Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend ISE Rule 623 (“Options Communications”) To Conform With the Rules of the Financial Industry Regulatory Authority Inc., 18944-18947 [2014-07511]
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18944
Federal Register / Vol. 79, No. 65 / Friday, April 4, 2014 / Notices
Existing Fund of which any of the
Substitution Applicants is an affiliated
person will be effected in accordance
with the conditions set forth in the
Commission’s no-action letter issued to
Signature Financial Group, Inc.
(available December 28, 1999).
4. The Section 17 Applicants submit
that the In-Kind Transactions, as
described in the application, meet the
conditions set forth in Section 17(b) of
the 1940 Act.
5. Section 17 Applicants maintain
that the terms of the proposed in-kind
purchase transactions, including the
consideration to be paid and received by
each Fund involved, are reasonable, fair
and do not involve overreaching
principally because the transactions will
conform with all but one of the
conditions (that the consideration paid
for the securities being purchased or
sold may not be entirely cash)
enumerated in Rule 17a–7 of the 1940
Act. The proposed transactions will take
place at relative net asset value in
conformity with the requirements of
Section 22(c) of the Act and Rule 22c–
1 thereunder with no change in the
amount of any Contract owner’s contract
value or death benefit or in the dollar
value of his or her investment in any of
the Separate Accounts. The Applicants
assert that Contract owners will not
suffer any adverse tax consequences as
a result of the substitutions, and the fees
and charges under the Contracts will not
increase because of the substitutions.
6. The Boards of Trustees of MIST and
Met Series Fund have adopted
procedures, as required by paragraph
(e)(1) of Rule 17a–7, pursuant to which
the series of each may purchase and sell
securities to and from their affiliates.
The Section 17 Applicants assert they
will carry out the proposed Insurance
Company in-kind purchases in
conformity with all of the conditions of
Rule 17a–7 and each series’ procedures
thereunder, except that the
consideration paid for the securities
being purchased or sold may not be
entirely cash. Nevertheless, the
Substitution Applicants state that the
circumstances surrounding the
proposed Substitutions will be such as
to offer the same degree of protection to
each Replacement Fund from
overreaching that Rule 17a–7 provides
to them generally in connection with
their purchase and sale of securities
under that Rule in the ordinary course
of their business. In particular, the
Insurance Companies (or any of their
affiliates) cannot effect the proposed
transactions at a price that is
disadvantageous to any of the
Replacement Funds. Although the
transactions may not be entirely for
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cash, each will be effected based upon
(1) the independent market price of the
portfolio securities valued as specified
in paragraph (b) of Rule 17a–7, and (2)
the net asset value per share of each
Fund involved valued in accordance
with the procedures disclosed in its
respective investment company
registration statement and as required
by Rule 22c–1 under the Act. No
brokerage commission, fee, or other
remuneration will be paid to any party
in connection with the proposed in-kind
purchase transactions.
7. The sale of shares of Replacement
Funds for investment securities, as
contemplated by the proposed
Insurance Company in-kind purchases,
is consistent with the investment
policies and restrictions of the
Investment Companies and the
Replacement Funds because (1) the
shares are sold at their net asset value,
and (2) the portfolio securities are of the
type and quality that the Replacement
Funds would each have acquired with
the proceeds from share sales had the
shares been sold for cash. To assure that
the second of these conditions is met,
MetLife Advisers, LLC and the subadviser, as applicable, will examine the
portfolio securities being offered to each
Replacement Fund and accept only
those securities as consideration for
shares that it would have acquired for
each such Fund in a cash transaction.
8. The Section 17 Applicants
represent that the proposed in-kind
purchases meet all of the requirements
of Section 17(b) of the Act and that an
exemption should be granted, to the
extent necessary, from the provisions of
Section 17(a).
Conclusion
Applicants assert that for the reasons
summarized above that the proposed
substitutions and related transactions
meet the standards of Section 26(c) of
the Act and are consistent with the
standards of Section 17(b) of the Act
and that the requested orders should be
granted.
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission Investor Advisory
Committee will hold a meeting on
Thursday, April 10, 2014, in MultiPurpose Room LL–006 at the
Commission’s headquarters, 100 F
Street NE., Washington, DC. The
meeting will begin at 10:00 a.m. (EST)
and will be open to the public. Seating
will be on a first-come, first-served
basis. Doors will open at 9:30 a.m.
Visitors will be subject to security
checks. The meeting will be webcast on
the Commission’s Web site at
www.sec.gov.
On March 28, 2014, the Commission
issued notice of the Committee meeting
(Release No. 33–9567), indicating that
the meeting is open to the public and
inviting the public to submit written
comments to the Committee. This
Sunshine Act notice is being issued
because a quorum of the Commission
may attend the meeting.
The agenda for the meeting includes:
Remarks from Commissioners; remarks
from the Investor Advocate; election of
Investor Advisory Committee Chair; a
recommendation from the Investor as
Purchaser Subcommittee regarding
crowdfunding regulations; and
nonpublic subcommittee meetings.
For further information, please
contact the Office of the Secretary at
(202) 551–5400.
Dated: April 2, 2014.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–07686 Filed 4–2–14; 4:15 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71832; File No. SR–ISE–
2014–18]
For the Commission, by the Division of
Investment Management pursuant to
delegated authority.
Kevin M. O’Neill,
Deputy Secretary.
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Amend ISE Rule 623
(‘‘Options Communications’’) To
Conform With the Rules of the
Financial Industry Regulatory
Authority Inc.
[FR Doc. 2014–07512 Filed 4–3–14; 8:45 am]
March 31, 2014.
BILLING CODE 8011–01–P
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 20,
2014, the International Securities
Exchange, LLC (‘‘Exchange’’ or ‘‘ISE’’)
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
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1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 79, No. 65 / Friday, April 4, 2014 / Notices
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which items have
been substantially prepared by the
Exchange. ISE has designated the
proposed rule change as constituting a
‘‘non-controversial’’ rule change under
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(6) 4 thereunder, which renders
the proposal effective upon receipt of
this filing by the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is proposing to update
ISE Rule 623 (Options Communications)
to conform with the rules of the
Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) for purposes
of an agreement between the Exchange
and FINRA pursuant to Exchange Act
Rule 17d–2.5 The text of the proposed
rule change is available on the
Exchange’s Web site at https://
www.ise.com, at the Exchange’s
principal office, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B and C below, of
the most significant aspects of such
statements.
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Pursuant to Exchange Act Rule 17d–
2,6 the Exchange and FINRA entered
into an agreement to allocate regulatory
responsibility for common rules (‘‘17d–
2 Agreement’’). The 17d–2 Agreement
covers common members of the
Exchange and FINRA (‘‘Common
Members’’) and allocates to FINRA
regulatory responsibility, with respect to
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
5 17 CFR 240.17d–2.
6 Id.
4 17
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Common Members, for the following: (i)
Examination of Common Members for
compliance with federal securities laws,
rules and regulations and rules of the
Exchange that the Exchange has
certified as identical or substantially
similar to FINRA rules; (ii) investigation
of Common Members for violations of
federal securities laws, rules and
regulations, and the rules of the
Exchange that the Exchange has
certified as identical or substantially
identical to FINRA rules; and (iii)
enforcement of compliance by Common
Members with the federal securities
laws, rules and regulations, and the
rules of the Exchange that the Exchange
has certified as identical or substantially
similar to FINRA rules.
The 17d–2 Agreement included a
certification by the Exchange that states
that the requirements contained in
certain Exchange rules are identical to,
or substantially similar to, certain
FINRA rules that have been identified as
comparable. To conform with
comparable FINRA rules for purposes of
the 17d–2 Agreement, the Exchange is
proposing to amend ISE Rule 623 to
conform with changes made by FINRA
to its corresponding rule, Rule 2220.7
First, the Exchange proposes to
amend Rule 623(a) to reduce the
number of defined categories of
communication from six (in the current
rule) to three: ‘‘Retail communications,’’
‘‘correspondence,’’ and ‘‘institutional
communications.’’ Current definitions
of ‘‘sales literature,’’ ‘‘advertisement,’’
and ‘‘independently prepared reprint’’
would be combined into a single
category of ‘‘retail communications.’’
Specifically, the proposal would define
‘‘retail communication’’ to mean ‘‘any
written (including electronic)
communication that is distributed or
made available to more than 25 retail
investors within any 30 calendar-day
period.’’ The Exchange would also
update the current definition of
‘‘correspondence’’ to mean ‘‘any written
(including electronic) communication
distributed or made to 25 or fewer retail
customers within any 30 calendar-day
period.’’ Finally, the Exchange would
define ‘‘institutional communication’’ to
include written (including electronic)
communications that are distributed or
made available only to institutional
investors. The Exchange believes the
7 See Exchange Act Release No. 68650 (Jan. 14,
2013), 78 FR 4182 (Jan. 18, 2013) (Approving,
among other things, amendments to FINRA Rule
2220 (Options Communications) to update crossreferences to FINRA Rule 2210 (Communications
with the Public)); see also Exchange Act Release No.
66681 (Mar. 29, 2012), 77 FR 20452 (Apr. 4, 2012)
(Approving, among other things, amendments to
FINRA Rule 2210).
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18945
proposed changes to the definitions in
Rule 623(a) would create a more concise
and descriptive rule, and clarify the
terms for ISE members.
Second, the Exchange is proposing to
amend Rule 623(b), ‘‘Approval by
Registered Options Principal.’’ More
specifically, the Exchange is proposing
to replace the phrase ‘‘advertisements,
sales literature . . . and independently
prepared reprints’’ in Rule 623(b)(1)
with the new term, ‘‘retail
communications.’’ The Exchange
believes that this change would make
the rule more coherent with the other
proposed changes.
In addition, the proposal would
amend Rule 623(b)(2) to delete the
requirement for prior approval by a
Registered Options Principal of
correspondence (as currently defined)
that is distributed to 25 or more existing
retail customers within a 30 calendarday period that makes any financial or
investment recommendation or
otherwise promotes the product or
service of a member. Under the
proposal, such communications would
be considered retail communications
and therefore subject to the principal
approval requirement of amended Rule
623(b)(1). Under the proposal,
correspondence (as amended) would
continue to be excluded from the
requirement to be approved by a
Registered Options Principal prior to
use but would still be subject to the
supervision and review requirements of
Rule 609. As such, ISE believes that the
proposed change would not
substantively change the scope of
options communications that would
require principal approval.
Next, the Exchange is proposing to
amend Rule 623(b)(3) to modify the
required approvals of Institutional
communications. Specifically, the
Exchange is proposing to add that its
members shall ‘‘establish written
procedures that are appropriate to its
business, size, structure, and customers
for review by a Registered Options
Principal of institutional
communications used by the member.’’
The Exchange believes this would better
align ISE Rule 623 with FINRA Rule
2220.
Third, the Exchange is proposing to
amend Rule 623(c) to replace the phrase
‘‘advertisements, sales literature, and
independently prepared reprints’’ with
the new proposed term, ‘‘retail
communications.’’ The Exchange is also
proposing to exempt options disclosure
documents and prospectuses from
Exchange review and approval as these
documents have other further
requirements under the Securities Act of
1933 (‘‘Securities Act’’). The Exchange
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Federal Register / Vol. 79, No. 65 / Friday, April 4, 2014 / Notices
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believes these changes would better
align Exchange Rule 623 with FINRA
Rule 2220.
Fourth, the Exchange is proposing to
amend Rule 623(d) to specify that its
members may not use any options
communications that would constitute a
prospectus (as defined in the Securities
Act) unless it would meet the
requirements of Securities Act Section
10.8 The Exchange believes this change
would put its members on notice that all
documents that may constitute a
prospectus would be required to comply
with the Securities Act.
In addition, the Exchange is
proposing to modify Rule 623(d) to
provide that any statement made
referring to potential opportunities or
advantages presented by options must
be accompanied by a statement
identifying the potential risks posed as
well. The Exchange believes that
moving this language to the end of
paragraph (d) would help alert the
public of potential risks associated with
options, as well as the advantages,
which would create more awareness of
the potential harms that may arise in the
participation of such securities. The
Exchange believes that this would help
ensure that investors are protected from
potentially false or misleading
communications distributed by its
members. The Exchange also believes
this would better align ISE Rule 623
with FINRA Rule 2220 and provide
greater clarity to its members and the
public regarding the Exchange’s rules.
In sum, the Exchange believes the
proposed changes would alert its
members to their requirements with
respect to Options Communications
while further regulating all
communications for compliance with
Exchange rules, and the Act and rules
promulgated thereunder. In addition,
the Exchange believes that the proposed
rule change would help ensure that
investors are protected from potentially
false or misleading communications
with the public distributed by its
members.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the Act
and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.9 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) requirements that the rules of an
exchange be designed to prevent
fraudulent and manipulative acts and
8 15
9 15
U.S.C. 78j.
U.S.C. 78f(b).
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17:37 Apr 03, 2014
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.10
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) requirement that the
rules of an exchange are not designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers.11
In particular, the Exchange believes
the proposed rule changes would
provide greater clarity to its members
and the public regarding the Exchange’s
rules and provide greater harmonization
between the Exchange and FINRA rules
of similar purpose, resulting in greater
uniformity and less burdensome and
more efficient regulatory compliance. In
addition, the Exchange believes that the
proposed rule change would help
ensure that investors are protected from
potentially false or misleading
communications with the public
distributed by its members.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. Specifically,
the Exchange believes that the proposed
rule change will merely bring clarity
and consistency to Exchange rules. The
Exchange does not believe the proposed
rule change will impose any burden on
any intramarket competition as it
applies to its members. In addition, the
Exchange does not believe the proposed
rule filing will bring any unnecessary
burden on intermarket competition as it
is consistent with FINRA Rule 2220
(Options Communications).
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change
does not: (i) Significantly affect the
10 15
U.S.C. 78f(b)(5).
11 Id.
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protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate if
consistent with the protection of
investors and the public interest, it has
become effective pursuant to Section
19(b)(3)(A) of the Act12 and Rule 19b–
4(f)(6) thereunder.13
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. Pursuant to Rule 19b–
4(f)(6)(iii), however, the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest.14
The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because it will allow the Exchange to
immediately conform its rules to
corresponding FINRA rules. This will
help ensure that such ISE rules will
continue to be covered by the existing
17d–2 Agreement between the Exchange
and FINRA and reduce duplicative
regulation of Common Members.15
At any time within sixty (60) days of
the filing the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
12 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). Rule 19b–4(f)(6) also
requires the Exchange to give the Commission
written notice of its intent to file the proposed rule
change, along with a brief description and text of
the proposed rule change, at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange satisfied this
requirement.
14 17 CFR 240.19b–4(f)(6)(iii).
15 For purposes of waiving the 30-day operative
delay, the Commission has considered the proposed
rule’s impact on efficiency, competition and capital
formation. See 15 U.S.C. 78c(f).
13 17
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Federal Register / Vol. 79, No. 65 / Friday, April 4, 2014 / Notices
Electronic Comments
DEPARTMENT OF TRANSPORTATION
• 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 No. SR–ISE–
2014–18 on the subject line.
Federal Aviation Administration
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
mstockstill on DSK4VPTVN1PROD with NOTICES
All submissions should refer to File
Number SR–ISE–2014–18. 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
Web site (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all
subsequent amendments, all written
statements with respect to the proposed
rule change that are filed with the
Commission, and all written
communications relating to the
proposed rule change 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 such
filing also will be available for
inspection and copying at the principal
office of ISE. All comments received
will be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–ISE–
2014–18 and should be submitted on or
before April 25, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–07511 Filed 4–3–14; 8:45 am]
BILLING CODE 8011–01–P
16 17
CFR 200.30–3(a)(12).
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17:37 Apr 03, 2014
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[Summary Notice No. PE–2014–23 ]
Petition for Exemption; Summary of
Petition Received
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice of petition for exemption
received.
AGENCY:
This notice contains a
summary of a petition seeking relief
from specified requirements of Title 14,
Code of Federal Regulations (14 CFR).
The purpose of this notice is to improve
the public’s awareness of, and
participation in, this aspect of the FAA’s
regulatory activities. Neither publication
of this notice nor the inclusion or
omission of information in the summary
is intended to affect the legal status of
the petition or its final disposition.
DATES: Comments on this petition must
identify the petition docket number
involved and must be received on or
before April 24, 2014.
ADDRESSES: You may send comments
identified by docket number FAA–
2014–0091 using any of the following
methods:
• Government-wide rulemaking Web
site: Go to https://www.regulations.gov
and follow the instructions for sending
your comments digitally.
• Mail: Send comments to the Docket
Management Facility; U.S. Department
of Transportation, 1200 New Jersey
Avenue SE., West Building Ground
Floor, Room W12–140, Washington, DC
20590.
• Fax: Fax comments to the Docket
Management Facility at 202–493–2251.
• Hand Delivery: Bring comments to
the Docket Management Facility in
Room W12–140 of the West Building
Ground Floor at 1200 New Jersey
Avenue SE., Washington, DC, between 9
a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
Privacy: We will post all comments
we receive, without change, to https://
www.regulations.gov, including any
personal information you provide.
Using the search function of our docket
Web site, anyone can find and read the
comments received into any of our
dockets, including the name of the
individual sending the comment (or
signing the comment for an association,
business, labor union, etc.). You may
review the DOT’s complete Privacy Act
Statement in the Federal Register
published on April 11, 2000 (65 FR
19477–78).
Docket: To read background
documents or comments received, go to
SUMMARY:
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18947
https://www.regulations.gov at any time
or to the Docket Management Facility in
Room W12–140 of the West Building
Ground Floor at 1200 New Jersey
Avenue SE., Washington, DC, between 9
a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT:
Mark Forseth, ANM–113, Federal
Aviation Administration, 1601 Lind
Avenue SW., Renton, WA 98057–3356,
email mark.forseth@faa.gov, phone
(425) 227–2796; or Sandra K. Long,
ARM–201, Office of Rulemaking,
Federal Aviation Administration, 800
Independence Avenue SW.,
Washington, DC 20591, email
sandra.long@faa.gov, phone (202) 493–
5245.
This notice is published pursuant to
14 CFR 11.85.
Lirio Liu,
Director, Office of Rulemaking.
Petition for Exemption
Docket No.: FAA–2014–0091
Petitioner: The Boeing Company
Section of 14 CFR Affected:
§§ 25.777(a), 25.1301(a)(b)(d), and
25.1309(a)(c)
Description of Relief Sought:
Petitioner seeks relief from the
requirements for cockpit controls;
equipment function and installation;
and equipment, systems, and
installations on Boeing Model 767–2C
airplanes.
[FR Doc. 2014–07510 Filed 4–3–14; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[Docket No. FD 35810]
CCET, LLC—Lease and Operation
Exemption—Rail Line of Norfolk
Southern Railway Company
CCET, LLC (CCET), a noncarrier, has
filed a verified notice of exemption
under 49 CFR 1150.31 to lease from
Norfolk Southern Railway Company
(NSR), and to operate, pursuant to a
lease agreement dated March 14, 2014,
an approximately 24-mile portion of
NSR’s CT Line, extending between
milepost CT 9.0 at Clare, Ohio, east of
Clare Yard, and milepost CT 32.83, west
of Williamsburg, Ohio, and passing
through Hamilton County and Clermont
County, Ohio (the Line).
According to CCET, the lease does not
contain any provision that prohibits,
restricts, or would otherwise limit
future interchange of traffic with any
third-party carrier. CCET states that it
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]]>Agencies
[Federal Register Volume 79, Number 65 (Friday, April 4, 2014)]
[Notices]
[Pages 18944-18947]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-07511]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71832; File No. SR-ISE-2014-18]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Amend ISE Rule 623 (``Options Communications'') To Conform
With the Rules of the Financial Industry Regulatory Authority Inc.
March 31, 2014.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 20, 2014, the International Securities Exchange, LLC
(``Exchange'' or ``ISE'')
[[Page 18945]]
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which items
have been substantially prepared by the Exchange. ISE has designated
the proposed rule change as constituting a ``non-controversial'' rule
change under Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)
\4\ thereunder, which renders the proposal effective upon receipt of
this filing by the Commission. The Commission is publishing this notice
to solicit comments on the proposed rule change from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to update ISE Rule 623 (Options
Communications) to conform with the rules of the Financial Industry
Regulatory Authority, Inc. (``FINRA'') for purposes of an agreement
between the Exchange and FINRA pursuant to Exchange Act Rule 17d-2.\5\
The text of the proposed rule change is available on the Exchange's Web
site at https://www.ise.com, at the Exchange's principal office, and at
the Commission's Public Reference Room.
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\5\ 17 CFR 240.17d-2.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Pursuant to Exchange Act Rule 17d-2,\6\ the Exchange and FINRA
entered into an agreement to allocate regulatory responsibility for
common rules (``17d-2 Agreement''). The 17d-2 Agreement covers common
members of the Exchange and FINRA (``Common Members'') and allocates to
FINRA regulatory responsibility, with respect to Common Members, for
the following: (i) Examination of Common Members for compliance with
federal securities laws, rules and regulations and rules of the
Exchange that the Exchange has certified as identical or substantially
similar to FINRA rules; (ii) investigation of Common Members for
violations of federal securities laws, rules and regulations, and the
rules of the Exchange that the Exchange has certified as identical or
substantially identical to FINRA rules; and (iii) enforcement of
compliance by Common Members with the federal securities laws, rules
and regulations, and the rules of the Exchange that the Exchange has
certified as identical or substantially similar to FINRA rules.
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\6\ Id.
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The 17d-2 Agreement included a certification by the Exchange that
states that the requirements contained in certain Exchange rules are
identical to, or substantially similar to, certain FINRA rules that
have been identified as comparable. To conform with comparable FINRA
rules for purposes of the 17d-2 Agreement, the Exchange is proposing to
amend ISE Rule 623 to conform with changes made by FINRA to its
corresponding rule, Rule 2220.\7\
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\7\ See Exchange Act Release No. 68650 (Jan. 14, 2013), 78 FR
4182 (Jan. 18, 2013) (Approving, among other things, amendments to
FINRA Rule 2220 (Options Communications) to update cross-references
to FINRA Rule 2210 (Communications with the Public)); see also
Exchange Act Release No. 66681 (Mar. 29, 2012), 77 FR 20452 (Apr. 4,
2012) (Approving, among other things, amendments to FINRA Rule
2210).
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First, the Exchange proposes to amend Rule 623(a) to reduce the
number of defined categories of communication from six (in the current
rule) to three: ``Retail communications,'' ``correspondence,'' and
``institutional communications.'' Current definitions of ``sales
literature,'' ``advertisement,'' and ``independently prepared reprint''
would be combined into a single category of ``retail communications.''
Specifically, the proposal would define ``retail communication'' to
mean ``any written (including electronic) communication that is
distributed or made available to more than 25 retail investors within
any 30 calendar-day period.'' The Exchange would also update the
current definition of ``correspondence'' to mean ``any written
(including electronic) communication distributed or made to 25 or fewer
retail customers within any 30 calendar-day period.'' Finally, the
Exchange would define ``institutional communication'' to include
written (including electronic) communications that are distributed or
made available only to institutional investors. The Exchange believes
the proposed changes to the definitions in Rule 623(a) would create a
more concise and descriptive rule, and clarify the terms for ISE
members.
Second, the Exchange is proposing to amend Rule 623(b), ``Approval
by Registered Options Principal.'' More specifically, the Exchange is
proposing to replace the phrase ``advertisements, sales literature . .
. and independently prepared reprints'' in Rule 623(b)(1) with the new
term, ``retail communications.'' The Exchange believes that this change
would make the rule more coherent with the other proposed changes.
In addition, the proposal would amend Rule 623(b)(2) to delete the
requirement for prior approval by a Registered Options Principal of
correspondence (as currently defined) that is distributed to 25 or more
existing retail customers within a 30 calendar-day period that makes
any financial or investment recommendation or otherwise promotes the
product or service of a member. Under the proposal, such communications
would be considered retail communications and therefore subject to the
principal approval requirement of amended Rule 623(b)(1). Under the
proposal, correspondence (as amended) would continue to be excluded
from the requirement to be approved by a Registered Options Principal
prior to use but would still be subject to the supervision and review
requirements of Rule 609. As such, ISE believes that the proposed
change would not substantively change the scope of options
communications that would require principal approval.
Next, the Exchange is proposing to amend Rule 623(b)(3) to modify
the required approvals of Institutional communications. Specifically,
the Exchange is proposing to add that its members shall ``establish
written procedures that are appropriate to its business, size,
structure, and customers for review by a Registered Options Principal
of institutional communications used by the member.'' The Exchange
believes this would better align ISE Rule 623 with FINRA Rule 2220.
Third, the Exchange is proposing to amend Rule 623(c) to replace
the phrase ``advertisements, sales literature, and independently
prepared reprints'' with the new proposed term, ``retail
communications.'' The Exchange is also proposing to exempt options
disclosure documents and prospectuses from Exchange review and approval
as these documents have other further requirements under the Securities
Act of 1933 (``Securities Act''). The Exchange
[[Page 18946]]
believes these changes would better align Exchange Rule 623 with FINRA
Rule 2220.
Fourth, the Exchange is proposing to amend Rule 623(d) to specify
that its members may not use any options communications that would
constitute a prospectus (as defined in the Securities Act) unless it
would meet the requirements of Securities Act Section 10.\8\ The
Exchange believes this change would put its members on notice that all
documents that may constitute a prospectus would be required to comply
with the Securities Act.
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\8\ 15 U.S.C. 78j.
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In addition, the Exchange is proposing to modify Rule 623(d) to
provide that any statement made referring to potential opportunities or
advantages presented by options must be accompanied by a statement
identifying the potential risks posed as well. The Exchange believes
that moving this language to the end of paragraph (d) would help alert
the public of potential risks associated with options, as well as the
advantages, which would create more awareness of the potential harms
that may arise in the participation of such securities. The Exchange
believes that this would help ensure that investors are protected from
potentially false or misleading communications distributed by its
members. The Exchange also believes this would better align ISE Rule
623 with FINRA Rule 2220 and provide greater clarity to its members and
the public regarding the Exchange's rules.
In sum, the Exchange believes the proposed changes would alert its
members to their requirements with respect to Options Communications
while further regulating all communications for compliance with
Exchange rules, and the Act and rules promulgated thereunder. In
addition, the Exchange believes that the proposed rule change would
help ensure that investors are protected from potentially false or
misleading communications with the public distributed by its members.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\9\ Specifically, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) requirements that the rules of an
exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public
interest.\10\ Additionally, the Exchange believes the proposed rule
change is consistent with the Section 6(b)(5) requirement that the
rules of an exchange are not designed to permit unfair discrimination
between customers, issuers, brokers, or dealers.\11\
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
\11\ Id.
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In particular, the Exchange believes the proposed rule changes
would provide greater clarity to its members and the public regarding
the Exchange's rules and provide greater harmonization between the
Exchange and FINRA rules of similar purpose, resulting in greater
uniformity and less burdensome and more efficient regulatory
compliance. In addition, the Exchange believes that the proposed rule
change would help ensure that investors are protected from potentially
false or misleading communications with the public distributed by its
members.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. Specifically, the Exchange
believes that the proposed rule change will merely bring clarity and
consistency to Exchange rules. The Exchange does not believe the
proposed rule change will impose any burden on any intramarket
competition as it applies to its members. In addition, the Exchange
does not believe the proposed rule filing will bring any unnecessary
burden on intermarket competition as it is consistent with FINRA Rule
2220 (Options Communications).
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change does not: (i) Significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate if consistent with the protection of investors
and the public interest, it has become effective pursuant to Section
19(b)(3)(A) of the Act\12\ and Rule 19b-4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6) also requires the
Exchange to give the Commission written notice of its intent to file
the proposed rule change, along with a brief description and text of
the proposed rule change, at least five business days prior to the
date of filing of the proposed rule change, or such shorter time as
designated by the Commission. The Exchange satisfied this
requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. Pursuant to
Rule 19b-4(f)(6)(iii), however, the Commission may designate a shorter
time if such action is consistent with the protection of investors and
the public interest.\14\ The Exchange has asked the Commission to waive
the 30-day operative delay so that the proposal may become operative
immediately upon filing.
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\14\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because it will allow the Exchange to immediately conform its rules to
corresponding FINRA rules. This will help ensure that such ISE rules
will continue to be covered by the existing 17d-2 Agreement between the
Exchange and FINRA and reduce duplicative regulation of Common
Members.\15\
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\15\ For purposes of waiving the 30-day operative delay, the
Commission has considered the proposed rule's impact on efficiency,
competition and capital formation. See 15 U.S.C. 78c(f).
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At any time within sixty (60) days of the filing the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
[[Page 18947]]
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 No. SR-ISE-2014-18 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2014-18. 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 Web site (https://www.sec.gov/rules/sro.shtml). Copies
of the submission, all subsequent amendments, all written statements
with respect to the proposed rule change that are filed with the
Commission, and all written communications relating to the proposed
rule change 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 such filing also will be available for inspection
and copying at the principal office of ISE. All comments received will
be posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-ISE-2014-18 and should be submitted on
or before April 25, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-07511 Filed 4-3-14; 8:45 am]
BILLING CODE 8011-01-P
