Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing of Proposed Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and Miami International Securities Exchange, LLC, 63448-63453 [2014-25203]

Download as PDF 63448 Federal Register / Vol. 79, No. 205 / Thursday, October 23, 2014 / Notices Executive Order. The meetings are open to the public. Please contact the Office of Personnel Management at the address shown below if you wish to present material to the Council at the meeting. The manner and time prescribed for presentations may be limited, depending upon the number of parties that express interest in presenting information. FOR FURTHER INFORMATION CONTACT: Tim Curry, Deputy Associate Director for Partnership and Labor Relations, Office of Personnel Management, 1900 E Street NW., Room 7H28, Washington, DC 20415. Phone (202) 606–2930 or email at PLR@opm.gov. For the National Council. Katherine Archuleta, Director. [FR Doc. 2014–25291 Filed 10–22–14; 8:45 am] BILLING CODE 6325–39–P OFFICE OF SCIENCE AND TECHNOLOGY POLICY Achieving Interoperability for Latent Fingerprint Identification: A Report ACTION: Request for public comment. The National Science and Technology Council’s Committee on Science requests public comment on the draft report Achieving Interoperability for Latent Fingerprint Identification in the United States. The draft report will be posted at www.whitehouse.gov/ administration/eop/ostp/library/ shareyourinput. Comments of approximately three pages or fewer in length (12,000 characters) are requested and must be received by November 26, 2014 to be considered. DATES: Responses must be received by November 26, 2014 to be considered. ADDRESSES: You may submit comments by any of the following methods: • Email: NSTC_latent@ostp.gov. Include [AFIS Interoperability] in the subject line of the message. • Fax: (202) 456–6040, Attn: Tania Simoncelli. • Mail: Attn: Tania Simoncelli, Office of Science and Technology Policy, Eisenhower Executive Office Building, 1650 Pennsylvania Ave. NW., Washington, DC 20504. Instructions: Respondents may submit their comments (3 pages or fewer) through one of the above methods. Submission via email is preferred. Responses to this request for public comment may be posted without change online. OSTP therefore requests that no business proprietary information, copyrighted information, or sensitive mstockstill on DSK4VPTVN1PROD with NOTICES SUMMARY: VerDate Sep<11>2014 16:52 Oct 22, 2014 Jkt 235001 personally identifiable information be submitted in response to this request. Please note that the U.S. Government will not pay for response preparation, or for the use of any information contained in the response. FOR FURTHER INFORMATION CONTACT: Tania Simoncelli, (202) 456–4444, NSTC_latent@ostp.eop.gov, OSTP. This request for public comment offers the opportunity for interested individuals and organizations to comment on the National Science and Technology Council’s Committee on Science draft report entitled Achieving Interoperability for Latent Fingerprint Identification in the United States. The report is available at www.whitehouse.gov/administration/ eop/ostp/library/shareyourinput. In 2010, the NSTC created a Subcommittee on Forensic Science (SoFS) to assess the challenges of and opportunities for implementing recommendations made by the National Research Council (NRC) in its 2009 report, Strengthening Forensic Science in the United States: A Path Forward www.ncjrs.gov/pdffiles1/nij/grants/ 228091.pdf. Among its recommendations, the NRC called on the Federal Government to launch a ‘‘broad-based effort to achieve nationwide fingerprint data interoperability.’’ In response to this recommendation, the SoFS chartered the AFIS Interoperability Task Force with the goal of coordinating the development of a strategic plan for achieving this goal. This report, Achieving Interoperability for Latent Fingerprint Identification in the United States, evolved out of the work of the Task Force. The report describes the current state of latent interoperability among Automated Fingerprint Identification Systems (AFIS) and identifies a series of actions that can be taken by Federal agencies to implement the standards needed to achieve interoperability, develop an overarching national connectivity strategy and infrastructure, and support State and local agencies in building connections across jurisdictions. SUPPLEMENTARY INFORMATION: Ted Wackler, Deputy Chief of Staff and Assistant Director. [FR Doc. 2014–25298 Filed 10–22–14; 8:45 am] BILLING CODE 3270–F5–P PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73383; File No. 4–678] Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d– 2; Notice of Filing of Proposed Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and Miami International Securities Exchange, LLC October 17, 2014. Pursuant to Section 17(d) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 17d–2 thereunder,2 notice is hereby given that on October 14, 2014, Miami International Securities Exchange, LLC (‘‘MIAX’’) and the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) (together with MIAX, the ‘‘Parties’’) filed with the Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’) a plan for the allocation of regulatory responsibilities, dated October 13, 2014 (‘‘17d–2 Plan’’ or the ‘‘Plan’’). The Commission is publishing this notice to solicit comments on the 17d–2 Plan from interested persons. 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 thereunder, and the SRO’s own rules, unless the SRO is relieved of this responsibility pursuant to Section 17(d) or Section 19(g)(2) of the Act.4 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 5 was intended, in part, to eliminate unnecessary multiple examinations and regulatory duplication.6 With respect to 1 15 U.S.C. 78q(d). CFR 240.17d–2. 3 15 U.S.C. 78s(g)(1). 4 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively. 5 15 U.S.C. 78q(d)(1). 6 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). 2 17 E:\FR\FM\23OCN1.SGM 23OCN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 79, No. 205 / Thursday, October 23, 2014 / Notices 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.7 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.8 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.9 Rule 17d–2 permits SROs to propose joint plans for the allocation of regulatory responsibilities with respect to their common members. Under paragraph (c) of Rule 17d–2, the Commission may declare such a plan effective if, after providing for appropriate notice and 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. 7 17 CFR 240.17d–1 and 17 CFR 240.17d–2, respectively. 8 See Securities Exchange Act Release No. 12352 (April 20, 1976), 41 FR 18808 (May 7, 1976). 9 See Securities Exchange Act Release No. 12935 (October 28, 1976), 41 FR 49091 (November 8, 1976). VerDate Sep<11>2014 16:52 Oct 22, 2014 Jkt 235001 II. Proposed Plan The proposed 17d–2 Plan is intended to reduce regulatory duplication for firms that are common members of both MIAX and FINRA.10 Pursuant to the proposed 17d–2 Plan, FINRA would assume certain examination and enforcement responsibilities for common members with respect to certain applicable laws, rules, and regulations. The text of the Plan delineates the proposed regulatory responsibilities with respect to the Parties. Included in the proposed Plan is an exhibit (Miami International Securities Exchange, LLC Rules Certification for 17d–2 Agreement with FINRA, referred to herein as the ‘‘Certification’’) that lists every MIAX rule for which FINRA would bear responsibility under the Plan for overseeing and enforcing with respect to MIAX members that are also members of FINRA and the associated persons therewith (‘‘Dual Members’’). Specifically, under the 17d–2 Plan, FINRA would assume examination and enforcement responsibility relating to compliance by Dual Members with the rules of MIAX that are substantially similar to the applicable rules of FINRA,11 as well as any provisions of the federal securities laws and the rules and regulations thereunder delineated in the Certification (‘‘Common Rules’’). In the event that a Dual Member is the subject of an investigation relating to a transaction on MIAX, the plan acknowledges that MIAX may, in its discretion, exercise concurrent jurisdiction and responsibility for such matter.12 Under the Plan, MIAX would retain full responsibility for surveillance, examination and enforcement with respect to trading activities or practices involving MIAX’s own marketplace, including, without limitation, registration pursuant to its applicable rules of associated persons (i.e., registration rules that are not Common Rules); its duties and obligations as a DEA pursuant to Rule 17d–1 under the 10 The proposed 17d–2 Plan refers to these common members as ‘‘Dual Members.’’ See Paragraph 1(c) of the proposed 17d–2 Plan. 11 See paragraph 1(b) of the proposed 17d–2 Plan (defining Common Rules). See also paragraph 1(f) of the proposed 17d–2 Plan (defining Regulatory Responsibilities). Paragraph 2 of the Plan provides that annually, or more frequently as required by changes in either MIAX rules or FINRA rules, the parties shall review and update, if necessary, the list of Common Rules. Further, paragraph 3 of the Plan provides that MIAX shall furnish FINRA with a list of Dual Members, and shall update the list no less frequently than once each calendar quarter. 12 See paragraph 6 of the proposed 17d–2 Plan. PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 63449 Act; and any MIAX rules that are not Common Rules.13 The text of the proposed 17d–2 Plan is as follows: AGREEMENT BETWEEN FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. AND MIAMI INTERNATIONAL SECURITIES EXCHANGE, LLC PURSUANT TO RULE 17d–2 UNDER THE SECURITIES EXCHANGE ACT OF 1934 This Agreement, by and between the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) and Miami International Securities Exchange, LLC (‘‘MIAX’’), is made this 13th day of October, 2014 (the ‘‘Agreement’’), pursuant to Section 17(d) of the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’) and Rule 17d–2 thereunder, which permits agreements between self-regulatory organizations to allocate regulatory responsibility to eliminate regulatory duplication. FINRA and MIAX may be referred to individually as a ‘‘party’’ and together as the ‘‘parties.’’ WHEREAS, FINRA and MIAX desire to reduce duplication in the examination of their Dual Members (as defined herein) and in the filing and processing of certain registration and membership records; and WHEREAS, FINRA and MIAX desire to execute an agreement covering such subjects pursuant to the provisions of Rule 17d–2 under the Exchange Act and to file such agreement with the Securities and Exchange Commission (the ‘‘SEC’’ or ‘‘Commission’’) for its approval. NOW, THEREFORE, in consideration of the mutual covenants contained hereinafter, FINRA and MIAX hereby agree as follows: 1. Definitions. Unless otherwise defined in this Agreement or the context otherwise requires, the terms used in this Agreement shall have the same meaning as they have under the Exchange Act and the rules and regulations thereunder. As used in this Agreement, the following terms shall have the following meanings: (a) ‘‘MIAX Rules’’ or ‘‘FINRA Rules’’ shall mean: (i) the rules of MIAX, or (ii) the rules of FINRA, respectively, as the rules of an exchange or association are defined in Exchange Act Section 3(a)(27). (b) ‘‘Common Rules’’ shall mean MIAX Rules that are substantially similar to the applicable FINRA Rules and certain provisions of the Exchange Act and SEC rules set forth on Exhibit 1 in that examination for compliance 13 See E:\FR\FM\23OCN1.SGM paragraph 2 of the proposed 17d–2 Plan. 23OCN1 mstockstill on DSK4VPTVN1PROD with NOTICES 63450 Federal Register / Vol. 79, No. 205 / Thursday, October 23, 2014 / Notices with such provisions and rules would not require FINRA to develop one or more new examination standards, modules, procedures, or criteria in order to analyze the application of the provision or rule, or a Dual Member’s activity, conduct, or output in relation to such provision or rule. (c) ‘‘Dual Members’’ shall mean those MIAX members that are also members of FINRA and the associated persons therewith. (d) ‘‘Effective Date’’ shall be the date this Agreement is approved by the Commission. (e) ‘‘Enforcement Responsibilities’’ shall mean the conduct of appropriate proceedings, in accordance with FINRA’s Code of Procedure (the Rule 9000 Series) and other applicable FINRA procedural rules, to determine whether violations of Common Rules have occurred, and if such violations are deemed to have occurred, the imposition of appropriate sanctions as specified under FINRA’s Code of Procedure and sanctions guidelines. (f) ‘‘Regulatory Responsibilities’’ shall mean the examination responsibilities and Enforcement Responsibilities relating to compliance by the Dual Members with the Common Rules and the provisions of the Exchange Act and the rules and regulations thereunder, and other applicable laws, rules and regulations, each as set forth on Exhibit 1 attached hereto. 2. Regulatory and Enforcement Responsibilities. FINRA shall assume Regulatory Responsibilities and Enforcement Responsibilities for Dual Members. Attached as Exhibit 1 to this Agreement and made part hereof, MIAX furnished FINRA with a current list of Common Rules and certified to FINRA that such rules that are MIAX Rules are substantially similar to the corresponding FINRA Rules (the ‘‘Certification’’). FINRA hereby agrees that the rules listed in the Certification are Common Rules as defined in this Agreement. Each year following the Effective Date of this Agreement, or more frequently if required by changes in either the rules of MIAX or FINRA, MIAX shall submit an updated list of Common Rules to FINRA for review which shall add MIAX Rules not included in the current list of Common Rules that qualify as Common Rules as defined in this Agreement; delete MIAX Rules included in the current list of Common Rules that no longer qualify as Common Rules as defined in this Agreement; and confirm that the remaining rules on the current list of Common Rules continue to be MIAX Rules that qualify as Common Rules as defined in this Agreement. Within 30 VerDate Sep<11>2014 16:52 Oct 22, 2014 Jkt 235001 days of receipt of such updated list, FINRA shall confirm in writing whether the rules listed in any updated list are Common Rules as defined in this Agreement. Notwithstanding anything herein to the contrary, it is explicitly understood that the term ‘‘Regulatory Responsibilities’’ does not include, and MIAX shall retain full responsibility for (unless otherwise addressed by separate agreement or rule) (collectively, the ‘‘Retained Responsibilities’’) the following: (a) surveillance, examination, investigation and enforcement with respect to trading activities or practices involving MIAX’s own marketplace; (b) registration pursuant to its applicable rules of associated persons (i.e., registration rules that are not Common Rules); (c) discharge of its duties and obligations as a Designated Examining Authority pursuant to Rule 17d-1 under the Exchange Act; and (d) any MIAX Rules that are not Common Rules as provided in paragraph 6. 3. Dual Members. Prior to the Effective Date, MIAX shall furnish FINRA with a current list of Dual Members, which shall be updated no less frequently than once each quarter. 4. No Charge. There shall be no charge to MIAX by FINRA for performing the Regulatory Responsibilities and Enforcement Responsibilities under this Agreement except as hereinafter provided. FINRA shall provide MIAX with ninety (90) days advance written notice in the event FINRA decides to impose any charges to MIAX for performing the Regulatory Responsibilities under this Agreement. If FINRA determines to impose a charge, MIAX shall have the right at the time of the imposition of such charge to terminate this Agreement; provided, however, that FINRA’s Regulatory Responsibilities under this Agreement shall continue until the Commission approves the termination of this Agreement. 5. Applicability of Certain Laws, Rules, Regulations or Orders. Notwithstanding any provision hereof, this Agreement shall be subject to any statute, or any rule or order of the SEC. To the extent such statute, rule or order is inconsistent with one or more provisions of this Agreement, the statute, rule or order shall supersede the provision(s) hereof to the extent necessary to be properly effectuated and the provision(s) hereof in that respect shall be null and void. 6. Notification of Violations. In the event that FINRA becomes aware of apparent violations of any MIAX Rules, PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 which are not listed as Common Rules, discovered pursuant to the performance of the Regulatory Responsibilities assumed hereunder, FINRA shall notify MIAX of those apparent violations for such response as MIAX deems appropriate. In the event that MIAX becomes aware of apparent violations of any Common Rules, discovered pursuant to the performance of the Retained Responsibilities, MIAX shall notify FINRA of those apparent violations and such matters shall be handled by FINRA as provided in this Agreement. Apparent violations of Common Rules shall be processed by, and enforcement proceedings in respect thereto shall be conducted by FINRA as provided hereinbefore; provided, however, that in the event a Dual Member is the subject of an investigation relating to a transaction on MIAX, MIAX may in its discretion assume concurrent jurisdiction and responsibility. Each party agrees to make available promptly all files, records and witnesses necessary to assist the other in its investigation or proceedings. 7. Continued Assistance. (a) FINRA shall make available to MIAX all information obtained by FINRA in the performance by it of the Regulatory Responsibilities hereunder with respect to the Dual Members subject to this Agreement. In particular, and not in limitation of the foregoing, FINRA shall furnish MIAX any information it obtains about Dual Members which reflects adversely on their financial condition. MIAX shall make available to FINRA any information coming to its attention that reflects adversely on the financial condition of Dual Members or indicates possible violations of applicable laws, rules or regulations by such firms. (b) The parties agree that documents or information shared shall be held in confidence, and used only for the purposes of carrying out their respective regulatory obligations. Neither party shall assert regulatory or other privileges as against the other with respect to documents or information that is required to be shared pursuant to this Agreement. (c) The sharing of documents or information between the parties pursuant to this Agreement shall not be deemed a waiver as against third parties of regulatory or other privileges relating to the discovery of documents or information. 8. Statutory Disqualifications. When FINRA becomes aware of a statutory disqualification as defined in the Exchange Act with respect to a Dual Member, FINRA shall determine E:\FR\FM\23OCN1.SGM 23OCN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 79, No. 205 / Thursday, October 23, 2014 / Notices pursuant to Sections 15A(g) and/or Section 6(c) of the Exchange Act the acceptability or continued applicability of the person to whom such disqualification applies and keep MIAX advised of its actions in this regard for such subsequent proceedings as MIAX may initiate. 9. Customer Complaints. MIAX shall forward to FINRA copies of all customer complaints involving Dual Members received by MIAX relating to FINRA’s Regulatory Responsibilities under this Agreement. It shall be FINRA’s responsibility to review and take appropriate action in respect to such complaints. 10. Advertising. FINRA shall assume responsibility to review the advertising of Dual Members subject to the Agreement, provided that such material is filed with FINRA in accordance with FINRA’s filing procedures and is accompanied with any applicable filing fees set forth in FINRA Rules. 11. No Restrictions on Regulatory Action. Nothing contained in this Agreement shall restrict or in any way encumber the right of either party to conduct its own independent or concurrent investigation, examination or enforcement proceeding of or against Dual Members, as either party, in its sole discretion, shall deem appropriate or necessary. 12. Termination. This Agreement may be terminated by MIAX or FINRA at any time upon the approval of the Commission after one (1) year’s written notice to the other party (or such shorter time as agreed by the parties), except as provided in paragraph 4. 13. Arbitration. In the event of a dispute between the parties as to the operation of this Agreement, MIAX and FINRA hereby agree that any such dispute shall be settled by arbitration in Washington, DC in accordance with the rules of the American Arbitration Association then in effect, or such other procedures as the parties may mutually agree upon. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction. Each party acknowledges that the timely and complete performance of its obligations pursuant to this Agreement is critical to the business and operations of the other party. In the event of a dispute between the parties, the parties shall continue to perform their respective obligations under this Agreement in good faith during the resolution of such dispute unless and until this Agreement is terminated in accordance with its provisions. Nothing in this Section 13 shall interfere with a VerDate Sep<11>2014 16:52 Oct 22, 2014 Jkt 235001 party’s right to terminate this Agreement as set forth herein. 14. Separate Agreement. This Agreement is wholly separate from the following agreement: (1) the multiparty Agreement made pursuant to Rule 17d– 2 of the Exchange Act among BATS Exchange, Inc., BOX Options Exchange, LLC, Chicago Board Options Exchange, Incorporated, C2 Options Exchange, Incorporated, the International Securities Exchange, LLC, FINRA, MIAX, the New York Stock Exchange LLC, NYSE MKT LLC, the NYSE Arca, Inc., The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, and MIAX 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 as approved by the SEC on July 26, 2013, and as may be amended from time to time; and (2) the multiparty Agreement made pursuant to Rule 17d– 2 of the Exchange Act among NYSE MKT LLC, BATS Exchange, Inc., BOX Options Exchange LLC, NASDAQ OMX BX, Inc., C2 Options Exchange, Incorporated, Chicago Board Options Exchange, Incorporated, International Securities Exchange LLC, FINRA, NYSE Arca, Inc., The NASDAQ Stock Market LLC, NASDAQ OMX PHLX, Inc., MIAX, and MIAX Exchange, LLC involving the allocation of regulatory responsibilities with respect to SRO market surveillance of common members activities with regard to certain common rules relating to listed options approved by the SEC on July 26, 2013, and as may be amended from time to time. 15. Notification of Members. MIAX and FINRA shall notify Dual Members of this Agreement after the Effective Date by means of a uniform joint notice. 16. Amendment. This Agreement may be amended in writing provided that the changes are approved by both parties. All such amendments must be filed with and approved by the Commission before they become effective. 17. Limitation of Liability. Neither FINRA nor MIAX nor any of their respective directors, governors, officers or employees shall be liable to the other party to this Agreement for any liability, loss or damage resulting from or claimed to have resulted from any delays, inaccuracies, errors or omissions with respect to the provision of Regulatory Responsibilities as provided hereby or for the failure to provide any such responsibility, except with respect to such liability, loss or damages as shall have been suffered by one or the PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 63451 other of FINRA or MIAX and caused by the willful misconduct of the other party or their respective directors, governors, officers or employees. No warranties, express or implied, are made by FINRA or MIAX with respect to any of the responsibilities to be performed by each of them hereunder. 18. Relief from Responsibility. Pursuant to Sections 17(d)(1)(A) and 19(g) of the Exchange Act and Rule 17d– 2 thereunder, FINRA and MIAX join in requesting the Commission, upon its approval of this Agreement or any part thereof, to relieve MIAX of any and all responsibilities with respect to matters allocated to FINRA pursuant to this Agreement; provided, however, that this Agreement shall not be effective until the Effective Date. 19. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. 20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and such counterparts together shall constitute one and the same instrument. IN WITNESS WHEREOF, each party has executed or caused this Agreement to be executed on its behalf by a duly authorized officer as of the date first written above. MIAMI INTERNATIONAL SECURITIES EXCHANGE, LLC. By: llllllllllllllll Name: Title: FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. By: llllllllllllllll Name: Title: EXHIBIT 1 Miami International Securities Exchange, LLC Rules Certification for 17d–2 Agreement with FINRA Miami International Securities Exchange, LLC (‘‘MIAX’’) hereby certifies that the requirements contained in the rules listed below are identical to, or substantially similar to, the comparable FINRA (NASD) Rule, Exchange Act provision or SEC rule identified (‘‘Common Rules’’). E:\FR\FM\23OCN1.SGM 23OCN1 63452 Federal Register / Vol. 79, No. 205 / Thursday, October 23, 2014 / Notices MIAX rules FINRA (NASD) rules, exchange act provision or SEC rule Rule 301 Just and Equitable Principles of Trade 14. Rule 303 Prevention of the Misuse of Material Nonpublic Information 1 15. Rule 315 Anti-Money Laundering Compliance Program 2. Rule 318(a) Manipulation ............. Rule 318(b) Manipulation ............. Rule 319 Forwarding of Proxy and Other Issuer-Related Materials 16. Rule 320 Trading Ahead of Research Reports. Rule 800(a), (b) and (d) Maintenance, Retention and Furnishing of Books, Records and Other Information 1 17. Rule 1304 Continuing Education for Registered Persons 18. Rule 1321 Transfer of Accounts .. Rule 1325 Telemarketing ............. FINRA Rule 2010 Standards of Commercial Honor and Principles of Trade.* Section 15(g) of the Exchange Act. FINRA Rule 3310 Anti-Money Laundering Compliance Program. FINRA Rule 2020 Use of Manipulative, Deceptive or other Fraudulent Devices.* FINRA Rule 6140 Other Trading Practices. FINRA Rule 2251 Processing and Forwarding of Proxy and Other Issuer-Related Materials. FINRA Rule 5280 Trading Ahead of Research Reports. FINRA Rule 4511 General Requirements* and Section 17 of the Exchange Act and the rules thereunder. FINRA Rule 1250(a)(1)–(4) and (b) Continuing Education Requirements. FINRA Rule 11870 Customer Account Transfer Contracts. FINRA Rule 3230 Telemarketing. 14 FINRA shall only have Regulatory Responsibilities regarding the rule and not the interpretations and policies. shall not have Regulatory Responsibilities regarding the rule to the extent it requires notification to MIAX. shall not have Regulatory Responsibilities regarding subsection (c) of Rule 319. 17 FINRA shall not have Regulatory Responsibilities regarding maintaining books and records as may be prescribed by MIAX to the extent it makes the rule inconsistent with the FINRA or SEC rule. 18 FINRA shall not have Regulatory Responsibilities for exercise of exemptive or other discretionary authority by MIAX to the extent it makes the rule inconsistent with the FINRA rule. In addition, FINRA shall only have Regulatory Responsibilities to the extent the category of persons subject to MIAX registration is the same as FINRA. 15 FINRA 16 FINRA mstockstill on DSK4VPTVN1PROD with NOTICES In addition, the following provisions shall be part of this 17d–2 Agreement: SEA Rule 200 of Regulation SHO— Definition of ‘‘Short Sale’’ and Marking Requirements and SEA Rule 203 of Regulation SHO— Borrowing and Delivery Requirements * FINRA shall not have Regulatory Responsibilities for these rules as they pertain to violations of insider trading activities, which is covered by a separate 17d–2 Agreement by and among BATS Exchange, Inc., BATS YExchange, Inc., Chicago Board Options Exchange, Inc., Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, the NASDAQ Stock Market LLC, National Stock Exchange, Inc., New York Stock Exchange LLC, NYSE Amex LLC, and NYSE Arca Inc., effective December 16, 2011, as may be amended from time to time. III. Date of Effectiveness of the Proposed Plan and Timing for Commission Action Pursuant to Section 17(d)(1) of the Act 194 and Rule 17d–2 thereunder,15 after November 13, 2014, the Commission may, by written notice, declare the plan submitted by MIAX and FINRA, File No. 4–678, to be effective if the Commission finds that 194 15 15 17 U.S.C. 78q(d)(1). CFR 240.17d–2. VerDate Sep<11>2014 16:52 Oct 22, 2014 Jkt 235001 the plan is necessary or appropriate in the public interest and for the protection of investors, to foster cooperation and coordination among self-regulatory organizations, or to remove impediments to and foster the development of the national market system and a national system for the clearance and settlement of securities transactions and in conformity with the factors set forth in Section 17(d) of the Act. IV. Solicitation of Comments In order to assist the Commission in determining whether to approve the proposed 17d–2 Plan and to relieve MIAX of the responsibilities which would be assigned to FINRA, 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/other.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number 4–678 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, Station Place, 100 F Street NE., Washington, DC 20549–1090. PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 All submissions should refer to File Number 4–678. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/rules/ other.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, 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 MIAX and FINRA. 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 4–678 and should be submitted on or before November 7, 2014. E:\FR\FM\23OCN1.SGM 23OCN1 Federal Register / Vol. 79, No. 205 / Thursday, October 23, 2014 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–25203 Filed 10–22–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73384; File No. SR–ICC– 2014–14] Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Designation of Longer Period for Commission Action on Proposed Rule Change To Add Rules Related to the Clearing of Standard Western European Sovereign CDS Contracts mstockstill on DSK4VPTVN1PROD with NOTICES October 17, 2014. On August 25, 2014, ICE Clear Credit LLC (‘‘ICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change SR–ICC–2014–14 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 The proposed rule change was published for comment in the Federal Register on September 4, 2014.3 The Commission has not received comments on the proposed rule change. The Commission is publishing this notice to designate a longer period for Commission action on the proposed rule change. Section 19(b)(2) of the Act 4 provides that within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The 45th day from the publication of notice of filing of this proposed rule change is October 19, 2014. The Commission is extending this 45-day time period. ICC proposes to adopt new clearing rules and amend the ICC Risk Management Framework to provide for the clearance of Standard Western 16 17 CFR 200.30–3(a)(34). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Securities Exchange Act Release No. 34–72941 (Aug. 28, 2014), 79 FR 52794 (Sep. 4, 2014) (SR– ICC–2014–14). 4 15 U.S.C. 78s(b)(2). 1 15 VerDate Sep<11>2014 16:52 Oct 22, 2014 Jkt 235001 European Sovereign credit default swap (‘‘CDS’’) contracts, specifically the Republic of Ireland, the Italian Republic, the Portuguese Republic, and the Kingdom of Spain. Given that ICC does not currently provide clearing services for Western European Sovereign CDS, and it is proposing a new General Wrong Way Risk methodology to address the potential wrong way risk associated with the clearing of sovereign contracts, the Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the complex issues under the proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,5 designates December 3, 2014, as the date by which the Commission should either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR–ICC–2014–14). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–25204 Filed 10–22–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73385; File No. SR–CFE– 2014–003] Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Regarding Exchange of Contract for Related Position Transactions and Minor Rule Violations October 17, 2014. Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on October 1, 2014 CBOE Futures Exchange, LLC (‘‘CFE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change described in Items I, II, and III below, which Items have been prepared by CFE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. CFE also has filed this proposed rule change with the Commodity Futures Trading Commission (‘‘CFTC’’). CFE filed a 5 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(31). 1 15 U.S.C. 78s(b)(7). written certification with the CFTC under Section 5c(c) of the Commodity Exchange Act (‘‘CEA’’) 2 on October 1, 2014. I. Self-Regulatory Organization’s Description of the Proposed Rule Change The Exchange proposes to amend two rules related to Exchange of Contract for Related Position (‘‘ECRP’’) transactions and minor rule violations, respectively. The only security futures currently traded on CFE are traded under Chapter 16 of CFE’s Rulebook which is applicable to Individual Stock Based and Exchange-Traded Fund Based Volatility Index security futures. The text of the proposed rule change is attached as Exhibit 4 to the filing but is not attached to the publication of this notice. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CFE 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. CFE 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 The purpose of the proposed CFE rule amendments included as part of this rule change is to amend: (i) CFE Rule 414 (Exchange of Contract for Related Position) to clarify that any parties to or Authorized Reporters for an ECRP transaction are obligated to comply with the requirements set forth in Rule 414; and (ii) CFE Rule 714 (Imposition of Fines for Minor Rule Violations), referred to herein sometimes as ‘‘Minor Rule Violation Rule,’’ to add new categories of rules for which the Exchange may impose summary fines for violations of the applicable rule(s) as well as to clarify the application of minor rule violation categories that contain more than one CFE Rule subsection. The rule amendments included as part of this rule change are to apply to all products traded on CFE, including both non-security futures and security futures. CFE is making these 6 17 PO 00000 Frm 00077 Fmt 4703 27 Sfmt 4703 63453 U.S.C. 7a–2(c). E:\FR\FM\23OCN1.SGM 23OCN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 79, Number 205 (Thursday, October 23, 2014)]
[Notices]
[Pages 63448-63453]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-25203]

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

[Release No. 34-73383; File No. 4-678]

Program for Allocation of Regulatory Responsibilities Pursuant to
Rule 17d-2; Notice of Filing of Proposed Plan for the Allocation of
Regulatory Responsibilities Between the Financial Industry Regulatory
Authority, Inc. and Miami International Securities Exchange, LLC

October 17, 2014.
Pursuant to Section 17(d) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 17d-2 thereunder,\2\ notice is hereby given that
on October 14, 2014, Miami International Securities Exchange, LLC
(``MIAX'') and the Financial Industry Regulatory Authority, Inc.
(``FINRA'') (together with MIAX, the ``Parties'') filed with the
Securities and Exchange Commission (``Commission'' or ``SEC'') a plan
for the allocation of regulatory responsibilities, dated October 13,
2014 (``17d-2 Plan'' or the ``Plan''). The Commission is publishing
this notice to solicit comments on the 17d-2 Plan from interested
persons.
---------------------------------------------------------------------------

\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) or Section 19(g)(2) of the Act.\4\ 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) and 15 U.S.C. 78s(g)(2), respectively.
---------------------------------------------------------------------------

Section 17(d)(1) of the Act \5\ was intended, in part, to eliminate
unnecessary multiple examinations and regulatory duplication.\6\ With
respect to

[[Page 63449]]

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

\5\ 15 U.S.C. 78q(d)(1).
\6\ 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.\7\ 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.\8\ 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.
---------------------------------------------------------------------------

\7\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
\8\ 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.\9\ Rule 17d-2 permits SROs
to propose joint plans for the allocation of regulatory
responsibilities with respect to their common members. Under paragraph
(c) of Rule 17d-2, the Commission may declare such a plan effective if,
after providing for appropriate notice and 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.
---------------------------------------------------------------------------

\9\ See Securities Exchange Act Release No. 12935 (October 28,
1976), 41 FR 49091 (November 8, 1976).
---------------------------------------------------------------------------

II. Proposed Plan

The proposed 17d-2 Plan is intended to reduce regulatory
duplication for firms that are common members of both MIAX and
FINRA.\10\ Pursuant to the proposed 17d-2 Plan, FINRA would assume
certain examination and enforcement responsibilities for common members
with respect to certain applicable laws, rules, and regulations. The
text of the Plan delineates the proposed regulatory responsibilities
with respect to the Parties. Included in the proposed Plan is an
exhibit (Miami International Securities Exchange, LLC Rules
Certification for 17d-2 Agreement with FINRA, referred to herein as the
``Certification'') that lists every MIAX rule for which FINRA would
bear responsibility under the Plan for overseeing and enforcing with
respect to MIAX members that are also members of FINRA and the
associated persons therewith (``Dual Members'').
---------------------------------------------------------------------------

\10\ The proposed 17d-2 Plan refers to these common members as
``Dual Members.'' See Paragraph 1(c) of the proposed 17d-2 Plan.
---------------------------------------------------------------------------

Specifically, under the 17d-2 Plan, FINRA would assume examination
and enforcement responsibility relating to compliance by Dual Members
with the rules of MIAX that are substantially similar to the applicable
rules of FINRA,\11\ as well as any provisions of the federal securities
laws and the rules and regulations thereunder delineated in the
Certification (``Common Rules''). In the event that a Dual Member is
the subject of an investigation relating to a transaction on MIAX, the
plan acknowledges that MIAX may, in its discretion, exercise concurrent
jurisdiction and responsibility for such matter.\12\
---------------------------------------------------------------------------

\11\ See paragraph 1(b) of the proposed 17d-2 Plan (defining
Common Rules). See also paragraph 1(f) of the proposed 17d-2 Plan
(defining Regulatory Responsibilities). Paragraph 2 of the Plan
provides that annually, or more frequently as required by changes in
either MIAX rules or FINRA rules, the parties shall review and
update, if necessary, the list of Common Rules. Further, paragraph 3
of the Plan provides that MIAX shall furnish FINRA with a list of
Dual Members, and shall update the list no less frequently than once
each calendar quarter.
\12\ See paragraph 6 of the proposed 17d-2 Plan.
---------------------------------------------------------------------------

Under the Plan, MIAX would retain full responsibility for
surveillance, examination and enforcement with respect to trading
activities or practices involving MIAX's own marketplace, including,
without limitation, registration pursuant to its applicable rules of
associated persons (i.e., registration rules that are not Common
Rules); its duties and obligations as a DEA pursuant to Rule 17d-1
under the Act; and any MIAX rules that are not Common Rules.\13\
---------------------------------------------------------------------------

\13\ See paragraph 2 of the proposed 17d-2 Plan.
---------------------------------------------------------------------------

The text of the proposed 17d-2 Plan is as follows:

AGREEMENT BETWEEN FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. AND
MIAMI INTERNATIONAL SECURITIES EXCHANGE, LLC PURSUANT TO RULE 17d-2
UNDER THE SECURITIES EXCHANGE ACT OF 1934

This Agreement, by and between the Financial Industry Regulatory
Authority, Inc. (``FINRA'') and Miami International Securities
Exchange, LLC (``MIAX''), is made this 13th day of October, 2014 (the
``Agreement''), pursuant to Section 17(d) of the Securities Exchange
Act of 1934 (the ``Exchange Act'') and Rule 17d-2 thereunder, which
permits agreements between self-regulatory organizations to allocate
regulatory responsibility to eliminate regulatory duplication. FINRA
and MIAX may be referred to individually as a ``party'' and together as
the ``parties.''
WHEREAS, FINRA and MIAX desire to reduce duplication in the
examination of their Dual Members (as defined herein) and in the filing
and processing of certain registration and membership records; and
WHEREAS, FINRA and MIAX desire to execute an agreement covering
such subjects pursuant to the provisions of Rule 17d-2 under the
Exchange Act and to file such agreement with the Securities and
Exchange Commission (the ``SEC'' or ``Commission'') for its approval.
NOW, THEREFORE, in consideration of the mutual covenants contained
hereinafter, FINRA and MIAX hereby agree as follows:
1. Definitions. Unless otherwise defined in this Agreement or the
context otherwise requires, the terms used in this Agreement shall have
the same meaning as they have under the Exchange Act and the rules and
regulations thereunder. As used in this Agreement, the following terms
shall have the following meanings:
(a) ``MIAX Rules'' or ``FINRA Rules'' shall mean: (i) the rules of
MIAX, or (ii) the rules of FINRA, respectively, as the rules of an
exchange or association are defined in Exchange Act Section 3(a)(27).
(b) ``Common Rules'' shall mean MIAX Rules that are substantially
similar to the applicable FINRA Rules and certain provisions of the
Exchange Act and SEC rules set forth on Exhibit 1 in that examination
for compliance

[[Page 63450]]

with such provisions and rules would not require FINRA to develop one
or more new examination standards, modules, procedures, or criteria in
order to analyze the application of the provision or rule, or a Dual
Member's activity, conduct, or output in relation to such provision or
rule.
(c) ``Dual Members'' shall mean those MIAX members that are also
members of FINRA and the associated persons therewith.
(d) ``Effective Date'' shall be the date this Agreement is approved
by the Commission.
(e) ``Enforcement Responsibilities'' shall mean the conduct of
appropriate proceedings, in accordance with FINRA's Code of Procedure
(the Rule 9000 Series) and other applicable FINRA procedural rules, to
determine whether violations of Common Rules have occurred, and if such
violations are deemed to have occurred, the imposition of appropriate
sanctions as specified under FINRA's Code of Procedure and sanctions
guidelines.
(f) ``Regulatory Responsibilities'' shall mean the examination
responsibilities and Enforcement Responsibilities relating to
compliance by the Dual Members with the Common Rules and the provisions
of the Exchange Act and the rules and regulations thereunder, and other
applicable laws, rules and regulations, each as set forth on Exhibit 1
attached hereto.
2. Regulatory and Enforcement Responsibilities. FINRA shall assume
Regulatory Responsibilities and Enforcement Responsibilities for Dual
Members. Attached as Exhibit 1 to this Agreement and made part hereof,
MIAX furnished FINRA with a current list of Common Rules and certified
to FINRA that such rules that are MIAX Rules are substantially similar
to the corresponding FINRA Rules (the ``Certification''). FINRA hereby
agrees that the rules listed in the Certification are Common Rules as
defined in this Agreement. Each year following the Effective Date of
this Agreement, or more frequently if required by changes in either the
rules of MIAX or FINRA, MIAX shall submit an updated list of Common
Rules to FINRA for review which shall add MIAX Rules not included in
the current list of Common Rules that qualify as Common Rules as
defined in this Agreement; delete MIAX Rules included in the current
list of Common Rules that no longer qualify as Common Rules as defined
in this Agreement; and confirm that the remaining rules on the current
list of Common Rules continue to be MIAX Rules that qualify as Common
Rules as defined in this Agreement. Within 30 days of receipt of such
updated list, FINRA shall confirm in writing whether the rules listed
in any updated list are Common Rules as defined in this Agreement.
Notwithstanding anything herein to the contrary, it is explicitly
understood that the term ``Regulatory Responsibilities'' does not
include, and MIAX shall retain full responsibility for (unless
otherwise addressed by separate agreement or rule) (collectively, the
``Retained Responsibilities'') the following:
(a) surveillance, examination, investigation and enforcement with
respect to trading activities or practices involving MIAX's own
marketplace;
(b) registration pursuant to its applicable rules of associated
persons (i.e., registration rules that are not Common Rules);
(c) discharge of its duties and obligations as a Designated
Examining Authority pursuant to Rule 17d-1 under the Exchange Act; and
(d) any MIAX Rules that are not Common Rules as provided in
paragraph 6.
3. Dual Members. Prior to the Effective Date, MIAX shall furnish
FINRA with a current list of Dual Members, which shall be updated no
less frequently than once each quarter.
4. No Charge. There shall be no charge to MIAX by FINRA for
performing the Regulatory Responsibilities and Enforcement
Responsibilities under this Agreement except as hereinafter provided.
FINRA shall provide MIAX with ninety (90) days advance written notice
in the event FINRA decides to impose any charges to MIAX for performing
the Regulatory Responsibilities under this Agreement. If FINRA
determines to impose a charge, MIAX shall have the right at the time of
the imposition of such charge to terminate this Agreement; provided,
however, that FINRA's Regulatory Responsibilities under this Agreement
shall continue until the Commission approves the termination of this
Agreement.
5. Applicability of Certain Laws, Rules, Regulations or Orders.
Notwithstanding any provision hereof, this Agreement shall be subject
to any statute, or any rule or order of the SEC. To the extent such
statute, rule or order is inconsistent with one or more provisions of
this Agreement, the statute, rule or order shall supersede the
provision(s) hereof to the extent necessary to be properly effectuated
and the provision(s) hereof in that respect shall be null and void.
6. Notification of Violations. In the event that FINRA becomes
aware of apparent violations of any MIAX Rules, which are not listed as
Common Rules, discovered pursuant to the performance of the Regulatory
Responsibilities assumed hereunder, FINRA shall notify MIAX of those
apparent violations for such response as MIAX deems appropriate. In the
event that MIAX becomes aware of apparent violations of any Common
Rules, discovered pursuant to the performance of the Retained
Responsibilities, MIAX shall notify FINRA of those apparent violations
and such matters shall be handled by FINRA as provided in this
Agreement. Apparent violations of Common Rules shall be processed by,
and enforcement proceedings in respect thereto shall be conducted by
FINRA as provided hereinbefore; provided, however, that in the event a
Dual Member is the subject of an investigation relating to a
transaction on MIAX, MIAX may in its discretion assume concurrent
jurisdiction and responsibility. Each party agrees to make available
promptly all files, records and witnesses necessary to assist the other
in its investigation or proceedings.
7. Continued Assistance.
(a) FINRA shall make available to MIAX all information obtained by
FINRA in the performance by it of the Regulatory Responsibilities
hereunder with respect to the Dual Members subject to this Agreement.
In particular, and not in limitation of the foregoing, FINRA shall
furnish MIAX any information it obtains about Dual Members which
reflects adversely on their financial condition. MIAX shall make
available to FINRA any information coming to its attention that
reflects adversely on the financial condition of Dual Members or
indicates possible violations of applicable laws, rules or regulations
by such firms.
(b) The parties agree that documents or information shared shall be
held in confidence, and used only for the purposes of carrying out
their respective regulatory obligations. Neither party shall assert
regulatory or other privileges as against the other with respect to
documents or information that is required to be shared pursuant to this
Agreement.
(c) The sharing of documents or information between the parties
pursuant to this Agreement shall not be deemed a waiver as against
third parties of regulatory or other privileges relating to the
discovery of documents or information.
8. Statutory Disqualifications. When FINRA becomes aware of a
statutory disqualification as defined in the Exchange Act with respect
to a Dual Member, FINRA shall determine

[[Page 63451]]

pursuant to Sections 15A(g) and/or Section 6(c) of the Exchange Act the
acceptability or continued applicability of the person to whom such
disqualification applies and keep MIAX advised of its actions in this
regard for such subsequent proceedings as MIAX may initiate.
9. Customer Complaints. MIAX shall forward to FINRA copies of all
customer complaints involving Dual Members received by MIAX relating to
FINRA's Regulatory Responsibilities under this Agreement. It shall be
FINRA's responsibility to review and take appropriate action in respect
to such complaints.
10. Advertising. FINRA shall assume responsibility to review the
advertising of Dual Members subject to the Agreement, provided that
such material is filed with FINRA in accordance with FINRA's filing
procedures and is accompanied with any applicable filing fees set forth
in FINRA Rules.
11. No Restrictions on Regulatory Action. Nothing contained in this
Agreement shall restrict or in any way encumber the right of either
party to conduct its own independent or concurrent investigation,
examination or enforcement proceeding of or against Dual Members, as
either party, in its sole discretion, shall deem appropriate or
necessary.
12. Termination. This Agreement may be terminated by MIAX or FINRA
at any time upon the approval of the Commission after one (1) year's
written notice to the other party (or such shorter time as agreed by
the parties), except as provided in paragraph 4.
13. Arbitration. In the event of a dispute between the parties as
to the operation of this Agreement, MIAX and FINRA hereby agree that
any such dispute shall be settled by arbitration in Washington, DC in
accordance with the rules of the American Arbitration Association then
in effect, or such other procedures as the parties may mutually agree
upon. Judgment on the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction. Each party acknowledges that
the timely and complete performance of its obligations pursuant to this
Agreement is critical to the business and operations of the other
party. In the event of a dispute between the parties, the parties shall
continue to perform their respective obligations under this Agreement
in good faith during the resolution of such dispute unless and until
this Agreement is terminated in accordance with its provisions. Nothing
in this Section 13 shall interfere with a party's right to terminate
this Agreement as set forth herein.
14. Separate Agreement. This Agreement is wholly separate from the
following agreement: (1) the multiparty Agreement made pursuant to Rule
17d-2 of the Exchange Act among BATS Exchange, Inc., BOX Options
Exchange, LLC, Chicago Board Options Exchange, Incorporated, C2 Options
Exchange, Incorporated, the International Securities Exchange, LLC,
FINRA, MIAX, the New York Stock Exchange LLC, NYSE MKT LLC, the NYSE
Arca, Inc., The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., NASDAQ
OMX PHLX LLC, and MIAX 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 as approved by
the SEC on July 26, 2013, and as may be amended from time to time; and
(2) the multiparty Agreement made pursuant to Rule 17d-2 of the
Exchange Act among NYSE MKT LLC, BATS Exchange, Inc., BOX Options
Exchange LLC, NASDAQ OMX BX, Inc., C2 Options Exchange, Incorporated,
Chicago Board Options Exchange, Incorporated, International Securities
Exchange LLC, FINRA, NYSE Arca, Inc., The NASDAQ Stock Market LLC,
NASDAQ OMX PHLX, Inc., MIAX, and MIAX Exchange, LLC involving the
allocation of regulatory responsibilities with respect to SRO market
surveillance of common members activities with regard to certain common
rules relating to listed options approved by the SEC on July 26, 2013,
and as may be amended from time to time.
15. Notification of Members. MIAX and FINRA shall notify Dual
Members of this Agreement after the Effective Date by means of a
uniform joint notice.
16. Amendment. This Agreement may be amended in writing provided
that the changes are approved by both parties. All such amendments must
be filed with and approved by the Commission before they become
effective.
17. Limitation of Liability. Neither FINRA nor MIAX nor any of
their respective directors, governors, officers or employees shall be
liable to the other party to this Agreement for any liability, loss or
damage resulting from or claimed to have resulted from any delays,
inaccuracies, errors or omissions with respect to the provision of
Regulatory Responsibilities as provided hereby or for the failure to
provide any such responsibility, except with respect to such liability,
loss or damages as shall have been suffered by one or the other of
FINRA or MIAX and caused by the willful misconduct of the other party
or their respective directors, governors, officers or employees. No
warranties, express or implied, are made by FINRA or MIAX with respect
to any of the responsibilities to be performed by each of them
hereunder.
18. Relief from Responsibility. Pursuant to Sections 17(d)(1)(A)
and 19(g) of the Exchange Act and Rule 17d-2 thereunder, FINRA and MIAX
join in requesting the Commission, upon its approval of this Agreement
or any part thereof, to relieve MIAX of any and all responsibilities
with respect to matters allocated to FINRA pursuant to this Agreement;
provided, however, that this Agreement shall not be effective until the
Effective Date.
19. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and such
counterparts together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each party has executed or caused this
Agreement to be executed on its behalf by a duly authorized officer as
of the date first written above.

MIAMI INTERNATIONAL SECURITIES EXCHANGE, LLC.

By:--------------------------------------------------------------------

Name:
Title:

FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC.

By:--------------------------------------------------------------------

Name:
Title:

EXHIBIT 1
Miami International Securities Exchange, LLC Rules Certification for
17d-2 Agreement with FINRA
Miami International Securities Exchange, LLC (``MIAX'') hereby
certifies that the requirements contained in the rules listed below are
identical to, or substantially similar to, the comparable FINRA (NASD)
Rule, Exchange Act provision or SEC rule identified (``Common Rules'').

[[Page 63452]]

------------------------------------------------------------------------
FINRA (NASD) rules, exchange act
MIAX rules provision or SEC rule
------------------------------------------------------------------------
Rule 301 Just and Equitable FINRA Rule 2010 Standards of
Principles of Trade \14\. Commercial Honor and Principles of
Trade.*
Rule 303 Prevention of the Misuse Section 15(g) of the Exchange Act.
of Material Nonpublic Information
\1\ \15\.
Rule 315 Anti-Money Laundering FINRA Rule 3310 Anti-Money
Compliance Program \2\. Laundering Compliance Program.
Rule 318(a) Manipulation.......... FINRA Rule 2020 Use of Manipulative,
Deceptive or other Fraudulent
Devices.*
Rule 318(b) Manipulation.......... FINRA Rule 6140 Other Trading
Practices.
Rule 319 Forwarding of Proxy and FINRA Rule 2251 Processing and
Other Issuer-Related Materials Forwarding of Proxy and Other
\16\. Issuer-Related Materials.
Rule 320 Trading Ahead of Research FINRA Rule 5280 Trading Ahead of
Reports. Research Reports.
Rule 800(a), (b) and (d) FINRA Rule 4511 General
Maintenance, Retention and Requirements* and Section 17 of the
Furnishing of Books, Records and Exchange Act and the rules
Other Information \1\ \17\. thereunder.
Rule 1304 Continuing Education for FINRA Rule 1250(a)(1)-(4) and (b)
Registered Persons \18\. Continuing Education Requirements.
Rule 1321 Transfer of Accounts.... FINRA Rule 11870 Customer Account
Transfer Contracts.
Rule 1325 Telemarketing........... FINRA Rule 3230 Telemarketing.
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\14\ FINRA shall only have Regulatory Responsibilities regarding the
rule and not the interpretations and policies.
\15\ FINRA shall not have Regulatory Responsibilities regarding the rule
to the extent it requires notification to MIAX.
\16\ FINRA shall not have Regulatory Responsibilities regarding
subsection (c) of Rule 319.
\17\ FINRA shall not have Regulatory Responsibilities regarding
maintaining books and records as may be prescribed by MIAX to the
extent it makes the rule inconsistent with the FINRA or SEC rule.
\18\ FINRA shall not have Regulatory Responsibilities for exercise of
exemptive or other discretionary authority by MIAX to the extent it
makes the rule inconsistent with the FINRA rule. In addition, FINRA
shall only have Regulatory Responsibilities to the extent the category
of persons subject to MIAX registration is the same as FINRA.

In addition, the following provisions shall be part of this 17d-2
Agreement:

SEA Rule 200 of Regulation SHO--Definition of ``Short Sale'' and
Marking Requirements and
SEA Rule 203 of Regulation SHO--Borrowing and Delivery Requirements

* FINRA shall not have Regulatory Responsibilities for these rules
as they pertain to violations of insider trading activities, which is
covered by a separate 17d-2 Agreement by and among BATS Exchange, Inc.,
BATS Y-Exchange, Inc., Chicago Board Options Exchange, Inc., Chicago
Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc.,
Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX, Inc.,
NASDAQ OMX PHLX LLC, the NASDAQ Stock Market LLC, National Stock
Exchange, Inc., New York Stock Exchange LLC, NYSE Amex LLC, and NYSE
Arca Inc., effective December 16, 2011, as may be amended from time to
time.

III. Date of Effectiveness of the Proposed Plan and Timing for
Commission Action

Pursuant to Section 17(d)(1) of the Act \194\ and Rule 17d-2
thereunder,\15\ after November 13, 2014, the Commission may, by written
notice, declare the plan submitted by MIAX and FINRA, File No. 4-678,
to be effective if the Commission finds that the plan is necessary or
appropriate in the public interest and for the protection of investors,
to foster cooperation and coordination among self-regulatory
organizations, or to remove impediments to and foster the development
of the national market system and a national system for the clearance
and settlement of securities transactions and in conformity with the
factors set forth in Section 17(d) of the Act.
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\194\ 15 U.S.C. 78q(d)(1).
\15\ 17 CFR 240.17d-2.
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IV. Solicitation of Comments

In order to assist the Commission in determining whether to approve
the proposed 17d-2 Plan and to relieve MIAX of the responsibilities
which would be assigned to FINRA, 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/other.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number 4-678 on the subject line.

Paper Comments

Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number 4-678. This file number
should be included on the subject line if email is used. To help the
Commission process and review your comments more efficiently, please
use only one method. The Commission will post all comments on the
Commission's Internet Web site (https://www.sec.gov/rules/other.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, 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 MIAX
and FINRA. 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 4-678
and should be submitted on or before November 7, 2014.

[[Page 63453]]

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)(34).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-25203 Filed 10-22-14; 8:45 am]
BILLING CODE 8011-01-P

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