[Federal Register Volume 81, Number 60 (Tuesday, March 29, 2016)]
[Notices]
[Pages 17511-17513]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-06994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77429; File No. SR-BX-2016-017]
Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Chapter XI
(Doing Business With the Public), Section 8 (Supervision of Accounts)
of the Exchange's Rulebook
March 23, 2016.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 14, 2016, NASDAQ BX, Inc. (``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III, below, which Items have
been substantially prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Chapter XI (Doing Business with the
Public), Section 8 (Supervision of Accounts) of the Exchange's rulebook
to remove outdated references to three
[[Page 17512]]
National Association of Securities Dealers, Inc. (``NASD'') rules and
to replace those references with references to four successor Financial
Industry Regulatory Authority, Inc. (``FINRA'') rules which have
replaced them.
The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxbx.cchwallstreet.com/, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to amend Chapter XI (Doing Business with
the Public), Section 8 (Supervision of Accounts) of the Exchange's
rulebook (the ``BX Options Supervision Rules'') to remove outdated
references to three NASD rules and to replace those references with
references to four successor FINRA rules which have replaced them.\3\
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\3\ The current FINRA rulebook consists of: (1) FINRA rules; (2)
NASD rules; and (3) rules incorporated from NYSE (Incorporated NYSE
Rules) (together, the NASD rules and Incorporated NYSE Rules are
referred to as the ``Transitional Rulebook''). As part of the
process of developing a new consolidated rulebook (the
``Consolidated FINRA Rulebook'') FINRA adopted FINRA Rules 3110,
3120, 3130 and 3170 which the Exchange seeks to incorporate in the
BX Options Supervision Rules.
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Currently, the BX Options Supervision Rules provide in Section 8(a)
that each member that conducts a public customer options business shall
ensure that its written supervisory system policies and procedures
pursuant to NASD Rules 3010, 3012, and 3013 (the ``Old NASD Rules'')
adequately address the member's public customer options business. Since
the adoption by the Exchange of the BX Options Supervision Rules, FINRA
has updated its own rulebook and deleted the Old NASD Rules, adopting
in their place FINRA Rules 3110, 3120, 3130 and 3170.\4\ The Exchange
therefore proposes to make a conforming change to the BX Options
Supervision Rules by deleting references to the Old NASD Rules and
replacing them with references to FINRA Rules 3110, 3120, 3130 and
3170.
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\4\ FINRA Rules 3110 (Supervision) and 3120 (Supervisory Control
System) were adopted by FINRA to replace NASD Rules 3010
(Supervision), and 3012 (Supervisory Control System). In addition,
new FINRA Rule 3170 (Tape Recording of Registered Persons by Certain
Firms) replaced NASD Rule 3010(b)(2). The new rules became effective
on December 1, 2014. See Securities Exchange Act Release No. 71179
(Dec. 23, 2013), 78 FR 79542 (Dec. 30, 2013) (Order Approving
Proposed Rule Change as Modified by Amendment No. 1) (File No. SR-
FINRA-2013-025); see also FINRA Regulatory Notice 08-24 (May 2008)
(Proposed Consolidated FINRA Rules Governing Supervision and
Supervisory Controls). FINRA Rule 3130 (Annual Certification of
Compliance and Supervisory Processes) replaced NASD Rule 3013
(Annual Certification of Compliance and Supervisory Processes) in
2008. See Securities Exchange Act Release No. 58661 (Sept. 26,
2008), 73 FR 57395 (Oct. 2, 2008) (SR-FINRA-2008-030).
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \5\ in general, and furthers the objectives of Section
6(b)(5) of the Act \6\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest,
by removing references to outdated NASD rules, thus minimizing any
potential confusion on the part of members and other market
participants regarding the standards and rules to which Exchange
members are subject.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. As the amendments merely
correct the Exchange rules to refer to the current FINRA rules
discussed above, it has no impact on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \7\ and Rule
19b-4(f)(6) thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(a)(iii).
\8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-BX-2016-017 on the subject line.
Paper Comments
Send paper comments in triplicate to, Secretary,
Securities and Exchange Commission, 100 F Street NE., Washington, DC
20549-1090.
All submissions should refer to File Number SR-BX-2016-017. 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 Web site (http://www.sec.gov/rules/sro.shtml).
[[Page 17513]]
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549-1090, on official business days between the hours of 10:00
a.m. and 3:00 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly.
All submissions should refer to File Number SR-BX-2016-017 and
should be submitted on or before April 19, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-06994 Filed 3-28-16; 8:45 am]
BILLING CODE 8011-01-P