Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing and Order Approving and Declaring Effective an Amendment to the Plan for the Allocation of Regulatory Responsibilities Between Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., BOX Exchange LLC, Cboe Exchange, Inc., Cboe C2 Exchange, Inc., NYSE Chicago, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., Nasdaq ISE, LLC, Nasdaq GEMX, LLC, Nasdaq MRX, LLC, Investors Exchange LLC, Miami International Securities Exchange, LLC, MIAX PEARL, LLC, MIAX Emerald, LLC, The Nasdaq Stock Market LLC, Nasdaq BX, Inc., Nasdaq PHLX, Inc., NYSE National, Inc., New York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., and Long-Term Stock Exchange, Inc., 37363-37369 [2019-16214]

Download as PDF Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Notices SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–42, OMB Control No. 3235–0047] Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736. jbell on DSK3GLQ082PROD with NOTICES Extension: Rule 204–3 Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) the Securities and Exchange Commission (‘‘Commission’’) has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information discussed below. The title for the collection of information is ‘‘Rule 204–3 (17 CFR 275.204–3) under the Investment Advisers Act of 1940.’’ (15 U.S.C. 80b). Rule 204–3, the ‘‘brochure rule,’’ requires advisers to deliver their brochures and brochure supplements at the start of an advisory relationship and to deliver annually thereafter the full updated brochures or a summary of material changes to their brochures. The rule also requires that advisers deliver amended brochures or brochure supplements (or just a statement describing the amendments) to clients only when disciplinary information in the brochures or supplements becomes materially inaccurate. The brochure assists the client in determining whether to retain, or continue employing, the adviser. The information that rule 204–3 requires to be contained in the brochure is also used by the Commission and staff in its enforcement, regulatory, and examination programs. This collection of information is found at 17 CFR 275.204–3 and is mandatory. The respondents to this information collection are investment advisers registered with the Commission. The Commission has estimated that compliance with rule 204–3 imposes a burden of approximately 3.7 hours annually based on advisers having a median of 78 clients each. Our latest data indicate that there were 13,173 advisers registered with the Commission as of March 31, 2019. Based on this figure, the Commission estimates a total annual burden of 49,090 hours for this collection of information. Rule 204–3 does not require recordkeeping or record retention. The VerDate Sep<11>2014 20:09 Jul 30, 2019 Jkt 247001 collection of information requirements under the rule are mandatory. The information collected pursuant to the rule is not filed with the Commission, but rather takes the form of disclosures to clients and prospective clients. Accordingly, these disclosures are not kept confidential. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. The public may view the background documentation for this information collection at the following website, www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: lindsay.m.abate@omb.eop.gov; and (ii) Charles Riddle, Information Officer, Securities and Exchange Commission, c/ o Candace Kenner, 100 F Street NE, Washington, DC 20549 or send an email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated: July 26, 2019. Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–16291 Filed 7–30–19; 8:45 am] BILLING CODE 8011–01–P PO 00000 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–86470; File No. 4–618] Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d– 2; Notice of Filing and Order Approving and Declaring Effective an Amendment to the Plan for the Allocation of Regulatory Responsibilities Between Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., BOX Exchange LLC, Cboe Exchange, Inc., Cboe C2 Exchange, Inc., NYSE Chicago, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., Nasdaq ISE, LLC, Nasdaq GEMX, LLC, Nasdaq MRX, LLC, Investors Exchange LLC, Miami International Securities Exchange, LLC, MIAX PEARL, LLC, MIAX Emerald, LLC, The Nasdaq Stock Market LLC, Nasdaq BX, Inc., Nasdaq PHLX, Inc., NYSE National, Inc., New York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., and Long-Term Stock Exchange, Inc. July 25, 2019. Notice is hereby given that the Securities and Exchange Commission (‘‘Commission’’) has issued an Order, pursuant to Section 17(d) of the Securities Exchange Act of 1934 (‘‘Act’’),1 approving and declaring effective an amendment to the plan for allocating regulatory responsibility (‘‘Plan’’) filed on July 15, 2019, pursuant to Rule 17d–2 of the Act,2 by Cboe BZX Exchange, Inc. (‘‘BZX’’), Cboe BYX Exchange, Inc. (‘‘BATS Y’’), BOX Exchange LLC (‘‘BOX’’), Cboe Exchange, Inc. (‘‘Cboe’’), Cboe C2 Exchange, Inc. (‘‘C2’’), NYSE Chicago, Inc. (‘‘CHX’’), Cboe EDGA Exchange, Inc. (‘‘EDGA’’), Cboe EDGX Exchange, Inc. (‘‘EDGX’’), Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’), Nasdaq ISE, LLC (‘‘ISE’’), Nasdaq GEMX, LLC (‘‘GEMX’’), Nasdaq MRX, LLC (‘‘MRX’’), Investors Exchange LLC (‘‘IEX’’), Miami International Securities Exchange, LLC (‘‘MIAX’’), MIAX PEARL, LLC (‘‘MIAX PEARL’’), MIAX Emerald, LLC (‘‘MIAX Emerald’’), The Nasdaq Stock Market LLC (‘‘Nasdaq’’), Nasdaq BX, Inc. (‘‘BX’’), Nasdaq PHLX, Inc. (‘‘PHLX’’), NYSE National, Inc. (‘‘NYSE National’’), New York Stock Exchange LLC (‘‘NYSE’’), NYSE American LLC (‘‘NYSE American’’), NYSE Arca, Inc. (‘‘NYSE Arca’’), and Long-Term Stock Exchange, Inc. (‘‘LTSE’’) (each, a ‘‘Participating Organization,’’ and, together, the ‘‘Participating Organizations’’ or the 1 15 2 17 Frm 00134 Fmt 4703 Sfmt 4703 37363 E:\FR\FM\31JYN1.SGM U.S.C. 78q(d). CFR 240.17d–2. 31JYN1 37364 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Notices ‘‘Parties’’). This Agreement amends and restates the agreement by and among the Participating Organizations approved by the Commission on February 4, 2019.3 jbell on DSK3GLQ082PROD with NOTICES I. Introduction Section 19(g)(1) of the Act,4 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.5 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 6 was intended, in part, to eliminate unnecessary multiple examinations and regulatory duplication.7 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.8 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.9 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 3 See Securities Exchange Act Release No. 85046, 84 FR 2643 (February 7, 2019). 4 15 U.S.C. 78s(g)(1). 5 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively. 6 15 U.S.C. 78q(d)(1). 7 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). 8 17 CFR 240.17d–1 and 17 CFR 240.17d–2, respectively. 9 See Securities Exchange Act Release No. 12352 (April 20, 1976), 41 FR 18808 (May 7, 1976). VerDate Sep<11>2014 20:09 Jul 30, 2019 Jkt 247001 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.10 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. II. The Plan On December 3, 2010, the Commission approved the SRO participants’ plan for allocating regulatory responsibilities pursuant to Rule 17d–2.11 On October 29, 2015, the Commission approved an amended plan that added Regulation NMS Rules 606, 607, and 611(c) and (d) and added additional Participating Organizations that are options markets to the Plan.12 On August 11, 2016, the Commission approved an amended plan that added IEX and ISE Mercury as Participating Organizations.13 On February 2, 2017, the Commission approved an amended plan that added MIAX PEARL as a Participating Organization.14 On February 4, 2019, the Commission approved an amended plan that added 10 See Securities Exchange Act Release No. 12935 (October 28, 1976), 41 FR 49091 (November 8, 1976). 11 See Securities Exchange Act Release No. 63430, 75 FR 76758 (December 9, 2010). 12 See Securities Exchange Act Release No. 76311, 80 FR 68377 (November 4, 2015). 13 See Securities Exchange Act Release No. 78552, 81 FR 54905 (August 17, 2016). 14 See Securities Exchange Act Release No. 79928, 82 FR 9814 (February 8, 2017). PO 00000 Frm 00135 Fmt 4703 Sfmt 4703 MIAX Emerald as a Participating Organization and reflected name changes of certain Participating Organizations.15 The proposed 17d–2 Plan is intended to reduce regulatory duplication for firms that are members of more than one Participating Organization.16 The Plan provides for the allocation of regulatory responsibility according to whether the covered rule pertains to NMS stocks or NMS securities. For covered rules that pertain to NMS stocks (i.e., Rules 607, 611, and 612), FINRA serves as the ‘‘Designated Regulation NMS Examining Authority’’ (‘‘DREA’’) for common members that are members of FINRA, and assumes certain examination and enforcement responsibilities for those members with respect to specified Regulation NMS rules. For common members that are not members of FINRA, the member’s DEA serves as the DREA, provided that the DEA exchange operates a national securities exchange or facility that trades NMS stocks and the common member is a member of such exchange or facility. Section 1(c) of the Plan contains a list of principles that are applicable to the allocation of common members in cases not specifically addressed in the Plan. An exchange that does not trade NMS stocks would have no regulatory authority for covered Regulation NMS rules pertaining to NMS stocks. For covered rules that pertain to NMS securities, and thus include options (i.e., Rule 606), the Plan provides that the DREA will be the same as the DREA for the rules pertaining to NMS stocks. For common members that are not members of an exchange that trades NMS stocks, the common member would be allocated according to the principles set forth in Section 1(c) of the Plan. The text of the Plan delineates the proposed regulatory responsibilities with respect to the Parties. Included in the proposed Plan is an exhibit (the ‘‘Covered Regulation NMS Rules’’) that lists the federal securities laws, rules, and regulations, for which the applicable DREA would bear examination and enforcement responsibility under the Plan for common members of the Participating Organization and their associated persons. Specifically, the applicable DREA assumes examination and enforcement responsibility relating to compliance by common members with the Covered 15 See Securities Exchange Act Release No. 85046, 84 FR 2643 (February 7, 2019). 16 The proposed 17d–2 Plan refers to these members as ‘‘Common Members.’’ E:\FR\FM\31JYN1.SGM 31JYN1 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Notices Regulation NMS Rules. Covered Regulation NMS Rules do not include the application of any rule of a Participating Organization, or any rule or regulation under the Act, to the extent that it pertains to violations of insider trading activities, because such matters are covered by a separate multiparty agreement under Rule 17d– 2.17 Under the Plan, Participating Organizations retain full responsibility for surveillance and enforcement with respect to trading activities or practices involving their own marketplace.18 jbell on DSK3GLQ082PROD with NOTICES III. Proposed Amendment to the Plan On July 15, 2019, the parties submitted a proposed amendment to the Plan. The primary purpose of the amendment is to add LTSE as a Participant to the Plan and to reflect the name change of Chicago Stock Exchange, Inc. to NYSE Chicago, Inc. The text of the proposed amended 17d–2 Plan is as follows (additions are in italics; deletions are in brackets): * * * * * Agreement for the Allocation of Regulatory Responsibility for the Covered Regulation NMS Rules Pursuant to § 17(d) of the Securities Exchange Act of 1934, 15 U.S.C. 78q(d), and Rule 17d–2 Thereunder This agreement (the ‘‘Agreement’’) by and among Cboe BZX Exchange, Inc. (‘‘BZX’’), Cboe BYX Exchange, Inc. (‘‘BATS Y’’), BOX Exchange LLC (‘‘BOX’’), Cboe Exchange, Inc. (‘‘Cboe’’), Cboe C2 Exchange, Inc. (‘‘C2’’), NYSE Chicago [Stock Exchange], Inc. (‘‘CHX’’), Cboe EDGA Exchange, Inc. (‘‘EDGA’’), Cboe EDGX Exchange, Inc. (‘‘EDGX’’), Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’), Nasdaq ISE, LLC (‘‘ISE’’), Nasdaq GEMX, LLC (‘‘GEMX’’), Nasdaq MRX, LLC (‘‘MRX’’), Investors Exchange LLC (‘‘IEX’’), Miami International Securities Exchange, LLC (‘‘MIAX’’), MIAX PEARL, LLC (‘‘MIAX PEARL’’), MIAX Emerald, LLC (‘‘MIAX Emerald’’), The Nasdaq Stock Market LLC (‘‘Nasdaq’’), Nasdaq BX, Inc. (‘‘BX’’), Nasdaq PHLX, Inc. (‘‘PHLX’’), NYSE National, Inc. (‘‘NYSE National’’), New York Stock Exchange LLC (‘‘NYSE’’), NYSE American LLC (‘‘NYSE American’’), [and] NYSE Arca, Inc. (‘‘NYSE Arca’’) and Long-Term Stock Exchange, Inc. (‘‘LTSE’’) (each, a ‘‘Participating Organization,’’ and, together, the ‘‘Participating Organizations’’), is made pursuant to 17 See Securities Exchange Act Release No. 84392 (October 10, 2018), 83 FR 52243 (October 16, 2018) (File No. 4–566) (notice of filing and order approving and declaring effective an amendment to the insider trading 17d–2 plan). 18 See paragraph 1(d) of the Plan. VerDate Sep<11>2014 20:09 Jul 30, 2019 Jkt 247001 § 17(d) of the Securities Exchange Act of 1934 (the ‘‘Act’’ or ‘‘SEA’’), 15 U.S.C. 78q(d), and Rule 17d–2 thereunder, which allow for plans to allocate regulatory responsibility among selfregulatory organizations (‘‘SROs’’). Upon approval by the Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’), this Agreement shall amend and restate the agreement by and among the Participating Organizations approved by the SEC on [February 2, 2017] February 4, 2019. Whereas, the Participating Organizations desire to: (a) Foster cooperation and coordination among the SROs; (b) remove impediments to, and foster the development of, a national market system; (c) strive to protect the interest of investors; and (d) eliminate duplication in their examination and enforcement of SEA Rules 606, 607, 611 and 612 (the ‘‘Covered Regulation NMS Rules’’); Whereas, the Participating Organizations are interested in allocating regulatory responsibilities with respect to broker-dealers that are members of more than one Participating Organization (the ‘‘Common Members’’) relating to the examination and enforcement of the Covered Regulation NMS Rules; and Whereas, the Participating Organizations will request regulatory allocation of these regulatory responsibilities by executing and filing with the SEC this plan for the above stated purposes pursuant to the provisions of § 17(d) of the Act, and Rule 17d–2 thereunder, as described below. Now, therefore, in consideration of the mutual covenants contained hereafter, and other valuable consideration to be mutually exchanged, the Participating Organizations hereby agree as follows: 1. Assumption of Regulatory Responsibility. The Designated Regulation NMS Examining Authority (the ‘‘DREA’’) shall assume examination and enforcement responsibilities relating to compliance by Common Members with the Covered Regulation NMS Rules to which the DREA is allocated responsibility (‘‘Regulatory Responsibility’’). A list of the Covered Regulation NMS Rules is attached hereto as Exhibit A. a. For Covered Regulation NMS Rules Pertaining to ‘‘NMS stocks’’ (as defined in Regulation NMS) (i.e., Rules 607, 611 and 612): FINRA shall serve as DREA for Common Members that are members of FINRA. The Designated Examining Authority (‘‘DEA’’) pursuant to SEA Rule 17d–1 shall serve as DREA for Common Members that are not members PO 00000 Frm 00136 Fmt 4703 Sfmt 4703 37365 of FINRA, provided that the DEA operates a national securities exchange or facility that trades NMS stocks and the Common Member is a member of such exchange or facility. For all other Common Members, the Participating Organizations shall allocate Common Members among the Participating Organizations (other than FINRA) that operate a national securities exchange that trades NMS stocks based on the principles outlined below and the Participating Organization to which such a Common Member is allocated shall serve as the DREA for that Common Member. (A Participating Organization that operates a national securities exchange that does not trade NMS stocks has no regulatory responsibilities related to Covered Regulation NMS Rules pertainining to NMS stocks and will not serve as DREA for such Covered Regulation NMS Rules.) b. For Covered Regulation NMS Rules Pertaining to ‘‘NMS securities’’ (as defined in Regulation NMS) (i.e., Rule 606), the DREA shall be same as the DREA for Covered Regulation NMS Rules pertaining to NMS stocks. For Common Members that are not members of a national securities exchange that trades NMS stocks and thus have not been appointed a DREA under paragraph a., the Participating Organizations shall allocate the Common Members among the Participating Organizations (other than FINRA) that operate a national securities exchange that trades NMS securities based on the principles outlined below and the Participating Organization to which such a Common Member is allocated shall serve as the DREA for that Common Member with respect to Covered Regulation NMS Rules pertaining to NMS securities. The allocation of Common Members to DREAs (including FINRA) for all Covered Regulation NMS Rules is provided in Exhibit B. c. For purposes of this paragraph 1, any allocation of a Common Member to a Participating Organization other than as specified in paragraphs a. and b. above shall be based on the following principles, except to the extent all affected Participating Organizations consent to one or more different principles and any such agreement to different principles would be deemed an amendment to this Agreement as provided in paragraph 22: i. The Participating Organizations shall not allocate a Common Member to a Participating Organization unless the Common Member is a member of that Participating Organization. E:\FR\FM\31JYN1.SGM 31JYN1 37366 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Notices jbell on DSK3GLQ082PROD with NOTICES ii. To the extent practicable, Common Members shall be allocated among the Participating Organizations of which they are members in such a manner as to equalize, as nearly as possible, the allocation among such Participating Organizations. iii. To the extent practicable, the allocation will take into account the amount of NMS stock activity (or NMS security activity, as applicable) conducted by each Common Member in order to most evenly divide the Common Members with the largest amount of activity among the Participating Organizations of which they are a members. The allocation will also take into account similar allocations pursuant to other plans or agreements to which the Participating Organizations are party to maintain consistency in oversight of the Common Members.1 iv. The Participating Organizations may reallocate Common Members from time-to-time and in such manner as they deem appropriate consistent with the terms of this Agreement. v. Whenever a Common Member ceases to be a member of its DREA (including FINRA), the DREA shall promptly inform the Participating Organizations, who shall review the matter and reallocate the Common Member to another Participating Organization. vi. The DEA or DREA (including FINRA) may request that a Common Member be reallocated to another Participating Organization (including the DEA or DREA (including FINRA)) by giving 30 days written notice to the Participating Organizations. The Participating Organizations shall promptly consider such request and, in their discretion, may approve or disapprove such request and if approved, reallocate the Common Member to such Participating Organization. vii. All determinations by the Participating Organizations with respect to allocations shall be by the affirmative vote of a majority of the Participating Organizations that, at the time of such determination, share the applicable Common Member being allocated; a Participating Organization shall not be entitled to vote on any allocation related to a Common Member unless the Common Member is a member of such Participating Organization. 1 For example, if one Participating Organization was allocated responsibility for a particular Common Member pursuant to a separate Rule 17d– 2 Agreement, that Participant Organization would be assigned to be the DREA of that Common Member, unless there is good cause not to make that assignment. VerDate Sep<11>2014 20:09 Jul 30, 2019 Jkt 247001 d. The Participating Organizations agree that they shall conduct meetings among them as needed for the purposes of ensuring proper allocation of Common Members and identifying issues or concerns with respect to the regulation of Common Members. Notwithstanding anything herein to the contrary, it is explicitly understood that the term ‘‘Regulatory Responsibility’’ does not include, and each of the Participating Organizations shall retain full responsibility for, examination, surveillance and enforcement with respect to trading activities or practices involving its own marketplace unless otherwise allocated pursuant to a separate Rule 17d–2 Agreement. 2. No Retention of Regulatory Responsibility. The Participating Organizations do not contemplate the retention of any responsibilities with respect to the regulatory activities being assumed by the DREA under the terms of this Agreement. Nothing in this Agreement will be interpreted to prevent a DREA from entering into Regulatory Services Agreement(s) to perform its Regulatory Responsibility. 3. No Charge. A DREA shall not charge Participating Organizations for performing the Regulatory Responsibility under this Agreement. 4. 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 SEC. 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. 5. Customer Complaints. If a Participating Organization receives a copy of a customer complaint relating to a DREA’s Regulatory Responsibility as set forth in this Agreement, the Participating Organization shall promptly forward to such DREA a copy of such customer complaint. It shall be such DREA’s responsibility to review and take appropriate action in respect to such complaint. 6. Parties to Make Personnel Available as Witnesses. Each Participating Organization shall make its personnel available to the DREA to serve as testimonial or non-testimonial witnesses as necessary to assist the DREA in fulfilling the Regulatory Responsibility allocated under this Agreement. The DREA shall provide reasonable advance notice when practicable and shall work with a Participating Organization to accommodate reasonable scheduling PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 conflicts within the context and demands as the entity with ultimate regulatory responsibility. The Participating Organization shall pay all reasonable travel and other expenses incurred by its employees to the extent that the DREA requires such employees to serve as witnesses, and provide information or other assistance pursuant to this Agreement. 7. Sharing of Work-Papers, Data and Related Information. a. Sharing. A Participating Organization shall make available to the DREA information necessary to assist the DREA in fulfilling the Regulatory Responsibility assumed under the terms of this Agreement. Such information shall include any information collected by a Participating Organization in the course of performing its regulatory obligations under the Act, including information relating to an on-going disciplinary investigation or action against a member, the amount of a fine imposed on a member, financial information, or information regarding proprietary trading systems gained in the course of examining a member (‘‘Regulatory Information’’). This Regulatory Information shall be used by the DREA solely for the purposes of fulfilling the DREA’s Regulatory Responsibility. b. No Waiver of Privilege. 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. Special or Cause Examinations and Enforcement Proceedings. Nothing in this Agreement shall restrict or in any way encumber the right of a Participating Organization to conduct special or cause examinations of a Common Member, or take enforcement proceedings against a Common Member as a Participating Organization, in its sole discretion, shall deem appropriate or necessary. 9. Dispute Resolution Under this Agreement. a. Negotiation. The Participating Organizations will attempt to resolve any disputes through good faith negotiation and discussion, escalating such discussion up through the appropriate management levels until reaching the executive management level. In the event a dispute cannot be settled through these means, the Participating Organizations shall refer the dispute to binding arbitration. b. Binding Arbitration. All claims, disputes, controversies, and other matters in question between the Participating Organizations to this E:\FR\FM\31JYN1.SGM 31JYN1 jbell on DSK3GLQ082PROD with NOTICES Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Notices Agreement arising out of or relating to this Agreement or the breach thereof that cannot be resolved by the Participating Organizations will be resolved through binding arbitration. Unless otherwise agreed by the Participating Organizations, a dispute submitted to binding arbitration pursuant to this paragraph shall be resolved using the following procedures: (i) The arbitration shall be conducted in a city selected by the DREA in which it maintains a principal office or where otherwise agreed to by the Participating Organizations in accordance with the Commercial Arbitration Rules of the American Arbitration Association and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof; and (ii) There shall be three arbitrators, and the chairperson of the arbitration panel shall be an attorney. The arbitrators shall be appointed in accordance with the Commercial Arbitration Rules of the American Arbitration Association. 10. Limitation of Liability. As between the Participating Organizations, no Participating Organization, including its respective directors, governors, officers, employees and agents, will be liable to any other Participating Organization, or its directors, governors, officers, employees and agents, for any liability, loss or damage resulting from any delays, inaccuracies, errors or omissions with respect to its performing or failing to perform regulatory responsibilities, obligations, or functions, except: (a) As otherwise provided for under the Act; (b) in instances of a Participating Organization’s gross negligence, willful misconduct or reckless disregard with respect to another Participating Organization; or (c) in instances of a breach of confidentiality obligations owed to another Participating Organization. The Participating Organizations understand and agree that the regulatory responsibilities are being performed on a good faith and best effort basis and no warranties, express or implied, are made by any Participating Organization to any other Participating Organization with respect to any of the responsibilities to be performed hereunder. This paragraph is not intended to create liability of any Participating Organization to any third party. 11. SEC Approval. a. The Participating Organizations agree to file promptly this Agreement with the SEC for its review and approval. FINRA shall file this Agreement on behalf, and with the VerDate Sep<11>2014 20:09 Jul 30, 2019 Jkt 247001 explicit consent, of all Participating Organizations. b. If approved by the SEC, the Participating Organizations will notify their members of the general terms of the Agreement and of its impact on their members. 12. Subsequent Parties; Limited Relationship. This Agreement shall inure to the benefit of and shall be binding upon the Participating Organizations hereto and their respective legal representatives, successors, and assigns. Nothing in this Agreement, expressed or implied, is intended or shall: (a) Confer on any person other than the Participating Organizations hereto, or their respective legal representatives, successors, and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, (b) constitute the Participating Organizations hereto partners or participants in a joint venture, or (c) appoint one Participating Organization the agent of the other. 13. Assignment. No Participating Organization may assign this Agreement without the prior written consent of the DREAs performing Regulatory Responsibility on behalf of such Participating Organization, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that any Participating Organization may assign the Agreement to a corporation controlling, controlled by or under common control with the Participating Organization without the prior written consent of such Participating Organization’s DREAs. No assignment shall be effective without Commission approval. 14. 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. 15. Termination. Any Participating Organization may cancel its participation in the Agreement at any time upon the approval of the Commission after 180 days written notice to the other Participating Organizations (or in the case of a change of control in ownership of a Participating Organization, such other notice time period as that Participating Organization may choose). The cancellation of its participation in this Agreement by any Participating PO 00000 Frm 00138 Fmt 4703 Sfmt 4703 37367 Organization shall not terminate this Agreement as to the remaining Participating Organizations. 16. General. The Participating Organizations agree to perform all acts and execute all supplementary instruments or documents that may be reasonably necessary or desirable to carry out the provisions of this Agreement. 17. Written Notice. Any written notice required or permitted to be given under this Agreement shall be deemed given if sent by certified mail, return receipt requested, or by a comparable means of electronic communication to each Participating Organization entitled to receipt thereof, to the attention of the Participating Organization’s representative at the Participating Organization’s then principal office or by email. 18. Confidentiality. The Participating Organizations agree that documents or information shared shall be held in confidence, and used only for the purposes of carrying out their respective regulatory obligations under this Agreement, provided, however, that each Participating Organization may disclose such documents or information as may be required to comply with applicable requlatory requirements or requests for information from the SEC. Any Participating Organization disclosing confidential documents or information in compliance with applicable regulatory or oversight requirements will request confidential treatment of such information. No Participating Organization shall assert regulatory or other privileges as against the other with respect to Regulatory Information that is required to be shared pursuant to this Agreement. 19. Regulatory Responsibility. Pursuant to Section 17(d)(1)(A) of the Act, and Rule 17d–2 thereunder, the Participating Organizations request the SEC, upon its approval of this Agreement, to relieve the Participating Organizations which are participants in this Agreement that are not the DREA as to a Common Member of any and all responsibilities with respect to the matters allocated to the DREA pursuant to this Agreement for purposes of §§ 17(d) and 19(g) of the Act. 20. Governing Law. This Agreement shall be deemed to have been made in the State of New York, and shall be construed and enforced in accordance with the law of the State of New York, without reference to principles of conflicts of laws thereof. Each of the Participating Organizations hereby consents to submit to the jurisdiction of the courts of the State of New York in E:\FR\FM\31JYN1.SGM 31JYN1 37368 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Notices connection with any action or proceeding relating to this Agreement. 21. Survival of Provisions. Provisions intended by their terms or context to survive and continue notwithstanding delivery of the regulatory services by the DREA and any expiration of this Agreement shall survive and continue. 22. Amendment. a. This Agreement may be amended to add a new Participating Organization, provided that such Participating Organization does not assume regulatory responsibility, by an amendment executed by all applicable DREAs and such new Participating Organization. All other Participating Organizations expressly consent to allow such DREAs to jointly add new Participating Organizations to the Agreement as provided above. Such DREAs will promptly notify all Participating Organizations of any such amendments to add a new Participating Organization. b. All other amendments must be approved by each Participating Organization. All amendments, including adding a new Participating Organization but excluding changes to Exhibit B, must be filed with and approved by the Commission before they become effective. 23. Effective Date. The Effective Date of this Agreement will be the date the SEC declares this Agreement to be effective pursuant to authority conferred by § 17(d) of the Act, and Rule 17d–2 thereunder. 24. Counterparts. This Agreement may be executed in any number of counterparts, including facsimile, each of which will be deemed an original, but all of which taken together shall constitute one single agreement among the Participating Organizations. * * * * * Exhibit A Covered Regulation NMS Rules jbell on DSK3GLQ082PROD with NOTICES SEA Rule 606—Disclosure of Order Routing Information.* SEA Rule 607—Customer Account Statements. SEA Rule 611—Order Protection Rule. SEA Rule 612—Minimum Pricing Increment. * Covered Regulation NMS Rules with asterisks (*) pertain to NMS securities. Covered Regulation NMS Rules without asterisks pertain to NMS stocks. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing. Comments may be submitted by any of the following methods: VerDate Sep<11>2014 20:09 Jul 30, 2019 Jkt 247001 Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number 4– 618 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number 4–618. 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/ sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed plan that are filed with the Commission, and all written communications relating to the proposed plan 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 the Participating Organizations. 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 4–618 and should be submitted on or before August 21, 2019. V. Discussion The Commission finds that the Plan, as amended, is consistent with the factors set forth in Section 17(d) of the Act 19 and Rule 17d–2(c) thereunder 20 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 PO 00000 19 15 20 17 U.S.C. 78q(d). CFR 240.17d–2(c). Frm 00139 Fmt 4703 Sfmt 4703 believes that the proposed amended Plan should reduce unnecessary regulatory duplication by allocating to the applicable DREA certain examination and enforcement responsibilities for Common Members that would otherwise be performed by multiple Parties. Accordingly, the proposed amended Plan promotes efficiency by reducing costs to Common Members. Furthermore, because the Parties will coordinate their regulatory functions in accordance with the proposed amended Plan, the amended Plan should promote investor protection. The Commission is hereby declaring effective a plan that allocates regulatory responsibility for certain provisions of the federal securities laws, rules, and regulations as set forth in Exhibit A to the Plan. The Commission notes that any amendment to the Plan must be approved by the relevant Parties as set forth in Paragraph 22 of the Plan and must be filed with and approved by the Commission before it may become effective.21 Under paragraph (c) of Rule 17d–2, the Commission may, after appropriate notice and comment, declare a plan, or any part of a plan, effective. In this instance, the Commission believes that appropriate notice and comment can take place after the proposed amendment is effective. In particular, the purpose of the amendment is to add LTSE as a Participating Organization and to reflect the name change of Chicago Stock Exchange, Inc. to NYSE Chicago, Inc. The Commission notes that the most recent prior amendment to the Plan was published for comment and the Commission did not receive any comments thereon.22 The Commission believes that the current amendment to the Plan does not raise any new regulatory issues that the Commission has not previously considered, and therefore believes that the amended Plan should become effective without any undue delay. VI. Conclusion This order gives effect to the amended Plan filed with the Commission that is contained in File No. 4–618. It is therefore ordered, pursuant to Section 17(d) of the Act, that the Plan, as amended, filed with the Commission pursuant to Rule 17d–2 on July 15, 21 See Paragraph 22 of the Plan. The Commission notes, however, that changes to Exhibit B to the Plan (the allocation of Common Members to DREAs) are not required to be filed with, and approved by, the Commission before they become effective. 22 See Securities Exchange Act Release No. 79928 (February 2, 2017), 82 FR 9814 (February 8, 2017). E:\FR\FM\31JYN1.SGM 31JYN1 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Notices 2019, is hereby approved and declared effective. It is further ordered that those SRO participants that are not the DREA as to a particular common member are relieved of those regulatory responsibilities allocated to the common member’s DREA under the amended Plan to the extent of such allocation. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.23 Rules (‘‘OATS Rules’’) for manual orders received by the member. Below is the text of the proposed rule change. Proposed new language is in italics; proposed deletions are in brackets. * * * * * Jill M. Peterson, Assistant Secretary. 7400. Order Audit Trail System SECURITIES AND EXCHANGE COMMISSION [Release No. 34–86479; File No. SR–FINRA– 2019–021] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Exemptions From the Order Audit Trail System Recording and Reporting Requirements July 25, 2019. jbell on DSK3GLQ082PROD with NOTICES Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on July 12, 2019, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by FINRA. FINRA has designated the proposed rule change as constituting a ‘‘non-controversial’’ rule change under paragraph (f)(6) of Rule 19b–4 under the Act,3 which renders the proposal effective upon receipt of this filing by the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA is proposing to amend Rule 7470 (Exemption to the Order Recording and Data Transmission Requirements) to extend for three years FINRA’s ability to exempt certain members from the recording and reporting requirements of the Order Audit Trail System (‘‘OATS’’) CFR 200.30–3(a)(34). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). VerDate Sep<11>2014 20:09 Jul 30, 2019 Jkt 247001 * * * * * * * * 7470. Exemption to the Order Recording and Data Transmission Requirements BILLING CODE 8011–01–P 1 15 * * [FR Doc. 2019–16214 Filed 7–30–19; 8:45 am] 23 17 7000. Clearing, Transaction and Order Data Requirements, and Facility Charges (a) through (b) No Change. (c) This Rule shall be in effect until July [10]11, 2022[2019]. * * * * * II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The OATS Rules impose obligations on FINRA members to record in electronic form and report to FINRA on a daily basis certain information with respect to orders originated, received, transmitted, modified, canceled, or executed by members relating to OTC equity securities and NMS stocks. OATS captures this order information and integrates it with quote and transaction information to create a time-sequenced record of orders, quotes, and transactions. This information is then used by FINRA staff to conduct surveillance and investigations of member firms for violations of FINRA rules and federal securities laws and regulations. On September 28, 2005, the SEC approved amendments to the OATS Rules that, among other things, gave FINRA the authority to grant exemptive relief from the OATS reporting PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 37369 requirements for manual orders.4 In 2006, FINRA’s exemptive authority was expanded to include the authority to exempt manual orders received by members from the OATS recording requirements.5 Under Rule 7470, at a minimum, members must meet the following criteria to be eligible to request an exemption from the OATS recording and reporting requirements for manual orders: (1) The member and current control affiliates and associated persons of the member have not been subject within the last five years to any final disciplinary action, and within the last ten years to any disciplinary action involving fraud; (2) the member has annual revenues of less than $2 million; (3) the member does not conduct any market making activities in any security subject to the OATS Rules; (4) the member does not execute principal transactions with its customers (with limited exceptions for principal transactions executed pursuant to error corrections); and (5) the member does not conduct clearing or carrying activities for other firms.6 An exemption granted by FINRA pursuant to Rule 7470 is for a maximum of two years; however, a member that continues to meet the criteria may request subsequent exemptions at or prior to the expiration of a grant of exemptive relief.7 Rule 7470 also includes a sunset provision. As initially adopted, the exemptive provision expired as of July 10, 2011, which was five years from the original effective date of the rule.8 In 2011, FINRA filed a proposed rule change to extend the sunset provision until July 10, 2015, noting that FINRA adopted this exemptive authority so that it would have the ability to grant relief to members that meet certain criteria in situations where, for example, the reporting of order information would be unduly burdensome for the member or where temporary relief from the OATS Rules, in the form of additional time to achieve compliance, would permit the members to avoid unnecessary expense 4 See Securities Exchange Act Release No. 52521 (September 28, 2005), 70 FR 57909 (October 4, 2005) (Order Approving File No. SR–NASD–00–23). 5 See Securities Exchange Act Release No. 53580 (March 30, 2006), 71 FR 17529 (April 6, 2006) (Order Approving File No. SR–NASD–2006–040). In 2006, the exemptive provision was also relocated from NASD Rule 6955(d) to NASD Rule 6958. As of December 15, 2008, NASD Rule 6958 was renumbered as FINRA Rule 7470. See FINRA Regulatory Notice 08–57 (October 2008). 6 See Rule 7470(a). 7 See Rule 7470(b). 8 See Securities Exchange Act Release No. 52521 (September 28, 2005), 70 FR 57909 (October 4, 2005) (Order Approving File No. SR–NASD–00–23). E:\FR\FM\31JYN1.SGM 31JYN1

Agencies

[Federal Register Volume 84, Number 147 (Wednesday, July 31, 2019)]
[Notices]
[Pages 37363-37369]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-16214]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86470; File No. 4-618]


Program for Allocation of Regulatory Responsibilities Pursuant to 
Rule 17d-2; Notice of Filing and Order Approving and Declaring 
Effective an Amendment to the Plan for the Allocation of Regulatory 
Responsibilities Between Cboe BZX Exchange, Inc., Cboe BYX Exchange, 
Inc., BOX Exchange LLC, Cboe Exchange, Inc., Cboe C2 Exchange, Inc., 
NYSE Chicago, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., 
Financial Industry Regulatory Authority, Inc., Nasdaq ISE, LLC, Nasdaq 
GEMX, LLC, Nasdaq MRX, LLC, Investors Exchange LLC, Miami International 
Securities Exchange, LLC, MIAX PEARL, LLC, MIAX Emerald, LLC, The 
Nasdaq Stock Market LLC, Nasdaq BX, Inc., Nasdaq PHLX, Inc., NYSE 
National, Inc., New York Stock Exchange LLC, NYSE American LLC, NYSE 
Arca, Inc., and Long-Term Stock Exchange, Inc.

July 25, 2019.
    Notice is hereby given that the Securities and Exchange Commission 
(``Commission'') has issued an Order, pursuant to Section 17(d) of the 
Securities Exchange Act of 1934 (``Act''),\1\ approving and declaring 
effective an amendment to the plan for allocating regulatory 
responsibility (``Plan'') filed on July 15, 2019, pursuant to Rule 17d-
2 of the Act,\2\ by Cboe BZX Exchange, Inc. (``BZX''), Cboe BYX 
Exchange, Inc. (``BATS Y''), BOX Exchange LLC (``BOX''), Cboe Exchange, 
Inc. (``Cboe''), Cboe C2 Exchange, Inc. (``C2''), NYSE Chicago, Inc. 
(``CHX''), Cboe EDGA Exchange, Inc. (``EDGA''), Cboe EDGX Exchange, 
Inc. (``EDGX''), Financial Industry Regulatory Authority, Inc. 
(``FINRA''), Nasdaq ISE, LLC (``ISE''), Nasdaq GEMX, LLC (``GEMX''), 
Nasdaq MRX, LLC (``MRX''), Investors Exchange LLC (``IEX''), Miami 
International Securities Exchange, LLC (``MIAX''), MIAX PEARL, LLC 
(``MIAX PEARL''), MIAX Emerald, LLC (``MIAX Emerald''), The Nasdaq 
Stock Market LLC (``Nasdaq''), Nasdaq BX, Inc. (``BX''), Nasdaq PHLX, 
Inc. (``PHLX''), NYSE National, Inc. (``NYSE National''), New York 
Stock Exchange LLC (``NYSE''), NYSE American LLC (``NYSE American''), 
NYSE Arca, Inc. (``NYSE Arca''), and Long-Term Stock Exchange, Inc. 
(``LTSE'') (each, a ``Participating Organization,'' and, together, the 
``Participating Organizations'' or the

[[Page 37364]]

``Parties''). This Agreement amends and restates the agreement by and 
among the Participating Organizations approved by the Commission on 
February 4, 2019.\3\
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    \1\ 15 U.S.C. 78q(d).
    \2\ 17 CFR 240.17d-2.
    \3\ See Securities Exchange Act Release No. 85046, 84 FR 2643 
(February 7, 2019).
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I. Introduction

    Section 19(g)(1) of the Act,\4\ 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.\5\ 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.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(g)(1).
    \5\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively.
---------------------------------------------------------------------------

    Section 17(d)(1) of the Act \6\ was intended, in part, to eliminate 
unnecessary multiple examinations and regulatory duplication.\7\ 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q(d)(1).
    \7\ 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).
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    To implement Section 17(d)(1), the Commission adopted two rules: 
Rule 17d-1 and Rule 17d-2 under the Act.\8\ 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.\9\ 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.
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    \8\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
    \9\ See Securities Exchange Act Release No. 12352 (April 20, 
1976), 41 FR 18808 (May 7, 1976).
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    To address regulatory duplication in these and other areas, the 
Commission adopted Rule 17d-2 under the Act.\10\ 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.
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 12935 (October 28, 
1976), 41 FR 49091 (November 8, 1976).
---------------------------------------------------------------------------

II. The Plan

    On December 3, 2010, the Commission approved the SRO participants' 
plan for allocating regulatory responsibilities pursuant to Rule 17d-
2.\11\ On October 29, 2015, the Commission approved an amended plan 
that added Regulation NMS Rules 606, 607, and 611(c) and (d) and added 
additional Participating Organizations that are options markets to the 
Plan.\12\ On August 11, 2016, the Commission approved an amended plan 
that added IEX and ISE Mercury as Participating Organizations.\13\ On 
February 2, 2017, the Commission approved an amended plan that added 
MIAX PEARL as a Participating Organization.\14\ On February 4, 2019, 
the Commission approved an amended plan that added MIAX Emerald as a 
Participating Organization and reflected name changes of certain 
Participating Organizations.\15\
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    \11\ See Securities Exchange Act Release No. 63430, 75 FR 76758 
(December 9, 2010).
    \12\ See Securities Exchange Act Release No. 76311, 80 FR 68377 
(November 4, 2015).
    \13\ See Securities Exchange Act Release No. 78552, 81 FR 54905 
(August 17, 2016).
    \14\ See Securities Exchange Act Release No. 79928, 82 FR 9814 
(February 8, 2017).
    \15\ See Securities Exchange Act Release No. 85046, 84 FR 2643 
(February 7, 2019).
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    The proposed 17d-2 Plan is intended to reduce regulatory 
duplication for firms that are members of more than one Participating 
Organization.\16\ The Plan provides for the allocation of regulatory 
responsibility according to whether the covered rule pertains to NMS 
stocks or NMS securities. For covered rules that pertain to NMS stocks 
(i.e., Rules 607, 611, and 612), FINRA serves as the ``Designated 
Regulation NMS Examining Authority'' (``DREA'') for common members that 
are members of FINRA, and assumes certain examination and enforcement 
responsibilities for those members with respect to specified Regulation 
NMS rules. For common members that are not members of FINRA, the 
member's DEA serves as the DREA, provided that the DEA exchange 
operates a national securities exchange or facility that trades NMS 
stocks and the common member is a member of such exchange or facility. 
Section 1(c) of the Plan contains a list of principles that are 
applicable to the allocation of common members in cases not 
specifically addressed in the Plan. An exchange that does not trade NMS 
stocks would have no regulatory authority for covered Regulation NMS 
rules pertaining to NMS stocks. For covered rules that pertain to NMS 
securities, and thus include options (i.e., Rule 606), the Plan 
provides that the DREA will be the same as the DREA for the rules 
pertaining to NMS stocks. For common members that are not members of an 
exchange that trades NMS stocks, the common member would be allocated 
according to the principles set forth in Section 1(c) of the Plan.
---------------------------------------------------------------------------

    \16\ The proposed 17d-2 Plan refers to these members as ``Common 
Members.''
---------------------------------------------------------------------------

    The text of the Plan delineates the proposed regulatory 
responsibilities with respect to the Parties. Included in the proposed 
Plan is an exhibit (the ``Covered Regulation NMS Rules'') that lists 
the federal securities laws, rules, and regulations, for which the 
applicable DREA would bear examination and enforcement responsibility 
under the Plan for common members of the Participating Organization and 
their associated persons.
    Specifically, the applicable DREA assumes examination and 
enforcement responsibility relating to compliance by common members 
with the Covered

[[Page 37365]]

Regulation NMS Rules. Covered Regulation NMS Rules do not include the 
application of any rule of a Participating Organization, or any rule or 
regulation under the Act, to the extent that it pertains to violations 
of insider trading activities, because such matters are covered by a 
separate multiparty agreement under Rule 17d-2.\17\ Under the Plan, 
Participating Organizations retain full responsibility for surveillance 
and enforcement with respect to trading activities or practices 
involving their own marketplace.\18\
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    \17\ See Securities Exchange Act Release No. 84392 (October 10, 
2018), 83 FR 52243 (October 16, 2018) (File No. 4-566) (notice of 
filing and order approving and declaring effective an amendment to 
the insider trading 17d-2 plan).
    \18\ See paragraph 1(d) of the Plan.
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III. Proposed Amendment to the Plan

    On July 15, 2019, the parties submitted a proposed amendment to the 
Plan. The primary purpose of the amendment is to add LTSE as a 
Participant to the Plan and to reflect the name change of Chicago Stock 
Exchange, Inc. to NYSE Chicago, Inc.
    The text of the proposed amended 17d-2 Plan is as follows 
(additions are in italics; deletions are in brackets):
* * * * *

Agreement for the Allocation of Regulatory Responsibility for the 
Covered Regulation NMS Rules Pursuant to Sec.  17(d) of the Securities 
Exchange Act of 1934, 15 U.S.C. 78q(d), and Rule 17d-2 Thereunder

    This agreement (the ``Agreement'') by and among Cboe BZX Exchange, 
Inc. (``BZX''), Cboe BYX Exchange, Inc. (``BATS Y''), BOX Exchange LLC 
(``BOX''), Cboe Exchange, Inc. (``Cboe''), Cboe C2 Exchange, Inc. 
(``C2''), NYSE Chicago [Stock Exchange], Inc. (``CHX''), Cboe EDGA 
Exchange, Inc. (``EDGA''), Cboe EDGX Exchange, Inc. (``EDGX''), 
Financial Industry Regulatory Authority, Inc. (``FINRA''), Nasdaq ISE, 
LLC (``ISE''), Nasdaq GEMX, LLC (``GEMX''), Nasdaq MRX, LLC (``MRX''), 
Investors Exchange LLC (``IEX''), Miami International Securities 
Exchange, LLC (``MIAX''), MIAX PEARL, LLC (``MIAX PEARL''), MIAX 
Emerald, LLC (``MIAX Emerald''), The Nasdaq Stock Market LLC 
(``Nasdaq''), Nasdaq BX, Inc. (``BX''), Nasdaq PHLX, Inc. (``PHLX''), 
NYSE National, Inc. (``NYSE National''), New York Stock Exchange LLC 
(``NYSE''), NYSE American LLC (``NYSE American''), [and] NYSE Arca, 
Inc. (``NYSE Arca'') and Long-Term Stock Exchange, Inc. (``LTSE'') 
(each, a ``Participating Organization,'' and, together, the 
``Participating Organizations''), is made pursuant to Sec.  17(d) of 
the Securities Exchange Act of 1934 (the ``Act'' or ``SEA''), 15 U.S.C. 
78q(d), and Rule 17d-2 thereunder, which allow for plans to allocate 
regulatory responsibility among self-regulatory organizations 
(``SROs''). Upon approval by the Securities and Exchange Commission 
(``Commission'' or ``SEC''), this Agreement shall amend and restate the 
agreement by and among the Participating Organizations approved by the 
SEC on [February 2, 2017] February 4, 2019.
    Whereas, the Participating Organizations desire to: (a) Foster 
cooperation and coordination among the SROs; (b) remove impediments to, 
and foster the development of, a national market system; (c) strive to 
protect the interest of investors; and (d) eliminate duplication in 
their examination and enforcement of SEA Rules 606, 607, 611 and 612 
(the ``Covered Regulation NMS Rules'');
    Whereas, the Participating Organizations are interested in 
allocating regulatory responsibilities with respect to broker-dealers 
that are members of more than one Participating Organization (the 
``Common Members'') relating to the examination and enforcement of the 
Covered Regulation NMS Rules; and
    Whereas, the Participating Organizations will request regulatory 
allocation of these regulatory responsibilities by executing and filing 
with the SEC this plan for the above stated purposes pursuant to the 
provisions of Sec.  17(d) of the Act, and Rule 17d-2 thereunder, as 
described below.
    Now, therefore, in consideration of the mutual covenants contained 
hereafter, and other valuable consideration to be mutually exchanged, 
the Participating Organizations hereby agree as follows:
    1. Assumption of Regulatory Responsibility. The Designated 
Regulation NMS Examining Authority (the ``DREA'') shall assume 
examination and enforcement responsibilities relating to compliance by 
Common Members with the Covered Regulation NMS Rules to which the DREA 
is allocated responsibility (``Regulatory Responsibility''). A list of 
the Covered Regulation NMS Rules is attached hereto as Exhibit A.
    a. For Covered Regulation NMS Rules Pertaining to ``NMS stocks'' 
(as defined in Regulation NMS) (i.e., Rules 607, 611 and 612): FINRA 
shall serve as DREA for Common Members that are members of FINRA. The 
Designated Examining Authority (``DEA'') pursuant to SEA Rule 17d-1 
shall serve as DREA for Common Members that are not members of FINRA, 
provided that the DEA operates a national securities exchange or 
facility that trades NMS stocks and the Common Member is a member of 
such exchange or facility. For all other Common Members, the 
Participating Organizations shall allocate Common Members among the 
Participating Organizations (other than FINRA) that operate a national 
securities exchange that trades NMS stocks based on the principles 
outlined below and the Participating Organization to which such a 
Common Member is allocated shall serve as the DREA for that Common 
Member. (A Participating Organization that operates a national 
securities exchange that does not trade NMS stocks has no regulatory 
responsibilities related to Covered Regulation NMS Rules pertainining 
to NMS stocks and will not serve as DREA for such Covered Regulation 
NMS Rules.)
    b. For Covered Regulation NMS Rules Pertaining to ``NMS 
securities'' (as defined in Regulation NMS) (i.e., Rule 606), the DREA 
shall be same as the DREA for Covered Regulation NMS Rules pertaining 
to NMS stocks. For Common Members that are not members of a national 
securities exchange that trades NMS stocks and thus have not been 
appointed a DREA under paragraph a., the Participating Organizations 
shall allocate the Common Members among the Participating Organizations 
(other than FINRA) that operate a national securities exchange that 
trades NMS securities based on the principles outlined below and the 
Participating Organization to which such a Common Member is allocated 
shall serve as the DREA for that Common Member with respect to Covered 
Regulation NMS Rules pertaining to NMS securities. The allocation of 
Common Members to DREAs (including FINRA) for all Covered Regulation 
NMS Rules is provided in Exhibit B.
    c. For purposes of this paragraph 1, any allocation of a Common 
Member to a Participating Organization other than as specified in 
paragraphs a. and b. above shall be based on the following principles, 
except to the extent all affected Participating Organizations consent 
to one or more different principles and any such agreement to different 
principles would be deemed an amendment to this Agreement as provided 
in paragraph 22:
    i. The Participating Organizations shall not allocate a Common 
Member to a Participating Organization unless the Common Member is a 
member of that Participating Organization.

[[Page 37366]]

    ii. To the extent practicable, Common Members shall be allocated 
among the Participating Organizations of which they are members in such 
a manner as to equalize, as nearly as possible, the allocation among 
such Participating Organizations.
    iii. To the extent practicable, the allocation will take into 
account the amount of NMS stock activity (or NMS security activity, as 
applicable) conducted by each Common Member in order to most evenly 
divide the Common Members with the largest amount of activity among the 
Participating Organizations of which they are a members. The allocation 
will also take into account similar allocations pursuant to other plans 
or agreements to which the Participating Organizations are party to 
maintain consistency in oversight of the Common Members.\1\
---------------------------------------------------------------------------

    \1\ For example, if one Participating Organization was allocated 
responsibility for a particular Common Member pursuant to a separate 
Rule 17d-2 Agreement, that Participant Organization would be 
assigned to be the DREA of that Common Member, unless there is good 
cause not to make that assignment.
---------------------------------------------------------------------------

    iv. The Participating Organizations may reallocate Common Members 
from time-to-time and in such manner as they deem appropriate 
consistent with the terms of this Agreement.
    v. Whenever a Common Member ceases to be a member of its DREA 
(including FINRA), the DREA shall promptly inform the Participating 
Organizations, who shall review the matter and reallocate the Common 
Member to another Participating Organization.
    vi. The DEA or DREA (including FINRA) may request that a Common 
Member be reallocated to another Participating Organization (including 
the DEA or DREA (including FINRA)) by giving 30 days written notice to 
the Participating Organizations. The Participating Organizations shall 
promptly consider such request and, in their discretion, may approve or 
disapprove such request and if approved, reallocate the Common Member 
to such Participating Organization.
    vii. All determinations by the Participating Organizations with 
respect to allocations shall be by the affirmative vote of a majority 
of the Participating Organizations that, at the time of such 
determination, share the applicable Common Member being allocated; a 
Participating Organization shall not be entitled to vote on any 
allocation related to a Common Member unless the Common Member is a 
member of such Participating Organization.
    d. The Participating Organizations agree that they shall conduct 
meetings among them as needed for the purposes of ensuring proper 
allocation of Common Members and identifying issues or concerns with 
respect to the regulation of Common Members. Notwithstanding anything 
herein to the contrary, it is explicitly understood that the term 
``Regulatory Responsibility'' does not include, and each of the 
Participating Organizations shall retain full responsibility for, 
examination, surveillance and enforcement with respect to trading 
activities or practices involving its own marketplace unless otherwise 
allocated pursuant to a separate Rule 17d-2 Agreement.
    2. No Retention of Regulatory Responsibility. The Participating 
Organizations do not contemplate the retention of any responsibilities 
with respect to the regulatory activities being assumed by the DREA 
under the terms of this Agreement. Nothing in this Agreement will be 
interpreted to prevent a DREA from entering into Regulatory Services 
Agreement(s) to perform its Regulatory Responsibility.
    3. No Charge. A DREA shall not charge Participating Organizations 
for performing the Regulatory Responsibility under this Agreement.
    4. 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 SEC. 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.
    5. Customer Complaints. If a Participating Organization receives a 
copy of a customer complaint relating to a DREA's Regulatory 
Responsibility as set forth in this Agreement, the Participating 
Organization shall promptly forward to such DREA a copy of such 
customer complaint. It shall be such DREA's responsibility to review 
and take appropriate action in respect to such complaint.
    6. Parties to Make Personnel Available as Witnesses. Each 
Participating Organization shall make its personnel available to the 
DREA to serve as testimonial or non-testimonial witnesses as necessary 
to assist the DREA in fulfilling the Regulatory Responsibility 
allocated under this Agreement. The DREA shall provide reasonable 
advance notice when practicable and shall work with a Participating 
Organization to accommodate reasonable scheduling conflicts within the 
context and demands as the entity with ultimate regulatory 
responsibility. The Participating Organization shall pay all reasonable 
travel and other expenses incurred by its employees to the extent that 
the DREA requires such employees to serve as witnesses, and provide 
information or other assistance pursuant to this Agreement.
    7. Sharing of Work-Papers, Data and Related Information.
    a. Sharing. A Participating Organization shall make available to 
the DREA information necessary to assist the DREA in fulfilling the 
Regulatory Responsibility assumed under the terms of this Agreement. 
Such information shall include any information collected by a 
Participating Organization in the course of performing its regulatory 
obligations under the Act, including information relating to an on-
going disciplinary investigation or action against a member, the amount 
of a fine imposed on a member, financial information, or information 
regarding proprietary trading systems gained in the course of examining 
a member (``Regulatory Information''). This Regulatory Information 
shall be used by the DREA solely for the purposes of fulfilling the 
DREA's Regulatory Responsibility.
    b. No Waiver of Privilege. 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. Special or Cause Examinations and Enforcement Proceedings. 
Nothing in this Agreement shall restrict or in any way encumber the 
right of a Participating Organization to conduct special or cause 
examinations of a Common Member, or take enforcement proceedings 
against a Common Member as a Participating Organization, in its sole 
discretion, shall deem appropriate or necessary.
    9. Dispute Resolution Under this Agreement.
    a. Negotiation. The Participating Organizations will attempt to 
resolve any disputes through good faith negotiation and discussion, 
escalating such discussion up through the appropriate management levels 
until reaching the executive management level. In the event a dispute 
cannot be settled through these means, the Participating Organizations 
shall refer the dispute to binding arbitration.
    b. Binding Arbitration. All claims, disputes, controversies, and 
other matters in question between the Participating Organizations to 
this

[[Page 37367]]

Agreement arising out of or relating to this Agreement or the breach 
thereof that cannot be resolved by the Participating Organizations will 
be resolved through binding arbitration. Unless otherwise agreed by the 
Participating Organizations, a dispute submitted to binding arbitration 
pursuant to this paragraph shall be resolved using the following 
procedures:
    (i) The arbitration shall be conducted in a city selected by the 
DREA in which it maintains a principal office or where otherwise agreed 
to by the Participating Organizations in accordance with the Commercial 
Arbitration Rules of the American Arbitration Association and judgment 
upon the award rendered by the arbitrator may be entered in any court 
having jurisdiction thereof; and
    (ii) There shall be three arbitrators, and the chairperson of the 
arbitration panel shall be an attorney. The arbitrators shall be 
appointed in accordance with the Commercial Arbitration Rules of the 
American Arbitration Association.
    10. Limitation of Liability. As between the Participating 
Organizations, no Participating Organization, including its respective 
directors, governors, officers, employees and agents, will be liable to 
any other Participating Organization, or its directors, governors, 
officers, employees and agents, for any liability, loss or damage 
resulting from any delays, inaccuracies, errors or omissions with 
respect to its performing or failing to perform regulatory 
responsibilities, obligations, or functions, except: (a) As otherwise 
provided for under the Act; (b) in instances of a Participating 
Organization's gross negligence, willful misconduct or reckless 
disregard with respect to another Participating Organization; or (c) in 
instances of a breach of confidentiality obligations owed to another 
Participating Organization. The Participating Organizations understand 
and agree that the regulatory responsibilities are being performed on a 
good faith and best effort basis and no warranties, express or implied, 
are made by any Participating Organization to any other Participating 
Organization with respect to any of the responsibilities to be 
performed hereunder. This paragraph is not intended to create liability 
of any Participating Organization to any third party.
    11. SEC Approval.
    a. The Participating Organizations agree to file promptly this 
Agreement with the SEC for its review and approval. FINRA shall file 
this Agreement on behalf, and with the explicit consent, of all 
Participating Organizations.
    b. If approved by the SEC, the Participating Organizations will 
notify their members of the general terms of the Agreement and of its 
impact on their members.
    12. Subsequent Parties; Limited Relationship. This Agreement shall 
inure to the benefit of and shall be binding upon the Participating 
Organizations hereto and their respective legal representatives, 
successors, and assigns. Nothing in this Agreement, expressed or 
implied, is intended or shall: (a) Confer on any person other than the 
Participating Organizations hereto, or their respective legal 
representatives, successors, and assigns, any rights, remedies, 
obligations or liabilities under or by reason of this Agreement, (b) 
constitute the Participating Organizations hereto partners or 
participants in a joint venture, or (c) appoint one Participating 
Organization the agent of the other.
    13. Assignment. No Participating Organization may assign this 
Agreement without the prior written consent of the DREAs performing 
Regulatory Responsibility on behalf of such Participating Organization, 
which consent shall not be unreasonably withheld, conditioned or 
delayed; provided, however, that any Participating Organization may 
assign the Agreement to a corporation controlling, controlled by or 
under common control with the Participating Organization without the 
prior written consent of such Participating Organization's DREAs. No 
assignment shall be effective without Commission approval.
    14. 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.
    15. Termination. Any Participating Organization may cancel its 
participation in the Agreement at any time upon the approval of the 
Commission after 180 days written notice to the other Participating 
Organizations (or in the case of a change of control in ownership of a 
Participating Organization, such other notice time period as that 
Participating Organization may choose). The cancellation of its 
participation in this Agreement by any Participating Organization shall 
not terminate this Agreement as to the remaining Participating 
Organizations.
    16. General. The Participating Organizations agree to perform all 
acts and execute all supplementary instruments or documents that may be 
reasonably necessary or desirable to carry out the provisions of this 
Agreement.
    17. Written Notice. Any written notice required or permitted to be 
given under this Agreement shall be deemed given if sent by certified 
mail, return receipt requested, or by a comparable means of electronic 
communication to each Participating Organization entitled to receipt 
thereof, to the attention of the Participating Organization's 
representative at the Participating Organization's then principal 
office or by email.
    18. Confidentiality. The Participating Organizations agree that 
documents or information shared shall be held in confidence, and used 
only for the purposes of carrying out their respective regulatory 
obligations under this Agreement, provided, however, that each 
Participating Organization may disclose such documents or information 
as may be required to comply with applicable requlatory requirements or 
requests for information from the SEC. Any Participating Organization 
disclosing confidential documents or information in compliance with 
applicable regulatory or oversight requirements will request 
confidential treatment of such information. No Participating 
Organization shall assert regulatory or other privileges as against the 
other with respect to Regulatory Information that is required to be 
shared pursuant to this Agreement.
    19. Regulatory Responsibility. Pursuant to Section 17(d)(1)(A) of 
the Act, and Rule 17d-2 thereunder, the Participating Organizations 
request the SEC, upon its approval of this Agreement, to relieve the 
Participating Organizations which are participants in this Agreement 
that are not the DREA as to a Common Member of any and all 
responsibilities with respect to the matters allocated to the DREA 
pursuant to this Agreement for purposes of Sec. Sec.  17(d) and 19(g) 
of the Act.
    20. Governing Law. This Agreement shall be deemed to have been made 
in the State of New York, and shall be construed and enforced in 
accordance with the law of the State of New York, without reference to 
principles of conflicts of laws thereof. Each of the Participating 
Organizations hereby consents to submit to the jurisdiction of the 
courts of the State of New York in

[[Page 37368]]

connection with any action or proceeding relating to this Agreement.
    21. Survival of Provisions. Provisions intended by their terms or 
context to survive and continue notwithstanding delivery of the 
regulatory services by the DREA and any expiration of this Agreement 
shall survive and continue.
    22. Amendment.
    a. This Agreement may be amended to add a new Participating 
Organization, provided that such Participating Organization does not 
assume regulatory responsibility, by an amendment executed by all 
applicable DREAs and such new Participating Organization. All other 
Participating Organizations expressly consent to allow such DREAs to 
jointly add new Participating Organizations to the Agreement as 
provided above. Such DREAs will promptly notify all Participating 
Organizations of any such amendments to add a new Participating 
Organization.
    b. All other amendments must be approved by each Participating 
Organization. All amendments, including adding a new Participating 
Organization but excluding changes to Exhibit B, must be filed with and 
approved by the Commission before they become effective.
    23. Effective Date. The Effective Date of this Agreement will be 
the date the SEC declares this Agreement to be effective pursuant to 
authority conferred by Sec.  17(d) of the Act, and Rule 17d-2 
thereunder.
    24. Counterparts. This Agreement may be executed in any number of 
counterparts, including facsimile, each of which will be deemed an 
original, but all of which taken together shall constitute one single 
agreement among the Participating Organizations.
* * * * *

Exhibit A

Covered Regulation NMS Rules

    SEA Rule 606--Disclosure of Order Routing Information.*
    SEA Rule 607--Customer Account Statements.
    SEA Rule 611--Order Protection Rule.
    SEA Rule 612--Minimum Pricing Increment.
    * Covered Regulation NMS Rules with asterisks (*) pertain to NMS 
securities. Covered Regulation NMS Rules without asterisks pertain to 
NMS stocks.

IV. Solicitation of Comments

    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/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number 4-618 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number 4-618. 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/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed plan that are filed with the 
Commission, and all written communications relating to the proposed 
plan 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 the Participating Organizations. 
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 4-618 and should be submitted 
on or before August 21, 2019.

V. Discussion

    The Commission finds that the Plan, as amended, is consistent with 
the factors set forth in Section 17(d) of the Act \19\ and Rule 17d-
2(c) thereunder \20\ 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 the applicable DREA certain examination and enforcement 
responsibilities for Common Members that would otherwise be performed 
by multiple Parties. Accordingly, the proposed amended Plan promotes 
efficiency by reducing costs to Common Members. Furthermore, because 
the Parties will coordinate their regulatory functions in accordance 
with the proposed amended Plan, the amended Plan should promote 
investor protection.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78q(d).
    \20\ 17 CFR 240.17d-2(c).
---------------------------------------------------------------------------

    The Commission is hereby declaring effective a plan that allocates 
regulatory responsibility for certain provisions of the federal 
securities laws, rules, and regulations as set forth in Exhibit A to 
the Plan. The Commission notes that any amendment to the Plan must be 
approved by the relevant Parties as set forth in Paragraph 22 of the 
Plan and must be filed with and approved by the Commission before it 
may become effective.\21\
---------------------------------------------------------------------------

    \21\ See Paragraph 22 of the Plan. The Commission notes, 
however, that changes to Exhibit B to the Plan (the allocation of 
Common Members to DREAs) are not required to be filed with, and 
approved by, the Commission before they become effective.
---------------------------------------------------------------------------

    Under paragraph (c) of Rule 17d-2, the Commission may, after 
appropriate notice and comment, declare a plan, or any part of a plan, 
effective. In this instance, the Commission believes that appropriate 
notice and comment can take place after the proposed amendment is 
effective. In particular, the purpose of the amendment is to add LTSE 
as a Participating Organization and to reflect the name change of 
Chicago Stock Exchange, Inc. to NYSE Chicago, Inc. The Commission notes 
that the most recent prior amendment to the Plan was published for 
comment and the Commission did not receive any comments thereon.\22\ 
The Commission believes that the current amendment to the Plan does not 
raise any new regulatory issues that the Commission has not previously 
considered, and therefore believes that the amended Plan should become 
effective without any undue delay.
---------------------------------------------------------------------------

    \22\ See Securities Exchange Act Release No. 79928 (February 2, 
2017), 82 FR 9814 (February 8, 2017).
---------------------------------------------------------------------------

VI. Conclusion

    This order gives effect to the amended Plan filed with the 
Commission that is contained in File No. 4-618.
    It is therefore ordered, pursuant to Section 17(d) of the Act, that 
the Plan, as amended, filed with the Commission pursuant to Rule 17d-2 
on July 15,

[[Page 37369]]

2019, is hereby approved and declared effective.
    It is further ordered that those SRO participants that are not the 
DREA as to a particular common member are relieved of those regulatory 
responsibilities allocated to the common member's DREA under the 
amended Plan to the extent of such allocation.
    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(34).

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-16214 Filed 7-30-19; 8:45 am]
 BILLING CODE 8011-01-P
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