Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing and Order Approving and Declaring Effective an Amendment to the Plan for the Allocation of Regulatory Responsibilities Among NYSE MKT LLC, BATS Exchange, Inc., BOX Options Exchange LLC, C2 Options Exchange, Incorporated, the Chicago Board Options Exchange, Incorporated, the International Securities Exchange LLC, Financial Industry Regulatory Authority, Inc., NYSE Arca, Inc., The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., the NASDAQ OMX PHLX, Inc., Miami International Securities Exchange, LLC, and Topaz Exchange, LLC Concerning Options-Related Market Surveillance, 46665-46671 [2013-18475]

Download as PDF Federal Register / Vol. 78, No. 148 / Thursday, August 1, 2013 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70052; File No. 4–551] Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d– 2; Notice of Filing and Order Approving and Declaring Effective an Amendment to the Plan for the Allocation of Regulatory Responsibilities Among NYSE MKT LLC, BATS Exchange, Inc., BOX Options Exchange LLC, C2 Options Exchange, Incorporated, the Chicago Board Options Exchange, Incorporated, the International Securities Exchange LLC, Financial Industry Regulatory Authority, Inc., NYSE Arca, Inc., The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., the NASDAQ OMX PHLX, Inc., Miami International Securities Exchange, LLC, and Topaz Exchange, LLC Concerning Options-Related Market Surveillance July 26, 2013. mstockstill on DSK4VPTVN1PROD with NOTICES 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 July 2, 2013, pursuant to Rule 17d–2 of the Act,2 by NYSE MKT LLC (‘‘MKT’’), BATS Exchange, Inc., (‘‘BATS’’), the BOX Options Exchange LLC (‘‘BOX’’), C2 Options Exchange, Incorporated (‘‘C2’’), the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’), the International Securities Exchange LLC (‘‘ISE’’), Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’), NYSE Arca, Inc. (‘‘Arca’’), The NASDAQ Stock Market LLC (‘‘Nasdaq’’), NASDAQ OMX BX, Inc. (‘‘BX’’), NASDAQ OMX PHLX, Inc. (‘‘PHLX’’), Miami International Securities Exchange (‘‘MIAX’’), and Topaz Exchange, LLC (‘‘Topaz’’) (collectively, ‘‘Participating Organizations’’ or ‘‘parties’’). I. Introduction Section 19(g)(1) of the Act,3 among other things, requires every selfregulatory 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 1 15 U.S.C. 78q(d). CFR 240.17d–2. 3 15 U.S.C. 78s(g)(1). 2 17 VerDate Mar<15>2010 17:02 Jul 31, 2013 Jkt 229001 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. 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. To implement Section 17(d)(1), the Commission adopted two rules: Rule 17d–1 and Rule 17d–2 under the Act.8 Rule 17d–1 authorizes the Commission to name a single SRO as the designated examining authority (‘‘DEA’’) to examine common members for compliance with the financial responsibility requirements imposed by the Act, or by Commission or SRO rules.9 When an SRO has been named as a common member’s DEA, all other SROs to which the common member belongs are relieved of the responsibility to examine the firm for compliance with the applicable financial responsibility rules. On its face, Rule 17d–1 deals only with an SRO’s obligations to enforce member compliance with financial responsibility requirements. Rule 17d–1 does not relieve an SRO from its obligation to examine a common member for compliance with its own rules and provisions of the federal securities laws governing matters other than financial responsibility, including sales practices and trading activities and practices. To address regulatory duplication in these and other areas, the Commission adopted Rule 17d–2 under the Act.10 U.S.C. 78q(d). 5 15 U.S.C. 78s(g)(2). 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). 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). 10 See Securities Exchange Act Release No. 12935 (October 28, 1976), 41 FR 49091 (November 8, 1976). PO 00000 4 15 Frm 00101 Fmt 4703 Sfmt 4703 46665 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. II. The Plan On December 11, 2007, the Commission declared effective the Participating Organizations’ Plan for allocating regulatory responsibilities pursuant to Rule 17d–2.11 On April 11, 2008, the Commission approved an amendment to the Plan to include NASDAQ as a participant.12 On October 9, 2008, the Commission approved an amendment to the Plan to clarify that the term Regulatory Responsibility for options position limits includes the examination responsibilities for the delta hedging exemption.13 On February 25, 2010, the Commission approved an amendment to the Plan to add BATS Exchange, Inc. and C2 Options Exchange, Incorporated as SRO participants and to reflect the name changes of the American Stock Exchange LLC to the NYSE Amex LLC, and the Boston Stock Exchange, Inc. to the NASDAQ OMX BX, Inc.14 On May 11, 2012, the Commission approved an amendment to the Plan to add BOX Options Exchange LLC as a participant to the Plan.15 On December 5, 2012, the Commission approved an amendment to the Plan to add the Miami International 11 See Securities Exchange Act Release No. 56941 (December 11, 2007), 72 FR 71723 (December 18, 2007) (File No. 4–551). 12 See Securities Exchange Act Release No. 57649 (April 11, 2008), 73 FR 20976 (April 17, 2008) (File No. 4–551). 13 See Securities Exchange Act Release No. 58765 (October 9, 2008), 73 FR 62344 (October 20, 2008) (File No. 4–551). 14 See Securities Exchange Act Release No. 61588 (February 25, 2010), 75 FR 9970 (March 4, 2010) (File No. 4–551). 15 See Securities Exchange Act Release No. 66975 (May 11, 2012), 77 FR 29712 (May 18, 2010) (File No. 4–551). E:\FR\FM\01AUN1.SGM 01AUN1 46666 Federal Register / Vol. 78, No. 148 / Thursday, August 1, 2013 / Notices Securities Exchange as a participant to the Plan.16 The Plan is designed to reduce regulatory duplication for common members by allocating regulatory responsibility for certain options-related market surveillance matters among the Participating Organizations. Generally, under the Plan, a Participating Organization will serve as the Designated Options Surveillance Regulator (‘‘DOSR’’) for each common member assigned to it and will assume regulatory responsibility with respect to that common member’s compliance with applicable common rules for certain accounts. When an SRO has been named as a common member’s DOSR, all other SROs to which the common member belongs will be relieved of regulatory responsibility for that common member, pursuant to the terms of the Plan, with respect to the applicable common rules specified in Exhibit A to the Plan. III. Proposed Amendment to the Plan On July 2, 2013, the parties submitted a proposed amendment to the Plan. The primary purpose of the amendment is to add Topaz as a Participant to the Plan. The text of the proposed amended 17d– 2 plan is as follows (additions are italicized; deletions are [bracketed]): * * * * * mstockstill on DSK4VPTVN1PROD with NOTICES Agreement by and Among NYSE MKT LLC, BATS Exchange, Inc., Box Options Exchange LLC Nasdaq OMX BX, INC., C2 Options Exchange, Incorporated, The Chicago Board Options Exchange, Incorporated, The International Securities Exchange LLC, Financial Industry Regulatory Authority, Inc., NYSE ARCA, Inc., The Nasdaq Stock Market LLC, NASDAQ OMX PHLX, Inc., [and] Miami International Securities Exchange, LLC and Topaz Exchange, LLC, Pursuant to Rule 17d–2 under the Securities Exchange Act of 1934 This agreement (this ‘‘Agreement’’), by and among the NYSE MKT LLC (‘‘MKT’’), BATS Exchange, Inc., (‘‘BATS’’), the C2 Options Exchange, Incorporated (‘‘C2’’), the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’), the International Securities Exchange LLC (‘‘ISE’’), Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’), NYSE Arca, Inc. (‘‘Arca’’), The NASDAQ Stock Market LLC (‘‘Nasdaq’’), the BOX Options Exchange LLC (‘‘BOX’’), NASDAQ OMX BX, Inc. (‘‘BX’’) the NASDAQ OMX PHLX, Inc. 16 See Securities Exchange Act Release No. 68362 (December 5, 2012), 77 FR 73719 (December 11, 2012) (File No. 4–551). VerDate Mar<15>2010 18:15 Jul 31, 2013 Jkt 229001 (‘‘PHLX’’), [and] the Miami International Securities Exchange, LLC (‘‘MIAX’’) and the Topaz Exchange, LLC (‘‘Topaz’’) is made this 10th day of October 2007, and as amended the 31st day of March 2008, the 1st day of October 2008, the 3rd day of February 2010, the 25th day of April 2012, and the 19th day of November 2012, and the 30th day of May 2013 pursuant to Section 17(d) of the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’), and Rule 17d–2 thereunder (‘‘Rule 17d–2’’), which allows for a joint plan among self-regulatory organizations (‘‘SROs’’) to allocate regulatory obligations with respect to brokers or dealers that are members of two or more of the parties to this Agreement (‘‘Common Members’’). The MKT, BATS, C2, CBOE, ISE, FINRA, Arca, Nasdaq, BOX, BX, PHLX, [and] MIAX and Topaz are collectively referred to herein as the ‘‘Participants’’ and individually, each a ‘‘Participant.’’ This Agreement shall be administered by a committee known as the Options Surveillance Group (the ‘‘OSG’’ or ‘‘Group’’), as described in Section V hereof. Unless defined in this Agreement or the context otherwise requires, the terms used herein shall have the meanings assigned thereto by the Exchange Act and the rules and regulations thereunder. Whereas, the Participants desire to eliminate regulatory duplication with respect to SRO market surveillance of Common Member 1 activities with regard to certain common rules relating to listed options (‘‘Options’’); and Whereas, for this purpose, the Participants desire to execute and file this Agreement with the Securities and Exchange Commission (the ‘‘SEC’’ or ‘‘Commission’’) pursuant to Rule 17d–2. Now, therefore, in consideration of the mutual covenants contained in this Agreement, the Participants agree as follows: I. Except as otherwise provided in this Agreement, each Participant shall assume Regulatory Responsibility (as defined below) for the Common Members that are allocated or assigned to such Participant in accordance with the terms of this Agreement and shall be relieved of its Regulatory Responsibility as to the remaining Common Members. For purposes of this Agreement, a Participant shall be considered to be the Designated Options Surveillance Regulator (‘‘DOSR’’) for each Common Member that is allocated to it in accordance with Section VII. 1 In the case of the BX and BOX, members are those persons who are Options Participants (as defined in the BOX Options Exchange LLC Rules and NASDAQ OMX BX, Inc. Rules). PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 II. As used in this Agreement, the term ‘‘Regulatory Responsibility’’ shall mean surveillance, investigation and enforcement responsibilities relating to compliance by the Common Members with such Options rules of the Participants as the Participants shall determine are substantially similar and shall approve from time to time, insofar as such rules relate to market surveillance (collectively, the ‘‘Common Rules’’). For the purposes of this Agreement the list of Common Rules is attached as Exhibit A hereto, which may only be amended upon unanimous written agreement by the Participants. The DOSR assigned to each Common Member shall assume Regulatory Responsibility with regard to that Common Member’s compliance with the applicable Common Rules for certain accounts.2 A DOSR may perform its Regulatory Responsibility or enter an agreement to transfer or assign such responsibilities to a national securities exchange registered with the SEC under Section 6(a) of the Exchange Act or a national securities association registered with the SEC under Section 15A of the Exchange Act. A DOSR may not transfer or assign its Regulatory Responsibility to an association registered for the limited purpose of regulating the activities of members who are registered as brokers or dealers in security futures products. The term ‘‘Regulatory Responsibility’’ does not include, and each Participant shall retain full responsibility with respect to: (a) Surveillance, investigative and enforcement responsibilities other than those included in the definition of Regulatory Responsibility; (b) any aspects of the rules of a Participant that are not substantially similar to the Common Rules or that are allocated for a separate surveillance purpose under any other agreement made pursuant to Rule 17d–2. Any such aspects of a Common Rule will be noted as excluded on Exhibit A. With respect to options position limits, the term Regulatory Responsibility shall include examination responsibilities for the delta hedging exemption. Specifically, the Participants intend that FINRA will conduct examinations for delta hedging for all Common Members that are members of FINRA notwithstanding the fact that FINRA’s position limit rule is, in some cases, limited to only firms that 2 Certain accounts shall include customer (‘‘C’’ as classified by the Options Clearing Corporation (‘‘OCC’’)) and firm (‘‘F’’ as classified by OCC) accounts, as well as other accounts, such as market maker accounts as the Participants shall, from time to time, identify as appropriate to review. E:\FR\FM\01AUN1.SGM 01AUN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 78, No. 148 / Thursday, August 1, 2013 / Notices are not members of an options exchange (i.e., access members). In such cases, FINRA’s examinations for delta hedging options position limit violations will be for the identical or substantively similar position limit rule(s) of the other Participant(s). Examinations for delta hedging for Common Members that are non-FINRA members will be conducted by the same Participant conducting position limit surveillance. The allocation of Common Members to DOSRs for surveillance of compliance with options position limits and other agreed to Common Rules is provided in Exhibit B. The allocation of Common Members to DOSRs for examinations of the delta hedging exemption under the options position limits rules is provided in Exhibit C. III. Each year within 30 days of the anniversary date of the commencement of operation of this Agreement, or more frequently if required by changes in the rules of a Participant, each Participant shall submit to the other Participants, through the Chair of the OSG, an updated list of Common Rules for review. This updated list may add Common Rules to Exhibit A, shall delete from Exhibit A rules of that Participant that are no longer identical or substantially similar to the Common Rules, and shall confirm that the remaining rules of the Participant included on Exhibit A continue to be identically or substantially similar to the Common Rules. Within 30 days from the date that each Participant has received revisions to Exhibit A from the Chair of the OSG, each Participant shall confirm in writing to the Chair of the OSG whether that Participant’s rules listed in Exhibit A are Common Rules. IV. Apparent violation of another Participant’s rules discovered by a DOSR, but which rules are not within the scope of the discovering DOSR’s Regulatory Responsibility, shall be referred to the relevant Participant for such action as is deemed appropriate by that Participant. Notwithstanding the foregoing, nothing contained herein shall preclude a DOSR in its discretion from requesting that another Participant conduct an investigative or enforcement proceeding (‘‘Proceeding’’) on a matter for which the requesting DOSR has Regulatory Responsibility. If such other Participant agrees, the Regulatory Responsibility in such case shall be deemed transferred to the accepting Participant and confirmed in writing by the Participants involved. Additionally, nothing in this Agreement shall prevent another Participant on whose market potential violative activity took place from conducting its own Proceeding on a matter. The VerDate Mar<15>2010 17:02 Jul 31, 2013 Jkt 229001 Participant conducting the Proceeding shall advise the assigned DOSR. Each Participant agrees, upon request, to make available promptly all relevant files, records and/or witnesses necessary to assist another Participant in a Proceeding. V. The OSG shall be composed of one representative designated by each of the Participants (a ‘‘Representative’’). Each Participant shall also designate one or more persons as its alternate representative(s) (an ‘‘Alternate Representative’’). In the absence of the Representative, the Alternate Representative shall assume the powers, duties and responsibilities of the Representative. Each Participant may at any time replace its Representative and/ or its Alternate Representative to the Group.3 A majority of the OSG shall constitute a quorum and, unless otherwise required, the affirmative vote of a majority of the Representatives present (in person, by telephone or by written consent) shall be necessary to constitute action by the Group. The Group will have a Chair, Vice Chair and Secretary. A different Participant will assume each position on a rotating basis for a one-year term. In the event that a Participant replaces a Representative who is acting as Chair, Vice Chair or Secretary, the newly appointed Representative shall assume the position of Chair, Vice Chair, or Secretary (as applicable) vacated by the Participant’s former Representative. In the event a Participant cannot fulfill its duties as Chair, the Participant serving as Vice Chair shall substitute for the Chair and complete the subject unfulfilled term. All notices and other communications for the OSG are to be sent in care of the Chair and, as appropriate, to each Representative. VI. The OSG shall determine the times and locations of Group meetings, provided that the Chair, acting alone, may also call a meeting of the Group in the event the Chair determines that there is good cause to do so. To the extent reasonably possible, notice of any meeting shall be given at least ten business days prior to the meeting date. Representatives shall always be given the option of participating in any meeting telephonically at their own expense rather than in person. VII. No less frequently than every two years, in such manner as the Group deems appropriate, the OSG shall allocate Common Members that conduct an Options business among the Participants (‘‘Allocation’’), and the Participant to which a Common Member 3 A Participant must give notice to the Chair of the Group of such a change. PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 46667 is allocated will serve as the DOSR for that Common Member. Any Allocation shall be based on the following principles, except to the extent all affected Participants consent to one or more different principles: (a) The OSG may not allocate a Common Member to a Participant unless the Common Member is a member of that Participant. (b) To the extent practicable, Common Members that conduct an Options business shall be allocated among the Participants of which they are members in such manner as to equalize as nearly as possible the allocation among such Participants, provided that no Common Members shall be allocated to FINRA. For example, if sixteen Common Members that conduct an Options business are members only of three Participants, none of which is FINRA, those Common Members shall be allocated among the three Participants such that no Participant is allocated more than six such members and no Participant is allocated less than five such members. If, in the previous example, one of the three Participants is FINRA, the sixteen Common Members would be allocated evenly between the remaining Participants, so that the two non-FINRA Participants would be allocated eight Common Members each. (c) To the extent practicable, Allocation shall take into account the amount of Options activity conducted by each Common Member in order to most evenly divide the Common Members with the largest amount of activity among the Participants of which they are members. Allocation will also take into account similar allocations pursuant to other plans or agreements to which the Common Members are party to maintain consistency in oversight of the Common Members.4 (d) To the extent practicable, Allocation of Common Members to Participants will be rotated among the applicable Participants such that a Common Member shall not be allocated to a Participant to which that Common Member was allocated within the previous two years. The assignment of DOSRs pursuant to the Allocation is attached as Exhibit B hereto, and will be updated from time to time to reflect Common Member Allocation changes. (e) The Group may reallocate Common Members from time-to-time, as it deems appropriate. (f) Whenever a Common Member ceases to be a member of its DOSR, the 4 For example, if one Participant was allocated a Common Member by another regulatory group that Participant would be assigned to be the DOSR of that Common Member, unless there is good cause not to make that assignment. E:\FR\FM\01AUN1.SGM 01AUN1 mstockstill on DSK4VPTVN1PROD with NOTICES 46668 Federal Register / Vol. 78, No. 148 / Thursday, August 1, 2013 / Notices DOSR shall promptly inform the Group, which shall review the matter and allocate the Common Member to another Participant. (g) A DOSR may request that a Common Member to which it is assigned be reallocated to another Participant by giving 30 days written notice to the Chair of the OSG. The Group, in its discretion, may approve such request and reallocate the Common Member to another Participant. (h) All determinations by the Group with respect to Allocation shall be made by the affirmative vote of a majority of the Participants that, at the time of such determination, share the applicable Common Member being allocated; a Participant shall not be entitled to vote on any Allocation relating to a Common Member unless the Common Member is a member of such Participant. VIII. Each DOSR shall conduct routine surveillance reviews to detect violations of the applicable Common Rules by each Common Member allocated to it with a frequency (daily, weekly, monthly, quarterly, semi-annually or annually as noted on Exhibit A) not less than that determined by the Group. The other Participants agree that, upon request, relevant information in their respective files relative to a Common Member will be made available to the applicable DOSR. In addition, each Participant shall provide, to the extent not otherwise already provided, information pertaining to its surveillance program that would be relevant to FINRA or the Participant(s) conducting routine examinations for the delta hedging exemption. At each meeting of the OSG, each Participant shall be prepared to report on the status of its surveillance program for the previous quarter and any period prior thereto that has not previously been reported to the Group. In the event a DOSR believes it will not be able to complete its Regulatory Responsibility for its allocated Common Members, it will so advise the Group in writing promptly. The Group will undertake to remedy this situation by reallocating the subject Common Members among the remaining Participants. In such instance, the Group may determine to impose a regulatory fee for services provided to the DOSR that was unable to fulfill its Regulatory Responsibility. IX. Each Participant will, upon request, promptly furnish a copy of the report or applicable portions thereof relating to any investigation made pursuant to the provisions of this Agreement to each other Participant of which the Common Member under investigation is a member. VerDate Mar<15>2010 17:02 Jul 31, 2013 Jkt 229001 X. Each Participant will routinely populate a common database, to be accessed by the Group relating to any formal regulatory action taken during the course of a Proceeding with respect to the Common Rules concerning a Common Member. XI. Any written notice required or permitted to be given under this Agreement shall be deemed given if sent by certified mail, return receipt requested, to any Participant to the attention of that Participant’s Representative, to the Participant’s principal place of business or by email at such address as the Representative shall have filed in writing with the Chair. XII. The costs incurred by each Participant in discharging its Regulatory Responsibility under this Agreement are not reimbursable. However, any of the Participants may agree that one or more will compensate the other(s) for costs incurred. XIII. The Participants shall notify the Common Members of this Agreement by means of a uniform joint notice approved by the Group. Each Participant will notify the Common Members that have been allocated to it that such Participant will serve as DOSR for that Common Member. XIV. This Agreement shall be effective upon approval of the Commission. This Agreement may only be amended in writing duly approved by each Participant. All amendments to this Agreement, excluding changes to Exhibits A, B and C, must be filed with and approved by the Commission. XV. Any Participant may manifest its intention to cancel its participation in this Agreement at any time upon providing written notice to (i) the Group six months prior to the date of such cancellation, or such other period as all the Participants may agree, and (ii) the Commission. Upon receipt of the notice the Group shall allocate, in accordance with the provisions of this Agreement, those Common Members for which the canceling Participant was the DOSR. The canceling Participant shall retain its Regulatory Responsibility and other rights, privileges and duties pursuant to this Agreement until the Group has completed the reallocation as described above, and the Commission has approved the cancellation. XVI. The cancellation of its participation in this Agreement by any Participant shall not terminate this Agreement as to the remaining Participants. This Agreement will only terminate following notice to the Commission, in writing, by the then Participants that they intend to terminate the Agreement and the PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 expiration of the applicable notice period. Such notice shall be given at least six months prior to the intended date of termination, or such other period as all the Participants may agree. Such termination will become effective upon Commission approval. XVII. Participation in the Group shall be strictly limited to the Participants and no other party shall have any right to attend or otherwise participate in the Group except with the unanimous approval of all Participants. Notwithstanding the foregoing, any national securities exchange registered with the SEC under Section 6(a) of the Act or any national securities association registered with the SEC under section 15A of the Act may become a Participant to this Agreement provided that: (i) Such applicant has adopted rules substantially similar to the Common Rules, and received approval thereof from the SEC; (ii) such applicant has provided each Participant with a signed statement whereby the applicant agrees to be bound by the terms of this Agreement to the same effect as though it had originally signed this Agreement and (iii) an amended agreement reflecting the addition of such applicant as a Participant has been filed with and approved by the Commission. XVIII. This Agreement is wholly separate from the multiparty Agreement made pursuant to Rule 17d–2 by and among the NYSE MKT LLC, the Boston Stock Exchange, Inc., the Chicago Board Options Exchange, Inc., the International Securities Exchange, LLC, Financial Industry Regulatory Authority, The NASDAQ Stock Market LLC, Inc., the New York Stock Exchange, LLC, the NYSE Arca, Inc., the Philadelphia Stock Exchange, Inc., Miami International Securities Exchange, LLC and the Topaz Exchange, LLC involving the allocation of regulatory responsibilities with respect to common members for compliance with common rules relating to the conduct by broker-dealers of accounts for listed options or index warrants entered into on June 5, 2008, and as may be amended from time to time. Limitation of Liability No Participant nor the Group nor any of their respective directors, governors, officers, employees or representatives shall be liable to any other Participant in 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 Responsibility as provided hereby or for E:\FR\FM\01AUN1.SGM 01AUN1 46669 Federal Register / Vol. 78, No. 148 / Thursday, August 1, 2013 / Notices the failure to provide any such Regulatory Responsibility, except with respect to such liability, loss or damages as shall have been suffered by one or more of the Participants and caused by the willful misconduct of one or more of the other Participants or its respective directors, governors, officers, employees or representatives. No warranties, express or implied, are made by the Participants, individually or as a group, or by the OSG with respect to any Regulatory Responsibility to be performed hereunder. Regulatory Responsibility with respect to the matters allocated to the DOSR. Relief From Responsibility Pursuant to Section 17(d)(1)(A) of the Exchange Act and Rule 17d–2, the Participants join in requesting the Commission, upon its approval of this Agreement or any part thereof, to relieve the Participants that are party to this Agreement and are not the DOSR as to a Common Member of any and all —Remainder of This Page Intentionally Left Blank— This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. In Witness Whereof, the Participants hereto have executed this Agreement as of the date and year first above written. EXHIBIT A—OPTIONS SURVEILLANCE GROUP 17d–2 AGREEMENT [Common Rules as of [November 6, 2012] July 1, 2013] SRO Description of rule Exchange rule No. Frequency of review Violation I: Expiring Exercise Declarations (EED)—For Listed Equity Options Expiring: The Third Saturday Following the Third Friday of a Month, Quarterly, and for Listed FLEX Options BATS ................................... BOX ..................................... C2 ........................................ CBOE ................................... FINRA .................................. ISE ....................................... MIAX .................................... Nasdaq ................................ NYSE Arca .......................... NYSE MKT .......................... NASDAQ OMX BX .............. NASDAQ OMX PHLX .......... Topaz ................................... SRO Exercise Exercise Exercise Exercise Exercise Exercise Exercise Exercise Exercise Exercise Exercise Exercise Exercise of of of of of of of of of of of of of Options Contracts ......................... Options Contracts ......................... Options Contracts ......................... Options Contracts ......................... Options Contracts ......................... Options Contracts ......................... Options Contracts ......................... Options Contracts ......................... Options Contracts ......................... Options Contracts ......................... Options Contracts ......................... Equity Options Contracts .............. Options Contracts ......................... Rule 23.1 .......................................................... Rule 9000 ......................................................... Rule 11.1 .......................................................... Rule 11.1 .......................................................... Rule 2360(b)(23) .............................................. Rule 1100 ......................................................... Rule 700 ........................................................... Nasdaq Chapter VIII, Sec. 1 ............................ Rule 6.24 .......................................................... Rule 980 ........................................................... Chapter VIII, Section 1 .................................... Rule 1042 ......................................................... Rule 1100 ......................................................... Description of rule (for review as they apply to PL) Exchange rule No. At At At At At At At At At At At At At Expiration. Expiration. Expiration. Expiration. Expiration. Expiration. Expiration. Expiration. Expiration. Expiration. Expiration. Expiration. Expiration. Frequency of review Violation II: Position Limits (PL)—For Listed Equity Options Expiring: The Third Saturday Following the Third Friday of a Month, Quarterly BATS ................................... BOX ..................................... C2 ........................................ CBOE ................................... FINRA .................................. ISE ....................................... MIAX .................................... mstockstill on DSK4VPTVN1PROD with NOTICES Nasdaq ................................ NYSE Arca .......................... NYSE MKT .......................... NASDAQ OMX BX .............. NASDAQ OMX PHLX .......... VerDate Mar<15>2010 17:02 Jul 31, 2013 Position Limits .................................................. Exemptions from Position ................................ Liquidating Positions ........................................ Position Limits .................................................. Exemptions from Position ................................ Liquidating Positions ........................................ Position Limits .................................................. Liquidating Positions ........................................ Position Limits .................................................. Liquidating Positions ........................................ Position Limits .................................................. Liquidation of Positions and Restrictions on Access. Position Limits .................................................. Exemptions from Position Limits ..................... Liquidating Positions ........................................ Position Limits .................................................. Exemptions from Position Limits ..................... Liquidating Positions ........................................ Position Limits .................................................. Exemptions from Position Limits ..................... Liquidating Positions ........................................ Position Limits .................................................. Liquidation of Positions .................................... Position Limits .................................................. Liquidating Positions ........................................ Position Limits .................................................. Exemptions from Position Limits ..................... Liquidating Positions ........................................ Position Limits .................................................. Liquidation of Positions .................................... Jkt 229001 PO 00000 Frm 00105 Fmt 4703 Rule Rule Rule Rule Rule Rule Rule Rule Rule Rule Rule Rule 18.7 .......................................................... 18.8 .......................................................... 18.11 ........................................................ 3120 ......................................................... 3130 ......................................................... 3160 ......................................................... 4.11. ......................................................... 4.14 .......................................................... 4.11 .......................................................... 4.14 .......................................................... 2360(b)(3) ................................................ 2360(b)(6) ................................................ Daily. As Needed. As Needed. Daily. As Needed. As Needed. Daily. As Needed. Daily. As Needed. Daily. As Needed. Rule 412 ........................................................... Rule 413 ........................................................... Rule 416 ........................................................... Rule 307 ........................................................... Rule 308 ........................................................... Rule 311 ........................................................... Chapter III, Section 7 ....................................... Chapter III, Section 8 ....................................... Chapter III, Section 11 ..................................... Rule 6.8 ............................................................ Rule 6.7 ............................................................ Rule 904 ........................................................... Rule 907 ........................................................... Chapter III, Section 7 ....................................... Chapter III, Section 8 ....................................... Chapter III, Section 11 ..................................... Rule 1001 ......................................................... Rule 1004 ......................................................... Daily. As Needed. As Needed. Daily. As Needed. As Needed. Daily. As Needed. As Needed. Daily. As Needed. Daily. As Needed. Daily. As Needed. As Needed. Daily. As Needed. Sfmt 4703 E:\FR\FM\01AUN1.SGM 01AUN1 46670 Federal Register / Vol. 78, No. 148 / Thursday, August 1, 2013 / Notices SRO Description of rule (for review as they apply to PL) Exchange rule No. Topaz ................................... Position Limits .................................................. Exemptions from Position Limits ..................... Liquidating Positions ........................................ Rule 412 ........................................................... Rule 413 ........................................................... Rule 416 ........................................................... SRO Description of rule (for review as they apply to LOPR) Exchange rule No. Frequency of review Daily. As Needed. As Needed. Frequency of review Violation III: Large Option Position Report (LOPR)—For Listed Equity and ETF Options BATS ................................... BOX ..................................... C2 ........................................ CBOE ................................... FINRA .................................. ISE ....................................... MIAX .................................... Nasdaq ................................ NYSE Arca .......................... NYSE MKT .......................... Nasdaq OMX BX ................. NASDAQ OMX PHLX .......... Topaz ................................... SRO Reports Related to Position Limits .................. Reports Related to Position Limits .................. Reports Related to Position Limits .................. Reports Related to Position Limits .................. Reports Related to Position Limits .................. Reports Related to Position Limits .................. Reports Related to Position Limits .................. Reports Related to Position Limits .................. Options ............................................................. Reports Related to Position Limits .................. Reports Related to Position Limits .................. Reports Related to Position Limits .................. Reporting of Options Positions ........................ Reporting of Options Positions ........................ Reports Related to Position Limits .................. Reporting of Options Positions ........................ Reports Related to Position Limits .................. Rule 18.10 ........................................................ Rule 3150 ......................................................... Rule 4.13(a) ..................................................... Rule 4.13(b) ..................................................... Rule 4.13(d) ..................................................... Rule 4.13(a) ..................................................... Rule 4.13(b) ..................................................... Rule 4.13(d) ..................................................... Rule 2360(b)(5) ................................................ Rule 415 ........................................................... Rule 310 ........................................................... Chapter III, Section 10 ..................................... Rule 6.6 ............................................................ Rule 906 ........................................................... Chapter III, Section 10 ..................................... Rule 1003 ......................................................... Rule 415 ........................................................... Description of rule (as they apply to OCC adjustments/by-laws article V, section 1.01(a) and .02) Exchange rule No. Yearly. Yearly. Yearly. Yearly. Yearly. Yearly. Yearly. Yearly. Yearly. Yearly. Yearly. Yearly. Yearly. Yearly. Yearly. Yearly. Yearly. Frequency of review Violation IV: Options Clearing Corporation (OCC) Adjustment Process BATS ................................... BOX ..................................... C2 ........................................ CBOE ................................... FINRA .................................. ISE ....................................... MIAX .................................... Nasdaq ................................ NYSE Arca .......................... NYSE MKT .......................... NASDAQ OMX BX .............. NASDAQ OMX PHLX .......... Topaz ................................... Adherence to Law ............................................ Adherence to Law ............................................ Adherence to Law ............................................ Adherence to Law ............................................ Violation of By-Laws and Rules of FINRA or the OCC. Adherence to Law ............................................ Adherence to Law ............................................ Adherence to Law ............................................ Adherence to Law and Good Business Practice. Business Conduct ............................................ Adherence to Law ............................................ Violation of By-Laws and Rules of OCC ......... Adherence to Law ............................................ mstockstill on DSK4VPTVN1PROD with NOTICES 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 (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number 4–551 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, VerDate Mar<15>2010 17:02 Jul 31, 2013 Jkt 229001 Rule Rule Rule Rule Rule 18.1 .......................................................... 3010 ......................................................... 4.2 ............................................................ 4.2 ............................................................ 2360(b)(21) .............................................. Yearly. Yearly. Yearly. Yearly. Yearly. Rule 401 ........................................................... Rule 300 ........................................................... Chapter III, Section 1 ....................................... Rule 11.1 .......................................................... Yearly. Yearly. Yearly. Yearly. Rule 16 ............................................................. Chapter III, Section 1 ....................................... Rule 1050 ......................................................... Rule 401 ........................................................... Yearly. Yearly. Yearly. Yearly. 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number 4–551. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://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 PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the plan also will be available for inspection and copying at the principal offices of MKT, BATS, C2, CBOE, ISE, FINRA, Arca, NASDAQ, BOX, BX, Phlx, MIAX, and Topaz. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions E:\FR\FM\01AUN1.SGM 01AUN1 Federal Register / Vol. 78, No. 148 / Thursday, August 1, 2013 / Notices should refer to File Number 4–551 and should be submitted on or before August 22, 2013. mstockstill on DSK4VPTVN1PROD with NOTICES V. Discussion The Commission continues to believe that the Plan, as proposed to be amended, is an achievement in cooperation among the SRO participants. The Plan, as amended, will reduce unnecessary regulatory duplication by allocating to the designated SRO the responsibility for certain options-related market surveillance matters that would otherwise be performed by multiple SROs. The Plan promotes efficiency by reducing costs to firms that are members of more than one of the SRO participants. In addition, because the SRO participants coordinate their regulatory functions in accordance with the Plan, the Plan promotes, and will continue to promote, investor protection. Under paragraph (c) of Rule 17d–2, the Commission may, after appropriate notice and comment, declare a plan, or any part of a plan, effective. In this instance, the Commission believes that appropriate notice and comment can take place after the proposed amendment is effective. The primary purpose of the amendment is to add Topaz as a Participant to the Plan. By declaring it effective today, the amended Plan can become effective and be implemented without undue delay.17 In addition, the Commission notes that the prior version of this Plan was published for comment, and the Commission did not receive any comments thereon.18 Finally, the Commission does not believe that the amendment to the Plan raises any new regulatory issues that the Commission has not previously considered. VI. Conclusion This order gives effect to the amended Plan submitted to the Commission that is contained in File No. 4–551. It is therefore ordered, pursuant to Section 17(d) of the Act, that the Plan, as amended by and between MKT, BATS, C2, CBOE, ISE, FINRA, Arca, NASDAQ, BOX, BX, Phlx, MIAX, and Topaz, filed with the Commission pursuant to Rule 17d–2 on July 2, 2013 is hereby approved and declared effective. It is further ordered that those SRO participants that are not the DOSR as to a particular common member are 17 On July 26, 2013, the Commission granted Topaz’s application for registration as a national securities exchange. See Securities Exchange Act Release No. 70050 (July 25, 2013) (File No. 10–209). 18 See supra note 16 (citing to Securities Exchange Act Release No. 68362). VerDate Mar<15>2010 17:02 Jul 31, 2013 Jkt 229001 relieved of those regulatory responsibilities allocated to the common member’s DOSR under the amended Plan to the extent of such allocation. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–18475 Filed 7–31–13; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF STATE [Public Notice 8400] In the Matter of the Review of the Designation of the Revolutionary People’s Liberation Party/Front (and other aliases) as a Foreign Terrorist Organization Pursuant to Section 219 of the Immigration and Nationality Act, as amended Based upon a review of the Administrative Record assembled pursuant to Section 219(a)(4)(C) of the Immigration and Nationality Act, as amended (8 U.S.C. 1189(a)(4)(C)) (‘‘INA’’), and in consultation with the Attorney General and the Secretary of the Treasury, I conclude that the circumstances that were the basis for the 2008 decision to maintain the designation of the aforementioned organization as a Foreign Terrorist Organization have not changed in such a manner as to warrant revocation of the designation and that the national security of the United States does not warrant a revocation of the designation. Therefore, I hereby determine that the designation of the aforementioned organization as a Foreign Terrorist Organization, pursuant to Section 219 of the INA (8 U.S.C. 1189), shall be maintained. This determination shall be published in the Federal Register. Dated: July 8, 2013. John F. Kerry, Secretary of State, Department of State. [FR Doc. 2013–18520 Filed 7–31–13; 8:45 am] BILLING CODE 4710–10–P DEPARTMENT OF STATE [Delegation of Authority No. 364] Membership on the Presidential Task Force on Wildlife Trafficking By virtue of the authority vested in me as Secretary of State, including Section 1 of the State Department Basic Authorities Act, as amended (22 U.S.C. PO 00000 19 17 CFR 200.30–3(a)(34). Frm 00107 Fmt 4703 Sfmt 4703 46671 § 2651a), and Executive Order 13648 of July 1, 2013 (the Executive Order), I hereby designate the Under Secretary for Economic Growth, Energy, and the Environment (the Under Secretary) as the Department of State representative to the Presidential Task Force on Wildlife Trafficking, established by Section 2 of the Executive Order; together with the authorities necessary to carry out such function. In the event that the position of the Under Secretary is vacant, I hereby designate the Under Secretary for Civilian Security, Democracy and Human Rights, and in the Under Secretaries’ collective absence, the Assistant Secretary for Oceans and International Environmental and Scientific Affairs to be the Department of State representative for purposes of the Executive Order. Any act, executive order, regulation, or procedure subject to, or affected by, this delegation shall be deemed to be such act, executive order, regulation, or procedure as amended from time to time. Notwithstanding this delegation of authority, the Secretary, the Deputy Secretary, and the Deputy Secretary for Management and Resources may at any time exercise any authority or function delegated by this delegation of authority. This delegation of authority shall be published in the Federal Register. Dated: July 23, 2013. John F. Kerry, Secretary of State. [FR Doc. 2013–18557 Filed 7–31–13; 8:45 am] BILLING CODE 4710–10–P DEPARTMENT OF STATE [Public Notice 8402] Waiver of Restriction on Assistance to the Central Government of Haiti Pursuant to Section 7031(b)(3) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2012 (Div. I, Pub. L. 112–74) (‘‘the Act’’), as carried forward by the Further Continuing Appropriations Act, 2013 (Div. F, Pub. L. 113–6), and Department of State Delegation of Authority Number 245–1, I hereby determine that it is important to the national interest of the United States to waive the requirements of Section 7031(b)(1) of the Act and similar provisions of law in prior year Acts with respect to Haiti and I hereby waive this restriction. This determination and the accompanying Memorandum of E:\FR\FM\01AUN1.SGM 01AUN1

Agencies

[Federal Register Volume 78, Number 148 (Thursday, August 1, 2013)]
[Notices]
[Pages 46665-46671]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-18475]



[[Page 46665]]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70052; File No. 4-551]


Program for Allocation of Regulatory Responsibilities Pursuant to 
Rule 17d-2; Notice of Filing and Order Approving and Declaring 
Effective an Amendment to the Plan for the Allocation of Regulatory 
Responsibilities Among NYSE MKT LLC, BATS Exchange, Inc., BOX Options 
Exchange LLC, C2 Options Exchange, Incorporated, the Chicago Board 
Options Exchange, Incorporated, the International Securities Exchange 
LLC, Financial Industry Regulatory Authority, Inc., NYSE Arca, Inc., 
The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., the NASDAQ OMX PHLX, 
Inc., Miami International Securities Exchange, LLC, and Topaz Exchange, 
LLC Concerning Options-Related Market Surveillance

July 26, 2013.
    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 July 2, 2013, pursuant to Rule 17d-2 
of the Act,\2\ by NYSE MKT LLC (``MKT''), BATS Exchange, Inc., 
(``BATS''), the BOX Options Exchange LLC (``BOX''), C2 Options 
Exchange, Incorporated (``C2''), the Chicago Board Options Exchange, 
Incorporated (``CBOE''), the International Securities Exchange LLC 
(``ISE''), Financial Industry Regulatory Authority, Inc. (``FINRA''), 
NYSE Arca, Inc. (``Arca''), The NASDAQ Stock Market LLC (``Nasdaq''), 
NASDAQ OMX BX, Inc. (``BX''), NASDAQ OMX PHLX, Inc. (``PHLX''), Miami 
International Securities Exchange (``MIAX''), and Topaz Exchange, LLC 
(``Topaz'') (collectively, ``Participating Organizations'' or 
``parties'').
---------------------------------------------------------------------------

    \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 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 December 11, 2007, the Commission declared effective the 
Participating Organizations' Plan for allocating regulatory 
responsibilities pursuant to Rule 17d-2.\11\ On April 11, 2008, the 
Commission approved an amendment to the Plan to include NASDAQ as a 
participant.\12\ On October 9, 2008, the Commission approved an 
amendment to the Plan to clarify that the term Regulatory 
Responsibility for options position limits includes the examination 
responsibilities for the delta hedging exemption.\13\ On February 25, 
2010, the Commission approved an amendment to the Plan to add BATS 
Exchange, Inc. and C2 Options Exchange, Incorporated as SRO 
participants and to reflect the name changes of the American Stock 
Exchange LLC to the NYSE Amex LLC, and the Boston Stock Exchange, Inc. 
to the NASDAQ OMX BX, Inc.\14\ On May 11, 2012, the Commission approved 
an amendment to the Plan to add BOX Options Exchange LLC as a 
participant to the Plan.\15\ On December 5, 2012, the Commission 
approved an amendment to the Plan to add the Miami International

[[Page 46666]]

Securities Exchange as a participant to the Plan.\16\
---------------------------------------------------------------------------

    \11\ See Securities Exchange Act Release No. 56941 (December 11, 
2007), 72 FR 71723 (December 18, 2007) (File No. 4-551).
    \12\ See Securities Exchange Act Release No. 57649 (April 11, 
2008), 73 FR 20976 (April 17, 2008) (File No. 4-551).
    \13\ See Securities Exchange Act Release No. 58765 (October 9, 
2008), 73 FR 62344 (October 20, 2008) (File No. 4-551).
    \14\ See Securities Exchange Act Release No. 61588 (February 25, 
2010), 75 FR 9970 (March 4, 2010) (File No. 4-551).
    \15\ See Securities Exchange Act Release No. 66975 (May 11, 
2012), 77 FR 29712 (May 18, 2010) (File No. 4-551).
    \16\ See Securities Exchange Act Release No. 68362 (December 5, 
2012), 77 FR 73719 (December 11, 2012) (File No. 4-551).
---------------------------------------------------------------------------

    The Plan is designed to reduce regulatory duplication for common 
members by allocating regulatory responsibility for certain options-
related market surveillance matters among the Participating 
Organizations. Generally, under the Plan, a Participating Organization 
will serve as the Designated Options Surveillance Regulator (``DOSR'') 
for each common member assigned to it and will assume regulatory 
responsibility with respect to that common member's compliance with 
applicable common rules for certain accounts. When an SRO has been 
named as a common member's DOSR, all other SROs to which the common 
member belongs will be relieved of regulatory responsibility for that 
common member, pursuant to the terms of the Plan, with respect to the 
applicable common rules specified in Exhibit A to the Plan.

III. Proposed Amendment to the Plan

    On July 2, 2013, the parties submitted a proposed amendment to the 
Plan. The primary purpose of the amendment is to add Topaz as a 
Participant to the Plan. The text of the proposed amended 17d-2 plan is 
as follows (additions are italicized; deletions are [bracketed]):
* * * * *

Agreement by and Among

NYSE MKT LLC, BATS Exchange, Inc., Box Options Exchange LLC Nasdaq OMX 
BX, INC., C2 Options Exchange, Incorporated, The Chicago Board Options 
Exchange, Incorporated, The International Securities Exchange LLC, 
Financial Industry Regulatory Authority, Inc., NYSE ARCA, Inc., The 
Nasdaq Stock Market LLC, NASDAQ OMX PHLX, Inc., [and] Miami 
International Securities Exchange, LLC and Topaz Exchange, LLC, 
Pursuant to Rule 17d-2 under the Securities Exchange Act of 1934
    This agreement (this ``Agreement''), by and among the NYSE MKT LLC 
(``MKT''), BATS Exchange, Inc., (``BATS''), the C2 Options Exchange, 
Incorporated (``C2''), the Chicago Board Options Exchange, Incorporated 
(``CBOE''), the International Securities Exchange LLC (``ISE''), 
Financial Industry Regulatory Authority, Inc. (``FINRA''), NYSE Arca, 
Inc. (``Arca''), The NASDAQ Stock Market LLC (``Nasdaq''), the BOX 
Options Exchange LLC (``BOX''), NASDAQ OMX BX, Inc. (``BX'') the NASDAQ 
OMX PHLX, Inc. (``PHLX''), [and] the Miami International Securities 
Exchange, LLC (``MIAX'') and the Topaz Exchange, LLC (``Topaz'') is 
made this 10th day of October 2007, and as amended the 31st day of 
March 2008, the 1st day of October 2008, the 3rd day of February 2010, 
the 25th day of April 2012, and the 19th day of November 2012, and the 
30th day of May 2013 pursuant to Section 17(d) of the Securities 
Exchange Act of 1934, as amended (the ``Exchange Act''), and Rule 17d-2 
thereunder (``Rule 17d-2''), which allows for a joint plan among self-
regulatory organizations (``SROs'') to allocate regulatory obligations 
with respect to brokers or dealers that are members of two or more of 
the parties to this Agreement (``Common Members''). The MKT, BATS, C2, 
CBOE, ISE, FINRA, Arca, Nasdaq, BOX, BX, PHLX, [and] MIAX and Topaz are 
collectively referred to herein as the ``Participants'' and 
individually, each a ``Participant.'' This Agreement shall be 
administered by a committee known as the Options Surveillance Group 
(the ``OSG'' or ``Group''), as described in Section V hereof. Unless 
defined in this Agreement or the context otherwise requires, the terms 
used herein shall have the meanings assigned thereto by the Exchange 
Act and the rules and regulations thereunder.
    Whereas, the Participants desire to eliminate regulatory 
duplication with respect to SRO market surveillance of Common Member 
\1\ activities with regard to certain common rules relating to listed 
options (``Options''); and
---------------------------------------------------------------------------

    \1\ In the case of the BX and BOX, members are those persons who 
are Options Participants (as defined in the BOX Options Exchange LLC 
Rules and NASDAQ OMX BX, Inc. Rules).
---------------------------------------------------------------------------

    Whereas, for this purpose, the Participants desire to execute and 
file this Agreement with the Securities and Exchange Commission (the 
``SEC'' or ``Commission'') pursuant to Rule 17d-2.
    Now, therefore, in consideration of the mutual covenants contained 
in this Agreement, the Participants agree as follows:
    I. Except as otherwise provided in this Agreement, each Participant 
shall assume Regulatory Responsibility (as defined below) for the 
Common Members that are allocated or assigned to such Participant in 
accordance with the terms of this Agreement and shall be relieved of 
its Regulatory Responsibility as to the remaining Common Members. For 
purposes of this Agreement, a Participant shall be considered to be the 
Designated Options Surveillance Regulator (``DOSR'') for each Common 
Member that is allocated to it in accordance with Section VII.
    II. As used in this Agreement, the term ``Regulatory 
Responsibility'' shall mean surveillance, investigation and enforcement 
responsibilities relating to compliance by the Common Members with such 
Options rules of the Participants as the Participants shall determine 
are substantially similar and shall approve from time to time, insofar 
as such rules relate to market surveillance (collectively, the ``Common 
Rules''). For the purposes of this Agreement the list of Common Rules 
is attached as Exhibit A hereto, which may only be amended upon 
unanimous written agreement by the Participants. The DOSR assigned to 
each Common Member shall assume Regulatory Responsibility with regard 
to that Common Member's compliance with the applicable Common Rules for 
certain accounts.\2\ A DOSR may perform its Regulatory Responsibility 
or enter an agreement to transfer or assign such responsibilities to a 
national securities exchange registered with the SEC under Section 6(a) 
of the Exchange Act or a national securities association registered 
with the SEC under Section 15A of the Exchange Act. A DOSR may not 
transfer or assign its Regulatory Responsibility to an association 
registered for the limited purpose of regulating the activities of 
members who are registered as brokers or dealers in security futures 
products.
---------------------------------------------------------------------------

    \2\ Certain accounts shall include customer (``C'' as classified 
by the Options Clearing Corporation (``OCC'')) and firm (``F'' as 
classified by OCC) accounts, as well as other accounts, such as 
market maker accounts as the Participants shall, from time to time, 
identify as appropriate to review.
---------------------------------------------------------------------------

    The term ``Regulatory Responsibility'' does not include, and each 
Participant shall retain full responsibility with respect to:
    (a) Surveillance, investigative and enforcement responsibilities 
other than those included in the definition of Regulatory 
Responsibility;
    (b) any aspects of the rules of a Participant that are not 
substantially similar to the Common Rules or that are allocated for a 
separate surveillance purpose under any other agreement made pursuant 
to Rule 17d-2. Any such aspects of a Common Rule will be noted as 
excluded on Exhibit A.
    With respect to options position limits, the term Regulatory 
Responsibility shall include examination responsibilities for the delta 
hedging exemption. Specifically, the Participants intend that FINRA 
will conduct examinations for delta hedging for all Common Members that 
are members of FINRA notwithstanding the fact that FINRA's position 
limit rule is, in some cases, limited to only firms that

[[Page 46667]]

are not members of an options exchange (i.e., access members). In such 
cases, FINRA's examinations for delta hedging options position limit 
violations will be for the identical or substantively similar position 
limit rule(s) of the other Participant(s). Examinations for delta 
hedging for Common Members that are non-FINRA members will be conducted 
by the same Participant conducting position limit surveillance. The 
allocation of Common Members to DOSRs for surveillance of compliance 
with options position limits and other agreed to Common Rules is 
provided in Exhibit B. The allocation of Common Members to DOSRs for 
examinations of the delta hedging exemption under the options position 
limits rules is provided in Exhibit C.
    III. Each year within 30 days of the anniversary date of the 
commencement of operation of this Agreement, or more frequently if 
required by changes in the rules of a Participant, each Participant 
shall submit to the other Participants, through the Chair of the OSG, 
an updated list of Common Rules for review. This updated list may add 
Common Rules to Exhibit A, shall delete from Exhibit A rules of that 
Participant that are no longer identical or substantially similar to 
the Common Rules, and shall confirm that the remaining rules of the 
Participant included on Exhibit A continue to be identically or 
substantially similar to the Common Rules. Within 30 days from the date 
that each Participant has received revisions to Exhibit A from the 
Chair of the OSG, each Participant shall confirm in writing to the 
Chair of the OSG whether that Participant's rules listed in Exhibit A 
are Common Rules.
    IV. Apparent violation of another Participant's rules discovered by 
a DOSR, but which rules are not within the scope of the discovering 
DOSR's Regulatory Responsibility, shall be referred to the relevant 
Participant for such action as is deemed appropriate by that 
Participant.
    Notwithstanding the foregoing, nothing contained herein shall 
preclude a DOSR in its discretion from requesting that another 
Participant conduct an investigative or enforcement proceeding 
(``Proceeding'') on a matter for which the requesting DOSR has 
Regulatory Responsibility. If such other Participant agrees, the 
Regulatory Responsibility in such case shall be deemed transferred to 
the accepting Participant and confirmed in writing by the Participants 
involved. Additionally, nothing in this Agreement shall prevent another 
Participant on whose market potential violative activity took place 
from conducting its own Proceeding on a matter. The Participant 
conducting the Proceeding shall advise the assigned DOSR. Each 
Participant agrees, upon request, to make available promptly all 
relevant files, records and/or witnesses necessary to assist another 
Participant in a Proceeding.
    V. The OSG shall be composed of one representative designated by 
each of the Participants (a ``Representative''). Each Participant shall 
also designate one or more persons as its alternate representative(s) 
(an ``Alternate Representative''). In the absence of the 
Representative, the Alternate Representative shall assume the powers, 
duties and responsibilities of the Representative. Each Participant may 
at any time replace its Representative and/or its Alternate 
Representative to the Group.\3\ A majority of the OSG shall constitute 
a quorum and, unless otherwise required, the affirmative vote of a 
majority of the Representatives present (in person, by telephone or by 
written consent) shall be necessary to constitute action by the Group.
---------------------------------------------------------------------------

    \3\ A Participant must give notice to the Chair of the Group of 
such a change.
---------------------------------------------------------------------------

    The Group will have a Chair, Vice Chair and Secretary. A different 
Participant will assume each position on a rotating basis for a one-
year term. In the event that a Participant replaces a Representative 
who is acting as Chair, Vice Chair or Secretary, the newly appointed 
Representative shall assume the position of Chair, Vice Chair, or 
Secretary (as applicable) vacated by the Participant's former 
Representative. In the event a Participant cannot fulfill its duties as 
Chair, the Participant serving as Vice Chair shall substitute for the 
Chair and complete the subject unfulfilled term. All notices and other 
communications for the OSG are to be sent in care of the Chair and, as 
appropriate, to each Representative.
    VI. The OSG shall determine the times and locations of Group 
meetings, provided that the Chair, acting alone, may also call a 
meeting of the Group in the event the Chair determines that there is 
good cause to do so. To the extent reasonably possible, notice of any 
meeting shall be given at least ten business days prior to the meeting 
date. Representatives shall always be given the option of participating 
in any meeting telephonically at their own expense rather than in 
person.
    VII. No less frequently than every two years, in such manner as the 
Group deems appropriate, the OSG shall allocate Common Members that 
conduct an Options business among the Participants (``Allocation''), 
and the Participant to which a Common Member is allocated will serve as 
the DOSR for that Common Member. Any Allocation shall be based on the 
following principles, except to the extent all affected Participants 
consent to one or more different principles:
    (a) The OSG may not allocate a Common Member to a Participant 
unless the Common Member is a member of that Participant.
    (b) To the extent practicable, Common Members that conduct an 
Options business shall be allocated among the Participants of which 
they are members in such manner as to equalize as nearly as possible 
the allocation among such Participants, provided that no Common Members 
shall be allocated to FINRA. For example, if sixteen Common Members 
that conduct an Options business are members only of three 
Participants, none of which is FINRA, those Common Members shall be 
allocated among the three Participants such that no Participant is 
allocated more than six such members and no Participant is allocated 
less than five such members. If, in the previous example, one of the 
three Participants is FINRA, the sixteen Common Members would be 
allocated evenly between the remaining Participants, so that the two 
non-FINRA Participants would be allocated eight Common Members each.
    (c) To the extent practicable, Allocation shall take into account 
the amount of Options activity conducted by each Common Member in order 
to most evenly divide the Common Members with the largest amount of 
activity among the Participants of which they are members. Allocation 
will also take into account similar allocations pursuant to other plans 
or agreements to which the Common Members are party to maintain 
consistency in oversight of the Common Members.\4\
---------------------------------------------------------------------------

    \4\ For example, if one Participant was allocated a Common 
Member by another regulatory group that Participant would be 
assigned to be the DOSR of that Common Member, unless there is good 
cause not to make that assignment.
---------------------------------------------------------------------------

    (d) To the extent practicable, Allocation of Common Members to 
Participants will be rotated among the applicable Participants such 
that a Common Member shall not be allocated to a Participant to which 
that Common Member was allocated within the previous two years. The 
assignment of DOSRs pursuant to the Allocation is attached as Exhibit B 
hereto, and will be updated from time to time to reflect Common Member 
Allocation changes.
    (e) The Group may reallocate Common Members from time-to-time, as 
it deems appropriate.
    (f) Whenever a Common Member ceases to be a member of its DOSR, the

[[Page 46668]]

DOSR shall promptly inform the Group, which shall review the matter and 
allocate the Common Member to another Participant.
    (g) A DOSR may request that a Common Member to which it is assigned 
be reallocated to another Participant by giving 30 days written notice 
to the Chair of the OSG. The Group, in its discretion, may approve such 
request and reallocate the Common Member to another Participant.
    (h) All determinations by the Group with respect to Allocation 
shall be made by the affirmative vote of a majority of the Participants 
that, at the time of such determination, share the applicable Common 
Member being allocated; a Participant shall not be entitled to vote on 
any Allocation relating to a Common Member unless the Common Member is 
a member of such Participant.
    VIII. Each DOSR shall conduct routine surveillance reviews to 
detect violations of the applicable Common Rules by each Common Member 
allocated to it with a frequency (daily, weekly, monthly, quarterly, 
semi-annually or annually as noted on Exhibit A) not less than that 
determined by the Group. The other Participants agree that, upon 
request, relevant information in their respective files relative to a 
Common Member will be made available to the applicable DOSR. In 
addition, each Participant shall provide, to the extent not otherwise 
already provided, information pertaining to its surveillance program 
that would be relevant to FINRA or the Participant(s) conducting 
routine examinations for the delta hedging exemption.
    At each meeting of the OSG, each Participant shall be prepared to 
report on the status of its surveillance program for the previous 
quarter and any period prior thereto that has not previously been 
reported to the Group. In the event a DOSR believes it will not be able 
to complete its Regulatory Responsibility for its allocated Common 
Members, it will so advise the Group in writing promptly. The Group 
will undertake to remedy this situation by reallocating the subject 
Common Members among the remaining Participants. In such instance, the 
Group may determine to impose a regulatory fee for services provided to 
the DOSR that was unable to fulfill its Regulatory Responsibility.
    IX. Each Participant will, upon request, promptly furnish a copy of 
the report or applicable portions thereof relating to any investigation 
made pursuant to the provisions of this Agreement to each other 
Participant of which the Common Member under investigation is a member.
    X. Each Participant will routinely populate a common database, to 
be accessed by the Group relating to any formal regulatory action taken 
during the course of a Proceeding with respect to the Common Rules 
concerning a Common Member.
    XI. Any written notice required or permitted to be given under this 
Agreement shall be deemed given if sent by certified mail, return 
receipt requested, to any Participant to the attention of that 
Participant's Representative, to the Participant's principal place of 
business or by email at such address as the Representative shall have 
filed in writing with the Chair.
    XII. The costs incurred by each Participant in discharging its 
Regulatory Responsibility under this Agreement are not reimbursable. 
However, any of the Participants may agree that one or more will 
compensate the other(s) for costs incurred.
    XIII. The Participants shall notify the Common Members of this 
Agreement by means of a uniform joint notice approved by the Group. 
Each Participant will notify the Common Members that have been 
allocated to it that such Participant will serve as DOSR for that 
Common Member.
    XIV. This Agreement shall be effective upon approval of the 
Commission. This Agreement may only be amended in writing duly approved 
by each Participant. All amendments to this Agreement, excluding 
changes to Exhibits A, B and C, must be filed with and approved by the 
Commission.
    XV. Any Participant may manifest its intention to cancel its 
participation in this Agreement at any time upon providing written 
notice to (i) the Group six months prior to the date of such 
cancellation, or such other period as all the Participants may agree, 
and (ii) the Commission. Upon receipt of the notice the Group shall 
allocate, in accordance with the provisions of this Agreement, those 
Common Members for which the canceling Participant was the DOSR. The 
canceling Participant shall retain its Regulatory Responsibility and 
other rights, privileges and duties pursuant to this Agreement until 
the Group has completed the reallocation as described above, and the 
Commission has approved the cancellation.
    XVI. The cancellation of its participation in this Agreement by any 
Participant shall not terminate this Agreement as to the remaining 
Participants. This Agreement will only terminate following notice to 
the Commission, in writing, by the then Participants that they intend 
to terminate the Agreement and the expiration of the applicable notice 
period. Such notice shall be given at least six months prior to the 
intended date of termination, or such other period as all the 
Participants may agree. Such termination will become effective upon 
Commission approval.
    XVII. Participation in the Group shall be strictly limited to the 
Participants and no other party shall have any right to attend or 
otherwise participate in the Group except with the unanimous approval 
of all Participants. Notwithstanding the foregoing, any national 
securities exchange registered with the SEC under Section 6(a) of the 
Act or any national securities association registered with the SEC 
under section 15A of the Act may become a Participant to this Agreement 
provided that: (i) Such applicant has adopted rules substantially 
similar to the Common Rules, and received approval thereof from the 
SEC; (ii) such applicant has provided each Participant with a signed 
statement whereby the applicant agrees to be bound by the terms of this 
Agreement to the same effect as though it had originally signed this 
Agreement and (iii) an amended agreement reflecting the addition of 
such applicant as a Participant has been filed with and approved by the 
Commission.
    XVIII. This Agreement is wholly separate from the multiparty 
Agreement made pursuant to Rule 17d-2 by and among the NYSE MKT LLC, 
the Boston Stock Exchange, Inc., the Chicago Board Options Exchange, 
Inc., the International Securities Exchange, LLC, Financial Industry 
Regulatory Authority, The NASDAQ Stock Market LLC, Inc., the New York 
Stock Exchange, LLC, the NYSE Arca, Inc., the Philadelphia Stock 
Exchange, Inc., Miami International Securities Exchange, LLC and the 
Topaz Exchange, LLC involving the allocation of regulatory 
responsibilities with respect to common members for compliance with 
common rules relating to the conduct by broker-dealers of accounts for 
listed options or index warrants entered into on June 5, 2008, and as 
may be amended from time to time.

Limitation of Liability

    No Participant nor the Group nor any of their respective directors, 
governors, officers, employees or representatives shall be liable to 
any other Participant in 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 Responsibility as provided hereby or for

[[Page 46669]]

the failure to provide any such Regulatory Responsibility, except with 
respect to such liability, loss or damages as shall have been suffered 
by one or more of the Participants and caused by the willful misconduct 
of one or more of the other Participants or its respective directors, 
governors, officers, employees or representatives. No warranties, 
express or implied, are made by the Participants, individually or as a 
group, or by the OSG with respect to any Regulatory Responsibility to 
be performed hereunder.

Relief From Responsibility

    Pursuant to Section 17(d)(1)(A) of the Exchange Act and Rule 17d-2, 
the Participants join in requesting the Commission, upon its approval 
of this Agreement or any part thereof, to relieve the Participants that 
are party to this Agreement and are not the DOSR as to a Common Member 
of any and all Regulatory Responsibility with respect to the matters 
allocated to the DOSR.

--Remainder of This Page Intentionally Left Blank--

    This Agreement may be executed in any number of counterparts, each 
of which shall be deemed to be an original, but all such counterparts 
shall together constitute one and the same Agreement.
    In Witness Whereof, the Participants hereto have executed this 
Agreement as of the date and year first above written.

                              Exhibit A--Options Surveillance Group 17d-2 Agreement
                              [Common Rules as of [November 6, 2012] July 1, 2013]
----------------------------------------------------------------------------------------------------------------
                 SRO                     Description of rule       Exchange rule No.       Frequency of review
----------------------------------------------------------------------------------------------------------------
    Violation I: Expiring Exercise Declarations (EED)--For Listed Equity Options Expiring: The Third Saturday
                  Following the Third Friday of a Month, Quarterly, and for Listed FLEX Options
----------------------------------------------------------------------------------------------------------------
BATS.................................  Exercise of Options      Rule 23.1..............  At Expiration.
                                        Contracts.
BOX..................................  Exercise of Options      Rule 9000..............  At Expiration.
                                        Contracts.
C2...................................  Exercise of Options      Rule 11.1..............  At Expiration.
                                        Contracts.
CBOE.................................  Exercise of Options      Rule 11.1..............  At Expiration.
                                        Contracts.
FINRA................................  Exercise of Options      Rule 2360(b)(23).......  At Expiration.
                                        Contracts.
ISE..................................  Exercise of Options      Rule 1100..............  At Expiration.
                                        Contracts.
MIAX.................................  Exercise of Options      Rule 700...............  At Expiration.
                                        Contracts.
Nasdaq...............................  Exercise of Options      Nasdaq Chapter VIII,     At Expiration.
                                        Contracts.               Sec. 1.
NYSE Arca............................  Exercise of Options      Rule 6.24..............  At Expiration.
                                        Contracts.
NYSE MKT.............................  Exercise of Options      Rule 980...............  At Expiration.
                                        Contracts.
NASDAQ OMX BX........................  Exercise of Options      Chapter VIII, Section 1  At Expiration.
                                        Contracts.
NASDAQ OMX PHLX......................  Exercise of Equity       Rule 1042..............  At Expiration.
                                        Options Contracts.
Topaz................................  Exercise of Options      Rule 1100..............  At Expiration.
                                        Contracts.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                         Description of rule
                 SRO                     (for review as they       Exchange rule No.       Frequency of review
                                             apply to PL)
----------------------------------------------------------------------------------------------------------------
 Violation II: Position Limits (PL)--For Listed Equity Options Expiring: The Third Saturday Following the Third
                                          Friday of a Month, Quarterly
----------------------------------------------------------------------------------------------------------------
BATS.................................  Position Limits........  Rule 18.7..............  Daily.
                                       Exemptions from          Rule 18.8..............  As Needed.
                                        Position.
                                       Liquidating Positions..  Rule 18.11.............  As Needed.
BOX..................................  Position Limits........  Rule 3120..............  Daily.
                                       Exemptions from          Rule 3130..............  As Needed.
                                        Position.
                                       Liquidating Positions..  Rule 3160..............  As Needed.
C2...................................  Position Limits........  Rule 4.11..............  Daily.
                                       Liquidating Positions..  Rule 4.14..............  As Needed.
CBOE.................................  Position Limits........  Rule 4.11..............  Daily.
                                       Liquidating Positions..  Rule 4.14..............  As Needed.
FINRA................................  Position Limits........  Rule 2360(b)(3)........  Daily.
                                       Liquidation of           Rule 2360(b)(6)........  As Needed.
                                        Positions and
                                        Restrictions on Access.
ISE..................................  Position Limits........  Rule 412...............  Daily.
                                       Exemptions from          Rule 413...............  As Needed.
                                        Position Limits.
                                       Liquidating Positions..  Rule 416...............  As Needed.
MIAX.................................  Position Limits........  Rule 307...............  Daily.
                                       Exemptions from          Rule 308...............  As Needed.
                                        Position Limits.
                                       Liquidating Positions..  Rule 311...............  As Needed.
Nasdaq...............................  Position Limits........  Chapter III, Section 7.  Daily.
                                       Exemptions from          Chapter III, Section 8.  As Needed.
                                        Position Limits.
                                       Liquidating Positions..  Chapter III, Section 11  As Needed.
NYSE Arca............................  Position Limits........  Rule 6.8...............  Daily.
                                       Liquidation of           Rule 6.7...............  As Needed.
                                        Positions.
NYSE MKT.............................  Position Limits........  Rule 904...............  Daily.
                                       Liquidating Positions..  Rule 907...............  As Needed.
                                       Position Limits........  Chapter III, Section 7.  Daily.
NASDAQ OMX BX........................  Exemptions from          Chapter III, Section 8.  As Needed.
                                        Position Limits.
                                       Liquidating Positions..  Chapter III, Section 11  As Needed.
NASDAQ OMX PHLX......................  Position Limits........  Rule 1001..............  Daily.
                                       Liquidation of           Rule 1004..............  As Needed.
                                        Positions.

[[Page 46670]]

 
Topaz................................  Position Limits........  Rule 412...............  Daily.
                                       Exemptions from          Rule 413...............  As Needed.
                                        Position Limits.
                                       Liquidating Positions..  Rule 416...............  As Needed.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                         Description of rule
                 SRO                     (for review as they       Exchange rule No.       Frequency of review
                                            apply to LOPR)
----------------------------------------------------------------------------------------------------------------
              Violation III: Large Option Position Report (LOPR)--For Listed Equity and ETF Options
----------------------------------------------------------------------------------------------------------------
BATS.................................  Reports Related to       Rule 18.10.............  Yearly.
                                        Position Limits.
BOX..................................  Reports Related to       Rule 3150..............  Yearly.
                                        Position Limits.
C2...................................  Reports Related to       Rule 4.13(a)...........  Yearly.
                                        Position Limits.
                                       Reports Related to       Rule 4.13(b)...........  Yearly.
                                        Position Limits.
                                       Reports Related to       Rule 4.13(d)...........  Yearly.
                                        Position Limits.
CBOE.................................  Reports Related to       Rule 4.13(a)...........  Yearly.
                                        Position Limits.
                                       Reports Related to       Rule 4.13(b)...........  Yearly.
                                        Position Limits.
                                       Reports Related to       Rule 4.13(d)...........  Yearly.
                                        Position Limits.
FINRA................................  Options................  Rule 2360(b)(5)........  Yearly.
ISE..................................  Reports Related to       Rule 415...............  Yearly.
                                        Position Limits.
MIAX.................................  Reports Related to       Rule 310...............  Yearly.
                                        Position Limits.
Nasdaq...............................  Reports Related to       Chapter III, Section 10  Yearly.
                                        Position Limits.
NYSE Arca............................  Reporting of Options     Rule 6.6...............  Yearly.
                                        Positions.
NYSE MKT.............................  Reporting of Options     Rule 906...............  Yearly.
                                        Positions.
Nasdaq OMX BX........................  Reports Related to       Chapter III, Section 10  Yearly.
                                        Position Limits.
NASDAQ OMX PHLX......................  Reporting of Options     Rule 1003..............  Yearly.
                                        Positions.
Topaz................................  Reports Related to       Rule 415...............  Yearly.
                                        Position Limits.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                       Description of rule (as
                                          they apply to OCC
                 SRO                     adjustments/by-laws       Exchange rule No.       Frequency of review
                                          article V, section
                                           1.01(a) and .02)
----------------------------------------------------------------------------------------------------------------
                       Violation IV: Options Clearing Corporation (OCC) Adjustment Process
----------------------------------------------------------------------------------------------------------------
BATS.................................  Adherence to Law.......  Rule 18.1..............  Yearly.
BOX..................................  Adherence to Law.......  Rule 3010..............  Yearly.
C2...................................  Adherence to Law.......  Rule 4.2...............  Yearly.
CBOE.................................  Adherence to Law.......  Rule 4.2...............  Yearly.
FINRA................................  Violation of By-Laws     Rule 2360(b)(21).......  Yearly.
                                        and Rules of FINRA or
                                        the OCC.
ISE..................................  Adherence to Law.......  Rule 401...............  Yearly.
MIAX.................................  Adherence to Law.......  Rule 300...............  Yearly.
Nasdaq...............................  Adherence to Law.......  Chapter III, Section 1.  Yearly.
NYSE Arca............................  Adherence to Law and     Rule 11.1..............  Yearly.
                                        Good Business Practice.
NYSE MKT.............................  Business Conduct.......  Rule 16................  Yearly.
NASDAQ OMX BX........................  Adherence to Law.......  Chapter III, Section 1.  Yearly.
NASDAQ OMX PHLX......................  Violation of By-Laws     Rule 1050..............  Yearly.
                                        and Rules of OCC.
Topaz................................  Adherence to Law.......  Rule 401...............  Yearly.
----------------------------------------------------------------------------------------------------------------

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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number 4-551 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number 4-551. This file number 
should be included on the subject line if email is used. To help the 
Commission process and review your comments more efficiently, please 
use only one method. The Commission will post all comments on the 
Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed plan that are filed with the 
Commission, and all written communications relating to the proposed 
plan between the Commission and any person, other than those that may 
be withheld from the public in accordance with the provisions of 5 
U.S.C. 552, will be available for Web site viewing and printing in the 
Commission's Public Reference Room, 100 F Street NE., Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the plan also will be available for inspection and 
copying at the principal offices of MKT, BATS, C2, CBOE, ISE, FINRA, 
Arca, NASDAQ, BOX, BX, Phlx, MIAX, and Topaz. All comments received 
will be posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions

[[Page 46671]]

should refer to File Number 4-551 and should be submitted on or before 
August 22, 2013.

V. Discussion

    The Commission continues to believe that the Plan, as proposed to 
be amended, is an achievement in cooperation among the SRO 
participants. The Plan, as amended, will reduce unnecessary regulatory 
duplication by allocating to the designated SRO the responsibility for 
certain options-related market surveillance matters that would 
otherwise be performed by multiple SROs. The Plan promotes efficiency 
by reducing costs to firms that are members of more than one of the SRO 
participants. In addition, because the SRO participants coordinate 
their regulatory functions in accordance with the Plan, the Plan 
promotes, and will continue to promote, investor protection. Under 
paragraph (c) of Rule 17d-2, the Commission may, after appropriate 
notice and comment, declare a plan, or any part of a plan, effective. 
In this instance, the Commission believes that appropriate notice and 
comment can take place after the proposed amendment is effective. The 
primary purpose of the amendment is to add Topaz as a Participant to 
the Plan. By declaring it effective today, the amended Plan can become 
effective and be implemented without undue delay.\17\ In addition, the 
Commission notes that the prior version of this Plan was published for 
comment, and the Commission did not receive any comments thereon.\18\ 
Finally, the Commission does not believe that the amendment to the Plan 
raises any new regulatory issues that the Commission has not previously 
considered.
---------------------------------------------------------------------------

    \17\ On July 26, 2013, the Commission granted Topaz's 
application for registration as a national securities exchange. See 
Securities Exchange Act Release No. 70050 (July 25, 2013) (File No. 
10-209).
    \18\ See supra note 16 (citing to Securities Exchange Act 
Release No. 68362).
---------------------------------------------------------------------------

VI. Conclusion

    This order gives effect to the amended Plan submitted to the 
Commission that is contained in File No. 4-551.
    It is therefore ordered, pursuant to Section 17(d) of the Act, that 
the Plan, as amended by and between MKT, BATS, C2, CBOE, ISE, FINRA, 
Arca, NASDAQ, BOX, BX, Phlx, MIAX, and Topaz, filed with the Commission 
pursuant to Rule 17d-2 on July 2, 2013 is hereby approved and declared 
effective.
    It is further ordered that those SRO participants that are not the 
DOSR as to a particular common member are relieved of those regulatory 
responsibilities allocated to the common member's DOSR under the 
amended Plan to the extent of such allocation.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(34).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-18475 Filed 7-31-13; 8:45 am]
BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.