Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Rule 2.4, Mandatory Participation in Testing of Backup Systems, 63859-63862 [2015-26680]

Download as PDF Federal Register / Vol. 80, No. 203 / Wednesday, October 21, 2015 / Notices mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest.’’ 13 The Exchange believes that this proposal is consistent with such authority and legal responsibility. 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. To the contrary, the proposal is not a competitive proposal but rather is necessary for the Exchange’s compliance with Regulation SCI. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received written comments on the proposed rule change. tkelley on DSK3SPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated this rule filing as non-controversial under Section 19(b)(3)(A) of the Act 14 and paragraph (f)(6) of Rule 19b–4 thereunder.15 The proposed rule change effects a change that (A) does not significantly affect the protection of investors or the public interest; (B) does not impose any significant burden on competition; and (C) by its terms, does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest; provided that the self-regulatory organization has given the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily temporarily suspend such rule change if it appears to the Commission that such action is: (1) Necessary or appropriate in the public interest; (2) for the protection of investors; or (3) otherwise in furtherance of the purposes of the Act. 13 See SCI Adopting Release, supra note 6 at 72350. 14 15 U.S.C. 78s(b)(3)(A). 15 17 CFR 240.19b–4. VerDate Sep<11>2014 22:39 Oct 20, 2015 Jkt 238001 63859 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 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–26679 Filed 10–20–15; 8:45 am] Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposal is consistent with the Act. Comments may be submitted by any of the following methods: BILLING CODE 8011–01–P Electronic Comments Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Rule 2.4, Mandatory Participation in Testing of Backup Systems • 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– EDGX–2015–45 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 No. SR–EDGX–2015–45. 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 such filing will also 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–EDGX– 2015–45 and should be submitted on or before November 12, 2015. PO 00000 Frm 00123 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76165; File No. SR–EDGA– 2015–40] October 15, 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 October 2, 2015, EDGA Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGA’’) 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 filed a proposal to adopt business continuity and disaster recovery plans (‘‘BC/DR plans’’) testing requirements for certain Exchange Members 5 in connection with Regulation Systems Compliance and Integrity (‘‘Regulation SCI’’), as further described below.6 The text of the proposed rule change is available at the Exchange’s Web site at www.batstrading.com, at the principal office of the Exchange, and at 16 17 CFR 200.30–3(a)(12). 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). 5 The term ‘‘Member’’ is defined as ‘‘any registered broker or dealer that has been admitted to membership in the Exchange.’’ See Exchange Rule 1.5(n). 6 See Securities Exchange Act Release No. 73639 (November 19, 2014), 79 FR 72252 (December 5, 2014) (‘‘SCI Adopting Release’’). 1 15 E:\FR\FM\21OCN1.SGM 21OCN1 63860 Federal Register / Vol. 80, No. 203 / Wednesday, October 21, 2015 / Notices the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change tkelley on DSK3SPTVN1PROD with NOTICES 1. Purpose As adopted by the Commission, Regulation SCI applies to certain selfregulatory organizations (including the Exchange), alternative trading systems (‘‘ATSs’’), plan processors, and exempt clearing agencies (collectively, ‘‘SCI entities’’), and will require these SCI entities to comply with requirements with respect to the automated systems central to the performance of their regulated activities. Among the requirements of Regulation SCI is Rule 1001(a)(2)(v), which requires the Exchange and other SCI entities to maintain ‘‘[b]usiness continuity and disaster recovery plans that include maintaining backup and recovery capabilities sufficiently resilient and geographically diverse and that are reasonably designed to achieve next business day resumption of trading and two-hour resumption of critical SCI systems following a wide-scale disruption.’’ 7 The Exchange takes pride in the reliability and availability of its systems. Historically, Exchange systems have been up and available more than 99.9% of the time; yet as a precaution, the Exchange has put extensive time and resources toward planning for system failures and already maintains robust BC/DR plans consistent with the Rule. As set forth below, in connection with Regulation SCI, the Exchange is proposing to require certain Members to participate in testing of the operation of the Exchange’s BC/DR plans. With respect to an SCI entity’s BC/DR plans, including its backup systems, paragraph (a) of Rule 1004 of Regulation SCI requires each SCI entity to: ‘‘[e]stablish standards for the designation of those members or participants that the SCI entity reasonably determines are, taken as a whole, the minimum necessary for the maintenance of fair and orderly markets in the event of the activation of such plans.’’ 8 Paragraph (b) of Rule 1004 further requires each SCI entity to ‘‘[d]esignate members or participants pursuant to the standards established in paragraph (a) of [Rule 1004] and require participation by such designated members or participants in scheduled functional and performance testing of the operation of such plans, in the manner and frequency specified by the SCI entity, provided that such frequency shall not be less than once every 12 months.’’ 9 In order to comply with Rule 1004 of Regulation SCI, the Exchange proposes to adopt Rule 2.4, governing mandatory participation in testing of Exchange backup systems, as described below. The Exchange proposes to delete current Rule 2.4 in its entirety because such rule was applicable to a waive-in process offered by the Exchange when it commenced operations and is now obsolete. First, in paragraph (a) of Rule 2.4, the Exchange proposes to include language from paragraph (a) of Rule 1004 of Regulation SCI to summarize the Exchange’s obligation pursuant to such rule. Specifically, the Exchange proposes to state that ‘‘[p]ursuant to Regulation SCI and with respect to the Exchange’s business continuity and disaster recovery plans, including its backup systems, the Exchange is required to establish standards for the designation of Members that the Exchange reasonably determines are, taken as a whole, the minimum necessary for the maintenance of fair and orderly markets in the event of the activation of such plans.’’ The Exchange further proposes that paragraph (a) indicate that the ‘‘Exchange has established standards and will designate Members according to those standards’’ as set forth in the proposed Rule. In addition, the Exchange proposes to make clear that all Members are permitted to connect to the Exchange’s backup systems as well as to participate in testing of such systems. Proposed paragraph (a) is consistent with the Commission’s adoption of Regulation SCI, which encouraged ‘‘SCI entities to permit non-designated members or participants to participate in the testing 8 17 7 17 CFR 242.1001(a)(2)(v). VerDate Sep<11>2014 22:39 Oct 20, 2015 9 17 Jkt 238001 PO 00000 CFR 242.1004(a). CFR 242.1004(b). Frm 00124 Fmt 4703 of the SCI entity’s BC/DR plans if they request to do so.’’ 10 Second, in paragraph (b) of Rule 2.4, the Exchange proposes to specify the criteria that will result in a Member receiving a designation requiring it to connect to the Exchange’s backup systems and to participate in functional and performance testing as announced by the Exchange, which shall occur at least once every 12 months. Specifically, proposed paragraph (b) would require all Members that account for a meaningful percentage of the Exchange’s volume to connect to the Exchange’s backup systems and to participate in functional and performance testing. The Exchange notes that it encourages all Members to connect to the Exchange’s backup systems and to participate in testing of such systems. In fact, the Exchange provides logical ports free of charge to all Members that connect to Exchange backup systems in order to help reduce the economic burden of maintaining connectivity to Exchange backup systems. However, in adopting the requirements of Rule 2.4(b), including both the requirement to maintain connectivity to Exchange backup systems and to participate in mandatory testing of such systems, the Exchange intends to subject to the Rule only those Members that the Exchange believes are necessary to maintain fair and orderly markets at the Exchange. The Exchange believes that designating Members to participate in mandatory testing because they account for a meaningful percentage of the Exchange’s overall volume is a reasonable means to ensure the maintenance of a fair and orderly market on the Exchange. In addition to paragraphs (a) and (b) described above, the Exchange also proposes to adopt Interpretation and Policy .01, which would provide additional detail regarding the notice that will be provided to Members that have been designated pursuant to subparagraph (b) of the Rule as well as the Exchange’s method for measuring the volume threshold. As proposed, Interpretation and Policy .01 would state that for purposes of identifying Members that account for a meaningful percentage of the Exchange’s overall volume, the Exchange will measure volume executed on the Exchange on a quarterly basis. The percentage of volume that the Exchange considers to be meaningful for purposes of this Interpretation and Policy .01 will be determined by the Exchange and will be 10 See SCI Adopting Release, supra note 6 at 72350. Sfmt 4703 E:\FR\FM\21OCN1.SGM 21OCN1 Federal Register / Vol. 80, No. 203 / Wednesday, October 21, 2015 / Notices tkelley on DSK3SPTVN1PROD with NOTICES published in a circular distributed to Members. The Exchange will publish the first circular consistent with this proposal prior to the Regulation SCI compliance date of November 3, 2015. The proposed Interpretation and Policy would also require the Exchange to notify individual Members quarterly that are subject to proposed paragraph (b) based on the prior calendar quarter’s volume. Finally, as proposed, if a Member has not previously been subject to the requirements of proposed paragraph (b), then such Member would have until the next calendar quarter before such requirements are applicable. The Exchange believes the proposed notice requirements are necessary to provide Members with proper advance notice in the event they become subject to proposed Rule 2.4(b). The proposed timeframes would also provide Members with adequate time to become compliant with such Rule due to the necessary infrastructure changes it may take to connect to the Exchange’s backup systems for a Member that is not already connected. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 11 in general, and furthers the objectives of Section 6(b)(5) of the Act 12 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. The proposal will ensure that the Members necessary to ensure the maintenance of a fair an orderly market are properly designated consistent with Rule 1004 of Regulation SCI. Specifically, the proposal will adopt criteria with respect to the designation of Members that are required to participate in the testing of the Exchange’s BC/DR plans, as well as appropriate notification regarding such designation. As set forth in the SCI Adopting Release, ‘‘SROs have the authority, and legal responsibility, under Section 6 of the Exchange Act, to adopt and enforce rules (including rules to comply with Regulation SCI’s requirements relating to BC/DR testing) applicable to their members or participants that are designed to, among other things, foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the 11 15 12 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). VerDate Sep<11>2014 22:39 Oct 20, 2015 Jkt 238001 mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest.’’ 13 The Exchange believes that this proposal is consistent with such authority and legal responsibility. 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. To the contrary, the proposal is not a competitive proposal but rather is necessary for the Exchange’s compliance with Regulation SCI. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated this rule filing as non-controversial under Section 19(b)(3)(A) of the Act 14 and paragraph (f)(6) of Rule 19b–4 thereunder.15 The proposed rule change effects a change that (A) does not significantly affect the protection of investors or the public interest; (B) does not impose any significant burden on competition; and (C) by its terms, does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest; provided that the self-regulatory organization has given the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily temporarily suspend such rule change if it appears to the Commission that such action is: (1) Necessary or appropriate in the public interest; (2) for the protection of investors; or (3) otherwise in furtherance of the purposes of the Act. 13 See SCI Adopting Release, supra note 6 at 72350. 14 15 U.S.C. 78s(b)(3)(A). 15 17 CFR 240.19b–4. PO 00000 Frm 00125 Fmt 4703 Sfmt 4703 63861 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 proposal 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– EDGA–2015–40 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 No. SR–EDGA–2015–40. 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 such filing will also 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–EDGA–2015–40 and should be submitted on or before November 12, 2015. E:\FR\FM\21OCN1.SGM 21OCN1 63862 Federal Register / Vol. 80, No. 203 / Wednesday, October 21, 2015 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–26680 Filed 10–20–15; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION Data Collection Available for Public Comments Summary of Information Collection Title: Servicing Agent Agreement. Description of Respondents: SBA Borrowers. Form Number: SBA Form 1506. Total Estimated Annual Responses: 8,429. Total Estimated Annual Hour Burden: 8,429. Curtis B. Rich, Management Analyst. [FR Doc. 2015–26662 Filed 10–20–15; 8:45 am] Form 994H, Default Report, Claim for Reimbursement & Records of Administrative Action. Solicitation of Public Comments SBA is requesting comments on (a) Whether the collection of information is necessary for the agency to properly perform its functions; (b) whether the burden estimates are accurate; (c) whether there are ways to minimize the burden, including through the use of automated techniques or other forms of information technology; and (d) whether there are ways to enhance the quality, utility, and clarity of the information. ACTION: 60-day notice and request for comments. BILLING CODE 8025–01–P The Small Business Administration (SBA) intends to request approval, from the Office of Management and Budget (OMB) for the collection of information described below. The Paperwork Reduction Act (PRA) of 1995, 44 U.S.C. chapter 35 requires federal agencies to publish a notice in the Federal Register concerning each proposed collection of information before submission to OMB, and to allow 60 days for public comment in response to the notice. This notice complies with that requirement. DATES: Submit comments on or before December 21, 2015. ADDRESSES: Send all comments to Mary Frias, Loan Specialist, Office of Financial Assistance, Small Business Administration, 409 3rd Street SW., Washington, DC 20416. FOR FURTHER INFORMATION CONTACT: Mary Frias, Loan Specialist, Office of Financial Assistance, mary.frias@ sba.gov 202–401–8234, or Curtis B. Rich, Management Analyst, 202–205– 7030, curtis.rich@sba.gov. SUPPLEMENTARY INFORMATION: The servicing agent agreement is executed by the borrower, and the certified development company as the loan servicing agent. The agreement is primarily used by the certified development company as the loan servicing agent and acknowledges the imposition of various fees allowed in SBA’s 504 loan program. SMALL BUSINESS ADMINISTRATION Summary of Information Collection Data Collection Available for Public Comments Title: Surety Bond Guarantees Assistance. Description of Respondents: Surety Companies. Form Number: SBA Forms 990, 991, 994, 994B, 994F, 994H. Total Estimated Annual Responses: 650. Total Estimated Annual Hour Burden: 1,658. tkelley on DSK3SPTVN1PROD with NOTICES SUMMARY: Solicitation of Public Comments SBA is requesting comments on (a) Whether the collection of information is necessary for the agency to properly perform its functions; (b) whether the burden estimates are accurate; (c) whether there are ways to minimize the burden, including through the use of automated techniques or other forms of information technology; and (d) whether there are ways to enhance the quality, utility, and clarity of the information. 16 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 22:39 Oct 20, 2015 Jkt 238001 60-Day notice and request for comments. ACTION: The Small Business Administration (SBA) intends to request approval, from the Office of Management and Budget (OMB) for the collection of information described below. The Paperwork Reduction Act (PRA) of 1995, 44 U.S.C Chapter 35 requires federal agencies to publish a notice in the Federal Register concerning each proposed collection of information before submission to OMB, and to allow 60 days for public comment in response to the notice. This notice complies with that requirement. DATES: Submit comments on or before December 21, 2015. ADDRESSES: Send all comments to Barbara Brannan, Management Analyst, Office of Surety Guarantee, Small Business Administration, 409 3rd Street SW., Washington, DC 20416. FOR FURTHER INFORMATION CONTACT: Barbara Brannan, Management Analyst, Office of Surety Guarantee, Barbara.brannan@sba.gov 202–205– 6545, or Curtis B. Rich, Management Analyst, 202–205–7030, curtis.rich@ sba.gov. SUMMARY: The Small Business Administration’s (SBA) Surety Bond Guarantees (SBG) Program was created to encourage surety companies to issue bonds for small contractors. The information collected on these forms is used to evaluate the eligibility of applicants for the program. Changes are being made to SBA Form 990, Surety Bond Guarantee Agreement, SBA Form 991, Surety Bond Guarantee Agreement Addendum, SBA Form 994, Application for Surety Bond Guarantee Assistance, SBA Form 994B, Surety Bond Guarantee Underwriting Review, SBA Form 994F, Schedule of Work in Process, and SBA SUPPLEMENTARY INFORMATION: PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 Curtis B. Rich, Management Analyst . [FR Doc. 2015–26663 Filed 10–20–15; 8:45 am] BILLING CODE 8025–01–P DEPARTMENT OF STATE [Public Notice: 9322] California-Arizona Meeting of the Binational Bridges and Border Crossings Group in Washington, DC Department of State. Notice. AGENCY: ACTION: Delegates from the United States and Mexican Governments, the states of Arizona and California, and the Mexican states of Baja California and Sonora, will participate in the California-Arizona Meeting of the U.S.Mexico Binational Bridges and Border Crossings Group on Wednesday, October 28, 2015 in Ensenada, Baja California, Mexico. The purpose of this meeting is to discuss operational matters involving existing and proposed international bridges and border crossings and their related infrastructure, and to exchange views on policy as well as technical information. This meeting includes a public session on Wednesday, October 28, 2015, from 9:00 a.m. until 10:15 a.m. This session allows proponents of proposed bridges and border crossings and related projects to make presentations to the delegations and members of the public. SUMMARY: E:\FR\FM\21OCN1.SGM 21OCN1

Agencies

[Federal Register Volume 80, Number 203 (Wednesday, October 21, 2015)]
[Notices]
[Pages 63859-63862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-26680]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76165; File No. SR-EDGA-2015-40]


Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt 
Rule 2.4, Mandatory Participation in Testing of Backup Systems

October 15, 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 October 2, 2015, EDGA Exchange, Inc. (the ``Exchange'' or 
``EDGA'') 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to adopt business continuity and 
disaster recovery plans (``BC/DR plans'') testing requirements for 
certain Exchange Members \5\ in connection with Regulation Systems 
Compliance and Integrity (``Regulation SCI''), as further described 
below.\6\
---------------------------------------------------------------------------

    \5\ The term ``Member'' is defined as ``any registered broker or 
dealer that has been admitted to membership in the Exchange.'' See 
Exchange Rule 1.5(n).
    \6\ See Securities Exchange Act Release No. 73639 (November 19, 
2014), 79 FR 72252 (December 5, 2014) (``SCI Adopting Release'').
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    The text of the proposed rule change is available at the Exchange's 
Web site at www.batstrading.com, at the principal office of the 
Exchange, and at

[[Page 63860]]

the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant parts of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    As adopted by the Commission, Regulation SCI applies to certain 
self-regulatory organizations (including the Exchange), alternative 
trading systems (``ATSs''), plan processors, and exempt clearing 
agencies (collectively, ``SCI entities''), and will require these SCI 
entities to comply with requirements with respect to the automated 
systems central to the performance of their regulated activities. Among 
the requirements of Regulation SCI is Rule 1001(a)(2)(v), which 
requires the Exchange and other SCI entities to maintain ``[b]usiness 
continuity and disaster recovery plans that include maintaining backup 
and recovery capabilities sufficiently resilient and geographically 
diverse and that are reasonably designed to achieve next business day 
resumption of trading and two-hour resumption of critical SCI systems 
following a wide-scale disruption.'' \7\ The Exchange takes pride in 
the reliability and availability of its systems. Historically, Exchange 
systems have been up and available more than 99.9% of the time; yet as 
a precaution, the Exchange has put extensive time and resources toward 
planning for system failures and already maintains robust BC/DR plans 
consistent with the Rule. As set forth below, in connection with 
Regulation SCI, the Exchange is proposing to require certain Members to 
participate in testing of the operation of the Exchange's BC/DR plans.
---------------------------------------------------------------------------

    \7\ 17 CFR 242.1001(a)(2)(v).
---------------------------------------------------------------------------

    With respect to an SCI entity's BC/DR plans, including its backup 
systems, paragraph (a) of Rule 1004 of Regulation SCI requires each SCI 
entity to: ``[e]stablish standards for the designation of those members 
or participants that the SCI entity reasonably determines are, taken as 
a whole, the minimum necessary for the maintenance of fair and orderly 
markets in the event of the activation of such plans.'' \8\ Paragraph 
(b) of Rule 1004 further requires each SCI entity to ``[d]esignate 
members or participants pursuant to the standards established in 
paragraph (a) of [Rule 1004] and require participation by such 
designated members or participants in scheduled functional and 
performance testing of the operation of such plans, in the manner and 
frequency specified by the SCI entity, provided that such frequency 
shall not be less than once every 12 months.'' \9\ In order to comply 
with Rule 1004 of Regulation SCI, the Exchange proposes to adopt Rule 
2.4, governing mandatory participation in testing of Exchange backup 
systems, as described below. The Exchange proposes to delete current 
Rule 2.4 in its entirety because such rule was applicable to a waive-in 
process offered by the Exchange when it commenced operations and is now 
obsolete.
---------------------------------------------------------------------------

    \8\ 17 CFR 242.1004(a).
    \9\ 17 CFR 242.1004(b).
---------------------------------------------------------------------------

    First, in paragraph (a) of Rule 2.4, the Exchange proposes to 
include language from paragraph (a) of Rule 1004 of Regulation SCI to 
summarize the Exchange's obligation pursuant to such rule. 
Specifically, the Exchange proposes to state that ``[p]ursuant to 
Regulation SCI and with respect to the Exchange's business continuity 
and disaster recovery plans, including its backup systems, the Exchange 
is required to establish standards for the designation of Members that 
the Exchange reasonably determines are, taken as a whole, the minimum 
necessary for the maintenance of fair and orderly markets in the event 
of the activation of such plans.'' The Exchange further proposes that 
paragraph (a) indicate that the ``Exchange has established standards 
and will designate Members according to those standards'' as set forth 
in the proposed Rule. In addition, the Exchange proposes to make clear 
that all Members are permitted to connect to the Exchange's backup 
systems as well as to participate in testing of such systems. Proposed 
paragraph (a) is consistent with the Commission's adoption of 
Regulation SCI, which encouraged ``SCI entities to permit non-
designated members or participants to participate in the testing of the 
SCI entity's BC/DR plans if they request to do so.'' \10\
---------------------------------------------------------------------------

    \10\ See SCI Adopting Release, supra note 6 at 72350.
---------------------------------------------------------------------------

    Second, in paragraph (b) of Rule 2.4, the Exchange proposes to 
specify the criteria that will result in a Member receiving a 
designation requiring it to connect to the Exchange's backup systems 
and to participate in functional and performance testing as announced 
by the Exchange, which shall occur at least once every 12 months. 
Specifically, proposed paragraph (b) would require all Members that 
account for a meaningful percentage of the Exchange's volume to connect 
to the Exchange's backup systems and to participate in functional and 
performance testing.
    The Exchange notes that it encourages all Members to connect to the 
Exchange's backup systems and to participate in testing of such 
systems. In fact, the Exchange provides logical ports free of charge to 
all Members that connect to Exchange backup systems in order to help 
reduce the economic burden of maintaining connectivity to Exchange 
backup systems. However, in adopting the requirements of Rule 2.4(b), 
including both the requirement to maintain connectivity to Exchange 
backup systems and to participate in mandatory testing of such systems, 
the Exchange intends to subject to the Rule only those Members that the 
Exchange believes are necessary to maintain fair and orderly markets at 
the Exchange. The Exchange believes that designating Members to 
participate in mandatory testing because they account for a meaningful 
percentage of the Exchange's overall volume is a reasonable means to 
ensure the maintenance of a fair and orderly market on the Exchange.
    In addition to paragraphs (a) and (b) described above, the Exchange 
also proposes to adopt Interpretation and Policy .01, which would 
provide additional detail regarding the notice that will be provided to 
Members that have been designated pursuant to subparagraph (b) of the 
Rule as well as the Exchange's method for measuring the volume 
threshold. As proposed, Interpretation and Policy .01 would state that 
for purposes of identifying Members that account for a meaningful 
percentage of the Exchange's overall volume, the Exchange will measure 
volume executed on the Exchange on a quarterly basis. The percentage of 
volume that the Exchange considers to be meaningful for purposes of 
this Interpretation and Policy .01 will be determined by the Exchange 
and will be

[[Page 63861]]

published in a circular distributed to Members. The Exchange will 
publish the first circular consistent with this proposal prior to the 
Regulation SCI compliance date of November 3, 2015. The proposed 
Interpretation and Policy would also require the Exchange to notify 
individual Members quarterly that are subject to proposed paragraph (b) 
based on the prior calendar quarter's volume. Finally, as proposed, if 
a Member has not previously been subject to the requirements of 
proposed paragraph (b), then such Member would have until the next 
calendar quarter before such requirements are applicable. The Exchange 
believes the proposed notice requirements are necessary to provide 
Members with proper advance notice in the event they become subject to 
proposed Rule 2.4(b). The proposed timeframes would also provide 
Members with adequate time to become compliant with such Rule due to 
the necessary infrastructure changes it may take to connect to the 
Exchange's backup systems for a Member that is not already connected.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \11\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \12\ 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. The proposal will ensure that the Members necessary to ensure 
the maintenance of a fair an orderly market are properly designated 
consistent with Rule 1004 of Regulation SCI. Specifically, the proposal 
will adopt criteria with respect to the designation of Members that are 
required to participate in the testing of the Exchange's BC/DR plans, 
as well as appropriate notification regarding such designation. As set 
forth in the SCI Adopting Release, ``SROs have the authority, and legal 
responsibility, under Section 6 of the Exchange Act, to adopt and 
enforce rules (including rules to comply with Regulation SCI's 
requirements relating to BC/DR testing) applicable to their members or 
participants that are designed to, among other things, foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public 
interest.'' \13\ The Exchange believes that this proposal is consistent 
with such authority and legal responsibility.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
    \13\ See SCI Adopting Release, supra note 6 at 72350.
---------------------------------------------------------------------------

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. To the contrary, the proposal 
is not a competitive proposal but rather is necessary for the 
Exchange's compliance with Regulation SCI.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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

    The Exchange has designated this rule filing as non-controversial 
under Section 19(b)(3)(A) of the Act \14\ and paragraph (f)(6) of Rule 
19b-4 thereunder.\15\ The proposed rule change effects a change that 
(A) does not significantly affect the protection of investors or the 
public interest; (B) does not impose any significant burden on 
competition; and (C) by its terms, does not become operative for 30 
days after the date of the filing, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest; provided that the self-regulatory organization 
has given the Commission written notice of its intent to file the 
proposed rule change, along with a brief description and text of the 
proposed rule change, at least five business days prior to the date of 
filing of the proposed rule change, or such shorter time as designated 
by the Commission.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily temporarily suspend such rule 
change if it appears to the Commission that such action is: (1) 
Necessary or appropriate in the public interest; (2) for the protection 
of investors; or (3) 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 proposal 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-EDGA-2015-40 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 No. SR-EDGA-2015-40. 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 such filing will also 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-EDGA-2015-40 and 
should be submitted on or before November 12, 2015.


[[Page 63862]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-26680 Filed 10-20-15; 8:45 am]
BILLING CODE 8011-01-P
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