Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Order Approving Proposed Amended Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and the NYSE Chicago, Inc., 29923-29925 [2019-13464]
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Federal Register / Vol. 84, No. 122 / Tuesday, June 25, 2019 / Notices
to Rule 19b–4(f)(6)(iii),13 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because doing so will allow the Pilot
Program to continue without
interruption in a manner that is
consistent with the Commission’s prior
approval of the extension and expansion
of the Pilot Program.14 Accordingly, the
Commission designates the proposed
rule change as operative upon filing
with the Commission.15
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Vanessa A. Countryman,
Acting Secretary.
[FR Doc. 2019–13410 Filed 6–24–19; 8:45 am]
Electronic Comments
BILLING CODE 8011–01–P
• 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 Number SR–
MRX–2019–13 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–MRX–2019–13. This file
number should be included on the
khammond on DSKBBV9HB2PROD with NOTICES
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/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 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
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
submissions. You should submit only
information that you wish to make
available publicly.
All submissions should refer to File
Number SR–MRX–2019–13 and should
be submitted on or before July 16, 2019.
13 17
CFR 240.19b–4(f)(6)(iii).
Securities Exchange Release No. 61061
(November 24, 2009), 74 FR 62857) (December 1,
2009) (SR–NYSEARCA–2009–44).
15 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
14 See
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20:35 Jun 24, 2019
Jkt 247001
[Release No. 34–86161; File No. 4–274]
Program for Allocation of Regulatory
Responsibilities Pursuant to Rule 17d–
2; Order Approving Proposed
Amended Plan for the Allocation of
Regulatory Responsibilities Between
the Financial Industry Regulatory
Authority, Inc. and the NYSE Chicago,
Inc.
June 20, 2019.
On May 8, 2019, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) and the NYSE Chicago, Inc.
(‘‘NYSE Chicago’’) (together with
FINRA, the ‘‘Parties’’) filed with the
Securities and Exchange Commission
16 17
PO 00000
CFR 200.30–3(a)(12).
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29923
(‘‘Commission’’) a plan for the
allocation of regulatory responsibilities,
dated May 7, 2019 (‘‘Amended 17d–2
Plan’’ or the ‘‘Amended Plan’’). The
Amended Plan was published for
comment on May 30, 2019.1 The
Commission received no comments on
the Amended Plan. This order approves
and declares effective the Amended
Plan.
I. Introduction
Section 19(g)(1) of the Act,2 among
other things, requires every selfregulatory organization (‘‘SRO’’)
registered as either a national securities
exchange or national securities
association to examine for, and enforce
compliance by, its members and persons
associated with its members with the
Act, the rules and regulations
thereunder, and the SRO’s own rules,
unless the SRO is relieved of this
responsibility pursuant to Section 17(d)
or Section 19(g)(2) of the Act.3 Without
this relief, the statutory obligation of
each individual SRO could result in a
pattern of multiple examinations of
broker-dealers that maintain
memberships in more than one SRO
(‘‘common members’’). Such regulatory
duplication would add unnecessary
expenses for common members and
their SROs.
Section 17(d)(1) of the Act 4 was
intended, in part, to eliminate
unnecessary multiple examinations and
regulatory duplication.5 With respect to
a common member, Section 17(d)(1)
authorizes the Commission, by rule or
order, to relieve an SRO of the
responsibility to receive regulatory
reports, to examine for and enforce
compliance with applicable statutes,
rules, and regulations, or to perform
other specified regulatory functions.
To implement Section 17(d)(1), the
Commission adopted two rules: Rule
17d–1 and Rule 17d–2 under the Act.6
Rule 17d–1 authorizes the Commission
to name a single SRO as the designated
examining authority (‘‘DEA’’) to
examine common members for
compliance with the financial
responsibility requirements imposed by
the Act, or by Commission or SRO
1 See Securities Exchange Act Release No. 85921
(May 23, 2019), 84 FR 25105.
2 15 U.S.C. 78s(g)(1).
3 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2),
respectively.
4 15 U.S.C. 78q(d)(1).
5 See Securities Act Amendments of 1975, Report
of the Senate Committee on Banking, Housing, and
Urban Affairs to Accompany S. 249, S. Rep. No. 94–
75, 94th Cong., 1st Session 32 (1975).
6 17 CFR 240.17d–1 and 17 CFR 240.17d–2,
respectively.
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25JNN1
29924
Federal Register / Vol. 84, No. 122 / Tuesday, June 25, 2019 / Notices
rules.7 When an SRO has been named as
a common member’s DEA, all other
SROs to which the common member
belongs are relieved of the responsibility
to examine the firm for compliance with
the applicable financial responsibility
rules. On its face, Rule 17d–1 deals only
with an SRO’s obligations to enforce
member compliance with financial
responsibility requirements. Rule 17d–1
does not relieve an SRO from its
obligation to examine a common
member for compliance with its own
rules and provisions of the federal
securities laws governing matters other
than financial responsibility, including
sales practices and trading activities and
practices.
To address regulatory duplication in
these and other areas, the Commission
adopted Rule 17d–2under the Act.8 Rule
17d–2permits 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.
khammond on DSKBBV9HB2PROD with NOTICES
II. Proposed Amended Plan
On September 26, 1978, the
Commission approved the Plan
allocating regulatory responsibilities
pursuant to Rule 17d–2 on a provisional
basis.9 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
7 See Securities Exchange Act Release No. 12352
(April 20, 1976), 41 FR 18808 (May 7, 1976).
8 See Securities Exchange Act Release No. 12935
(October 28, 1976), 41 FR 49091 (November 8,
1976).
9 See Securities Exchange Act Release No. 15191
(September 26, 1978), 43 FR 46093 (October 5,
1978).
VerDate Sep<11>2014
20:35 Jun 24, 2019
Jkt 247001
disputes under the Plan.10 On May 30,
1980, the Commission approved the
Plan, as amended.11 On September 8,
2010, the Commission approved an
amendment to replace the previous Plan
in its entirety.12 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 NYSE
Chicago’s affiliated routing brokerdealer, Archipelago Securities LLC.
III. Discussion
The Commission finds that the
proposed Amended Plan is consistent
with the factors set forth in Section
17(d) of the Act 13 and Rule 17d–2(c)
thereunder 14 in that the proposed
Amended Plan is necessary or
appropriate in the public interest and
for the protection of investors, fosters
cooperation and coordination among
SROs, and removes impediments to and
fosters the development of the national
market system. In particular, the
Commission believes that the proposed
Amended Plan should reduce
unnecessary regulatory duplication by
allocating to FINRA certain examination
and enforcement responsibilities for
common members that would otherwise
be performed by FINRA and NYSE
Chicago. Accordingly, the proposed
Amended Plan promotes efficiency by
reducing costs to common members.
Furthermore, because NYSE Chicago
and FINRA will coordinate their
regulatory functions in accordance with
the Amended Plan, the Amended Plan
should promote investor protection.
The Commission notes that, under the
Amended Plan, NYSE Chicago and
FINRA have allocated regulatory
responsibility for those NYSE Chicago
rules, set forth in the Certification, that
are substantially similar to the
applicable FINRA rules in that
examination for compliance with such
provisions and rules would not require
FINRA to develop one or more new
examination standards, modules,
procedures, or criteria in order to
analyze the application of the rule, or a
common member’s activity, conduct, or
output in relation to such rule. In
addition, under the Amended Plan,
10 See Securities Exchange Act Release No. 16591
(February 20, 1980), 45 FR 12573 (February 26,
1980).
11 See Securities Exchange Act Release No. 16858
(May 30, 1980), 45 FR 37927 (June 5, 1980).
12 See Securities Exchange Act Release No. 62866
(September 8, 2010), 75 FR 55833 (September 14,
2010).
13 15 U.S.C. 78q(d).
14 17 CFR 240.17d–2(c).
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FINRA would assume regulatory
responsibility for certain provisions of
the federal securities laws and the rules
and regulations thereunder that are set
forth in the Certification. The common
rules covered by the Amended Plan are
specifically listed in the Certification, as
may be amended by the parties from
time to time.
According to the Amended Plan,
NYSE Chicago will review the
Certification at least annually, or more
frequently if required by changes in
either the rules of NYSE Chicago or
FINRA, and, if necessary, submit to
FINRA an updated list of common rules
to add NYSE Chicago rules not included
on the then-current list of common rules
that are substantially similar to FINRA
rules; delete NYSE Chicago rules
included in the then-current list of
common rules that no longer qualify as
common rules; and confirm that the
remaining rules on the list of common
rules continue to be NYSE Chicago rules
that qualify as common rules.15 FINRA
will then confirm in writing whether the
rules listed in any updated list are
common rules as defined in the
Amended Plan. Under the Amended
Plan, NYSE Chicago also will provide
FINRA with a current list of common
members and shall update the list no
less frequently than once each quarter.16
The Commission believes that these
provisions are designed to provide for
continuing communication between the
parties to ensure the continued accuracy
of the scope of the proposed allocation
of regulatory responsibility. In addition,
as noted above, the primary purpose of
the amendment is to the extent that it
becomes a member of the exchange,
allocate regulatory responsibility to
FINRA for Chicago’s affiliated routing
broker-dealer, Archipelago Securities
LLC. The Commission does not believe
that the amendment to the plan raises
any new regulatory issues that the
Commission has not previously
considered.
The Commission is hereby declaring
effective an Amended Plan that, among
other things, allocates regulatory
responsibility to FINRA for the
oversight and enforcement of all NYSE
Chicago rules that are substantially
similar to the rules of FINRA for
common members of FINRA and NYSE
Chicago. Therefore, modifications to the
Certification need not be filed with the
Commission as an amendment to the
Amended Plan, provided that the
parties are only adding to, deleting
from, or confirming changes to NYSE
Chicago rules in the Certification in
15 See
16 See
E:\FR\FM\25JNN1.SGM
paragraph 2 of the Amended Plan.
paragraph 3 of the Amended Plan.
25JNN1
Federal Register / Vol. 84, No. 122 / Tuesday, June 25, 2019 / Notices
conformance with the definition of
common rules provided in the
Amended Plan. However, should the
parties decide to add a NYSE Chicago
rule to the Certification that is not
substantially similar to a FINRA rule;
delete a NYSE Chicago rule from the
Certification that is substantially similar
to a FINRA rule; or leave on the
Certification a NYSE Chicago rule that
is no longer substantially similar to a
FINRA rule, then such a change would
constitute an amendment to the
Amended Plan, which must be filed
with the Commission pursuant to Rule
17d–2 under the Act.17
IV. Conclusion
This order gives effect to the
Amended Plan filed with the
Commission in File No. 4–274. The
parties shall notify all members affected
by the Amended Plan of their rights and
obligations under the Amended Plan.
It is therefore ordered, pursuant to
Section 17(d) of the Act, that the
Amended Plan in File No. 4–274,
between FINRA and NYSE Chicago,
filed pursuant to Rule 17d–2 under the
Act, hereby is approved and declared
effective.
It is further ordered that NYSE
Chicago is relieved of those
responsibilities allocated to FINRA
under the Amended Plan in File No.
4–274.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Vanessa A. Countryman,
Acting Secretary.
[FR Doc. 2019–13464 Filed 6–24–19; 8:45 am]
BILLING CODE 8011–01–P
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
In the event that the time, date, or
location of this meeting changes, an
announcement of the change, along with
the new time, date, and/or place of the
meeting will be posted on the
Commission’s website at https://
www.sec.gov. No earlier notice of this
meeting was practicable.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
The subject matters of the closed
meeting will consist of the following
topics:
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings;
Resolution of litigation claims; and
Other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting agenda items that
may consist of adjudicatory,
examination, litigation, or regulatory
matters.
CONTACT PERSON FOR MORE INFORMATION:
For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Dated: June 20, 2019.
Vanessa A. Countryman,
Acting Secretary.
[FR Doc. 2019–13529 Filed 6–21–19; 11:15 am]
SMALL BUSINESS ADMINISTRATION
10:00 a.m. on
Wednesday, June 26, 2019.
PLACE: The meeting will be held at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
STATUS: This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
Reporting and Recordkeeping
Requirements Under OMB Review
khammond on DSKBBV9HB2PROD with NOTICES
TIME AND DATE:
17 The addition to or deletion from the
Certification of any federal securities laws, rules,
and regulations for which FINRA would bear
responsibility under the Amended Plan for
examining, and enforcing compliance by, common
members, also would constitute an amendment to
the Amended Plan.
18 17 CFR 200.30–3(a)(34).
Jkt 247001
Solicitation of Public Comments
Title: Surety Bond Guarantees
Assistance.
Description of Respondents: Surety
Companies.
Form Number: SBA Forms 990, 991,
994, 994B, 994F, 994H.
Estimated Annual Responses: 1,026.
Estimated Annual Hour Burden:
13,983.
Curtis Rich,
Management Analyst.
Sunshine Act Meetings
20:35 Jun 24, 2019
Comments should refer to
the information collection by name and/
or OMB Control Number and should be
sent to: Agency Clearance Officer, Curtis
Rich, Small Business Administration,
409 3rd Street SW, 5th Floor,
Washington, DC 20416; and SBA Desk
Officer, Office of Information and
Regulatory Affairs, Office of
Management and Budget, New
Executive Office Building, Washington,
DC 20503.
FOR FURTHER INFORMATION CONTACT:
Curtis Rich, Agency Clearance Officer,
(202) 205–7030 curtis.rich@sba.gov.
Copies: A copy of the Form OMB
83–1, supporting statement, and other
documents submitted to OMB for
review may be obtained from the
Agency Clearance Officer.
SUPPLEMENTARY INFORMATION: Small
Business Administration Surety Bond
Guarantee Program was created to
encourage surety companies to issue
bonds for small contractors. The
information collected on these forms
from Small Business contractors or
surety companies/agents is used to
evaluate the eligibility of program
application. One form is used by surety
companies to request claims payments
or report recoveries related to defaulted
contractors.
ADDRESSES:
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
VerDate Sep<11>2014
29925
[FR Doc. 2019–13491 Filed 6–24–19; 8:45 am]
BILLING CODE 8025–01–P
AGENCY:
DEPARTMENT OF STATE
ACTION:
[Public Notice: 10802]
Small Business Administration.
30-Day notice.
The Small Business
Administration (SBA) is publishing this
notice to comply with requirements of
the Paperwork Reduction Act (PRA)
requires agencies to submit proposed
reporting and recordkeeping
requirements to OMB for review and
approval, and to publish a notice in the
Federal Register notifying the public
that the agency has made such a
submission. This notice also allows an
additional 30 days for public comments.
DATES: Submit comments on or before
July 25, 2019.
SUMMARY:
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Certification Pursuant to Section
7041(F)(3) of the Department of State,
Foreign Operations, and Related
Programs Appropriations Act, 2019
By virtue of the authority vested in
me pursuant to section 7041(f)(3) of the
Department of State, Foreign
Operations, and Related Programs
Appropriations Act, 2019 (Div. F, Pub.
L. 116–6) and Department of State
Delegation of Authority 245–2, I hereby
certify that Libya’s Government of
National Accord is cooperating with
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]]>Agencies
[Federal Register Volume 84, Number 122 (Tuesday, June 25, 2019)]
[Notices]
[Pages 29923-29925]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13464]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-86161; File No. 4-274]
Program for Allocation of Regulatory Responsibilities Pursuant to
Rule 17d-2; Order Approving Proposed Amended Plan for the Allocation of
Regulatory Responsibilities Between the Financial Industry Regulatory
Authority, Inc. and the NYSE Chicago, Inc.
June 20, 2019.
On May 8, 2019, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') and the NYSE Chicago, Inc. (``NYSE Chicago'') (together
with FINRA, the ``Parties'') filed with the Securities and Exchange
Commission (``Commission'') a plan for the allocation of regulatory
responsibilities, dated May 7, 2019 (``Amended 17d-2 Plan'' or the
``Amended Plan''). The Amended Plan was published for comment on May
30, 2019.\1\ The Commission received no comments on the Amended Plan.
This order approves and declares effective the Amended Plan.
---------------------------------------------------------------------------
\1\ See Securities Exchange Act Release No. 85921 (May 23,
2019), 84 FR 25105.
---------------------------------------------------------------------------
I. Introduction
Section 19(g)(1) of the Act,\2\ among other things, requires every
self-regulatory organization (``SRO'') registered as either a national
securities exchange or national securities association to examine for,
and enforce compliance by, its members and persons associated with its
members with the Act, the rules and regulations thereunder, and the
SRO's own rules, unless the SRO is relieved of this responsibility
pursuant to Section 17(d) or Section 19(g)(2) of the Act.\3\ Without
this relief, the statutory obligation of each individual SRO could
result in a pattern of multiple examinations of broker-dealers that
maintain memberships in more than one SRO (``common members''). Such
regulatory duplication would add unnecessary expenses for common
members and their SROs.
---------------------------------------------------------------------------
\2\ 15 U.S.C. 78s(g)(1).
\3\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively.
---------------------------------------------------------------------------
Section 17(d)(1) of the Act \4\ was intended, in part, to eliminate
unnecessary multiple examinations and regulatory duplication.\5\ With
respect to a common member, Section 17(d)(1) authorizes the Commission,
by rule or order, to relieve an SRO of the responsibility to receive
regulatory reports, to examine for and enforce compliance with
applicable statutes, rules, and regulations, or to perform other
specified regulatory functions.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78q(d)(1).
\5\ See Securities Act Amendments of 1975, Report of the Senate
Committee on Banking, Housing, and Urban Affairs to Accompany S.
249, S. Rep. No. 94-75, 94th Cong., 1st Session 32 (1975).
---------------------------------------------------------------------------
To implement Section 17(d)(1), the Commission adopted two rules:
Rule 17d-1 and Rule 17d-2 under the Act.\6\ Rule 17d-1 authorizes the
Commission to name a single SRO as the designated examining authority
(``DEA'') to examine common members for compliance with the financial
responsibility requirements imposed by the Act, or by Commission or SRO
[[Page 29924]]
rules.\7\ When an SRO has been named as a common member's DEA, all
other SROs to which the common member belongs are relieved of the
responsibility to examine the firm for compliance with the applicable
financial responsibility rules. On its face, Rule 17d-1 deals only with
an SRO's obligations to enforce member compliance with financial
responsibility requirements. Rule 17d-1 does not relieve an SRO from
its obligation to examine a common member for compliance with its own
rules and provisions of the federal securities laws governing matters
other than financial responsibility, including sales practices and
trading activities and practices.
---------------------------------------------------------------------------
\6\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
\7\ See Securities Exchange Act Release No. 12352 (April 20,
1976), 41 FR 18808 (May 7, 1976).
---------------------------------------------------------------------------
To address regulatory duplication in these and other areas, the
Commission adopted Rule 17d-2under the Act.\8\ Rule 17d-2permits 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.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 12935 (October 28,
1976), 41 FR 49091 (November 8, 1976).
---------------------------------------------------------------------------
II. Proposed Amended Plan
On September 26, 1978, the Commission approved the Plan allocating
regulatory responsibilities pursuant to Rule 17d-2 on a provisional
basis.\9\ 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.\10\ On May
30, 1980, the Commission approved the Plan, as amended.\11\ On
September 8, 2010, the Commission approved an amendment to replace the
previous Plan in its entirety.\12\ 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 NYSE Chicago's
affiliated routing broker-dealer, Archipelago Securities LLC.
---------------------------------------------------------------------------
\9\ See Securities Exchange Act Release No. 15191 (September 26,
1978), 43 FR 46093 (October 5, 1978).
\10\ See Securities Exchange Act Release No. 16591 (February 20,
1980), 45 FR 12573 (February 26, 1980).
\11\ See Securities Exchange Act Release No. 16858 (May 30,
1980), 45 FR 37927 (June 5, 1980).
\12\ See Securities Exchange Act Release No. 62866 (September 8,
2010), 75 FR 55833 (September 14, 2010).
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III. Discussion
The Commission finds that the proposed Amended Plan is consistent
with the factors set forth in Section 17(d) of the Act \13\ and Rule
17d-2(c) thereunder \14\ in that the proposed Amended Plan is necessary
or appropriate in the public interest and for the protection of
investors, fosters cooperation and coordination among SROs, and removes
impediments to and fosters the development of the national market
system. In particular, the Commission believes that the proposed
Amended Plan should reduce unnecessary regulatory duplication by
allocating to FINRA certain examination and enforcement
responsibilities for common members that would otherwise be performed
by FINRA and NYSE Chicago. Accordingly, the proposed Amended Plan
promotes efficiency by reducing costs to common members. Furthermore,
because NYSE Chicago and FINRA will coordinate their regulatory
functions in accordance with the Amended Plan, the Amended Plan should
promote investor protection.
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\13\ 15 U.S.C. 78q(d).
\14\ 17 CFR 240.17d-2(c).
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The Commission notes that, under the Amended Plan, NYSE Chicago and
FINRA have allocated regulatory responsibility for those NYSE Chicago
rules, set forth in the Certification, that are substantially similar
to the applicable FINRA rules in that examination for compliance with
such provisions and rules would not require FINRA to develop one or
more new examination standards, modules, procedures, or criteria in
order to analyze the application of the rule, or a common member's
activity, conduct, or output in relation to such rule. In addition,
under the Amended Plan, FINRA would assume regulatory responsibility
for certain provisions of the federal securities laws and the rules and
regulations thereunder that are set forth in the Certification. The
common rules covered by the Amended Plan are specifically listed in the
Certification, as may be amended by the parties from time to time.
According to the Amended Plan, NYSE Chicago will review the
Certification at least annually, or more frequently if required by
changes in either the rules of NYSE Chicago or FINRA, and, if
necessary, submit to FINRA an updated list of common rules to add NYSE
Chicago rules not included on the then-current list of common rules
that are substantially similar to FINRA rules; delete NYSE Chicago
rules included in the then-current list of common rules that no longer
qualify as common rules; and confirm that the remaining rules on the
list of common rules continue to be NYSE Chicago rules that qualify as
common rules.\15\ FINRA will then confirm in writing whether the rules
listed in any updated list are common rules as defined in the Amended
Plan. Under the Amended Plan, NYSE Chicago also will provide FINRA with
a current list of common members and shall update the list no less
frequently than once each quarter.\16\ The Commission believes that
these provisions are designed to provide for continuing communication
between the parties to ensure the continued accuracy of the scope of
the proposed allocation of regulatory responsibility. In addition, as
noted above, the primary purpose of the amendment is to the extent that
it becomes a member of the exchange, allocate regulatory responsibility
to FINRA for Chicago's affiliated routing broker-dealer, Archipelago
Securities LLC. The Commission does not believe that the amendment to
the plan raises any new regulatory issues that the Commission has not
previously considered.
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\15\ See paragraph 2 of the Amended Plan.
\16\ See paragraph 3 of the Amended Plan.
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The Commission is hereby declaring effective an Amended Plan that,
among other things, allocates regulatory responsibility to FINRA for
the oversight and enforcement of all NYSE Chicago rules that are
substantially similar to the rules of FINRA for common members of FINRA
and NYSE Chicago. Therefore, modifications to the Certification need
not be filed with the Commission as an amendment to the Amended Plan,
provided that the parties are only adding to, deleting from, or
confirming changes to NYSE Chicago rules in the Certification in
[[Page 29925]]
conformance with the definition of common rules provided in the Amended
Plan. However, should the parties decide to add a NYSE Chicago rule to
the Certification that is not substantially similar to a FINRA rule;
delete a NYSE Chicago rule from the Certification that is substantially
similar to a FINRA rule; or leave on the Certification a NYSE Chicago
rule that is no longer substantially similar to a FINRA rule, then such
a change would constitute an amendment to the Amended Plan, which must
be filed with the Commission pursuant to Rule 17d-2 under the Act.\17\
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\17\ The addition to or deletion from the Certification of any
federal securities laws, rules, and regulations for which FINRA
would bear responsibility under the Amended Plan for examining, and
enforcing compliance by, common members, also would constitute an
amendment to the Amended Plan.
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IV. Conclusion
This order gives effect to the Amended Plan filed with the
Commission in File No. 4-274. The parties shall notify all members
affected by the Amended Plan of their rights and obligations under the
Amended Plan.
It is therefore ordered, pursuant to Section 17(d) of the Act, that
the Amended Plan in File No. 4-274, between FINRA and NYSE Chicago,
filed pursuant to Rule 17d-2 under the Act, hereby is approved and
declared effective.
It is further ordered that NYSE Chicago is relieved of those
responsibilities allocated to FINRA under the Amended Plan in File No.
4-274.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(34).
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Vanessa A. Countryman,
Acting Secretary.
[FR Doc. 2019-13464 Filed 6-24-19; 8:45 am]
BILLING CODE 8011-01-P
