Communications with the Public ....................................... FINRA Rule 2210 Communications with the Public.
Rule 11.2232 Customer Confirmations .................................................... FINRA Rule 2232 Customer Confirmations and SEA Rule 10b 10 Con-
firmation of Transactions.
Rule 11.3.1 Business Conduct of ETP Holders * ..................................... FINRA Rule 2010 Standards of Commercial Honor and Principles of
Trade.* 4
Rule 11.3.2 Violations Prohibited * # ......................................................... FINRA Rule 2010 Standards of Commercial Honor and Principles of
Trade and FINRA Rule 3110 Supervision.* 5
Rule 11.3.3 Use of Fraudulent Devices * ................................................. FINRA Rule 2020 Use of Manipulative, Deceptive or Other Fraudulent
Device.*
Rule 11.3.5(a) Advertising Practices ........................................................ FINRA Rule 2210(d)(1)(B) Communications with the Public.
Rule 11.3.5(c) Advertising Practices ........................................................ FINRA Rule 2210(d)(1) Communications with the Public.
Rule 11.3.6 Fair Dealing with Customers ................................................ FINRA Rule 2020 Use of Manipulative, Deceptive or Other Fraudulent
Device, FINRA 2010 Standards of Commercial Honor and Principles
of Trade, and FINRA Rule 2111 Suitability.6
Rule 11.3.8(a) The Prompt Receipt and Delivery of Securities ............... FINRA Rule 11860 COD Orders.
Rule 11.3.9 Charges for Services Performed .......................................... FINRA Rule 2122 Charges for Services Performed.
Rule 11.3.10 Use of Information .............................................................. FINRA Rule 2060 Use of Information Obtained in Fiduciary Capacity.
Rule 11.3.11 Publication of Transactions and Quotations # ..................... FINRA Rule 5210 Publication of Transactions and Quotations.
Rule 11.3.12 Offers at Stated Prices ....................................................... FINRA Rule 5220 Offers at Stated Prices.
Rule 11.3.13 Payment Designed to Influence Market Prices, Other than FINRA Rule 5230 Payments Involving Publications that Influence the
Paid Advertising. Market Price of a Security.7
Rule 11.3.15 Disclosure of Control .......................................................... FINRA Rule 2262 Disclosure of Control Relationship With Issuer.
Rule 11.3.16 Discretionary Accounts ....................................................... NASD Rule 2510 Discretionary Accounts.8
Rule 11.3.17 Customer’s Securities or Funds ......................................... FINRA Rule 2150(a) Customers’ Securities or Funds—Improper Use.
Rule 11.3.18 Prohibition Against Guarantees .......................................... FINRA Rule 2150(b) Customers’ Securities or Funds—Prohibition
Against Guarantees.
Rule 11.3.19 Sharing in Accounts; Extent Permissible ........................... FINRA Rule 2150(c)(1) Customers’ Securities or Funds—Sharing in
Accounts; Extent Permissible.
Rule 11.3.21 Telephone Solicitation ........................................................ FINRA Rule 3230 Telemarketing.
Rule 11.3310 Anti-Money Laundering Compliance Program # ................ FINRA Rule 3310 Anti-Money Laundering Compliance Program.
Rule 11.4.1 Requirements * # .................................................................... FINRA Rule 4511 General Requirements.*
Rule 11.4.3 Record of Written Complaints .............................................. FINRA Rule 4513 Records of Written Customer Complaints.
Rule 11.5.1 Written Procedures * # ........................................................... FINRA Rule 3110(b) Supervision—Written Procedures.*
Rule 11.5.2 Responsibility of ETP Holders .............................................. FINRA Rule 3110(a) and (b)(7) Supervision.*
Rule 11.5.3 Records * ............................................................................... FINRA Rule 3110(a) and (b) Supervision; * and FINRA Rule 4511 Gen-
eral Requirements.
Rule 11.5.4 Review of Activities and Annual Inspections ........................ FINRA Rule 3110(c) and (d) Supervision—Internal Inspections/Review
of Transactions and Correspondence.* 9
Rule 11.5.7 Annual Certification of Compliance and Supervisory Proc- FINRA Rule 3130 Annual Certification of Compliance and Supervisory
esses #. Processes.
Rule 11.5220 Disruptive Quoting and Trading Activity Prohibited # ......... FINRA Rule 5210 .03 Disruptive Quoting and Trading Activity Prohib-
ited.
Rule 11.5320 Prohibition Against Trading Ahead of Customer Orders ... FINRA Rule 5320 Prohibition Against Trading Ahead of Customer Or-
ders.
Rule 11.12.10 Best Execution .................................................................. FINRA Rule 5310 Best Execution and Interpositioning.10ROW≤

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Federal Register / Vol. 83, No. 214 / Monday, November 5, 2018 / Notices 55415

NYSE national rule: FINRA rule, NASD rule, Exchange Act provision or SEC rule:

Rule 11.12.3 Excessive Sales by an ETP Holder ................................... FINRA Rule 6140(c) Other Trading Practices.
* FINRA shall not have any 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 BZX Exchange, Inc., Bats BYX Exchange, Inc., Chicago Stock Exchange, Inc., Bats EDGA
Exchange, Inc., Bats EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., NASDAQ BX, Inc., NASDAQ PHLX LLC, The NASDAQ
Stock Market LLC, National Stock Exchange, Inc., New York Stock Exchange, LLC, NYSE MKT LLC, and NYSE Arca, Inc. effective August 3,
2016, as may be amended from time to time.
1 FINRA shall only have Regulatory Responsibilities to the extent NYSE National has adopted or accepts interpretations consistent with FINRA
Rule 4530 regarding the specific timing and thresholds for reporting.
2 Applies only to NYSE National ETP Holders and their associated persons, as that term is defined in FINRA’s By-laws Art. I(rr).
3 FINRA shall not have regulatory responsibilities to the extent NYSE National prescribes additional procedures not required by FINRA.
4 FINRA shall not have Regulatory Responsibilities regarding .01 of NYSE National Rule 11.3.1.
5 FINRA shall only have Regulatory Responsibilities regarding the first phrase of the NYSE National Rule regarding prohibitions from violating
the Securities Exchange Act of 1934 and the rules and regulations thereunder; responsibility for the remainder of the Rule shall remain with
NYSE National.
6 FINRA shall not have Regulatory Responsibilities regarding .01 of NYSE National Rule 11.3.6.
7 FINRA shall not have Regulatory Responsibilities with regard to the prohibitions set forth under subsection (a) of FINRA Rule 5230 to the ex-
tent subsections (b)(2) or (b)(3) of the Rule apply.
8 FINRA shall not have Regulatory Responsibilities for the NYSE National rule to the extent the exception in FINRA Rule 2510(d)(2) applies.
9 FINRA shall not have Regulatory Responsibilities regarding the NYSE National requirement to annually inspect each office of the ETP Holder
(other than as required by the FINRA rule to annually inspect each OSJ and any branch office that supervises one or more non-branch loca-
tions).
10 FINRA shall not have Regulatory Responsibilities regarding .01 of NYSE National Rule 11.12.10.

[In addition, the following provisions Washington, DC 20549, on official regulatory functions in accordance with
shall be part of this 17d–2 Agreement:] business days between the hours of 10 the Amended Plan, the Amended Plan
[Securities Exchange Act of 1934:] a.m. and 3 p.m. Copies of the plan also should promote investor protection.
[Section 15(f)] will be available for inspection and The Commission notes that, under the
IV. Solicitation of Comments copying at the principal offices of Amended Plan, NYSE National and
FINRA and NYSE National. All FINRA have allocated regulatory
Interested persons are invited to comments received will be posted responsibility for those NYSE National
submit written data, views, and without change. Persons submitting rules, set forth in the Certification, that
arguments concerning the foregoing. comments are cautioned that we do not are substantially similar to the
Comments may be submitted by any of redact or edit personal identifying applicable FINRA rules in that
the following methods: information from comment submissions. examination for compliance with such
Electronic Comments You should submit only information provisions and rules would not require
• Use the Commission’s internet that you wish to make available FINRA to develop one or more new
comment form (http://www.sec.gov/ publicly. All submissions should refer examination standards, modules,
rules/sro.shtml); or to File Number 4–694 and should be procedures, or criteria in order to
• Send an email to rule-comments@ submitted on or before November 26, analyze the application of the rule, or a
sec.gov. Please include File Number 4– 2018. Dual Member’s activity, conduct, or
694 on the subject line. output in relation to such rule. The
V. Discussion
Common Rules covered by the
Paper Comments The Commission finds that the Amended Plan are specifically listed in
• Send paper comments in triplicate proposed Amended Plan is consistent the Certification, as may be amended by
to Secretary, Securities and Exchange with the factors set forth in Section the Parties from time to time.
Commission, 100 F Street NE, 17(d) of the Act 12 and Rule 17d–2(c) According to the Amended Plan,
Washington, DC 20549–1090. thereunder 13 in that the proposed NYSE National will review the
All submissions should refer to File Amended Plan is necessary or Certification, at least annually, or more
Number 4–694. This file number should appropriate in the public interest and frequently if required by changes in
be included on the subject line if email for the protection of investors, fosters either the rules of NYSE National or
is used. To help the Commission cooperation and coordination among FINRA, and, if necessary, submit to
process and review your comments SROs, and removes impediments to and FINRA an updated list of Common
more efficiently, please use only one fosters the development of the national Rules to add NYSE National rules not
method. The Commission will post all market system. In particular, the included on the then-current list of
comments on the Commission’s internet Commission believes that the proposed Common Rules that are substantially
website (http://www.sec.gov/rules/ Amended Plan should reduce similar to FINRA rules; delete NYSE
sro.shtml). Copies of the submission, all unnecessary regulatory duplication by National rules included in the then-
subsequent amendments, all written allocating to FINRA certain examination current list of Common Rules that no
statements with respect to the proposed and enforcement responsibilities for longer qualify as common rules; and
plan that are filed with the Commission, Dual Members that would otherwise be confirm that the remaining rules on the
and all written communications relating performed by NYSE National and list of Common Rules continue to be
to the proposed plan between the FINRA. Accordingly, the proposed NYSE National rules that qualify as
Commission and any person, other than Amended Plan promotes efficiency by common rules.14 FINRA will then
those that may be withheld from the reducing costs to Dual Members. confirm in writing whether the rules
public in accordance with the Furthermore, because NYSE National listed in any updated list are Common
provisions of 5 U.S.C. 552, will be and FINRA will coordinate their Rules as defined in the Amended Plan.
available for website viewing and Under the Amended Plan, NYSE
printing in the Commission’s Public 12 15 U.S.C. 78q(d).
Reference Room, 100 F Street NE, 13 17 CFR 240.17d–2(c). 14 See paragraph 2 of the Amended Plan.

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55416 Federal Register / Vol. 83, No. 214 / Monday, November 5, 2018 / Notices

National will also provide FINRA with be implemented without undue delay. rule change as described in Items I and
a current list of Dual Members and shall The Commission notes that the prior II below, which Items have been
update the list no less frequently than version of this plan immediately prior to prepared by the Exchange. The
once each quarter.15 The Commission this proposed amendment was Commission is publishing this notice to
believes that these provisions are published for comment and the solicit comments on the proposed rule
designed to provide for continuing Commission did not receive any change from interested persons.
communication between the Parties to comments thereon.17 Furthermore, the I. Self-Regulatory Organization’s
ensure the continued accuracy of the Commission does not believe that the Statement of the Terms of Substance of
scope of the proposed allocation of amendment to the plan raises any new the Proposed Rule Change
regulatory responsibility. regulatory issues that the Commission
The Commission is hereby declaring has not previously considered. The Exchange proposes to list and
effective an Amended Plan that, among trade the shares of the
other things, allocates regulatory VI. Conclusion BrandywineGLOBAL—Global Total
responsibility to FINRA for the This order gives effect to the Return ETF (the ‘‘Fund’’), a series of
oversight and enforcement of all NYSE Amended Plan filed with the Legg Mason ETF Investment Trust (the
National rules that are substantially Commission in File No. 4–694. The ‘‘Trust’’) under Nasdaq Rule 5735
similar to the rules of FINRA for Dual Parties shall notify all members affected (‘‘Managed Fund Shares’’).3 The shares
Members of NYSE National and FINRA. by the Amended Plan of their rights and of the Fund are collectively referred to
Therefore, modifications to the obligations under the Amended Plan. herein as the ‘‘Shares.’’
Certification need not be filed with the It is therefore ordered, pursuant to The text of the proposed rule change
Commission as an amendment to the Section 17(d) of the Act, that the is available on the Exchange’s website at
Amended Plan, provided that the Amended Plan in File No. 4–694, http://nasdaq.cchwallstreet.com, at the
Parties are only adding to, deleting between the FINRA and NYSE National, principal office of the Exchange, and at
from, or confirming changes to NYSE filed pursuant to Rule 17d-2 under the the Commission’s Public Reference
National rules in the Certification in Act, hereby is approved and declared Room.
conformance with the definition of effective. II. Self-Regulatory Organization’s
Common Rules provided in the It is further ordered that NYSE Statement of the Purpose of, and
Amended Plan. However, should the National is relieved of those Statutory Basis for, the Proposed Rule
Parties decide to add an NYSE National responsibilities allocated to FINRA Change
rule to the Certification that is not under the Amended Plan in File No. 4–
substantially similar to a FINRA rule; 694. In its filing with the Commission, the
delete an NYSE National rule from the Exchange included statements
For the Commission, by the Division of concerning the purpose of and basis for
Certification that is substantially similar Trading and Markets, pursuant to delegated
to a FINRA rule; or leave on the authority.18 3 The Commission approved Nasdaq Rule 5735 in
Certification an NYSE National rule that Eduardo A. Aleman, Securities Exchange Act Release No. 57962 (June
is no longer substantially similar to a Assistant Secretary. 13, 2008), 73 FR 35175 (June 20, 2008) (SR–
FINRA rule, then such a change would [FR Doc. 2018–24070 Filed 11–2–18; 8:45 am]
NASDAQ–2008–039). There are already multiple
constitute an amendment to the actively-managed funds listed on the Exchange.
BILLING CODE 8011–01–P See, e.g., Securities Exchange Act Release Nos.
Amended Plan, which must be filed 80946 (June 15, 2017), 82 FR 28126 (June 20, 2017)
with the Commission pursuant to Rule (SR–NASDAQ–2017–039) (order approving listing
17d–2 under the Act.16 SECURITIES AND EXCHANGE
and trading of Guggenheim Limited Duration ETF);
Under paragraph (c) of Rule 17d–2, 78592 (August 16, 2016), 81 FR 56729 (August 22,
COMMISSION 2016) (SR–NASDAQ–2016–061) (order approving
the Commission may, after appropriate listing and trading of First Trust Equity Market
notice and comment, declare a plan, or [Release No. 34–84505; File No. SR– Neutral ETF); 78443 (July 29, 2016), 81 FR 51517
any part of a plan, effective. In this NASDAQ–2018–080] (August 4, 2016) (SR–NASDAQ–2016–064) (order
instance, the Commission believes that approving listing and trading of First Trust Strategic
appropriate notice and comment can Self-Regulatory Organizations; The Mortgage REIT ETF); 71913 (April 9, 2014), 79 FR
Nasdaq Stock Market LLC; Notice of 21333 (April 15, 2014) (SR–NASDAQ–2014–019)
take place after the proposed (order approving listing and trading of First Trust
amendment is effective. The primary Filing of a Proposed Rule Change To Managed Municipal ETF); 69464 (April 26, 2013),
purposes of the amendment are to (1) List and Trade Shares of the 78 FR 25774 (May 2, 2013) (SR–NASDAQ–2013–
reflect the name change of National BrandywineGLOBAL—Global Total 036) (order approving listing and trading of First
Return ETF, a Series of Legg Mason Trust Senior Loan Fund); 66489 (February 29,
Stock Exchange, Inc. to NYSE National, 2012), 77 FR 13379 (March 6, 2012) (SR–NASDAQ–
Inc., (2) update the SRO rules that are ETF Investment Trust Under Nasdaq 2012–004) (order approving listing and trading of
covered by the agreement, and (3) to the Rule 5735 WisdomTree Emerging Markets Corporate Bond
Fund); see also filings for similar ETFs listed on
extent that it becomes a member of October 30, 2018. other national securities exchanges: Securities
NYSE National, allocate regulatory Pursuant to Section 19(b)(1) of the Exchange Act Release Nos. 80657 (May 11, 2017)
responsibility to FINRA for NYSE 82 FR 22702 (May 17, 2017) (SR–NYSE Arca–2017–
Securities Exchange Act of 1934 09) (order approving listing and trading of Janus
National’s affiliated routing broker- (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Short Duration Income ETF); 79683 (December 23,
dealer, Archipelago Securities. By notice is hereby given that on October 2016), 81 FR 96539 (December 30, 2016) (SR–
declaring it effective today, the 17, 2018, The Nasdaq Stock Market LLC NYSEArca–2016–82) (order approving listing and
Amended Plan can become effective and trading of JPMorgan Diversified Event Driven ETF);
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the 77904 (May 25, 2016), 81 FR 35101 (SR–NYSE
Securities and Exchange Commission Arca–2016–17) (order approving listing and trading
15 See paragraph 3 of the Amended Plan. (‘‘SEC’’ or ‘‘Commission’’) the proposed of JPMorgan Diversified Alternative ETF); 68870
16 The Commission also notes that the addition to (February 8 2013), 78 FR 11245 (February 15, 2013)
or deletion from the Certification of any federal 17 See supra note 11 (citing to Securities
(SR–NYSEArca–2012–139) (order approving listing
securities laws, rules, and regulations for which and trading of First Trust Preferred Securities and
FINRA would bear responsibility under the Exchange Act Release No. 77089). Income ETF). The Exchange believes the proposed
18 17 CFR 200.30–3(a)(34).
Amended Plan for examining, and enforcing rule change raises no significant issues not
1 15 U.S.C. 78s(b)(1).
compliance by, Dual Members, also would previously addressed in those prior Commission
constitute an amendment to the Amended Plan. 2 17 CFR 240.19b–4. orders.

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Document Created: 2018-11-03 00:29:23
Document Modified: 2018-11-03 00:29:23
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		83 FR 55410