Federal Register / Vol. 80, No. 60 / Monday, March 30, 2015 / Notices 16713 

31 In the rule 2a–7 submissions, the staff 

estimated that 757 registered money market funds 

have $3.8 trillion in assets under management, or 

$5 billion in assets under management per 

registered money market fund. The staff further 

estimated that 0.2% of those assets are held in small 

money market funds (funds with less than $50 

million in assets under management), 3% are held 

in medium-sized money market funds (funds with 

$50 million to $1 billion in assets under 

management), and the remaining assets are held in 

large money market funds (funds with more than 

$1 billion in assets under management). 

32This estimate is based on the following 

calculations: 30 unregistered money market funds 

× $5 billion = $150 billion. ($150 billion × 0.2% × 

$0.0051295) = $1.5 million for small funds. ($150 

billion × 3% × 0.0005041) = $2.3 million for 

medium-sized funds. ($150 billion × 96.8% × 

0.0000009) = $0.1 million for large funds. $1.5 

million + $2.3 million + $0.1 million = $3.9 million. 

The estimate of cost per dollar of assets is the same 

as that used in the rule 2a–7 submissions. See supra 

note 12. 

33This estimate is based on the following 

calculation: $150 billion × 0.0000132 = $1.98 

million. 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

management.31 Based on a cost of 

$0.0051295 per dollar of assets under 

management for small funds, 

$0.0005041 per dollar of assets under 

management for medium-sized funds 

and $0.0000009 per dollar of assets 

under management for large funds, the 

staff estimates compliance with rule 

2–7 for these unregistered money 

market funds totals $3.9 million 

annually.32

Consistent with estimates made in the 

rule 2a–7 submissions, Commission 

staff estimates that unregistered money 

market funds also incur capital costs to 

create computer programs for 

maintaining and preserving compliance 

records for rule 2a–7 of $0.0000132 per 

dollar of assets under management. 

Based on the assets under management 

figures described above, staff estimates 

annual capital costs for all unregistered 

money market funds of $1.98 million.33

Commission staff further estimates 

that, even absent the requirements of 

rule 2a–7, money market funds would 

spend at least half of the amounts 

described above for record preservation 

($2.0 million) and for capital costs 

($0.99 million). Commission staff 

concludes that the aggregate annual 

costs of compliance with the rule are 

$2.0 million for record preservation and 

$0.99 million for capital costs. 

The collections of information 

required for unregistered money market 

funds by rule 12d1–1 are necessary in 

order for acquiring funds to able to 

obtain the benefits described above. 

Notices to the Commission will not be 

kept confidential. An agency may not 

conduct or sponsor, and a person is not 

required to respond to, a collection of 

information unless it displays a 

currently valid control number. 

The public may view the background 

documentation for this information 

collection at the following Web site, 

www.reginfo.gov. Comments should be 

directed to: (i) Desk Officer for the 

Securities and Exchange Commission, 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503, 

or by sending an email to: Shagufta_

Ahmed@omb.eop.gov; and (ii) Pamela 

Dyson, Director/Chief Information 

Officer, Securities and Exchange 

Commission, c/o Remi Pavlik-Simon, 

100 F Street NE., Washington, DC 20549 

or send an email to: PRA_Mailbox@

sec.gov. Comments must be submitted to 

OMB within 30 days of this notice. 

Dated: March 24, 2015. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–07128 Filed 3–27–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74568; File No. SR–FINRA– 

2015–006] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Section 4(c) of 

Schedule A to the FINRA By-Laws To 

Increase Qualification Examination 

Fees 

March 24, 2015. 

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 10, 

2015, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

prepared by FINRA. FINRA has 

designated the proposed rule change as 

‘‘establishing or changing a due, fee or 

other charge’’ under Section 

19(b)(3)(A)(ii) of the Act 3 and Rule 19b– 

4(f)(2) thereunder, 4 which renders the 

proposal effective upon receipt of this 

filing by the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to amend Section 

4(c) of Schedule A to the FINRA ByLaws to increase qualification 

examination fees. 

Below is the text of the proposed rule 

change. Proposed new language is in 

italics; proposed deletions are in 

brackets. 

* * * * * 

SCHEDULE A TO THE BY-LAWS OF 

THE CORPORATION 

* * * * * 

Section 4—Fees 

(a) through (b) No Change. 

(c) The following fees shall be 

assessed to each individual who 

registers to take an examination as 

described below. These fees are in 

addition to the registration fee described 

in paragraph (b) and any other fees that 

the owner of an examination that FINRA 

administers may assess. 

Series 4 Registered Options Principal ............................................................................................................................................. [$100] $105 

Series 6 Investment Company Products/Variable Contracts Representative ................................................................................ [$95] $100 

Series 7 General Securities Representative ..................................................................................................................................... [$290] $305 

Series 9 General Securities Sales Supervisor—Options Module ................................................................................................... [$75] $80 

Series 10 General Securities Sales Supervisor—General Module ................................................................................................... [$120] $125 

Series 11 Assistant Representative—Order Processing .................................................................................................................... [$75] $80 

Series 14 Compliance Official ........................................................................................................................................................... [$335] $350 

Series 16 Supervisory Analyst ........................................................................................................................................................... [$230] $240 

Series 17 Limited Registered Representative .................................................................................................................................... [$75] $80 

Series 22 Direct Participation Programs Representative .................................................................................................................. [$95] $100 

Series 23 General Securities Principal Sales Supervisor Module ................................................................................................... [$95] $100 

Series 24 General Securities Principal .............................................................................................................................................. [$115] $120 

Series 26 Investment Company Products/Variable Contracts Principal ......................................................................................... [$95] $100 

Series 27 Financial and Operations Principal .................................................................................................................................. [$115] $120 

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16714 Federal Register / Vol. 80, No. 60 / Monday, March 30, 2015 / Notices 

5See NASD Rules 1021(a) and 1031(a), and NASD 

Rules 1022 and 1032. See also NASD Rules 1041 

and 1050 and FINRA Rule 1230(b)(6) regarding the 

qualification and registration requirements for 

Order Processing Assistant Representatives, 

Research Analysts and Operations Professionals, 

respectively. 

6PROCTOR is a computer system that is 

specifically designed for the administration and 

delivery of computer-based testing and training. 

7The delivery fee represents a portion of the 

entire examination fee when a FINRA client has 

established an additional fee for an examination 

that it sponsors. For example, the fee to take the 

Series 51 (Municipal Fund Securities Limited 

Principal) examination is currently $155. Of this 

amount, $95 is the FINRA administration and 

delivery fee, and $60 is the development fee 

determined by the FINRA client, the MSRB. See 

MSRB Rule A–16. 

8While delivery costs for examinations have 

increased over the last three years, delivery costs for 

qualification examinations are scheduled to 

stabilize in 2015 and 2016 based on FINRA’s 

recently negotiated agreements with vendors that 

deliver the qualification examinations through their 

networks of test delivery centers. 

9 15 U.S.C. 78o–3(b)(5). 

Series 28 Introducing Broker-Dealer Financial and Operations Principal ..................................................................................... [$95] $100 

Series 37 Canada Module of S7 (Options Required) ........................................................................................................................ [$175] $185 

Series 38 Canada Module of S7 (No Options Required) .................................................................................................................. [$175] $185 

Series 39 Direct Participation Programs Principal ........................................................................................................................... [$90] $95 

Series 42 Registered Options Representative .................................................................................................................................... [$70] $75 

Series 51 Municipal Fund Securities Limited Principal ................................................................................................................. [$95] $105 

Series 52 Municipal Securities Representative ................................................................................................................................ [$120] $130 

Series 53 Municipal Securities Principal .......................................................................................................................................... [$105] $115 

Series 55 Limited Representative—Equity Trader ............................................................................................................................ [$105] $110 

Series 62 Corporate Securities Limited Representative ................................................................................................................... [$90] $95 

Series 72 Government Securities Representative ............................................................................................................................. [$105] $110 

Series 79 Investment Banking Qualification Examination .............................................................................................................. [$290] $305 

Series 82 Limited Representative—Private Securities Offering ....................................................................................................... [$90] $95 

Series 86 Research Analyst—Analysis .............................................................................................................................................. [$175] $185 

Series 87 Research Analyst—Regulatory ........................................................................................................................................... [$125] $130 

Series 99 Operations Professional ..................................................................................................................................................... [$125] $130 

(1) through (4) No Change. 

(d) through (i) No Change. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FINRA 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. FINRA 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 proposed rule change amends 

Section 4(c) of Schedule A of the FINRA 

By-Laws to increase qualification 

examination fees. Persons engaged in 

the investment banking or securities 

business of a FINRA member who 

function as principals or representatives 

are required to register with FINRA in 

each category of registration appropriate 

to their functions.5 Such individuals 

must pass an appropriate qualification 

examination before their registration can 

become effective. These mandatory 

qualification examinations cover a 

broad range of subjects regarding 

financial markets and products, 

individual responsibilities, securities 

industry rules, and regulatory structure. 

FINRA develops, maintains, and 

delivers all qualification examinations 

for individuals who are registered or 

seeking registration with FINRA. FINRA 

also administers and delivers 

examinations sponsored (i.e., 

developed) by the Municipal Securities 

Rulemaking Board (‘‘MSRB’’) and other 

self-regulatory organizations, the North 

American Securities Administrators 

Association, the National Futures 

Association, and the Federal Deposit 

Insurance Corporation. 

FINRA currently administers 

examinations electronically through the 

PROCTOR® system 6 at testing centers 

operated by vendors under contract 

with FINRA. FINRA charges an 

examination fee to candidates for 

FINRA-sponsored and co-sponsored 

examinations to cover the development, 

maintenance and delivery of these 

examinations. For qualification 

examinations sponsored by a FINRA 

client and administered by FINRA, 

FINRA charges a delivery fee that 

represents either a portion of or the 

entire examination fee for the 

examination.7

FINRA regularly conducts a 

comprehensive review of the 

examination fee structure, including an 

analysis of the costs associated with 

developing, administering, and 

delivering each examination, so that 

FINRA may better understand whether 

pricing changes are warranted and 

evaluate the financial condition of each 

qualification examination program. 

Based on the results of the review, 

FINRA may propose changes to better 

align the examination fee structure with 

the costs associated with the programs. 

When changes are warranted, fees are 

set at levels that are expected to meet 

cost and revenue objectives over a twoto-three year period to provide firms 

and examination candidates with a 

predictable cost environment. 

In this regard, the most recent review 

revealed that certain operational costs 

have increased and, based on current 

information, will continue to increase 

over the next few years. In particular, 

these increased costs consist of: (1) Fees 

that vendors charge FINRA for 

delivering qualification examinations 

through their networks of test delivery 

centers; (2) staff labor associated with 

the development and maintenance of 

the qualification examinations; and (3) 

PROCTOR system maintenance and 

enhancement expenses.8 FINRA 

believes that the proposed rule change 

will help to better align the examination 

program fees with these increased costs. 

Therefore, FINRA is proposing to amend 

Section 4(c) of Schedule A to the FINRA 

By-Laws to increase the fees for the 

qualification examinations set forth in 

Section 4(c). 

FINRA has filed the proposed rule 

change for immediate effectiveness. 

FINRA is proposing that the 

implementation date of the proposed 

rule change will be April 1, 2015. 

Specifically, the proposed qualification 

examination fees would become 

effective for examination requests made 

in the CRD system on or after April 1, 

2015. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(5) of the Act,9 which 

requires, among other things, that 

FINRA rules provide for the equitable 

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Federal Register / Vol. 80, No. 60 / Monday, March 30, 2015 / Notices 16715 

10See Securities Exchange Act Release No. 66465 

(February 24, 2012), 77 FR 12635 (March 1, 2012) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2012–009). 

11See supra note 8. 12See supra note 8. 

allocation of reasonable dues, fees and 

other charges among members and 

issuers and other persons using any 

facility or system that FINRA operates 

or controls. 

FINRA believes that the proposed rule 

change constitutes an equitable 

allocation of fees as the qualification 

examination fees will be assessed only 

on those individuals who take 

qualification examinations. In addition, 

all candidates who register for a 

particular qualification examination 

will be charged the same amount. 

FINRA further believes that the 

proposed qualification examination 

changes are reasonable because they 

will more closely align the overall 

examination program fees with the 

overall costs associated with the 

programs. In this regard, FINRA notes 

that the last time that it increased fees 

for any of the qualification examinations 

set forth in Schedule A to the FINRA 

By-Laws was April 2012.10 Since that 

time, FINRA’s examination program 

expenses have increased and, based on 

current information, will continue to 

increase over the next few years. 

Specifically, FINRA has experienced 

cost increases relating to: (1) Fees that 

vendors charge FINRA for delivering 

qualification examinations through their 

networks of test delivery centers; (2) 

staff labor associated with the 

development and maintenance of the 

qualification examinations; and (3) 

PROCTOR system maintenance and 

enhancement expenses. 11

To better align the fees and costs 

associated with the examination 

programs, FINRA is proposing modest 

fee increases. In this regard, FINRA 

notes that no qualification examination 

fee will increase by more than $15 and 

the majority of examination fees will 

increase by only $5. Accordingly, 

FINRA believes that the proposed 

qualification examination fee changes 

are equitably allocated and reasonable. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. FINRA 

believes that the proposed qualification 

examination fee changes have limited 

economic impacts on the industry. 

Economic Impact Assessment 

(a) Need for the Rule 

FINRA seeks to set the qualification 

examination fees in such a manner as to 

meet expected program costs and 

revenues over a two-to-three year period 

in order to provide firms and 

examination candidates with a 

predicable cost environment. FINRA has 

determined that operational costs for the 

program have increased since FINRA 

last adjusted the fees in April 2012. 

FINRA also projects that these 

operational costs will continue to 

increase. As a result, FINRA has 

determined that a fee increase is needed 

to better align the examination program 

fees to meet these increased costs. 

(b) Economic Baseline 

The current examination fee structure 

and expected costs associated with the 

examination programs serve as an 

economic baseline for the proposed rule 

change. Qualification examination fees 

are charged directly to members that act 

as sponsors for individuals seeking to 

obtain qualifications through the 

examination programs. While some 

members may choose to absorb these 

costs directly, other members directly 

pass on the costs of taking qualification 

examinations to the sponsored 

individual. FINRA’s qualification 

examination program expenses have 

increased over the past three years and 

are expected to continue to rise in the 

next few years. Specifically, the 

following expenses have increased and 

are expected to further increase in the 

next few years: (1) Fees that vendors 

charge FINRA for delivering 

qualification examinations through their 

networks of test delivery centers; (2) 

FINRA staff labor expenses associated 

with the development and maintenance 

of the qualification examinations; and 

(3) technology maintenance and 

enhancement expenses.12

In 2014, the total volume of 

qualification examinations was 130,830, 

sponsored by 2,813 member firms. The 

average volume per member firm was 47 

qualification examinations. The median 

volume per member firm was four 

qualification examinations, as large 

member firms that employed more 

representatives contributed to the 

majority of the qualification 

examination enrollments. For example, 

the top 25 member firms with the 

highest qualification examination 

enrollments accounted for 52% of the 

total volume with an average of 2,704 

enrollments per firm. In contrast, 70% 

of the overall member firms had less 

than 10 qualification examination 

enrollments. Equivalently in 2014, the 

number of persons enrolling for 

qualification examinations was 95,306, 

and the average number of enrollments 

per person was 1.4. 

Historically, the fees collected by the 

qualification examination programs 

have provided a limited but stable 

contribution to FINRA’s overall 

revenue. In the absence of the proposed 

rule change, the qualification 

examination programs would not be 

able to meet the target contribution 

margin, in addition to, covering 

increased costs in the coming years. 

(c) Economic Impacts 

Assuming stable qualification 

examination delivery volumes (defined 

by the number and type of qualification 

examinations provided), the 

contribution margin of the qualification 

examination programs is estimated to 

reach the target level in 2015 and 2016 

if the proposed fee increases become 

effective in April 2015. Compared to 

2014, the total increase in qualification 

examination fees is estimated to be 

$0.94 million in 2015 and $1.25 million 

in 2016. At the individual examination 

level, no qualification examination fee 

will increase by more than $15 and the 

majority of qualification examination 

fees will increase by $5. 

The increases in the qualification 

examination fees would impose a 

burden on members or individuals that 

pay for these examinations. Compared 

to the current fee structure, the average 

increase in qualification examination 

fees per member firm is estimated to be 

$334 in 2015 and $446 in 2016. The 

median fee increase per member firm is 

estimated to be $34 in 2015 and $45 in 

2016, as large member firms are 

expected to account for the majority of 

the examination enrollments. For 

example, the top 25 member firms with 

the highest enrollments are estimated to 

have an average increase of $18,459 in 

2015 and $24,612 in 2016. For the 

member firms with less than 10 

enrollments (which accounted for 70% 

of the overall member firms), the 

average increase per firm is estimated to 

be $26 in 2015 and $35 in 2016. In 

contrast with the dollar amount 

increases, assuming stable qualification 

examination delivery volumes, the 

percentage increases in qualification 

examination fees for member firms vary 

in a narrow range of 3% to 5% with an 

average of 4% in 2015 and 4% to 7% 

with an average of 5% in 2016. At the 

individual level, compared to 2014, the 

average qualification examination fee 

increase per person is estimated to be 

$10 in 2015 and $13 in 2016. 

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16716 Federal Register / Vol. 80, No. 60 / Monday, March 30, 2015 / Notices 

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(2). 

15 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

FINRA does not believe that the 

proposed rule change would impact the 

competition among member firms, those 

who seek qualifications, or to the 

provision of member services. Based on 

the economic impact assessment, the 

proposed increases in qualification 

examination fees are limited. Moreover, 

they do not impose significantly 

different impacts on member firms with 

different sizes or business models. 

Furthermore, FINRA does not believe 

that the proposed rule change will 

create any competitive advantage for 

any individuals as all candidates who 

register for a particular qualification 

examination will be charged the same 

amount. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 13 and paragraph (f)(2) of Rule 

19b–4 thereunder. 14 At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

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 rule-comments@

sec.gov. Please include File Number SR– 

FINRA–2015–006 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–FINRA–2015–006. 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). 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, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of FINRA. 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–FINRA– 

2015–006 and should be submitted on 

or before April 20, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority. 15

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–07133 Filed 3–27–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74570; File No. SR–NYSE– 

2015–12] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Amending Rule 

13 Relating to Pegging Interest 

March 24, 2015. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on March 17, 

2015, New York Stock Exchange LLC 

(‘‘NYSE’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 13 (Orders and Modifiers) relating 

to pegging interest. The text of the 

proposed rule change is available on the 

Exchange’s Web site at www.nyse.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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 13 relating to pegging interest to 

provide that if the protected best bid or 

offer (‘‘PBBO’’) is not within the range 

of the pegging interest, the pegging 

interest would peg to the ‘‘next bestpriced available displayable interest,’’ 

rather than the ‘‘next best-priced 

available interest.’’ This amendment 

would therefore exclude non-displayed 

interest from consideration as part of the 

‘‘next best-priced available interest’’ 

under the rule. 

Background 

Under current Rule 13, pegging 

interest pegs to prices based on (i) a 

PBBO, which may be available on the 

Exchange or an away market, or (ii) 

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