Automated Matching Systems Exchange, LLC; Order Instituting Proceedings To Determine Whether To Grant or Deny an Application for an Exemption From Registration as a National Securities Exchange Under Section 5 of the Securities Exchange Act of 1934, 64421-64423 [2014-25675]

Download as PDF Federal Register / Vol. 79, No. 209 / Wednesday, October 29, 2014 / Notices OFFICE OF PERSONNEL MANAGEMENT Submission for Review: OPM 1655, Application for Senior Administrative Law Judge, and OPM 1655–A, Geographic Preference Statement for Senior Administrative Law Judge Applicant Office of Personnel Management. ACTION: 30-day notice and request for comments. AGENCY: The Administrative Law Judge Program Office, Office of Personnel Management (OPM) offers the general public and other federal agencies the opportunity to comment on an information collection request (ICR) 3206–0248, OPM 1655, Application for Senior Administrative Law Judge, and OPM 1655–A, Geographic Preference Statement for Senior Administrative Law Judge Applicant. OPM is soliciting comments for this collection under 44 U.S.C. 3507(a)(1)(D) and 5 CFR 1320.5(a)(1)(iv) and 1320.10(a). The information collection was previously published in the Federal Register on August 1, 2014 at 79 FR 44872 allowing for a 60-day public comment period. No comments were received for this information collection. The purpose of this notice is to allow an additional 30 days for public comments. DATES: Comments are encouraged and will be accepted until November 28, 2014. SUMMARY: Interested persons are invited to submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management Budget, 725 17th Street NW., Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent via electronic mail to oira_submission@ omb.eop.gov or faxed to (202) 395–6974. FOR FURTHER INFORMATION CONTACT: A copy of the proposed information collection, with applicable supporting documentation, may be obtained by contacting the Administrative Law Judge Office, Office of Personnel Management, 1900 E Street NW., Washington, DC 20415, Attention: Juanita H. Love, ALJ Program Manager or sent via electronic mail to juanita.love@opm.gov. SUPPLEMENTARY INFORMATION: The Office of Management and Budget is particularly interested in comments that: 1. Evaluate whether the proposed collection of information is necessary for the proper performance of the mstockstill on DSK4VPTVN1PROD with NOTICES ADDRESSES: VerDate Sep<11>2014 16:21 Oct 28, 2014 Jkt 235001 functions of the agency, including whether the information will have practical utility; 2. Evaluate the accuracy of the agency’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; 3. Enhance the quality, utility, and clarity of the information to be collected; and 4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses. OPM 1655, Application for Senior Administrative Law Judge, and OPM 1655–A, Geographic Preference Statement for Senior Administrative Law Judge Applicant, are used by retired Administrative Law Judges seeking reemployment on a temporary and intermittent basis to complete hearings of one or more specified case(s) in accordance with the Administrative Procedure Act of 1946. OPM proposes to revise the information collection to more clearly state, in the form instructions, the licensure requirement for appointment as an ALJ; to eliminate an obsolete reference to the OF 612, Optional Application for Federal Employment, which OPM canceled on June 13, 2011, see 76 FR 31998; to reference a full list of the Privacy Act routine uses applicable to this information collection; to update geographic locations; and to make technical changes to citations and terminology. Analysis Agency: Administrative Law Judge Program Office, Office of Personnel Management. Title: OPM 1655, Application for Senior Administrative Law Judge, and OPM 1655–A, Geographic Preference Statement for Senior Administrative Law Judge Applicant. OMB Number: 3206–0248. Frequency: Annually. Affected Public: Federal Administrative Law Judge Retirees. Number of Respondents: Approximately 150—OPM 1655/ Approximately 200—OPM 1655–A. Estimated Time per Respondent: Approximately 30–45 Minutes—OPM 1655/Approximately 15–25 Minutes— OPM 1655–A. Total Burden Hours: Estimated 94 hours—OPM 1655/Estimated 67 hours— OPM 1655–A. PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 64421 U.S. Office of Personnel Management. Katherine Archuleta, Director. [FR Doc. 2014–25688 Filed 10–28–14; 8:45 am] BILLING CODE 6325–43–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73419; File No. 10–214] Automated Matching Systems Exchange, LLC; Order Instituting Proceedings To Determine Whether To Grant or Deny an Application for an Exemption From Registration as a National Securities Exchange Under Section 5 of the Securities Exchange Act of 1934 October 23, 2014. I. Introduction On July 7, 2014, Automated Matching Systems Exchange, LLC (‘‘AMSE’’) filed with the Securities and Exchange Commission (‘‘Commission’’) an application seeking a limited volume exemption under Section 5 of the Securities Exchange Act (‘‘Exchange Act’’) from registration as a national securities exchange under Section 6 of the Exchange Act.1 Notice of AMSE’s exemption application was published for comment in the Federal Register on July 29, 2014.2 Although Section 5 of the Exchange Act does not require the Commission to institute proceedings on whether to grant or deny AMSE’s exemption application, the Commission has determined, in its discretion, to institute such proceedings in order to solicit further the views of interested persons on AMSE’s exemption application. This order institutes proceedings to determine whether to grant or deny the exemption application. II. Description of AMSE’s System AMSE proposes to conduct business in reliance upon an exemption from registration as a national securities exchange pursuant to Section 5 of the Exchange Act.3 In general, AMSE seeks to operate as an exchange for alternative trading systems.4 AMSE proposes to 1 15 U.S.C. 78e. Securities Exchange Act Release No. 72661 (July 23, 2014), 79 FR 44070 (‘‘Notice). The Commission notes that Section 5 of the Exchange Act did not require publication of AMSE’s exemption application. The Commission determined, in its discretion, to publish the Notice in order to solicit the views of interested persons on AMSE’s exemption application. 3 15 U.S.C. 78e. 4 For more detail on AMSE’s proposed system, see AMSE’s full exemption application and 2 See E:\FR\FM\29OCN1.SGM Continued 29OCN1 64422 Federal Register / Vol. 79, No. 209 / Wednesday, October 29, 2014 / Notices operate solely on an ‘‘off-order-book’’ trading basis. AMSE does not intend to have a physical exchange trading floor, centralized order book, or specialists or market makers with affirmative and negative market making obligations. Each member of AMSE would maintain its own automated matching system or electronic order book. Each member of AMSE would adopt its own rules governing the execution and priority of orders on its system. Trades would occur when an order to buy and an order to sell match on a member’s electronic order book. Each member would report its transactions to AMSE at such intervals as required by AMSE. mstockstill on DSK4VPTVN1PROD with NOTICES III. Proceedings To Determine Whether To Grant or Deny the Exemption Application and Grounds for Denial Under Consideration The Commission is instituting proceedings to determine whether AMSE’s exemption application should be granted or denied. Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the exemption application. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described in greater detail below, the Commission seeks and encourages interested persons to provide additional comment on the exemption application. The Commission is providing notice of the grounds for denial under consideration. Section 5 of the Exchange Act allows the Commission to exempt an exchange from the requirements of exchange registration if ‘‘in the opinion of the Commission, by reason of the limited volume of transactions effected on such exchange, it is not practicable Exhibits, which are published with the Notice on the Commission’s Web site at http://www.sec.gov/ rules/other.shtml. The Commission notes that alternative trading systems are securities markets that meet the definition of exchange under the Exchange Act. Regulation ATS established an alternative regulatory regime for securities markets by giving them the choice to register as exchanges, or to register as broker-dealers and comply with Regulation ATS. See Securities Exchange Act Release No. 40760 (December 8, 1998), 63 FR 70844, 70847 (December 22, 1998) (‘‘Regulation ATS Adopting Release’’). Rule 300 of Regulation ATS defines an alternative trading system to mean ‘‘any organization, association, person, group of persons, or system: (1) That constitutes, maintains, or provides a market place or facilities for bringing together purchasers and sellers of securities or for otherwise performing with respect to securities the functions commonly performed by a stock exchange within the meaning of [Rule 3b–16]; and (2) That does not: (i) Set rules governing the conduct of subscribers other than the conduct of such subscribers trading on such organization, association, person, group of persons, or system; or (ii) Discipline subscribers other than by exclusion from trading.’’ See 17 CFR 242.300(a). VerDate Sep<11>2014 16:21 Oct 28, 2014 Jkt 235001 and not necessary or appropriate in the public interest or for the protection of investors to require such registration.’’ 5 Section 3(a)(1) of the Exchange Act 6 defines an ‘‘exchange’’ to be ‘‘any organization, association, or group of persons, whether incorporated or incorporated, which constitutes, maintains, or provides a market place or facilities for bringing together purchasers and sellers of securities or for otherwise performing with respect to securities the functions commonly performed by a stock market as that term is generally understood, and includes the market place and facilities maintained by such exchange.’’ Rule 3b–16 under the Exchange Act 7 further provides that ‘‘[a]n organization, association, or group of persons shall be considered to constitute, maintain, or provide ‘a market place or facilities for bringing together purchasers and sellers of securities or for otherwise performing with respect to securities the functions commonly performed by a stock exchange,’ as those terms are used in Section 3(a)(1) of the Act, (15 U.S.C. 78c(a)(1)), if such organization, association, or group of persons: (1) Brings together the orders of securities of multiple buyers and sellers; and (2) Uses established, non-discretionary methods (whether by providing a trading facility or by setting rules) under which such orders interact with each other, and the buyers and sellers entering such orders agree to the terms of the trade.’’ As noted above, trades would occur on the separate systems of the individual members of AMSE. As described in the AMSE exemption application, it does not appear that the orders of the individual members of AMSE would interact with one another on any AMSE system, but rather on each distinct and separate system of AMSE’s members. That is, it does not appear that any AMSE system would operate as an exchange by bringing together purchasers and sellers of securities. As a result, the Commission is concerned that AMSE’s exemption application does not meet a key threshold requirement for being granted an exemption from exchange registration— namely, that the applicant actually be an ‘‘exchange’’ as defined under Section 3(a)(1) of the Exchange Act and Rule 3b–16 thereunder.8 5 15 U.S.C. 78e. U.S.C. 78c(a)(1). 7 17 CFR 240.3b–16. 8 See Regulation ATS Adopting Release, 63 FR at 70898–70901 (discussing the Commission’s revised interpretation of the ‘‘exchange’’ definition). Among other things, the Commission stated that ‘‘the first essential element of an exchange is the bringing 6 15 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 Accordingly, the Commission believes that it is appropriate at this time to issue this order to institute proceedings to determine whether to grant or deny the exemption application on the grounds that the applicant does not meet the definition of an ‘‘exchange’’ under Section 3(a)(1) of the Exchange Act and Rule 3b–16 thereunder. IV. Procedure: Request for Written Comments The Commission requests written views, data, and arguments with respect to the concerns identified above as well as other relevant concerns. Such comments should be submitted by November 19, 2014. Rebuttal comments should be submitted by December 3, 2014. Although there do not appear to be any issues relevant to a grant or denial of the exemption application which would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider any request for an opportunity to make an oral presentation. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/other.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number 10–214 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 10–214. 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 (http://www.sec.gov/ rules/other.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the exemptive application that are filed with the Commission, and all written communications relating to the exemptive application 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 together of orders of multiple buyers and sellers.’’ Id. at 70900. E:\FR\FM\29OCN1.SGM 29OCN1 Federal Register / Vol. 79, No. 209 / Wednesday, October 29, 2014 / Notices 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. 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 publicly available. All submissions should refer to File Number 10–214 and should be submitted on or before November 19, 2014. Rebuttal comments should be submitted by December 3, 2014. By the Commission. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–25675 Filed 10–28–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73415; File No. SR–MSRB– 2014–06] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, Consisting of Proposed New Rule G– 44, on Supervisory and Compliance Obligations of Municipal Advisors; Proposed Amendments to Rule G–8, on Books and Records To Be Made by Brokers, Dealers and Municipal Securities Dealers; and Proposed Amendments to Rule G–9, on Preservation of Records October 23, 2014. mstockstill on DSK4VPTVN1PROD with NOTICES I. Introduction On July 24, 2014, the Municipal Securities Rulemaking Board (the ‘‘MSRB’’ or ‘‘Board’’) filed with the Securities and Exchange Commission (the ‘‘SEC’’ or ‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change consisting of proposed new Rule G–44, on supervisory and compliance obligations of municipal advisors and proposed amendments to Rule G–8, on books and records to be made by brokers, dealers and municipal securities dealers, and proposed amendments to Rule G–9, on preservation of records. The proposed rule change was published for comment 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 16:21 Oct 28, 2014 Jkt 235001 in the Federal Register on August 5, 2014.3 The Commission received eight comment letters on the proposal.4 On October 17, 2014, the MSRB responded to the comments 5 and filed Amendment No. 1 to the proposed rule change.6 The Commission is publishing this notice to solicit comments on Amendment No. 1 to the proposed rule change from interested persons and is approving the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. II. Description of the Proposed Rule Change As further described in the Proposing Release, the MSRB states that the purpose of the proposed rule change is to establish supervisory and compliance obligations of municipal advisors when engaging in municipal advisory activities. Proposed Rule G–44 utilizes a primarily principles-based approach to supervision and compliance in order to, among other things, accommodate the diversity of the municipal advisor 3 Securities Exchange Act Release No. 72706 (July 29, 2014) (the ‘‘Proposing Release’’), 79 FR 45546 (August 5, 2014). 4 See Letters to Secretary, Commission, from Tamara K. Salmon, Senior Associate Counsel, Investment Company Institute (‘‘ICI’’), dated August 19, 2014 (the ‘‘ICI Letter’’); David L. Cohen, Managing Director and Associate General Counsel, Securities Industry and Financial Markets Association (‘‘SIFMA’’), dated August 21, 2014 (the ‘‘SIFMA Letter’’); Dave A. Sanchez (‘‘Sanchez’’), dated August 25, 2014 (the ‘‘Sanchez Letter’’); Michael Nicholas, Chief Executive Officer, Bond Dealers of America (‘‘BDA’’), dated August 26, 2014 (the ‘‘BDA Letter’’); Anonymous Attorney, dated August 26, 2014 (the ‘‘Anonymous Attorney Letter’’); Nathan R. Howard, Counsel, National Association of Independent Public Finance Advisors (‘‘NAIPFA’’), dated August 26, 2014 (the ‘‘NAIPFA Letter’’); Cristeena G. Naser, Vice President, American Bankers Association (‘‘ABA’’), dated August 26, 2014 (the ‘‘ABA Letter’’); and Joshua Cooperman, Cooperman Associates (‘‘Cooperman’’), dated August 30, 2014 (the ‘‘Cooperman Letter’’). 5 See Letter to Secretary, Commission, from Michael L. Post, Deputy General Counsel, MSRB, dated October 17, 2014 (the ‘‘MSRB Response Letter’’), available at http://www.sec.gov/comments/ sr-msrb-2014-06/msrb201406-9.pdf. 6 See Letter to Secretary, Commission, from Michael L. Post, Deputy General Counsel, MSRB, dated October 17, 2014 (the ‘‘MSRB Amendment Letter’’), available at http://www.sec.gov/comments/ sr-msrb-2014-06/msrb201406-10.pdf. In Amendment No. 1, the MSRB partially amended the text of the original proposed rule change to (i) revise paragraphs .01 and .02 of the Supplementary Material to Rule G–44 to expand the applicability of the provision, requiring a municipal advisor’s written supervisory procedures to address how its supervision is adequate even without having separate supervisors, to account for instances of self-supervision that may occur in firms that are not sole proprietorships; (ii) amend the text of Rule G– 44(e) to reference Rule G–8(h)(v)(A)–(E) rather than Rule G–8(h)(iii); and (iii) amend the text of Rule G– 9(k) to reference Rule 15Ba1–8(d) under the Act rather than Rule 15a1–8(d) under the Act. PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 64423 population, including small and singleperson entities. Proposed Rule G–44 is accompanied by proposed amendments to Rules G–8 and G–9 to establish fundamental books-and-records requirements for municipal advisors, including those related to their supervisory and compliance obligations.7 Proposed Rule G–44 In the Proposing Release, the MSRB stated that proposed Rule G–44 follows a widely accepted model in the securities industry consisting of a reasonably designed supervisory system complemented by the designation of a chief compliance officer (‘‘CCO’’). The proposed rule draws on aspects of existing supervision and compliance regulation under other regimes, including those for broker-dealers under rules of the MSRB and Financial Industry Regulatory Authority (‘‘FINRA’’) and for investment advisers under the Investment Advisers Act of 1940 (‘‘Advisers Act’’).8 In summary, proposed Rule G–44 would require: • A supervisory system reasonably designed to achieve compliance with applicable securities laws; • Written supervisory procedures; • The designation of one or more municipal advisor principals to be responsible for supervision; • Compliance processes reasonably designed to achieve compliance with applicable securities laws; • An annual certification regarding those compliance processes; • The designation of a CCO to administer those compliance processes; and • At least annual reviews of compliance policies and supervisory procedures. The proposed amendments to Rules G–8 and G–9, in summary, would require each municipal advisor to make and keep records of its: • Written supervisory procedures; • Designations of persons as responsible for supervision; • Written compliance policies; • Designations of persons as CCO; • Reviews of compliance policies and supervisory procedures; and • Annual certifications regarding compliance processes. Paragraph (a) of proposed Rule G–44 is the core provision, which would require all municipal advisors to establish, implement and maintain a system to supervise their municipal advisory activities and those of their 7 See supra note 3. 8 Id. E:\FR\FM\29OCN1.SGM 29OCN1

Agencies

[Federal Register Volume 79, Number 209 (Wednesday, October 29, 2014)]
[Notices]
[Pages 64421-64423]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-25675]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73419; File No. 10-214]


Automated Matching Systems Exchange, LLC; Order Instituting 
Proceedings To Determine Whether To Grant or Deny an Application for an 
Exemption From Registration as a National Securities Exchange Under 
Section 5 of the Securities Exchange Act of 1934

October 23, 2014.

I. Introduction

    On July 7, 2014, Automated Matching Systems Exchange, LLC 
(``AMSE'') filed with the Securities and Exchange Commission 
(``Commission'') an application seeking a limited volume exemption 
under Section 5 of the Securities Exchange Act (``Exchange Act'') from 
registration as a national securities exchange under Section 6 of the 
Exchange Act.\1\ Notice of AMSE's exemption application was published 
for comment in the Federal Register on July 29, 2014.\2\ Although 
Section 5 of the Exchange Act does not require the Commission to 
institute proceedings on whether to grant or deny AMSE's exemption 
application, the Commission has determined, in its discretion, to 
institute such proceedings in order to solicit further the views of 
interested persons on AMSE's exemption application. This order 
institutes proceedings to determine whether to grant or deny the 
exemption application.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78e.
    \2\ See Securities Exchange Act Release No. 72661 (July 23, 
2014), 79 FR 44070 (``Notice). The Commission notes that Section 5 
of the Exchange Act did not require publication of AMSE's exemption 
application. The Commission determined, in its discretion, to 
publish the Notice in order to solicit the views of interested 
persons on AMSE's exemption application.
---------------------------------------------------------------------------

II. Description of AMSE's System

    AMSE proposes to conduct business in reliance upon an exemption 
from registration as a national securities exchange pursuant to Section 
5 of the Exchange Act.\3\ In general, AMSE seeks to operate as an 
exchange for alternative trading systems.\4\ AMSE proposes to

[[Page 64422]]

operate solely on an ``off-order-book'' trading basis. AMSE does not 
intend to have a physical exchange trading floor, centralized order 
book, or specialists or market makers with affirmative and negative 
market making obligations. Each member of AMSE would maintain its own 
automated matching system or electronic order book. Each member of AMSE 
would adopt its own rules governing the execution and priority of 
orders on its system. Trades would occur when an order to buy and an 
order to sell match on a member's electronic order book. Each member 
would report its transactions to AMSE at such intervals as required by 
AMSE.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78e.
    \4\ For more detail on AMSE's proposed system, see AMSE's full 
exemption application and Exhibits, which are published with the 
Notice on the Commission's Web site at http://www.sec.gov/rules/other.shtml. The Commission notes that alternative trading systems 
are securities markets that meet the definition of exchange under 
the Exchange Act. Regulation ATS established an alternative 
regulatory regime for securities markets by giving them the choice 
to register as exchanges, or to register as broker-dealers and 
comply with Regulation ATS. See Securities Exchange Act Release No. 
40760 (December 8, 1998), 63 FR 70844, 70847 (December 22, 1998) 
(``Regulation ATS Adopting Release''). Rule 300 of Regulation ATS 
defines an alternative trading system to mean ``any organization, 
association, person, group of persons, or system: (1) That 
constitutes, maintains, or provides a market place or facilities for 
bringing together purchasers and sellers of securities or for 
otherwise performing with respect to securities the functions 
commonly performed by a stock exchange within the meaning of [Rule 
3b-16]; and (2) That does not: (i) Set rules governing the conduct 
of subscribers other than the conduct of such subscribers trading on 
such organization, association, person, group of persons, or system; 
or (ii) Discipline subscribers other than by exclusion from 
trading.'' See 17 CFR 242.300(a).
---------------------------------------------------------------------------

III. Proceedings To Determine Whether To Grant or Deny the Exemption 
Application and Grounds for Denial Under Consideration

    The Commission is instituting proceedings to determine whether 
AMSE's exemption application should be granted or denied. Institution 
of such proceedings is appropriate at this time in view of the legal 
and policy issues raised by the exemption application. Institution of 
proceedings does not indicate that the Commission has reached any 
conclusions with respect to any of the issues involved. Rather, as 
described in greater detail below, the Commission seeks and encourages 
interested persons to provide additional comment on the exemption 
application.
    The Commission is providing notice of the grounds for denial under 
consideration. Section 5 of the Exchange Act allows the Commission to 
exempt an exchange from the requirements of exchange registration if 
``in the opinion of the Commission, by reason of the limited volume of 
transactions effected on such exchange, it is not practicable and not 
necessary or appropriate in the public interest or for the protection 
of investors to require such registration.'' \5\ Section 3(a)(1) of the 
Exchange Act \6\ defines an ``exchange'' to be ``any organization, 
association, or group of persons, whether incorporated or incorporated, 
which constitutes, maintains, or provides a market place or facilities 
for bringing together purchasers and sellers of securities or for 
otherwise performing with respect to securities the functions commonly 
performed by a stock market as that term is generally understood, and 
includes the market place and facilities maintained by such exchange.'' 
Rule 3b-16 under the Exchange Act \7\ further provides that ``[a]n 
organization, association, or group of persons shall be considered to 
constitute, maintain, or provide `a market place or facilities for 
bringing together purchasers and sellers of securities or for otherwise 
performing with respect to securities the functions commonly performed 
by a stock exchange,' as those terms are used in Section 3(a)(1) of the 
Act, (15 U.S.C. 78c(a)(1)), if such organization, association, or group 
of persons: (1) Brings together the orders of securities of multiple 
buyers and sellers; and (2) Uses established, non-discretionary methods 
(whether by providing a trading facility or by setting rules) under 
which such orders interact with each other, and the buyers and sellers 
entering such orders agree to the terms of the trade.''
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78e.
    \6\ 15 U.S.C. 78c(a)(1).
    \7\ 17 CFR 240.3b-16.
---------------------------------------------------------------------------

    As noted above, trades would occur on the separate systems of the 
individual members of AMSE. As described in the AMSE exemption 
application, it does not appear that the orders of the individual 
members of AMSE would interact with one another on any AMSE system, but 
rather on each distinct and separate system of AMSE's members. That is, 
it does not appear that any AMSE system would operate as an exchange by 
bringing together purchasers and sellers of securities. As a result, 
the Commission is concerned that AMSE's exemption application does not 
meet a key threshold requirement for being granted an exemption from 
exchange registration--namely, that the applicant actually be an 
``exchange'' as defined under Section 3(a)(1) of the Exchange Act and 
Rule 3b-16 thereunder.\8\
---------------------------------------------------------------------------

    \8\ See Regulation ATS Adopting Release, 63 FR at 70898-70901 
(discussing the Commission's revised interpretation of the 
``exchange'' definition). Among other things, the Commission stated 
that ``the first essential element of an exchange is the bringing 
together of orders of multiple buyers and sellers.'' Id. at 70900.
---------------------------------------------------------------------------

    Accordingly, the Commission believes that it is appropriate at this 
time to issue this order to institute proceedings to determine whether 
to grant or deny the exemption application on the grounds that the 
applicant does not meet the definition of an ``exchange'' under Section 
3(a)(1) of the Exchange Act and Rule 3b-16 thereunder.

IV. Procedure: Request for Written Comments

    The Commission requests written views, data, and arguments with 
respect to the concerns identified above as well as other relevant 
concerns. Such comments should be submitted by November 19, 2014. 
Rebuttal comments should be submitted by December 3, 2014. Although 
there do not appear to be any issues relevant to a grant or denial of 
the exemption application which would be facilitated by an oral 
presentation of views, data, and arguments, the Commission will 
consider any request for an opportunity to make an oral presentation.
    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/other.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number 10-214 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 10-214. 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 (http://www.sec.gov/rules/other.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the exemptive application that are filed 
with the Commission, and all written communications relating to the 
exemptive application 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

[[Page 64423]]

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. 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 publicly available. All 
submissions should refer to File Number 10-214 and should be submitted 
on or before November 19, 2014. Rebuttal comments should be submitted 
by December 3, 2014.

    By the Commission.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-25675 Filed 10-28-14; 8:45 am]
BILLING CODE 8011-01-P