Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Manner in Which the Exchange Will Designate Certain Options Members To Participate in its Mandatory Disaster Recovery Testing for Calendar Year 2023, 51876-51879 [2023-16622]
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Federal Register / Vol. 88, No. 149 / Friday, August 4, 2023 / Notices
III. Opportunity to Comment
In accordance with 10 CFR 2.110(b),
the NRC staff is inviting public
comments on the SDA application
within 60 days of publication of this
notice, for consideration by the NRC
staff and Advisory Committee on
Reactor Safeguards in their review of the
application. Comments should be
submitted as described in the
ADDRESSES section of this document.
The NRC staff will perform a detailed
technical review of the SDA application
and will document its safety findings in
a safety evaluation report.
Docketing of the application does not
preclude the NRC from requesting
additional information from the
applicant as the review proceeds, nor
does it predict whether the Commission
will grant or deny the application.
Dated: August 1, 2023.
For the Nuclear Regulatory Commission.
Getachew Tesfaye,
Senior Project Manager, New Reactor
Licensing Branch, Division of New and
Renewed Licenses, Office of Nuclear Reactor
Regulation.
[FR Doc. 2023–16679 Filed 8–3–23; 8:45 am]
BILLING CODE 7590–01–P
NUCLEAR REGULATORY
COMMISSION
[Project No. 99902069; NRC–2023–0138]
Kairos Power, LLC; Receipt of
Construction Permit Application
Nuclear Regulatory
Commission.
ACTION: Construction permit
application; receipt.
The U.S. Nuclear Regulatory
Commission (NRC) is providing public
notice of receipt and availability of an
application for construction permits for
a two-unit reactor facility from Kairos
Power, LLC. The application for the
construction permits was received on
July 14, 2023.
DATES: August 4, 2023.
ADDRESSES: Please refer to Docket ID
NRC–2023–0138 when contacting the
NRC about the availability of
information regarding this document.
You may obtain publicly available
information related to this document
using any of the following methods:
• Federal Rulemaking Website: Go to
https://www.regulations.gov and search
for Docket ID NRC–2023–0138. Address
questions about Docket IDs in
Regulations.gov to Stacy Schumann;
telephone: 301–415–0624; email:
Stacy.Schumann@nrc.gov. For technical
questions, contact the individuals listed
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• NRC’s Agencywide Documents
Access and Management System
(ADAMS): You may obtain publicly
available documents online in the
ADAMS Public Documents collection at
https://www.nrc.gov/reading-rm/
adams.html. To begin the search, select
‘‘Begin Web-based ADAMS Search.’’ For
problems with ADAMS, please contact
the NRC’s Public Document Room (PDR)
reference staff at 1–800–397–209, at
301–415–4737, or by email to
PDR.Resource@nrc.gov. The ADAMS
accession number for each document
referenced (if it is available in ADAMS)
is provided the first time that it is
mentioned in this document.
• NRC’s PDR: The PDR, where you
may examine and order copies of
publicly available documents, is open
by appointment. To make an
appointment to visit the PDR, please
send an email to PDR.Resource@nrc.gov
or call 1–800–397–4209 or 301–415–
4737, between 8 a.m. and 4 p.m. ET,
Monday through Friday, except Federal
holidays.
FOR FURTHER INFORMATION CONTACT:
Michael Orenak, Office of Nuclear
Reactor Regulation, U.S. Nuclear
Regulatory Commission, Washington,
DC 20555–0001; telephone: 301–415–
3229; email: Michael.Orenak@nrc.gov.
SUPPLEMENTARY INFORMATION:
I. Discussion
AGENCY:
SUMMARY:
in the FOR FURTHER INFORMATION
CONTACT section of this document.
On July 14, 2023, Kairos Power LLC
(Kairos) filed, pursuant to section 104c
of the Atomic Energy Act, as amended,
part 50 of title 10 of the Code of Federal
Regulations (10 CFR), ‘‘Domestic
Licensing of Production and Utilization
Facilities,’’ an application for two
construction permits for a two-unit test
reactor facility located in Oak Ridge,
Tennessee. The two-unit facility is to be
identified as Hermes 2, and both units
are based on a high-temperature fluoride
salt-cooled design that utilizes solid tristructural isotropic fuel.
The application is available in
ADAMS under Package Accession No.
ML23195A121. Along with other
documents, the ADAMS package
includes the transmittal letter (ADAMS
Accession No. ML23195A122), the
preliminary safety analysis report
(ADAMS Accession No. ML23195A124),
and the environmental report (ADAMS
Accession No. ML23195A125). The
information submitted by the applicant
includes certain administrative
information such as financial
qualifications submitted pursuant to 10
CFR 50.33, technical information
submitted pursuant to 10 CFR 50.34,
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and the environmental report submitted
pursuant to 10 CFR part 51,
‘‘Environmental Protection Regulations
for Domestic Licensing and Related
Regulatory Functions.’’
The NRC staff is currently
undertaking its acceptance review of the
application. If the application is
accepted for docketing, subsequent
Federal Register notices will be issued
that address the acceptability of the
tendered construction permit
application for docketing and provisions
for participation of the public in the
permitting process.
Dated: July 31, 2023.
For the Nuclear Regulatory Commission.
Michael D. Orenak,
Project Manager, Advanced Reactor Licensing
Branch 1, Division of Advanced Reactors and
Non-Power Production and Utilization
Facilities, Office of Nuclear Reactor
Regulation.
[FR Doc. 2023–16605 Filed 8–3–23; 8:45 am]
BILLING CODE 7590–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98028; File No. SR–MEMX–
2023–14]
Self-Regulatory Organizations; MEMX
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend the Manner in
Which the Exchange Will Designate
Certain Options Members To
Participate in its Mandatory Disaster
Recovery Testing for Calendar Year
2023
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 25,
2023, MEMX LLC (‘‘MEMX’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing with the
Commission a proposed rule change to
amend the manner in which the
Exchange will designate certain Options
Members to participate in mandatory
1 15
2 17
E:\FR\FM\04AUN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
04AUN1
Federal Register / Vol. 88, No. 149 / Friday, August 4, 2023 / Notices
disaster recovery testing, pursuant to
Regulation SCI and MEMX Rule 2.4 for
calendar year 2023. The text of the
proposed rule change is provided in
Exhibit 5.
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
ddrumheller on DSK120RN23PROD with NOTICES1
1. Purpose
In preparation for the launch of the
Exchange’s options market (‘‘MEMX
Options’’),3 the Exchange proposes to
amend MEMX Rule 2.4, Mandatory
Participation in Testing of Backup
Systems, to specify how the Exchange
will designate certain Options
Members 4 to participate in mandatory
disaster recovery pursuant to Regulation
SCI and MEMX Rule 2.4 for calendar
year 2023. Regulation SCI requires
MEMX, as an SCI entity, to maintain
business continuity and disaster
recovery plans that provide for resilient
and geographically diverse backup and
recovery capabilities that are reasonably
designed to achieve two-hour
resumption of critical SCI systems and
next business day resumption of other
SCI systems following a wide-scale
disruption.5
Regulation SCI and MEMX Rule 2.4
also require MEMX to designate certain
Members 6 to participate in business
3 On August 8, 2022, the Commission approved
SR–MEMX–2022–10, which proposed rules for the
trading of options on the Exchange. See Securities
Exchange Act Release No. 95445 (August 9, 2022),
87 FR 49884 (August 12, 2022) (SR–MEMX–2022–
010). The Exchange plans to launch MEMX Options
in September of 2023.
4 As of July 18, 2023, 15 firms have filed
paperwork with the Exchange making them eligible
for MEMX Options membership.
5 Securities Exchange Act Release No. 73639
(November 19, 2014), 79 FR 72252 (December 5,
2014).
6 The term ‘‘Member’’ refers to any registered
broker or dealer that has been admitted to
membership in the Exchange. A Member will have
the status of a member of the Exchange as that term
is defined in section 3(a)(3) of the Act. Membership
may be granted to a sole proprietor, corporation,
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continuity and disaster recovery testing
in a manner specified by MEMX and at
a frequency of not less than once every
12 months.7 Such testing is part of an
industry-wide test, which is next
scheduled for October 14, 2023.
MEMX Rule 2.4 governs mandatory
participation in testing of the
Exchange’s backup systems, and states
that the Exchange will designate
Members that account for a specified
percentage of executed volume on
MEMX as required to connect to the
Exchange’s backup systems and
participate in functional and
performance testing of such system.8
MEMX Options, which is scheduled to
launch in September 2023, is not
expecting to have sufficient trading data
on which to base its Options Member
designation prior to the October 14,
2023 test. Thus, as currently written,
Rule 2.4 would not permit the Exchange
to designate any Options Members to
participate in the industry-wide test for
2023 because no Options Members will
have sufficient trading volume on
MEMX Options upon which a
designation can be based.
To address the unique circumstances
for disaster recovery testing in 2023, the
year in which MEMX Options will
become operational, the Exchange
proposes to amend paragraph (c).
Proposed paragraph (c) would provide
that for calendar year 2023 with respect
to MEMX Options, notwithstanding
paragraph (b) which assigns the
Exchange responsibility of ‘‘identifying
Members that account for a meaningful
percentage of the Exchange’s overall
volume,’’ the Exchange will instead
designate at least three Options
Members who have a meaningful
percentage of trading volumes in
options on other options exchanges.
This would allow the Exchange to
identify Options Members for industrywide disaster recovery testing in the
absence of metrics that will be used in
ordinary course to designate such firms.
MEMX believes that designating at
least three Options Members who are
likely already to be participating in the
industry-wide test by virtue of their
trading activities on MEMX and other
exchanges is likely to reduce the
burdens associated with being
limited liability company or other organization
which is a registered broker or dealer pursuant to
section 15 of the Act, and which has been approved
by the Exchange. See MEMX Rule 1.5(p). The term
‘‘Options Member’’ means a firm, or organization
that is registered with the Exchange pursuant to
Chapter 17 of the Exchange’s Rules for purposes of
participating in options trading on MEMX Options
as an ‘‘Options Order Entry Firm’’ or ‘‘Options
Market Maker’’. See MEMX Rule 16.1.
7 MEMX Rule 2.4(a) and (b).
8 Id.
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51877
designated for disaster recovery testing
by MEMX Options in absence of
significant trading volumes on the
Exchange. Moreover, to reduce the
burdens on designated Options
Members, the Exchange proposes, where
possible, to designate firms that have
already established connections to its
backup systems. This is intended to
address the ‘‘notice’’ requirements in
the existing Rule 2.4.9 The Exchange
believes that designating three or more
such firms is reasonably designed to
provide the minimum necessary for the
maintenance of fair and orderly markets
in the event of the activation of such
plans.
MEMX intends to notify Options
Members of their designation for
disaster recovery testing no later than
October 1, 2023. With respect to
industry-wide disaster recovery testing
in 2024 and beyond, the Exchange will
issue one or more regulatory circulars
establishing the standards to be used for
determining which Options Members
contribute a meaningful percentage of
the Exchange’s overall volume and thus
are required to participate in functional
and performance testing. Such
standards will be informed by the
Exchange’s actual market and trading
data, in accordance with MEMX Rule
2.4(b).
2. Statutory Basis
The Exchange believes that its
proposal is consistent with section 6(b)
of the Act,10 in general, and furthers the
objectives of section 6(b)(5) of the Act,11
in particular, in that it is designed to
prevent fraudulent and manipulative
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest.
MEMX believes that, in the absence of
sufficient trading data on MEMX
Options, its proposed methodology of
designating Options Members who have
meaningful levels of trading activity on
other exchanges and who have
established connectivity to the
Exchange’s backup systems is consistent
with the protection of investors and the
public interest. The Exchange further
9 Pursuant to Rule 2.4(b), the Exchange will
provide at least six months prior notice to a
Member that is designated for mandatory testing.
See MEMX Rule 2.4(b).
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 88, No. 149 / Friday, August 4, 2023 / Notices
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believes that the proposed rule change
will ensure that the Options Members
necessary to ensure the maintenance of
fair and orderly markets in the event of
the activation of the Exchange’s disaster
recovery plans have been designated
consistent with MEMX Rule 2.4 and
Rule 1004 of Regulation SCI.
Specifically, the proposal will address
the unique circumstances of industrywide testing taking place within a short
time of MEMX Options commencing
operations. The Exchange believes that
the proposed rule change balances the
objectives of having Options Members
participate in industry-wide disaster
recovery testing, including MEMX
Options’ backup systems, and the
burdens on such Options Members who,
at the time of designation, will not have
traded on MEMX Options.
As set forth in the SCI Adopting
Release, ‘‘SROs have the authority, and
legal responsibility, under section 6 of
the Exchange Act, to adopt and enforce
rules (including rules to comply with
Regulation SCI’s requirements relating
to BC/DR testing) applicable to their
members or participants that are
designed to, among other things, foster
cooperation and coordination with
persons engaged in regulating, clearing,
settling, processing information with
respect to, and facilitating transactions
in securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.’’ 12
The Exchange believes that this
proposal is consistent with such
authority and legal responsibility.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes its proposed
rule change would not impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. To the
contrary, the Exchange believes that the
proposed rule change promotes fair
competition among brokers and dealers
and exchanges by ensuring the
Exchange can designate Options
Members to participate in mandatory
disaster recovery testing pursuant to
Regulation SCI for calendar year 2023.
The Exchange believes that designating
three or more such firms is reasonably
designed to provide the minimum
necessary for the maintenance of fair
and orderly markets in the event of the
activation of such plans, thereby
promoting intermarket competition
between exchanges in furtherance of the
principles of section 11(a)(1) of the
12 See
supra note 7 at 72350.
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Act.13 The Exchange notes that MEMX
and the Long-Term Stock Exchange, Inc.
(‘‘LTSE’’) adopted similar rules for 2020
in advance of launches that year.14
With respect to intramarket
competition, the proposed rule change
seeks to reduce the burdens on Members
by only designating Options Members
who are likely already participating in
the industry-wide test by virtue of their
trading activities on other exchanges.
Under the proposed rule change, the
Exchange will designate firms that have
already established connections to the
Exchange’s backup systems.
Consequently, MEMX does not believe
that the proposed rule change would
impose any burden on intramarket
competition that is not necessary or
appropriate in furtherance of the Act.
change should be approved or
disapproved.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Paper Comments
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to section
19(b)(3)(A) of the Act 15 and Rule 19b–
4(f)(6) thereunder.16
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
13 15
U.S.C. 78k–1(a)(1).
Securities Exchange Act Release No. 89899
(September 16, 2020), 85 FR 59580 (September 22,
2020) (SR–MEMX–2020–07), and Release No. 89216
(July 2, 2020), 85 FR 41259 (July 9, 2020) (SR–
LTSE–2020–10).
15 15 U.S.C. 78s(b)(3)(A).
16 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change at least five business
days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
14 See
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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:
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–
MEMX–2023–14 on the subject line.
• 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–MEMX–2023–14. 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 10
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–MEMX–2023–14 and should be
submitted on or before August 25, 2023.
E:\FR\FM\04AUN1.SGM
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Federal Register / Vol. 88, No. 149 / Friday, August 4, 2023 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Dated: July 31, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–16622 Filed 8–3–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–638, OMB Control No.
3235–0690]
Dated: August 1, 2023.
Sherry R. Haywood,
Assistant Secretary.
ddrumheller on DSK120RN23PROD with NOTICES1
Submission for OMB Review;
Comment Request; Extension: Form
SF–3
[FR Doc. 2023–16675 Filed 8–3–23; 8:45 am]
BILLING CODE 8011–01–P
Upon Written Request Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
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 this
request for extension of the previously
approved collection of information
discussed below.
Form SF–3 (17 CFR 239.45) is a short
form registration statement used for
non-shelf issuers of asset-backed
securities to register a public offering of
their securities under the Securities Act
of 1933 (15 U.S.C. 77a et seq.). Form
SF–3 takes approximately 1,380 hours
per response and is filed by
approximately 71 issuers annually. The
information collected is intended to
ensure that the information required to
be filed by the Commission permits
verification of compliance with
securities law requirements and assures
the public availability of such
information in the asset-backed
securities market. We estimate that 25%
of the 1,380.50 hours per response
(345.12 hours) is prepared by the issuer
for a total annual reporting burden of
24,504 hours (345.12 hours per response
× 71 responses).
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 background
documentation for this information
collection at the following website:
www.reginfo.gov. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
17 17
CFR 200.30–3(a)(12).
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18:51 Aug 03, 2023
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search function. Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice by September 5, 2023 to (i)
www.reginfo.gov/public/do/PRAMain
and (ii) David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549, or by sending an email to:
PRA_Mailbox@sec.gov.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98029; File No. SR–FINRA–
2023–008]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Order Approving a
Proposed Rule Change To Amend
FINRA Rules 1015, 9261, 9341, 9524,
9830 and Funding Portal Rule 900
(Code of Procedure) To Permit
Hearings Under Those Rules To Be
Conducted by Video Conference
I. Introduction
On April 26, 2023, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) filed with the Securities and
Exchange Commission (‘‘SEC’’ or
‘‘Commission’’), pursuant to section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Exchange Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend FINRA Rules 1015,
9261, 9341, 9524 and 9830 and Funding
Portal Rule 900 to allow for video
conference hearings before the Office of
Hearing Officers (‘‘OHO’’) and the
National Adjudicatory Council (‘‘NAC’’)
under specified conditions. The
proposed rule change was published for
comment in the Federal Register on
May 4, 2023.3 On June 7, 2023, FINRA
consented to extend until August 2,
2023, the time period in which the
Commission must approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to approve or
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Exchange Act Release No. 97403 (May 4,
2023), 88 FR 28645 (May 4, 2023) (File No. SR–
FINRA–2023–008) (‘‘Notice’’). The Commission did
not receive any comments in connection with the
Notice.
2 17
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51879
disapprove the proposed rule change.4
This order approves the proposed rule
change.
II. Description of the Proposed Rule
Change
A. Background
FINRA Rules 1015, 9261, 9341, 9524
and 9830 and Funding Portal Rule 900
pertain to the procedures for various
types of proceedings conducted by OHO
and the NAC.5 As summarized in the
Notice, OHO conducts hearings in
disciplinary proceedings 6 and hearings
for temporary and permanent cease and
desist orders (‘‘TCDOs’’ and ‘‘PCDOs’’).7
When orders in disciplinary
proceedings are appealed, the NAC
holds hearings on oral argument.8 The
NAC also conducts hearings in
membership proceedings,9 eligibility
proceedings,10 and Funding Portal
eligibility proceedings.11 Under these
4 See Letter from Ilana Reid, Associate General
Counsel, FINRA (June 7, 2023) available at https://
www.finra.org/sites/default/files/2023-06/sr-finra2023-008-extension-no-1.pdf.
5 See Notice at 28646.
6 See Notice at 28646. FINRA stated that the
FINRA Rule 9200 Series sets forth the procedures
for disciplinary proceedings initiated by the
Department of Enforcement against any FINRA
member or associated person for alleged violation
of any rule, regulation, or statutory provision that
FINRA has jurisdiction to enforce, including the
federal securities laws and the regulations
thereunder. See Notice at n.8. See also FINRA Rule
9261.
7 See Notice at 28646. FINRA stated that the
FINRA Rule 9800 Series sets forth the procedures
for TCDO and PCDO proceedings. These provide a
mechanism for FINRA to take necessary remedial
action against a member or associated person where
there is a significant risk that the alleged
misconduct could cause continuing harm to the
investing public, if not addressed expeditiously.
See Notice at n.9. See also FINRA Rule 9830.
8 See Notice at 28646. FINRA stated that the
FINRA Rule 9300 Series sets forth the procedures
for review of disciplinary proceedings by the NAC.
See Notice at n.10. See also FINRA Rule 9341.
9 See Notice at 28646. FINRA stated that the
FINRA Rule 1000 Series governs, among other
things, the process for: (i) applying for FINRA
membership; (ii) FINRA members to seek approval
of a change in ownership, control or business
operations; and (iii) an applicant to request that the
NAC review a FINRA decision rendered under the
Rule 1000 Series. See Notice at n.11. See also
FINRA Rule 1015.
10 See Notice at 28646. FINRA stated that the
FINRA Rule 9520 Series sets forth the procedures
for eligibility proceedings and review of those
proceedings by the NAC and FINRA Board. See
Notice at n.12. See also FINRA Rule 9524.
‘‘Eligibility proceedings,’’ refer to the process where
FINRA may allow a person subject to statutory
disqualification to enter or remain in the securities
industry. See e.g., https://www.finra.org/rulesguidance/guidance/eligibility-requirements
(providing general information about these
proceedings).
11 See Notice at 28646. Paragraph (b) of Funding
Portal Rule 900 was established as a streamlined
version of the FINRA Rule 9520 Series, discussed
supra note 10, and sets forth the procedures for
E:\FR\FM\04AUN1.SGM
Continued
04AUN1
]]>Agencies
[Federal Register Volume 88, Number 149 (Friday, August 4, 2023)]
[Notices]
[Pages 51876-51879]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16622]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98028; File No. SR-MEMX-2023-14]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend the Manner
in Which the Exchange Will Designate Certain Options Members To
Participate in its Mandatory Disaster Recovery Testing for Calendar
Year 2023
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on July 25, 2023, MEMX LLC (``MEMX'' or the ``Exchange'') filed
with the Securities and Exchange Commission (the ``Commission'') the
proposed rule change as described in Items I, II, and III 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing with the Commission a proposed rule change
to amend the manner in which the Exchange will designate certain
Options Members to participate in mandatory
[[Page 51877]]
disaster recovery testing, pursuant to Regulation SCI and MEMX Rule 2.4
for calendar year 2023. The text of the proposed rule change is
provided in Exhibit 5.
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
In preparation for the launch of the Exchange's options market
(``MEMX Options''),\3\ the Exchange proposes to amend MEMX Rule 2.4,
Mandatory Participation in Testing of Backup Systems, to specify how
the Exchange will designate certain Options Members \4\ to participate
in mandatory disaster recovery pursuant to Regulation SCI and MEMX Rule
2.4 for calendar year 2023. Regulation SCI requires MEMX, as an SCI
entity, to maintain business continuity and disaster recovery plans
that provide for resilient and geographically diverse backup and
recovery capabilities that are reasonably designed to achieve two-hour
resumption of critical SCI systems and next business day resumption of
other SCI systems following a wide-scale disruption.\5\
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\3\ On August 8, 2022, the Commission approved SR-MEMX-2022-10,
which proposed rules for the trading of options on the Exchange. See
Securities Exchange Act Release No. 95445 (August 9, 2022), 87 FR
49884 (August 12, 2022) (SR-MEMX-2022-010). The Exchange plans to
launch MEMX Options in September of 2023.
\4\ As of July 18, 2023, 15 firms have filed paperwork with the
Exchange making them eligible for MEMX Options membership.
\5\ Securities Exchange Act Release No. 73639 (November 19,
2014), 79 FR 72252 (December 5, 2014).
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Regulation SCI and MEMX Rule 2.4 also require MEMX to designate
certain Members \6\ to participate in business continuity and disaster
recovery testing in a manner specified by MEMX and at a frequency of
not less than once every 12 months.\7\ Such testing is part of an
industry-wide test, which is next scheduled for October 14, 2023.
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\6\ The term ``Member'' refers to any registered broker or
dealer that has been admitted to membership in the Exchange. A
Member will have the status of a member of the Exchange as that term
is defined in section 3(a)(3) of the Act. Membership may be granted
to a sole proprietor, corporation, limited liability company or
other organization which is a registered broker or dealer pursuant
to section 15 of the Act, and which has been approved by the
Exchange. See MEMX Rule 1.5(p). The term ``Options Member'' means a
firm, or organization that is registered with the Exchange pursuant
to Chapter 17 of the Exchange's Rules for purposes of participating
in options trading on MEMX Options as an ``Options Order Entry
Firm'' or ``Options Market Maker''. See MEMX Rule 16.1.
\7\ MEMX Rule 2.4(a) and (b).
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MEMX Rule 2.4 governs mandatory participation in testing of the
Exchange's backup systems, and states that the Exchange will designate
Members that account for a specified percentage of executed volume on
MEMX as required to connect to the Exchange's backup systems and
participate in functional and performance testing of such system.\8\
MEMX Options, which is scheduled to launch in September 2023, is not
expecting to have sufficient trading data on which to base its Options
Member designation prior to the October 14, 2023 test. Thus, as
currently written, Rule 2.4 would not permit the Exchange to designate
any Options Members to participate in the industry-wide test for 2023
because no Options Members will have sufficient trading volume on MEMX
Options upon which a designation can be based.
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\8\ Id.
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To address the unique circumstances for disaster recovery testing
in 2023, the year in which MEMX Options will become operational, the
Exchange proposes to amend paragraph (c). Proposed paragraph (c) would
provide that for calendar year 2023 with respect to MEMX Options,
notwithstanding paragraph (b) which assigns the Exchange responsibility
of ``identifying Members that account for a meaningful percentage of
the Exchange's overall volume,'' the Exchange will instead designate at
least three Options Members who have a meaningful percentage of trading
volumes in options on other options exchanges. This would allow the
Exchange to identify Options Members for industry-wide disaster
recovery testing in the absence of metrics that will be used in
ordinary course to designate such firms.
MEMX believes that designating at least three Options Members who
are likely already to be participating in the industry-wide test by
virtue of their trading activities on MEMX and other exchanges is
likely to reduce the burdens associated with being designated for
disaster recovery testing by MEMX Options in absence of significant
trading volumes on the Exchange. Moreover, to reduce the burdens on
designated Options Members, the Exchange proposes, where possible, to
designate firms that have already established connections to its backup
systems. This is intended to address the ``notice'' requirements in the
existing Rule 2.4.\9\ The Exchange believes that designating three or
more such firms is reasonably designed to provide the minimum necessary
for the maintenance of fair and orderly markets in the event of the
activation of such plans.
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\9\ Pursuant to Rule 2.4(b), the Exchange will provide at least
six months prior notice to a Member that is designated for mandatory
testing. See MEMX Rule 2.4(b).
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MEMX intends to notify Options Members of their designation for
disaster recovery testing no later than October 1, 2023. With respect
to industry-wide disaster recovery testing in 2024 and beyond, the
Exchange will issue one or more regulatory circulars establishing the
standards to be used for determining which Options Members contribute a
meaningful percentage of the Exchange's overall volume and thus are
required to participate in functional and performance testing. Such
standards will be informed by the Exchange's actual market and trading
data, in accordance with MEMX Rule 2.4(b).
2. Statutory Basis
The Exchange believes that its proposal is consistent with section
6(b) of the Act,\10\ in general, and furthers the objectives of section
6(b)(5) of the Act,\11\ in particular, in that it is designed to
prevent fraudulent and manipulative practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general to
protect investors and the public interest.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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MEMX believes that, in the absence of sufficient trading data on
MEMX Options, its proposed methodology of designating Options Members
who have meaningful levels of trading activity on other exchanges and
who have established connectivity to the Exchange's backup systems is
consistent with the protection of investors and the public interest.
The Exchange further
[[Page 51878]]
believes that the proposed rule change will ensure that the Options
Members necessary to ensure the maintenance of fair and orderly markets
in the event of the activation of the Exchange's disaster recovery
plans have been designated consistent with MEMX Rule 2.4 and Rule 1004
of Regulation SCI. Specifically, the proposal will address the unique
circumstances of industry-wide testing taking place within a short time
of MEMX Options commencing operations. The Exchange believes that the
proposed rule change balances the objectives of having Options Members
participate in industry-wide disaster recovery testing, including MEMX
Options' backup systems, and the burdens on such Options Members who,
at the time of designation, will not have traded on MEMX Options.
As set forth in the SCI Adopting Release, ``SROs have the
authority, and legal responsibility, under section 6 of the Exchange
Act, to adopt and enforce rules (including rules to comply with
Regulation SCI's requirements relating to BC/DR testing) applicable to
their members or participants that are designed to, among other things,
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public
interest.'' \12\ The Exchange believes that this proposal is consistent
with such authority and legal responsibility.
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\12\ See supra note 7 at 72350.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes its proposed rule change would not impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. To the contrary, the Exchange
believes that the proposed rule change promotes fair competition among
brokers and dealers and exchanges by ensuring the Exchange can
designate Options Members to participate in mandatory disaster recovery
testing pursuant to Regulation SCI for calendar year 2023. The Exchange
believes that designating three or more such firms is reasonably
designed to provide the minimum necessary for the maintenance of fair
and orderly markets in the event of the activation of such plans,
thereby promoting intermarket competition between exchanges in
furtherance of the principles of section 11(a)(1) of the Act.\13\ The
Exchange notes that MEMX and the Long-Term Stock Exchange, Inc.
(``LTSE'') adopted similar rules for 2020 in advance of launches that
year.\14\
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\13\ 15 U.S.C. 78k-1(a)(1).
\14\ See Securities Exchange Act Release No. 89899 (September
16, 2020), 85 FR 59580 (September 22, 2020) (SR-MEMX-2020-07), and
Release No. 89216 (July 2, 2020), 85 FR 41259 (July 9, 2020) (SR-
LTSE-2020-10).
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With respect to intramarket competition, the proposed rule change
seeks to reduce the burdens on Members by only designating Options
Members who are likely already participating in the industry-wide test
by virtue of their trading activities on other exchanges. Under the
proposed rule change, the Exchange will designate firms that have
already established connections to the Exchange's backup systems.
Consequently, MEMX does not believe that the proposed rule change would
impose any burden on intramarket competition that is not necessary or
appropriate in furtherance of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to section 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6) thereunder.\16\
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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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 change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
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 SR-MEMX-2023-14 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 SR-MEMX-2023-14. 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 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-MEMX-2023-14 and should be
submitted on or before August 25, 2023.
[[Page 51879]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Dated: July 31, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-16622 Filed 8-3-23; 8:45 am]
BILLING CODE 8011-01-P
