Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Order Approving and Declaring Effective a Proposed Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and the Long-Term Stock Exchange, Inc., 39883-39885 [2019-17208]
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Federal Register / Vol. 84, No. 155 / Monday, August 12, 2019 / Notices
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3015, and
39 CFR part 3020, subpart B. Comment
deadline(s) for each request appear in
section II.
This Notice will be published in the
Federal Register.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2019–17182 Filed 8–9–19; 8:45 am]
BILLING CODE 7710–FW–P
jspears on DSK3GMQ082PROD with NOTICES
II. Docketed Proceeding(s)
1. Docket No(s).: MC2019–181 and
CP2019–203; Filing Title: USPS Request
to Add Priority Mail Contract 545 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: August 6, 2019; Filing
Authority: 39 U.S.C. 3642, 39 CFR
3020.30 et seq., and 39 CFR 3015.5;
Public Representative: Kenneth R.
Moeller; Comments Due: August 14,
2019.
2. Docket No(s).: MC2019–182 and
CP2019–204; Filing Title: USPS Request
to Add Priority Mail Contract 546 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: August 6, 2019; Filing
Authority: 39 U.S.C. 3642, 39 CFR
3020.30 et seq., and 39 CFR 3015.5;
Public Representative: Kenneth R.
Moeller; Comments Due: August 14,
2019.
3. Docket No(s).: MC2019–183 and
CP2019–205; Filing Title: USPS Request
to Add Priority Mail & First-Class
Package Service Contract 111 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: August 6, 2019; Filing
Authority: 39 U.S.C. 3642, 39 CFR
3020.30 et seq., and 39 CFR 3015.5;
Public Representative: Christopher C.
Mohr; Comments Due: August 14, 2019.
4. Docket No(s).: MC2019–184 and
CP2019–206; Filing Title: USPS Request
to Add Priority Mail & First-Class
Package Service Contract 112 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: August 6, 2019; Filing
Authority: 39 U.S.C. 3642, 39 CFR
3020.30 et seq., and 39 CFR 3015.5;
Public Representative: Christopher C.
Mohr; Comments Due: August 14, 2019.
5. Docket No(s).: MC2019–185 and
CP2019–207; Filing Title: USPS Request
to Add Priority Mail & First-Class
Package Service Contract 113 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: August 6, 2019; Filing
Authority: 39 U.S.C. 3642, 39 CFR
3020.30 et seq., and 39 CFR 3015.5;
Public Representative: Christopher C.
Mohr; Comments Due: August 14, 2019.
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17:16 Aug 09, 2019
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–86587; File No. 4–747]
Program for Allocation of Regulatory
Responsibilities Pursuant to Rule 17d–
2; Order Approving and Declaring
Effective a Proposed Plan for the
Allocation of Regulatory
Responsibilities Between the Financial
Industry Regulatory Authority, Inc. and
the Long-Term Stock Exchange, Inc.
August 7, 2019.
On July 11, 2019, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) and the Long-Term Stock
Exchange, Inc. (‘‘LTSE’’) (together with
FINRA, the ‘‘Parties’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’ or ‘‘SEC’’) a plan for the
allocation of regulatory responsibilities,
dated July 11, 2019 (‘‘17d–2 Plan’’ or the
‘‘Plan’’). The Plan was published for
comment on July 17, 2019.1 The
Commission received no comments on
the Plan. This order approves and
declares effective the Plan.
I. Introduction
Section 19(g)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’),2 among
other things, requires every selfregulatory organization (‘‘SRO’’)
registered as either a national securities
exchange or national securities
association to examine for, and enforce
compliance by, its members and persons
associated with its members with the
Act, the rules and regulations
thereunder, and the SRO’s own rules,
unless the SRO is relieved of this
responsibility pursuant to Section 17(d)
or Section 19(g)(2) of the Act.3 Without
this relief, the statutory obligation of
each individual SRO could result in a
pattern of multiple examinations of
broker-dealers that maintain
memberships in more than one SRO
(‘‘common members’’). Such regulatory
duplication would add unnecessary
expenses for common members and
their SROs.
1 See Securities Exchange Act Release No. 86356
(July 11, 2019), 84 FR 34225.
2 15 U.S.C. 78s(g)(1).
3 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2),
respectively.
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39883
Section 17(d)(1) of the Act 4 was
intended, in part, to eliminate
unnecessary multiple examinations and
regulatory duplication.5 With respect to
a common member, Section 17(d)(1)
authorizes the Commission, by rule or
order, to relieve an SRO of the
responsibility to receive regulatory
reports, to examine for and enforce
compliance with applicable statutes,
rules, and regulations, or to perform
other specified regulatory functions.
To implement Section 17(d)(1), the
Commission adopted two rules: Rule
17d–1 and Rule 17d–2 under the Act.6
Rule 17d–1 authorizes the Commission
to name a single SRO as the designated
examining authority (‘‘DEA’’) to
examine common members for
compliance with the financial
responsibility requirements imposed by
the Act, or by Commission or SRO
rules.7 When an SRO has been named as
a common member’s DEA, all other
SROs to which the common member
belongs are relieved of the responsibility
to examine the firm for compliance with
the applicable financial responsibility
rules. On its face, Rule 17d–1 deals only
with an SRO’s obligations to enforce
member compliance with financial
responsibility requirements. Rule 17d–1
does not relieve an SRO from its
obligation to examine a common
member for compliance with its own
rules and provisions of the federal
securities laws governing matters other
than financial responsibility, including
sales practices and trading activities and
practices.
To address regulatory duplication in
these and other areas, the Commission
adopted Rule 17d–2 under the Act.8
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
4 15
U.S.C. 78q(d)(1).
Securities Act Amendments of 1975, Report
of the Senate Committee on Banking, Housing, and
Urban Affairs to Accompany S. 249, S. Rep. No. 94–
75, 94th Cong., 1st Session 32 (1975).
6 17 CFR 240.17d–1 and 17 CFR 240.17d–2,
respectively.
7 See Securities Exchange Act Release No. 12352
(April 20, 1976), 41 FR 18808 (May 7, 1976).
8 See Securities Exchange Act Release No. 12935
(October 28, 1976), 41 FR 49091 (November 8,
1976).
5 See
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Federal Register / Vol. 84, No. 155 / Monday, August 12, 2019 / Notices
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.
limitation, registration pursuant to its
applicable rules of associated persons
(i.e., registration rules that are not
Common Rules); its duties as a DEA
pursuant to Rule 17d–1 under the Act;
and any LTSE rules that are not
Common Rules.12
II. Proposed Plan
III. Discussion
The Commission finds that the
proposed Plan is consistent with the
factors set forth in Section 17(d) of the
Act 13 and Rule 17d–2(c) thereunder 14
in that the proposed 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
Plan should reduce unnecessary
regulatory duplication by allocating to
FINRA certain examination and
enforcement responsibilities for
common members that would otherwise
be performed by LTSE and FINRA.
Accordingly, the proposed Plan
promotes efficiency by reducing costs to
common members. Furthermore,
because LTSE and FINRA will
coordinate their regulatory functions in
accordance with the Plan, the Plan
should promote investor protection.
The Commission notes that, under the
Plan, LTSE and FINRA have allocated
regulatory responsibility for those LTSE
rules, set forth in the Certification, that
are substantially similar to the
applicable FINRA rules in that
examination for compliance with such
provisions and rules would not require
FINRA to develop one or more new
examination standards, modules,
procedures, or criteria in order to
analyze the application of the rule, or a
common member’s activity, conduct, or
output in relation to such rule. In
addition, under the Plan, FINRA would
assume regulatory responsibility for
certain provisions of the federal
securities laws and the rules and
regulations thereunder that are set forth
in the Certification. The Common Rules
covered by the Plan are specifically
listed in the Certification, as may be
amended by the Parties from time to
time.
According to the Plan, LTSE will
review the Certification, at least
annually, or more frequently if required
by changes in either the rules of LTSE
or FINRA, and, if necessary, submit to
FINRA an updated list of Common
Rules to add LTSE rules not included on
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The proposed 17d–2 Plan is intended
to reduce regulatory duplication for
firms that are common members of both
LTSE and FINRA.9 Pursuant to the
proposed 17d–2 Plan, FINRA would
assume certain examination and
enforcement responsibilities for
common members with respect to
certain applicable laws, rules, and
regulations.
The text of the Plan delineates the
proposed regulatory responsibilities
with respect to the Parties. Included in
the proposed Plan is an exhibit (the
‘‘LTSE Certification of Common Rules,’’
referred to herein as the ‘‘Certification’’)
that lists every LTSE rule, and select
federal securities laws, rules, and
regulations, for which FINRA would
bear responsibility under the Plan for
overseeing and enforcing with respect to
LTSE members that are also members of
FINRA and the associated persons
therewith (‘‘Dual Members’’).
Specifically, under the 17d–2 Plan,
FINRA would assume examination and
enforcement responsibility relating to
compliance by Dual Members with the
rules of LTSE that are substantially
similar to the applicable rules of
FINRA,10 as well as any provisions of
the federal securities laws and the rules
and regulations thereunder delineated
in the Certification (‘‘Common Rules’’).
In the event that a Dual Member is the
subject of an investigation relating to a
transaction on LTSE, the plan
acknowledges that LTSE may, in its
discretion, exercise concurrent
jurisdiction and responsibility for such
matter.11
Under the Plan, LTSE would retain
full responsibility for surveillance and
enforcement with respect to trading
activities or practices involving LTSE’s
own marketplace, including, without
9 The proposed 17d–2 Plan refers to these
common members as ‘‘Dual Members.’’ See
Paragraph 1(c) of the proposed 17d–2 Plan.
10 See paragraph 1(b) of the proposed 17d–2 Plan
(defining Common Rules). See also paragraph 1(f)
of the proposed 17d–2 Plan (defining Regulatory
Responsibilities). Paragraph 2 of the Plan provides
that annually, or more frequently as required by
changes in either LTSE rules or FINRA rules, the
parties shall review and update, if necessary, the
list of Common Rules. Further, paragraph 3 of the
Plan provides that LTSE shall furnish FINRA with
a list of Dual Members, and shall update the list no
less frequently than once each calendar quarter.
11 See paragraph 6 of the proposed 17d–2 Plan.
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17:16 Aug 09, 2019
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12 See
paragraph 2 of the proposed 17d–2 Plan.
U.S.C. 78q(d).
14 17 CFR 240.17d–2(c).
13 15
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Sfmt 4703
the then-current list of Common Rules
that are substantially similar to FINRA
rules; delete LTSE rules included in the
then-current list of Common Rules that
are no longer substantially similar to
FINRA rules; and confirm that the
remaining rules on the list of Common
Rules continue to be LTSE rules that are
substantially similar to FINRA rules.15
FINRA will then confirm in writing
whether the rules listed in any updated
list are Common Rules as defined in the
Plan. Under the Plan, LTSE will also
provide FINRA with a current list of
common members and shall update the
list no less frequently than once each
quarter.16 The Commission believes that
these provisions are designed to provide
for continuing communication between
the Parties to ensure the continued
accuracy of the scope of the proposed
allocation of regulatory responsibility.
The Commission is hereby declaring
effective a Plan that, among other
things, allocates regulatory
responsibility to FINRA for the
oversight and enforcement of all LTSE
rules that are substantially similar to the
rules of FINRA for common members of
LTSE and FINRA. Therefore,
modifications to the Certification need
not be filed with the Commission as an
amendment to the Plan, provided that
the Parties are only adding to, deleting
from, or confirming changes to LTSE
rules in the Certification in conformance
with the definition of Common Rules
provided in the Plan. However, should
the Parties decide to add an LTSE rule
to the Certification that is not
substantially similar to a FINRA rule;
delete an LTSE rule from the
Certification that is substantially similar
to a FINRA rule; or leave on the
Certification an LTSE rule that is no
longer substantially similar to a FINRA
rule, then such a change would
constitute an amendment to the Plan,
which must be filed with the
Commission pursuant to Rule 17d–2
under the Act.17
IV. Conclusion
This Order gives effect to the Plan
filed with the Commission in File No.
4–747. The Parties shall notify all
members affected by the Plan of their
rights and obligations under the Plan.
It is therefore ordered, pursuant to
Section 17(d) of the Act, that the Plan
15 See
paragraph 2 of the Plan.
paragraph 3 of the Plan.
17 The Commission also notes that the addition to
or deletion from the Certification of any federal
securities laws, rules, and regulations for which
FINRA would bear responsibility under the Plan for
examining, and enforcing compliance by, common
members, also would constitute an amendment to
the Plan.
16 See
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Federal Register / Vol. 84, No. 155 / Monday, August 12, 2019 / Notices
in File No. 4–747, between FINRA and
LTSE, filed pursuant to Rule 17d–2
under the Act, is approved and declared
effective.
It is further ordered that LTSE is
relieved of those responsibilities
allocated to FINRA under the Plan in
File No. 4–747.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–17208 Filed 8–9–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting; Cancellation
FEDERAL REGISTER CITATION OF PREVIOUS
ANNOUNCEMENT: 84 FR 38321, August 6,
2019.
PREVIOUSLY ANNOUNCED TIME AND DATE OF
THE MEETING: Thursday, August 8, 2019
at 10:00 a.m.
The Open
Meeting scheduled for Thursday,
August 8, 2019 at 10:00 a.m., has been
cancelled.
CHANGES IN THE MEETING:
CONTACT PERSON FOR MORE INFORMATION:
For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Dated: August 7, 2019.
Vanessa A. Countryman,
Secretary.
Dated: August 8, 2019.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2019–17353 Filed 8–8–19; 4:15 pm]
BILLING CODE 8011–01–P
TENNESSEE VALLEY AUTHORITY
[FR Doc. 2019–17248 Filed 8–8–19; 11:15 am]
BILLING CODE 8011–01–P
Sugar Camp Energy LLC Mine
Expansion (Revision 6) Environmental
Impact Statement
SECURITIES AND EXCHANGE
COMMISSION
Tennessee Valley Authority.
Notice of intent.
AGENCY:
Sunshine Act Meetings
ACTION:
2:00 p.m. on Thursday,
August 15, 2019.
PLACE: The meeting will be held at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
STATUS: This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
In the event that the time, date, or
location of this meeting changes, an
announcement of the change, along with
the new time, date, and/or place of the
SUMMARY:
TIME AND DATE:
jspears on DSK3GMQ082PROD with NOTICES
meeting will be posted on the
Commission’s website at https://
www.sec.gov.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
The subject matters of the closed
meeting will consist of the following
topics:
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings;
Resolution of litigation claims; and
Other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting agenda items that
may consist of adjudicatory,
examination, litigation, or regulatory
matters
CONTACT PERSON FOR MORE INFORMATION:
For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
18 17
CFR 200.30–3(a)(34).
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17:16 Aug 09, 2019
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The Tennessee Valley
Authority (TVA) intends to prepare an
Environmental Impact Statement (EIS)
on the proposed expansion of mining
operations by Sugar Camp Energy, LLC
to extract TVA-owned coal reserves in
Hamilton and Franklin counties,
Illinois. A portion of the expansion area
contains coal reserves owned by TVA
that are leased to Sugar Camp Energy,
LLC. TVA will consider whether to
approve the company’s application to
mine approximately 12,125 acres
(‘‘project area’’) of TVA-owned coal
reserves.
Comments must be received or
postmarked by September 11, 2019.
ADDRESSES: Written comments should
be sent to Elizabeth Smith, NEPA
Specialist, Tennessee Valley Authority,
DATES:
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Fmt 4703
Sfmt 4703
39885
400 W Summit Hill Drive #WT11B,
Knoxville, Tennessee 37902. Comments
may be sent electronically to esmith14@
tva.gov.
FOR FURTHER INFORMATION CONTACT:
Elizabeth Smith, by phone at 865–632–
3053, by email at esmith14@tva.gov, or
by mail at the address above.
SUPPLEMENTARY INFORMATION: This
notice is provided in accordance with
the Council on Environmental Quality’s
regulations (40 CFR parts 1500 to 1508)
and TVA’s procedures for implementing
the National Environmental Policy Act
(NEPA) and Section 106 of the National
Historic Preservation Act (NHPA) and
its implementing regulations (36 CFR
part 800).
Sugar Camp Energy, LLC (Sugar
Camp) proposes to expand its
underground longwall mining
operations at its Sugar Camp Mine No.
1 in southern Illinois by approximately
37,972 acres. TVA owns coal reserves
underlying approximately 12,125 acres
of the Herrin No. 6 seam within the
expansion area. In November 2017,
Sugar Camp obtained approval for the
expansion from the State of Illinois,
when the Illinois Department of Natural
Resources (IDNR), Office of Mines and
Minerals (OMM) Land Reclamation
Division (LRD) approved Significant
Revision (SR) No. 6 to the company’s
Surface Coal Mining and Reclamation
Operations Permit—Underground
Operations (Number 382). TVA will
consider whether to approve the
company’s application to mine
approximately 12,125 acres (‘‘project
area’’) of the TVA-owned coal reserves.
Under the proposal, surface and
underground disturbance would occur.
Surface activities to support the
underground mining would be limited
to the construction of bleeder shafts and
installation of associated utilities to
operate the bleeder shafts to support the
extraction of TVA-owned coal. The
exact location of these surface activities
is unknown at this time, but they would
occur within the project area. Other
activities to support the underground
mining of TVA-owned coal would be
located outside of the project area and
include operation of the coal
preparation plant (approximately 3.5
miles southwest of Macedonia, Illinois).
Underground mining would be
performed using two techniques. Coal
would be extracted using room and
pillar and continuous mining
techniques during a development
period, followed by longwall mining
and associated planned subsidence.
Subsidence would only occur under a
portion of the project area. Sugar Camp
would utilize its existing Mine No. 1
E:\FR\FM\12AUN1.SGM
12AUN1
]]>Agencies
[Federal Register Volume 84, Number 155 (Monday, August 12, 2019)]
[Notices]
[Pages 39883-39885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17208]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-86587; File No. 4-747]
Program for Allocation of Regulatory Responsibilities Pursuant to
Rule 17d-2; Order Approving and Declaring Effective a Proposed Plan for
the Allocation of Regulatory Responsibilities Between the Financial
Industry Regulatory Authority, Inc. and the Long-Term Stock Exchange,
Inc.
August 7, 2019.
On July 11, 2019, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') and the Long-Term Stock Exchange, Inc. (``LTSE'') (together
with FINRA, the ``Parties'') filed with the Securities and Exchange
Commission (``Commission'' or ``SEC'') a plan for the allocation of
regulatory responsibilities, dated July 11, 2019 (``17d-2 Plan'' or the
``Plan''). The Plan was published for comment on July 17, 2019.\1\ The
Commission received no comments on the Plan. This order approves and
declares effective the Plan.
---------------------------------------------------------------------------
\1\ See Securities Exchange Act Release No. 86356 (July 11,
2019), 84 FR 34225.
---------------------------------------------------------------------------
I. Introduction
Section 19(g)(1) of the Securities Exchange Act of 1934
(``Act''),\2\ among other things, requires every self-regulatory
organization (``SRO'') registered as either a national securities
exchange or national securities association to examine for, and enforce
compliance by, its members and persons associated with its members with
the Act, the rules and regulations thereunder, and the SRO's own rules,
unless the SRO is relieved of this responsibility pursuant to Section
17(d) or Section 19(g)(2) of the Act.\3\ Without this relief, the
statutory obligation of each individual SRO could result in a pattern
of multiple examinations of broker-dealers that maintain memberships in
more than one SRO (``common members''). Such regulatory duplication
would add unnecessary expenses for common members and their SROs.
---------------------------------------------------------------------------
\2\ 15 U.S.C. 78s(g)(1).
\3\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively.
---------------------------------------------------------------------------
Section 17(d)(1) of the Act \4\ was intended, in part, to eliminate
unnecessary multiple examinations and regulatory duplication.\5\ With
respect to a common member, Section 17(d)(1) authorizes the Commission,
by rule or order, to relieve an SRO of the responsibility to receive
regulatory reports, to examine for and enforce compliance with
applicable statutes, rules, and regulations, or to perform other
specified regulatory functions.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78q(d)(1).
\5\ See Securities Act Amendments of 1975, Report of the Senate
Committee on Banking, Housing, and Urban Affairs to Accompany S.
249, S. Rep. No. 94-75, 94th Cong., 1st Session 32 (1975).
---------------------------------------------------------------------------
To implement Section 17(d)(1), the Commission adopted two rules:
Rule 17d-1 and Rule 17d-2 under the Act.\6\ Rule 17d-1 authorizes the
Commission to name a single SRO as the designated examining authority
(``DEA'') to examine common members for compliance with the financial
responsibility requirements imposed by the Act, or by Commission or SRO
rules.\7\ When an SRO has been named as a common member's DEA, all
other SROs to which the common member belongs are relieved of the
responsibility to examine the firm for compliance with the applicable
financial responsibility rules. On its face, Rule 17d-1 deals only with
an SRO's obligations to enforce member compliance with financial
responsibility requirements. Rule 17d-1 does not relieve an SRO from
its obligation to examine a common member for compliance with its own
rules and provisions of the federal securities laws governing matters
other than financial responsibility, including sales practices and
trading activities and practices.
---------------------------------------------------------------------------
\6\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
\7\ See Securities Exchange Act Release No. 12352 (April 20,
1976), 41 FR 18808 (May 7, 1976).
---------------------------------------------------------------------------
To address regulatory duplication in these and other areas, the
Commission adopted Rule 17d-2 under the Act.\8\ 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
[[Page 39884]]
and settlement system; and is in conformity with the factors set forth
in Section 17(d) of the Act. Commission approval of a plan filed
pursuant to Rule 17d-2 relieves an SRO of those regulatory
responsibilities allocated by the plan to another SRO.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 12935 (October 28,
1976), 41 FR 49091 (November 8, 1976).
---------------------------------------------------------------------------
II. Proposed Plan
The proposed 17d-2 Plan is intended to reduce regulatory
duplication for firms that are common members of both LTSE and
FINRA.\9\ Pursuant to the proposed 17d-2 Plan, FINRA would assume
certain examination and enforcement responsibilities for common members
with respect to certain applicable laws, rules, and regulations.
---------------------------------------------------------------------------
\9\ The proposed 17d-2 Plan refers to these common members as
``Dual Members.'' See Paragraph 1(c) of the proposed 17d-2 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 ``LTSE Certification of Common Rules,''
referred to herein as the ``Certification'') that lists every LTSE
rule, and select federal securities laws, rules, and regulations, for
which FINRA would bear responsibility under the Plan for overseeing and
enforcing with respect to LTSE members that are also members of FINRA
and the associated persons therewith (``Dual Members'').
Specifically, under the 17d-2 Plan, FINRA would assume examination
and enforcement responsibility relating to compliance by Dual Members
with the rules of LTSE that are substantially similar to the applicable
rules of FINRA,\10\ as well as any provisions of the federal securities
laws and the rules and regulations thereunder delineated in the
Certification (``Common Rules''). In the event that a Dual Member is
the subject of an investigation relating to a transaction on LTSE, the
plan acknowledges that LTSE may, in its discretion, exercise concurrent
jurisdiction and responsibility for such matter.\11\
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\10\ See paragraph 1(b) of the proposed 17d-2 Plan (defining
Common Rules). See also paragraph 1(f) of the proposed 17d-2 Plan
(defining Regulatory Responsibilities). Paragraph 2 of the Plan
provides that annually, or more frequently as required by changes in
either LTSE rules or FINRA rules, the parties shall review and
update, if necessary, the list of Common Rules. Further, paragraph 3
of the Plan provides that LTSE shall furnish FINRA with a list of
Dual Members, and shall update the list no less frequently than once
each calendar quarter.
\11\ See paragraph 6 of the proposed 17d-2 Plan.
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Under the Plan, LTSE would retain full responsibility for
surveillance and enforcement with respect to trading activities or
practices involving LTSE's own marketplace, including, without
limitation, registration pursuant to its applicable rules of associated
persons (i.e., registration rules that are not Common Rules); its
duties as a DEA pursuant to Rule 17d-1 under the Act; and any LTSE
rules that are not Common Rules.\12\
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\12\ See paragraph 2 of the proposed 17d-2 Plan.
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III. Discussion
The Commission finds that the proposed Plan is consistent with the
factors set forth in Section 17(d) of the Act \13\ and Rule 17d-2(c)
thereunder \14\ in that the proposed 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 Plan should reduce
unnecessary regulatory duplication by allocating to FINRA certain
examination and enforcement responsibilities for common members that
would otherwise be performed by LTSE and FINRA. Accordingly, the
proposed Plan promotes efficiency by reducing costs to common members.
Furthermore, because LTSE and FINRA will coordinate their regulatory
functions in accordance with the Plan, the Plan should promote investor
protection.
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\13\ 15 U.S.C. 78q(d).
\14\ 17 CFR 240.17d-2(c).
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The Commission notes that, under the Plan, LTSE and FINRA have
allocated regulatory responsibility for those LTSE rules, set forth in
the Certification, that are substantially similar to the applicable
FINRA rules in that examination for compliance with such provisions and
rules would not require FINRA to develop one or more new examination
standards, modules, procedures, or criteria in order to analyze the
application of the rule, or a common member's activity, conduct, or
output in relation to such rule. In addition, under the Plan, FINRA
would assume regulatory responsibility for certain provisions of the
federal securities laws and the rules and regulations thereunder that
are set forth in the Certification. The Common Rules covered by the
Plan are specifically listed in the Certification, as may be amended by
the Parties from time to time.
According to the Plan, LTSE will review the Certification, at least
annually, or more frequently if required by changes in either the rules
of LTSE or FINRA, and, if necessary, submit to FINRA an updated list of
Common Rules to add LTSE rules not included on the then-current list of
Common Rules that are substantially similar to FINRA rules; delete LTSE
rules included in the then-current list of Common Rules that are no
longer substantially similar to FINRA rules; and confirm that the
remaining rules on the list of Common Rules continue to be LTSE rules
that are substantially similar to FINRA rules.\15\ FINRA will then
confirm in writing whether the rules listed in any updated list are
Common Rules as defined in the Plan. Under the Plan, LTSE will also
provide FINRA with a current list of common members and shall update
the list no less frequently than once each quarter.\16\ The Commission
believes that these provisions are designed to provide for continuing
communication between the Parties to ensure the continued accuracy of
the scope of the proposed allocation of regulatory responsibility.
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\15\ See paragraph 2 of the Plan.
\16\ See paragraph 3 of the Plan.
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The Commission is hereby declaring effective a Plan that, among
other things, allocates regulatory responsibility to FINRA for the
oversight and enforcement of all LTSE rules that are substantially
similar to the rules of FINRA for common members of LTSE and FINRA.
Therefore, modifications to the Certification need not be filed with
the Commission as an amendment to the Plan, provided that the Parties
are only adding to, deleting from, or confirming changes to LTSE rules
in the Certification in conformance with the definition of Common Rules
provided in the Plan. However, should the Parties decide to add an LTSE
rule to the Certification that is not substantially similar to a FINRA
rule; delete an LTSE rule from the Certification that is substantially
similar to a FINRA rule; or leave on the Certification an LTSE rule
that is no longer substantially similar to a FINRA rule, then such a
change would constitute an amendment to the Plan, which must be filed
with the Commission pursuant to Rule 17d-2 under the Act.\17\
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\17\ The Commission also notes that the addition to or deletion
from the Certification of any federal securities laws, rules, and
regulations for which FINRA would bear responsibility under the Plan
for examining, and enforcing compliance by, common members, also
would constitute an amendment to the Plan.
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IV. Conclusion
This Order gives effect to the Plan filed with the Commission in
File No. 4-747. The Parties shall notify all members affected by the
Plan of their rights and obligations under the Plan.
It is therefore ordered, pursuant to Section 17(d) of the Act, that
the Plan
[[Page 39885]]
in File No. 4-747, between FINRA and LTSE, filed pursuant to Rule 17d-2
under the Act, is approved and declared effective.
It is further ordered that LTSE is relieved of those
responsibilities allocated to FINRA under the Plan in File No. 4-747.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(34).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-17208 Filed 8-9-19; 8:45 am]
BILLING CODE 8011-01-P
