Document ID: SEC-2019-1376-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Long-Term Stock Exchange, Inc.
Posted Date: 2019-09-25T04:00Z

[Federal Register Volume 84, Number 186 (Wednesday, September 25, 2019)]
[Notices]
[Pages 50525-50527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20679]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87021; File No. 4-753]

Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.; 
Notice of Filing of Proposed Minor Rule Violation Plan

September 19, 2019.
    Pursuant to Section 19(d)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19d-1(c)(2) thereunder,\2\ notice is hereby 
given that on August 23, 2019, Long-Term Stock Exchange, Inc. (``LTSE'' 
or the ``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-

[[Page 50526]]

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 Rule 19d-1(c)(2) under the Act, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(d)(1).
    \2\ 17 CFR 240.19d-1(c)(2).
    \3\ 17 CFR 240.19d-1(c)(2).
    \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.
---------------------------------------------------------------------------

    The Exchange proposes to include in its MRVP the procedures 
included in LTSE Rule 9.216(b) (``Procedure for Violation Under Plan 
Pursuant to Exchange Act Rule 19d-1(c)(2)'') and violations included in 
Rule 9.218 (``Violations Appropriate for Disposition Under Plan 
Pursuant to Exchange Act Rule 19d-1(c)(2)'').\5\ According to the 
Exchange's proposed MRVP, under Rule 9.216(b), the Exchange may impose 
a fine (not to exceed $2,500) and/or a censure on any Member or its 
associated person with respect to any rule listed in LTSE Rule 9.218. 
If the Financial Industry Regulatory Authority (``FINRA'') Department 
of Enforcement or the Department of Market Regulation, on behalf of the 
Exchange, has reason to believe a violation has occurred and if the 
Member or its associated person does not dispute the violation, the 
Department of Enforcement or the Department of Market Regulation may 
prepare and request that the Member or associated person execute a 
minor rule violation plan letter accepting a finding of violation, 
consenting to the imposition of sanctions, and agreeing to waive such 
Member's or associated person's right to a hearing before a Hearing 
Panel or, if applicable, an Extended Hearing Panel, and any right of 
appeal to the LTSE Appeals Committee, the Board, the SEC, and the 
courts, or to otherwise challenge the validity of the letter, if the 
letter is accepted. The letter shall describe the act or practice 
engaged in or omitted, the rule, regulation, or statutory provision 
violated, and the sanction or sanctions to be imposed. Unless the 
letter states otherwise, the effective date of any sanction(s) imposed 
will be a date to be determined by LTSE Regulation staff. In the event 
the letter is not accepted by the Member or associated person, or is 
rejected by the Office of Disciplinary Affairs, the matter can proceed 
in accordance with the Exchange's disciplinary rules already approved 
by the Commission, which include hearing rights for formal disciplinary 
proceedings.\6\
---------------------------------------------------------------------------

    \5\ The Exchange received its grant of registration on May 10, 
2019, which included approving the rules that govern the Exchange. 
Securities Exchange Act Release No. 85828 (May 10, 2019), 84 FR 
21841 (May 15, 2019). Exhibit A includes the entirety of Rules 
9.216(b) and 9.218. Terms not otherwise defined in this Notice are 
defined in the LTSE rules.
    \6\ See, generally, Chapter 9.
---------------------------------------------------------------------------

    The Exchange proposes that, as set forth in LTSE Rule 9.218, 
violations of the following rules would be appropriate for disposition 
under the MRVP: Rule 2.160(p) Continuing Education Requirements; Rule 
4.511 (General Requirements related to books and records requirements); 
Rule 4.540 (Furnishing of Records); Rule 5.110 (Supervision); Rule 
8.220 (Automated Submission of Trading Data Requested); Rule 
11.151(a)(1) (Market Maker Two-sided Quote Obligation); Rule 11.290 
(Short Sales); Rule 11.310 (Locking or Crossing Quotations in NMS 
Stocks); and Rule 11.420 (Order Audit Trail System Requirements).
    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.
    Based on compliance with the above, the Exchange hereby requests 
that the rule violations designated in LTSE Rule 9.218 be designated as 
minor rule violations subject to a minor rule violation reporting plan 
and that the Exchange be relieved of the current reporting requirements 
regarding such violations. In addition, going forward, to the extent 
that there are any changes to the rules applicable to the Exchange's 
MRVP, the Exchange hereby 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 foregoing, 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. 4-753 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. 4-753. 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 (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 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 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. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File No. 4-753, and should be submitted on 
or before October 16, 2019.

II. Date of Effectiveness of 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,\7\ after

[[Page 50527]]

October 16, 2019, 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. 
4-753, 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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(d)(1); 17 CFR 240.19d-1(c)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(44).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-20679 Filed 9-24-19; 8:45 am]
 BILLING CODE 8011-01-P