Self-Regulatory Organizations; Order Approving Minor Rule Violation Plan for EDGA Exchange, Inc., 26827-26828 [2010-11260]
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Federal Register / Vol. 75, No. 91 / Wednesday, May 12, 2010 / Notices
device, the Vendor should include only
the entitled individuals, and not the
device, in the count.
III. Discussion
After careful consideration, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange.7 In
particular, it is consistent with Section
6(b)(4) of the Act,8 which requires that
the rules of a national securities
exchange provide for the equitable
allocation of reasonable dues, fees, and
other charges among its members and
issuers and other parties using its
facilities, and Section 6(b)(5) of the
Act,9 which requires, among other
things, that the rules of a national
securities exchange be designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system and, in general, to protect
investors and the public interest, and
not be designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Commission also finds that the
proposed rule change is consistent with
the provisions of Section 6(b)(8) of the
Act,10 which requires that the rules of
an exchange not impose any burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act. Finally, the
Commission finds that the proposed
rule change is consistent with Rule
603(a) of Regulation NMS,11 adopted
under Section 11A(c)(1) of the Act,
which requires an exclusive processor
that distributes information with respect
to quotations for or transactions in an
NMS stock to do so on terms that are
fair and reasonable and that are not
unreasonably discriminatory.12
The Exchange proposes to
permanently implement the Subscriber
Entitlement unit-of-count methodology
in accordance with the terms set forth
in the Pilot Program. According to the
Exchange, the proposed rule change
WReier-Aviles on DSKGBLS3C1PROD with NOTICES
7 In
approving this proposed rule change, the
Commission notes that it has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
8 15 U.S.C. 78f(b)(4).
9 15 U.S.C. 78f(b)(5).
10 15 U.S.C. 78f(b)(8).
11 17 CFR 242.603(a).
12 NYSE is an exclusive processor of NYSE depthof-book data under Section 3(a)(22)(B) of the Act,
15 U.S.C. 78c(a)(22)(B), which defines an exclusive
processor as, among other things, an exchange that
distributes information with respect to quotations
or transactions on an exclusive basis on its own
behalf.
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15:00 May 11, 2010
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would simplify the way it charges for
NYSE OpenBook by changing the
methodology for the unit-of-count, and
this change should reduce the fees and
administrative costs related to the
receipt and distribution of NYSE
OpenBook packages. The Exchange has
indicated that its experience with the
Pilot Program has been successful. The
Commission has reviewed the proposal
using the approach set forth in the
NYSE Arca Order for non-core market
data fees.13 The Commission has
previously found that NYSE was subject
to significant competitive forces in
setting fees for its depth-of-book order
data in the proposed rule changes that
established and extended the Pilot
Program’s revised unit-of-count
methodology.14 There are a variety of
alternative sources of information that
impose significant competitive
pressures on the NYSE in setting the
terms for distributing its depth-of-book
order data. The Commission believes
that the availability of those
alternatives, as well as the NYSE’s
compelling need to attract order flow,
imposed significant competitive
pressure on the NYSE to act equitably,
fairly, and reasonably in setting the
terms of its proposal.
Because the NYSE was subject to
significant competitive forces in setting
the terms of the proposal, the
Commission will approve the proposal
in the absence of a substantial
countervailing basis to find that its
terms nevertheless fail to meet an
applicable requirement of the Act or the
rules thereunder. An analysis of the
proposal does not provide such a basis.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,15 that the
proposed rule change (SR–NYSE–2010–
22) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–11258 Filed 5–11–10; 8:45 am]
BILLING CODE 8010–01–P
13 Securities Exchange Act Release No. 59039
(December 2, 2008), 73 FR 74770 (December 9,
2008) (SR–NYSEArca-2006–21) (‘‘NYSE Arca
Order’’). In the NYSE Arca Order, the Commission
describes in great detail the competitive factors that
apply to non-core market data products. The
Commission hereby incorporates by reference the
data and analysis from the NYSE Arca Order into
this order.
14 See note 5, supra.
15 15 U.S.C. 78s(b)(2).
16 17 CFR 200.30–3(a)(12).
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26827
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62037; File No. 4–595]
Self-Regulatory Organizations; Order
Approving Minor Rule Violation Plan
for EDGA Exchange, Inc.
May 5, 2010.
On March 19, 2010, EDGA Exchange,
Inc. (‘‘EDGA Exchange’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) a proposed minor rule
violation plan (‘‘MRVP’’) pursuant to
Section 19(d)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’)1 and Rule
19d–1(c)(2) thereunder.2 The proposed
MRVP was published for public
comment on March 29, 2010.3 The
Commission received no comments on
the proposal. This order approves EDGA
Exchange’s proposed MRVP.
EDGA Exchange’s MRVP specifies
those uncontested minor rule violations
with sanctions not exceeding $2,500
which would not be subject to the
provisions of Rule 19d–1(c)(1) under the
Act4 requiring that a self-regulatory
organization promptly file notice with
the Commission of any final
disciplinary action taken with respect to
any person or organization.5 In
accordance with Rule 19d–1(c)(2), the
Exchange proposed to designate certain
rule violations as minor rule violations,
and requested that it be relieved of the
reporting requirements regarding such
violations, provided it gives notice of
such violations to the Commission on a
quarterly basis. EDGA Exchange
included in its proposed MRVP the
policies and procedures currently
included in EDGA Exchange Rule 8.15
(‘‘Imposition of Fines for Minor
Violation(s) of Rules’’) and the rule
violations included in EDGA Exchange
Rule 8.15.01.6
1 15
U.S.C. 78s(d)(1).
CFR 240.19d–1(c)(2).
3 See Securities Exchange Act Release No. 61753
(March 22, 2010), 75 FR 15471.
4 17 CFR 240.19d–1(c)(1).
5 The Commission adopted amendments to
paragraph (c) of Rule 19d–1 to allow self-regulatory
organizations (‘‘SROs’’) to submit for Commission
approval plans for the abbreviated reporting of
minor disciplinary infractions. See Securities
Exchange Act Release No. 21013 (June 1, 1984), 49
FR 23828 (June 8, 1984). Any disciplinary action
taken by an SRO against any person for violation
of a rule of the SRO which has been designated as
a minor rule violation pursuant to such a plan shall
not be considered ‘‘final’’ for purposes of Section
19(d)(1) of the Act if the sanction imposed consists
of a fine not exceeding $2,500 and the sanctioned
person has not sought an adjudication, including a
hearing, or otherwise exhausted his or her
administrative remedies.
6 On March 12, 2010, the Commission approved
EDGA Exchange’s application for registration as a
2 17
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12MYN1
26828
Federal Register / Vol. 75, No. 91 / Wednesday, May 12, 2010 / Notices
WReier-Aviles on DSKGBLS3C1PROD with NOTICES
Pursuant to the Exchange’s proposed
MRVP, under Rule 8.15, the Exchange
may impose a fine (not to exceed
$2,500) on a member, an associated
person of a member, or a registered or
non-registered employee of a member
with respect to any rule listed in Rule
8.15.01. The Exchange shall serve the
person against whom a fine is imposed
with a written statement setting forth
the rule or rules allegedly violated, the
act or omission constituting each such
violation, the fine imposed, and the date
by which such determination becomes
final or by which such determination
must be contested. If the person against
whom the fine is imposed pays the fine,
such payment shall be deemed to be a
waiver of such person’s right to a
disciplinary proceeding and any review
of the matter under Exchange rules. Any
person against whom a fine is imposed
may contest the Exchange’s
determination by filing with the
Exchange a written response, at which
point the matter shall become a
disciplinary proceeding.
Upon approval of the plan, the
Exchange will provide the Commission
a quarterly report of actions taken on
minor rule violations under the plan.
The quarterly report will include the
Exchange’s internal file number for the
case, the name of the individual and/or
organization, the nature of the violation,
the specific rule provision violated, the
sanction imposed, the number of times
the rule violation has occurred, and the
date of disposition.7
The Commission finds that the
proposed MRVP is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange. In
particular, the Commission believes that
the proposal is consistent with Section
6(b)(5) of the Act,8 which requires that
the rules of an exchange be designed to
promote just and equitable principles of
trade, to remove impediments and to
perfect the mechanism of a free and
open market and national market
system, and, in general, to protect
national securities exchange, including the rules
governing the EDGA Exchange. See Securities
Exchange Act Release No. 61698, 75 FR 13151
(March 18, 2010). In the approval order, the
Commission noted that EDGA Exchange Rule 8.15
provides for the imposition of fines for minor rule
violations pursuant to a minor rule violation plan.
Accordingly, the Commission noted that, EDGA
Exchange Rule 8.15 provides for the imposition of
fines for minor rule violations pursuant to a minor
rule violation plan. Accordingly, the Commission
noted that as a condition to the operation of EDGA
Exchange, the Exchange must file a minor rule
violation plan with the Commission.
7 EDGA Exchange attached a sample form of the
quarterly report with its submission to the
Commission.
8 15 U.S.C. 78f(b)(5).
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15:00 May 11, 2010
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investors and the public interest. The
Commission also believes that the
proposal is consistent with Sections
6(b)(1) and 6(b)(6) of the Act9 which
require that the rules of an exchange
enforce compliance with, and provide
appropriate discipline for, violations of
the Commission and Exchange rules. In
addition, because the MRVP offers
procedural rights to a person sanctioned
under Rule 8.15, the Commission
believes that Rule 8.15 provides a fair
procedure for the disciplining of
members and persons associated with
members, consistent with Sections
6(b)(7) and 6(d)(1) of the Act.10
Finally, the Commission finds that the
proposal is consistent with the public
interest, the protection of investors, or
otherwise in furtherance of the purposes
of the Act, as required by Rule 19d–
1(c)(2) under the Act,11 because the
MRVP strengthens EDGA Exchange’s
ability to carry out its oversight and
enforcement responsibilities as an SRO
in cases where full disciplinary
proceedings are unsuitable in view of
the minor nature of the particular
violation.
In approving this proposal, the
Commission in no way minimizes the
importance of compliance with
Exchange rules and all other rules
subject to the imposition of sanctions
under Rule 8.15. The Commission
believes that the violation of an SRO’s
rules, as well as Commission rules, is a
serious matter. However, Rule 8.15
provides a reasonable means of
addressing violations that do not rise to
the level of requiring formal
disciplinary proceedings, while
providing greater flexibility in handling
certain violations. The Commission
expects that EDGA Exchange will
continue to conduct surveillance with
due diligence and make determinations
based on its findings, on a case-by-case
basis, whether a sanction under the
MRVP is appropriate, or whether a
violation requires formal disciplinary
action.
It is therefore ordered, pursuant to
Rule 19d–1(c)(2) under the Act,12 that
the proposed MRVP for EDGA
Exchange, File No. 4–595, be, and
hereby is, approved and declared
effective.
U.S.C. 78f(b)(1) and 78f(b)(6).
U.S.C. 78f(b)(7) and 78f(d)(1).
11 17 CFR 240.19d–1(c)(2).
12 Id.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–11260 Filed 5–11–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62040; File No. SR–CBOE–
2010–040]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Adding 75 Options
Classes to the Penny Pilot Program
May 5, 2010.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 29,
2010, the Chicago Board Options
Exchange, Incorporated (‘‘Exchange’’ or
‘‘CBOE’’) filed with the Securities and
Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CBOE proposes to amend proposes to
amend [sic] its rules relating to the
Penny Pilot Program. The text of the
rule proposal is available on the
Exchange’s Web site (https://
www.cboe.org/legal), at the Exchange’s
Office of the Secretary, at the
Commission’s Public Reference Room
and on the Commission’s Web site at
https://www.sec.gov.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
9 15
10 15
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13 17
CFR 200.30–3(a)(44).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 75, Number 91 (Wednesday, May 12, 2010)]
[Notices]
[Pages 26827-26828]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-11260]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62037; File No. 4-595]
Self-Regulatory Organizations; Order Approving Minor Rule
Violation Plan for EDGA Exchange, Inc.
May 5, 2010.
On March 19, 2010, EDGA Exchange, Inc. (``EDGA Exchange'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') a proposed minor rule violation plan (``MRVP'')
pursuant to Section 19(d)(1) of the Securities Exchange Act of 1934
(``Act'')\1\ and Rule 19d-1(c)(2) thereunder.\2\ The proposed MRVP was
published for public comment on March 29, 2010.\3\ The Commission
received no comments on the proposal. This order approves EDGA
Exchange's proposed MRVP.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(d)(1).
\2\ 17 CFR 240.19d-1(c)(2).
\3\ See Securities Exchange Act Release No. 61753 (March 22,
2010), 75 FR 15471.
---------------------------------------------------------------------------
EDGA Exchange's MRVP specifies those uncontested minor rule
violations with sanctions not exceeding $2,500 which would not be
subject to the provisions of Rule 19d-1(c)(1) under the Act\4\
requiring that a self-regulatory organization promptly file notice with
the Commission of any final disciplinary action taken with respect to
any person or organization.\5\ In accordance with Rule 19d-1(c)(2), the
Exchange proposed to designate certain rule violations as minor rule
violations, and requested that it be relieved of the reporting
requirements regarding such violations, provided it gives notice of
such violations to the Commission on a quarterly basis. EDGA Exchange
included in its proposed MRVP the policies and procedures currently
included in EDGA Exchange Rule 8.15 (``Imposition of Fines for Minor
Violation(s) of Rules'') and the rule violations included in EDGA
Exchange Rule 8.15.01.\6\
---------------------------------------------------------------------------
\4\ 17 CFR 240.19d-1(c)(1).
\5\ The Commission adopted amendments to paragraph (c) of Rule
19d-1 to allow self-regulatory organizations (``SROs'') to submit
for Commission approval plans for the abbreviated reporting of minor
disciplinary infractions. See Securities Exchange Act Release No.
21013 (June 1, 1984), 49 FR 23828 (June 8, 1984). Any disciplinary
action taken by an SRO against any person for violation of a rule of
the SRO which has been designated as a minor rule violation pursuant
to such a plan shall not be considered ``final'' for purposes of
Section 19(d)(1) of the Act if the sanction imposed consists of a
fine not exceeding $2,500 and the sanctioned person has not sought
an adjudication, including a hearing, or otherwise exhausted his or
her administrative remedies.
\6\ On March 12, 2010, the Commission approved EDGA Exchange's
application for registration as a national securities exchange,
including the rules governing the EDGA Exchange. See Securities
Exchange Act Release No. 61698, 75 FR 13151 (March 18, 2010). In the
approval order, the Commission noted that EDGA Exchange Rule 8.15
provides for the imposition of fines for minor rule violations
pursuant to a minor rule violation plan. Accordingly, the Commission
noted that, EDGA Exchange Rule 8.15 provides for the imposition of
fines for minor rule violations pursuant to a minor rule violation
plan. Accordingly, the Commission noted that as a condition to the
operation of EDGA Exchange, the Exchange must file a minor rule
violation plan with the Commission.
---------------------------------------------------------------------------
[[Page 26828]]
Pursuant to the Exchange's proposed MRVP, under Rule 8.15, the
Exchange may impose a fine (not to exceed $2,500) on a member, an
associated person of a member, or a registered or non-registered
employee of a member with respect to any rule listed in Rule 8.15.01.
The Exchange shall serve the person against whom a fine is imposed with
a written statement setting forth the rule or rules allegedly violated,
the act or omission constituting each such violation, the fine imposed,
and the date by which such determination becomes final or by which such
determination must be contested. If the person against whom the fine is
imposed pays the fine, such payment shall be deemed to be a waiver of
such person's right to a disciplinary proceeding and any review of the
matter under Exchange rules. Any person against whom a fine is imposed
may contest the Exchange's determination by filing with the Exchange a
written response, at which point the matter shall become a disciplinary
proceeding.
Upon approval of the plan, the Exchange will provide the Commission
a quarterly report of actions taken on minor rule violations under the
plan. The quarterly report will include the Exchange's internal file
number for the case, the name of the individual and/or organization,
the nature of the violation, the specific rule provision violated, the
sanction imposed, the number of times the rule violation has occurred,
and the date of disposition.\7\
---------------------------------------------------------------------------
\7\ EDGA Exchange attached a sample form of the quarterly report
with its submission to the Commission.
---------------------------------------------------------------------------
The Commission finds that the proposed MRVP is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange. In particular, the
Commission believes that the proposal is consistent with Section
6(b)(5) of the Act,\8\ which requires that the rules of an exchange be
designed to promote just and equitable principles of trade, to remove
impediments and to perfect the mechanism of a free and open market and
national market system, and, in general, to protect investors and the
public interest. The Commission also believes that the proposal is
consistent with Sections 6(b)(1) and 6(b)(6) of the Act\9\ which
require that the rules of an exchange enforce compliance with, and
provide appropriate discipline for, violations of the Commission and
Exchange rules. In addition, because the MRVP offers procedural rights
to a person sanctioned under Rule 8.15, the Commission believes that
Rule 8.15 provides a fair procedure for the disciplining of members and
persons associated with members, consistent with Sections 6(b)(7) and
6(d)(1) of the Act.\10\
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b)(5).
\9\ 15 U.S.C. 78f(b)(1) and 78f(b)(6).
\10\ 15 U.S.C. 78f(b)(7) and 78f(d)(1).
---------------------------------------------------------------------------
Finally, the Commission finds that the proposal is consistent with
the public interest, the protection of investors, or otherwise in
furtherance of the purposes of the Act, as required by Rule 19d-1(c)(2)
under the Act,\11\ because the MRVP strengthens EDGA Exchange's ability
to carry out its oversight and enforcement responsibilities as an SRO
in cases where full disciplinary proceedings are unsuitable in view of
the minor nature of the particular violation.
---------------------------------------------------------------------------
\11\ 17 CFR 240.19d-1(c)(2).
---------------------------------------------------------------------------
In approving this proposal, the Commission in no way minimizes the
importance of compliance with Exchange rules and all other rules
subject to the imposition of sanctions under Rule 8.15. The Commission
believes that the violation of an SRO's rules, as well as Commission
rules, is a serious matter. However, Rule 8.15 provides a reasonable
means of addressing violations that do not rise to the level of
requiring formal disciplinary proceedings, while providing greater
flexibility in handling certain violations. The Commission expects that
EDGA Exchange will continue to conduct surveillance with due diligence
and make determinations based on its findings, on a case-by-case basis,
whether a sanction under the MRVP is appropriate, or whether a
violation requires formal disciplinary action.
It is therefore ordered, pursuant to Rule 19d-1(c)(2) under the
Act,\12\ that the proposed MRVP for EDGA Exchange, File No. 4-595, be,
and hereby is, approved and declared effective.
---------------------------------------------------------------------------
\12\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(44).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-11260 Filed 5-11-10; 8:45 am]
BILLING CODE 8010-01-P
