Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing of an Amendment to the Agreement Between the Financial Industry Regulatory Authority, Inc. and the NYSE Chicago, Inc., 25105-25109 [2019-11223]
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Federal Register / Vol. 84, No. 104 / Thursday, May 30, 2019 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–11237 Filed 5–29–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85921; File No. 4–274]
Program for Allocation of Regulatory
Responsibilities Pursuant to Rule 17d–
2; Notice of Filing of an Amendment to
the Agreement Between the Financial
Industry Regulatory Authority, Inc. and
the NYSE Chicago, Inc.
May 23, 2019.
Pursuant to Section 17(d) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 17d–2 thereunder,2
notice is hereby given that on May 8,
2019, the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) and the
NYSE Chicago, Inc. (‘‘CHX’’) (together
with FINRA, the ‘‘Parties’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’)
an amendment to their July 9, 2010
Agreement Between Financial Industry
Regulatory Authority, Inc. and Chicago
Stock Exchange, Inc. (‘‘17d–2 Plan’’ or
the ‘‘Plan’’) for the allocation of
regulatory responsibilities. The
Commission is publishing this notice to
solicit comments on the amendment to
the 17d–2 Plan from interested persons.
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I. Introduction
Section 19(g)(1) of the Act,3 among
other things, requires every selfregulatory organization (‘‘SRO’’)
registered as either a national securities
exchange or national securities
association to examine for, and enforce
compliance by, its members and persons
associated with its members with the
Act, the rules and regulations
thereunder, and the SRO’s own rules,
unless the SRO is relieved of this
responsibility pursuant to Section 17(d)
or Section 19(g)(2) of the Act.4 Without
this relief, the statutory obligation of
each individual SRO could result in a
pattern of multiple examinations of
broker-dealers that maintain
memberships in more than one SRO
(‘‘common members’’). Such regulatory
duplication would add unnecessary
20 17
CFR 200.30–3(a)(12).
U.S.C. 78q(d).
2 17 CFR 240.17d–2.
3 15 U.S.C. 78s(g)(1).
4 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2),
respectively.
1 15
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expenses for common members and
their SROs.
Section 17(d)(1) of the Act 5 was
intended, in part, to eliminate
unnecessary multiple examinations and
regulatory duplication.6 With respect to
a common member, Section 17(d)(1)
authorizes the Commission, by rule or
order, to relieve an SRO of the
responsibility to receive regulatory
reports, to examine for and enforce
compliance with applicable statutes,
rules, and regulations, or to perform
other specified regulatory functions.
To implement Section 17(d)(1), the
Commission adopted two rules: Rule
17d–1 and Rule 17d–2 under the Act.7
Rule 17d–1 authorizes the Commission
to name a single SRO as the designated
examining authority (‘‘DEA’’) to
examine common members for
compliance with the financial
responsibility requirements imposed by
the Act, or by Commission or SRO
rules.8 When an SRO has been named as
a common member’s DEA, all other
SROs to which the common member
belongs are relieved of the responsibility
to examine the firm for compliance with
the applicable financial responsibility
rules. On its face, Rule 17d–1 deals only
with an SRO’s obligations to enforce
member compliance with financial
responsibility requirements. Rule 17d–1
does not relieve an SRO from its
obligation to examine a common
member for compliance with its own
rules and provisions of the federal
securities laws governing matters other
than financial responsibility, including
sales practices and trading activities and
practices.
To address regulatory duplication in
these and other areas, the Commission
adopted Rule 17d–2 under the Act.9
Rule 17d–2 permits SROs to propose
joint plans for the allocation of
regulatory responsibilities with respect
to their common members. Under
paragraph (c) of Rule 17d–2, the
Commission may declare such a plan
effective if, after providing for
appropriate notice and comment, it
determines that the plan is necessary or
appropriate in the public interest and
for the protection of investors; to foster
cooperation and coordination among the
SROs; to remove impediments to, and
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).
7 17 CFR 240.17d–1 and 17 CFR 240.17d–2,
respectively.
8 See Securities Exchange Act Release No. 12352
(April 20, 1976), 41 FR 18808 (May 7, 1976).
9 See Securities Exchange Act Release No. 12935
(October 28, 1976), 41 FR 49091 (November 8,
1976).
25105
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. The Plan
On September 26, 1978, the
Commission approved the Plan
allocating regulatory responsibilities
pursuant to Rule 17d–2 on a provisional
basis.10 Under the Plan, the predecessor
to FINRA was responsible, in part, for
conducting on-site examination of each
dual member for which it was the DEA.
On February 20, 1980, the Commission
noticed for comment an amendment to
the Plan, which provided, in part, for
the handling of customer complaints,
the review of dual members’
advertising, and the arbitration of
disputes under the Plan.11 On May 30,
1980, the Commission approved the
Plan, as amended.12 On September 8,
2010, the Commission approved an
amendment to replace the previous Plan
in its entirety.13
III. Proposed Amendment to the Plan
On May 8, 2019, the Parties submitted
a proposed amendment to the Plan. The
primary purpose of the amendment is to
the extent that it becomes a member of
the exchange, allocate regulatory
responsibility to FINRA for CHX’s
affiliated routing broker-dealer,
Archipelago Securities LLC. The text of
the proposed amended 17d–2 plan is as
follows (additions are italicized;
deletions are [bracketed]):
AGREEMENT BETWEEN FINANCIAL
INDUSTRY REGULATORY
AUTHORITY, INC. AND NYSE
CHICAGO [STOCK EXCHANGE], INC.
PURSUANT TO RULE 17d–2 UNDER
THE SECURITIES EXCHANGE ACT OF
1934
This Agreement, by and between the
Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) and the
NYSE Chicago [Stock Exchange], Inc.
(‘‘CHX’’), is made this [9th]7th day of
[July]May, [2010]2019 (the
‘‘Agreement’’), pursuant to Section 17(d)
5 15
6 See
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10 See Securities Exchange Act Release No. 15191
(September 26, 1978), 43 FR 46093 (October 5,
1978).
11 See Securities Exchange Act Release No. 16591
(February 20, 1980), 45 FR 12573 (February 26,
1980).
12 See Securities Exchange Act Release No. 16858
(May 30, 1980), 45 FR 37927 (June 5, 1980).
13 See Securities Exchange Act Release No. 62866
(September 8, 2010), 75 FR 55833 (September 14,
2010).
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Federal Register / Vol. 84, No. 104 / Thursday, May 30, 2019 / Notices
of the Securities Exchange Act of 1934
(the ‘‘Exchange Act’’) and Rule 17d–2
thereunder which permits agreements
between self-regulatory organizations to
allocate regulatory responsibility to
eliminate regulatory duplication. FINRA
and CHX may be referred to
individually as a ‘‘party’’ and together
as the ‘‘parties.’’
This Agreement amends and restates
the agreement entered into between the
parties on [September 16, 1977]July 9,
2010, entitled ‘‘Agreement Between [the
National Association of Securities
Dealers, Inc.]Financial Industry
Regulatory Authority, Inc. and [the
Midwest]Chicago Stock Exchange
[Incorporated]Inc. Pursuant to SEC Rule
17d–2 Under the Securities Exchange
Act of 1934,’’ and any subsequent
amendments thereafter.
Whereas, Finra and CHX desire to
reduce duplication in the examination
of their Dual Members (as defined
herein) and in the filing and processing
of certain registration and membership
records; and
Whereas, Finra and CHX desire to
execute an agreement covering such
subjects pursuant to the provisions of
Rule 17d–2 under the Exchange Act and
to file such agreement with the
Securities and Exchange Commission
(the ‘‘SEC’’ or ‘‘Commission’’) for its
approval.
Now, Therefore, in consideration of
the mutual covenants contained
hereinafter, FINRA and CHX hereby
agree as follows:
1. Definitions. Unless otherwise
defined in this Agreement or the context
otherwise requires, the terms used in
this Agreement shall have the same
meaning as they have under the
Exchange Act and the rules and
regulations thereunder. As used in this
Agreement, the following terms shall
have the following meanings:
(a) ‘‘CHX Rules’’ or ‘‘FINRA Rules’’
shall mean: (i) The rules of the CHX, or
(ii) the rules of FINRA, respectively, as
the rules of an exchange or association
are defined in Exchange Act Section
3(a)(27).
(b) ‘‘Common Rules’’ shall mean the
CHX Rules that are substantially similar
to the applicable FINRA Rules and
certain provisions of the Exchange Act
and SEC rules set forth on Exhibit 1 in
that examination for compliance with
such rules would not require FINRA to
develop one or more new examination
standards, modules, procedures, or
criteria in order to analyze the
application of such provisions or rule,
or a Dual Member’s activity, conduct, or
output in relation to such rule;
provided, however, Common Rules
shall not include the application of SEC,
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CHX or FINRA rules as they pertain to
violations of insider trading activities,
which is covered by a separate 17d–2
Agreement by and among [the American
Stock Exchange LLC, BATS Exchange,
Inc., Chicago Board Options Exchange,
Inc., Chicago Stock Exchange, Inc.,
EDGA Exchange, Inc., EDGX Exchange,
Inc., Financial Industry Regulatory
Authority, Inc., International Securities
Exchange, LLC, The NASDAQ Stock
Market LLC, National Stock Exchange,
Inc., New York Stock Exchange, LLC,
NYSE Arca Inc., NYSE Regulation, Inc.,
NASDAQ OMX BX, Inc. and NASDAQ
OMX PHLX, Inc. effective April 15,
2010] the Cboe BZX Exchange, Inc., Bats
Cboe BYX Exchange, Inc., Chicago
Stock Exchange, Inc., Cboe EDGA
Exchange, Inc., Bats Cboe EDGX
Exchange, Inc., Financial Industry
Regulatory Authority, Inc., Nasdaq BX,
Inc., Nasdaq PHLX LLC, The Nasdaq
Stock Market LLC, NYSE National, Inc.,
New York Stock Exchange LLC, NYSE
American LLC, NYSE Arca, Inc., and
Investors Exchange LLC, approved by
the SEC on October 10, 2018, as may be
amended from time to time. Common
Rules shall not include provisions
regarding (i) notice, reporting or any
other filings made directly to or from
CHX, (ii) incorporation by reference of
other CHX Rules that are not Common
Rules, (iii) exercise of discretion in a
manner that differs from FINRA’s
exercise of discretion, including, but not
limited to exercise of exemptive
authority, by CHX, (iv) prior written
approval of CHX, and (v) payment of
fees or fines to CHX.
(c) ‘‘Dual Members’’ shall mean those
CHX members that are also members of
FINRA and the associated persons
therewith.
(d) ‘‘Effective Date’’ shall be the date
this Agreement is approved by the
Commission.
(e) ‘‘Enforcement Responsibilities’’
shall mean the conduct of appropriate
proceedings, in accordance with the
FINRA Code of Procedure (the Rule
9000 Series) and other applicable
FINRA procedural rules, to determine
whether violations of Common Rules
have occurred, and if such violations are
deemed to have occurred, the
imposition of appropriate sanctions as
specified under the FINRA Code of
Procedure and sanctions guidelines.
(f) ‘‘Regulatory Responsibilities’’ shall
mean the examination responsibilities
and Enforcement Responsibilities
relating to compliance by the Dual
Members with the Common Rules and
the provisions of the Exchange Act and
the rules and regulations thereunder,
and other applicable laws, rules and
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regulations, each as set forth on Exhibit
1 attached hereto.
2. Regulatory and Enforcement
Responsibilities. FINRA shall assume
Regulatory Responsibilities and
Enforcement Responsibilities for Dual
Members. Attached as Exhibit 1 to this
Agreement and made part hereof, CHX
furnished FINRA with a current list of
Common Rules and certified to FINRA
that such rules are substantially similar
to the corresponding FINRA Rule (the
‘‘Certification’’). FINRA hereby agrees
that the rules listed in the Certification
are Common Rules as defined in this
Agreement. Each year following the
Effective Date of this Agreement, or
more frequently if required by changes
in either the rules of CHX or FINRA,
CHX shall submit an updated list of
Common Rules to FINRA for review
which shall add CHX Rules not
included in the current list of Common
Rules that qualify as Common Rules as
defined in this Agreement; delete CHX
Rules included in the current list of
Common Rules that no longer qualify as
Common Rules as defined in this
Agreement; and confirm that the
remaining rules on the current list of
Common Rules continue to be CHX
Rules that qualify as Common Rules as
defined in this Agreement. Within 30
days of receipt of such updated list,
FINRA shall confirm in writing whether
the rules listed in any updated list are
Common Rules as defined in this
Agreement. Notwithstanding anything
herein to the contrary, it is explicitly
understood that the term ‘‘Regulatory
Responsibilities’’ does not include, and
CHX shall retain full responsibility for
(unless otherwise addressed by separate
agreement or rule) the following
(collectively, the ‘‘Retained
Responsibilities’’):
(a) Surveillance, examination,
investigation and enforcement with
respect to trading activities or practices
involving CHX’s own marketplace;
(b) registration pursuant to its
applicable rules of associated persons
(i.e., registration rules that are not
Common Rules);
(c) discharge of its duties and
obligations as a Designated Examining
Authority pursuant to Rule 17d–1 under
the Exchange Act, if applicable; and
(d) any CHX Rules that are not
Common Rules except for CHX Rules for
any CHX affiliate that is a member that
operates as a facility (as defined in
Section 3(a)(2) of the Exchange Act),
acts as a router for CHX and is a
member of FINRA (‘‘Router Member’’) as
provided in paragraph 6. As of the date
of this Agreement, Archipelago
Securities LLC is the only Router
Member.
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3. Dual Members. Prior to the
Effective Date, CHX shall furnish FINRA
with a current list of Dual Members,
which shall be updated no less
frequently than once each quarter.
4. No Charge. There shall be no
charge to CHX by FINRA for performing
the Regulatory Responsibilities and
Enforcement Responsibilities under this
Agreement except as hereinafter
provided. FINRA shall provide CHX
with ninety (90) days advance written
notice in the event FINRA decides to
impose any charges to CHX for
performing the Regulatory
Responsibilities under this Agreement.
If FINRA determines to impose a charge,
CHX shall have the right at the time of
the imposition of such charge to
terminate this Agreement; provided,
however, that FINRA’s Regulatory
Responsibilities under this Agreement
shall continue until the Commission
approves the termination of this
Agreement.
5. Applicability of Certain Laws,
Rules, Regulations or Orders.
Notwithstanding any provision hereof,
this Agreement shall be subject to any
statute, or any rule or order of the
Commission. To the extent such statute,
rule or order is inconsistent with one or
more provisions of this Agreement, the
statute, rule or order shall supersede the
provision(s) hereof to the extent
necessary to be properly effectuated and
the provision(s) hereof in that respect
shall be null and void.
6. Notification of Violations.
(a) In the event that FINRA becomes
aware of apparent violations of any CHX
Rules, which are not listed as Common
Rules, discovered pursuant to the
performance of the Regulatory
Responsibilities assumed hereunder,
FINRA shall notify CHX of those
apparent violations for such response as
CHX deems appropriate. With respect to
apparent violations of any CHX Rules
by any Router Member, FINRA shall not
make referrals to CHX pursuant to this
paragraph 6. Such apparent violations
shall be processed by, and enforcement
proceedings in respect thereto will be
conducted by, FINRA as provided in
this agreement.
(b) In the event that CHX becomes
aware of apparent violations of any
Common Rules, discovered pursuant to
the performance of the Retained
Responsibilities, CHX shall notify
FINRA of those apparent violations and
such matters shall be handled by FINRA
as provided in this Agreement.
(c) Apparent violations of Common
Rules shall be processed by, and
enforcement proceedings in respect
thereto shall be conducted by FINRA as
provided hereinbefore; provided,
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however, that in the event a Dual
Member is the subject of an
investigation relating to a transaction on
the CHX, CHX may in its discretion
assume concurrent jurisdiction and
responsibility.
(d) Each party agrees to make
available promptly all files, records and
witnesses necessary to assist the other
in its investigation or proceedings.
7. Continued Assistance.
(a) FINRA shall make available to
CHX all information obtained by FINRA
in the performance by it of the
Regulatory Responsibilities hereunder
with respect to the Dual Members
subject to this Agreement. In particular,
and not in limitation of the foregoing,
FINRA shall furnish CHX any
information it obtains about Dual
Members which reflects adversely on
their financial condition. CHX shall
make available to FINRA any
information coming to its attention that
reflects adversely on the financial
condition of Dual Members or indicates
possible violations of applicable laws,
rules or regulations by such firms.
(b) The parties agree that documents
or information shared shall be held in
confidence, and used only for the
purposes of carrying out their respective
regulatory obligations. Neither party
shall assert regulatory or other
privileges as against the other with
respect to documents or information
that is required to be shared pursuant to
this Agreement.
(c) The sharing of documents or
information between the parties
pursuant to this Agreement shall not be
deemed a waiver as against third parties
of regulatory or other privileges relating
to the discovery of documents or
information.
8. Statutory Disqualifications. When
FINRA becomes aware of a statutory
disqualification as defined in the
Exchange Act with respect to a Dual
Member, FINRA shall determine
pursuant to Sections 15A(g) and/or
Section 6(c) of the Exchange Act the
acceptability or continued applicability
of the person to whom such
disqualification applies and keep CHX
advised of its actions in this regard for
such subsequent proceedings as CHX
may initiate.
9. Customer Complaints. CHX shall
forward to FINRA copies of all customer
complaints involving Dual Members
received by CHX relating to FINRA’s
Regulatory Responsibilities under this
Agreement. It shall be FINRA’s
responsibility to review and take
appropriate action in respect to such
complaints.
10. Advertising. FINRA shall assume
responsibility to review the advertising
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25107
of Dual Members subject to the
Agreement, provided that such material
is filed with FINRA in accordance with
FINRA’s filing procedures and is
accompanied with any applicable filing
fees set forth in FINRA Rules.
11. No Restrictions on Regulatory
Action. Nothing contained in this
Agreement shall restrict or in any way
encumber the right of either party to
conduct its own independent or
concurrent investigation, examination
or enforcement proceeding of or against
Dual Members, as either party, in its
sole discretion, shall deem appropriate
or necessary.
12. Termination. This Agreement may
be terminated by CHX or FINRA at any
time upon the approval of the
Commission after one (1) year’s written
notice to the other party, except as
provided in paragraph 4.
13. Arbitration. In the event of a
dispute between the parties as to the
operation of this Agreement, CHX and
FINRA hereby agree that any such
dispute shall be settled by arbitration in
Washington, DC in accordance with the
rules of the American Arbitration
Association then in effect, or such other
procedures as the parties may mutually
agree upon. Judgment on the award
rendered by the arbitrator(s) may be
entered in any court having jurisdiction.
Each party acknowledges that the timely
and complete performance of its
obligations pursuant to this Agreement
is critical to the business and operations
of the other party. In the event of a
dispute between the parties, the parties
shall continue to perform their
respective obligations under this
Agreement in good faith during the
resolution of such dispute unless and
until this Agreement is terminated in
accordance with its provisions. Nothing
in this Section 13 shall interfere with a
party’s right to terminate this Agreement
as set forth herein.
14. Notification of Members. CHX and
FINRA shall notify Dual Members of
this Agreement after the Effective Date
by means of a uniform joint notice.
15. Amendment. This Agreement may
be amended in writing duly approved
by each party. All such amendments
must be filed with and approved by the
Commission before they become
effective.
16. Limitation of Liability. Neither
FINRA nor CHX nor any of their
respective directors, governors, officers
or employees shall be liable to the other
party to this Agreement for any liability,
loss or damage resulting from or
claimed to have resulted from any
delays, inaccuracies, errors or omissions
with respect to the provision of
Regulatory Responsibilities as provided
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hereby or for the failure to provide any
such responsibility, except with respect
to such liability, loss or damages as
shall have been suffered by one or the
other of FINRA or CHX and caused by
the willful misconduct of the other
party or their respective directors,
governors, officers or employees. No
warranties, express or implied, are made
by FINRA or CHX with respect to any
of the responsibilities to be performed
by each of them hereunder.
17. Relief from Responsibility.
Pursuant to Sections 17(d)(1)(A) and
19(g) of the Exchange Act and Rule
17d–2 thereunder, FINRA and CHX join
in requesting the Commission, upon its
approval of this Agreement or any part
thereof, to relieve CHX of any and all
responsibilities with respect to matters
allocated to FINRA pursuant to this
Agreement; provided, however, that this
Agreement shall not be effective until
the Effective Date.
18. Severability. Any term or
provision of this Agreement that is
invalid or unenforceable in any
jurisdiction shall, as to such
jurisdiction, be ineffective to the extent
of such invalidity or unenforceability
without rendering invalid or
unenforceable the remaining terms and
provisions of this Agreement or
affecting the validity or enforceability of
any of the terms or provisions of this
Agreement in any other jurisdiction.
19. Counterparts. This Agreement
may be executed in one or more
counterparts, each of which shall be
deemed an original, and such
counterparts together shall constitute
one and the same instrument.
20. Separate Agreement. This
Agreement is wholly separate from the
following agreements: (1) The
multiparty agreement for insider trading
activities, which is covered by a
separate 17d–2 Agreement by and
among Cboe BZX Exchange, Inc., Cboe
BYX Exchange, Inc., Chicago Stock
Exchange, Inc., Cboe EDGA Exchange,
Inc., Cboe EDGX Exchange, Inc.,
Financial Industry Regulatory
Authority, Inc., Nasdaq BX, Inc.,
Nasdaq PHLX LLC, The Nasdaq Stock
Market LLC, NYSE National Inc., New
York Stock Exchange LLC, NYSE
American LLC, and NYSE Arca Inc.,
and Investors Exchange LLC effective
October 10, 2018, as may be amended
from time to time and (2) the multiparty
17d–2 agreement relating to Regulation
NMS rules by and among Bats BZX
Exchange, Inc., Bats BYX Exchange,
Inc., BOX Options Exchange LLC,
Chicago Board Options Exchange,
Incorporated, C2 Options Exchange,
Incorporated, Chicago Stock Exchange,
Inc., Bats EDGA Exchange, Inc., Bats
EDGX Exchange, Inc., Financial
Industry Regulatory Authority, Inc.,
International Securities Exchange, LLC,
Investors Exchange LLC, ISE Gemini,
Exhibit 1
Chx Certification of Common Rules
CHX hereby certifies that the
requirements contained in the rules
listed below for CHX are identical to, or
substantially similar to, the comparable
FINRA (NASD) Rules, Exchange Act
provision or SEC rule identified
(‘‘Common Rules’’).
#Common Rules shall not include
provisions regarding (i) notice, reporting
or any other filings made directly to or
from CHX, (ii) incorporation by
reference to other CHX Rules that are
not Common Rules, (iii) exercise of
discretion in a manner that differs from
FINRA’s exercise of discretion,
including but not limited to exercise of
exemptive authority, by CHX, (iv) prior
written approval of CHX, and (v)
payment of fees or fines to CHX.
CHX rule
FINRA (NASD) rule, exchange act provision, SEC rule
Article 6, Rule 5(a) Supervision of Registered Persons and Branch and
Resident Offices#.
Article 6, Rule 5(c) Supervision of Registered Persons and Branch and
Resident Offices#.
Article 6, Rule 10 Fingerprinting ...............................................................
Article 6, Rule 11 Continuing Education for Registered Persons# ..........
FINRA Rule 3110(a) Supervision*; FINRA Rule 2010 Standards of
Commercial Honor and Principles of Trade
FINRA Rule 3110(b)(1) ,(b)(2) (b)(4), (b)(6)(A), (b)(7), (c), and (d)
Supervision*
Exchange Act Rule 17f–2
FINRA Rule 1240(a)(1)–(6), and(b) Continuing Education Requirements
FINRA Rule 3310 Anti-Money Laundering Compliance Program
FINRA Rules 2020 Use of Manipulative, Deceptive or Other Fraudulent
Devices
FINRA Rule 11870(a)(1) Customer Account Transfer Contracts
FINRA Rule 2111(a) and (b) Suitability
FINRA Rule 2210(d)(1)(B) Communications with the Public, FINRA
Rule 2010 Standards of Commercial Honor and Principles of Trade
FINRA Rule 3230 Telemarketing
FINRA Rule 2010 Standards of Commercial Honor and Principles of
Trade
Exchange Act Sections 9(a); 10(b) and Rule 10b–5 thereunder*
Exchange Act Sections 9(a); 10(b) and Rule 10b–5 thereunder*;
FINRA Rule 6140(a) Other Trading Practices
Exchange Act Sections 9(a); 10(b) and Rule 10b–5 thereunder*;
FINRA Rule 6140(d) Other Trading Practices
FINRA Rule 5320 Prohibition Against Trading Ahead of Customer Orders
FINRA Rule 4511 General Requirements*
FINRA Rule 11310 Book-Entry Settlement
Article 6, Rule 12 Anti-Money Laundering Compliance Program# ...........
Article 8, Rule 3 Fraudulent Acts ..............................................................
Article 8, Rule 10 Customer Dealings—Account Transfers .....................
Article 8, Rule 11 Customer Dealings—Suitability ...................................
Article 8, Rule 13(a) Advertising, Promotion and Telemarketing .............
Article 8, Rule 13(d) Advertising, Promotion and Telemarketing .............
Article 9, Rule 2 Just and Equitable Trade Principles# ............................
Article 9, Rule 10 Prearranged Trades .....................................................
Article 9, Rule 11 Price Manipulation .......................................................
Article 9, Rule 12 Manipulative Operations ..............................................
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LLC, ISE Mercury, LLC, Miami
International Securities Exchange, LLC,
MIAX PEARL, LLC, The NASDAQ Stock
Market LLC, NASDAQ BX, Inc.,
NASDAQ PHLX, Inc., National Stock
Exchange, Inc., New York Stock
Exchange LLC, NYSE MKT LLC, and
NYSE Arca, Inc. effective February 2,
2017 as may be amended from time to
time.
In witness whereof, each party has
executed or caused this Agreement to be
executed on its behalf by a duly
authorized officer as of the date first
written above.
Article 9, Rule 17 Prohibition Against Trading Ahead of Customer Orders#.
Article 11, Rule 2 Maintenance of Books and Records# .........................
Article 21, Rule 2 Book-Entry Settlement Requirements .........................
* FINRA shall not have any Regulatory Responsibilities for these rules as they pertain to violations of insider trading activities, which is covered
by a separate 17d–2 Agreement by and among the Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., Chicago Stock Exchange, Inc., Cboe
EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., Nasdaq BX, Inc., Nasdaq PHLX LLC, The
Nasdaq Stock Market LLC, NYSE National, Inc., New York Stock Exchange, LLC, NYSE American LLC, and NYSE Arca, Inc. and Investors’ Exchange LLC effective October 10, 2018, as may be amended from time to time.
VerDate Sep<11>2014
18:08 May 29, 2019
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Federal Register / Vol. 84, No. 104 / Thursday, May 30, 2019 / Notices
IV. Date of Effectiveness of the
Proposed Plan and Timing for
Commission Action
Pursuant to Section 17(d)(1) of the
Act 14 and Rule 17d–2 thereunder,15
after June 20, 2019, the Commission
may, by written notice, declare the plan
submitted by FINRA and CHX, File No.
4–274, to be effective if the Commission
finds that the plan is necessary or
appropriate in the public interest and
for the protection of investors, to foster
cooperation and coordination among
self-regulatory organizations, or to
remove impediments to and foster the
development of the national market
system and a national system for the
clearance and settlement of securities
transactions and in conformity with the
factors set forth in Section 17(d) of the
Act.
V. Solicitation of Comments
In order to assist the Commission in
determining whether to approve the
proposed 17d–2 Plan and to relieve
CHX of the responsibilities which
would be assigned to FINRA, interested
persons are invited to submit written
data, views, and arguments concerning
the foregoing. Comments may be
submitted by any of the following
methods:
jbell on DSK3GLQ082PROD with NOTICES
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/other.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number 4–
274 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, Station Place, 100 F Street
NE, Washington, DC 20549–1090.
All submissions should refer to File
Number 4–274. 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
website (https://www.sec.gov/rules/
other.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
14 15
15 17
U.S.C. 78q(d)(1).
CFR 240.17d–2.
VerDate Sep<11>2014
18:08 May 29, 2019
provisions of 5 U.S.C. 552, will be
available for website 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
plan also will be available for inspection
and copying at the principal offices of
CHX and FINRA. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number 4–274 and should be submitted
on or before June 20, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–11223 Filed 5–29–19; 8:45 am]
BILLING CODE 8011–01–P
DEPARTMENT OF STATE
[Public Notice: 10777]
Department of State Commission on
Unalienable Rights
Department of State.
Notice of intent to establish an
advisory committee.
AGENCY:
ACTION:
The Secretary of State announces an
intent to establish the Department of
State Commission on Unalienable
Rights (the Commission), in accordance
with the Federal Advisory Committee
Act.
Nature and Purpose: The Commission
will provide the Secretary of State
advice and recommendations
concerning international human rights
matters. The Commission will provide
fresh thinking about human rights
discourse where such discourse has
departed from our nation’s founding
principles of natural law and natural
rights.
Other information: It is anticipated
that the Commission will meet at least
once per month and at such other times
and places as are required to fulfill the
objectives of the Commission. The
Department of State affirms that the
advisory committee is necessary and in
the public interest.
FOR FURTHER INFORMATION CONTACT:
Emily Sissell, 202–647–3599.
16 17
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25109
Dated: May 22, 2019.
Kiron K. Skinner,
Director, Policy Planning, U.S. Department
of State.
[FR Doc. 2019–11300 Filed 5–29–19; 8:45 am]
BILLING CODE 4710–10–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
[Docket No. 2019–0103]
Agency Information Collection
Activities: Requests for Comments;
Clearance of a Renewed Approval of
Information Collection: Airport Grants
Program
Federal Aviation
Administration (FAA), DOT
ACTION: Notice and request for
comments.
AGENCY:
In accordance with the
Paperwork Reduction Act of 1995, FAA
invites public comments about our
intention to request the Office of
Management and Budget (OMB)
approval for a renewal information
collection. The Federal Register Notice
with a 60-day comment period soliciting
comments on the following collection of
information was published on March
11, 2019. The collection involves data
from airport sponsors and planning
agencies to determine eligibility, and to
ensure proper use of Federal funds and
project accomplishments for the Airport
Improvement Program. This is the 30day notice.
DATES: Written comments should be
submitted by July 1, 2019.
ADDRESSES: Interested persons are
invited to submit written comments on
the proposed information collection to
the Office of Information and Regulatory
Affairs, Office of Management and
Budget. Comments should be addressed
to the attention of the Desk Officer,
Department of Transportation/FAA, and
sent via electronic mail to oira_
submission@omb.eop.gov, or faxed to
(202) 395–6974, or mailed to the Office
of Information and Regulatory Affairs,
Office of Management and Budget,
Docket Library, Room 10102, 725 17th
Street NW, Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT:
Patricia Dickerson by email at:
patricia.a.dickerson@faa.gov; phone:
202–267–9297.
SUPPLEMENTARY INFORMATION:
Public Comments Invited: You are
asked to comment on any aspect of this
information collection, including (a)
Whether the proposed collection of
information is necessary for FAA’s
SUMMARY:
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]]>Agencies
[Federal Register Volume 84, Number 104 (Thursday, May 30, 2019)]
[Notices]
[Pages 25105-25109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11223]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85921; File No. 4-274]
Program for Allocation of Regulatory Responsibilities Pursuant to
Rule 17d-2; Notice of Filing of an Amendment to the Agreement Between
the Financial Industry Regulatory Authority, Inc. and the NYSE Chicago,
Inc.
May 23, 2019.
Pursuant to Section 17(d) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 17d-2 thereunder,\2\ notice is hereby given that
on May 8, 2019, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') and the NYSE Chicago, Inc. (``CHX'') (together with FINRA,
the ``Parties'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') an amendment to their July 9, 2010
Agreement Between Financial Industry Regulatory Authority, Inc. and
Chicago Stock Exchange, Inc. (``17d-2 Plan'' or the ``Plan'') for the
allocation of regulatory responsibilities. The Commission is publishing
this notice to solicit comments on the amendment to the 17d-2 Plan from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78q(d).
\2\ 17 CFR 240.17d-2.
---------------------------------------------------------------------------
I. Introduction
Section 19(g)(1) of the Act,\3\ among other things, requires every
self-regulatory organization (``SRO'') registered as either a national
securities exchange or national securities association to examine for,
and enforce compliance by, its members and persons associated with its
members with the Act, the rules and regulations thereunder, and the
SRO's own rules, unless the SRO is relieved of this responsibility
pursuant to Section 17(d) or Section 19(g)(2) of the Act.\4\ Without
this relief, the statutory obligation of each individual SRO could
result in a pattern of multiple examinations of broker-dealers that
maintain memberships in more than one SRO (``common members''). Such
regulatory duplication would add unnecessary expenses for common
members and their SROs.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78s(g)(1).
\4\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively.
---------------------------------------------------------------------------
Section 17(d)(1) of the Act \5\ was intended, in part, to eliminate
unnecessary multiple examinations and regulatory duplication.\6\ With
respect to a common member, Section 17(d)(1) authorizes the Commission,
by rule or order, to relieve an SRO of the responsibility to receive
regulatory reports, to examine for and enforce compliance with
applicable statutes, rules, and regulations, or to perform other
specified regulatory functions.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78q(d)(1).
\6\ See Securities Act Amendments of 1975, Report of the Senate
Committee on Banking, Housing, and Urban Affairs to Accompany S.
249, S. Rep. No. 94-75, 94th Cong., 1st Session 32 (1975).
---------------------------------------------------------------------------
To implement Section 17(d)(1), the Commission adopted two rules:
Rule 17d-1 and Rule 17d-2 under the Act.\7\ Rule 17d-1 authorizes the
Commission to name a single SRO as the designated examining authority
(``DEA'') to examine common members for compliance with the financial
responsibility requirements imposed by the Act, or by Commission or SRO
rules.\8\ When an SRO has been named as a common member's DEA, all
other SROs to which the common member belongs are relieved of the
responsibility to examine the firm for compliance with the applicable
financial responsibility rules. On its face, Rule 17d-1 deals only with
an SRO's obligations to enforce member compliance with financial
responsibility requirements. Rule 17d-1 does not relieve an SRO from
its obligation to examine a common member for compliance with its own
rules and provisions of the federal securities laws governing matters
other than financial responsibility, including sales practices and
trading activities and practices.
---------------------------------------------------------------------------
\7\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
\8\ See Securities Exchange Act Release No. 12352 (April 20,
1976), 41 FR 18808 (May 7, 1976).
---------------------------------------------------------------------------
To address regulatory duplication in these and other areas, the
Commission adopted Rule 17d-2 under the Act.\9\ Rule 17d-2 permits SROs
to propose joint plans for the allocation of regulatory
responsibilities with respect to their common members. Under paragraph
(c) of Rule 17d-2, the Commission may declare such a plan effective if,
after providing for appropriate notice and comment, it determines that
the plan is necessary or appropriate in the public interest and for the
protection of investors; to foster cooperation and coordination among
the SROs; to remove impediments to, and foster the development of, a
national market system and a national clearance and settlement system;
and is in conformity with the factors set forth in Section 17(d) of the
Act. Commission approval of a plan filed pursuant to Rule 17d-2
relieves an SRO of those regulatory responsibilities allocated by the
plan to another SRO.
---------------------------------------------------------------------------
\9\ See Securities Exchange Act Release No. 12935 (October 28,
1976), 41 FR 49091 (November 8, 1976).
---------------------------------------------------------------------------
II. The Plan
On September 26, 1978, the Commission approved the Plan allocating
regulatory responsibilities pursuant to Rule 17d-2 on a provisional
basis.\10\ Under the Plan, the predecessor to FINRA was responsible, in
part, for conducting on-site examination of each dual member for which
it was the DEA. On February 20, 1980, the Commission noticed for
comment an amendment to the Plan, which provided, in part, for the
handling of customer complaints, the review of dual members'
advertising, and the arbitration of disputes under the Plan.\11\ On May
30, 1980, the Commission approved the Plan, as amended.\12\ On
September 8, 2010, the Commission approved an amendment to replace the
previous Plan in its entirety.\13\
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 15191 (September
26, 1978), 43 FR 46093 (October 5, 1978).
\11\ See Securities Exchange Act Release No. 16591 (February 20,
1980), 45 FR 12573 (February 26, 1980).
\12\ See Securities Exchange Act Release No. 16858 (May 30,
1980), 45 FR 37927 (June 5, 1980).
\13\ See Securities Exchange Act Release No. 62866 (September 8,
2010), 75 FR 55833 (September 14, 2010).
---------------------------------------------------------------------------
III. Proposed Amendment to the Plan
On May 8, 2019, the Parties submitted a proposed amendment to the
Plan. The primary purpose of the amendment is to the extent that it
becomes a member of the exchange, allocate regulatory responsibility to
FINRA for CHX's affiliated routing broker-dealer, Archipelago
Securities LLC. The text of the proposed amended 17d-2 plan is as
follows (additions are italicized; deletions are [bracketed]):
AGREEMENT BETWEEN FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. AND
NYSE CHICAGO [STOCK EXCHANGE], INC. PURSUANT TO RULE 17d-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
This Agreement, by and between the Financial Industry Regulatory
Authority, Inc. (``FINRA'') and the NYSE Chicago [Stock Exchange], Inc.
(``CHX''), is made this [9th]7th day of [July]May, [2010]2019 (the
``Agreement''), pursuant to Section 17(d)
[[Page 25106]]
of the Securities Exchange Act of 1934 (the ``Exchange Act'') and Rule
17d-2 thereunder which permits agreements between self-regulatory
organizations to allocate regulatory responsibility to eliminate
regulatory duplication. FINRA and CHX may be referred to individually
as a ``party'' and together as the ``parties.''
This Agreement amends and restates the agreement entered into
between the parties on [September 16, 1977]July 9, 2010, entitled
``Agreement Between [the National Association of Securities Dealers,
Inc.]Financial Industry Regulatory Authority, Inc. and [the
Midwest]Chicago Stock Exchange [Incorporated]Inc. Pursuant to SEC Rule
17d-2 Under the Securities Exchange Act of 1934,'' and any subsequent
amendments thereafter.
Whereas, Finra and CHX desire to reduce duplication in the
examination of their Dual Members (as defined herein) and in the filing
and processing of certain registration and membership records; and
Whereas, Finra and CHX desire to execute an agreement covering such
subjects pursuant to the provisions of Rule 17d-2 under the Exchange
Act and to file such agreement with the Securities and Exchange
Commission (the ``SEC'' or ``Commission'') for its approval.
Now, Therefore, in consideration of the mutual covenants contained
hereinafter, FINRA and CHX hereby agree as follows:
1. Definitions. Unless otherwise defined in this Agreement or the
context otherwise requires, the terms used in this Agreement shall have
the same meaning as they have under the Exchange Act and the rules and
regulations thereunder. As used in this Agreement, the following terms
shall have the following meanings:
(a) ``CHX Rules'' or ``FINRA Rules'' shall mean: (i) The rules of
the CHX, or (ii) the rules of FINRA, respectively, as the rules of an
exchange or association are defined in Exchange Act Section 3(a)(27).
(b) ``Common Rules'' shall mean the CHX Rules that are
substantially similar to the applicable FINRA Rules and certain
provisions of the Exchange Act and SEC rules set forth on Exhibit 1 in
that examination for compliance with such rules would not require FINRA
to develop one or more new examination standards, modules, procedures,
or criteria in order to analyze the application of such provisions or
rule, or a Dual Member's activity, conduct, or output in relation to
such rule; provided, however, Common Rules shall not include the
application of SEC, CHX or FINRA rules as they pertain to violations of
insider trading activities, which is covered by a separate 17d-2
Agreement by and among [the American Stock Exchange LLC, BATS Exchange,
Inc., Chicago Board Options Exchange, Inc., Chicago Stock Exchange,
Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry
Regulatory Authority, Inc., International Securities Exchange, LLC, The
NASDAQ Stock Market LLC, National Stock Exchange, Inc., New York Stock
Exchange, LLC, NYSE Arca Inc., NYSE Regulation, Inc., NASDAQ OMX BX,
Inc. and NASDAQ OMX PHLX, Inc. effective April 15, 2010] the Cboe BZX
Exchange, Inc., Bats Cboe BYX Exchange, Inc., Chicago Stock Exchange,
Inc., Cboe EDGA Exchange, Inc., Bats Cboe EDGX Exchange, Inc.,
Financial Industry Regulatory Authority, Inc., Nasdaq BX, Inc., Nasdaq
PHLX LLC, The Nasdaq Stock Market LLC, NYSE National, Inc., New York
Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., and Investors
Exchange LLC, approved by the SEC on October 10, 2018, as may be
amended from time to time. Common Rules shall not include provisions
regarding (i) notice, reporting or any other filings made directly to
or from CHX, (ii) incorporation by reference of other CHX Rules that
are not Common Rules, (iii) exercise of discretion in a manner that
differs from FINRA's exercise of discretion, including, but not limited
to exercise of exemptive authority, by CHX, (iv) prior written approval
of CHX, and (v) payment of fees or fines to CHX.
(c) ``Dual Members'' shall mean those CHX members that are also
members of FINRA and the associated persons therewith.
(d) ``Effective Date'' shall be the date this Agreement is approved
by the Commission.
(e) ``Enforcement Responsibilities'' shall mean the conduct of
appropriate proceedings, in accordance with the FINRA Code of Procedure
(the Rule 9000 Series) and other applicable FINRA procedural rules, to
determine whether violations of Common Rules have occurred, and if such
violations are deemed to have occurred, the imposition of appropriate
sanctions as specified under the FINRA Code of Procedure and sanctions
guidelines.
(f) ``Regulatory Responsibilities'' shall mean the examination
responsibilities and Enforcement Responsibilities relating to
compliance by the Dual Members with the Common Rules and the provisions
of the Exchange Act and the rules and regulations thereunder, and other
applicable laws, rules and regulations, each as set forth on Exhibit 1
attached hereto.
2. Regulatory and Enforcement Responsibilities. FINRA shall assume
Regulatory Responsibilities and Enforcement Responsibilities for Dual
Members. Attached as Exhibit 1 to this Agreement and made part hereof,
CHX furnished FINRA with a current list of Common Rules and certified
to FINRA that such rules are substantially similar to the corresponding
FINRA Rule (the ``Certification''). FINRA hereby agrees that the rules
listed in the Certification are Common Rules as defined in this
Agreement. Each year following the Effective Date of this Agreement, or
more frequently if required by changes in either the rules of CHX or
FINRA, CHX shall submit an updated list of Common Rules to FINRA for
review which shall add CHX Rules not included in the current list of
Common Rules that qualify as Common Rules as defined in this Agreement;
delete CHX Rules included in the current list of Common Rules that no
longer qualify as Common Rules as defined in this Agreement; and
confirm that the remaining rules on the current list of Common Rules
continue to be CHX Rules that qualify as Common Rules as defined in
this Agreement. Within 30 days of receipt of such updated list, FINRA
shall confirm in writing whether the rules listed in any updated list
are Common Rules as defined in this Agreement. Notwithstanding anything
herein to the contrary, it is explicitly understood that the term
``Regulatory Responsibilities'' does not include, and CHX shall retain
full responsibility for (unless otherwise addressed by separate
agreement or rule) the following (collectively, the ``Retained
Responsibilities''):
(a) Surveillance, examination, investigation and enforcement with
respect to trading activities or practices involving CHX's own
marketplace;
(b) registration pursuant to its applicable rules of associated
persons (i.e., registration rules that are not Common Rules);
(c) discharge of its duties and obligations as a Designated
Examining Authority pursuant to Rule 17d-1 under the Exchange Act, if
applicable; and
(d) any CHX Rules that are not Common Rules except for CHX Rules
for any CHX affiliate that is a member that operates as a facility (as
defined in Section 3(a)(2) of the Exchange Act), acts as a router for
CHX and is a member of FINRA (``Router Member'') as provided in
paragraph 6. As of the date of this Agreement, Archipelago Securities
LLC is the only Router Member.
[[Page 25107]]
3. Dual Members. Prior to the Effective Date, CHX shall furnish
FINRA with a current list of Dual Members, which shall be updated no
less frequently than once each quarter.
4. No Charge. There shall be no charge to CHX by FINRA for
performing the Regulatory Responsibilities and Enforcement
Responsibilities under this Agreement except as hereinafter provided.
FINRA shall provide CHX with ninety (90) days advance written notice in
the event FINRA decides to impose any charges to CHX for performing the
Regulatory Responsibilities under this Agreement. If FINRA determines
to impose a charge, CHX shall have the right at the time of the
imposition of such charge to terminate this Agreement; provided,
however, that FINRA's Regulatory Responsibilities under this Agreement
shall continue until the Commission approves the termination of this
Agreement.
5. Applicability of Certain Laws, Rules, Regulations or Orders.
Notwithstanding any provision hereof, this Agreement shall be subject
to any statute, or any rule or order of the Commission. To the extent
such statute, rule or order is inconsistent with one or more provisions
of this Agreement, the statute, rule or order shall supersede the
provision(s) hereof to the extent necessary to be properly effectuated
and the provision(s) hereof in that respect shall be null and void.
6. Notification of Violations.
(a) In the event that FINRA becomes aware of apparent violations of
any CHX Rules, which are not listed as Common Rules, discovered
pursuant to the performance of the Regulatory Responsibilities assumed
hereunder, FINRA shall notify CHX of those apparent violations for such
response as CHX deems appropriate. With respect to apparent violations
of any CHX Rules by any Router Member, FINRA shall not make referrals
to CHX pursuant to this paragraph 6. Such apparent violations shall be
processed by, and enforcement proceedings in respect thereto will be
conducted by, FINRA as provided in this agreement.
(b) In the event that CHX becomes aware of apparent violations of
any Common Rules, discovered pursuant to the performance of the
Retained Responsibilities, CHX shall notify FINRA of those apparent
violations and such matters shall be handled by FINRA as provided in
this Agreement.
(c) Apparent violations of Common Rules shall be processed by, and
enforcement proceedings in respect thereto shall be conducted by FINRA
as provided hereinbefore; provided, however, that in the event a Dual
Member is the subject of an investigation relating to a transaction on
the CHX, CHX may in its discretion assume concurrent jurisdiction and
responsibility.
(d) Each party agrees to make available promptly all files, records
and witnesses necessary to assist the other in its investigation or
proceedings.
7. Continued Assistance.
(a) FINRA shall make available to CHX all information obtained by
FINRA in the performance by it of the Regulatory Responsibilities
hereunder with respect to the Dual Members subject to this Agreement.
In particular, and not in limitation of the foregoing, FINRA shall
furnish CHX any information it obtains about Dual Members which
reflects adversely on their financial condition. CHX shall make
available to FINRA any information coming to its attention that
reflects adversely on the financial condition of Dual Members or
indicates possible violations of applicable laws, rules or regulations
by such firms.
(b) The parties agree that documents or information shared shall be
held in confidence, and used only for the purposes of carrying out
their respective regulatory obligations. Neither party shall assert
regulatory or other privileges as against the other with respect to
documents or information that is required to be shared pursuant to this
Agreement.
(c) The sharing of documents or information between the parties
pursuant to this Agreement shall not be deemed a waiver as against
third parties of regulatory or other privileges relating to the
discovery of documents or information.
8. Statutory Disqualifications. When FINRA becomes aware of a
statutory disqualification as defined in the Exchange Act with respect
to a Dual Member, FINRA shall determine pursuant to Sections 15A(g)
and/or Section 6(c) of the Exchange Act the acceptability or continued
applicability of the person to whom such disqualification applies and
keep CHX advised of its actions in this regard for such subsequent
proceedings as CHX may initiate.
9. Customer Complaints. CHX shall forward to FINRA copies of all
customer complaints involving Dual Members received by CHX relating to
FINRA's Regulatory Responsibilities under this Agreement. It shall be
FINRA's responsibility to review and take appropriate action in respect
to such complaints.
10. Advertising. FINRA shall assume responsibility to review the
advertising of Dual Members subject to the Agreement, provided that
such material is filed with FINRA in accordance with FINRA's filing
procedures and is accompanied with any applicable filing fees set forth
in FINRA Rules.
11. No Restrictions on Regulatory Action. Nothing contained in this
Agreement shall restrict or in any way encumber the right of either
party to conduct its own independent or concurrent investigation,
examination or enforcement proceeding of or against Dual Members, as
either party, in its sole discretion, shall deem appropriate or
necessary.
12. Termination. This Agreement may be terminated by CHX or FINRA
at any time upon the approval of the Commission after one (1) year's
written notice to the other party, except as provided in paragraph 4.
13. Arbitration. In the event of a dispute between the parties as
to the operation of this Agreement, CHX and FINRA hereby agree that any
such dispute shall be settled by arbitration in Washington, DC in
accordance with the rules of the American Arbitration Association then
in effect, or such other procedures as the parties may mutually agree
upon. Judgment on the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction. Each party acknowledges that
the timely and complete performance of its obligations pursuant to this
Agreement is critical to the business and operations of the other
party. In the event of a dispute between the parties, the parties shall
continue to perform their respective obligations under this Agreement
in good faith during the resolution of such dispute unless and until
this Agreement is terminated in accordance with its provisions. Nothing
in this Section 13 shall interfere with a party's right to terminate
this Agreement as set forth herein.
14. Notification of Members. CHX and FINRA shall notify Dual
Members of this Agreement after the Effective Date by means of a
uniform joint notice.
15. Amendment. This Agreement may be amended in writing duly
approved by each party. All such amendments must be filed with and
approved by the Commission before they become effective.
16. Limitation of Liability. Neither FINRA nor CHX nor any of their
respective directors, governors, officers or employees shall be liable
to the other party to this Agreement for any liability, loss or damage
resulting from or claimed to have resulted from any delays,
inaccuracies, errors or omissions with respect to the provision of
Regulatory Responsibilities as provided
[[Page 25108]]
hereby or for the failure to provide any such responsibility, except
with respect to such liability, loss or damages as shall have been
suffered by one or the other of FINRA or CHX and caused by the willful
misconduct of the other party or their respective directors, governors,
officers or employees. No warranties, express or implied, are made by
FINRA or CHX with respect to any of the responsibilities to be
performed by each of them hereunder.
17. Relief from Responsibility. Pursuant to Sections 17(d)(1)(A)
and 19(g) of the Exchange Act and Rule 17d-2 thereunder, FINRA and CHX
join in requesting the Commission, upon its approval of this Agreement
or any part thereof, to relieve CHX of any and all responsibilities
with respect to matters allocated to FINRA pursuant to this Agreement;
provided, however, that this Agreement shall not be effective until the
Effective Date.
18. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and such
counterparts together shall constitute one and the same instrument.
20. Separate Agreement. This Agreement is wholly separate from the
following agreements: (1) The multiparty agreement for insider trading
activities, which is covered by a separate 17d-2 Agreement by and among
Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., Chicago Stock
Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc.,
Financial Industry Regulatory Authority, Inc., Nasdaq BX, Inc., Nasdaq
PHLX LLC, The Nasdaq Stock Market LLC, NYSE National Inc., New York
Stock Exchange LLC, NYSE American LLC, and NYSE Arca Inc., and
Investors Exchange LLC effective October 10, 2018, as may be amended
from time to time and (2) the multiparty 17d-2 agreement relating to
Regulation NMS rules by and among Bats BZX Exchange, Inc., Bats BYX
Exchange, Inc., BOX Options Exchange LLC, Chicago Board Options
Exchange, Incorporated, C2 Options Exchange, Incorporated, Chicago
Stock Exchange, Inc., Bats EDGA Exchange, Inc., Bats EDGX Exchange,
Inc., Financial Industry Regulatory Authority, Inc., International
Securities Exchange, LLC, Investors Exchange LLC, ISE Gemini, LLC, ISE
Mercury, LLC, Miami International Securities Exchange, LLC, MIAX PEARL,
LLC, The NASDAQ Stock Market LLC, NASDAQ BX, Inc., NASDAQ PHLX, Inc.,
National Stock Exchange, Inc., New York Stock Exchange LLC, NYSE MKT
LLC, and NYSE Arca, Inc. effective February 2, 2017 as may be amended
from time to time.
In witness whereof, each party has executed or caused this
Agreement to be executed on its behalf by a duly authorized officer as
of the date first written above.
Exhibit 1
Chx Certification of Common Rules
CHX hereby certifies that the requirements contained in the rules
listed below for CHX are identical to, or substantially similar to, the
comparable FINRA (NASD) Rules, Exchange Act provision or SEC rule
identified (``Common Rules'').
#Common Rules shall not include provisions regarding (i) notice,
reporting or any other filings made directly to or from CHX, (ii)
incorporation by reference to other CHX Rules that are not Common
Rules, (iii) exercise of discretion in a manner that differs from
FINRA's exercise of discretion, including but not limited to exercise
of exemptive authority, by CHX, (iv) prior written approval of CHX, and
(v) payment of fees or fines to CHX.
------------------------------------------------------------------------
FINRA (NASD) rule, exchange act
CHX rule provision, SEC rule
------------------------------------------------------------------------
Article 6, Rule 5(a) Supervision of FINRA Rule 3110(a) Supervision*;
Registered Persons and Branch and FINRA Rule 2010 Standards of
Resident Offices#. Commercial Honor and Principles of
Trade
Article 6, Rule 5(c) Supervision of FINRA Rule 3110(b)(1) ,(b)(2)
Registered Persons and Branch and (b)(4), (b)(6)(A), (b)(7), (c),
Resident Offices#. and (d) Supervision*
Article 6, Rule 10 Fingerprinting.. Exchange Act Rule 17f-2
Article 6, Rule 11 Continuing FINRA Rule 1240(a)(1)-(6), and(b)
Education for Registered Persons#. Continuing Education Requirements
Article 6, Rule 12 Anti-Money FINRA Rule 3310 Anti-Money
Laundering Compliance Program#. Laundering Compliance Program
Article 8, Rule 3 Fraudulent Acts.. FINRA Rules 2020 Use of
Manipulative, Deceptive or Other
Fraudulent Devices
Article 8, Rule 10 Customer FINRA Rule 11870(a)(1) Customer
Dealings--Account Transfers. Account Transfer Contracts
Article 8, Rule 11 Customer FINRA Rule 2111(a) and (b)
Dealings--Suitability. Suitability
Article 8, Rule 13(a) Advertising, FINRA Rule 2210(d)(1)(B)
Promotion and Telemarketing. Communications with the Public,
FINRA Rule 2010 Standards of
Commercial Honor and Principles of
Trade
Article 8, Rule 13(d) Advertising, FINRA Rule 3230 Telemarketing
Promotion and Telemarketing.
Article 9, Rule 2 Just and FINRA Rule 2010 Standards of
Equitable Trade Principles#. Commercial Honor and Principles of
Trade
Article 9, Rule 10 Prearranged Exchange Act Sections 9(a); 10(b)
Trades. and Rule 10b-5 thereunder*
Article 9, Rule 11 Price Exchange Act Sections 9(a); 10(b)
Manipulation. and Rule 10b-5 thereunder*; FINRA
Rule 6140(a) Other Trading
Practices
Article 9, Rule 12 Manipulative Exchange Act Sections 9(a); 10(b)
Operations. and Rule 10b-5 thereunder*; FINRA
Rule 6140(d) Other Trading
Practices
Article 9, Rule 17 Prohibition FINRA Rule 5320 Prohibition Against
Against Trading Ahead of Customer Trading Ahead of Customer Orders
Orders#.
Article 11, Rule 2 Maintenance of FINRA Rule 4511 General
Books and Records#. Requirements*
Article 21, Rule 2 Book-Entry FINRA Rule 11310 Book-Entry
Settlement Requirements. Settlement
------------------------------------------------------------------------
* FINRA shall not have any Regulatory Responsibilities for these rules
as they pertain to violations of insider trading activities, which is
covered by a separate 17d-2 Agreement by and among the Cboe BZX
Exchange, Inc., Cboe BYX Exchange, Inc., Chicago Stock Exchange, Inc.,
Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Financial Industry
Regulatory Authority, Inc., Nasdaq BX, Inc., Nasdaq PHLX LLC, The
Nasdaq Stock Market LLC, NYSE National, Inc., New York Stock Exchange,
LLC, NYSE American LLC, and NYSE Arca, Inc. and Investors' Exchange
LLC effective October 10, 2018, as may be amended from time to time.
[[Page 25109]]
IV. Date of Effectiveness of the Proposed Plan and Timing for
Commission Action
Pursuant to Section 17(d)(1) of the Act \14\ and Rule 17d-2
thereunder,\15\ after June 20, 2019, the Commission may, by written
notice, declare the plan submitted by FINRA and CHX, File No. 4-274, to
be effective if the Commission finds that the plan is necessary or
appropriate in the public interest and for the protection of investors,
to foster cooperation and coordination among self-regulatory
organizations, or to remove impediments to and foster the development
of the national market system and a national system for the clearance
and settlement of securities transactions and in conformity with the
factors set forth in Section 17(d) of the Act.
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\14\ 15 U.S.C. 78q(d)(1).
\15\ 17 CFR 240.17d-2.
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V. Solicitation of Comments
In order to assist the Commission in determining whether to approve
the proposed 17d-2 Plan and to relieve CHX of the responsibilities
which would be assigned to FINRA, interested persons are invited to
submit written data, views, and arguments concerning the foregoing.
Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/other.shtml); or
Send an email to [email protected]. Please include
File Number 4-274 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, Station Place, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to File Number 4-274. 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 website (https://www.sec.gov/rules/other.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 website 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 plan also will be available for inspection and
copying at the principal offices of CHX and FINRA. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number 4-274 and should be submitted on or before
June 20, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(34).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-11223 Filed 5-29-19; 8:45 am]
BILLING CODE 8011-01-P
