Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.; Order Declaring Effective a Minor Rule Violation Plan, 59427-59428 [2019-23977]
Download as PDF
<![CDATA[
Federal Register / Vol. 84, No. 213 / Monday, November 4, 2019 / Notices
designates the proposed rule change
operative upon filing.33
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–ISE–2019–29 and should be
submitted on or before November 25,
2019.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.34
Jill M. Peterson,
Assistant Secretary.
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 SR–
ISE–2019–29 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–ISE–2019–29. 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 rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
33 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
VerDate Sep<11>2014
20:48 Nov 01, 2019
Jkt 250001
[FR Doc. 2019–23974 Filed 11–1–19; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–87415; File No. 4–753]
Self-Regulatory Organizations; LongTerm Stock Exchange, Inc.; Order
Declaring Effective a Minor Rule
Violation Plan
October 29, 2019.
On August 23, 2019, Long-Term Stock
Exchange, Inc. (‘‘LTSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) a proposed minor rule
violation plan (‘‘MRVP’’) pursuant to
Section 19(d)(1) of the Securities
Exchange Act of 1934 (the ‘‘Act’’),1 and
Rule 19d–1(c)(2) thereunder.2 The
proposed MRVP was published for
comment on September 25, 2019.3 The
Commission received no comments on
the proposal. This order declares the
Exchange’s proposed MRVP effective.
In accordance with Rule 19d–1(c)(2)
under the Act,4 the Exchange proposed
to designate certain specified rule
violations as minor rule violations, with
sanctions not exceeding $2,500.
Violations resolved under the MRVP
would not be subject to the provisions
of Rule 19d–1(c)(1) of the Act,5 which
requires that a self-regulatory
organization (‘‘SRO’’) promptly file
notice with the Commission of any final
disciplinary action taken with respect to
34 17
CFR 200.30–3(a)(12).
U.S.C. 78s(d)(1).
2 17 CFR 240.19d–1(c)(2).
3 See Securities Exchange Act Release No. 87021
(September 19, 2019), 84 FR 50525 (‘‘Notice’’).
4 17 CFR 240.19d–1(c)(2).
5 17 CFR 240.19d–1(c)(1).
1 15
PO 00000
Frm 00077
Fmt 4703
Sfmt 4703
59427
any person or organization.6 In
accordance with Rule 19d–1(c)(2) under
the Act,7 the Exchange proposed to
designate certain specified rule
violations as minor rule violations, and
requested that it be relieved of the
prompt reporting requirements
regarding such violations, provided it
gives notice of such violations to the
Commission on a quarterly basis.
The Exchange proposed to include in
its MRVP the procedures included in
LTSE Rule 9.216(b) (‘‘Procedure for
Violation Under Plan Pursuant to
Exchange Act Rule 19d–1(c)(2)’’) and
violations included in Rule 9.218
(‘‘Violations Appropriate for Disposition
Under Plan Pursuant to Exchange Act
Rule 19d–1(c)(2)’’).8 According to the
Exchange’s proposed MRVP, the
Exchange may impose a fine (not to
exceed $2,500) and/or a censure on any
Member or its associated person with
respect to any rule listed in LTSE Rule
9.218. If the Financial Industry
Regulatory Authority’s (‘‘FINRA’’)
Department of Enforcement or
Department of Market Regulation, on
behalf of the Exchange, has reason to
believe a violation has occurred, and if
the Member or its associated person
does not dispute the violation, either
Department may prepare and request
that the Member or associated person
execute a minor rule violation plan
letter. The letter would describe the act
or practice engaged in or omitted, the
rule, regulation, or statutory provision
6 The Commission adopted amendments to
paragraph (c) of Rule 19d–1 to allow SROs to
submit for Commission approval plans for the
abbreviated reporting of minor disciplinary
infractions. See Securities Exchange Act Release
No. 21013 (June 1, 1984), 49 FR 23828 (June 8,
1984). Any disciplinary action taken by an SRO
against any person for violation of a rule of the SRO
which has been designated as a minor rule violation
pursuant to a plan filed with and declared effective
by the Commission is not considered ‘‘final’’ for
purposes of Section 19(d)(1) of the Act if the
sanction imposed consists of a fine not exceeding
$2,500 and the sanctioned person has not sought an
adjudication, including a hearing, or otherwise
exhausted his administrative remedies.
7 17 CFR 240.19d–1(c)(2).
8 The Commission granted the Exchange’s
application for registration as a national securities
exchange on May 10, 2019, which included the
rules that govern the Exchange. See Securities
Exchange Act Release No. 85828 (May 10, 2019), 84
FR 21841 (May 15, 2019). Terms not otherwise
defined in this Order are defined in the LTSE rules.
Under the proposed MRVP, violations of the
following rules would be appropriate for
disposition under the MRVP: Rule 2.160(p)
(Continuing Education Requirements); Rule 4.511
(General Requirements related to books and records
requirements); Rule 4.540 (Furnishing of Records);
Rule 5.110 (Supervision); Rule 8.220 (Automated
Submission of Trading Data Requested); Rule
11.151(a)(1) (Market Maker Two-sided Quote
Obligation); Rule 11.290 (Short Sales); Rule 11.310
(Locking or Crossing Quotations in NMS Stocks);
and Rule 11.420 (Order Audit Trail System
Requirements). See Notice, supra note 3, at 50526.
E:\FR\FM\04NON1.SGM
04NON1
59428
Federal Register / Vol. 84, No. 213 / Monday, November 4, 2019 / Notices
violated, and the sanction or sanctions
to be imposed. The letter, if accepted,
would stipulate that the Member or
associated person accepts the finding of
violation, consents to the imposition of
sanctions, and agrees to waive such
Member’s or associated person’s right to
a hearing before a Hearing Panel or, if
applicable, an Extended Hearing Panel,
and any right of appeal to the LTSE
Appeals Committee, the Board, the
Commission, and the courts, or to
otherwise challenge the validity of the
letter. Unless the letter states otherwise,
the effective date of any sanction(s)
imposed would be a date to be
determined by LTSE Regulation staff. In
the event the letter is not accepted by
the Member or associated person, or is
rejected by FINRA’s Office of
Disciplinary Affairs, the matter can
proceed in accordance with the
Exchange’s disciplinary rules, which
include hearing rights for formal
disciplinary proceedings.9
According to the Exchange, upon the
Commission’s declaration of
effectiveness of the MRVP, the Exchange
will provide to the Commission a
quarterly report for any actions taken on
minor rule violations under the
MRVP.10 The quarterly report will
include: The Exchange’s internal file
number for the case, the name of the
individual and/or organization, the
nature of the violation, the specific rule
provision violated, the sanction
imposed, the number of times the rule
violation occurred, and the date of the
disposition.11
The Exchange requested that the
Commission deem any changes to the
rules applicable to the Exchange’s
MRVP to be deemed modifications to
the Exchange’s MRVP.12
The Commission finds that the
proposal is consistent with the public
interest, the protection of investors, or
otherwise in furtherance of the purposes
of the Act, as required by Rule 19d–
1(c)(2) under the Act,13 because the
MRVP will permit the Exchange to carry
out its oversight and enforcement
responsibilities as an SRO more
efficiently in cases where formal
disciplinary proceedings are not
necessary due to the minor nature of the
particular violation.
In declaring the Exchange’s MRVP
effective, the Commission does not
minimize the importance of compliance
with Exchange rules and all other rules
9 See
Notice, supra note 3, at 50526.
Id.
11 The Exchange attached a sample form of the
quarterly report with its submission to the
Commission.
12 See Notice, supra note 3, at 50526.
13 17 CFR 240.19d–1(c)(2).
subject to the imposition of sanctions
under LTSE Rule 9.216(b). Violation of
an SRO’s rules, as well as Commission
rules, is a serious matter. However,
LTSE Rule 9.216(b) provides a
reasonable means of addressing
violations that do not rise to the level of
requiring formal disciplinary
proceedings, while providing greater
flexibility in handling certain violations.
Regarding whether a violation requires
formal disciplinary action or whether a
sanction under the MRVP is
appropriate, the Commission expects
the Exchange to continue to conduct
surveillance and make determinations
based on its findings on a case-by-case
basis.
It is therefore ordered, pursuant to
Rule 19d–1(c)(2) under the Act,14 that
the proposed MRVP for Long-Term
Stock Exchange, Inc, File No. 4–753 be,
and hereby is, declared effective.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–23977 Filed 11–1–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87413; File No. SR–GEMX–
2019–15]
Self-Regulatory Organizations; Nasdaq
GEMX, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Options 3,
Section 17, the Exchange’s Kill Switch
Risk Protection
October 29, 2019.
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 October
15, 2019, Nasdaq GEMX, LLC (‘‘GEMX’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
10 See
VerDate Sep<11>2014
20:48 Nov 01, 2019
Jkt 250001
14 Id.
15 17
CFR 200.30–3(a)(44).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00078
Fmt 4703
Sfmt 4703
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Options 3, Section 17, which sets forth
the Exchange’s optional Kill Switch risk
protection.
The text of the proposed rule change
is available on the Exchange’s website at
https://nasdaqgemx.cchwallstreet.com/,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to expand the
optional Kill Switch risk protection the
Exchange offers to Members today to
allow cancellation and restriction of
quotes, orders, or both. This new
functionality will be offered alongside
the existing port Kill Switch (as defined
below), which currently allows
Members to cancel and restrict only
their orders. The Exchange also
proposes to amend its rules to add more
detail on how the port Kill Switch
operates today. As discussed further
below, no functional changes to the
existing port Kill Switch functionality
are being contemplated by this rule
change; rather, the Exchange is
providing more detailed information on
the port Kill Switch so that the rule is
more aligned with the current operation
of existing functionality.
Port Kill Switch
Today, Kill Switch provides Members
with a risk management tool for
immediate control of their order
activity. Specifically as set forth in
Options 3, Section 17(a), Kill Switch
enables Members to initiate a message 3
3 Today, Members are able to send a message to
the Exchange to initiate the Kill Switch. A Kill
E:\FR\FM\04NON1.SGM
04NON1
]]>Agencies
[Federal Register Volume 84, Number 213 (Monday, November 4, 2019)]
[Notices]
[Pages 59427-59428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23977]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87415; File No. 4-753]
Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.;
Order Declaring Effective a Minor Rule Violation Plan
October 29, 2019.
On August 23, 2019, Long-Term Stock Exchange, Inc. (``LTSE'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') a proposed minor rule violation plan (``MRVP'')
pursuant to Section 19(d)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19d-1(c)(2) thereunder.\2\ The proposed MRVP
was published for comment on September 25, 2019.\3\ The Commission
received no comments on the proposal. This order declares the
Exchange's proposed MRVP effective.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(d)(1).
\2\ 17 CFR 240.19d-1(c)(2).
\3\ See Securities Exchange Act Release No. 87021 (September 19,
2019), 84 FR 50525 (``Notice'').
---------------------------------------------------------------------------
In accordance with Rule 19d-1(c)(2) under the Act,\4\ the Exchange
proposed to designate certain specified rule violations as minor rule
violations, with sanctions not exceeding $2,500. Violations resolved
under the MRVP would not be subject to the provisions of Rule 19d-
1(c)(1) of the Act,\5\ which requires that a self-regulatory
organization (``SRO'') promptly file notice with the Commission of any
final disciplinary action taken with respect to any person or
organization.\6\ In accordance with Rule 19d-1(c)(2) under the Act,\7\
the Exchange proposed to designate certain specified rule violations as
minor rule violations, and requested that it be relieved of the prompt
reporting requirements regarding such violations, provided it gives
notice of such violations to the Commission on a quarterly basis.
---------------------------------------------------------------------------
\4\ 17 CFR 240.19d-1(c)(2).
\5\ 17 CFR 240.19d-1(c)(1).
\6\ The Commission adopted amendments to paragraph (c) of Rule
19d-1 to allow SROs to submit for Commission approval plans for the
abbreviated reporting of minor disciplinary infractions. See
Securities Exchange Act Release No. 21013 (June 1, 1984), 49 FR
23828 (June 8, 1984). Any disciplinary action taken by an SRO
against any person for violation of a rule of the SRO which has been
designated as a minor rule violation pursuant to a plan filed with
and declared effective by the Commission is not considered ``final''
for purposes of Section 19(d)(1) of the Act if the sanction imposed
consists of a fine not exceeding $2,500 and the sanctioned person
has not sought an adjudication, including a hearing, or otherwise
exhausted his administrative remedies.
\7\ 17 CFR 240.19d-1(c)(2).
---------------------------------------------------------------------------
The Exchange proposed to include in its MRVP the procedures
included in LTSE Rule 9.216(b) (``Procedure for Violation Under Plan
Pursuant to Exchange Act Rule 19d-1(c)(2)'') and violations included in
Rule 9.218 (``Violations Appropriate for Disposition Under Plan
Pursuant to Exchange Act Rule 19d-1(c)(2)'').\8\ According to the
Exchange's proposed MRVP, the Exchange may impose a fine (not to exceed
$2,500) and/or a censure on any Member or its associated person with
respect to any rule listed in LTSE Rule 9.218. If the Financial
Industry Regulatory Authority's (``FINRA'') Department of Enforcement
or Department of Market Regulation, on behalf of the Exchange, has
reason to believe a violation has occurred, and if the Member or its
associated person does not dispute the violation, either Department may
prepare and request that the Member or associated person execute a
minor rule violation plan letter. The letter would describe the act or
practice engaged in or omitted, the rule, regulation, or statutory
provision
[[Page 59428]]
violated, and the sanction or sanctions to be imposed. The letter, if
accepted, would stipulate that the Member or associated person accepts
the finding of violation, consents to the imposition of sanctions, and
agrees to waive such Member's or associated person's right to a hearing
before a Hearing Panel or, if applicable, an Extended Hearing Panel,
and any right of appeal to the LTSE Appeals Committee, the Board, the
Commission, and the courts, or to otherwise challenge the validity of
the letter. Unless the letter states otherwise, the effective date of
any sanction(s) imposed would be a date to be determined by LTSE
Regulation staff. In the event the letter is not accepted by the Member
or associated person, or is rejected by FINRA's Office of Disciplinary
Affairs, the matter can proceed in accordance with the Exchange's
disciplinary rules, which include hearing rights for formal
disciplinary proceedings.\9\
---------------------------------------------------------------------------
\8\ The Commission granted the Exchange's application for
registration as a national securities exchange on May 10, 2019,
which included the rules that govern the Exchange. See Securities
Exchange Act Release No. 85828 (May 10, 2019), 84 FR 21841 (May 15,
2019). Terms not otherwise defined in this Order are defined in the
LTSE rules.
Under the proposed MRVP, violations of the following rules would
be appropriate for disposition under the MRVP: Rule 2.160(p)
(Continuing Education Requirements); Rule 4.511 (General
Requirements related to books and records requirements); Rule 4.540
(Furnishing of Records); Rule 5.110 (Supervision); Rule 8.220
(Automated Submission of Trading Data Requested); Rule 11.151(a)(1)
(Market Maker Two-sided Quote Obligation); Rule 11.290 (Short
Sales); Rule 11.310 (Locking or Crossing Quotations in NMS Stocks);
and Rule 11.420 (Order Audit Trail System Requirements). See Notice,
supra note 3, at 50526.
\9\ See Notice, supra note 3, at 50526.
---------------------------------------------------------------------------
According to the Exchange, upon the Commission's declaration of
effectiveness of the MRVP, the Exchange will provide to the Commission
a quarterly report for any actions taken on minor rule violations under
the MRVP.\10\ The quarterly report will include: The Exchange's
internal file number for the case, the name of the individual and/or
organization, the nature of the violation, the specific rule provision
violated, the sanction imposed, the number of times the rule violation
occurred, and the date of the disposition.\11\
---------------------------------------------------------------------------
\10\ See Id.
\11\ The Exchange attached a sample form of the quarterly report
with its submission to the Commission.
---------------------------------------------------------------------------
The Exchange requested that the Commission deem any changes to the
rules applicable to the Exchange's MRVP to be deemed modifications to
the Exchange's MRVP.\12\
---------------------------------------------------------------------------
\12\ See Notice, supra note 3, at 50526.
---------------------------------------------------------------------------
The Commission finds that the proposal is consistent with the
public interest, the protection of investors, or otherwise in
furtherance of the purposes of the Act, as required by Rule 19d-1(c)(2)
under the Act,\13\ because the MRVP will permit the Exchange to carry
out its oversight and enforcement responsibilities as an SRO more
efficiently in cases where formal disciplinary proceedings are not
necessary due to the minor nature of the particular violation.
---------------------------------------------------------------------------
\13\ 17 CFR 240.19d-1(c)(2).
---------------------------------------------------------------------------
In declaring the Exchange's MRVP effective, the Commission does not
minimize the importance of compliance with Exchange rules and all other
rules subject to the imposition of sanctions under LTSE Rule 9.216(b).
Violation of an SRO's rules, as well as Commission rules, is a serious
matter. However, LTSE Rule 9.216(b) provides a reasonable means of
addressing violations that do not rise to the level of requiring formal
disciplinary proceedings, while providing greater flexibility in
handling certain violations. Regarding whether a violation requires
formal disciplinary action or whether a sanction under the MRVP is
appropriate, the Commission expects the Exchange to continue to conduct
surveillance and make determinations based on its findings on a case-
by-case basis.
It is therefore ordered, pursuant to Rule 19d-1(c)(2) under the
Act,\14\ that the proposed MRVP for Long-Term Stock Exchange, Inc, File
No. 4-753 be, and hereby is, declared effective.
---------------------------------------------------------------------------
\14\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(44).
---------------------------------------------------------------------------
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-23977 Filed 11-1-19; 8:45 am]
BILLING CODE 8011-01-P
