Document ID: SEC-2017-0479-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ISE Mercury, LLC
Posted Date: 2017-03-21T04:00Z

[Federal Register Volume 82, Number 53 (Tuesday, March 21, 2017)]
[Notices]
[Pages 14556-14557]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-05554]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80259; File No. 4-707]

Self-Regulatory Organizations; ISE Mercury, LLC; Notice of Filing 
of Proposed Minor Rule Violation Plan

March 16, 2017.
    Pursuant to Section 19(d)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19d-1(c)(2) thereunder,\2\ notice is hereby 
given that on March 9, 2017, ISE Mercury, LLC (``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') a proposed 
minor rule violation plan (``MRVP'') with sanctions not exceeding 
$2,500 which would not be subject to the provisions of Rule 19d-1(c)(1) 
of the Act \3\ requiring that a self-regulatory organization (``SRO'') 
promptly file notice with the Commission of any final disciplinary 
action taken with respect to any person or organization.\4\ In 
accordance with

[[Page 14557]]

Rule 19d-1(c)(2) under the Act,\5\ the Exchange proposed to designate 
certain specified rule violations as minor rule violations, and 
requested that it be relieved of the prompt reporting requirements 
regarding such violations, provided it gives notice of such violations 
to the Commission on a quarterly basis.
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    \1\ 15 U.S.C. 78s(d)(1).
    \2\ 17 CFR 240.19d-1(c)(2).
    \3\ 17 CFR 240.19d-1(c)(1).
    \4\ The Commission adopted amendments to paragraph (c) of Rule 
19d-1 to allow SROs to submit for Commission approval plans for the 
abbreviated reporting of minor disciplinary infractions. See 
Securities Exchange Act Release No. 21013 (June 1, 1984), 49 FR 
23828 (June 8, 1984). Any disciplinary action taken by an SRO 
against any person for violation of a rule of the SRO which has been 
designated as a minor rule violation pursuant to such a plan filed 
with and declared effective by the Commission shall not be 
considered ``final'' for purposes of Section 19(d)(1) of the Act if 
the sanction imposed consists of a fine not exceeding $2,500 and the 
sanctioned person has not sought an adjudication, including a 
hearing, or otherwise exhausted his administrative remedies.
    \5\ 17 CFR 240.19d-1(c)(2).
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    The Exchange proposes to include in its MRVP the procedures and 
violations currently included in Exchange Rule 1614 (``Imposition of 
Fines for Minor Rule Violations''), which has been incorporated by 
reference from the International Securities Exchange's rule book.\6\ 
According to the Exchange's MRVP, under Rule 1614, the Exchange may 
impose a fine (not to exceed $2,500) on any Member, or person 
associated with or employed by a Member, for any rule listed in Rule 
1614(d).\7\ The Exchange shall serve the person against whom a fine is 
imposed with a written statement setting forth the rule or rules 
violated, the act or omission constituting each such violation, the 
fine imposed, and the date by which such determination becomes final or 
by which such determination must be contested. If the person against 
whom the fine is imposed pays the fine, such payment shall be deemed to 
be a waiver of such person's right to a disciplinary proceeding and any 
review of the matter under the Exchange rules. Any person against whom 
a fine is imposed may contest the Exchange's determination by filing 
with the Exchange a written answer, at which point the matter shall 
become a disciplinary proceeding.
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    \6\ The Exchange received its grant of registration on January 
29, 2016, which included approving the rules that govern the 
Exchange. See Securities Exchange Act Release No. 76998 (Jan. 29, 
2016), 81 FR 6066 (Feb. 4, 2016).
    \7\ While Rule 1614 allows the Exchange to administer fines up 
to $5,000, the Exchange is only seeking relief from the reporting 
requirements of paragraph (c)(1) of Rule 19d-1 for fines 
administered under Rule 1614(d) that do not exceed $2,500.
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    The Exchange proposes that, as set forth in Exchange Rule 1614(d), 
violations of the following rules would be appropriate for disposition 
under the MRVP: Rule 412 (Position Limits); Rule 1403 (Focus Reports); 
Rule 1404 (Requests for Trade Data); Rule 723 (Price Improvement 
Mechanism for Crossing Transactions); Rule 717 (Order Entry); Rule 803 
(Quotation Parameters); Rule 805 (Execution of Orders in Appointed 
Options); Rule 419 (Mandatory Systems Testing); Rule 1100 (Exercise of 
Options Contracts); Rule 415 (Reports Related to Position Limits); and 
Rule 804(e) (Continuous Quotes).
    Upon the Commission's declaration of effectiveness of the MRVP, the 
Exchange will provide to the Commission a quarterly report for any 
actions taken on minor rule violations under the MRVP. The quarterly 
report will include: The Exchange's internal file number for the case, 
the name of the individual and/or organization, the nature of the 
violation, the specific rule provision violated, the sanction imposed, 
the number of times the rule violation occurred, and the date of the 
disposition.
    The Exchange also proposes that, going forward, to the extent that 
there are any changes to the rules applicable to the Exchange's MRVP, 
the Exchange requests that the Commission deem such changes to be 
modifications to the Exchange's MRVP.

I. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the Exchange's proposed MRVP, including whether 
the proposed MRVP 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 No. 4-707 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 No. 4-707. 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 MRVP that are filed with the 
Commission, and all written communications relating to the proposed 
MRVP 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 the proposed MRVP 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 No. 4-707 and should be submitted on 
or before April 11, 2017.

II. Date of Effectiveness of the Proposed Minor Rule Violation Plan and 
Timing for Commission Action

    Pursuant to Section 19(d)(1) of the Act and Rule 19d-1(c)(2) 
thereunder,\8\ after April 11, 2017, the Commission may, by order, 
declare the Exchange's proposed MRVP effective if the plan is 
consistent with the public interest, the protection of investors, or 
otherwise in furtherance of the purposes of the Act. The Commission in 
its order may restrict the categories of violations to be designated as 
minor rule violations and may impose any other terms or conditions to 
the proposed MRVP, File No. 4-707, and to the period of its 
effectiveness, which the Commission deems necessary or appropriate in 
the public interest, for the protection of investors or otherwise in 
furtherance of the purposes of the Act.
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    \8\ 15 U.S.C. 78s(d)(1); 17 CFR 240.19d-1(c)(2).
    \9\ 17 CFR 200.30-3(a)(44).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-05554 Filed 3-20-17; 8:45 am]
BILLING CODE 8011-01-P