Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing and Order Approving and Declaring Effective an Amendment to the Plan for the Allocation of Regulatory Responsibilities 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, MIAX Sapphire, and MEMX LLC Concerning Options-Related Market Surveillance, 64497-64504 [2024-17387]
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Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices
235–9141. All three may be reached by
mail at 2300 Clarendon Boulevard, Suite
1300, Arlington, VA 22201–3367; or by
fax at 703–235–4495.
Dated: August 1, 2024.
Neysa M. Slater-Chandler,
Director of Administration, U.S. Nuclear
Waste Technical Review Board.
[FR Doc. 2024–17383 Filed 8–6–24; 8:45 am]
BILLING CODE 6820–AM–P
POSTAL REGULATORY COMMISSION
[Docket Nos. CP2021–43; MC2024–459 and
CP2024–466; MC2024–468 and CP2024–475;
MC2024–469 and CP2024–476; MC2024–470
and CP2024–477]
New Postal Products
Postal Regulatory Commission.
Notice.
AGENCY:
ACTION:
The Commission is noticing a
recent Postal Service filing for the
Commission’s consideration concerning
a negotiated service agreement. This
notice informs the public of the filing,
invites public comment, and takes other
administrative steps.
DATES: Comments are due: August 9,
2024.
SUMMARY:
Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Docketed Proceeding(s)
khammond on DSKJM1Z7X2PROD with NOTICES
I. Introduction
The Commission gives notice that the
Postal Service filed request(s) for the
Commission to consider matters related
to negotiated service agreement(s). The
request(s) may propose the addition or
removal of a negotiated service
agreement from the Market Dominant or
the Competitive product list, or the
modification of an existing product
currently appearing on the Market
Dominant or the Competitive product
list.
Section II identifies the docket
number(s) associated with each Postal
Service request, the title of each Postal
Service request, the request’s acceptance
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date, and the authority cited by the
Postal Service for each request. For each
request, the Commission appoints an
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s website (https://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
with the requirements of 39 CFR
3011.301.1
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern Market Dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3030, and 39
CFR part 3040, subpart B. For request(s)
that the Postal Service states concern
Competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3035, and
39 CFR part 3040, subpart B. Comment
deadline(s) for each request appear in
section II.
64497
Authority: 39 U.S.C. 3642, 39 CFR
3040.130 through 3040.135, and 39 CFR
3035.105; Public Representative:
Kenneth R. Moeller; Comments Due:
August 9, 2024.
4. Docket No(s).: MC2024–469 and
CP2024–476; Filing Title: USPS Request
to Add Priority Mail Express, Priority
Mail & USPS Ground Advantage
Contract 191 to Competitive Product
List and Notice of Filing Materials
Under Seal; Filing Acceptance Date:
August 1, 2024; Filing Authority: 39
U.S.C. 3642, 39 CFR 3040.130 through
3040.135, and 39 CFR 3035.105; Public
Representative: Kenneth R. Moeller;
Comments Due: August 9, 2024.
5. Docket No(s).: MC2024–470 and
CP2024–477; Filing Title: USPS Request
to Add Priority Mail Express, Priority
Mail & USPS Ground Advantage
Contract 192 to Competitive Product
List and Notice of Filing Materials
Under Seal; Filing Acceptance Date:
August 1, 2024; Filing Authority: 39
U.S.C. 3642, 39 CFR 3040.130 through
3040.135, and 39 CFR 3035.105; Public
Representative: Arif Hafiz; Comments
Due: August 9, 2024.
This Notice will be published in the
Federal Register.
Jennie L. Jbara,
Primary Certifying Official.
[FR Doc. 2024–17476 Filed 8–6–24; 8:45 am]
BILLING CODE 7710–FW–P
II. Docketed Proceeding(s)
1. Docket No(s).: CP2021–43; Filing
Title: USPS Notice of Amendment to
Parcel Select Contract 44, Filed Under
Seal; Filing Acceptance Date: August 1,
2024; Filing Authority: 39 CFR
3035.105; Public Representative: Arif
Hafiz; Comments Due: August 9, 2024.
2. Docket No(s).: MC2024–459 and
CP2024–466; Filing Title: USPS Request
to Add Priority Mail Express
International, Priority Mail International
& First-Class Package International
Service Contract 41 to Competitive
Product List and Notice of Filing
Materials Under Seal; Filing Acceptance
Date: August 1, 2024; Filing Authority:
39 U.S.C. 3642, 39 CFR 3040.130
through 3040.135, and 39 CFR 3035.105;
Public Representative: Katalin K.
Clendenin; Comments Due: August 9,
2024.
3. Docket No(s).: MC2024–468 and
CP2024–475; Filing Title: USPS Request
to Add Parcel Select Contract 60 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: August 1, 2024; Filing
1 See Docket No. RM2018–3, Order Adopting
Final Rules Relating to Non-Public Information,
June 27, 2018, Attachment A at 19–22 (Order No.
4679).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100635; File No. 4–551]
Program for Allocation of Regulatory
Responsibilities Pursuant to Rule 17d–
2; Notice of Filing and Order
Approving and Declaring Effective an
Amendment to the Plan for the
Allocation of Regulatory
Responsibilities 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,
MIAX Sapphire, and MEMX LLC
Concerning Options-Related Market
Surveillance
August 1, 2024.
Notice is hereby given that the
Securities and Exchange Commission
(‘‘Commission’’) has issued an Order,
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Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices
pursuant to Section 17(d) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 approving and declaring
effective an amendment to the plan for
allocating regulatory responsibility
(‘‘Plan’’) filed on July 31, 2024, pursuant
to Rule 17d–2 of the Act,2 by NYSE
American LLC (‘‘NYSE American’’),
Cboe BZX Exchange, Inc., (‘‘BZX’’), the
Cboe EDGX Exchange, Inc. (‘‘EDGX’’),
Cboe C2 Exchange, Inc. (‘‘C2’’), Cboe
Exchange, Inc. (‘‘Cboe’’), Nasdaq ISE,
LLC (‘‘ISE’’), Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’),
NYSE Arca, Inc. (‘‘Arca’’), The
NASDAQ Stock Market LLC (‘‘Nasdaq’’),
BOX Exchange LLC (‘‘BOX’’), NASDAQ
BX, Inc. (‘‘BX’’), NASDAQ PHLX LLC
(‘‘PHLX’’), Miami International
Securities Exchange, LLC (‘‘MIAX’’),
Nasdaq GEMX, LLC (‘‘Gemini’’), Nasdaq
MRX, LLC (‘‘Mercury’’), MIAX PEARL,
LLC (‘‘MIAX PEARL’’), and MIAX
Emerald, LLC (MIAX Emerald), MIAX
Sapphire, LLC (‘‘MIAX Sapphire’’), and
MEMX LLC (‘‘MEMX’’) (collectively,
‘‘Participating Organizations’’ or
‘‘parties’’).
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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) 4 or Section 19(g)(2) 5 of the Act.
Without this relief, the statutory
obligation of each individual SRO could
result in a pattern of multiple
examinations of broker-dealers that
maintain memberships in more than one
SRO (‘‘common members’’). Such
regulatory duplication would add
unnecessary expenses for common
members and their SROs.
Section 17(d)(1) of the Act 6 was
intended, in part, to eliminate
unnecessary multiple examinations and
regulatory duplication.7 With respect to
a common member, Section 17(d)(1)
authorizes the Commission, by rule or
order, to relieve an SRO of the
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).
5 15 U.S.C. 78s(g)(2).
6 15 U.S.C. 78q(d)(1).
7 See Securities Act Amendments of 1975, Report
of the Senate Committee on Banking, Housing, and
Urban Affairs to Accompany S. 249, S. Rep. No. 94–
75, 94th Cong., 1st Session 32 (1975).
2 17
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responsibility to receive regulatory
reports, to examine for and enforce
compliance with applicable statutes,
rules, and regulations, or to perform
other specified regulatory functions.
To implement Section 17(d)(1), the
Commission adopted two rules: Rule
17d–1 and Rule 17d–2 under the Act.8
Rule 17d–1 authorizes the Commission
to name a single SRO as the designated
examining authority (‘‘DEA’’) to
examine common members for
compliance with the financial
responsibility requirements imposed by
the Act, or by Commission or SRO
rules.9 When an SRO has been named as
a common member’s DEA, all other
SROs to which the common member
belongs are relieved of the responsibility
to examine the firm for compliance with
the applicable financial responsibility
rules. On its face, Rule 17d–1 deals only
with an SRO’s obligations to enforce
member compliance with financial
responsibility requirements. Rule 17d–1
does not relieve an SRO from its
obligation to examine a common
member for compliance with its own
rules and provisions of the federal
securities laws governing matters other
than financial responsibility, including
sales practices and trading activities and
practices.
To address regulatory duplication in
these and other areas, the Commission
adopted Rule 17d–2 under the Act.10
Rule 17d–2 permits SROs to propose
joint plans for the allocation of
regulatory responsibilities with respect
to their common members. Under
paragraph (c) of Rule 17d–2, the
Commission may declare such a plan
effective if, after providing for notice
and comment, it determines that the
plan is necessary or appropriate in the
public interest and for the protection of
investors, to foster cooperation and
coordination among the SROs, to
remove impediments to, and foster the
development of, a national market
system and a national clearance and
settlement system, and is in conformity
with the factors set forth in Section
17(d) of the Act. Commission approval
of a plan filed pursuant to Rule 17d–2
relieves an SRO of those regulatory
responsibilities allocated by the plan to
another SRO.
II. The Plan
On December 11, 2007, the
Commission declared effective the
8 17 CFR 240.17d–1 and 17 CFR 240.17d–2,
respectively.
9 See Securities Exchange Act Release No. 12352
(April 20, 1976), 41 FR 18808 (May 7, 1976).
10 See Securities Exchange Act Release No. 12935
(October 28, 1976), 41 FR 49091 (November 8,
1976).
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Participating Organizations’ Plan for
allocating regulatory responsibilities
pursuant to Rule 17d–2.11 On April 11,
2008, the Commission approved an
amendment to the Plan to include
NASDAQ as a participant.12 On October
9, 2008, the Commission approved an
amendment to the Plan to clarify that
the term Regulatory Responsibility for
options position limits includes the
examination responsibilities for the
delta hedging exemption.13 On February
25, 2010, the Commission approved an
amendment to the Plan to add Bats and
C2 as SRO participants and to reflect the
name changes of the American Stock
Exchange LLC to the NYSE Amex LLC,
and the Boston Stock Exchange, Inc. to
the NASDAQ OMX BX, Inc.14 On May
11, 2012, the Commission approved an
amendment to the Plan to add BOX as
a participant to the Plan.15 On December
5, 2012, the Commission approved an
amendment to the Plan to add MIAX as
a participant to the Plan.16 On July 26,
2013, the Commission approved an
amendment to the Plan to add Topaz
Exchange, LLC as a Participant to the
Plan.17 On October 29, 2015, the
Commission approved an amendment to
add EDGX as a Participant to the Plan
and to change the name of Topaz
Exchange, LLC to ISE Gemini, LLC.18
On February 16, 2016, the Commission
approved an amendment to add ISE
Mercury, LLC as a Participant to the
Plan.19 On February 2, 2017, the
Commission approved an amendment to
add MIAX PEARL as a Participant to the
Plan.20 On February 11, 2019, the
Commission approved an amendment to
add MIAX Emerald as a Participant to
11 See Securities Exchange Act Release No. 56941
(December 11, 2007), 72 FR 71723 (December 18,
2007) (File No. 4–551).
12 See Securities Exchange Act Release No. 57649
(April 11, 2008), 73 FR 20976 (April 17, 2008) (File
No. 4–551).
13 See Securities Exchange Act Release No. 58765
(October 9, 2008), 73 FR 62344 (October 20, 2008)
(File No. 4–551).
14 See Securities Exchange Act Release No. 61588
(February 25, 2010), 75 FR 9970 (March 4, 2010)
(File No. 4–551).
15 See Securities Exchange Act Release No. 66975
(May 11, 2012), 77 FR 29712 (May 18, 2010) (File
No. 4–551).
16 See Securities Exchange Act Release No. 68362
(December 5, 2012), 77 FR 73719 (December 11,
2012) (File No. 4–551).
17 See Securities Exchange Act Release No. 70052
(July 26, 2013), 78 FR 46665 (August 1, 2013) (File
No. 4–551).
18 See Securities Exchange Act Release No. 76310
(October 29, 2015), 80 FR 68354 (November 4, 2015)
(File No. 4–551).
19 See Securities Exchange Act Release No. 77149
(February 16, 2016), 81 FR 8781 (February 22, 2016)
(File No. 4–551).
20 See Securities Exchange Act Release No. 79930
(February 2, 2017), 82 FR 9807 (February 8, 2017)
(File No. 4–551).
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Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices
the Plan.21 On November 23, 2022, the
Commission approved a proposed
amendment to the Plan to add MEMX as
a Participant to the Plan, to reflect name
changes of certain Participating
Organizations, and update rule
references.22
The Plan is designed to reduce
regulatory duplication for common
members by allocating regulatory
responsibility for certain options-related
market surveillance matters among the
Participating Organizations. Generally,
under the Plan, a Participating
Organization will serve as the
Designated Options Surveillance
Regulator (‘‘DOSR’’) for each common
member assigned to it and will assume
regulatory responsibility with respect to
that common member’s compliance
with applicable common rules for
certain accounts. When an SRO has
been named as a common member’s
DOSR, all other SROs to which the
common member belongs will be
relieved of regulatory responsibility for
that common member, pursuant to the
terms of the Plan, with respect to the
applicable common rules specified in
Exhibit A to the Plan.
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III. Proposed Amendment to the Plan
On July 31, 2024, the parties
submitted a proposed amendment to the
Plan. The primary purpose of the
amendment is to add MIAX Sapphire as
a Participant to the Plan. The text of the
proposed amended 17d–2 plan is as
follows (additions are italicized;
deletions are [bracketed]):
*
*
*
*
*
AGREEMENT BY AND AMONG NYSE
AMERICAN LLC, CBOE BZX
EXCHANGE, INC., CBOE EDGX
EXCHANGE INC., BOX EXCHANGE
LLC, NASDAQ BX, INC., CBOE C2
EXCHANGE, INC., CBOE EXCHANGE,
INC., NASDAQ ISE, LLC, NASDAQ
GEMX, LLC, NASDAQ MRX, LLC,
FINANCIAL INDUSTRY REGULATORY
AUTHORITY, INC., NYSE ARCA, INC.,
THE NASDAQ STOCK MARKET LLC,
NASDAQ PHLX LLC, MIAMI
INTERNATIONAL SECURITIES
EXCHANGE, LLC, MIAX PEARL, LLC,
MIAX EMERALD, LLC, MIAX
SAPPHIRE, LLC, AND MEMX LLC
PURSUANT TO RULE 17d–2 UNDER
THE SECURITIES EXCHANGE ACT OF
1934
This agreement (this ‘‘Agreement’’),
by and among NYSE American LLC
21 See Securities Exchange Act Release No. 85097
(February 11, 2019), 84 FR 4871 (February 19, 2019)
(File No. 4–551).
22 See Securities Exchange Act Release No. 96383
(November 23, 2022), 87 FR 73569 (November 30,
2022) (File No. 4–551).
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(‘‘NYSE American’’), Cboe BZX
Exchange, Inc., (‘‘BZX’’), the Cboe EDGX
Exchange, Inc. (‘‘EDGX’’), Cboe C2
Exchange, Inc. (‘‘C2’’), Cboe Exchange,
Inc. (‘‘Cboe’’), Nasdaq ISE, LLC (‘‘ISE’’),
Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’), NYSE Arca,
Inc. (‘‘Arca’’), The Nasdaq Stock Market
LLC (‘‘Nasdaq’’), BOX Exchange LLC
(‘‘BOX’’), Nasdaq BX, Inc. (‘‘BX’’),
Nasdaq PHLX LLC (‘‘PHLX’’), Miami
International Securities Exchange, LLC
(‘‘MIAX’’), Nasdaq GEMX, LLC
(‘‘GEMX’’), Nasdaq MRX, LLC (‘‘MRX’’),
MIAX PEARL, LLC (‘‘MIAX PEARL’’),
MIAX Emerald, LLC (‘‘MIAX Emerald’’),
MIAX Sapphire, LLC (‘‘MIAX
Sapphire’’), and MEMX LLC (‘‘MEMX’’),
is made the 10th day of October 2007,
and as amended the 31st day of March
2008, the 1st day of October 2008, the
3rd day of February 2010, the 25th day
of April 2012, the 19th day of November
2012, the 30th day of May 2013, the
16th day of October 2015, the 29th day
of January 2016, the 23rd day of January
2017, the 8th day of January 2019, [and]
the 18th[th] day of October 2022, and
the 19th day of July 2024, pursuant to
Section 17(d) of the Securities Exchange
Act of 1934, as amended (the ‘‘Exchange
Act’’), and Rule 17d–2 thereunder
(‘‘Rule 17d–2’’), which allows for a joint
plan among self-regulatory
organizations (‘‘SROs’’) to allocate
regulatory obligations with respect to
brokers or dealers that are members of
two or more of the parties to this
Agreement (‘‘Common Members’’).
NYSE American, BZX, C2, Cboe, EDGX,
Gemini, ISE, Mercury, FINRA, Arca,
Nasdaq, BOX, BX, PHLX, MIAX, MIAX
PEARL, MIAX Emerald, MIAX
Sapphire, and MEMX, are collectively
referred to herein as the ‘‘Participants’’
and individually, each a ‘‘Participant.’’
This Agreement shall be administered
by a committee known as the Options
Surveillance Group (the ‘‘OSG’’ or
‘‘Group’’), as described in Section V
hereof. Unless defined in this
Agreement or the context otherwise
requires, the terms used herein shall
have the meanings assigned thereto by
the Exchange Act and the rules and
regulations thereunder.
Whereas, the Participants desire to
eliminate regulatory duplication with
respect to SRO market surveillance of
Common Member 1 activities with
regard to certain common rules relating
to listed options (‘‘Options’’); and
Whereas, for this purpose, the
Participants desire to execute and file
1 In the case of the BX and BOX, members are
those persons who are Options Participants (as
defined in the BOX Exchange LLC Rules and
NASDAQ BX, Inc. Rules).
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64499
this Agreement with the Securities and
Exchange Commission (the ‘‘SEC’’ or
‘‘Commission’’) pursuant to Rule 17d–2.
Now, therefore, in consideration of
the mutual covenants contained in this
Agreement, the Participants agree as
follows:
I. Except as otherwise provided in this
Agreement, each Participant shall
assume Regulatory Responsibility (as
defined below) for the Common
Members that are allocated or assigned
to such Participant in accordance with
the terms of this Agreement and shall be
relieved of its Regulatory Responsibility
as to the remaining Common Members.
For purposes of this Agreement, a
Participant shall be considered to be the
Designated Options Surveillance
Regulator (‘‘DOSR’’) for each Common
Member that is allocated to it in
accordance with Section VII.
II. As used in this Agreement, the
term ‘‘Regulatory Responsibility’’ shall
mean surveillance, investigation and
enforcement responsibilities relating to
compliance by the Common Members
with such Options rules of the
Participants as the Participants shall
determine are substantially similar and
shall approve from time to time, insofar
as such rules relate to market
surveillance (collectively, the ‘‘Common
Rules’’). For the purposes of this
Agreement the list of Common Rules is
attached as Exhibit A hereto, which may
only be amended upon unanimous
written agreement by the Participants.
The DOSR assigned to each Common
Member shall assume Regulatory
Responsibility with regard to that
Common Member’s compliance with the
applicable Common Rules for certain
accounts.2 A DOSR may perform its
Regulatory Responsibility or enter an
agreement to transfer or assign such
responsibilities to a national securities
exchange registered with the SEC under
Section 6(a) of the Exchange Act or a
national securities association registered
with the SEC under Section 15A of the
Exchange Act. A DOSR may not transfer
or assign its Regulatory Responsibility
to an association registered for the
limited purpose of regulating the
activities of members who are registered
as brokers or dealers in security futures
products.
The term ‘‘Regulatory Responsibility’’
does not include, and each Participant
shall retain full responsibility with
respect to:
2 Certain accounts shall include customer (‘‘C’’ as
classified by the Options Clearing Corporation
(‘‘OCC’’)) and firm (‘‘F’’ as classified by OCC)
accounts, as well as other accounts, such as market
maker accounts as the Participants shall, from time
to time, identify as appropriate to review.
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Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices
(a) surveillance, investigative and
enforcement responsibilities other than
those included in the definition of
Regulatory Responsibility;
(b) any aspects of the rules of a
Participant that are not substantially
similar to the Common Rules or that are
allocated for a separate surveillance
purpose under any other agreement
made pursuant to Rule 17d–2. Any such
aspects of a Common Rule will be noted
as excluded on Exhibit A.
With respect to options position
limits, the term Regulatory
Responsibility shall include
examination responsibilities for the
delta hedging exemption. Specifically,
the Participants intend that FINRA will
conduct examinations for delta hedging
for all Common Members that are
members of FINRA notwithstanding the
fact that FINRA’s position limit rule is,
in some cases, limited to only firms that
are not members of an options exchange
(i.e., access members). In such cases,
FINRA’s examinations for delta hedging
options position limit violations will be
for the identical or substantively similar
position limit rule(s) of the other
Participant(s). Examinations for delta
hedging for Common Members that are
non-FINRA members will be conducted
by the same Participant conducting
position limit surveillance. The
allocation of Common Members to
DOSRs for surveillance of compliance
with options position limits and other
agreed to Common Rules is provided in
Exhibit B. The allocation of Common
Members to DOSRs for examinations of
the delta hedging exemption under the
options position limits rules is provided
in Exhibit C.
III. Each year within 30 days of the
anniversary date of the commencement
of operation of this Agreement, or more
frequently if required by changes in the
rules of a Participant, each Participant
shall submit to the other Participants,
through the Chair of the OSG, an
updated list of Common Rules for
review. This updated list may add
Common Rules to Exhibit A, shall delete
from Exhibit A rules of that Participant
that are no longer identical or
substantially similar to the Common
Rules, and shall confirm that the
remaining rules of the Participant
included on Exhibit A continue to be
identically or substantially similar to
the Common Rules. Within 30 days
from the date that each Participant has
received revisions to Exhibit A from the
Chair of the OSG, each Participant shall
confirm in writing to the Chair of the
OSG whether that Participant’s rules
listed in Exhibit A are Common Rules.
IV. Apparent violation of another
Participant’s rules discovered by a
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17:07 Aug 06, 2024
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DOSR, but which rules are not within
the scope of the discovering DOSR’s
Regulatory Responsibility, shall be
referred to the relevant Participant for
such action as is deemed appropriate by
that Participant.
Notwithstanding the foregoing,
nothing contained herein shall preclude
a DOSR in its discretion from requesting
that another Participant conduct an
investigative or enforcement proceeding
(‘‘Proceeding’’) on a matter for which
the requesting DOSR has Regulatory
Responsibility. If such other Participant
agrees, the Regulatory Responsibility in
such case shall be deemed transferred to
the accepting Participant and confirmed
in writing by the Participants involved.
Additionally, nothing in this Agreement
shall prevent another Participant on
whose market potential violative
activity took place from conducting its
own Proceeding on a matter. The
Participant conducting the Proceeding
shall advise the assigned DOSR. Each
Participant agrees, upon request, to
make available promptly all relevant
files, records and/or witnesses necessary
to assist another Participant in a
Proceeding.
V. The OSG shall be composed of one
representative designated by each of the
Participants (a ‘‘Representative’’). Each
Participant shall also designate one or
more persons as its alternate
representative(s) (an ‘‘Alternate
Representative’’). In the absence of the
Representative, the Alternate
Representative shall assume the powers,
duties and responsibilities of the
Representative. Each Participant may at
any time replace its Representative and/
or its Alternate Representative to the
Group.3 A majority of the OSG shall
constitute a quorum and, unless
otherwise required, the affirmative vote
of a majority of the Representatives
present (in person, by telephone or by
written consent) shall be necessary to
constitute action by the Group.
The Group will have a Chair, Vice
Chair and Secretary. A different
Participant will assume each position
on a rotating basis for a one-year term.
In the event that a Participant replaces
a Representative who is acting as Chair,
Vice Chair or Secretary, the newly
appointed Representative shall assume
the position of Chair, Vice Chair, or
Secretary (as applicable) vacated by the
Participant’s former Representative. In
the event a Participant cannot fulfill its
duties as Chair, the Participant serving
as Vice Chair shall substitute for the
Chair and complete the subject
unfulfilled term. All notices and other
3 A Participant must give notice to the Chair of
the Group of such a change.
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
communications for the OSG are to be
sent in care of the Chair and, as
appropriate, to each Representative.
VI. The OSG shall determine the
times and locations of Group meetings,
provided that the Chair, acting alone,
may also call a meeting of the Group in
the event the Chair determines that
there is good cause to do so. To the
extent reasonably possible, notice of any
meeting shall be given at least ten
business days prior to the meeting date.
Representatives shall always be given
the option of participating in any
meeting telephonically at their own
expense rather than in person.
VII. No less frequently than every two
years, in such manner as the Group
deems appropriate, the OSG shall
allocate Common Members that conduct
an Options business among the
Participants (‘‘Allocation’’), and the
Participant to which a Common Member
is allocated will serve as the DOSR for
that Common Member. Any Allocation
shall be based on the following
principles, except to the extent all
affected Participants consent to one or
more different principles:
(a) The OSG may not allocate a
Common Member to a Participant
unless the Common Member is a
member of that Participant.
(b) To the extent practicable, Common
Members that conduct an Options
business shall be allocated among the
Participants of which they are members
in such manner as to equalize as nearly
as possible the allocation among such
Participants, provided that no Common
Members shall be allocated to FINRA.
For example, if sixteen Common
Members that conduct an Options
business are members only of three
Participants, none of which is FINRA,
those Common Members shall be
allocated among the three Participants
such that no Participant is allocated
more than six such members and no
Participant is allocated less than five
such members. If, in the previous
example, one of the three Participants is
FINRA, the sixteen Common Members
would be allocated evenly between the
remaining Participants, so that the two
non-FINRA Participants would be
allocated eight Common Members each.
(c) To the extent practicable,
Allocation shall take into account the
amount of Options activity conducted
by each Common Member in order to
most evenly divide the Common
Members with the largest amount of
activity among the Participants of which
they are members. Allocation will also
take into account similar allocations
pursuant to other plans or agreements to
which the Common Members are party
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to maintain consistency in oversight of
the Common Members.4
(d) To the extent practicable,
Allocation of Common Members to
Participants will be rotated among the
applicable Participants such that a
Common Member shall not be allocated
to a Participant to which that Common
Member was allocated within the
previous two years. The assignment of
DOSRs pursuant to the Allocation is
attached as Exhibit B hereto, and will be
updated from time to time to reflect
Common Member Allocation changes.
(e) The Group may reallocate
Common Members from time-to-time, as
it deems appropriate.
(f) Whenever a Common Member
ceases to be a member of its DOSR, the
DOSR shall promptly inform the Group,
which shall review the matter and
allocate the Common Member to
another Participant.
(g) A DOSR may request that a
Common Member to which it is
assigned be reallocated to another
Participant by giving 30 days written
notice to the Chair of the OSG. The
Group, in its discretion, may approve
such request and reallocate the Common
Member to another Participant.
(h) All determinations by the Group
with respect to Allocation shall be made
by the affirmative vote of a majority of
the Participants that, at the time of such
determination, share the applicable
Common Member being allocated; a
Participant shall not be entitled to vote
on any Allocation relating to a Common
Member unless the Common Member is
a member of such Participant.
VIII. Each DOSR shall conduct routine
surveillance reviews to detect violations
of the applicable Common Rules by
each Common Member allocated to it
with a frequency (daily, weekly,
monthly, quarterly, semi-annually or
annually as noted on Exhibit A) not less
than that determined by the Group. The
other Participants agree that, upon
request, relevant information in their
respective files relative to a Common
Member will be made available to the
applicable DOSR. In addition, each
Participant shall provide, to the extent
not otherwise already provided,
information pertaining to its
surveillance program that would be
relevant to FINRA or the Participant(s)
conducting routine examinations for the
delta hedging exemption.
At each meeting of the OSG, each
Participant shall be prepared to report
on the status of its surveillance program
4 For example, if one Participant was allocated a
Common Member by another regulatory group that
Participant would be assigned to be the DOSR of
that Common Member, unless there is good cause
not to make that assignment.
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17:07 Aug 06, 2024
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for the previous quarter and any period
prior thereto that has not previously
been reported to the Group. In the event
a DOSR believes it will not be able to
complete its Regulatory Responsibility
for its allocated Common Members, it
will so advise the Group in writing
promptly. The Group will undertake to
remedy this situation by reallocating the
subject Common Members among the
remaining Participants. In such
instance, the Group may determine to
impose a regulatory fee for services
provided to the DOSR that was unable
to fulfill its Regulatory Responsibility.
IX. Each Participant will, upon
request, promptly furnish a copy of the
report or applicable portions thereof
relating to any investigation made
pursuant to the provisions of this
Agreement to each other Participant of
which the Common Member under
investigation is a member.
X. Each Participant will routinely
populate a common database, to be
accessed by the Group relating to any
formal regulatory action taken during
the course of a Proceeding with respect
to the Common Rules concerning a
Common Member.
XI. Any written notice required or
permitted to be given under this
Agreement shall be deemed given if sent
by certified mail, return receipt
requested, to any Participant to the
attention of that Participant’s
Representative, to the Participant’s
principal place of business or by email
at such address as the Representative
shall have filed in writing with the
Chair.
XII. The costs incurred by each
Participant in discharging its Regulatory
Responsibility under this Agreement are
not reimbursable. However, any of the
Participants may agree that one or more
will compensate the other(s) for costs
incurred.
XIII. The Participants shall notify the
Common Members of this Agreement by
means of a uniform joint notice
approved by the Group. Each
Participant will notify the Common
Members that have been allocated to it
that such Participant will serve as DOSR
for that Common Member.
XIV. This Agreement shall be effective
upon approval of the Commission. This
Agreement may only be amended in
writing duly approved by each
Participant. All amendments to this
Agreement, excluding changes to
Exhibits A, B and C, must be filed with
and approved by the Commission.
XV. Any Participant may manifest its
intention to cancel its participation in
this Agreement at any time upon
providing written notice to (i) the Group
six months prior to the date of such
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
64501
cancellation, or such other period as all
the Participants may agree, and (ii) the
Commission. Upon receipt of the notice
the Group shall allocate, in accordance
with the provisions of this Agreement,
those Common Members for which the
canceling Participant was the DOSR.
The canceling Participant shall retain its
Regulatory Responsibility and other
rights, privileges and duties pursuant to
this Agreement until the Group has
completed the reallocation as described
above, and the Commission has
approved the cancellation.
XVI. The cancellation of its
participation in this Agreement by any
Participant shall not terminate this
Agreement as to the remaining
Participants. This Agreement will only
terminate following notice to the
Commission, in writing, by the then
Participants that they intend to
terminate the Agreement and the
expiration of the applicable notice
period. Such notice shall be given at
least six months prior to the intended
date of termination, or such other period
as all the Participants may agree. Such
termination will become effective upon
Commission approval.
XVII. Participation in the Group shall
be strictly limited to the Participants
and no other party shall have any right
to attend or otherwise participate in the
Group except with the unanimous
approval of all Participants.
Notwithstanding the foregoing, any
national securities exchange registered
with the SEC under Section 6(a) of the
Act or any national securities
association registered with the SEC
under section 15A of the Act may
become a Participant to this Agreement
provided that: (i) such applicant has
adopted rules substantially similar to
the Common Rules, and received
approval thereof from the SEC; (ii) such
applicant has provided each Participant
with a signed statement whereby the
applicant agrees to be bound by the
terms of this Agreement to the same
effect as though it had originally signed
this Agreement and (iii) an amended
agreement reflecting the addition of
such applicant as a Participant has been
filed with and approved by the
Commission.
XVIII. This Agreement is wholly
separate from the multiparty Agreement
made pursuant to Rule 17d–2 by and
among [the NYSE American LLC,] the
Cboe BZX Exchange, Inc., BOX
Exchange LLC, [the C2 Exchange, Inc.,
the] Cboe Exchange, Inc., Cboe C2
Exchange, Inc., [the] Nasdaq ISE, LLC,
Financial Industry Regulatory
Authority, Inc., Miami International
Securities Exchange, LLC, NYSE
American LLC, NYSE Arca, Inc., The
E:\FR\FM\07AUN1.SGM
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Nasdaq Stock Market LLC, Nasdaq BX,
Inc., Nasdaq PHLX LLC, [the New York
Stock Exchange, LLC, the NYSE Arca,
Inc., the Nasdaq BX, Inc., the Nasdaq
PHLX LLC, Miami International
Securities Exchange, LLC,] Nasdaq
GEMX, LLC, [Nasdaq MRX, LLC,] Cboe
EDGX Exchange, Inc., Nasdaq MRX,
LLC, MIAX PEARL, LLC, [and] MIAX
Emerald, LLC, and MEMX LLC
involving the allocation of regulatory
responsibilities with respect to common
members for compliance with common
rules relating to the conduct by brokerdealers of accounts for listed options or
index warrants approved by the SEC on
[February 12, 2019] October 18, 2022,
and as may be amended from time to
time.
Limitation of Liability
No Participant nor the Group nor any
of their respective directors, governors,
officers, employees or representatives
shall be liable to any other Participant
in 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
Responsibility as provided hereby or for
the failure to provide any such
Regulatory Responsibility, except with
respect to such liability, loss or damages
as shall have been suffered by one or
more of the Participants and caused by
the willful misconduct of one or more
of the other Participants or its respective
directors, governors, officers, employees
or representatives. No warranties,
express or implied, are made by the
Participants, individually or as a group,
or by the OSG with respect to any
Regulatory Responsibility to be
performed hereunder.
Relief From Responsibility
Pursuant to Section 17(d)(1)(A) of the
Exchange Act and Rule 17d–2, the
Participants join in requesting the
Commission, upon its approval of this
Agreement or any part thereof, to relieve
the Participants that are party to this
Agreement and are not the DOSR as to
a Common Member of any and all
Regulatory Responsibility with respect
to the matters allocated to the DOSR.
*
*
*
*
*
This Agreement may be executed in
any number of counterparts, each of
which shall be deemed to be an original,
but all such counterparts shall together
constitute one and the same Agreement.
In Witness Whereof, the Participants
hereto have executed this Agreement as
of the date and year first above written.
EXHIBIT A
Options Surveillance Group 17d–2
Agreement COMMON RULES as of
[October 18, 2022] July 19, 2024
VIOLATION I: EXPIRING EXERCISE DECLARATIONS (EED)—FOR LISTED AND FLEX EQUITY OPTIONS
SRO
Description of rule
BZX .............................
BOX ............................
C2 ...............................
Cboe ...........................
EDGX ..........................
FINRA .........................
ISE ..............................
GEMX .........................
MRX ............................
MIAX ...........................
MIAX PEARL ..............
MIAX Emerald .............
MIAX Sapphire ............
MEMX .........................
Nasdaq ........................
Nasdaq BX ..................
Nasdaq PHLX .............
NYSE Arca ..................
NYSE American ..........
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
Exercise
of
of
of
of
of
of
of
of
of
of
of
of
of
of
of
of
of
of
of
Exchange rule No.
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Options Contracts ..................................
Equity Options Contracts ......................
Options Contracts ..................................
Options Contracts ..................................
Rule 23.1 .........................................................................................
Rule 9000 ........................................................................................
Ch. 6, Sec. B ...................................................................................
Rule 6.20(a)–(d), I&P .01–.07 .........................................................
Rule 23.1 .........................................................................................
Rule 2360(b)(23) ..............................................................................
Options 6B, Section 1 ......................................................................
Options 6B, Section 1 ......................................................................
Options 6B, Section 1 ......................................................................
Rule 700 ..........................................................................................
Rule 700 ..........................................................................................
Rule 700 ..........................................................................................
Rule 700 ..........................................................................................
Rule 23.1 .........................................................................................
Options 6B, Section 1 ......................................................................
Options 6B, Section 1 ......................................................................
Options 6B, Section 1 ......................................................................
Rule 6.24–O .....................................................................................
Rule 980 ..........................................................................................
Frequency of review
At
At
At
At
At
At
At
At
At
At
At
At
At
At
At
At
At
At
At
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
Expiration.
VIOLATION II: POSITION LIMITS (PL)—FOR LISTED EQUITY OPTIONS
SRO
Description of rule
(for review as they apply to PL)
Exchange rule No.
BZX .............................
Position Limits ..........................................................
Exemptions from Position .........................................
Liquidation Positions .................................................
Position Limits ..........................................................
Exemptions from Position Limits ..............................
Liquidation Positions .................................................
Position Limits ..........................................................
Liquidation of Positions ............................................
Position Limits ..........................................................
Liquidation of Positions ............................................
Position Limits ..........................................................
Exemptions from Position .........................................
Liquidation Positions .................................................
Position Limits ..........................................................
Liquidation of Positions and Restrictions on Access
Position Limits ..........................................................
Exemptions from Position Limits ..............................
Liquidating Positions .................................................
Position Limits ..........................................................
Exemptions from Position Limits ..............................
Liquidating Positions .................................................
Position Limits ..........................................................
Exemptions from Position Limits ..............................
Rule 18.7 .........................................................................................
Rule 18.8 .........................................................................................
Rule 18.11 .......................................................................................
Rule 3120 ........................................................................................
Rule 3130 ........................................................................................
Rule 3160 ........................................................................................
Ch. 8 ................................................................................................
Ch. 8 ................................................................................................
Rule 8.30 .........................................................................................
Rule 8.44 .........................................................................................
Rule 18.7 .........................................................................................
Rule 18.8 .........................................................................................
Rule 18.11 .......................................................................................
Rule 2360(b)(3) ................................................................................
Rule 2360(b)(6) ................................................................................
ISE Options 9, Section 13 ...............................................................
ISE Options 9, Section 14 ...............................................................
ISE Options 9, Section 17 ...............................................................
GEMX Options 9, Section 13 ..........................................................
GEMX Options 9, Section 14 ..........................................................
GEMX Options 9, Section 17 ..........................................................
MRX Options 9, Section 13 .............................................................
MRX Options 9, Section 14 .............................................................
BOX ............................
C2 ...............................
Cboe ...........................
khammond on DSKJM1Z7X2PROD with NOTICES
EDGX ..........................
FINRA .........................
ISE ..............................
GEMX .........................
MRX ............................
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Frequency of
review
Daily.
As Needed.
As Needed.
Daily.
As Needed.
As Needed.
Daily.
As Needed.
Daily.
As Needed.
Daily.
As Needed.
As Needed.
Daily.
As Needed.
Daily.
As Needed.
As Needed.
Daily.
As Needed.
As Needed.
Daily.
As Needed.
64503
Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices
VIOLATION II: POSITION LIMITS (PL)—FOR LISTED EQUITY OPTIONS—Continued
Description of rule
(for review as they apply to PL)
Exchange rule No.
Liquidating Positions .................................................
Position Limits ..........................................................
Exemptions from Position Limits ..............................
Liquidating Positions .................................................
Position Limits ..........................................................
Exemptions from Position Limits ..............................
Liquidating Positions .................................................
Position Limits ..........................................................
Exemptions from Position Limits ..............................
Liquidating Positions .................................................
Position Limits ..........................................................
Exemptions from Position Limits ..............................
Liquidating Positions .................................................
Position Limits ..........................................................
Exemptions from Position .........................................
Liquidation Positions .................................................
Position Limits ..........................................................
Exemptions from Position Limits ..............................
Liquidation Positions .................................................
Position Limits ..........................................................
Exemptions from Position Limits ..............................
Liquidation Positions .................................................
Position Limits ..........................................................
Liquidation of Position ..............................................
Position Limits ..........................................................
Liquidation of Position ..............................................
Position Limits ..........................................................
Liquidating Positions .................................................
MRX Options 9, Section 17 .............................................................
Rule 307 ..........................................................................................
Rule 308 ..........................................................................................
Rule 311 ..........................................................................................
Rule 307 ..........................................................................................
Rule 308 ..........................................................................................
Rule 311 ..........................................................................................
Rule 307 ..........................................................................................
Rule 308 ..........................................................................................
Rule 311 ..........................................................................................
Rule 307 ..........................................................................................
Rule 308 ..........................................................................................
Rule 311 ..........................................................................................
Rule 18.7 .........................................................................................
Rule 18.8 .........................................................................................
Rule 18.11 .......................................................................................
NOM Options 9, Section 13 ............................................................
NOM Options 9, Section 14 ............................................................
NOM Options 9, Section 17 ............................................................
BX Options 9, Section 13 ................................................................
BX Options 9, Section 14 ................................................................
BX Options 9, Section 17 ................................................................
PHLX Options 9, Section 13 ...........................................................
PHLX Options 9, Section 17 ...........................................................
Rule 6.8–O .......................................................................................
Rule 6.7–O .......................................................................................
Rule 904 ..........................................................................................
Rule 907 ..........................................................................................
SRO
MIAX ...........................
MIAX Pearl ..................
MIAX Emerald .............
MIAX Sapphire ............
MEMX .........................
Nasdaq ........................
Nasdaq BX ..................
Nasdaq PHLX .............
NYSE Arca ..................
NYSE American ..........
Frequency of
review
As Needed.
Daily.
As Needed.
As Needed.
Daily.
As Needed.
As Needed.
Daily.
As Needed.
As Needed.
Daily.
As Needed.
As Needed.
Daily.
As Needed.
As Needed.
Daily.
As Needed.
As Needed.
Daily.
As Needed.
As Needed.
Daily.
As Needed.
Daily.
As Needed.
Daily.
As Needed.
VIOLATION III: LARGE OPTIONS POSITION REPORT (LOPR)—FOR LISTED AND FLEX EQUITY OPTIONS AND ETF OPTIONS
Description of rule
(for review as they apply to LOPR)
SRO
BZX .............................
BOX ............................
C2 ...............................
Exchange rule No.
EDGX ..........................
FINRA .........................
ISE ..............................
Reports
Reports
Reports
Reports
Reports
Reports
Reports
Reports
Reports
Options
Reports
GEMX .........................
Reports Related to Options Position Limits .............
MRX ............................
Reports Related to Options Position Limits .............
MIAX ...........................
MIAX PEARL ..............
MIAX Emerald .............
MIAX Sapphire ............
MEMX .........................
Nasdaq ........................
Reports
Reports
Reports
Reports
Reports
Reports
Nasdaq BX ..................
Reports Related to Options Position Limits .............
Cboe ...........................
Related to Position Limits ...........................
Related to Position Limits ...........................
Related to Position Limits ...........................
Related to Position Limits ...........................
Related to Position Limits ...........................
Related to Position Limits ...........................
Related to Position Limits ...........................
Related to Position Limits ...........................
Related to Position Limits ...........................
.....................................................................
Related to Options Position Limits .............
Related
Related
Related
Related
Related
Related
to
to
to
to
to
to
Position Limits ...........................
Position Limits ...........................
Position Limits ...........................
Position Limits ...........................
Position Limits ...........................
Options Position Limits .............
Nasdaq PHLX .............
Reporting of Options Positions .................................
NYSE Arca ..................
NYSE American ..........
Reporting of Options Positions .................................
Reporting of Options Positions .................................
Rule 18.10 .......................................................................................
Rule 3150 ........................................................................................
Ch. 8 ................................................................................................
Ch. 8 ................................................................................................
Ch. 8 ................................................................................................
Rule 8.43(a) .....................................................................................
Rule 8.43(b) .....................................................................................
Rule 8.43(d) .....................................................................................
Rule 18.10 .......................................................................................
Rule 2360(b)(5) ................................................................................
ISE Options 9, Section 16—Reports Related to Options Position
Limits.
GEMX Options 9, Section 16—Reports Related to Options Position Limits.
MRX Options 9, Section 16—Reports Related to Options Position
Limits.
Rule 310 ..........................................................................................
Rule 310 ..........................................................................................
Rule 310 ..........................................................................................
Rule 310 ..........................................................................................
Rule 18.10 .......................................................................................
NOM Options 9, Section 16—Reports Related to Options Position
Limits.
BX Options 9, Section 16—Reports Related to Options Position
Limits.
PHLX Options 6E, Section 2—Reporting of Options Positions,
PHLX Options 9, Section 13—Position Limits.
Rule 6.6–O .......................................................................................
Rule 906 ..........................................................................................
Frequency of
review
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
VIOLATION IV: OPTIONS CLEARING CORPORATION (OCC) ADJUSTMENT PROCESS
Description of rule
(as they apply to OCC adjustments/by-laws article
V, section 1 .01(a) and .02)
khammond on DSKJM1Z7X2PROD with NOTICES
SRO
BZX .............................
BOX ............................
C2 ...............................
Cboe ...........................
EDGX ..........................
FINRA .........................
ISE ..............................
GEMX .........................
VerDate Sep<11>2014
Adherence to Law ....................................................
Adherence to Law ....................................................
Adherence to Law ....................................................
Adherence to Law ....................................................
Adherence to Law ....................................................
Violation of By-Laws and Rules of FINRA or The
OCC.
Adherence to Law ....................................................
Adherence to Law ....................................................
17:07 Aug 06, 2024
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Exchange rule No.
Frequency of
review
Rule 18.1 .........................................................................................
Rule 3010 ........................................................................................
Ch. 8 ................................................................................................
Rule 8.2 ...........................................................................................
Rule 18.1 .........................................................................................
Rule 2360(b)(21) ..............................................................................
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
ISE Options 9, Section 2 .................................................................
GEMX Options 9, Section 2 ............................................................
Yearly.
Yearly.
Fmt 4703
Sfmt 4703
E:\FR\FM\07AUN1.SGM
07AUN1
64504
Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices
VIOLATION IV: OPTIONS CLEARING CORPORATION (OCC) ADJUSTMENT PROCESS—Continued
SRO
Description of rule
(as they apply to OCC adjustments/by-laws article
V, section 1 .01(a) and .02)
Exchange rule No.
MRX ............................
MIAX ...........................
MIAX PEARL ..............
MIAX Emerald .............
MIAX Sapphire ............
MEMX .........................
Nasdaq ........................
Nasdaq BX ..................
Nasdaq PHLX .............
NYSE Arca ..................
NYSE American ..........
Adherence to Law ....................................................
Adherence to Law ....................................................
Adherence to Law ....................................................
Adherence to Law ....................................................
Adherence to Law ....................................................
Adherence to Law ....................................................
Adherence to Law ....................................................
Adherence to Law ....................................................
Violation of By-Laws And Rules Of OCC .................
Adherence to Law and Good Business Practice .....
Business Conduct .....................................................
MRX Options 9, Section 2 ...............................................................
Rule 300 ..........................................................................................
Rule 300 ..........................................................................................
Rule 300 ..........................................................................................
Rule 300 ..........................................................................................
Rule 18.1 .........................................................................................
NOM Options 9, Section 2 ..............................................................
BX Options 9, Section 2 ..................................................................
PHLX Options 9, Section 24 ...........................................................
Rule 11.1 .........................................................................................
Rule 16 ............................................................................................
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing.
Comments may be submitted by any of
the following methods:
khammond on DSKJM1Z7X2PROD with NOTICES
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number 4–
551 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number 4–551. This file number should
be included on the subject line if email
is used. To help the Commission
process and review your comments
more efficiently, please use only one
method. The Commission will post all
comments on the Commission’s internet
website (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all
subsequent amendments, all written
statements with respect to the proposed
plan that are filed with the Commission,
and all written communications relating
to the proposed plan between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
plan also will be available for inspection
and copying at the principal offices of
NYSE American, BZX, C2, Cboe, EDGX,
VerDate Sep<11>2014
17:07 Aug 06, 2024
Jkt 262001
Gemini, ISE, Mercury, FINRA, Arca,
Nasdaq, BOX, BX, PHLX, MIAX, MIAX
PEARL, MIAX Emerald, MIAX
Sapphire, and MEMX. 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 4–551 and should be
submitted on or before August 28, 2024.
V. Discussion
The Commission finds that the
proposed Amended Plan is consistent
with the factors set forth in Section
17(d) of the Act 22 and Rule 17d–2(c)
thereunder 23 in that the proposed
Amended Plan is necessary or
appropriate in the public interest and
for the protection of investors, fosters
cooperation and coordination among
SROs, and removes impediments to and
fosters the development of the national
market system. The Commission
continues to believe that the Plan, as
proposed to be amended, is an
achievement in cooperation among the
SRO participants. The Plan, as
amended, will reduce unnecessary
regulatory duplication by allocating to
the designated SRO the responsibility
for certain options-related market
surveillance matters that would
otherwise be performed by multiple
SROs. The Plan promotes efficiency by
reducing costs to firms that are members
of more than one of the SRO
participants. In addition, because the
SRO participants coordinate their
regulatory functions in accordance with
the Plan, the Plan promotes, and will
22 15
23 17
PO 00000
U.S.C. 78q(d).
CFR 240.17d–2(c).
Frm 00104
Fmt 4703
Sfmt 9990
Frequency of
review
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
Yearly.
continue to promote, investor
protection. Under paragraph (c) of Rule
17d–2, the Commission may, after
appropriate notice and comment,
declare a plan, or any part of a plan,
effective. In this instance, the
Commission believes that appropriate
notice and comment can take place after
the proposed amendment is effective.
The primary purpose of the amendment
is to add MIAX Sapphire as a
Participant. By declaring it effective
today, the amended Plan can become
effective and be implemented without
undue delay. In addition, the
Commission notes that the prior version
of this Plan was published for comment,
and the Commission did not receive any
comments thereon.24 Finally, the
Commission does not believe that the
amendment to the Plan raises any new
regulatory issues that the Commission
has not previously considered.
VI. Conclusion
This order gives effect to the amended
Plan submitted to the Commission that
is contained in File No. 4–551.
It is further ordered that those SRO
participants that are not the DOSR as to
a particular common member are
relieved of those regulatory
responsibilities allocated to the common
member’s DOSR under the amended
Plan to the extent of such allocation.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–17387 Filed 8–6–24; 8:45 am]
BILLING CODE 8011–01–P
24 See Securities Exchange Act Release No. 96383
(November 23, 2022), 87 FR 73569 (November 30,
2022) (File No. 4–551).
25 17 CFR 200.30–3(a)(34).
E:\FR\FM\07AUN1.SGM
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]]>Agencies
[Federal Register Volume 89, Number 152 (Wednesday, August 7, 2024)]
[Notices]
[Pages 64497-64504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17387]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100635; File No. 4-551]
Program for Allocation of Regulatory Responsibilities Pursuant to
Rule 17d-2; Notice of Filing and Order Approving and Declaring
Effective an Amendment to the Plan for the Allocation of Regulatory
Responsibilities 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,
MIAX Sapphire, and MEMX LLC Concerning Options-Related Market
Surveillance
August 1, 2024.
Notice is hereby given that the Securities and Exchange Commission
(``Commission'') has issued an Order,
[[Page 64498]]
pursuant to Section 17(d) of the Securities Exchange Act of 1934
(``Act''),\1\ approving and declaring effective an amendment to the
plan for allocating regulatory responsibility (``Plan'') filed on July
31, 2024, pursuant to Rule 17d-2 of the Act,\2\ by NYSE American LLC
(``NYSE American''), Cboe BZX Exchange, Inc., (``BZX''), the Cboe EDGX
Exchange, Inc. (``EDGX''), Cboe C2 Exchange, Inc. (``C2''), Cboe
Exchange, Inc. (``Cboe''), Nasdaq ISE, LLC (``ISE''), Financial
Industry Regulatory Authority, Inc. (``FINRA''), NYSE Arca, Inc.
(``Arca''), The NASDAQ Stock Market LLC (``Nasdaq''), BOX Exchange LLC
(``BOX''), NASDAQ BX, Inc. (``BX''), NASDAQ PHLX LLC (``PHLX''), Miami
International Securities Exchange, LLC (``MIAX''), Nasdaq GEMX, LLC
(``Gemini''), Nasdaq MRX, LLC (``Mercury''), MIAX PEARL, LLC (``MIAX
PEARL''), and MIAX Emerald, LLC (MIAX Emerald), MIAX Sapphire, LLC
(``MIAX Sapphire''), and MEMX LLC (``MEMX'') (collectively,
``Participating Organizations'' or ``parties'').
---------------------------------------------------------------------------
\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) \4\ or Section 19(g)(2) \5\ of the Act.
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).
\5\ 15 U.S.C. 78s(g)(2).
---------------------------------------------------------------------------
Section 17(d)(1) of the Act \6\ was intended, in part, to eliminate
unnecessary multiple examinations and regulatory duplication.\7\ With
respect to a common member, Section 17(d)(1) authorizes the Commission,
by rule or order, to relieve an SRO of the responsibility to receive
regulatory reports, to examine for and enforce compliance with
applicable statutes, rules, and regulations, or to perform other
specified regulatory functions.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78q(d)(1).
\7\ See Securities Act Amendments of 1975, Report of the Senate
Committee on Banking, Housing, and Urban Affairs to Accompany S.
249, S. Rep. No. 94-75, 94th Cong., 1st Session 32 (1975).
---------------------------------------------------------------------------
To implement Section 17(d)(1), the Commission adopted two rules:
Rule 17d-1 and Rule 17d-2 under the Act.\8\ Rule 17d-1 authorizes the
Commission to name a single SRO as the designated examining authority
(``DEA'') to examine common members for compliance with the financial
responsibility requirements imposed by the Act, or by Commission or SRO
rules.\9\ When an SRO has been named as a common member's DEA, all
other SROs to which the common member belongs are relieved of the
responsibility to examine the firm for compliance with the applicable
financial responsibility rules. On its face, Rule 17d-1 deals only with
an SRO's obligations to enforce member compliance with financial
responsibility requirements. Rule 17d-1 does not relieve an SRO from
its obligation to examine a common member for compliance with its own
rules and provisions of the federal securities laws governing matters
other than financial responsibility, including sales practices and
trading activities and practices.
---------------------------------------------------------------------------
\8\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
\9\ See Securities Exchange Act Release No. 12352 (April 20,
1976), 41 FR 18808 (May 7, 1976).
---------------------------------------------------------------------------
To address regulatory duplication in these and other areas, the
Commission adopted Rule 17d-2 under the Act.\10\ Rule 17d-2 permits
SROs to propose joint plans for the allocation of regulatory
responsibilities with respect to their common members. Under paragraph
(c) of Rule 17d-2, the Commission may declare such a plan effective if,
after providing for notice and comment, it determines that the plan is
necessary or appropriate in the public interest and for the protection
of investors, to foster cooperation and coordination among the SROs, to
remove impediments to, and foster the development of, a national market
system and a national clearance and settlement system, and is in
conformity with the factors set forth in Section 17(d) of the Act.
Commission approval of a plan filed pursuant to Rule 17d-2 relieves an
SRO of those regulatory responsibilities allocated by the plan to
another SRO.
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 12935 (October 28,
1976), 41 FR 49091 (November 8, 1976).
---------------------------------------------------------------------------
II. The Plan
On December 11, 2007, the Commission declared effective the
Participating Organizations' Plan for allocating regulatory
responsibilities pursuant to Rule 17d-2.\11\ On April 11, 2008, the
Commission approved an amendment to the Plan to include NASDAQ as a
participant.\12\ On October 9, 2008, the Commission approved an
amendment to the Plan to clarify that the term Regulatory
Responsibility for options position limits includes the examination
responsibilities for the delta hedging exemption.\13\ On February 25,
2010, the Commission approved an amendment to the Plan to add Bats and
C2 as SRO participants and to reflect the name changes of the American
Stock Exchange LLC to the NYSE Amex LLC, and the Boston Stock Exchange,
Inc. to the NASDAQ OMX BX, Inc.\14\ On May 11, 2012, the Commission
approved an amendment to the Plan to add BOX as a participant to the
Plan.\15\ On December 5, 2012, the Commission approved an amendment to
the Plan to add MIAX as a participant to the Plan.\16\ On July 26,
2013, the Commission approved an amendment to the Plan to add Topaz
Exchange, LLC as a Participant to the Plan.\17\ On October 29, 2015,
the Commission approved an amendment to add EDGX as a Participant to
the Plan and to change the name of Topaz Exchange, LLC to ISE Gemini,
LLC.\18\ On February 16, 2016, the Commission approved an amendment to
add ISE Mercury, LLC as a Participant to the Plan.\19\ On February 2,
2017, the Commission approved an amendment to add MIAX PEARL as a
Participant to the Plan.\20\ On February 11, 2019, the Commission
approved an amendment to add MIAX Emerald as a Participant to
[[Page 64499]]
the Plan.\21\ On November 23, 2022, the Commission approved a proposed
amendment to the Plan to add MEMX as a Participant to the Plan, to
reflect name changes of certain Participating Organizations, and update
rule references.\22\
---------------------------------------------------------------------------
\11\ See Securities Exchange Act Release No. 56941 (December 11,
2007), 72 FR 71723 (December 18, 2007) (File No. 4-551).
\12\ See Securities Exchange Act Release No. 57649 (April 11,
2008), 73 FR 20976 (April 17, 2008) (File No. 4-551).
\13\ See Securities Exchange Act Release No. 58765 (October 9,
2008), 73 FR 62344 (October 20, 2008) (File No. 4-551).
\14\ See Securities Exchange Act Release No. 61588 (February 25,
2010), 75 FR 9970 (March 4, 2010) (File No. 4-551).
\15\ See Securities Exchange Act Release No. 66975 (May 11,
2012), 77 FR 29712 (May 18, 2010) (File No. 4-551).
\16\ See Securities Exchange Act Release No. 68362 (December 5,
2012), 77 FR 73719 (December 11, 2012) (File No. 4-551).
\17\ See Securities Exchange Act Release No. 70052 (July 26,
2013), 78 FR 46665 (August 1, 2013) (File No. 4-551).
\18\ See Securities Exchange Act Release No. 76310 (October 29,
2015), 80 FR 68354 (November 4, 2015) (File No. 4-551).
\19\ See Securities Exchange Act Release No. 77149 (February 16,
2016), 81 FR 8781 (February 22, 2016) (File No. 4-551).
\20\ See Securities Exchange Act Release No. 79930 (February 2,
2017), 82 FR 9807 (February 8, 2017) (File No. 4-551).
\21\ See Securities Exchange Act Release No. 85097 (February 11,
2019), 84 FR 4871 (February 19, 2019) (File No. 4-551).
\22\ See Securities Exchange Act Release No. 96383 (November 23,
2022), 87 FR 73569 (November 30, 2022) (File No. 4-551).
---------------------------------------------------------------------------
The Plan is designed to reduce regulatory duplication for common
members by allocating regulatory responsibility for certain options-
related market surveillance matters among the Participating
Organizations. Generally, under the Plan, a Participating Organization
will serve as the Designated Options Surveillance Regulator (``DOSR'')
for each common member assigned to it and will assume regulatory
responsibility with respect to that common member's compliance with
applicable common rules for certain accounts. When an SRO has been
named as a common member's DOSR, all other SROs to which the common
member belongs will be relieved of regulatory responsibility for that
common member, pursuant to the terms of the Plan, with respect to the
applicable common rules specified in Exhibit A to the Plan.
III. Proposed Amendment to the Plan
On July 31, 2024, the parties submitted a proposed amendment to the
Plan. The primary purpose of the amendment is to add MIAX Sapphire as a
Participant to the Plan. The text of the proposed amended 17d-2 plan is
as follows (additions are italicized; deletions are [bracketed]):
* * * * *
AGREEMENT BY AND AMONG NYSE AMERICAN LLC, CBOE BZX EXCHANGE, INC., CBOE
EDGX EXCHANGE INC., BOX EXCHANGE LLC, NASDAQ BX, INC., CBOE C2
EXCHANGE, INC., CBOE EXCHANGE, INC., NASDAQ ISE, LLC, NASDAQ GEMX, LLC,
NASDAQ MRX, LLC, FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC., NYSE
ARCA, INC., THE NASDAQ STOCK MARKET LLC, NASDAQ PHLX LLC, MIAMI
INTERNATIONAL SECURITIES EXCHANGE, LLC, MIAX PEARL, LLC, MIAX EMERALD,
LLC, MIAX SAPPHIRE, LLC, AND MEMX LLC PURSUANT TO RULE 17d-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
This agreement (this ``Agreement''), by and among NYSE American LLC
(``NYSE American''), Cboe BZX Exchange, Inc., (``BZX''), the Cboe EDGX
Exchange, Inc. (``EDGX''), Cboe C2 Exchange, Inc. (``C2''), Cboe
Exchange, Inc. (``Cboe''), Nasdaq ISE, LLC (``ISE''), Financial
Industry Regulatory Authority, Inc. (``FINRA''), NYSE Arca, Inc.
(``Arca''), The Nasdaq Stock Market LLC (``Nasdaq''), BOX Exchange LLC
(``BOX''), Nasdaq BX, Inc. (``BX''), Nasdaq PHLX LLC (``PHLX''), Miami
International Securities Exchange, LLC (``MIAX''), Nasdaq GEMX, LLC
(``GEMX''), Nasdaq MRX, LLC (``MRX''), MIAX PEARL, LLC (``MIAX
PEARL''), MIAX Emerald, LLC (``MIAX Emerald''), MIAX Sapphire, LLC
(``MIAX Sapphire''), and MEMX LLC (``MEMX''), is made the 10th day of
October 2007, and as amended the 31st day of March 2008, the 1st day of
October 2008, the 3rd day of February 2010, the 25th day of April 2012,
the 19th day of November 2012, the 30th day of May 2013, the 16th day
of October 2015, the 29th day of January 2016, the 23rd day of January
2017, the 8th day of January 2019, [and] the 18th[th] day of October
2022, and the 19th day of July 2024, pursuant to Section 17(d) of the
Securities Exchange Act of 1934, as amended (the ``Exchange Act''), and
Rule 17d-2 thereunder (``Rule 17d-2''), which allows for a joint plan
among self-regulatory organizations (``SROs'') to allocate regulatory
obligations with respect to brokers or dealers that are members of two
or more of the parties to this Agreement (``Common Members''). NYSE
American, BZX, C2, Cboe, EDGX, Gemini, ISE, Mercury, FINRA, Arca,
Nasdaq, BOX, BX, PHLX, MIAX, MIAX PEARL, MIAX Emerald, MIAX Sapphire,
and MEMX, are collectively referred to herein as the ``Participants''
and individually, each a ``Participant.'' This Agreement shall be
administered by a committee known as the Options Surveillance Group
(the ``OSG'' or ``Group''), as described in Section V hereof. Unless
defined in this Agreement or the context otherwise requires, the terms
used herein shall have the meanings assigned thereto by the Exchange
Act and the rules and regulations thereunder.
Whereas, the Participants desire to eliminate regulatory
duplication with respect to SRO market surveillance of Common Member
\1\ activities with regard to certain common rules relating to listed
options (``Options''); and
---------------------------------------------------------------------------
\1\ In the case of the BX and BOX, members are those persons who
are Options Participants (as defined in the BOX Exchange LLC Rules
and NASDAQ BX, Inc. Rules).
---------------------------------------------------------------------------
Whereas, for this purpose, the Participants desire to execute and
file this Agreement with the Securities and Exchange Commission (the
``SEC'' or ``Commission'') pursuant to Rule 17d-2.
Now, therefore, in consideration of the mutual covenants contained
in this Agreement, the Participants agree as follows:
I. Except as otherwise provided in this Agreement, each Participant
shall assume Regulatory Responsibility (as defined below) for the
Common Members that are allocated or assigned to such Participant in
accordance with the terms of this Agreement and shall be relieved of
its Regulatory Responsibility as to the remaining Common Members. For
purposes of this Agreement, a Participant shall be considered to be the
Designated Options Surveillance Regulator (``DOSR'') for each Common
Member that is allocated to it in accordance with Section VII.
II. As used in this Agreement, the term ``Regulatory
Responsibility'' shall mean surveillance, investigation and enforcement
responsibilities relating to compliance by the Common Members with such
Options rules of the Participants as the Participants shall determine
are substantially similar and shall approve from time to time, insofar
as such rules relate to market surveillance (collectively, the ``Common
Rules''). For the purposes of this Agreement the list of Common Rules
is attached as Exhibit A hereto, which may only be amended upon
unanimous written agreement by the Participants. The DOSR assigned to
each Common Member shall assume Regulatory Responsibility with regard
to that Common Member's compliance with the applicable Common Rules for
certain accounts.\2\ A DOSR may perform its Regulatory Responsibility
or enter an agreement to transfer or assign such responsibilities to a
national securities exchange registered with the SEC under Section 6(a)
of the Exchange Act or a national securities association registered
with the SEC under Section 15A of the Exchange Act. A DOSR may not
transfer or assign its Regulatory Responsibility to an association
registered for the limited purpose of regulating the activities of
members who are registered as brokers or dealers in security futures
products.
---------------------------------------------------------------------------
\2\ Certain accounts shall include customer (``C'' as classified
by the Options Clearing Corporation (``OCC'')) and firm (``F'' as
classified by OCC) accounts, as well as other accounts, such as
market maker accounts as the Participants shall, from time to time,
identify as appropriate to review.
---------------------------------------------------------------------------
The term ``Regulatory Responsibility'' does not include, and each
Participant shall retain full responsibility with respect to:
[[Page 64500]]
(a) surveillance, investigative and enforcement responsibilities
other than those included in the definition of Regulatory
Responsibility;
(b) any aspects of the rules of a Participant that are not
substantially similar to the Common Rules or that are allocated for a
separate surveillance purpose under any other agreement made pursuant
to Rule 17d-2. Any such aspects of a Common Rule will be noted as
excluded on Exhibit A.
With respect to options position limits, the term Regulatory
Responsibility shall include examination responsibilities for the delta
hedging exemption. Specifically, the Participants intend that FINRA
will conduct examinations for delta hedging for all Common Members that
are members of FINRA notwithstanding the fact that FINRA's position
limit rule is, in some cases, limited to only firms that are not
members of an options exchange (i.e., access members). In such cases,
FINRA's examinations for delta hedging options position limit
violations will be for the identical or substantively similar position
limit rule(s) of the other Participant(s). Examinations for delta
hedging for Common Members that are non-FINRA members will be conducted
by the same Participant conducting position limit surveillance. The
allocation of Common Members to DOSRs for surveillance of compliance
with options position limits and other agreed to Common Rules is
provided in Exhibit B. The allocation of Common Members to DOSRs for
examinations of the delta hedging exemption under the options position
limits rules is provided in Exhibit C.
III. Each year within 30 days of the anniversary date of the
commencement of operation of this Agreement, or more frequently if
required by changes in the rules of a Participant, each Participant
shall submit to the other Participants, through the Chair of the OSG,
an updated list of Common Rules for review. This updated list may add
Common Rules to Exhibit A, shall delete from Exhibit A rules of that
Participant that are no longer identical or substantially similar to
the Common Rules, and shall confirm that the remaining rules of the
Participant included on Exhibit A continue to be identically or
substantially similar to the Common Rules. Within 30 days from the date
that each Participant has received revisions to Exhibit A from the
Chair of the OSG, each Participant shall confirm in writing to the
Chair of the OSG whether that Participant's rules listed in Exhibit A
are Common Rules.
IV. Apparent violation of another Participant's rules discovered by
a DOSR, but which rules are not within the scope of the discovering
DOSR's Regulatory Responsibility, shall be referred to the relevant
Participant for such action as is deemed appropriate by that
Participant.
Notwithstanding the foregoing, nothing contained herein shall
preclude a DOSR in its discretion from requesting that another
Participant conduct an investigative or enforcement proceeding
(``Proceeding'') on a matter for which the requesting DOSR has
Regulatory Responsibility. If such other Participant agrees, the
Regulatory Responsibility in such case shall be deemed transferred to
the accepting Participant and confirmed in writing by the Participants
involved. Additionally, nothing in this Agreement shall prevent another
Participant on whose market potential violative activity took place
from conducting its own Proceeding on a matter. The Participant
conducting the Proceeding shall advise the assigned DOSR. Each
Participant agrees, upon request, to make available promptly all
relevant files, records and/or witnesses necessary to assist another
Participant in a Proceeding.
V. The OSG shall be composed of one representative designated by
each of the Participants (a ``Representative''). Each Participant shall
also designate one or more persons as its alternate representative(s)
(an ``Alternate Representative''). In the absence of the
Representative, the Alternate Representative shall assume the powers,
duties and responsibilities of the Representative. Each Participant may
at any time replace its Representative and/or its Alternate
Representative to the Group.\3\ A majority of the OSG shall constitute
a quorum and, unless otherwise required, the affirmative vote of a
majority of the Representatives present (in person, by telephone or by
written consent) shall be necessary to constitute action by the Group.
---------------------------------------------------------------------------
\3\ A Participant must give notice to the Chair of the Group of
such a change.
---------------------------------------------------------------------------
The Group will have a Chair, Vice Chair and Secretary. A different
Participant will assume each position on a rotating basis for a one-
year term. In the event that a Participant replaces a Representative
who is acting as Chair, Vice Chair or Secretary, the newly appointed
Representative shall assume the position of Chair, Vice Chair, or
Secretary (as applicable) vacated by the Participant's former
Representative. In the event a Participant cannot fulfill its duties as
Chair, the Participant serving as Vice Chair shall substitute for the
Chair and complete the subject unfulfilled term. All notices and other
communications for the OSG are to be sent in care of the Chair and, as
appropriate, to each Representative.
VI. The OSG shall determine the times and locations of Group
meetings, provided that the Chair, acting alone, may also call a
meeting of the Group in the event the Chair determines that there is
good cause to do so. To the extent reasonably possible, notice of any
meeting shall be given at least ten business days prior to the meeting
date. Representatives shall always be given the option of participating
in any meeting telephonically at their own expense rather than in
person.
VII. No less frequently than every two years, in such manner as the
Group deems appropriate, the OSG shall allocate Common Members that
conduct an Options business among the Participants (``Allocation''),
and the Participant to which a Common Member is allocated will serve as
the DOSR for that Common Member. Any Allocation shall be based on the
following principles, except to the extent all affected Participants
consent to one or more different principles:
(a) The OSG may not allocate a Common Member to a Participant
unless the Common Member is a member of that Participant.
(b) To the extent practicable, Common Members that conduct an
Options business shall be allocated among the Participants of which
they are members in such manner as to equalize as nearly as possible
the allocation among such Participants, provided that no Common Members
shall be allocated to FINRA. For example, if sixteen Common Members
that conduct an Options business are members only of three
Participants, none of which is FINRA, those Common Members shall be
allocated among the three Participants such that no Participant is
allocated more than six such members and no Participant is allocated
less than five such members. If, in the previous example, one of the
three Participants is FINRA, the sixteen Common Members would be
allocated evenly between the remaining Participants, so that the two
non-FINRA Participants would be allocated eight Common Members each.
(c) To the extent practicable, Allocation shall take into account
the amount of Options activity conducted by each Common Member in order
to most evenly divide the Common Members with the largest amount of
activity among the Participants of which they are members. Allocation
will also take into account similar allocations pursuant to other plans
or agreements to which the Common Members are party
[[Page 64501]]
to maintain consistency in oversight of the Common Members.\4\
---------------------------------------------------------------------------
\4\ For example, if one Participant was allocated a Common
Member by another regulatory group that Participant would be
assigned to be the DOSR of that Common Member, unless there is good
cause not to make that assignment.
---------------------------------------------------------------------------
(d) To the extent practicable, Allocation of Common Members to
Participants will be rotated among the applicable Participants such
that a Common Member shall not be allocated to a Participant to which
that Common Member was allocated within the previous two years. The
assignment of DOSRs pursuant to the Allocation is attached as Exhibit B
hereto, and will be updated from time to time to reflect Common Member
Allocation changes.
(e) The Group may reallocate Common Members from time-to-time, as
it deems appropriate.
(f) Whenever a Common Member ceases to be a member of its DOSR, the
DOSR shall promptly inform the Group, which shall review the matter and
allocate the Common Member to another Participant.
(g) A DOSR may request that a Common Member to which it is assigned
be reallocated to another Participant by giving 30 days written notice
to the Chair of the OSG. The Group, in its discretion, may approve such
request and reallocate the Common Member to another Participant.
(h) All determinations by the Group with respect to Allocation
shall be made by the affirmative vote of a majority of the Participants
that, at the time of such determination, share the applicable Common
Member being allocated; a Participant shall not be entitled to vote on
any Allocation relating to a Common Member unless the Common Member is
a member of such Participant.
VIII. Each DOSR shall conduct routine surveillance reviews to
detect violations of the applicable Common Rules by each Common Member
allocated to it with a frequency (daily, weekly, monthly, quarterly,
semi-annually or annually as noted on Exhibit A) not less than that
determined by the Group. The other Participants agree that, upon
request, relevant information in their respective files relative to a
Common Member will be made available to the applicable DOSR. In
addition, each Participant shall provide, to the extent not otherwise
already provided, information pertaining to its surveillance program
that would be relevant to FINRA or the Participant(s) conducting
routine examinations for the delta hedging exemption.
At each meeting of the OSG, each Participant shall be prepared to
report on the status of its surveillance program for the previous
quarter and any period prior thereto that has not previously been
reported to the Group. In the event a DOSR believes it will not be able
to complete its Regulatory Responsibility for its allocated Common
Members, it will so advise the Group in writing promptly. The Group
will undertake to remedy this situation by reallocating the subject
Common Members among the remaining Participants. In such instance, the
Group may determine to impose a regulatory fee for services provided to
the DOSR that was unable to fulfill its Regulatory Responsibility.
IX. Each Participant will, upon request, promptly furnish a copy of
the report or applicable portions thereof relating to any investigation
made pursuant to the provisions of this Agreement to each other
Participant of which the Common Member under investigation is a member.
X. Each Participant will routinely populate a common database, to
be accessed by the Group relating to any formal regulatory action taken
during the course of a Proceeding with respect to the Common Rules
concerning a Common Member.
XI. Any written notice required or permitted to be given under this
Agreement shall be deemed given if sent by certified mail, return
receipt requested, to any Participant to the attention of that
Participant's Representative, to the Participant's principal place of
business or by email at such address as the Representative shall have
filed in writing with the Chair.
XII. The costs incurred by each Participant in discharging its
Regulatory Responsibility under this Agreement are not reimbursable.
However, any of the Participants may agree that one or more will
compensate the other(s) for costs incurred.
XIII. The Participants shall notify the Common Members of this
Agreement by means of a uniform joint notice approved by the Group.
Each Participant will notify the Common Members that have been
allocated to it that such Participant will serve as DOSR for that
Common Member.
XIV. This Agreement shall be effective upon approval of the
Commission. This Agreement may only be amended in writing duly approved
by each Participant. All amendments to this Agreement, excluding
changes to Exhibits A, B and C, must be filed with and approved by the
Commission.
XV. Any Participant may manifest its intention to cancel its
participation in this Agreement at any time upon providing written
notice to (i) the Group six months prior to the date of such
cancellation, or such other period as all the Participants may agree,
and (ii) the Commission. Upon receipt of the notice the Group shall
allocate, in accordance with the provisions of this Agreement, those
Common Members for which the canceling Participant was the DOSR. The
canceling Participant shall retain its Regulatory Responsibility and
other rights, privileges and duties pursuant to this Agreement until
the Group has completed the reallocation as described above, and the
Commission has approved the cancellation.
XVI. The cancellation of its participation in this Agreement by any
Participant shall not terminate this Agreement as to the remaining
Participants. This Agreement will only terminate following notice to
the Commission, in writing, by the then Participants that they intend
to terminate the Agreement and the expiration of the applicable notice
period. Such notice shall be given at least six months prior to the
intended date of termination, or such other period as all the
Participants may agree. Such termination will become effective upon
Commission approval.
XVII. Participation in the Group shall be strictly limited to the
Participants and no other party shall have any right to attend or
otherwise participate in the Group except with the unanimous approval
of all Participants. Notwithstanding the foregoing, any national
securities exchange registered with the SEC under Section 6(a) of the
Act or any national securities association registered with the SEC
under section 15A of the Act may become a Participant to this Agreement
provided that: (i) such applicant has adopted rules substantially
similar to the Common Rules, and received approval thereof from the
SEC; (ii) such applicant has provided each Participant with a signed
statement whereby the applicant agrees to be bound by the terms of this
Agreement to the same effect as though it had originally signed this
Agreement and (iii) an amended agreement reflecting the addition of
such applicant as a Participant has been filed with and approved by the
Commission.
XVIII. This Agreement is wholly separate from the multiparty
Agreement made pursuant to Rule 17d-2 by and among [the NYSE American
LLC,] the Cboe BZX Exchange, Inc., BOX Exchange LLC, [the C2 Exchange,
Inc., the] Cboe Exchange, Inc., Cboe C2 Exchange, Inc., [the] Nasdaq
ISE, LLC, Financial Industry Regulatory Authority, Inc., Miami
International Securities Exchange, LLC, NYSE American LLC, NYSE Arca,
Inc., The
[[Page 64502]]
Nasdaq Stock Market LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, [the New
York Stock Exchange, LLC, the NYSE Arca, Inc., the Nasdaq BX, Inc., the
Nasdaq PHLX LLC, Miami International Securities Exchange, LLC,] Nasdaq
GEMX, LLC, [Nasdaq MRX, LLC,] Cboe EDGX Exchange, Inc., Nasdaq MRX,
LLC, MIAX PEARL, LLC, [and] MIAX Emerald, LLC, and MEMX LLC 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 or index warrants
approved by the SEC on [February 12, 2019] October 18, 2022, and as may
be amended from time to time.
Limitation of Liability
No Participant nor the Group nor any of their respective directors,
governors, officers, employees or representatives shall be liable to
any other Participant in 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 Responsibility as provided hereby or for the failure to
provide any such Regulatory Responsibility, except with respect to such
liability, loss or damages as shall have been suffered by one or more
of the Participants and caused by the willful misconduct of one or more
of the other Participants or its respective directors, governors,
officers, employees or representatives. No warranties, express or
implied, are made by the Participants, individually or as a group, or
by the OSG with respect to any Regulatory Responsibility to be
performed hereunder.
Relief From Responsibility
Pursuant to Section 17(d)(1)(A) of the Exchange Act and Rule 17d-2,
the Participants join in requesting the Commission, upon its approval
of this Agreement or any part thereof, to relieve the Participants that
are party to this Agreement and are not the DOSR as to a Common Member
of any and all Regulatory Responsibility with respect to the matters
allocated to the DOSR.
* * * * *
This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all such counterparts
shall together constitute one and the same Agreement.
In Witness Whereof, the Participants hereto have executed this
Agreement as of the date and year first above written.
EXHIBIT A
Options Surveillance Group 17d-2 Agreement COMMON RULES as of [October
18, 2022] July 19, 2024
Violation I: Expiring Exercise Declarations (EED)--For Listed and FLEX Equity Options
--------------------------------------------------------------------------------------------------------------------------------------------------------
SRO Description of rule Exchange rule No. Frequency of review
--------------------------------------------------------------------------------------------------------------------------------------------------------
BZX.............................. Exercise of Options Contracts.................................. Rule 23.1............... At Expiration.
BOX.............................. Exercise of Options Contracts.................................. Rule 9000............... At Expiration.
C2............................... Exercise of Options Contracts.................................. Ch. 6, Sec. B........... At Expiration.
Cboe............................. Exercise of Options Contracts.................................. Rule 6.20(a)-(d), I&P At Expiration.
.01-.07.
EDGX............................. Exercise of Options Contracts.................................. Rule 23.1............... At Expiration.
FINRA............................ Exercise of Options Contracts.................................. Rule 2360(b)(23)........ At Expiration.
ISE.............................. Exercise of Options Contracts.................................. Options 6B, Section 1... At Expiration.
GEMX............................. Exercise of Options Contracts.................................. Options 6B, Section 1... At Expiration.
MRX.............................. Exercise of Options Contracts.................................. Options 6B, Section 1... At Expiration.
MIAX............................. Exercise of Options Contracts.................................. Rule 700................ At Expiration.
MIAX PEARL....................... Exercise of Options Contracts.................................. Rule 700................ At Expiration.
MIAX Emerald..................... Exercise of Options Contracts.................................. Rule 700................ At Expiration.
MIAX Sapphire.................... Exercise of Options Contracts.................................. Rule 700................ At Expiration.
MEMX............................. Exercise of Options Contracts.................................. Rule 23.1............... At Expiration.
Nasdaq........................... Exercise of Options Contracts.................................. Options 6B, Section 1... At Expiration.
Nasdaq BX........................ Exercise of Options Contracts.................................. Options 6B, Section 1... At Expiration.
Nasdaq PHLX...................... Exercise of Equity Options Contracts........................... Options 6B, Section 1... At Expiration.
NYSE Arca........................ Exercise of Options Contracts.................................. Rule 6.24-O............. At Expiration.
NYSE American.................... Exercise of Options Contracts.................................. Rule 980................ At Expiration.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Violation II: Position Limits (PL)--For Listed Equity Options
--------------------------------------------------------------------------------------------------------------------------------------------------------
SRO Description of rule (for review as they apply to PL) Exchange rule No. Frequency of review
--------------------------------------------------------------------------------------------------------------------------------------------------------
BZX.............................. Position Limits................................................ Rule 18.7............... Daily.
Exemptions from Position....................................... Rule 18.8............... As Needed.
Liquidation Positions.......................................... Rule 18.11.............. As Needed.
BOX.............................. Position Limits................................................ Rule 3120............... Daily.
Exemptions from Position Limits................................ Rule 3130............... As Needed.
Liquidation Positions.......................................... Rule 3160............... As Needed.
C2............................... Position Limits................................................ Ch. 8................... Daily.
Liquidation of Positions....................................... Ch. 8................... As Needed.
Cboe............................. Position Limits................................................ Rule 8.30............... Daily.
Liquidation of Positions....................................... Rule 8.44............... As Needed.
EDGX............................. Position Limits................................................ Rule 18.7............... Daily.
Exemptions from Position....................................... Rule 18.8............... As Needed.
Liquidation Positions.......................................... Rule 18.11.............. As Needed.
FINRA............................ Position Limits................................................ Rule 2360(b)(3)......... Daily.
Liquidation of Positions and Restrictions on Access............ Rule 2360(b)(6)......... As Needed.
ISE.............................. Position Limits................................................ ISE Options 9, Section Daily.
13.
Exemptions from Position Limits................................ ISE Options 9, Section As Needed.
14.
Liquidating Positions.......................................... ISE Options 9, Section As Needed.
17.
GEMX............................. Position Limits................................................ GEMX Options 9, Section Daily.
13.
Exemptions from Position Limits................................ GEMX Options 9, Section As Needed.
14.
Liquidating Positions.......................................... GEMX Options 9, Section As Needed.
17.
MRX.............................. Position Limits................................................ MRX Options 9, Section Daily.
13.
Exemptions from Position Limits................................ MRX Options 9, Section As Needed.
14.
[[Page 64503]]
Liquidating Positions.......................................... MRX Options 9, Section As Needed.
17.
MIAX............................. Position Limits................................................ Rule 307................ Daily.
Exemptions from Position Limits................................ Rule 308................ As Needed.
Liquidating Positions.......................................... Rule 311................ As Needed.
MIAX Pearl....................... Position Limits................................................ Rule 307................ Daily.
Exemptions from Position Limits................................ Rule 308................ As Needed.
Liquidating Positions.......................................... Rule 311................ As Needed.
MIAX Emerald..................... Position Limits................................................ Rule 307................ Daily.
Exemptions from Position Limits................................ Rule 308................ As Needed.
Liquidating Positions.......................................... Rule 311................ As Needed.
MIAX Sapphire.................... Position Limits................................................ Rule 307................ Daily.
Exemptions from Position Limits................................ Rule 308................ As Needed.
Liquidating Positions.......................................... Rule 311................ As Needed.
MEMX............................. Position Limits................................................ Rule 18.7............... Daily.
Exemptions from Position....................................... Rule 18.8............... As Needed.
Liquidation Positions.......................................... Rule 18.11.............. As Needed.
Nasdaq........................... Position Limits................................................ NOM Options 9, Section Daily.
13.
Exemptions from Position Limits................................ NOM Options 9, Section As Needed.
14.
Liquidation Positions.......................................... NOM Options 9, Section As Needed.
17.
Nasdaq BX........................ Position Limits................................................ BX Options 9, Section 13 Daily.
Exemptions from Position Limits................................ BX Options 9, Section 14 As Needed.
Liquidation Positions.......................................... BX Options 9, Section 17 As Needed.
Nasdaq PHLX...................... Position Limits................................................ PHLX Options 9, Section Daily.
13.
Liquidation of Position........................................ PHLX Options 9, Section As Needed.
17.
NYSE Arca........................ Position Limits................................................ Rule 6.8-O.............. Daily.
Liquidation of Position........................................ Rule 6.7-O.............. As Needed.
NYSE American.................... Position Limits................................................ Rule 904................ Daily.
Liquidating Positions.......................................... Rule 907................ As Needed.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Violation III: Large Options Position Report (LOPR)--For Listed and FLEX Equity Options and ETF Options
--------------------------------------------------------------------------------------------------------------------------------------------------------
SRO Description of rule (for review as they apply to LOPR) Exchange rule No. Frequency of review
--------------------------------------------------------------------------------------------------------------------------------------------------------
BZX.............................. Reports Related to Position Limits............................. Rule 18.10.............. Yearly.
BOX.............................. Reports Related to Position Limits............................. Rule 3150............... Yearly.
C2............................... Reports Related to Position Limits............................. Ch. 8................... Yearly.
Reports Related to Position Limits............................. Ch. 8................... Yearly.
Reports Related to Position Limits............................. Ch. 8................... Yearly.
Cboe............................. Reports Related to Position Limits............................. Rule 8.43(a)............ Yearly.
Reports Related to Position Limits............................. Rule 8.43(b)............ Yearly.
Reports Related to Position Limits............................. Rule 8.43(d)............ Yearly.
EDGX............................. Reports Related to Position Limits............................. Rule 18.10.............. Yearly.
FINRA............................ Options........................................................ Rule 2360(b)(5)......... Yearly.
ISE.............................. Reports Related to Options Position Limits..................... ISE Options 9, Section Yearly.
16--Reports Related to
Options Position Limits.
GEMX............................. Reports Related to Options Position Limits..................... GEMX Options 9, Section Yearly.
16--Reports Related to
Options Position Limits.
MRX.............................. Reports Related to Options Position Limits..................... MRX Options 9, Section Yearly.
16--Reports Related to
Options Position Limits.
MIAX............................. Reports Related to Position Limits............................. Rule 310................ Yearly.
MIAX PEARL....................... Reports Related to Position Limits............................. Rule 310................ Yearly.
MIAX Emerald..................... Reports Related to Position Limits............................. Rule 310................ Yearly.
MIAX Sapphire.................... Reports Related to Position Limits............................. Rule 310................ Yearly.
MEMX............................. Reports Related to Position Limits............................. Rule 18.10.............. Yearly.
Nasdaq........................... Reports Related to Options Position Limits..................... NOM Options 9, Section Yearly.
16--Reports Related to
Options Position Limits.
Nasdaq BX........................ Reports Related to Options Position Limits..................... BX Options 9, Section Yearly.
16--Reports Related to
Options Position Limits.
Nasdaq PHLX...................... Reporting of Options Positions................................. PHLX Options 6E, Section Yearly.
2--Reporting of Options
Positions, PHLX Options
9, Section 13--Position
Limits.
NYSE Arca........................ Reporting of Options Positions................................. Rule 6.6-O.............. Yearly.
NYSE American.................... Reporting of Options Positions................................. Rule 906................ Yearly.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Violation IV: Options Clearing Corporation (OCC) Adjustment Process
--------------------------------------------------------------------------------------------------------------------------------------------------------
Description of rule (as they apply to OCC adjustments/by-laws
SRO article V, section 1 .01(a) and .02) Exchange rule No. Frequency of review
--------------------------------------------------------------------------------------------------------------------------------------------------------
BZX.............................. Adherence to Law............................................... Rule 18.1............... Yearly.
BOX.............................. Adherence to Law............................................... Rule 3010............... Yearly.
C2............................... Adherence to Law............................................... Ch. 8................... Yearly.
Cboe............................. Adherence to Law............................................... Rule 8.2................ Yearly.
EDGX............................. Adherence to Law............................................... Rule 18.1............... Yearly.
FINRA............................ Violation of By-Laws and Rules of FINRA or The OCC............. Rule 2360(b)(21)........ Yearly.
ISE.............................. Adherence to Law............................................... ISE Options 9, Section 2 Yearly.
GEMX............................. Adherence to Law............................................... GEMX Options 9, Section Yearly.
2.
[[Page 64504]]
MRX.............................. Adherence to Law............................................... MRX Options 9, Section 2 Yearly.
MIAX............................. Adherence to Law............................................... Rule 300................ Yearly.
MIAX PEARL....................... Adherence to Law............................................... Rule 300................ Yearly.
MIAX Emerald..................... Adherence to Law............................................... Rule 300................ Yearly.
MIAX Sapphire.................... Adherence to Law............................................... Rule 300................ Yearly.
MEMX............................. Adherence to Law............................................... Rule 18.1............... Yearly.
Nasdaq........................... Adherence to Law............................................... NOM Options 9, Section 2 Yearly.
Nasdaq BX........................ Adherence to Law............................................... BX Options 9, Section 2. Yearly.
Nasdaq PHLX...................... Violation of By-Laws And Rules Of OCC.......................... PHLX Options 9, Section Yearly.
24.
NYSE Arca........................ Adherence to Law and Good Business Practice.................... Rule 11.1............... Yearly.
NYSE American.................... Business Conduct............................................... Rule 16................. Yearly.
--------------------------------------------------------------------------------------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number 4-551 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number 4-551. This file number
should be included on the subject line if email is used. To help the
Commission process and review your comments more efficiently, please
use only one method. The Commission will post all comments on the
Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed plan that are filed with the
Commission, and all written communications relating to the proposed
plan between the Commission and any person, other than those that may
be withheld from the public in accordance with the provisions of 5
U.S.C. 552, will be available for website viewing and printing in the
Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the plan also will be available for inspection and
copying at the principal offices of NYSE American, BZX, C2, Cboe, EDGX,
Gemini, ISE, Mercury, FINRA, Arca, Nasdaq, BOX, BX, PHLX, MIAX, MIAX
PEARL, MIAX Emerald, MIAX Sapphire, and MEMX. 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 4-551 and should be submitted on or before August
28, 2024.
V. Discussion
The Commission finds that the proposed Amended Plan is consistent
with the factors set forth in Section 17(d) of the Act \22\ and Rule
17d-2(c) thereunder \23\ in that the proposed Amended Plan is necessary
or appropriate in the public interest and for the protection of
investors, fosters cooperation and coordination among SROs, and removes
impediments to and fosters the development of the national market
system. The Commission continues to believe that the Plan, as proposed
to be amended, is an achievement in cooperation among the SRO
participants. The Plan, as amended, will reduce unnecessary regulatory
duplication by allocating to the designated SRO the responsibility for
certain options-related market surveillance matters that would
otherwise be performed by multiple SROs. The Plan promotes efficiency
by reducing costs to firms that are members of more than one of the SRO
participants. In addition, because the SRO participants coordinate
their regulatory functions in accordance with the Plan, the Plan
promotes, and will continue to promote, investor protection. Under
paragraph (c) of Rule 17d-2, the Commission may, after appropriate
notice and comment, declare a plan, or any part of a plan, effective.
In this instance, the Commission believes that appropriate notice and
comment can take place after the proposed amendment is effective. The
primary purpose of the amendment is to add MIAX Sapphire as a
Participant. By declaring it effective today, the amended Plan can
become effective and be implemented without undue delay. In addition,
the Commission notes that the prior version of this Plan was published
for comment, and the Commission did not receive any comments
thereon.\24\ Finally, the Commission does not believe that the
amendment to the Plan raises any new regulatory issues that the
Commission has not previously considered.
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\22\ 15 U.S.C. 78q(d).
\23\ 17 CFR 240.17d-2(c).
\24\ See Securities Exchange Act Release No. 96383 (November 23,
2022), 87 FR 73569 (November 30, 2022) (File No. 4-551).
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VI. Conclusion
This order gives effect to the amended Plan submitted to the
Commission that is contained in File No. 4-551.
It is further ordered that those SRO participants that are not the
DOSR as to a particular common member are relieved of those regulatory
responsibilities allocated to the common member's DOSR under the
amended Plan to the extent of such allocation.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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\25\ 17 CFR 200.30-3(a)(34).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-17387 Filed 8-6-24; 8:45 am]
BILLING CODE 8011-01-P
