Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 4.3, Record of Written Complaints, 19381-19383 [2015-08204]
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Federal Register / Vol. 80, No. 69 / Friday, April 10, 2015 / Notices
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management investment companies
(‘‘Underlying Funds’’) in reliance on
section 12(d)(1)(G) of the Act; and (d)
also is eligible to invest in securities (as
defined in section 2(a)(36) of the Act) in
reliance on rule 12d1–2 under the Act
(each a ‘‘Fund of Funds’’), and together
with the Underlying Funds, the
‘‘Funds’’), also to invest, to the extent
consistent with its investment
objectives, policies, strategies and
limitations, in financial instruments that
may not be securities within the
meaning of section 2(a)(36) of the Act
(‘‘Other Investments’’).2 Applicants also
request that the order exempt any entity
controlling, controlled by or under
common control with VESC, that now or
in the future acts as principal
underwriter with respect to the
transactions described in the
application.
4. Consistent with its fiduciary
obligations under the Act, each Fund of
Funds’ board of trustees will review the
advisory fees charged by the Fund of
Funds’ Adviser to ensure that they are
based on services provided that are in
addition to, rather than duplicative of,
services provided pursuant to the
advisory agreement of any investment
company in which the Fund of Funds
may invest.
Applicants’ Legal Analysis
1. Section 12(d)(1)(A) of the Act
provides that no registered investment
company (‘‘acquiring company’’) may
acquire securities of another investment
company (‘‘acquired company’’) if such
securities represent more than 3% of the
acquired company’s outstanding voting
stock or more than 5% of the acquiring
company’s total assets, or if such
securities, together with the securities of
other investment companies, represent
more than 10% of the acquiring
company’s total assets. Section
12(d)(1)(B) of the Act provides that no
registered open-end investment
company may sell its securities to
another investment company if the sale
will cause the acquiring company to
own more than 3% of the acquired
company’s voting stock, or cause more
than 10% of the acquired company’s
voting stock to be owned by investment
companies and companies controlled by
them.
2. Section 12(d)(1)(G) of the Act
provides, in part, that section 12(d)(1)
will not apply to securities of an
acquired company purchased by an
acquiring company if: (i) The acquired
2 Every existing entity that currently intends to
rely on the requested order is named as an
applicant. Any entity that relies on the order in the
future will do so only in accordance with the terms
and condition in the application.
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company and acquiring company are
part of the same group of investment
companies; (ii) the acquiring company
holds only securities of acquired
companies that are part of the same
group of investment companies,
Government securities, and short-term
paper; (iii) the aggregate sales loads and
distribution-related fees of the acquiring
company and the acquired company are
not excessive under rules adopted
pursuant to section 22(b) or section
22(c) of the Act by a securities
association registered under section 15A
of the Exchange Act or by the
Commission; and (iv) the acquired
company has a policy that prohibits it
from acquiring securities of registered
open-end investment companies or
registered unit investment trusts in
reliance on section 12(d)(1)(F) or (G) of
the Act.
3. Rule 12d1–2 under the Act permits
a registered open-end investment
company or a registered unit investment
trust that relies on section 12(d)(1)(G) of
the Act to acquire, in addition to
securities issued by another registered
investment company in the same group
of investment companies, Government
securities, and short-term paper: (i)
Securities issued by an investment
company that is not in the same group
of investment companies, when the
acquisition is in reliance on section
12(d)(1)(A) or 12(d)(1)(F) of the Act; (ii)
securities (other than securities issued
by an investment company); and (iii)
securities issued by a money market
fund, when the investment is in reliance
on rule 12d1–1 under the Act. For the
purposes of rule 12d1–2, ‘‘securities’’
means any security as defined in section
2(a)(36) of the Act.
4. Section 6(c) of the Act provides that
the Commission may exempt any
person, security, or transaction from any
provision of the Act, or from any rule
under the Act, if such exemption is
necessary or appropriate in the public
interest and consistent with the
protection of investors and the purposes
fairly intended by the policies and
provisions of the Act. Applicants submit
that their request for relief meets this
standard.
5. Applicants request an order under
section 6(c) of the Act for an exemption
from rule 12d1–2(a) to allow the Funds
of Funds to invest in Other Investments
while investing in Underlying Funds.
Applicants state that the Funds of
Funds will comply with rule 12d1–2
under the Act, but for the fact that the
Funds of Funds may invest a portion of
their assets in Other Investments.
Applicants assert that permitting the
Funds of Funds to invest in Other
Investments as described in the
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19381
application would not raise any of the
concerns that the requirements of
section 12(d)(1) were designed to
address.
Applicants’ Condition
Applicants agree that any order
granting the requested relief will be
subject to the following condition:
Applicants will comply with all
provisions of rule 12d1–2 under the Act,
except for paragraph (a)(2) to the extent
that it restricts any Fund of Funds from
investing in Other Investments as
described in the application.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Brent J. Fields,
Secretary.
[FR Doc. 2015–08258 Filed 4–9–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74656; File No. SR–BATS–
2015–25]
Self-Regulatory Organizations; BATS
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Rule 4.3,
Record of Written Complaints
April 6, 2015.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 26,
2015, BATS Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BATS’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange has
designated this proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 4.3, Record of Written Complaints.
The text of the proposed rule change is
below. Proposed new language is in
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6)(iii).
2 17
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Federal Register / Vol. 80, No. 69 / Friday, April 10, 2015 / Notices
italics; proposed deletions are in
brackets.
*
*
*
*
*
Rule 4.3. Record of Written Complaints
(a) Each Member shall keep and
preserve for a period of not less than
[five]four years a file of all written
complaints of customers and action
taken by the Member in respect thereof,
if any. Further, for the first two years of
the [five]four-year period, the Member
shall keep such file in a place readily
accessible to examination or spot
checks.
(b) (No change).
*
*
*
*
*
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 II.A., II.B., and II.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 Exchange filed a proposal to
amend Rule 4.3, Record of Written
Complaints, to conform with the rules of
the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) for purposes
of an agreement between the Exchange
and FINRA, as well as to conform
Exchange Rule 4.3 with the rules of the
EDGX Exchange, Inc. (‘‘EDGX’’) and the
EDGA Exchange, Inc. (‘‘EDGA’’).5
Pursuant to Rule 17d–2 under the
Act,6 the Exchange and FINRA entered
into an agreement to allocate regulatory
responsibility for common rules (the
‘‘17d–2 Agreement’’). The 17d–2
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5 See
EDGA and EDGX Rules 4.3. See also
Securities Exchange Act Release Nos. 70715
(October 15, 2013), 78 FR 64041 (October 18, 2013)
(SR–EDGA–2013–31) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
to Amend EDGA Rule 4.3, Record of Written
Complains, to Conform with Financial Industry
Regulatory Authority, Inc. Rule 4513); and 70714
(October 15, 2013), 78 FR 64038 (October 18, 2013)
(SR–EDGX–2013–39) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
to Amend EDGX Rule 4.3, Record of Written
Complains, to Conform with Financial Industry
Regulatory Authority, Inc. Rule 4513).
6 17 CFR 240.17d–2.
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Agreement covers common members of
the Exchange and FINRA and allocates
to FINRA regulatory responsibility, with
respect to common members, for the
following: (i) Examination of common
members of the Exchange and FINRA
for compliance with federal securities
laws, rules and regulations and rules of
the Exchange that the Exchange has
certified as identical or substantially
similar to FINRA rules; (ii) investigation
of common members of the Exchange
and FINRA for violations of federal
securities laws, rules or regulations, or
Exchange rules that the Exchange has
certified as identical or substantially
identical to a FINRA rule; and (iii)
enforcement of compliance by common
members of the Exchange and FINRA
with the federal securities laws, rules
and regulations, and the rules of the
Exchange that the Exchange has
certified as identical or substantially
similar to FINRA rules.7
The 17d–2 Agreement included a
certification by the Exchange that states
that the requirements contained in
certain Exchange rules are identical to,
or substantially similar to, certain
FINRA rules that have been identified as
comparable. To conform to comparable
FINRA rules for purposes of the 17d–2
Agreement, the Exchange proposes to
amend Rule 4.3, Record of Written
Complaints, to align with FINRA Rule
4513.8
Exchange Rule 4.3 currently requires
that members of the Exchange
(‘‘Members’’) keep and preserve written
customer complaints 9 for a period of
not less than five years, the first two of
which must be in a readily accessible
place. To take into account FINRA’s
four-year routine examination cycle for
certain members, FINRA Rule 4513
requires that members preserve the
customer complaint records for a period
of at least four years. Under the 17d–2
Agreement, FINRA examines common
members of the Exchange and FINRA
for compliance with Exchange Rule 4.3.
However, because of the differing
retention periods between Exchange
Rule 4.3 and FINRA Rule 4513, the 17d–
7 See Securities and Exchange Release No. 58375
(August 13, 2008), 75 FR 51295 (August 19, 2008)
(approving File No. 10–198).
8 See also Securities Exchange Act Release No.
63784 (January 27, 2011), 76 FR 5850 (February 2,
2011) (Order Approving Proposed Rule Change);
(File No. SR–FINRA–2010–052).
9 Exchange Rule 4.3(b) defines a ‘‘complaint’’ as
‘‘any written statement of a customer or any person
acting on behalf of a customer alleging a grievance
involving the activities of a Member or persons
under the control of the Member in connection with
(1) the solicitation or execution of any transaction
conducted or contemplated to be conducted
through the facilities of the Exchange or (2) the
disposition of securities or funds of that customer
which activities are related to such a transaction.’’
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2 Agreement specifically states that
FINRA has the regulatory
responsibilities for the first four years of
Exchange Rule 4.3’s five year record
retention requirement.
The Exchange, therefore, proposes to
decrease the record retention
requirements under Rule 4.3 from five
to four years. The Exchange believes
that amending the record retention
requirements for customer complaints to
align with FINRA Rule 4513 would help
to avoid confusion among Members that
are also members of FINRA, EDGA, or
EDGX. The Exchange further believes
that aligning the Exchange’s rules with
FINRA Rule 4513 would account for
FINRA’s four-year routine examination
cycle for certain members, which
FINRA conducts on the Exchange’s
behalf under the 17d–2 Agreement
ensuring consistent regulation of
Members that are also members of
FINRA.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act 10 in general, and
furthers the objectives of Section 6(b)(5)
of the Act 11 in particular, in that it is
designed to promote just and equitable
principles of trade, to remove
impediments to, and perfect the
mechanism of, a free and open market
and a national market system, and, in
general, to protect investors and the
public interest, by eliminating
unnecessary confusion with respect to
the Exchange’s rules. The proposed rule
change should provide greater
harmonization between similar
Exchange, EDGA, EDGX and FINRA
rules, resulting in greater uniformity
and less burdensome and more efficient
regulatory compliance. The proposed
rule change should foster cooperation
and coordination with persons engaged
in facilitating transactions in securities
and should remove impediments to and
perfect the mechanism of a free and
open market and a national market
system consistent with the requirements
of Section 6(b)(5) of the Act.12
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act because the
proposed change would apply to all
Members equally.
10 See
15 U.S.C. 78f(b).
U.S.C. 78f(b)(5).
12 15 U.S.C. 78f(b)(5).
11 15
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Federal Register / Vol. 80, No. 69 / Friday, April 10, 2015 / Notices
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(ii) of the Act 13 and
subparagraph (f)(6) of Rule 19b–4
thereunder.14
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File No. SR–
BATS–2015–25 on the subject line.
mstockstill on DSK4VPTVN1PROD with NOTICES
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File No.
SR–BATS–2015–25. This file number
13 See
15 U.S.C. 78s(b)(3)(a)(ii).
14 See 17 CFR 240.19b–4(f)(6). In addition, Rule
19b–4(f)(6) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change at least five business
days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
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20:09 Apr 09, 2015
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should be included on the subject line
if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml).
Copies of the submission, all
subsequent amendments, all written
statements with respect to the proposed
rule change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. 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
No. SR–BATS–2015–25 and should be
submitted on or before May 1, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Brent J. Fields,
Secretary.
[FR Doc. 2015–08204 Filed 4–9–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74649; File No. SR–NYSE–
2015–14]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Amending Rule
1000 To Reflect That Exchange
Systems Will Reject Incoming Orders
of Over 1,000,000 Shares That Are
Marketable Upon Arrival
April 6, 2015.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
15 See
17 CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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19383
notice is hereby given that on March 23,
2015, New York Stock Exchange LLC
(‘‘NYSE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. 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 amend
Rule 1000 to reflect that Exchange
systems will reject incoming orders of
over 1,000,000 shares that are
marketable upon arrival. The text of the
proposed rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization 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 those 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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Rule 1000 (Automatic Executions) to
reflect that Exchange systems will reject
incoming orders of over 1,000,000
shares that are marketable upon arrival
against interest in Exchange systems.
Currently, Exchange systems accept
orders up to a maximum order size of
25,000,000 shares.4 Rule 1000 provides
that market and limit orders of up to
1,000,000 shares are eligible to initiate
or participate in automatic executions
on the Exchange. However, because an
order of over 1,000,000 shares in size is
ineligible for automatic execution, if
such an order is marketable on arrival,
the Exchange suspends automatic
executions in that security and it is
auto-quoted with a ‘‘slow’’ quote
4 See
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]]>Agencies
[Federal Register Volume 80, Number 69 (Friday, April 10, 2015)]
[Notices]
[Pages 19381-19383]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-08204]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74656; File No. SR-BATS-2015-25]
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rule 4.3, Record of Written Complaints
April 6, 2015.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 26, 2015, BATS Exchange, Inc. (the ``Exchange'' or
``BATS'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The Exchange
has designated this proposal as a ``non-controversial'' proposed rule
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with
the Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 4.3, Record of Written
Complaints. The text of the proposed rule change is below. Proposed new
language is in
[[Page 19382]]
italics; proposed deletions are in brackets.
* * * * *
Rule 4.3. Record of Written Complaints
(a) Each Member shall keep and preserve for a period of not less
than [five]four years a file of all written complaints of customers and
action taken by the Member in respect thereof, if any. Further, for the
first two years of the [five]four-year period, the Member shall keep
such file in a place readily accessible to examination or spot checks.
(b) (No change).
* * * * *
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 II.A., II.B., and II.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 Exchange filed a proposal to amend Rule 4.3, Record of Written
Complaints, to conform with the rules of the Financial Industry
Regulatory Authority, Inc. (``FINRA'') for purposes of an agreement
between the Exchange and FINRA, as well as to conform Exchange Rule 4.3
with the rules of the EDGX Exchange, Inc. (``EDGX'') and the EDGA
Exchange, Inc. (``EDGA'').\5\
---------------------------------------------------------------------------
\5\ See EDGA and EDGX Rules 4.3. See also Securities Exchange
Act Release Nos. 70715 (October 15, 2013), 78 FR 64041 (October 18,
2013) (SR-EDGA-2013-31) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change to Amend EDGA Rule 4.3, Record
of Written Complains, to Conform with Financial Industry Regulatory
Authority, Inc. Rule 4513); and 70714 (October 15, 2013), 78 FR
64038 (October 18, 2013) (SR-EDGX-2013-39) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change to Amend EDGX Rule
4.3, Record of Written Complains, to Conform with Financial Industry
Regulatory Authority, Inc. Rule 4513).
---------------------------------------------------------------------------
Pursuant to Rule 17d-2 under the Act,\6\ the Exchange and FINRA
entered into an agreement to allocate regulatory responsibility for
common rules (the ``17d-2 Agreement''). The 17d-2 Agreement covers
common members of the Exchange and FINRA and allocates to FINRA
regulatory responsibility, with respect to common members, for the
following: (i) Examination of common members of the Exchange and FINRA
for compliance with federal securities laws, rules and regulations and
rules of the Exchange that the Exchange has certified as identical or
substantially similar to FINRA rules; (ii) investigation of common
members of the Exchange and FINRA for violations of federal securities
laws, rules or regulations, or Exchange rules that the Exchange has
certified as identical or substantially identical to a FINRA rule; and
(iii) enforcement of compliance by common members of the Exchange and
FINRA with the federal securities laws, rules and regulations, and the
rules of the Exchange that the Exchange has certified as identical or
substantially similar to FINRA rules.\7\
---------------------------------------------------------------------------
\6\ 17 CFR 240.17d-2.
\7\ See Securities and Exchange Release No. 58375 (August 13,
2008), 75 FR 51295 (August 19, 2008) (approving File No. 10-198).
---------------------------------------------------------------------------
The 17d-2 Agreement included a certification by the Exchange that
states that the requirements contained in certain Exchange rules are
identical to, or substantially similar to, certain FINRA rules that
have been identified as comparable. To conform to comparable FINRA
rules for purposes of the 17d-2 Agreement, the Exchange proposes to
amend Rule 4.3, Record of Written Complaints, to align with FINRA Rule
4513.\8\
---------------------------------------------------------------------------
\8\ See also Securities Exchange Act Release No. 63784 (January
27, 2011), 76 FR 5850 (February 2, 2011) (Order Approving Proposed
Rule Change); (File No. SR-FINRA-2010-052).
---------------------------------------------------------------------------
Exchange Rule 4.3 currently requires that members of the Exchange
(``Members'') keep and preserve written customer complaints \9\ for a
period of not less than five years, the first two of which must be in a
readily accessible place. To take into account FINRA's four-year
routine examination cycle for certain members, FINRA Rule 4513 requires
that members preserve the customer complaint records for a period of at
least four years. Under the 17d-2 Agreement, FINRA examines common
members of the Exchange and FINRA for compliance with Exchange Rule
4.3. However, because of the differing retention periods between
Exchange Rule 4.3 and FINRA Rule 4513, the 17d-2 Agreement specifically
states that FINRA has the regulatory responsibilities for the first
four years of Exchange Rule 4.3's five year record retention
requirement.
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\9\ Exchange Rule 4.3(b) defines a ``complaint'' as ``any
written statement of a customer or any person acting on behalf of a
customer alleging a grievance involving the activities of a Member
or persons under the control of the Member in connection with (1)
the solicitation or execution of any transaction conducted or
contemplated to be conducted through the facilities of the Exchange
or (2) the disposition of securities or funds of that customer which
activities are related to such a transaction.''
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The Exchange, therefore, proposes to decrease the record retention
requirements under Rule 4.3 from five to four years. The Exchange
believes that amending the record retention requirements for customer
complaints to align with FINRA Rule 4513 would help to avoid confusion
among Members that are also members of FINRA, EDGA, or EDGX. The
Exchange further believes that aligning the Exchange's rules with FINRA
Rule 4513 would account for FINRA's four-year routine examination cycle
for certain members, which FINRA conducts on the Exchange's behalf
under the 17d-2 Agreement ensuring consistent regulation of Members
that are also members of FINRA.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \10\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \11\ in particular, in that it
is designed to promote just and equitable principles of trade, to
remove impediments to, and perfect the mechanism of, a free and open
market and a national market system, and, in general, to protect
investors and the public interest, by eliminating unnecessary confusion
with respect to the Exchange's rules. The proposed rule change should
provide greater harmonization between similar Exchange, EDGA, EDGX and
FINRA rules, resulting in greater uniformity and less burdensome and
more efficient regulatory compliance. The proposed rule change should
foster cooperation and coordination with persons engaged in
facilitating transactions in securities and should remove impediments
to and perfect the mechanism of a free and open market and a national
market system consistent with the requirements of Section 6(b)(5) of
the Act.\12\
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\10\ See 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
\12\ 15 U.S.C. 78f(b)(5).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act because the proposed change
would apply to all Members equally.
[[Page 19383]]
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(ii) of the Act \13\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\14\
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\13\ See 15 U.S.C. 78s(b)(3)(a)(ii).
\14\ See 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File No. SR-BATS-2015-25 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File No. SR-BATS-2015-25. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. 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 No. SR-BATS-2015-25 and should
be submitted on or before May 1, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ See 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-08204 Filed 4-9-15; 8:45 am]
BILLING CODE 8011-01-P
