Document ID: SEC-2016-0282-0001
Agency: sec
Document Type: Notice
Title: Program for Allocation of Regulatory Responsibilities: Filing of Proposed Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and ISE Mercury, LLC
Posted Date: 2016-02-19T05:00Z

[Federal Register Volume 81, Number 33 (Friday, February 19, 2016)]
[Notices]
[Pages 8566-8571]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-03300]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77122; File No. 4-697]

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 ISE Mercury, LLC

February 11, 2016.
    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 February 9, 2016, ISE Mercury, LLC (``ISE Mercury'') and the 
Financial Industry Regulatory Authority, Inc. (``FINRA'') (together 
with ISE Mercury, the ``Parties'') filed with the Securities and 
Exchange Commission (``Commission'' or ``SEC'') a plan for the 
allocation of regulatory responsibilities, dated February 8, 2016 
(``17d-2 Plan'' or the ``Plan''). The Commission is publishing this 
notice to solicit comments on the 17d-2 Plan from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78q(d).
    \2\ 17 CFR 240.17d-2.
---------------------------------------------------------------------------

I. Introduction

    Section 19(g)(1) of the Act,\3\ among other things, requires every 
self-regulatory 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'') for 
compliance with certain rules that are substantially

[[Page 8567]]

identical across multiple SROs. Such regulatory duplication would add 
unnecessary expenses for common members and their SROs.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78s(g)(1).
    \4\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78q(d)(1).
    \6\ See 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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \7\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
    \8\ See Securities Exchange Act Release No. 12352 (April 20, 
1976), 41 FR 18808 (May 7, 1976).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 12935 (October 28, 
1976), 41 FR 49091 (November 8, 1976).
---------------------------------------------------------------------------

II. Proposed Plan

    The proposed 17d-2 Plan is intended to reduce regulatory 
duplication for firms that are common members of both ISE Mercury 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.
---------------------------------------------------------------------------

    \10\ The proposed 17d-2 Plan refers to these common members as 
``Dual Members.'' See Paragraph 1(c) of the proposed 17d-2 Plan.
---------------------------------------------------------------------------

    The text of the Plan delineates the proposed regulatory 
responsibilities with respect to the Parties. Included in the proposed 
Plan is an exhibit (the ``ISE Mercury Certification of Common Rules,'' 
referred to herein as the ``Certification'') that lists every ISE 
Mercury 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 ISE Mercury 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 ISE Mercury 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''). In the event that a Dual Member 
is the subject of an investigation relating to a transaction on ISE 
Mercury, the plan acknowledges that ISE Mercury may, in its discretion, 
exercise concurrent jurisdiction and responsibility for such 
matter.\12\
---------------------------------------------------------------------------

    \11\ See 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 ISE MERCURY 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 ISE MERCURY shall furnish 
FINRA with a list of Dual Members, and shall update the list no less 
frequently than once each calendar quarter.
    \12\ See paragraph 6 of the proposed 17d-2 Plan.
---------------------------------------------------------------------------

    Under the Plan, ISE Mercury would retain full responsibility for 
surveillance and enforcement with respect to trading activities or 
practices involving ISE Mercury'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 ISE 
Mercury rules that are not Common Rules.\13\
---------------------------------------------------------------------------

    \13\ See paragraph 2 of the proposed 17d-2 Plan.
---------------------------------------------------------------------------

    The text of the proposed 17d-2 Plan is as follows:
AGREEMENT BETWEEN FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. AND ISE 
MERCURY, LLC PURSUANT TO RULE 17d-2 UNDER THE SECURITIES EXCHANGE ACT 
OF 1934
    This Agreement, by and between Financial Industry Regulatory 
Authority, Inc. (``FINRA'') and ISE Mercury, LLC (``ISE Mercury''), is 
made this 8th day of February, 2016 (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 ISE Mercury may be referred 
to individually as a ``party'' and together as the ``parties.''
    WHEREAS, FINRA and ISE Mercury 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 ISE Mercury 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 ISE Mercury 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:

[[Page 8568]]

    (a) ``ISE Mercury Rules'' or ``FINRA Rules'' shall mean the rules 
of ISE Mercury or FINRA, respectively, as the rules of an exchange or 
association are defined in Exchange Act Section 3(a)(27).
    (b) ``Common Rules'' shall mean the ISE Mercury Rules that are 
substantially similar to the applicable FINRA Rules set forth in 
Exhibit 1 in that examination for compliance with such 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 rule, or a Dual Member's activity, conduct, or output in relation 
to such rule.
    (c) ``Dual Members'' shall mean those ISE Mercury 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 the FINRA Code of Procedure 
(the 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 the 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, 
ISE Mercury furnished FINRA with a current list of Common Rules and 
certified to FINRA that such rules are substantially similar to the 
corresponding FINRA Rule (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 ISE 
Mercury Rules or FINRA Rules, ISE Mercury shall submit an updated list 
of Common Rules to FINRA for review which shall add ISE Mercury Rules 
not included in the current list of Common Rules that qualify as Common 
Rules as defined in this Agreement; delete ISE Mercury 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 ISE Mercury 
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 ISE Mercury shall retain full 
responsibility for (unless otherwise addressed by separate agreement or 
rule) the following (collectively, the ``Retained Responsibilities''):
    (a) surveillance and enforcement with respect to trading activities 
or practices involving ISE Mercury's own marketplaces, including 
without limitation ISE Mercury's Rules relating to the rights and 
obligations of market makers;
    (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 ISE Mercury Rules that are not Common Rules.
    3. Dual Members. Prior to the Effective Date, ISE Mercury 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 ISE Mercury by FINRA for 
performing the Regulatory Responsibilities and Enforcement 
Responsibilities under this Agreement except as hereinafter provided. 
FINRA shall provide ISE Mercury with ninety (90) days advance written 
notice in the event FINRA decides to impose any charges to ISE Mercury 
for performing the Regulatory Responsibilities under this Agreement. If 
FINRA determines to impose a charge, ISE Mercury 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. 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 ISE Mercury Rules, which are not 
listed as Common Rules, discovered pursuant to the performance of the 
Regulatory Responsibilities assumed hereunder, FINRA shall notify ISE 
Mercury of those apparent violations for such response as ISE Mercury 
deems appropriate. In the event ISE Mercury becomes aware of apparent 
violations of the Common Rules, discovered pursuant to the performance 
of the Retained Responsibilities, ISE Mercury shall notify FINRA of 
those apparent violations and such matters shall be handled by FINRA as 
provided in this Agreement. Apparent violations of all the Common Rules 
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 ISE Mercury, ISE Mercury may 
in its discretion assume concurrent jurisdiction and responsibility. 
Each party agrees to make available promptly all files, records and 
witnesses necessary to assist the other in its investigation or 
proceedings.
    7. Continued Assistance. FINRA shall make available to ISE Mercury 
all information obtained by FINRA in the performance by it of the 
Regulatory Responsibilities hereunder in respect to the Dual Members 
subject to this Agreement. In particular, and not in limitation of the 
foregoing, FINRA shall furnish ISE Mercury any information it obtains 
about Dual Members which reflects adversely on their financial 
condition. It is understood that such information is of an extremely 
sensitive nature and, accordingly, ISE Mercury acknowledges and agrees 
to take all reasonable steps to maintain its confidentiality. ISE 
Mercury 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.
    8. Dual Member Applications.
    (a) Dual Members subject to this Agreement shall be required to 
submit, and FINRA shall be responsible for processing and acting upon 
all

[[Page 8569]]

applications submitted on behalf of allied persons, partners, officers, 
registered personnel and any other person required to be approved by 
the ISE Mercury Rules and FINRA Rules or associated with Dual Members 
thereof. Upon request, FINRA shall advise ISE Mercury of any changes of 
allied members, partners, officers, registered personnel and other 
persons required to be approved by the ISE Mercury Rules and FINRA 
Rules.
    (b) Dual Members shall be required to send to FINRA all letters, 
termination notices or other material respecting the individuals listed 
in paragraph 8(a).
    (c) When as a result of processing such submissions 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 ISE Mercury advised of its actions in 
this regard for such subsequent proceedings as ISE Mercury may 
initiate.
    (d) Notwithstanding the foregoing, FINRA shall not review the 
membership application, reports, filings, fingerprint cards, notices, 
or other writings filed to determine if such documentation submitted by 
a broker or dealer, or a person associated therewith or other persons 
required to register or qualify by examination: (i) meets the ISE 
Mercury requirements for general membership or for specified categories 
of membership or participation in ISE Mercury, such as (A) Primary 
Market Maker Membership (``PMM''); (B) Competitive Market Maker 
Membership (``CMM''); (C) Electronic Access Membership (``EAM'') (or 
any similar type of ISE Mercury membership or participation that is 
created after this Agreement is executed); or (ii) meets the ISE 
Mercury requirements to be associated with, or employed by, a ISE 
Mercury member or participant in any capacity, such a Designated 
Trading Representative (``DTR'') (or any similar type of participation, 
employment category or title, or associate-person category or class 
that is created after this Agreement is executed). FINRA shall not 
review applications or other documentation filed to request a change in 
the rights or status described in this paragraph 8(d), including 
termination or limitation on activities, of a member or a participant 
of ISE Mercury, or a person associated with, or requesting association 
with, a member or participant of ISE Mercury.
    9. Branch Office Information. FINRA shall also be responsible for 
processing and, if required, acting upon all requests for the opening, 
address changes, and terminations of branch offices by Dual Members and 
any other applications required of Dual Members with respect to the 
Common Rules as they may be amended from time to time. Upon request, 
FINRA shall advise ISE Mercury of the opening, address change and 
termination of branch and main offices of Dual Members and the names of 
such branch office managers.
    10. Customer Complaints. ISE Mercury shall forward to FINRA copies 
of all customer complaints involving Dual Members received by ISE 
Mercury 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.
    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 ISE Mercury or 
FINRA at any time upon the approval of the Commission after one (1) 
year's written notice to the other party (or such shorter time as may 
be agreed by the parties), 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, ISE Mercury 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.
    15. Separate Agreement. This Agreement is wholly separate from (1) 
the multiparty Agreement made pursuant to Rule 17d-2 of the Exchange 
Act among BATS Exchange, Inc., BOX Options Exchange, LLC, the Chicago 
Board Options Exchange, Incorporated, C2 Options Exchange, 
Incorporated, the International Securities Exchange, LLC, Financial 
Industry Regulatory Authority, Inc., Miami International Securities 
Exchange, LLC, the New York Stock Exchange, LLC, the NYSE MKT LLC, the 
NYSE Arca Inc., The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., and 
the NASDAQ OMX PHLX, LLC approved by the Commission on December 5, 2012 
involving the allocation of regulatory responsibilities with respect to 
common members for compliance with common rules relating to the conduct 
by broker-dealers of accounts for listed options or index warrants or 
(2) the multiparty Agreement made pursuant to Rule 17d-2 of the 
Exchange Act among NYSE MKT LLC, BATS Exchange, Inc., BOX Options 
Exchange, LLC, C2 Options Exchange, Incorporated, Chicago Board Options 
Exchange, Incorporated, International Securities Exchange LLC, 
Financial Industry Regulatory Authority, Inc., NYSE Arca, Inc., The 
NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX, Inc. and 
Miami International Securities Exchange, LLC, approved by the 
Commission on December 5, 2012 involving options-related market 
surveillance matters and such agreements as may be amended from time to 
time.
    16. Notification of Members. ISE Mercury and FINRA shall notify 
Dual Members of this Agreement after the Effective Date by means of a 
uniform joint notice.
    17. 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.
    18. Limitation of Liability. Neither FINRA nor ISE Mercury 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 ISE Mercury 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 ISE Mercury 
with respect to any of the responsibilities to be performed by each of 
them hereunder.
    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

[[Page 8570]]

affecting the validity or enforceability of any of the terms or 
provisions of this Agreement in any other jurisdiction.
    20. Relief from Responsibility. Pursuant to Sections 17(d)(1)(A) 
and 19(g) of the Exchange Act and Rule 17d-2 thereunder, FINRA and ISE 
Mercury join in requesting the Commission, upon its approval of this 
Agreement or any part thereof, to relieve ISE Mercury of any and all 
responsibilities with respect to matters allocated to FINRA pursuant to 
this Agreement; provided, however, that this Agreement shall not be 
effective until the Effective Date.
    21. 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.
FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC.

By---------------------------------------------------------------------

Name:

Title:

ISE MERCURY, LLC

By---------------------------------------------------------------------

Name:

Title:

EXHIBIT 1

ISE MERCURY CERTIFICATION OF COMMON RULES
    ISE Mercury hereby certifies that the requirements contained in the 
rules listed below for ISE Mercury are identical to, or substantially 
similar to, the comparable FINRA Rules or SEC Rules identified.

------------------------------------------------------------------------
            ISE Mercury rule                   FINRA or SEC rule 1
------------------------------------------------------------------------
400 Just and Equitable Principles of     FINRA Rule 2010 Standards of
 Trade.                                   Commercial Honor and Just and
                                          Equitable Principles of Trade;
                                          FINRA Rule 0140(a)
                                          Applicability.
408(a)(1) Prevention of the Misuse of    Section 15(f) of the Securities
 Material, Nonpublic Information.         Exchange Act of 1934.
409 Disciplinary Action ..............  FINRA Rule 4530(a)(1)(A) and
                                          (2) Reporting Requirements.
420 Anti-Money Laundering Compliance     FINRA Rule 3310 Anti-Money
 Program .                               Laundering Compliance Program.
603 Termination of Registered Persons..  FINRA By-Laws, Article V,
                                          Section 3.
604 Continuing Education for Registered  FINRA Rule 1250 Continuing
 Persons 2 .                             Education Requirements.
614 Statements of Financial Condition    Rule 17a-5 of the Securities
 to Customers.                            Exchange Act of 1934.
622 Transfer of Accounts...............  FINRA rule 11870 Customer
                                          Account Transfer Contracts.
626 Telephone Solicitation.............  FINRA Rule 3230 Telemarketing.
1400(a) Maintenance, Retention, and      FINRA Rule 4511(a) Books and
 Furnishing of Books, Records and Other   Records--Requirements.
 Information 3.
------------------------------------------------------------------------
 INRA shall not have Regulatory Responsibilities regarding notification
  or reporting to ISE Mercury. In addition, FINRA shall only have
  Regulatory Responsibilities to the extent the exercise of discretion
  by ISE Mercury is the same as FINRA.
1 ISE Mercury will be responsible for any significant differences
  between its rules and the comparable FINRA rule identified, until such
  time amendments to such rule(s) become operative.
2 FINRA shall not have Regulatory Responsibilities with regard to the
  application of the rule to the Series 56 registration.
3 FINRA shall not have Regulatory Responsibilities regarding the
  requirement to ``keep current and preserve such books and records as
  the Exchange may prescribe;'' responsibility for such requirement
  remains with ISE Mercury.

III. Date of Effectiveness of the Proposed Plan and Timing for 
Commission Action

    Pursuant to Section 17(d)(1) of the Act \14\ and Rule 17d-2 
thereunder,\15\ after March 7, 2016, the Commission may, by written 
notice, declare the plan submitted by ISE Mercury and FINRA, File No. 
4-697, 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.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78q(d)(1).
    \15\ 17 CFR 240.17d-2.
---------------------------------------------------------------------------

IV. Solicitation of Comments

    In order to assist the Commission in determining whether to approve 
the proposed 17d-2 Plan and to relieve ISE Mercury 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 email to rule-comments@sec.gov. Please include 
File Number 4-697 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 4-697. 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/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 Web site viewing and printing in the 
Commission's Public Reference Room, on official business days between 
the hours of 10:00 a.m. and 3:00 p.m. Copies of the plan also will be 
available for inspection and copying at the principal offices of ISE 
Mercury 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 4-697 
and should be submitted on or before March 7, 2016.
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(34).

[[Page 8571]]

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

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-03300 Filed 2-18-16; 8:45 am]
BILLING CODE 8011-01-P