Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Order Approving and Declaring Effective a Proposed Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and the Miami International Securities Exchange, LLC, 70230-70232 [2014-27878]

Download as PDF 70230 Federal Register / Vol. 79, No. 227 / Tuesday, November 25, 2014 / Notices On November 17, 2014, the United States Postal Service® (Postal Service) filed a request with the Postal Regulatory Commission to remove Return Receipt for Merchandise service from the Mail Classification Schedule’s marketdominant product list, pursuant to 39 U.S.C. 3642. Approval of this request would simplify the Postal Service’s Ancillary Services product by recognizing that: (1) Return Receipt for Merchandise service has become outmoded; and (2) equivalent or improved product features can be obtained by transitioning to Signature ConfirmationTM service or Certified Mail® service (return receipt requested). Interested persons may comment on, or view documents pertinent to, this request at https://www.prc.gov, Docket No. MC2015–8. SUPPLEMENTARY INFORMATION: Stanley F. Mires, Attorney, Federal Requirements. BILLING CODE 7710–12–P POSTAL SERVICE Transfer of First-Class Mail® Parcels to the Competitive Product List Postal ServiceTM. ACTION: Notice. AGENCY: The Postal Service hereby provides notice that it has filed a request with the Postal Regulatory Commission to transfer First-Class Mail Parcels from the Mail Classification Schedule’s Market-Dominant Product List to its Competitive Product List. DATES: Effective date: November 25, 2014. SUMMARY: FOR FURTHER INFORMATION CONTACT: John F. Rosato, 202–268–8597, or john.f.rosato@usps.gov. On November 14, 2014 the United States Postal Service® filed a request with the Postal Regulatory Commission to transfer First-Class Mail Parcels from the Mail Classification Schedule’s market-dominant product list to its competitive product list, pursuant to 39 U.S.C. 3642. The transfer would: (1) Remove First-Class Mail Parcels from the Market-Dominant Product List; and (2) replace it with a new ‘‘retail’’ subcategory within the competitive product list’s First-Class Package Service product. The new retail subcategory would provide the same service standards and pricing structure as the current First-Class Mail Parcels product. Documents pertinent to this wreier-aviles on DSK4TPTVN1PROD with NOTICES SUPPLEMENTARY INFORMATION: 14:41 Nov 24, 2014 Stanley F. Mires, Attorney, Federal Requirements. [FR Doc. 2014–27806 Filed 11–24–14; 8:45 am] BILLING CODE 7710–12–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73641; File No. 4–678] Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d– 2; Order Approving and Declaring Effective a Proposed Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and the Miami International Securities Exchange, LLC November 19, 2014. [FR Doc. 2014–27805 Filed 11–24–14; 8:45 am] VerDate Sep<11>2014 request are available at https:// www.prc.gov, Docket No. MC2015–7. Jkt 235001 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 Plan was published for comment on October 23, 2014.1 The Commission received no comments on the Plan. This order approves and declares effective the Plan. I. Introduction Section 19(g)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),2 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.3 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 1 See Securities Exchange Act Release No. 73383 (October 17, 2014), 79 FR 63448. 2 15 U.S.C. 78s(g)(1). 3 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively. PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 expenses for common members and their SROs. Section 17(d)(1) of the Act 4 was intended, in part, to eliminate unnecessary multiple examinations and regulatory duplication.5 With respect to a common member, Section 17(d)(1) authorizes the Commission, by rule or order, to relieve an SRO of the responsibility to receive regulatory reports, to examine for and enforce compliance with applicable statutes, rules, and regulations, or to perform other specified regulatory functions. To implement Section 17(d)(1), the Commission adopted two rules: Rule 17d–1 and Rule 17d–2 under the Act.6 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.7 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.8 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 4 15 U.S.C. 78q(d)(1). 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). 6 17 CFR 240.17d–1 and 17 CFR 240.17d–2, respectively. 7 See Securities Exchange Act Release No. 12352 (April 20, 1976), 41 FR 18808 (May 7, 1976). 8 See Securities Exchange Act Release No. 12935 (October 28, 1976), 41 FR 49091 (November 8, 1976). 5 See E:\FR\FM\25NON1.SGM 25NON1 Federal Register / Vol. 79, No. 227 / Tuesday, November 25, 2014 / Notices foster the development of, a national market system and a national clearance and settlement system; and is in conformity with the factors set forth in Section 17(d) of the Act. Commission approval of a plan filed pursuant to Rule 17d–2 relieves an SRO of those regulatory responsibilities allocated by the plan to another SRO. II. Proposed Plan wreier-aviles on DSK4TPTVN1PROD with NOTICES The proposed 17d–2 Plan is intended to reduce regulatory duplication for firms that are common members of both MIAX and FINRA.9 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,10 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.11 Under the Plan, MIAX would retain full responsibility for surveillance, examination and enforcement with 9 The proposed 17d–2 Plan refers to these common members as ‘‘Dual Members.’’ See Paragraph 1(c) of the proposed 17d–2 Plan. 10 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. 11 See paragraph 6 of the proposed 17d–2 Plan. VerDate Sep<11>2014 14:41 Nov 24, 2014 Jkt 235001 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.12 III. Discussion The Commission finds that the proposed Plan is consistent with the factors set forth in Section 17(d) of the Act13 and Rule 17d–2(c) thereunder 14 in that the proposed Plan is necessary or appropriate in the public interest and for the protection of investors, fosters cooperation and coordination among SROs, and removes impediments to and fosters the development of the national market system. In particular, the Commission believes that the proposed Plan should reduce unnecessary regulatory duplication by allocating to FINRA certain examination and enforcement responsibilities for common members that would otherwise be performed by MIAX and FINRA. Accordingly, the proposed Plan promotes efficiency by reducing costs to common members. Furthermore, because MIAX and FINRA will coordinate their regulatory functions in accordance with the Plan, the Plan should promote investor protection. The Commission notes that, under the Plan, MIAX and FINRA have allocated regulatory responsibility for those MIAX rules, set forth in the Certification, that are substantially similar to the applicable FINRA rules in that examination for compliance 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 rule, or a common member’s activity, conduct, or output in relation to such rule. In addition, under the Plan, FINRA would assume regulatory responsibility for certain provisions of the federal securities laws and the rules and regulations thereunder that are set forth in the Certification. The Common Rules covered by the Plan are specifically listed in the Certification, as may be amended by the Parties from time to time. According to the Plan, MIAX will review the Certification, at least annually, or more frequently if required by changes in either the rules of MIAX 12 See paragraph 2 of the proposed 17d–2 Plan. U.S.C. 78q(d). 14 17 CFR 240.17d–2(c). 13 15 PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 70231 or FINRA, and, if necessary, submit to FINRA an updated list of Common Rules to add MIAX rules not included on the then-current list of Common Rules that are substantially similar to FINRA rules; delete MIAX rules included in the then-current list of Common Rules that are no longer substantially similar to FINRA rules; and confirm that the remaining rules on the list of Common Rules continue to be MIAX rules that are substantially similar to FINRA rules.15 FINRA will then confirm in writing whether the rules listed in any updated list are Common Rules as defined in the Plan. Under the Plan, MIAX will also provide FINRA with a current list of common members and shall update the list no less frequently than once each quarter.16 The Commission believes that these provisions are designed to provide for continuing communication between the Parties to ensure the continued accuracy of the scope of the proposed allocation of regulatory responsibility. The Commission is hereby declaring effective a Plan that, among other things, allocates regulatory responsibility to FINRA for the oversight and enforcement of all MIAX rules that are substantially similar to the rules of FINRA for common members of MIAX and FINRA. Therefore, modifications to the Certification need not be filed with the Commission as an amendment to the Plan, provided that the Parties are only adding to, deleting from, or confirming changes to MIAX rules in the Certification in conformance with the definition of Common Rules provided in the Plan. However, should the Parties decide to add a MIAX rule to the Certification that is not substantially similar to a FINRA rule; delete a MIAX rule from the Certification that is substantially similar to a FINRA rule; or leave on the Certification a MIAX rule that is no longer substantially similar to a FINRA rule, then such a change would constitute an amendment to the Plan, which must be filed with the Commission pursuant to Rule 17d–2 under the Act.17 IV. Conclusion This Order gives effect to the Plan filed with the Commission in File No. 4–678. The Parties shall notify all 15 See paragraph 2 of the Plan. paragraph 3 of the Plan. 17 The Commission also notes that the addition to or deletion from the Certification of any federal securities laws, rules, and regulations for which FINRA would bear responsibility under the Plan for examining, and enforcing compliance by, common members, also would constitute an amendment to the Plan. 16 See E:\FR\FM\25NON1.SGM 25NON1 70232 Federal Register / Vol. 79, No. 227 / Tuesday, November 25, 2014 / Notices members affected by the Plan of their rights and obligations under the Plan. It is therefore ordered, pursuant to Section 17(d) of the Act, that the Plan in File No. 4–678, between FINRA and MIAX, filed pursuant to Rule 17d–2 under the Act, is approved and declared effective. It is further ordered that MIAX is relieved of those responsibilities allocated to FINRA under the Plan in File No. 4–678. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–27878 Filed 11–24–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73647; File No. SR– NASDAQ–2014–087] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt an All-Inclusive Annual Listing Fee and Modify Certain Other Listing Fees November 19, 2014. wreier-aviles on DSK4TPTVN1PROD with NOTICES Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1, and Rule 19b–4 thereunder,2 notice is hereby given that on November 7, 2014, The NASDAQ Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to adopt an all-inclusive annual listing fee and modify certain other listing fees. While these amendments are effective upon filing, the Exchange has designated the proposed amendments to be operative on January 1, 2015. The text of the proposed rule change is available at https:// nasdaq.cchwallstreet.com, at NASDAQ’s principal office, and at the Commission’s Public Reference Room. 18 17 CFR 200.30–3(a)(34). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 14:41 Nov 24, 2014 Jkt 235001 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Nasdaq proposes to adopt an allinclusive annual listing fee, which will simplify billing and provide transparency and certainty to companies as to the annual cost of listing, modify annual fees for listed companies that remain on the existing fee schedule, and clarify certain fee rules. Nasdaq understands from speaking with listed companies that many companies object to the number and in some cases the variable nature of certain of Nasdaq’s listing fees. For example, a company may owe fees when it issues additional shares as a result of events that do not raise money and cannot always be forecasted or budgeted for by the company, such as the exercise by employees of stock options or the implementation of a reverse stock split. To address such concerns, Nasdaq has determined to create an alternative fee schedule, which eliminates fees related to the issuance of additional shares, record-keeping changes, and substitution listing events, thereby simplifying and clarifying for companies the annual fees to which they are subject. In addition, under this alternative fee structure, Nasdaq will also eliminate the fee for a written interpretation of the listing rules and for review by Nasdaq Staff of a compliance plan. As a result, companies subject to this alternative structure will pay only a single annual fee to Nasdaq, which will include all the ordinary costs of listing for the year.3 This change will also benefit Nasdaq, by eliminating the 3 A company that receives a delisting determination or public reprimand letter must still pay fees for review of that decision by an independent Hearings Panel or the Nasdaq Listing and Hearing Review Council. Companies also will pay application and entry fees to list new classes of securities. PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 multiple invoices that must be sent to a company each year 4 and providing more certainty as to revenue. As detailed in the charts below, for companies listed on the Capital Market, other than ADRs and Closed-end Funds, the all-inclusive annual fee will range from $42,000 to $75,000; for ADRs listed on the Capital Market the all-inclusive annual fee will range from $37,000 to $45,000. On the Global and Global Select Markets, the all-inclusive annual fee for companies other than ADRs and Closed-end Funds will range from $45,000 to $155,000 and the allinclusive annual fee for ADRs will range from $45,000 to $75,000. The allinclusive annual fee for Closed-end Funds listed on any market tier will range from $30,000 to $100,000. In each case, a company’s all-inclusive annual fee will be based on its total shares outstanding.5 While this alternative is being introduced in response to feedback from Nasdaq’s listed-companies, Nasdaq also understands that this innovation may not be appealing to all companies and therefore proposes to allow currently listed companies the option to switch to the proposed all-inclusive annual fee schedule for 2015 or to wait until 2018, when it will become mandatory for all companies. However, Nasdaq will offer incentives to companies that voluntarily elect the all-inclusive annual fee schedule for 2015.6 Specifically, any company that chooses to be subject to 4 In addition to the annual fee, companies are also billed quarterly for listing of additional shares fees and upon the occurrence of events that result in record keeping and substitution listing fees. 5 In establishing the fee changes described in this rule filing, including the changes to the number and cut-off point of pricing tiers, Nasdaq considered various factors that distinguish companies, including market tier, shares outstanding, and security type, as well as the perceived use of various Nasdaq regulatory and support services by companies of various characteristics. Pricing for similar securities on other national securities exchanges was also considered. Based on this analysis, Nasdaq proposes to modify the number of fee tiers within the annual fee schedule to better align fees with the size of the companies that pay those fees and the use Nasdaq believes that companies of various sizes typically make of Nasdaq’s services. In setting the all-inclusive annual fee, Nasdaq reviewed the billing history of more than 1,800 companies that had been listed on Nasdaq for at least four years to determine the fees assessed these companies for all listing-related services, including those assessed for listing of additional shares, record-keeping changes, substitution listing events, rule interpretations, and compliance plan reviews. Nasdaq established the all-inclusive annual fee for each security type and shares outstanding tier based on this analysis of historical fees paid and regulatory services used, taking into account the changes also proposed to the annual fee schedule. 6 Companies may make this election on the NASDAQ OMX Listing Center Web site. A copy of the electronic form that will be used for this purpose is attached to the rule filing as Exhibit 3. E:\FR\FM\25NON1.SGM 25NON1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 79, Number 227 (Tuesday, November 25, 2014)]
[Notices]
[Pages 70230-70232]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-27878]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73641; File No. 4-678]


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

November 19, 2014.
    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 Plan was published for 
comment on October 23, 2014.\1\ The Commission received no comments on 
the Plan. This order approves and declares effective the Plan.
---------------------------------------------------------------------------

    \1\ See Securities Exchange Act Release No. 73383 (October 17, 
2014), 79 FR 63448.
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I. Introduction

    Section 19(g)(1) of the Securities Exchange Act of 1934 
(``Act''),\2\ 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.\3\ 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.
---------------------------------------------------------------------------

    \2\ 15 U.S.C. 78s(g)(1).
    \3\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively.
---------------------------------------------------------------------------

    Section 17(d)(1) of the Act \4\ was intended, in part, to eliminate 
unnecessary multiple examinations and regulatory duplication.\5\ With 
respect to a common member, Section 17(d)(1) authorizes the Commission, 
by rule or order, to relieve an SRO of the responsibility to receive 
regulatory reports, to examine for and enforce compliance with 
applicable statutes, rules, and regulations, or to perform other 
specified regulatory functions.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78q(d)(1).
    \5\ 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.\6\ 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.\7\ 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.
---------------------------------------------------------------------------

    \6\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
    \7\ See Securities Exchange Act Release No. 12352 (April 20, 
1976), 41 FR 18808 (May 7, 1976).
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    To address regulatory duplication in these and other areas, the 
Commission adopted Rule 17d-2 under the Act.\8\ 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

[[Page 70231]]

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

    \8\ 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.\9\ 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'').
---------------------------------------------------------------------------

    \9\ 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,\10\ 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.\11\
---------------------------------------------------------------------------

    \10\ 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.
    \11\ 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.\12\
---------------------------------------------------------------------------

    \12\ See paragraph 2 of the proposed 17d-2 Plan.
---------------------------------------------------------------------------

III. Discussion

    The Commission finds that the proposed Plan is consistent with the 
factors set forth in Section 17(d) of the Act\13\ and Rule 17d-2(c) 
thereunder \14\ in that the proposed Plan is necessary or appropriate 
in the public interest and for the protection of investors, fosters 
cooperation and coordination among SROs, and removes impediments to and 
fosters the development of the national market system. In particular, 
the Commission believes that the proposed Plan should reduce 
unnecessary regulatory duplication by allocating to FINRA certain 
examination and enforcement responsibilities for common members that 
would otherwise be performed by MIAX and FINRA. Accordingly, the 
proposed Plan promotes efficiency by reducing costs to common members. 
Furthermore, because MIAX and FINRA will coordinate their regulatory 
functions in accordance with the Plan, the Plan should promote investor 
protection.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78q(d).
    \14\ 17 CFR 240.17d-2(c).
---------------------------------------------------------------------------

    The Commission notes that, under the Plan, MIAX and FINRA have 
allocated regulatory responsibility for those MIAX rules, set forth in 
the Certification, that are substantially similar to the applicable 
FINRA rules in that examination for compliance 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 rule, or a common member's activity, conduct, or 
output in relation to such rule. In addition, under the Plan, FINRA 
would assume regulatory responsibility for certain provisions of the 
federal securities laws and the rules and regulations thereunder that 
are set forth in the Certification. The Common Rules covered by the 
Plan are specifically listed in the Certification, as may be amended by 
the Parties from time to time.
    According to the Plan, MIAX will review the Certification, at least 
annually, or more frequently if required by changes in either the rules 
of MIAX or FINRA, and, if necessary, submit to FINRA an updated list of 
Common Rules to add MIAX rules not included on the then-current list of 
Common Rules that are substantially similar to FINRA rules; delete MIAX 
rules included in the then-current list of Common Rules that are no 
longer substantially similar to FINRA rules; and confirm that the 
remaining rules on the list of Common Rules continue to be MIAX rules 
that are substantially similar to FINRA rules.\15\ FINRA will then 
confirm in writing whether the rules listed in any updated list are 
Common Rules as defined in the Plan. Under the Plan, MIAX will also 
provide FINRA with a current list of common members and shall update 
the list no less frequently than once each quarter.\16\ The Commission 
believes that these provisions are designed to provide for continuing 
communication between the Parties to ensure the continued accuracy of 
the scope of the proposed allocation of regulatory responsibility.
---------------------------------------------------------------------------

    \15\ See paragraph 2 of the Plan.
    \16\ See paragraph 3 of the Plan.
---------------------------------------------------------------------------

    The Commission is hereby declaring effective a Plan that, among 
other things, allocates regulatory responsibility to FINRA for the 
oversight and enforcement of all MIAX rules that are substantially 
similar to the rules of FINRA for common members of MIAX and FINRA. 
Therefore, modifications to the Certification need not be filed with 
the Commission as an amendment to the Plan, provided that the Parties 
are only adding to, deleting from, or confirming changes to MIAX rules 
in the Certification in conformance with the definition of Common Rules 
provided in the Plan. However, should the Parties decide to add a MIAX 
rule to the Certification that is not substantially similar to a FINRA 
rule; delete a MIAX rule from the Certification that is substantially 
similar to a FINRA rule; or leave on the Certification a MIAX rule that 
is no longer substantially similar to a FINRA rule, then such a change 
would constitute an amendment to the Plan, which must be filed with the 
Commission pursuant to Rule 17d-2 under the Act.\17\
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    \17\ The Commission also notes that the addition to or deletion 
from the Certification of any federal securities laws, rules, and 
regulations for which FINRA would bear responsibility under the Plan 
for examining, and enforcing compliance by, common members, also 
would constitute an amendment to the Plan.
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IV. Conclusion

    This Order gives effect to the Plan filed with the Commission in 
File No. 4-678. The Parties shall notify all

[[Page 70232]]

members affected by the Plan of their rights and obligations under the 
Plan.
    It is therefore ordered, pursuant to Section 17(d) of the Act, that 
the Plan in File No. 4-678, between FINRA and MIAX, filed pursuant to 
Rule 17d-2 under the Act, is approved and declared effective.
    It is further ordered that MIAX is relieved of those 
responsibilities allocated to FINRA under the Plan in File No. 4-678.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(34).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-27878 Filed 11-24-14; 8:45 am]
BILLING CODE 8011-01-P

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