55180 Federal Register / Vol. 73, No. 186 / Wednesday, September 24, 2008 / Notices 

1 15 U.S.C. 78q(d). 

2 17 CFR 240.17d–2. 

FORM SH INFORMATION TABLE—PAGE 5 

FRIDAY, [Month, Day, Year] 

Name of issuer CUSIP Short position 

(start of day) 

Number of 

securities sold 

short (day) 

Value of 

securities sold 

short (day) 

Short position 

(end of day) 

Largest intraday short 

position 

Time of day of 

largest intraday short 

position 

FORM SH INFORMATION TABLE—PAGE 6 

SATURDAY-SUNDAY, [Month, Day, Year] 

Name of issuer CUSIP Short position 

(start of day) 

Number of 

securities sold 

short (day) 

Value of 

securities sold 

short (day) 

Short position 

(end of day) 

Largest intraday short 

position 

Time of day of 

largest intraday short 

position 

[FR Doc. E8–22487 Filed 9–23–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58563; File No. 4–569] 

Program for Allocation of Regulatory 

Responsibilities Pursuant to Rule 17d– 

2; Notice of Filing of Proposed Plan for 

the Allocation of Regulatory 

Responsibilities Between the Financial 

Industry Regulatory Authority, Inc. and 

BATS Exchange, Inc. 

September 17, 2008. 

Pursuant to section 17(d) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 17d–2 thereunder,2

notice is hereby given that on August 

27, 2008, BATS Exchange, Inc. 

(‘‘BATS’’) and the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

(together with BATS, the ‘‘Parties’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’) 

a plan for the allocation of regulatory 

responsibilities, dated August 25, 2008 

(‘‘17d–2 Plan’’ or the ‘‘Plan’’). The 

Commission is publishing this notice to 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 186 / Wednesday, September 24, 2008 / Notices 55181 

3 15 U.S.C. 78s(g)(1). 

4 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), 

respectively. 5 15 U.S.C. 78q(d)(1). 

6See 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). 

7 17 CFR 240.17d–1 and 17 CFR 240.17d–2, 

respectively. 

8See Securities Exchange Act Release No. 12352 

(April 20, 1976), 41 FR 18808 (May 7, 1976). 

9See Securities Exchange Act Release No. 12935 

(October 28, 1976), 41 FR 49091 (November 8, 

1976). 

10The proposed 17d–2 Plan refers to these 

common members as ‘‘Dual Members.’’ See 

Paragraph 1(c) of the proposed 17d–2 Plan. 

11See paragraph 1(b) of the proposed 17d–2 Plan 

(defining Common Rules). See also paragraph 1(f) 

of the proposed 17d–2 Plan (defining Regulatory 

Responsibilities). Paragraph 2 of the Plan provides 

that annually, or more frequently as required by 

changes in either BATS’s rules or FINRA rules, the 

parties shall review and update, if necessary, the 

list of Common Rules. Further, paragraph 3 of the 

Plan provides that BATS shall furnish FINRA with 

a list of Dual Members, and shall update the list no 

less frequently than once each calendar quarter. 

12See Securities Exchange Act Release No. 58350 

(August 13, 2008), 73 FR 48247 (August 18, 2008) 

(File No. 4–566) (notice of filing of proposed plan). 

See also Securities Exchange Act Release No. 58536 

(September 12, 2008) (File No. 4–566) (order 

approving and declaring effective the plan). The 

Certification identifies several Common Rules that 

may also be addressed in the context of regulating 

insider trading activities pursuant to the proposed 

separate multiparty agreement. 

13See paragraph 6 of the proposed 17d–2 Plan. 

14See paragraph 2 of the proposed 17d–2 Plan. 

15See paragraph 6 of the proposed 17d–2 Plan. 

solicit comments on the 17d–2 Plan 

from interested persons. 

I. Introduction 

Section 19(g)(1) of the Act,3 among 

other things, requires every selfregulatory organization (‘‘SRO’’) 

registered as either a national securities 

exchange or national securities 

association to examine for, and enforce 

compliance by, its members and persons 

associated with its members with the 

Act, the rules and regulations 

thereunder, and the SRO’s own rules, 

unless the SRO is relieved of this 

responsibility pursuant to section 17(d) 

or section 19(g)(2) of the Act.4 Without 

this relief, the statutory obligation of 

each individual SRO could result in a 

pattern of multiple examinations of 

broker-dealers that maintain 

memberships in more than one SRO 

(‘‘common members’’). Such regulatory 

duplication would add unnecessary 

expenses for common members and 

their SROs. 

Section 17(d)(1) of the Act 5 was 

intended, in part, to eliminate 

unnecessary multiple examinations and 

regulatory duplication.6 With respect to 

a common member, section 17(d)(1) 

authorizes the Commission, by rule or 

order, to relieve an SRO of the 

responsibility to receive regulatory 

reports, to examine for and enforce 

compliance with applicable statutes, 

rules, and regulations, or to perform 

other specified regulatory functions. 

To implement section 17(d)(1), the 

Commission adopted two rules: Rule 

17d–1 and Rule 17d–2 under the Act.7

Rule 17d–1 authorizes the Commission 

to name a single SRO as the designated 

examining authority (‘‘DEA’’) to 

examine common members for 

compliance with the financial 

responsibility requirements imposed by 

the Act, or by Commission or SRO 

rules.8 When an SRO has been named as 

a common member’s DEA, all other 

SROs to which the common member 

belongs are relieved of the responsibility 

to examine the firm for compliance with 

the applicable financial responsibility 

rules. On its face, Rule 17d–1 deals only 

with an SRO’s obligations to enforce 

member compliance with financial 

responsibility requirements. Rule 17d–1 

does not relieve an SRO from its 

obligation to examine a common 

member for compliance with its own 

rules and provisions of the federal 

securities laws governing matters other 

than financial responsibility, including 

sales practices and trading activities and 

practices. 

To address regulatory duplication in 

these and other areas, the Commission 

adopted Rule 17d–2 under the Act.9

Rule 17d–2 permits SROs to propose 

joint plans for the allocation of 

regulatory responsibilities with respect 

to their common members. Under 

paragraph (c) of Rule 17d–2, the 

Commission may declare such a plan 

effective if, after providing for 

appropriate notice and comment, it 

determines that the plan is necessary or 

appropriate in the public interest and 

for the protection of investors; to foster 

cooperation and coordination among the 

SROs; to remove impediments to, and 

foster the development of, a national 

market system and a national clearance 

and settlement system; and is in 

conformity with the factors set forth in 

Section 17(d) of the Act. Commission 

approval of a plan filed pursuant to Rule 

17d–2 relieves an SRO of those 

regulatory responsibilities allocated by 

the plan to another SRO. 

II. Proposed Plan 

The proposed 17d–2 Plan is intended 

to reduce regulatory duplication for 

firms that are common members of both 

BATS and FINRA.10 Pursuant to the 

proposed 17d–2 Plan, FINRA would 

assume certain examination and 

enforcement responsibilities for 

common members with respect to 

certain applicable laws, rules, and 

regulations. 

The text of the Plan delineates the 

proposed regulatory responsibilities 

with respect to the Parties. Included in 

the proposed Plan is an exhibit (the 

‘‘BATS Exchange Rules Certification for 

17d–2 Agreement with FINRA,’’ referred 

to herein as the ‘‘Certification’’) that 

lists every BATS rule, and select federal 

securities laws, rules, and regulations, 

for which FINRA would bear 

responsibility under the Plan for 

overseeing and enforcing with respect to 

BATS members that are also members of 

FINRA and the associated persons 

therewith (‘‘Dual Members’’). 

Specifically, under the 17d–2 Plan, 

FINRA would assume examination and 

enforcement responsibility relating to 

compliance by Dual Members with the 

rules of BATS that are substantially 

similar to the applicable rules of 

FINRA,11 as well as any provisions of 

the federal securities laws and the rules 

and regulations thereunder delineated 

in the Certification (‘‘Common Rules’’). 

Common Rules would not include the 

application of any BATS rule or FINRA 

rule, or any rule or regulation under the 

Act, to the extent that it pertains to 

violations of insider trading activities, 

because such matters are covered by a 

separate multiparty agreement under 

Rule 17d–2.12 In the event that a Dual 

Member is the subject of an 

investigation relating to a transaction on 

BATS, the plan acknowledges that 

BATS may, in its discretion, exercise 

concurrent jurisdiction and 

responsibility for such matter.13

Under the Plan, BATS would retain 

full responsibility for surveillance and 

enforcement with respect to trading 

activities or practices involving BATS’s 

own marketplace, including, without 

limitation, registration pursuant to its 

applicable rules of associated persons 

(i.e., registration rules that are not 

Common Rules); its duties as a DEA 

pursuant to Rule 17d–1 under the Act; 

and any BATS rules that are not 

Common Rules, except for BATS rules 

for any broker-dealer subsidiary of 

BATS Holding, Inc.14 Apparent 

violations of any BATS rules by any 

broker-dealer subsidiary of BATS 

Holdings, Inc. will be processed by, and 

enforcement proceedings in respect 

thereto will be conducted by, FINRA.15

The text of the proposed 17d–2 Plan 

is as follows: 


jlentini on PROD1PC65 with NOTICES
55182 Federal Register / Vol. 73, No. 186 / Wednesday, September 24, 2008 / Notices 

Agreement Between Financial Industry 

Regulatory Authority, Inc. and BATS 

Exchange, Inc. Pursuant to Rule 17d–2 

Under the Securities Exchange Act of 

1934 

This Agreement, by and between the 

Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) and BATS 

Exchange, Inc. (‘‘BATS’’), is made this 

25th day of August, 2008 (the 

‘‘Agreement’’), pursuant to section 17(d) 

of the Securities Exchange Act of 1934 

(the ‘‘Exchange Act’’) and Rule 17d–2 

thereunder, which permits agreements 

between self-regulatory organizations to 

allocate regulatory responsibility to 

eliminate regulatory duplication. FINRA 

and BATS may be referred to 

individually as a ‘‘party’’ and together 

as the ‘‘parties.’’ 

Whereas, FINRA and BATS desire to 

reduce duplication in the examination 

of their Dual Members (as defined 

herein) and in the filing and processing 

of certain registration and membership 

records; and 

Whereas, FINRA and BATS desire to 

execute an agreement covering such 

subjects pursuant to the provisions of 

Rule 17d–2 under the Exchange Act and 

to file such agreement with the 

Securities and Exchange Commission 

(the ‘‘SEC’’ or ‘‘Commission’’) for its 

approval. 

Now, therefore, in consideration of 

the mutual covenants contained 

hereinafter, FINRA and BATS hereby 

agree as follows: 

1. Definitions. Unless otherwise 

defined in this Agreement or the context 

otherwise requires, the terms used in 

this Agreement shall have the same 

meaning as they have under the 

Exchange Act and the rules and 

regulations thereunder. As used in this 

Agreement, the following terms shall 

have the following meanings: 

(a) ‘‘BATS Rules’’ or ‘‘FINRA Rules’’ 

shall mean: (i) The rules of BATS, or (ii) 

the rules of FINRA, respectively, as the 

rules of an exchange or association are 

defined in Exchange Act Section 

3(a)(27). 

(b) ‘‘Common Rules’’ shall mean 

BATS Rules that are substantially 

similar to the applicable FINRA Rules 

and certain provisions of the Exchange 

Act and SEC rules set forth on Exhibit 

1 in that examination for compliance 

with such provisions and rules would 

not require FINRA to develop one or 

more new examination standards, 

modules, procedures, or criteria in order 

to analyze the application of the 

provision or rule, or a Dual Member’s 

activity, conduct, or output in relation 

to such provision or rule; provided, 

however, Common Rules shall not 

include the application of the SEC, 

BATS or FINRA rules as they pertain to 

violations of insider trading activities, 

which is covered by a separate 17d–2 

Agreement by and among the American 

Stock Exchange, LLC, Boston Stock 

Exchange, Inc., CBOE Stock Exchange, 

LLC, Chicago Stock Exchange, Inc., 

Financial Industry Regulatory 

Authority, Inc., International Securities 

Exchange, LLC, The NASDAQ Stock 

Market LLC, National Stock Exchange, 

Inc., New York Stock Exchange, LLC, 

NYSE Arca Inc., NYSE Regulation, Inc., 

and Philadelphia Stock Exchange, Inc. 

submitted to the SEC on August 12, 

2008. 

(c) ‘‘Dual Members’’ shall mean those 

BATS members that are also members of 

FINRA and the associated persons 

therewith. 

(d) ‘‘Effective Date’’ shall have the 

meaning set forth in paragraph 13. 

(e) ‘‘Enforcement Responsibilities’’ 

shall mean the conduct of appropriate 

proceedings, in accordance with 

FINRA’s Code of Procedure (the NASD 

Rule 9000 Series) and other applicable 

FINRA procedural rules, to determine 

whether violations of Common Rules 

have occurred, and if such violations are 

deemed to have occurred, the 

imposition of appropriate sanctions as 

specified under FINRA’s Code of 

Procedure and sanctions guidelines. 

(f) ‘‘Regulatory Responsibilities’’ shall 

mean the examination responsibilities 

and Enforcement Responsibilities 

relating to compliance by the Dual 

Members with the Common Rules and 

the provisions of the Exchange Act and 

the rules and regulations thereunder, 

and other applicable laws, rules and 

regulations, each as set forth on Exhibit 

1 attached hereto. 

2. Regulatory and Enforcement 

Responsibilities. FINRA shall assume 

Regulatory Responsibilities and 

Enforcement Responsibilities for Dual 

Members. Attached as Exhibit 1 to this 

Agreement and made part hereof, BATS 

furnished FINRA with a current list of 

Common Rules and certified to FINRA 

that such rules that are BATS Rules are 

substantially similar to the 

corresponding FINRA Rules (the 

‘‘Certification’’). FINRA hereby agrees 

that the rules listed in the Certification 

are Common Rules as defined in this 

Agreement. Each year following the 

Effective Date of this Agreement, or 

more frequently if required by changes 

in either the rules of BATS or FINRA, 

BATS shall submit an updated list of 

Common Rules to FINRA for review 

which shall add BATS Rules not 

included in the current list of Common 

Rules that qualify as Common Rules as 

defined in this Agreement; delete BATS 

Rules included in the current list of 

Common Rules that no longer qualify as 

Common Rules as defined in this 

Agreement; and confirm that the 

remaining rules on the current list of 

Common Rules continue to be BATS 

Rules that qualify as Common Rules as 

defined in this Agreement. Within 30 

days of receipt of such updated list, 

FINRA shall confirm in writing whether 

the rules listed in any updated list are 

Common Rules as defined in this 

Agreement. Notwithstanding anything 

herein to the contrary, it is explicitly 

understood that the term ‘‘Regulatory 

Responsibilities’’ does not include, and 

BATS shall retain full responsibility for 

(unless otherwise addressed by separate 

agreement or rule) (collectively, the 

‘‘Retained Responsibilities’’) the 

following: 

(a) Surveillance, examination, 

investigation and enforcement with 

respect to trading activities or practices 

involving BATS’s own marketplace; 

(b) Registration pursuant to its 

applicable rules of associated persons 

(i.e., registration rules that are not 

Common Rules); 

(c) Discharge of its duties and 

obligations as a Designated Examining 

Authority pursuant to Rule 17d–1 under 

the Exchange Act; and 

(d) Any BATS Rules that are not 

Common Rules, except for BATS Rules 

for any broker-dealer subsidiary of 

BATS Holdings, Inc., as provided in 

paragraph 6. 

3. Dual Members. Prior to the 

Effective Date, BATS shall furnish 

FINRA with a current list of Dual 

Members, which shall be updated no 

less frequently than once each quarter. 

4. No Charge. There shall be no charge 

to BATS by FINRA for performing the 

Regulatory Responsibilities and 

Enforcement Responsibilities under this 

Agreement except as hereinafter 

provided. FINRA shall provide BATS 

with ninety (90) days advance written 

notice in the event FINRA decides to 

impose any charges to BATS for 

performing the Regulatory 

Responsibilities under this Agreement. 

If FINRA determines to impose a charge, 

BATS shall have the right at the time of 

the imposition of such charge to 

terminate this Agreement; provided, 

however, that FINRA’s Regulatory 

Responsibilities under this Agreement 

shall continue until the Commission 

approves the termination of this 

Agreement. 

5. Reassignment of Regulatory 

Responsibilities. Notwithstanding any 

provision hereof, this Agreement shall 

be subject to any statute, or any rule or 

order of the Commission, or industry 

agreement, restructuring the regulatory 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 186 / Wednesday, September 24, 2008 / Notices 55183 

framework of the securities industry or 

reassigning Regulatory Responsibilities 

between self-regulatory organizations. 

To the extent such action is inconsistent 

with this Agreement, such action shall 

supersede the provisions hereof to the 

extent necessary for them to be properly 

effectuated and the provisions hereof in 

that respect shall be null and void. 

6. Notification of Violations. In the 

event that FINRA becomes aware of 

apparent violations of any BATS Rules, 

which are not listed as Common Rules, 

discovered pursuant to the performance 

of the Regulatory Responsibilities 

assumed hereunder, FINRA shall notify 

BATS of those apparent violations for 

such response as BATS deems 

appropriate. In the event that BATS 

becomes aware of apparent violations of 

any Common Rules, discovered 

pursuant to the performance of the 

Retained Responsibilities, BATS shall 

notify FINRA of those apparent 

violations and such matters shall be 

handled by FINRA as provided in this 

Agreement. With respect to apparent 

violations of any BATS Rules by any 

broker-dealer subsidiary of BATS’ 

parent company, BATS Holdings, Inc., 

FINRA shall not make referrals to BATS 

pursuant to this paragraph 6. Such 

apparent violations shall be processed 

by, and enforcement proceedings in 

respect thereto will be conducted by, 

FINRA as provided in this Agreement. 

Each party agrees to make available 

promptly all files, records and witnesses 

necessary to assist the other in its 

investigation or proceedings. Apparent 

violations of Common Rules, FINRA 

Rules, federal securities laws, and rules 

and regulations thereunder, shall be 

processed by, and enforcement 

proceedings in respect thereto shall be 

conducted by FINRA as provided 

hereinbefore; provided, however, that in 

the event a Dual Member is the subject 

of an investigation relating to a 

transaction on BATS, BATS may in its 

discretion assume concurrent 

jurisdiction and responsibility. 

7. Continued Assistance. 

(a) FINRA shall make available to 

BATS all information obtained by 

FINRA in the performance by it of the 

Regulatory Responsibilities hereunder 

with respect to the Dual Members 

subject to this Agreement. In particular, 

and not in limitation of the foregoing, 

FINRA shall furnish BATS any 

information it obtains about Dual 

Members which reflects adversely on 

their financial condition. BATS shall 

make available to FINRA any 

information coming to its attention that 

reflects adversely on the financial 

condition of Dual Members or indicates 

possible violations of applicable laws, 

rules or regulations by such firms. 

(b) The parties agree that documents 

or information shared shall be held in 

confidence, and used only for the 

purposes of carrying out their respective 

regulatory obligations. Neither party 

shall assert regulatory or other 

privileges as against the other with 

respect to documents or information 

that is required to be shared pursuant to 

this Agreement. 

(c) The sharing of documents or 

information between the parties 

pursuant to this Agreement shall not be 

deemed a waiver as against third parties 

of regulatory or other privileges relating 

to the discovery of documents or 

information. 

8. Statutory Disqualifications. When 

FINRA becomes aware of a statutory 

disqualification as defined in the 

Exchange Act with respect to a Dual 

Member, FINRA shall determine 

pursuant to Sections 15A(g) and/or 

Section 6(c) of the Exchange Act the 

acceptability or continued applicability 

of the person to whom such 

disqualification applies and keep BATS 

advised of its actions in this regard for 

such subsequent proceedings as BATS 

may initiate. 

9. Customer Complaints. BATS shall 

forward to FINRA copies of all customer 

complaints involving Dual Members 

received by BATS relating to FINRA’s 

Regulatory Responsibilities under this 

Agreement. It shall be FINRA’s 

responsibility to review and take 

appropriate action in respect to such 

complaints. 

10. Advertising. FINRA shall assume 

responsibility to review the advertising 

of Dual Members subject to the 

Agreement, provided that such material 

is filed with FINRA in accordance with 

FINRA’s filing procedures and is 

accompanied with any applicable filing 

fees set forth in FINRA Rules. 

11. No Restrictions on Regulatory 

Action. Nothing contained in this 

Agreement shall restrict or in any way 

encumber the right of either party to 

conduct its own independent or 

concurrent investigation, examination 

or enforcement proceeding of or against 

Dual Members, as either party, in its 

sole discretion, shall deem appropriate 

or necessary. 

12. Termination. This Agreement may 

be terminated by BATS or FINRA at any 

time upon the approval of the 

Commission after one (1) year’s written 

notice to the other party, except as 

provided in paragraph 4. 

13. Effective Date. This Agreement 

shall be effective upon approval of the 

Commission. 

14. Arbitration. In the event of a 

dispute between the parties as to the 

operation of this Agreement, BATS and 

FINRA hereby agree that any such 

dispute shall be settled by arbitration in 

Washington, DC in accordance with the 

rules of the American Arbitration 

Association then in effect, or such other 

procedures as the parties may mutually 

agree upon. Judgment on the award 

rendered by the arbitrator(s) may be 

entered in any court having jurisdiction. 

Each party acknowledges that the timely 

and complete performance of its 

obligations pursuant to this Agreement 

is critical to the business and operations 

of the other party. In the event of a 

dispute between the parties, the parties 

shall continue to perform their 

respective obligations under this 

Agreement in good faith during the 

resolution of such dispute unless and 

until this Agreement is terminated in 

accordance with its provisions. Nothing 

in this Section 14 shall interfere with a 

party’s right to terminate this Agreement 

as set forth herein. 

15. Notification of Members. BATS 

and FINRA shall notify Dual Members 

of this Agreement after the Effective 

Date by means of a uniform joint notice. 

16. Amendment. This Agreement may 

be amended in writing duly approved 

by each party. All such amendments 

must be filed with and approved by the 

Commission before they become 

effective. 

17. Limitation of Liability. Neither 

FINRA nor BATS nor any of their 

respective directors, governors, officers 

or employees shall be liable to the other 

party to this Agreement for any liability, 

loss or damage resulting from or 

claimed to have resulted from any 

delays, inaccuracies, errors or omissions 

with respect to the provision of 

Regulatory Responsibilities as provided 

hereby or for the failure to provide any 

such responsibility, except with respect 

to such liability, loss or damages as 

shall have been suffered by one or the 

other of FINRA or BATS and caused by 

the willful misconduct of the other 

party or their respective directors, 

governors, officers or employees. No 

warranties, express or implied, are made 

by FINRA or BATS with respect to any 

of the responsibilities to be performed 

by each of them hereunder. 

18. Relief from Responsibility. 

Pursuant to sections 17(d)(1)(A) and 

19(g) of the Exchange Act and Rule 17d– 

2 thereunder, FINRA and BATS join in 

requesting the Commission, upon its 

approval of this Agreement or any part 

thereof, to relieve BATS of any and all 

responsibilities with respect to matters 

allocated to FINRA pursuant to this 

Agreement; provided, however, that this 


jlentini on PROD1PC65 with NOTICES
55184 Federal Register / Vol. 73, No. 186 / Wednesday, September 24, 2008 / Notices 

Agreement shall not be effective until 

the Effective Date. 

19. Severability. Any term or 

provision of this Agreement that is 

invalid or unenforceable in any 

jurisdiction shall, as to such 

jurisdiction, be ineffective to the extent 

of such invalidity or unenforceability 

without rendering invalid or 

unenforceable the remaining terms and 

provisions of this Agreement or 

affecting the validity or enforceability of 

any of the terms or provisions of this 

Agreement in any other jurisdiction. 

20. Counterparts. This Agreement 

may be executed in one or more 

counterparts, each of which shall be 

deemed an original, and such 

counterparts together shall constitute 

one and the same instrument. 

In witness whereof, each party has 

executed or caused this Agreement to be 

executed on its behalf by a duly 

authorized officer as of the date first 

written above. 

BATS EXCHANGE, INC. 

By: llllllllllllllll

Name: 

Title: 

FINANCIAL INDUSTRY REGULATORY 

AUTHORITY, INC. 

By: llllllllllllllll

Name: 

Title: 

Exhibit 1 

BATS Exchange Rules Certification for 

17d–2 Agreement With FINRA 

BATS Exchange hereby certifies that 

the requirements contained in the rules 

listed below are identical to, or 

substantially similar to, the comparable 

FINRA (NASD) Rule, Exchange Act 

provision or SEC rule identified 

(‘‘Common Rules’’). 

BATS Exchange Rule: FINRA (NASD) Rule, Exchange Act Provision or SEC Rule: 

Rule 2.5 Interpretation and Policy .02, Continuing Education Requirement for Authorized Traders of Members.1120(a)(1)–(4) Continuing Education Requirements. 

Rule 3.1 Business Conduct of Members ............................................... 2110 Standards of Commercial Honor and Principles of Trade. 

Rule 3.2 Violations Prohibited* .............................................................. 2110 Standards of Commercial Honor and Principles of Trade and 

3010 Supervision.* 

Rule 3.3 Use of Fraudulent Devices ...................................................... 2120 Use of Manipulative, Deceptive or Other Fraudulent Device. 

Rule 3.5(a) Advertising Practices .......................................................... 2210(d)(1)(B) Communications with the Public. 

Rule 3.5(b) Advertising Practices .......................................................... 2210(d)(2)(C) Communications with the Public. 

Rule 3.5(c) Advertising Practices ........................................................... 2210(d)(1) Communications with the Public. 

Rule 3.5(d) Advertising Practices .......................................................... 2210(b)(1) Communications with the Public. 

Rule 3.5(e) Advertising Practices .......................................................... 2210(b)(2)(A) and 2210(c) Communications with the Public. 

Rule 3.5(f) Advertising Practices ........................................................... 2210(d)(2)(A) and 2210(d)(1)(E) Communications with the Public. 

Rule 3.5(g) Advertising Practices .......................................................... 2210(d)(1) Communications with the Public. 

Rule 3.5(h) Advertising Practices .......................................................... 2210(d)(1) Communications with the Public. 

Rule 3.6 Fair Dealing with Customers ................................................... IM–2310–2(b)(1), (2), (4)(A)(i), (4)(A)(iii), (4)(A)(iv), and (5). 

Rule 3.7(a) Recommendations to Customers ....................................... 2310(a) Recommendations to Customers (Suitability). 

Rule 3.8(a) The Prompt Receipt and Delivery of Securities ................. 3370 Purchases. 

Rule 3.8(b) The Prompt Receipt and Delivery of Securities ................. SEC Regulation SHO. 

Rule 3.9 Charges for Services Performed ............................................. 2430 Charges for Services Performed. 

Rule 3.10 Use of Information ................................................................. 3120 Use of Information Obtained in Fiduciary Capacity. 

Rule 3.13 Payment Designed to Influence Market Prices, Other than 

Paid Advertising.

3330 Payment Designed to Influence Market Prices, Other than Paid 

Advertising. 

Rule 3.14 Disclosure on Confirmations ................................................. 2230 Confirmations and SEC Rule 10b–10 Confirmation of Transactions. 

Rule 3.15 Disclosure of Control ............................................................. 2240 Disclosure of Control Relationship With Issuer. 

Rule 3.16 Discretionary Accounts .......................................................... 2510 Discretionary Accounts. 

Rule 3.17 Customer’s Securities or Funds ............................................ 2330(a) Customers’ Securities or Funds—Improper Use. 

Rule 3.18 Prohibition Against Guarantees ............................................ 2330(e) Customers’ Securities or Funds—Prohibition Against Guarantees. 

Rule 3.19 Sharing in Accounts; Extent Permissible .............................. 2330(f)(1) Customers’ Securities or Funds—Sharing in Accounts; Extent Permissible. 

Rule 4.1 Requirements .......................................................................... Section 17 of the Exchange Act and the rules thereunder. 

Rule 5.1 Written Procedures .................................................................. 3010(b)(1) Supervision—Written Procedures.* 

Rule 5.2 Responsibility of Members ...................................................... 3010(a)(4) and (b)(4) Supervision.* 

Rule 5.3 Records ................................................................................... 3010(a)(1), (b) and (c) Supervision.* 

Rule 5.4 Review of Activities ................................................................. 3010(c) & (d) Supervision—Internal Inspections/ Review of Transactions and Correspondence.* 

Rule 5.5 Information Barrier Procedures ............................................... Section 15(f) of Exchange Act. 

Rule 5.6 Anti-Money Laundering Compliance Program ........................ 3011 Anti-Money Laundering Compliance Program. 

Rule 9.3 Predispute Arbitration Agreements ......................................... 3110(f)—Books and Records (Requirements When Using Predispute 

Arbitration Agreements for Customer Accounts).* 

Rule 12.11 Best Execution .................................................................... 2320 Best Execution and Interpositioning. 

FINRA shall only have Regulatory Responsibility regarding the first phase of the BATS rule regarding prohibitions from violating the Securities 

Exchange Act of 1934 and the rules and regulations thereunder; responsibility for the remainder of the Rule shall remain with BATS. 

* FINRA shall not have any Regulatory Responsibilities for these rules as they pertain to violations of insider trading activities, which is covered 

by a separate 17d–2 Agreement by and among the American Stock Exchange, LLC, Boston Stock Exchange, Inc., CBOE Stock Exchange, LLC, 

Chicago Stock Exchange, Inc., Financial Industry Regulatory Authority, Inc., International Securities Exchange, LLC, The NASDAQ Stock Market 

LLC, National Stock Exchange, Inc., New York Stock Exchange, LLC, NYSE Arca Inc., NYSE Regulation, Inc., and Philadelphia Stock Exchange, Inc. submitted to the SEC on August 12, 2008. 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 186 / Wednesday, September 24, 2008 / Notices 55185 

16 15 U.S.C. 78q(d)(1). 17 17 CFR 240.17d–2. 18 17 CFR 200.30–3(a)(34). 1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

In addition, the following provisions 

shall be part of this 17d–2 Agreement: Securities Exchange Act of 1934: 

Section 15(f) 

SEC Rules: 

Rule 200 of Regulation SHO—Definition 

of ‘‘Short Sale’’ and Marking 

Requirements Rule 203 of Regulation SHO— 

Borrowing and Delivery Requirements Rule 606 of Regulation NMS— 

Disclosure of Order Routing 

Information 

Rule 607 of Regulation NMS—Customer 

Account Statements 

* * * * * 

III. Date of Effectiveness of the 

Proposed Plan and Timing for 

Commission Action 

Pursuant to section 17(d)(1) of the 

Act 16 and Rule 17d–2 thereunder,17

October 15, 2008, the Commission may, 

by written notice, declare the plan 

submitted by BATS and FINRA, File No. 

4–569, to be effective if the Commission 

finds that the plan is necessary or 

appropriate in the public interest and 

for the protection of investors, to foster 

cooperation and coordination among 

self-regulatory organizations, or to 

remove impediments to and foster the 

development of the national market 

system and a national system for the 

clearance and settlement of securities 

transactions and in conformity with the 

factors set forth in section 17(d) of the 

Act. 

IV. Solicitation of Comments 

In order to assist the Commission in 

determining whether to approve the 

proposed 17d–2 Plan and to relieve 

BATS of the responsibilities which 

would be assigned to FINRA, interested 

persons are invited to submit written 

data, views, and arguments concerning 

the foregoing. Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/other.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File 

Number 4–569 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, Station Place, 100 F Street, 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number 4–569. This file number should 

be included on the subject line if e-mail 

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/ 

other.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 inspection and copying in 

the Commission’s Public Reference 

Room, on official business days between 

the hours of 10 a.m. and 3 p.m. Copies 

of the plan also will be available for 

inspection and copying at the principal 

offices of BATS and 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 4–569 and should be submitted 

on or before October 15, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–22212 Filed 9–23–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, September 18, 2008, at 

5:30 p.m. Commissioners and certain staff 

members who have an interest in the 

matter will attend the Closed Meeting. The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions as set forth in 

5 U.S.C. 552b(c)(8) and (9) and 17 CFR 

200.402(a)(8) and (9), permit 

consideration of the scheduled matter at 

the Closed Meeting. Commissioner Paredes as duty officer, 

voted to consider the item listed for the 

closed meeting in closed session, and 

determined that no earlier notice thereof 

was possible. The subject matter of the Closed 

Meeting scheduled for Thursday, 

September 18, 2008, will be: 

Matters related to the financial 

markets. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. For further 

information and to ascertain what, if 

any, matters have been added, deleted 

or postponed, please contact: 

The Office of the Secretary at 

(202) 551–5400. 

Dated: September 18, 2008. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–22246 Filed 9–23–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58570; File No. SR–Amex– 

2008–70] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Notice 

of Filing of Proposed Rule Change, as 

Modified by Amendment No. 1, To 

Revise Its Initial Listing Process To 

Eliminate the Current Appeal Process 

for Initial Listing Decisions, Add a New 

Confidential Pre-application Eligibility 

Review Process, and Upgrade Its 

Listing Requirements by Eliminating 

the Alternative Listing Standards 

September 17, 2008. 

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 

September 4, 2008, the American Stock 

Exchange LLC (‘‘Amex’’ or the 

‘‘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 

prepared by the Exchange. Amex filed 

Amendment No. 1 on September 17, 

2008. The Commission is publishing 

this notice to solicit comments on the 

proposed rule change, as amended, from 

interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

In connection with its pending 

acquisition by NYSE Euronext, the 

parent company of the New York Stock 

Exchange LLC (‘‘NYSE’’) and NYSE 

Arca, Inc. (‘‘NYSE Arca’’), the Exchange 

desires to revise its initial listing 

process to more closely align it with the 

process in place at the NYSE, as well as 

to upgrade its listing requirements. To 

that end, the Exchange proposes to 

amend Sections 101, 201, 206 and 


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