Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing of Proposed Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and Nasdaq PHLX LLC, 85338-85343 [2023-26800]
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Federal Register / Vol. 88, No. 234 / Thursday, December 7, 2023 / Notices
(iii) by its terms, does not become
operative for 30 days after the date of
the filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest.9
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act normally does not become operative
for 30 days after the date of its filing.
However, Rule 19b–4(f)(6)(iii) 10 permits
the Commission to designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange requested that
the Commission waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The proposed change raises no
novel legal or regulatory issues and
modifies the Exchange’s rules to correct
citations to Rule 600(b) of Regulation
NMS, which should help prevent
confusion and result in increased clarity
within the Exchange’s rules. Therefore,
the Commission believes that waiver of
the 30-day operative delay is consistent
with the protection of investors and the
public interest. Accordingly, the
Commission hereby waives the 30-day
operative delay and designates the
proposed rule change operative upon
filing.11
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.
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
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• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
9 In addition, Rule 19b–4(f)(6) requires a selfregulatory 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.
10 17 CFR 240.19b–4(f)(6)(iii).
11 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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• Send an email to rule-comments@
sec.gov. Please include file number SR–
NYSEARCA–2023–81 on the subject
line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
Program for Allocation of Regulatory
Responsibilities Pursuant to Rule 17d–
2; Notice of Filing of Proposed Plan for
the Allocation of Regulatory
Responsibilities Between the Financial
Industry Regulatory Authority, Inc. and
Nasdaq PHLX LLC
• 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–NYSEARCA–2023–81. 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–NYSEARCA–2023–81 and should be
submitted on or before December 28,
2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–26799 Filed 12–6–23; 8:45 am]
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CFR 200.30–3(a)(12), (59).
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December 1, 2023.
Pursuant to section 17(d) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 17d–2 thereunder,2
notice is hereby given that on November
17, 2023, the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
and Nasdaq PHLX LLC (‘‘PHLX’’)
(together with FINRA, the ‘‘Parties’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’)
a plan for the allocation of regulatory
responsibilities, dated November 15,
2023 (‘‘17d–2 Plan’’ or the ‘‘Plan’’). The
Commission is publishing this notice to
solicit comments on the 17d–2 Plan
from interested persons.
I. Introduction
Section 19(g)(1) of the Act,3 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.4 Without
this relief, the statutory obligation of
each individual SRO could result in a
pattern of multiple examinations of
broker-dealers that maintain
memberships in more than one SRO
(‘‘common members’’). Such regulatory
duplication would add unnecessary
expenses for common members and
their SROs.
Section 17(d)(1) of the Act 5 was
intended, in part, to eliminate
unnecessary multiple examinations and
regulatory duplication.6 With respect to
a common member, section 17(d)(1)
authorizes the Commission, by rule or
1 15
U.S.C. 78q(d).
CFR 240.17d–2.
3 15 U.S.C. 78s(g)(1).
4 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2),
respectively.
5 15 U.S.C. 78q(d)(1).
6 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).
2 17
BILLING CODE 8011–01–P
12 17
[Release No. 34–99065; File No. 4–818]
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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.7
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.8 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.9
Rule 17d–2 permits SROs to propose
joint plans for the allocation of
regulatory responsibilities with respect
to their common members. Under
paragraph (c) of Rule 17d–2, the
Commission may declare such a plan
effective if, after providing for
appropriate notice and comment, it
determines that the plan is necessary or
appropriate in the public interest and
for the protection of investors; to foster
cooperation and coordination among the
SROs; to remove impediments to, and
foster the development of, a national
market system and a national clearance
and settlement system; and is in
conformity with the factors set forth in
section 17(d) of the Act. Commission
approval of a plan filed pursuant to Rule
17d–2 relieves an SRO of those
regulatory responsibilities allocated by
the plan to another SRO.
7 17 CFR 240.17d–1 and 17 CFR 240.17d–2,
respectively.
8 See Securities Exchange Act Release No. 12352
(April 20, 1976), 41 FR 18808 (May 7, 1976).
9 See Securities Exchange Act Release No. 12935
(October 28, 1976), 41 FR 49091 (November 8,
1976).
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II. Proposed Plan
The proposed 17d–2 Plan is intended
to reduce regulatory duplication for
firms that are common members of both
PHLX and FINRA.10 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
‘‘PHLX Certification of Common Rules,’’
referred to herein as the ‘‘Certification’’)
that lists every PHLX 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
PHLX 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 PHLX that are substantially
similar to the applicable rules of
FINRA,11 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 PHLX, the plan
acknowledges that PHLX may, in its
discretion, exercise concurrent
jurisdiction and responsibility for such
matter.12
Under the Plan, PHLX would retain
full responsibility for surveillance,
examination, investigation and
enforcement with respect to trading
activities or practices involving PHLX’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 PHLX rules that are not
Common Rules, except for PHLX Rules
for any PHLX member that operates as
a facility (as defined in section 3(a)(2) of
10 The proposed 17d–2 Plan refers to these
common members as ‘‘Dual Members.’’ See
Paragraph 1(c) of the proposed 17d–2 Plan.
11 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 PHLX rules or FINRA rules, the
parties shall review and update, if necessary, the
list of Common Rules.
12 See paragraph 5 of the proposed 17d–2 Plan.
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85339
the Exchange Act), acts as an outbound
router for PHLX and is a member of
FINRA (‘‘Router Member’’).13
The text of the proposed 17d–2 Plan
is as follows:
Agreement Between Financial Industry
Regulatory Authority, Inc. and NASDAQ
PHLX LLC Pursuant to Rule 17d–2 Under the
Securities Exchange Act of 1934
This Agreement, by and between Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) and Nasdaq PHLX LLC (‘‘PHLX’’),
is made this 15th day of November, 2023 (the
‘‘Agreement’’), pursuant to section 17(d) of
the Securities Exchange Act of 1934 (the
‘‘Exchange Act’’) and Rule 17d–2 thereunder,
which permits agreements between selfregulatory organizations to allocate
regulatory responsibility to eliminate
regulatory duplication. FINRA and PHLX
may be referred to individually as a ‘‘party’’
and together as the ‘‘parties.’’
Whereas, FINRA and PHLX desire to
reduce duplication in the examination of
their Dual Members (as defined herein) and
in the filing and processing of certain
registration and membership records; and
Whereas, FINRA and PHLX desire to
execute an agreement covering such subjects
pursuant to the provisions of Rule 17d–2
under the Exchange Act and to file such
agreement with the U.S. Securities and
Exchange Commission (the ‘‘SEC’’ or
‘‘Commission’’) for its approval.
Now, therefore, in consideration of the
mutual covenants contained hereinafter,
FINRA and PHLX hereby agree as follows:
1. Definitions. Unless otherwise defined in
this Agreement or the context otherwise
requires, the terms used in this Agreement
shall have the same meaning as they have
under the Exchange Act and the rules and
regulations thereunder. As used in this
Agreement, the following terms shall have
the following meanings:
(a) ‘‘PHLX Rules’’ or ‘‘FINRA Rules’’ shall
mean the rules of PHLX or FINRA,
respectively, as the rules of an exchange or
association are defined in Exchange Act
section 3(a)(27).
(b) ‘‘Common Rules’’ shall mean the PHLX
Rules that are substantially similar to the
applicable FINRA Rules and certain
provisions of the Exchange Act and SEC rules
set forth on Exhibit 1 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 Dual Member’s
activity, conduct, or output in relation to
such provision or rule; provided, however,
Common Rules shall not include the
application of the SEC, PHLX or FINRA rules
as they pertain to violations of insider trading
activities, which is covered by a separate
17d–2 Agreement by and among Cboe BZX
Exchange, Inc., Cboe BYX Exchange, Inc.,
Chicago Stock Exchange, Inc., Cboe EDGA
Exchange, Inc., Cboe EDGX Exchange, Inc.,
Financial Industry Regulatory Authority,
Inc., MEMX LLC, MIAX PEARL, LLC, Nasdaq
BX, Inc., Nasdaq PHLX LLC, The Nasdaq
13 See
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paragraph 2 of the proposed 17d–2 Plan.
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Stock Market LLC, NYSE National, Inc., New
York Stock Exchange LLC, NYSE American
LLC, NYSE Arca, Inc., Investors’ Exchange
LLC and Long-Term Stock Exchange, Inc.
approved by the Commission on September
23, 2020. Common Rules shall not include
any provisions regarding: (i) notice, reporting
or any other filings made directly to or from
PHLX; (ii) incorporation by reference of other
PHLX Rules that are not Common Rules; (iii)
exercise of discretion in a manner that differs
from FINRA’s exercise of discretion
including, but not limited to exercise of
exemptive authority by PHLX; (iv) prior
written approval of PHLX; and (v) payment
of fees or fines to PHLX.
(c) ‘‘Dual Members’’ shall mean those
PHLX members that are also members of
FINRA and the associated persons therewith.
(d) ‘‘Effective Date’’ shall have the meaning
set forth in paragraph 13.
(e) ‘‘Enforcement Responsibilities’’ shall
mean the conduct of appropriate
proceedings, in accordance with the FINRA
Code of Procedure (the Rule 9000 Series) and
other applicable FINRA procedural rules, to
determine whether violations of Common
Rules have occurred, and if such violations
are deemed to have occurred, the imposition
of appropriate sanctions as specified under
the FINRA Code of Procedure and FINRA’s
sanction guidelines.
(f) ‘‘Regulatory Responsibilities’’ shall
mean the examination responsibilities and
Enforcement Responsibilities relating to
compliance by the Dual Members with the
Common Rules and the provisions of the
Exchange Act and the rules and regulations
thereunder, and other applicable laws, rules
and regulations, each as set forth on Exhibit
1 attached hereto. The term ‘‘Regulatory
Responsibilities’’ shall also include the
surveillance, investigation and Enforcement
Responsibilities relating to compliance by
Dual Members with Rule 14e–4 of the
Exchange Act (‘‘Rule 14e–4’’), with a focus
on the standardized call option provision of
Rule 14e–4(a)(1)(ii)(D).
2. Regulatory Responsibilities. FINRA shall
assume Regulatory Responsibilities for Dual
Members. Attached as Exhibit 1 to this
Agreement and made part hereof, PHLX
furnished FINRA with a current list of
Common Rules and certified to FINRA that
such rules are substantially similar to the
corresponding FINRA Rule (the
‘‘Certification’’). FINRA hereby agrees that
the rules listed in the Certification are
Common Rules as defined in this Agreement.
Each year following the Effective Date of this
Agreement, or more frequently if required by
changes in either the PHLX Rules or FINRA
Rules, PHLX shall submit an updated list of
Common Rules to FINRA for review which
shall add PHLX Rules not included in the
current list of Common Rules that qualify as
Common Rules as defined in this Agreement;
delete PHLX Rules included in the current
list of Common Rules that no longer qualify
as Common Rules as defined in this
Agreement; and confirm that the remaining
rules on the current list of Common Rules
continue to be PHLX Rules that qualify as
Common Rules as defined in this Agreement.
Within 30 days of receipt of such updated
list, FINRA shall confirm in writing whether
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the rules listed in any updated list are
Common Rules as defined in this Agreement.
Notwithstanding anything herein to the
contrary, it is explicitly understood that the
term ‘‘Regulatory Responsibilities’’ does not
include, and PHLX shall retain full
responsibility for (unless otherwise
addressed by separate agreement or rule) the
following (collectively, the ‘‘Retained
Responsibilities’’):
(a) Surveillance, examination, investigation
and enforcement with respect to trading
activities or practices involving PHLX’s own
marketplaces;
(b) registration pursuant to its applicable
rules of associated persons (i.e., registration
rules that are not Common Rules);
(c) discharge of its duties and obligations
as a Designated Examining Authority
pursuant to Rule 17d–1 under the Exchange
Act; and
(d) any PHLX Rules that are not Common
Rules, except for PHLX Rules for any PHLX
member that operates as a facility (as defined
in section 3(a)(2) of the Exchange Act), acts
as an outbound router for PHLX and is a
member of FINRA (‘‘Router Member’’) as
provided in paragraph 5. As of the date of
this Agreement, Nasdaq Execution Services,
LLC is the only Router Member.
3. No Charge. There shall be no charge to
PHLX by FINRA for performing the
Regulatory Responsibilities under this
Agreement except as hereinafter provided.
FINRA shall provide PHLX with ninety (90)
days advance written notice in the event
FINRA decides to impose any charges to
PHLX for performing the Regulatory
Responsibilities under this Agreement. If
FINRA determines to impose a charge, PHLX
shall have the right at the time of the
imposition of such charge to terminate this
Agreement; provided, however, that FINRA’s
Regulatory Responsibilities under this
Agreement shall continue until the
Commission approves the termination of this
Agreement.
4. Reassignment of Regulatory
Responsibilities. Notwithstanding any
provision hereof, this Agreement shall be
subject to any statute, or any rule or order of
the Commission. To the extent such action is
inconsistent with this Agreement, such
action shall supersede the provisions hereof
to the extent necessary for them to be
properly effectuated and the provisions
hereof in that respect shall be null and void.
5. Notification of Violations. In the event
that FINRA becomes aware of apparent
violations of any PHLX Rules, which are not
listed as Common Rules, discovered pursuant
to the performance of the Regulatory
Responsibilities assumed hereunder, FINRA
shall notify PHLX of those apparent
violations for such response as PHLX deems
appropriate. With respect to apparent
violations of any PHLX Rules by any Router
Member, FINRA shall not make referrals to
PHLX pursuant to this paragraph 5. Such
apparent violations shall be processed by,
and enforcement proceedings in respect
thereto will be conducted by, FINRA as
provided in this Agreement. In the event that
PHLX becomes aware of apparent violations
of any Common Rules, discovered pursuant
to the performance of the Retained
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Responsibilities, PHLX shall notify FINRA of
those apparent violations and such matters
shall be handled by FINRA as provided in
this Agreement. Each party agrees to make
available promptly all files, records and
witnesses necessary to assist the other in its
investigation or proceedings. Apparent
violations of Common Rules shall be
processed by, and enforcement proceedings
in respect thereto shall be conducted by
FINRA as provided hereinbefore; provided,
however, that in the event a Dual Member is
the subject of an investigation relating to a
transaction on PHLX, PHLX may in its
discretion assume concurrent jurisdiction
and responsibility.
6. Continued Assistance.
(a) FINRA shall make available to PHLX all
information obtained by FINRA in the
performance by it of the Regulatory
Responsibilities hereunder with respect to
the Dual Members subject to this Agreement.
In particular, and not in limitation of the
foregoing, FINRA shall furnish PHLX any
information it obtains about Dual Members
which reflects adversely on their financial
condition. PHLX shall make available to
FINRA any information coming to its
attention that reflects adversely on the
financial condition of Dual Members or
indicates possible violations of applicable
laws, rules or regulations by such firms.
(b) The parties agree that documents or
information shared shall be held in
confidence, and used only for the purposes
of carrying out their respective regulatory
obligations. Neither party shall assert
regulatory or other privileges as against the
other with respect to documents or
information that is required to be shared
pursuant to this Agreement.
(c) The sharing of documents or
information between the parties pursuant to
this Agreement shall not be deemed a waiver
as against third parties of regulatory or other
privileges relating to the discovery of
documents or information.
7. Dual Member Applications.
(a) Dual Members subject to this
Agreement shall be required to submit, and
FINRA shall be responsible for processing
and acting upon all applications submitted
on behalf of partners, officers, registered
personnel and any other person required to
be approved by the PHLX Rules and FINRA
Rules or associated with Dual Members
thereof. Upon request, FINRA shall advise
PHLX of any changes of allied members,
partners, officers, registered personnel and
other persons required to be approved by the
PHLX Rules and FINRA Rules.
(b) Dual Members shall be required to send
to FINRA all letters, termination notices or
other material respecting the individuals
listed in paragraph 7(a).
(c) When as a result of processing such
submissions FINRA becomes aware of a
statutory disqualification as defined in the
Exchange Act with respect to a Dual Member,
FINRA shall determine pursuant to sections
15A(g) and/or section 6(c) of the Exchange
Act the acceptability or continued
applicability of the person to whom such
disqualification applies and keep PHLX
advised of its actions in this regard for such
subsequent proceedings as PHLX may
initiate.
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(d) Notwithstanding the foregoing, FINRA
shall not review the membership application,
reports, filings, fingerprint cards, notices, or
other writings filed to determine if such
documentation submitted by a broker or
dealer, or an associated person therewith or
other persons required to register or qualify
by examination meets the PHLX
requirements for general membership or for
specified categories of membership or
participation in PHLX, such as PSX Market
Maker, Equities ECN, Order Entry Firm, or
any similar type of PHLX membership or
participation that is created after this
Agreement is executed. FINRA shall not
review applications or other documentation
filed to request a change in the rights or
status described in this paragraph 7(d),
including termination or limitation on
activities, of a member or a participant of
PHLX, or a person associated with, or
requesting association with, a member or
participant of PHLX.
8. Branch Office Information. FINRA shall
also be responsible for processing and, if
required, acting upon all requests for the
opening, address changes, and terminations
of branch offices by Dual Members and any
other applications required of Dual Members
with respect to the Common Rules as they
may be amended from time to time. Upon
request, FINRA shall advise PHLX of the
opening, address change and termination of
branch and main offices of Dual Members
and the names of such branch office
managers.
9. Customer Complaints. PHLX shall
forward to FINRA copies of all customer
complaints involving Dual Members received
by PHLX relating to FINRA’s Regulatory
Responsibilities under this Agreement. It
shall be FINRA’s responsibility to review and
take appropriate action in respect to such
complaints.
10. Advertising. FINRA shall assume
responsibility to review the advertising of
Dual Members subject to the Agreement,
provided that such material is filed with
FINRA in accordance with FINRA’s filing
procedures and is accompanied with any
applicable filing fees set forth in FINRA
Rules.
11. No Restrictions on Regulatory Action.
Nothing contained in this Agreement shall
restrict or in any way encumber the right of
either party to conduct its own independent
or concurrent investigation, examination or
enforcement proceeding of or against Dual
Members, as either party, in its sole
discretion, shall deem appropriate or
necessary.
12. Termination. This Agreement may be
terminated by PHLX or FINRA at any time
upon the approval of the Commission after
one (1) year’s written notice to the other
party, except as provided in paragraph 3.
13. Effective Date. This Agreement shall be
effective upon approval of the Commission.
14. Arbitration. In the event of a dispute
between the parties as to the operation of this
Agreement, PHLX and FINRA hereby agree
that any such dispute shall be settled by
arbitration in Washington, DC in accordance
with the rules of the American Arbitration
Association then in effect, or such other
procedures as the parties may mutually agree
upon. Judgment on the award rendered by
the arbitrator(s) may be entered in any court
having jurisdiction. Each party acknowledges
that the timely and complete performance of
its obligations pursuant to this Agreement is
critical to the business and operations of the
other party. In the event of a dispute between
the parties, the parties shall continue to
perform their respective obligations under
this Agreement in good faith during the
resolution of such dispute unless and until
this Agreement is terminated in accordance
with its provisions. Nothing in this paragraph
14 shall interfere with a party’s right to
terminate this Agreement as set forth herein.
15. Amendment. This Agreement may be
amended in writing duly approved by each
party. All such amendments must be filed
with and approved by the Commission before
they become effective.
16. Limitation of Liability. Neither FINRA
nor PHLX nor any of their respective
directors, governors, officers or employees
shall be liable to the other party to this
Agreement for any liability, loss or damage
resulting from or claimed to have resulted
from any delays, inaccuracies, errors or
omissions with respect to the provision of
Regulatory Responsibilities as provided
hereby or for the failure to provide any such
responsibility, except with respect to such
liability, loss or damages as shall have been
suffered by one or the other of FINRA or
PHLX and caused by the willful misconduct
of the other party or their respective
directors, governors, officers or employees.
No warranties, express or implied, are made
by FINRA or PHLX with respect to any of the
responsibilities to be performed by each of
them hereunder.
17. Relief from Responsibility. Pursuant to
sections 17(d)(1)(A) and 19(g) of the
Exchange Act and Rule 17d–2 thereunder,
FINRA and PHLX join in requesting the
Commission, upon its approval of this
Agreement or any part thereof, to relieve
PHLX of any and all responsibilities with
respect to matters allocated to FINRA
pursuant to this Agreement; provided,
however, that this Agreement shall not be
effective until the Effective Date.
18. Severability. Any term or provision of
this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent
of such invalidity or unenforceability
without rendering invalid or unenforceable
the remaining terms and provisions of this
Agreement or affecting the validity or
enforceability of any of the terms or
provisions of this Agreement in any other
jurisdiction.
19. Separate Agreement. This Agreement is
wholly separate from (1) the multiparty
Agreement made pursuant to Rule 17d–2 of
the Exchange Act among Cboe BZX
Exchange, Inc., BOX Exchange, Cboe
Exchange, Inc., Cboe C2 Exchange, Inc.,
Nasdaq ISE, LLC, Financial Industry
Regulatory Authority, Inc., Miami
International Securities Exchange, LLC,
NYSE American LLC, NYSE Arca, Inc., The
Nasdaq Stock Market, LLC, Nasdaq BX, Inc.,
Nasdaq PHLX LLC, Nasdaq GEMX, LLC,
Cboe EDGX Exchange, Inc., Nasdaq MRX,
LLC, MIAX PEARL, LLC, MIAX Emerald,
LLC, and MEMX LCC approved by the
Commission on October 18, 2022 involving
the allocation of regulatory responsibilities
with respect to common members for
compliance with common rules relating to
the conduct by broker-dealers of accounts for
listed options, index warrants, currency
index warrants and currency warrants or (2)
the multiparty Agreement made pursuant to
Rule 17d–2 of the Exchange Act among NYSE
American LLC, Cboe BZX Exchange, Inc., the
Cboe EDGX Exchange, Inc., Cboe C2
Exchange, Inc., Cboe Exchange, Inc., Nasdaq
ISE, LLC, Financial Industry Regulatory
Authority, Inc., NYSE Arca, Inc., The Nasdaq
Stock Market LLC, BOX Exchange LLC,
Nasdaq BX, Inc., Nasdaq PHLX LLC, Miami
International Securities Exchange, LLC,
Nasdaq GEMX, LLC, Nasdaq MRX, LLC,
MIAX PEARL, LLC, MIAX Emerald, LLC, and
MEMX LLC approved by the Commission on
November 23, 2022 involving options-related
market surveillance matters and such
agreements as may be amended from time to
time.
20. Counterparts. This Agreement may be
executed in one or more counterparts, each
of which shall be deemed an original, and
such counterparts together shall constitute
one and the same instrument.
*
*
*
*
*
Exhibit 1
PHLX Certification of Common Rules
PHLX hereby certifies that the
requirements contained in the rules listed
below for PHLX are identical to, or
substantially similar to, the comparable
FINRA Rules or SEC Rules identified.
# Common Rules shall not include
provisions regarding (i) notice, reporting or
any other filings made directly to or from
PHLX, (ii) incorporations by reference to
other PHLX Rules that are not Common
Rules, (iii) exercise of discretion in a manner
that differs from FINRA’s exercise of
discretion including, but not limited to
exercise of exemptive authority, by PHLX,
(iv) prior written approval of PHLX, and (v)
payment of fees or fines to PHLX.
PHLX Rule
FINRA or SEC Rule
General 2, Section 11 Contact Information Requirements # ...................
General 3, Rule 1002(b) Qualifications of Exchange Members and Associated Persons; Registration of Branch Offices and Designation of
Office of Supervisory Jurisdiction #.
4517. Member Filing and Contact Information Requirements.
FINRA By-Laws Article III, Sec. 1; FINRA By-Laws Article III, Sec. 3(a)
and (b).
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Federal Register / Vol. 88, No. 234 / Thursday, December 7, 2023 / Notices
PHLX Rule
FINRA or SEC Rule
General 3, Rule 1002(d). Qualifications of Exchange Members and Associated Persons; Registration of Branch Offices and Designation of
Office of Supervisory Jurisdiction #.
General 3, Rule 1012(c)(1). Duty to Ensure the Accuracy, Completeness, and Current Nature of Membership Information Filed with the
Exchange #.
General 4, Section 1, 1210. Registration Requirements # .......................
3110(a)(3) Supervision and SM .01 and .02. Supervision* and FINRA
By-Laws Article IV, Sec. 8.
1122. Filing of Misleading Information as to Membership or Registration; FINRA By-Laws Article IV, Sec. 1(c).
1210. Registration Requirements; FINRA By-Laws, Article V, Sec. 1;
FINRA By-Laws, Article V, Sec. 2; FINRA By-Laws, Article V, Sec. 3.
1220. Registration Categories.
1230. Associated Persons Exempt from Registration.
General 4, Section 1, 1220. Registration Categories 1# ..........................
General 4, Section 1, Rule 1230(1)–(2)(D) and Supplementary Material
.01. Associated Persons Exempt from Registration #.
General 4, Section 1, 1240. Continuing Education Requirements 2# ...... 1240. Continuing Education.
General 4, Section 1, 1250. Electronic Filing Requirements for Uniform 1010. Electronic Filing Requirements for Uniform Forms.
Forms #.
General 9, Section 1(b). Manipulative Operations and General 9, Sec2020. Use of Manipulative, Deceptive or Other Fraudulent Devices*;
tion 2(b)(i) Customers’ Securities and Excessive Trading of Members.
6140 Other Trading Practices; 5350 Stop Orders; 6130 Transactions
Related to Initial Public Offerings.
General 9, Section 1(c)(1). Standards of Commercial Honor and Prin2010. Standards of Commercial Honor and Principles of Trade *.
ciples of Trade.
General 9, Section 1(a). Prohibition Against Trading Ahead of Cus5320. Prohibition Against Trading Ahead of Customer Orders.
tomer Orders.
General 9, Section 1(c)(2). Anti-Intimidation/Coordination ...................... 5240. Anti-Intimidation/Coordination.
General 9, Section 1(c)(3). Conduct Inconsistent with Just and Equi5290. Order Entry and Execution Practices.
table Principles of Trade.
General 9, Section 2(a). Customers’ Securities and Excessive Trading
2150(a). Improper Use of Customers’ Securities or Funds; Prohibition
of Members.
Against Guarantees and Sharing in Accounts.
General 9, Section 11. Best Execution and Interpositioning ................... 5310. Best Execution and Interpositioning.
General 9, Section 19. Discretionary Accounts ....................................... 3260. Discretionary Accounts.
General 9, Section 20. Supervision ......................................................... 3110. Supervision.
General 9, Section 30. Books and Records ............................................ 4511. General Requirements.
General 9, Section 35. Nonregistered Foreign Finders ........................... Rule 2040(c). Payments to Unregistered Persons.
General 9, Section 39. Fidelity Bonds ..................................................... 4360. Fidelity Bonds.
General 9, Section 58. Advertisements, Market Letters, Research Re2210. Communications with the Public.
ports and Sales Literature.
Options 6E, Section 1(a). Maintenance, Retention and Furnishing of
4511(a). General Requirements.
Books, Records and Other Information #.
Options 10, Section 7(g) and (h).# Supervision of Accounts .................. 3120. Supervisory Control System.
3130. Annual Certification of Compliance and Supervisory Processes.
Options 10, Section 10. Confirmations to Customers .............................. 2232. Customer Confirmations.
Options 10, Section 17. Profit Sharing ..................................................... 2150(c). Improper Use of Customers’ Securities or Funds; Prohibition
Against Guarantees and Sharing in Accounts.
ddrumheller on DSK120RN23PROD with NOTICES1
1 FINRA shall only have Regulatory Responsibilities regarding General 4, Section 1, 1220 to the extent that PHLX recognizes the same categories of limited principal and representative registration.
2 FINRA Rule 1240.01 allows for other persons to make their election to participate in the continuing education program under Rule 1240(c) either (1) between January 31, 2022, and March 15, 2022; or (2) between March 15, 2023, and December 31, 2023. In contrast, Supplementary
Material .02 of Nasdaq PHLX General 4, Section 1, 1240 allows for other persons to make their election to participate in the continuing education
program under PHLX General 4, Section 1, 1240(c) either (1) by March 15, 2022, or (2) between July 6, 2023, and December 31, 2023. Therefore, FINRA shall not have Regulatory Responsibilities regarding elections made by other persons under General 4, Section 1, 1240(c) between
March 15, 2023, and July 5, 2023.
* FINRA shall not have any Regulatory Responsibilities for these rules as they pertain to violations of insider trading activities, which is covered
by a separate 17d–2 Agreement by and among Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., NYSE Chicago, Inc., Cboe EDGA Exchange Inc., Cboe EDGX Exchange Inc., Financial Industry Regulatory Authority, Inc., MEMX, LLC, MIAX PEARL, LLC, Nasdaq BX, Inc.,
Nasdaq PHLX LLC, The Nasdaq Stock Market LLC, NYSE National, Inc., New York Stock Exchange, LLC, NYSE American LLC, NYSE Arca
Inc., Investors’ Exchange LLC, and the Long-Term Stock Exchange, Inc. as approved by the SEC on September 23, 2020.
In addition, the following provisions shall
be part of this 17d–2 Agreement:
The following provisions are covered by
the Agreement between the Parties:
• SEC ’34 Act Section 28(e) Effect on
Existing Law
• SEC ’34 Act Rule 10b–10 Confirmation of
Transactions
• SEC ’34 Act Rule 203 of Regulation SHO
Borrowing and Delivery Requirements
• SEC ’34 Act Rule 606 of Regulation NMS
Disclosure of Order Routing Information
• SEC ’34 Act Rule 607 of Regulation NMS
Customer Account Statements
• SEA Rule 14e–4—Prohibited Transactions
in Connection with Partial Tender Offers∧
∧ FINRA shall perform surveillance,
investigation, and Enforcement
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Responsibilities for SEA Rule 14e–
4(a)(1)(ii)(D).
III. Date of Effectiveness of the
Proposed Plan and Timing for
Commission Action
Pursuant to section 17(d)(1) of the
Act 14 and Rule 17d–2 thereunder,15
after December 22, 2023, the
Commission may, by written notice,
declare the plan submitted by PHLX and
FINRA, File No. 4–818, to be effective
if the Commission finds that the plan is
necessary or appropriate in the public
14 15
U.S.C. 78q(d)(1).
15 17 CFR 240.17d–2.
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interest and for the protection of
investors, to foster cooperation and
coordination among self-regulatory
organizations, or to remove
impediments to and foster the
development of the national market
system and a national system for the
clearance and settlement of securities
transactions and in conformity with the
factors set forth in section 17(d) of the
Act.
IV. Solicitation of Comments
In order to assist the Commission in
determining whether to approve the
proposed 17d–2 Plan and to relieve
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Federal Register / Vol. 88, No. 234 / Thursday, December 7, 2023 / Notices
PHLX of the responsibilities which
would be assigned to FINRA, interested
persons are invited to submit written
data, views, and arguments concerning
the foregoing. Comments may be
submitted by any of the following
methods:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–26800 Filed 12–6–23; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/other.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number 4–
818 on the subject line.
[Disaster Declaration # 20117 and # 20118;
New York Disaster Number NY–20002]
Administrative Disaster Declaration of
a Rural Area for the State of New York
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, Station Place, 100 F Street
NE, Washington, DC 20549–1090.
ddrumheller on DSK120RN23PROD with NOTICES1
SMALL BUSINESS ADMINISTRATION
All submissions should refer to File
Number 4–818. 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/
other.shtml). Copies of the submission,
all subsequent amendments, all written
statements with respect to the proposed
rule change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
plan also will be available for inspection
and copying at the principal offices of
PHLX and FINRA. 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 No. 4–818 and should be
submitted on or before December 22,
2023.
This is a notice of an
Administrative disaster declaration of a
rural area for the State of New York
dated 12/01/2023.
Incident: Severe Storms and Flooding.
Incident Period: 07/09/2023 through
07/10/2023.
DATES: Issued on 12/01/2023.
Physical Loan Application Deadline
Date: 01/30/2024.
Economic Injury (EIDL) Loan
Application Deadline Date: 9/03/2024.
ADDRESSES: Visit the MySBA Loan
Portal at https://lending.sba.gov to
apply for a disaster assistance loan.
FOR FURTHER INFORMATION CONTACT:
Alan Escobar, Office of Disaster
Recovery & Resilience, U.S. Small
Business Administration, 409 3rd Street
SW, Suite 6050, Washington, DC 20416,
(202) 205–6734.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
Administrator’s disaster declaration of a
rural area, applications for disaster
loans may be submitted online using the
MySBA Loan Portal https://
lending.sba.gov or other locally
announced locations. Please contact the
SBA disaster assistance customer
service center by email at
disastercustomerservice@sba.gov or by
phone at 1–800–659–2955 for further
assistance.
Primary Counties: Clinton
The Interest Rates are:
SUMMARY:
Percent
For Physical Damage:
Homeowners with Credit Available Elsewhere ......................
Homeowners without Credit
Available Elsewhere ..............
Businesses with Credit Available Elsewhere ......................
16 17
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CFR 200.30–3(a)(12).
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5.000
2.500
8.000
85343
Percent
Businesses
without
Credit
Available Elsewhere ..............
Non-Profit Organizations with
Credit Available Elsewhere ...
Non-Profit Organizations without Credit Available Elsewhere .....................................
For Economic Injury:
Business and Small Agricultural
Cooperatives without Credit
Available Elsewhere ..............
Non-Profit Organizations without Credit Available Elsewhere .....................................
4.000
2.375
2.375
4.000
2.375
The number assigned to this disaster
for physical damage is 201176 and for
economic injury is 201180.
The State which received an EIDL
Declaration is New York.
(Catalog of Federal Domestic Assistance
Number 59008)
Isabella Guzman,
Administrator.
[FR Doc. 2023–26895 Filed 12–6–23; 8:45 am]
BILLING CODE 8026–09–P
DEPARTMENT OF STATE
[Public Notice: 12278]
Overseas Schools Advisory Council
Notice of Meeting
The Overseas Schools
Advisory Council, Department of State,
will hold its January Committee
Meeting. This meeting is open to the
public.
SUMMARY:
Thursday, January 31, 2024, from
9 a.m. until approximately 4 p.m.
ADDRESSES: Conference Room 1107,
Department of State, 2201 C Street NW,
Washington, DC.
SUPPLEMENTARY INFORMATION: The
Overseas Schools Advisory Council
works closely with the U.S. business
community on improving those
American-sponsored schools overseas
that are assisted by the Department of
State and attended by dependents of
U.S. Government employees, and the
children of employees of U.S.
corporations and foundations abroad.
This meeting will address issues
related to the work and the support
provided by the Overseas Schools
Advisory Council to the Americansponsored overseas schools. There will
be a report and discussion about the
status of the Council-sponsored Child
Protection Project and discussion on a
possible project addressing school based
mental health issues. The Council will
also receive a report from a
representative of the College Board.
DATES:
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]]>Agencies
[Federal Register Volume 88, Number 234 (Thursday, December 7, 2023)]
[Notices]
[Pages 85338-85343]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-26800]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99065; File No. 4-818]
Program for Allocation of Regulatory Responsibilities Pursuant to
Rule 17d-2; Notice of Filing of Proposed Plan for the Allocation of
Regulatory Responsibilities Between the Financial Industry Regulatory
Authority, Inc. and Nasdaq PHLX LLC
December 1, 2023.
Pursuant to section 17(d) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 17d-2 thereunder,\2\ notice is hereby given that
on November 17, 2023, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') and Nasdaq PHLX LLC (``PHLX'') (together with FINRA, the
``Parties'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') a plan for the allocation of regulatory
responsibilities, dated November 15, 2023 (``17d-2 Plan'' or the
``Plan''). The Commission is publishing this notice to solicit comments
on the 17d-2 Plan from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78q(d).
\2\ 17 CFR 240.17d-2.
---------------------------------------------------------------------------
I. Introduction
Section 19(g)(1) of the Act,\3\ 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.\4\ 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.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78s(g)(1).
\4\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively.
---------------------------------------------------------------------------
Section 17(d)(1) of the Act \5\ was intended, in part, to eliminate
unnecessary multiple examinations and regulatory duplication.\6\ With
respect to a common member, section 17(d)(1) authorizes the Commission,
by rule or
[[Page 85339]]
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.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78q(d)(1).
\6\ 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.\7\ 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.\8\ 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.
---------------------------------------------------------------------------
\7\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
\8\ 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.\9\ Rule 17d-2 permits SROs
to propose joint plans for the allocation of regulatory
responsibilities with respect to their common members. Under paragraph
(c) of Rule 17d-2, the Commission may declare such a plan effective if,
after providing for appropriate notice and comment, it determines that
the plan is necessary or appropriate in the public interest and for the
protection of investors; to foster cooperation and coordination among
the SROs; to remove impediments to, and foster the development of, a
national market system and a national clearance and settlement system;
and is in conformity with the factors set forth in section 17(d) of the
Act. Commission approval of a plan filed pursuant to Rule 17d-2
relieves an SRO of those regulatory responsibilities allocated by the
plan to another SRO.
---------------------------------------------------------------------------
\9\ 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 PHLX and
FINRA.\10\ 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.
---------------------------------------------------------------------------
\10\ 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 ``PHLX Certification of Common Rules,''
referred to herein as the ``Certification'') that lists every PHLX
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 PHLX 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 PHLX that are substantially similar to the applicable
rules of FINRA,\11\ 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 PHLX, the
plan acknowledges that PHLX may, in its discretion, exercise concurrent
jurisdiction and responsibility for such matter.\12\
---------------------------------------------------------------------------
\11\ 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 PHLX rules or FINRA rules, the parties shall review and
update, if necessary, the list of Common Rules.
\12\ See paragraph 5 of the proposed 17d-2 Plan.
---------------------------------------------------------------------------
Under the Plan, PHLX would retain full responsibility for
surveillance, examination, investigation and enforcement with respect
to trading activities or practices involving PHLX'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 PHLX rules that are not Common Rules, except for PHLX
Rules for any PHLX member that operates as a facility (as defined in
section 3(a)(2) of the Exchange Act), acts as an outbound router for
PHLX and is a member of FINRA (``Router Member'').\13\
---------------------------------------------------------------------------
\13\ See paragraph 2 of the proposed 17d-2 Plan.
---------------------------------------------------------------------------
The text of the proposed 17d-2 Plan is as follows:
Agreement Between Financial Industry Regulatory Authority, Inc. and
NASDAQ PHLX LLC Pursuant to Rule 17d-2 Under the Securities Exchange
Act of 1934
This Agreement, by and between Financial Industry Regulatory
Authority, Inc. (``FINRA'') and Nasdaq PHLX LLC (``PHLX''), is made
this 15th day of November, 2023 (the ``Agreement''), pursuant to
section 17(d) of the Securities Exchange Act of 1934 (the ``Exchange
Act'') and Rule 17d-2 thereunder, which permits agreements between
self-regulatory organizations to allocate regulatory responsibility
to eliminate regulatory duplication. FINRA and PHLX may be referred
to individually as a ``party'' and together as the ``parties.''
Whereas, FINRA and PHLX desire to reduce duplication in the
examination of their Dual Members (as defined herein) and in the
filing and processing of certain registration and membership
records; and
Whereas, FINRA and PHLX desire to execute an agreement covering
such subjects pursuant to the provisions of Rule 17d-2 under the
Exchange Act and to file such agreement with the U.S. Securities and
Exchange Commission (the ``SEC'' or ``Commission'') for its
approval.
Now, therefore, in consideration of the mutual covenants
contained hereinafter, FINRA and PHLX hereby agree as follows:
1. Definitions. Unless otherwise defined in this Agreement or
the context otherwise requires, the terms used in this Agreement
shall have the same meaning as they have under the Exchange Act and
the rules and regulations thereunder. As used in this Agreement, the
following terms shall have the following meanings:
(a) ``PHLX Rules'' or ``FINRA Rules'' shall mean the rules of
PHLX or FINRA, respectively, as the rules of an exchange or
association are defined in Exchange Act section 3(a)(27).
(b) ``Common Rules'' shall mean the PHLX Rules that are
substantially similar to the applicable FINRA Rules and certain
provisions of the Exchange Act and SEC rules set forth on Exhibit 1
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 Dual Member's activity, conduct, or
output in relation to such provision or rule; provided, however,
Common Rules shall not include the application of the SEC, PHLX or
FINRA rules as they pertain to violations of insider trading
activities, which is covered by a separate 17d-2 Agreement by and
among Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., Chicago
Stock Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange,
Inc., Financial Industry Regulatory Authority, Inc., MEMX LLC, MIAX
PEARL, LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, The Nasdaq
[[Page 85340]]
Stock Market LLC, NYSE National, Inc., New York Stock Exchange LLC,
NYSE American LLC, NYSE Arca, Inc., Investors' Exchange LLC and
Long-Term Stock Exchange, Inc. approved by the Commission on
September 23, 2020. Common Rules shall not include any provisions
regarding: (i) notice, reporting or any other filings made directly
to or from PHLX; (ii) incorporation by reference of other PHLX Rules
that are not Common Rules; (iii) exercise of discretion in a manner
that differs from FINRA's exercise of discretion including, but not
limited to exercise of exemptive authority by PHLX; (iv) prior
written approval of PHLX; and (v) payment of fees or fines to PHLX.
(c) ``Dual Members'' shall mean those PHLX members that are also
members of FINRA and the associated persons therewith.
(d) ``Effective Date'' shall have the meaning set forth in
paragraph 13.
(e) ``Enforcement Responsibilities'' shall mean the conduct of
appropriate proceedings, in accordance with the FINRA Code of
Procedure (the Rule 9000 Series) and other applicable FINRA
procedural rules, to determine whether violations of Common Rules
have occurred, and if such violations are deemed to have occurred,
the imposition of appropriate sanctions as specified under the FINRA
Code of Procedure and FINRA's sanction guidelines.
(f) ``Regulatory Responsibilities'' shall mean the examination
responsibilities and Enforcement Responsibilities relating to
compliance by the Dual Members with the Common Rules and the
provisions of the Exchange Act and the rules and regulations
thereunder, and other applicable laws, rules and regulations, each
as set forth on Exhibit 1 attached hereto. The term ``Regulatory
Responsibilities'' shall also include the surveillance,
investigation and Enforcement Responsibilities relating to
compliance by Dual Members with Rule 14e-4 of the Exchange Act
(``Rule 14e-4''), with a focus on the standardized call option
provision of Rule 14e-4(a)(1)(ii)(D).
2. Regulatory Responsibilities. FINRA shall assume Regulatory
Responsibilities for Dual Members. Attached as Exhibit 1 to this
Agreement and made part hereof, PHLX furnished FINRA with a current
list of Common Rules and certified to FINRA that such rules are
substantially similar to the corresponding FINRA Rule (the
``Certification''). FINRA hereby agrees that the rules listed in the
Certification are Common Rules as defined in this Agreement. Each
year following the Effective Date of this Agreement, or more
frequently if required by changes in either the PHLX Rules or FINRA
Rules, PHLX shall submit an updated list of Common Rules to FINRA
for review which shall add PHLX Rules not included in the current
list of Common Rules that qualify as Common Rules as defined in this
Agreement; delete PHLX Rules included in the current list of Common
Rules that no longer qualify as Common Rules as defined in this
Agreement; and confirm that the remaining rules on the current list
of Common Rules continue to be PHLX Rules that qualify as Common
Rules as defined in this Agreement. Within 30 days of receipt of
such updated list, FINRA shall confirm in writing whether the rules
listed in any updated list are Common Rules as defined in this
Agreement. Notwithstanding anything herein to the contrary, it is
explicitly understood that the term ``Regulatory Responsibilities''
does not include, and PHLX shall retain full responsibility for
(unless otherwise addressed by separate agreement or rule) the
following (collectively, the ``Retained Responsibilities''):
(a) Surveillance, examination, investigation and enforcement
with respect to trading activities or practices involving PHLX's own
marketplaces;
(b) registration pursuant to its applicable rules of associated
persons (i.e., registration rules that are not Common Rules);
(c) discharge of its duties and obligations as a Designated
Examining Authority pursuant to Rule 17d-1 under the Exchange Act;
and
(d) any PHLX Rules that are not Common Rules, except for PHLX
Rules for any PHLX member that operates as a facility (as defined in
section 3(a)(2) of the Exchange Act), acts as an outbound router for
PHLX and is a member of FINRA (``Router Member'') as provided in
paragraph 5. As of the date of this Agreement, Nasdaq Execution
Services, LLC is the only Router Member.
3. No Charge. There shall be no charge to PHLX by FINRA for
performing the Regulatory Responsibilities under this Agreement
except as hereinafter provided. FINRA shall provide PHLX with ninety
(90) days advance written notice in the event FINRA decides to
impose any charges to PHLX for performing the Regulatory
Responsibilities under this Agreement. If FINRA determines to impose
a charge, PHLX shall have the right at the time of the imposition of
such charge to terminate this Agreement; provided, however, that
FINRA's Regulatory Responsibilities under this Agreement shall
continue until the Commission approves the termination of this
Agreement.
4. Reassignment of Regulatory Responsibilities. Notwithstanding
any provision hereof, this Agreement shall be subject to any
statute, or any rule or order of the Commission. To the extent such
action is inconsistent with this Agreement, such action shall
supersede the provisions hereof to the extent necessary for them to
be properly effectuated and the provisions hereof in that respect
shall be null and void.
5. Notification of Violations. In the event that FINRA becomes
aware of apparent violations of any PHLX Rules, which are not listed
as Common Rules, discovered pursuant to the performance of the
Regulatory Responsibilities assumed hereunder, FINRA shall notify
PHLX of those apparent violations for such response as PHLX deems
appropriate. With respect to apparent violations of any PHLX Rules
by any Router Member, FINRA shall not make referrals to PHLX
pursuant to this paragraph 5. Such apparent violations shall be
processed by, and enforcement proceedings in respect thereto will be
conducted by, FINRA as provided in this Agreement. In the event that
PHLX becomes aware of apparent violations of any Common Rules,
discovered pursuant to the performance of the Retained
Responsibilities, PHLX shall notify FINRA of those apparent
violations and such matters shall be handled by FINRA as provided in
this Agreement. Each party agrees to make available promptly all
files, records and witnesses necessary to assist the other in its
investigation or proceedings. Apparent violations of Common Rules
shall be processed by, and enforcement proceedings in respect
thereto shall be conducted by FINRA as provided hereinbefore;
provided, however, that in the event a Dual Member is the subject of
an investigation relating to a transaction on PHLX, PHLX may in its
discretion assume concurrent jurisdiction and responsibility.
6. Continued Assistance.
(a) FINRA shall make available to PHLX all information obtained
by FINRA in the performance by it of the Regulatory Responsibilities
hereunder with respect to the Dual Members subject to this
Agreement. In particular, and not in limitation of the foregoing,
FINRA shall furnish PHLX any information it obtains about Dual
Members which reflects adversely on their financial condition. PHLX
shall make available to FINRA any information coming to its
attention that reflects adversely on the financial condition of Dual
Members or indicates possible violations of applicable laws, rules
or regulations by such firms.
(b) The parties agree that documents or information shared shall
be held in confidence, and used only for the purposes of carrying
out their respective regulatory obligations. Neither party shall
assert regulatory or other privileges as against the other with
respect to documents or information that is required to be shared
pursuant to this Agreement.
(c) The sharing of documents or information between the parties
pursuant to this Agreement shall not be deemed a waiver as against
third parties of regulatory or other privileges relating to the
discovery of documents or information.
7. Dual Member Applications.
(a) Dual Members subject to this Agreement shall be required to
submit, and FINRA shall be responsible for processing and acting
upon all applications submitted on behalf of partners, officers,
registered personnel and any other person required to be approved by
the PHLX Rules and FINRA Rules or associated with Dual Members
thereof. Upon request, FINRA shall advise PHLX of any changes of
allied members, partners, officers, registered personnel and other
persons required to be approved by the PHLX Rules and FINRA Rules.
(b) Dual Members shall be required to send to FINRA all letters,
termination notices or other material respecting the individuals
listed in paragraph 7(a).
(c) When as a result of processing such submissions FINRA
becomes aware of a statutory disqualification as defined in the
Exchange Act with respect to a Dual Member, FINRA shall determine
pursuant to sections 15A(g) and/or section 6(c) of the Exchange Act
the acceptability or continued applicability of the person to whom
such disqualification applies and keep PHLX advised of its actions
in this regard for such subsequent proceedings as PHLX may initiate.
[[Page 85341]]
(d) Notwithstanding the foregoing, FINRA shall not review the
membership application, reports, filings, fingerprint cards,
notices, or other writings filed to determine if such documentation
submitted by a broker or dealer, or an associated person therewith
or other persons required to register or qualify by examination
meets the PHLX requirements for general membership or for specified
categories of membership or participation in PHLX, such as PSX
Market Maker, Equities ECN, Order Entry Firm, or any similar type of
PHLX membership or participation that is created after this
Agreement is executed. FINRA shall not review applications or other
documentation filed to request a change in the rights or status
described in this paragraph 7(d), including termination or
limitation on activities, of a member or a participant of PHLX, or a
person associated with, or requesting association with, a member or
participant of PHLX.
8. Branch Office Information. FINRA shall also be responsible
for processing and, if required, acting upon all requests for the
opening, address changes, and terminations of branch offices by Dual
Members and any other applications required of Dual Members with
respect to the Common Rules as they may be amended from time to
time. Upon request, FINRA shall advise PHLX of the opening, address
change and termination of branch and main offices of Dual Members
and the names of such branch office managers.
9. Customer Complaints. PHLX shall forward to FINRA copies of
all customer complaints involving Dual Members received by PHLX
relating to FINRA's Regulatory Responsibilities under this
Agreement. It shall be FINRA's responsibility to review and take
appropriate action in respect to such complaints.
10. Advertising. FINRA shall assume responsibility to review the
advertising of Dual Members subject to the Agreement, provided that
such material is filed with FINRA in accordance with FINRA's filing
procedures and is accompanied with any applicable filing fees set
forth in FINRA Rules.
11. No Restrictions on Regulatory Action. Nothing contained in
this Agreement shall restrict or in any way encumber the right of
either party to conduct its own independent or concurrent
investigation, examination or enforcement proceeding of or against
Dual Members, as either party, in its sole discretion, shall deem
appropriate or necessary.
12. Termination. This Agreement may be terminated by PHLX or
FINRA at any time upon the approval of the Commission after one (1)
year's written notice to the other party, except as provided in
paragraph 3.
13. Effective Date. This Agreement shall be effective upon
approval of the Commission.
14. Arbitration. In the event of a dispute between the parties
as to the operation of this Agreement, PHLX and FINRA hereby agree
that any such dispute shall be settled by arbitration in Washington,
DC in accordance with the rules of the American Arbitration
Association then in effect, or such other procedures as the parties
may mutually agree upon. Judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction. Each
party acknowledges that the timely and complete performance of its
obligations pursuant to this Agreement is critical to the business
and operations of the other party. In the event of a dispute between
the parties, the parties shall continue to perform their respective
obligations under this Agreement in good faith during the resolution
of such dispute unless and until this Agreement is terminated in
accordance with its provisions. Nothing in this paragraph 14 shall
interfere with a party's right to terminate this Agreement as set
forth herein.
15. Amendment. This Agreement may be amended in writing duly
approved by each party. All such amendments must be filed with and
approved by the Commission before they become effective.
16. Limitation of Liability. Neither FINRA nor PHLX nor any of
their respective directors, governors, officers or employees shall
be liable to the other party to this Agreement for any liability,
loss or damage resulting from or claimed to have resulted from any
delays, inaccuracies, errors or omissions with respect to the
provision of Regulatory Responsibilities as provided hereby or for
the failure to provide any such responsibility, except with respect
to such liability, loss or damages as shall have been suffered by
one or the other of FINRA or PHLX and caused by the willful
misconduct of the other party or their respective directors,
governors, officers or employees. No warranties, express or implied,
are made by FINRA or PHLX with respect to any of the
responsibilities to be performed by each of them hereunder.
17. Relief from Responsibility. Pursuant to sections 17(d)(1)(A)
and 19(g) of the Exchange Act and Rule 17d-2 thereunder, FINRA and
PHLX join in requesting the Commission, upon its approval of this
Agreement or any part thereof, to relieve PHLX of any and all
responsibilities with respect to matters allocated to FINRA pursuant
to this Agreement; provided, however, that this Agreement shall not
be effective until the Effective Date.
18. Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
19. Separate Agreement. This Agreement is wholly separate from
(1) the multiparty Agreement made pursuant to Rule 17d-2 of the
Exchange Act among Cboe BZX Exchange, Inc., BOX Exchange, Cboe
Exchange, Inc., Cboe C2 Exchange, Inc., Nasdaq ISE, LLC, Financial
Industry Regulatory Authority, Inc., Miami International Securities
Exchange, LLC, NYSE American LLC, NYSE Arca, Inc., The Nasdaq Stock
Market, LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, Nasdaq GEMX, LLC,
Cboe EDGX Exchange, Inc., Nasdaq MRX, LLC, MIAX PEARL, LLC, MIAX
Emerald, LLC, and MEMX LCC approved by the Commission on October 18,
2022 involving the allocation of regulatory responsibilities with
respect to common members for compliance with common rules relating
to the conduct by broker-dealers of accounts for listed options,
index warrants, currency index warrants and currency warrants or (2)
the multiparty Agreement made pursuant to Rule 17d-2 of the Exchange
Act among NYSE American LLC, Cboe BZX Exchange, Inc., the Cboe EDGX
Exchange, Inc., Cboe C2 Exchange, Inc., Cboe Exchange, Inc., Nasdaq
ISE, LLC, Financial Industry Regulatory Authority, Inc., NYSE Arca,
Inc., The Nasdaq Stock Market LLC, BOX Exchange LLC, Nasdaq BX,
Inc., Nasdaq PHLX LLC, Miami International Securities Exchange, LLC,
Nasdaq GEMX, LLC, Nasdaq MRX, LLC, MIAX PEARL, LLC, MIAX Emerald,
LLC, and MEMX LLC approved by the Commission on November 23, 2022
involving options-related market surveillance matters and such
agreements as may be amended from time to time.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and such
counterparts together shall constitute one and the same instrument.
* * * * *
Exhibit 1
PHLX Certification of Common Rules
PHLX hereby certifies that the requirements contained in the
rules listed below for PHLX are identical to, or substantially
similar to, the comparable FINRA Rules or SEC Rules identified.
# Common Rules shall not include provisions regarding (i)
notice, reporting or any other filings made directly to or from
PHLX, (ii) incorporations by reference to other PHLX Rules that are
not Common Rules, (iii) exercise of discretion in a manner that
differs from FINRA's exercise of discretion including, but not
limited to exercise of exemptive authority, by PHLX, (iv) prior
written approval of PHLX, and (v) payment of fees or fines to PHLX.
------------------------------------------------------------------------
PHLX Rule FINRA or SEC Rule
------------------------------------------------------------------------
General 2, Section 11 Contact 4517. Member Filing and Contact
Information Requirements . Information Requirements.
General 3, Rule 1002(b) Qualifications FINRA By-Laws Article III, Sec.
of Exchange Members and Associated 1; FINRA By-Laws Article III,
Persons; Registration of Branch Sec. 3(a) and (b).
Offices and Designation of Office of
Supervisory Jurisdiction .
[[Page 85342]]
General 3, Rule 1002(d). Qualifications 3110(a)(3) Supervision and SM
of Exchange Members and Associated .01 and .02. Supervision* and
Persons; Registration of Branch FINRA By-Laws Article IV, Sec.
Offices and Designation of Office of 8.
Supervisory Jurisdiction .
General 3, Rule 1012(c)(1). Duty to 1122. Filing of Misleading
Ensure the Accuracy, Completeness, and Information as to Membership
Current Nature of Membership or Registration; FINRA By-Laws
Information Filed with the Exchange . Article IV, Sec. 1(c).
General 4, Section 1, 1210. 1210. Registration
Registration Requirements . Requirements; FINRA By-Laws,
Article V, Sec. 1; FINRA By-
Laws, Article V, Sec. 2; FINRA
By-Laws, Article V, Sec. 3.
General 4, Section 1, 1220. 1220. Registration Categories.
Registration Categories 1.
General 4, Section 1, Rule 1230(1)- 1230. Associated Persons Exempt
(2)(D) and Supplementary Material .01. from Registration.
Associated Persons Exempt from
Registration .
General 4, Section 1, 1240. Continuing 1240. Continuing Education.
Education Requirements 2.
General 4, Section 1, 1250. Electronic 1010. Electronic Filing
Filing Requirements for Uniform Forms Requirements for Uniform
. Forms.
General 9, Section 1(b). Manipulative 2020. Use of Manipulative,
Operations and General 9, Section Deceptive or Other Fraudulent
2(b)(i) Customers' Securities and Devices*; 6140 Other Trading
Excessive Trading of Members. Practices; 5350 Stop Orders;
6130 Transactions Related to
Initial Public Offerings.
General 9, Section 1(c)(1). Standards 2010. Standards of Commercial
of Commercial Honor and Principles of Honor and Principles of Trade
Trade. *.
General 9, Section 1(a). Prohibition 5320. Prohibition Against
Against Trading Ahead of Customer Trading Ahead of Customer
Orders. Orders.
General 9, Section 1(c)(2). Anti- 5240. Anti-Intimidation/
Intimidation/Coordination. Coordination.
General 9, Section 1(c)(3). Conduct 5290. Order Entry and Execution
Inconsistent with Just and Equitable Practices.
Principles of Trade.
General 9, Section 2(a). Customers' 2150(a). Improper Use of
Securities and Excessive Trading of Customers' Securities or
Members. Funds; Prohibition Against
Guarantees and Sharing in
Accounts.
General 9, Section 11. Best Execution 5310. Best Execution and
and Interpositioning. Interpositioning.
General 9, Section 19. Discretionary 3260. Discretionary Accounts.
Accounts.
General 9, Section 20. Supervision..... 3110. Supervision.
General 9, Section 30. Books and 4511. General Requirements.
Records.
General 9, Section 35. Nonregistered Rule 2040(c). Payments to
Foreign Finders. Unregistered Persons.
General 9, Section 39. Fidelity Bonds.. 4360. Fidelity Bonds.
General 9, Section 58. Advertisements, 2210. Communications with the
Market Letters, Research Reports and Public.
Sales Literature.
Options 6E, Section 1(a). Maintenance, 4511(a). General Requirements.
Retention and Furnishing of Books,
Records and Other Information .
Options 10, Section 7(g) and (h). 3120. Supervisory Control
Supervision of Accounts. System.
3130. Annual Certification of
Compliance and Supervisory
Processes.
Options 10, Section 10. Confirmations 2232. Customer Confirmations.
to Customers.
Options 10, Section 17. Profit Sharing. 2150(c). Improper Use of
Customers' Securities or
Funds; Prohibition Against
Guarantees and Sharing in
Accounts.
------------------------------------------------------------------------
\1\ FINRA shall only have Regulatory Responsibilities regarding General
4, Section 1, 1220 to the extent that PHLX recognizes the same
categories of limited principal and representative registration.
\2\ FINRA Rule 1240.01 allows for other persons to make their election
to participate in the continuing education program under Rule 1240(c)
either (1) between January 31, 2022, and March 15, 2022; or (2)
between March 15, 2023, and December 31, 2023. In contrast,
Supplementary Material .02 of Nasdaq PHLX General 4, Section 1, 1240
allows for other persons to make their election to participate in the
continuing education program under PHLX General 4, Section 1, 1240(c)
either (1) by March 15, 2022, or (2) between July 6, 2023, and
December 31, 2023. Therefore, FINRA shall not have Regulatory
Responsibilities regarding elections made by other persons under
General 4, Section 1, 1240(c) between March 15, 2023, and July 5,
2023.
* FINRA shall not have any Regulatory Responsibilities for these rules
as they pertain to violations of insider trading activities, which is
covered by a separate 17d-2 Agreement by and among Cboe BZX Exchange,
Inc., Cboe BYX Exchange, Inc., NYSE Chicago, Inc., Cboe EDGA Exchange
Inc., Cboe EDGX Exchange Inc., Financial Industry Regulatory
Authority, Inc., MEMX, LLC, MIAX PEARL, LLC, Nasdaq BX, Inc., Nasdaq
PHLX LLC, The Nasdaq Stock Market LLC, NYSE National, Inc., New York
Stock Exchange, LLC, NYSE American LLC, NYSE Arca Inc., Investors'
Exchange LLC, and the Long-Term Stock Exchange, Inc. as approved by
the SEC on September 23, 2020.
In addition, the following provisions shall be part of this 17d-
2 Agreement:
The following provisions are covered by the Agreement between
the Parties:
SEC '34 Act Section 28(e) Effect on Existing Law
SEC '34 Act Rule 10b-10 Confirmation of Transactions
SEC '34 Act Rule 203 of Regulation SHO Borrowing and
Delivery Requirements
SEC '34 Act Rule 606 of Regulation NMS Disclosure of Order
Routing Information
SEC '34 Act Rule 607 of Regulation NMS Customer Account
Statements
SEA Rule 14e-4--Prohibited Transactions in Connection with
Partial Tender Offers[supcaret]
[supcaret] FINRA shall perform surveillance, investigation, and
Enforcement Responsibilities for SEA Rule 14e-4(a)(1)(ii)(D).
III. Date of Effectiveness of the Proposed Plan and Timing for
Commission Action
Pursuant to section 17(d)(1) of the Act \14\ and Rule 17d-2
thereunder,\15\ after December 22, 2023, the Commission may, by written
notice, declare the plan submitted by PHLX and FINRA, File No. 4-818,
to be effective if the Commission finds that the plan is necessary or
appropriate in the public interest and for the protection of investors,
to foster cooperation and coordination among self-regulatory
organizations, or to remove impediments to and foster the development
of the national market system and a national system for the clearance
and settlement of securities transactions and in conformity with the
factors set forth in section 17(d) of the Act.
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\14\ 15 U.S.C. 78q(d)(1).
\15\ 17 CFR 240.17d-2.
---------------------------------------------------------------------------
IV. Solicitation of Comments
In order to assist the Commission in determining whether to approve
the proposed 17d-2 Plan and to relieve
[[Page 85343]]
PHLX of the responsibilities which would be assigned to FINRA,
interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/other.shtml); or
Send an email to [email protected]. Please include
File Number 4-818 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, Station Place, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to File Number 4-818. 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/other.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the plan also will be available for inspection and
copying at the principal offices of PHLX and FINRA. 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 No. 4-818 and should be submitted on or before
December 22, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-26800 Filed 12-6-23; 8:45 am]
BILLING CODE 8011-01-P
