Document ID: SEC-2017-0077-0001
Agency: sec
Document Type: Notice
Title: Filings and Orders: Proposed Amended Plan for Allocation of Regulatory Responsibilities Among Financial Industry Regulatory Authority, Inc.; Miami International Securities Exchange, LLC; and MIAX PEARL, LLC
Posted Date: 2017-01-19T05:00Z

[Federal Register Volume 82, Number 12 (Thursday, January 19, 2017)]
[Notices]
[Pages 6674-6678]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-01151]

[[Page 6674]]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79779; File No. 4-678]

Program for Allocation of Regulatory Responsibilities Pursuant to 
Rule 17d-2; Notice of Filing of Proposed Amended Plan for the 
Allocation of Regulatory Responsibilities Among the Financial Industry 
Regulatory Authority, Inc., Miami International Securities Exchange, 
LLC, and MIAX PEARL, LLC

January 12, 2017.
    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 January 12, 2017, Miami International Securities Exchange, LLC 
(``MIAX''), MIAX PEARL, LLC (``MIAX PEARL''), and the Financial 
Industry Regulatory Authority, Inc. (``FINRA'') (together, the 
``Parties'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') an amended plan for the allocation of 
regulatory responsibilities, dated January 11, 2017 (``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''). 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. The Plan

    On November 19, 2014, the Commission declared effective the Plan 
entered into between FINRA and MIAX for allocating regulatory 
responsibility pursuant to Rule 17d-2.\10\ The Plan is intended to 
reduce regulatory duplication for firms that are common members of both 
MIAX and FINRA. The plan reduces regulatory duplication for firms that 
are members of MIAX and FINRA by allocating regulatory responsibility 
with respect to certain applicable laws, rules, and regulations. 
Included in the Plan is an exhibit that lists every MIAX rule for which 
FINRA bears responsibility under the Plan for overseeing and enforcing 
with respect to MIAX members that are also members of FINRA and the 
associated persons therewith.
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 73641 (November 19, 
2014), 79 FR 70230 (November 25, 2014).
---------------------------------------------------------------------------

III. Proposed Amendment to Plan

    On January 12, 2017, the parties submitted a proposed amendment to 
the Plan. The primary purpose of the amendment is to add MIAX PEARL as 
a Participant to the Plan. The text of the proposed amended 17d-2 plan 
is as follows (additions are italicized; deletions are [bracketed]):

Agreement [Between] Among Financial Industry Regulatory Authority, 
Inc., [and] Miami International Securities Exchange, LLC and MIAX 
PEARL, LLC Pursuant to Rule 17d-2 Under the Securities Exchange Act of 
1934

    This Agreement, by and [between] among the Financial Industry 
Regulatory Authority, Inc. (``FINRA''), [and] Miami International 
Securities Exchange, LLC (``MIAX'') and MIAX PEARL, LLC (``MIAX 
PEARL''), is made this [13th] 11th day of [October] January, 201[4] 7 
(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] MIAX and MIAX PEARL may be referred to individually as a 
``party'' and together as the ``parties.''
    This Agreement amends and restates the agreement entered into 
between FINRA and MIAX on October 13, 2014, entitled ``Agreement 
between Financial Industry Regulatory Authority, Inc. and Miami 
International Securities

[[Page 6675]]

Exchange, LLC Pursuant to Rule 17d-2 under the Securities Exchange Act 
of 1934,'' and any subsequent amendments thereafter.
    Whereas, [FINRA and MIAX] the parties desire to reduce duplication 
in the examination of their [Dual] Common Members (as defined herein) 
and in the filing and processing of certain registration and membership 
records; and
    Whereas, [FINRA and MIAX] the parties 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 MIAX] the parties 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) ``MIAX Rules,'' ``MIAX PEARL Rules or ``FINRA Rules'' shall 
mean: (i) The rules of MIAX or MIAX PEARL, respectively, 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 MIAX Rules and MIAX PEARL 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] Common Member's 
activity, conduct, or output in relation to such provision or rule. 
Common Rules shall not include any provisions regarding (i) notice, 
reporting or any other filings made directly to or from MIAX or MIAX 
PEARL, (ii) compliance with other referenced MIAX or MIAX PEARL Rules 
that are not Common Rules, (iii) exercise of discretion including, but 
not limited to exercise of exemptive authority, by MIAX or MIAX PEARL, 
(iv) prior written approval of MIAX or MIAX PEARL and (v) payment of 
fees or fines to MIAX or MIAX PEARL.
    (c) ``[Dual] Common Members'' shall mean [those MIAX] members [that 
are also members of FINRA and the associated persons therewith] of 
FINRA and at least one of MIAX or MIAX PEARL.
    (d) ``Effective Date'' shall be the date this Agreement is approved 
by the Commission.
    (e) ``Enforcement Responsibilities'' shall mean the conduct of 
appropriate proceedings, in accordance with FINRA's 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 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] Common 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] 
Common Members. Attached as Exhibit 1 to this Agreement and made part 
hereof, MIAX and MIAX PEARL furnished FINRA with a current list of 
Common Rules and certified to FINRA that such rules that are MIAX Rules 
and MIAX PEARL 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 MIAX or 
FINRA] the rules of the parties, MIAX and MIAX PEARL shall submit an 
updated list of Common Rules to FINRA for review which shall add MIAX 
Rules or MIAX PEARL Rules not included in the current list of Common 
Rules that qualify as Common Rules as defined in this Agreement; delete 
MIAX Rules or MIAX PEARL 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 MIAX Rules or MIAX PEARL 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 MIAX and MIAX PEARL 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 MIAX's and MIAX 
PEARL's own marketplace;
    (b) registration pursuant to [its] their applicable rules of 
associated persons (i.e., registration rules that are not Common 
Rules);
    (c) discharge of [its] their duties and obligations as a Designated 
Examining Authority pursuant to Rule 17d-1 under the Exchange Act; and
    (d) any MIAX Rules and MIAX PEARL Rules that are not Common Rules 
as provided in paragraph 6.
    3. [Dual] Common Members. Prior to the Effective Date, MIAX and 
MIAX PEARL shall furnish FINRA with a current list of [Dual] Common 
Members, which shall be updated no less frequently than once each 
quarter.
    4. No Charge. There shall be no charge to MIAX and MIAX PEARL by 
FINRA for performing the Regulatory Responsibilities and Enforcement 
Responsibilities under this Agreement except as hereinafter provided. 
FINRA shall provide MIAX and MIAX PEARL with ninety (90) days advance 
written notice in the event FINRA decides to impose any charges to MIAX 
and MIAX PEARL for performing the Regulatory Responsibilities under 
this Agreement. If FINRA determines to impose a charge, MIAX and MIAX 
PEARL 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. Applicability of Certain Laws, Rules, Regulations or Orders. 
Notwithstanding any provision hereof, this Agreement shall be subject 
to any statute, or any rule or order of the SEC. To the extent such 
statute, rule or order is inconsistent with one or more provisions of 
this Agreement, the statute, rule or order shall supersede the 
provision(s) hereof to the extent necessary to be properly effectuated 
and the provision(s) hereof in that respect shall be null and void.
    6. Notification of Violations. In the event that FINRA becomes 
aware of

[[Page 6676]]

apparent violations of any MIAX Rules or MIAX PEARL Rules, which are 
not listed as Common Rules, discovered pursuant to the performance of 
the Regulatory Responsibilities assumed hereunder, FINRA shall notify 
MIAX and MIAX PEARL of those apparent violations for such response as 
MIAX and MIAX PEARL deem[s] appropriate. In the event that MIAX or MIAX 
PEARL becomes aware of apparent violations of any Common Rules, 
discovered pursuant to the performance of the Retained 
Responsibilities, MIAX and MIAX PEARL shall notify FINRA of those 
apparent violations and such matters shall be handled by FINRA as 
provided in this Agreement. Apparent violations of 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] Common Member is the subject of an investigation 
relating to a transaction on MIAX or MIAX PEARL, MIAX and MIAX PEARL 
may in [its] their 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.
    (a) FINRA shall make available to MIAX and MIAX PEARL all 
information obtained by FINRA in the performance by it of the 
Regulatory Responsibilities hereunder with respect to the [Dual] Common 
Members subject to this Agreement. In particular, and not in limitation 
of the foregoing, FINRA shall furnish MIAX and MIAX PEARL any 
information it obtains about [Dual] Common Members which reflects 
adversely on their financial condition. MIAX and MIAX PEARL shall make 
available to FINRA any information coming to its attention that 
reflects adversely on the financial condition of [Dual] Common 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] No party shall 
assert regulatory or other privileges as against [the] any 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] among 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] Common 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 MIAX and MIAX PEARL advised of its actions in this 
regard for such subsequent proceedings as MIAX and MIAX PEARL may 
initiate.
    9. Customer Complaints. MIAX and MIAX PEARL shall forward to FINRA 
copies of all customer complaints involving [Dual] Common Members 
received by MIAX and MIAX PEARL 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] Common 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] 
any party to conduct its own independent or concurrent investigation, 
examination or enforcement proceeding of or against [Dual] Common 
Members, as [either] any party, in its sole discretion, shall deem 
appropriate or necessary.
    12. Termination. This Agreement may be terminated by [MIAX or 
FINRA] any party at any time upon the approval of the Commission after 
one (1) year's written notice to the other [party] parties (or such 
shorter time as agreed by the parties), except as provided in paragraph 
4.
    13. Arbitration. In the event of a dispute [between] among the 
parties as to the operation of this Agreement, [MIAX and FINRA] the 
parties 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] parties. In the 
event of a dispute [between] among 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 13 shall interfere with a party's right to terminate 
this Agreement as set forth herein.
    14. Separate Agreement. This Agreement is wholly separate from the 
following agreement: (1) The multiparty Agreement made pursuant to Rule 
17d-2 of the Exchange Act among BATS Exchange, Inc., BOX Options 
Exchange, LLC, Chicago Board Options Exchange, Incorporated, C2 Options 
Exchange, Incorporated, the International Securities Exchange, LLC, 
FINRA, MIAX, [the New York Stock Exchange LLC,] NYSE MKT LLC, the NYSE 
Arca, Inc., The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., NASDAQ 
OMX PHLX LLC, ISE Gemini, LLC, EDGX Exchange, Inc. and [Topaz Exchange, 
LLC] ISE Mercury, LLC 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 entered as approved by the SEC on 
[July 26, 2013] February 16, 2016, and as may be amended from time to 
time; and (2) the multiparty Agreement made pursuant to Rule 17d-2 of 
the Exchange Act among NYSE MKT LLC, BATS Exchange, Inc., EDGX 
Exchange, Inc., BOX Options Exchange LLC, NASDAQ OMX BX, Inc., C2 
Options Exchange, Incorporated, Chicago Board Options Exchange, 
Incorporated, International Securities Exchange LLC, ISE Gemini, LLC, 
ISE Mercury, LLC, FINRA, NYSE Arca, Inc., The NASDAQ Stock Market LLC, 
NASDAQ OMX PHLX, Inc., and MIAX[, and Topaz Exchange, LLC] involving 
the allocation of regulatory responsibilities with respect to SRO 
market surveillance of common members activities with regard to certain 
common rules relating to listed options approved by the SEC on [July 
26, 2013] February 16, 2016, and as may be amended from time to time.
    15. Notification of Members. [MIAX and FINRA] The parties shall 
notify [Dual] Common Members of this Agreement after the Effective Date 
by means of a uniform joint notice.
    16. Amendment. This Agreement may be amended in writing provided 
that the changes are approved by [both parties] each party. All such 
amendments must be filed with and approved by the

[[Page 6677]]

Commission before they become effective.
    17. Limitation of Liability. [Neither FINRA nor MIAX] None of the 
parties nor any of their respective directors, governors, officers or 
employees shall be liable to [the] any 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 MIAX] any party and caused by 
the willful misconduct of [the other] another party or their respective 
directors, governors, officers or employees. No warranties, express or 
implied, are made by [FINRA or MIAX] any party hereto 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] 
MIAX and MIAX PEARL join in requesting the Commission, upon its 
approval of this Agreement or any part thereof, to relieve MIAX and 
MIAX PEARL 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.
    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.

MIAMI INTERNATIONAL SECURITIES EXCHANGE, LLC.

By:--------------------------------------------------------------------
Name:
Title:

MIAX PEARL, LLC.

By:--------------------------------------------------------------------
Name:
Title:

FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC.

By:--------------------------------------------------------------------
Name:
Title:
Exhibit 1
Miami International Securities Exchange, LLC and MIAX PEARL, LLC Rules 
Certification for 17d-2 Agreement With FINRA
    Miami International Securities Exchange, LLC (``MIAX'') and MIAX 
PEARL, LLC (``MIAX PEARL'') hereby [certifies] certify 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'').

------------------------------------------------------------------------
                                                     FINRA (NASD) rules,
                                                        exchange act
         MIAX rules             MIAX pearl rules      provision or SEC
                                                            rule
------------------------------------------------------------------------
Rule 301 Just and Equitable   Rule 301 Just and     FINRA Rule 2010
 Principles of Trade \1\.      Equitable             Standards of
                               Principles of Trade   Commercial Honor
                               \1\.                  and Principles of
                                                     Trade *.
Rule 303 Prevention of the    Rule 303 Prevention   Section 15(g) of the
 Misuse of Material            of the Misuse of      Exchange Act and
 Nonpublic Information \1\ #   Material Nonpublic    FINRA Rule
 [\2\].                        Information \1\ #.    3110(b)(1)
                                                     Supervision.
Rule 315 Anti-Money           Rule 315 Anti-Money   FINRA Rule 3310 Anti-
 Laundering Compliance         Laundering            Money Laundering
 Program [\2\] #.              Compliance Program    Compliance Program.
                               #.
Rule 318(a) Manipulation....  Rule 318(a)           FINRA Rule 2020 Use
                               Manipulation.         of Manipulative,
                                                     Deceptive or other
                                                     Fraudulent Devices
                                                     *.
Rule 318(b) Manipulation....  Rule 318(b)           FINRA Rule 6140
                               Manipulation.         Other Trading
                                                     Practices.
Rule 319 Forwarding of Proxy  Rule 319 Forwarding   FINRA Rule 2251
 and Other Issuer-Related      of Proxy and Other    Processing and
 Materials [\3\] 2.            Issuer-Related        Forwarding of Proxy
                               Materials \2\.        and Other Issuer-
                                                     Related Materials.
Rule 320 Trading Ahead of     Rule 320 Trading      FINRA Rule 5280
 Research Reports.             Ahead of Research     Trading Ahead of
                               Reports.              Research Reports.
Rule 800(a), (b) and (d)      Rule 800(a), (b) and  FINRA Rule 4511
 Maintenance, Retention and    (d) Maintenance,      General
 Furnishing of Books,          Retention and         Requirements * and
 Records and Other             Furnishing of         Section 17 of the
 Information \1\ [\4\] #.      Books, Records and    Exchange Act and
                               Other Information     the rules
                               \1\ #.                thereunder #.
Rule 1304 Continuing          Rule 1304 Continuing  FINRA Rule
 Education for Registered      Education for         1250(a)(1)-(4), (6)
 Persons [\4\] #.              Registered Persons    and (b) Continuing
                               #.                    Education
                                                     Requirements #.
Rule 1321 Transfer of         Rule 1321 Transfer    FINRA Rule 11870
 Accounts.                     of Accounts.          Customer Account
                                                     Transfer Contracts.
Rule 1325 Telemarketing.....  Rule 1325             FINRA Rule 3230
                               Telemarketing.        Telemarketing.
------------------------------------------------------------------------
In addition, the following provisions shall be part of this 17d-2
  Agreement:
SEA Rule 200 of Regulation SHO--Definition of ``Short Sale'' and Marking
  Requirements and
SEA Rule 203 of Regulation SHO--Borrowing and Delivery Requirements
* FINRA shall not have 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 BATS Exchange,
  Inc., BATS Y-Exchange, Inc., Chicago Board Options Exchange, Inc.,
  Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange,
  Inc., Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX,
  Inc., NASDAQ OMX PHLX LLC, the NASDAQ Stock Market LLC, National Stock
  Exchange, Inc., New York Stock Exchange LLC, NYSE Amex LLC, and NYSE
  Arca Inc., effective December 16, 2011, as may be amended from time to
  time.
# FINRA shall not have Regulatory Responsibilities regarding (i) notice,
  reporting or any other filings made directly to or from MIAX or MIAX
  PEARL, (ii) compliance with other referenced MIAX or MIAX PEARL Rules
  that are not Common Rules, (iii) exercise of discretion including, but
  not limited to exercise of exemptive authority, by MIAX or MIAX PEARL,
  (iv) prior written approval of MIAX or MIAX PEARL and (v) payment of
  fees or fines to MIAX or MIAX PEARL.
\1\ FINRA shall only have Regulatory Responsibilities regarding the rule
  and not the interpretations and policies.
[\2\] FINRA shall not have Regulatory Responsibilities regarding the
  rule to the extent it requires notification to MIAX.]
[\3\]\2\ FINRA shall not have Regulatory Responsibilities regarding
  subsection (c) of Rule 319.
[\4\] FINRA shall not have Regulatory Responsibilities for exercise of
  exemptive or other discretionary authority by MIAX to the extent it
  makes the rule inconsistent with the FINRA rule. In addition, FINRA
  shall only have Regulatory Responsibilities to the extent the category
  of persons subject to MIAX registration is the same as FINRA.]

[[Page 6678]]

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

    Pursuant to Section 17(d)(1) of the Act \11\ and Rule 17d-2 
thereunder,\12\ February 3, 2017 declare the plan submitted by MIAX, 
MIAX PEARL, and FINRA, File No. 4-678, 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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78q(d)(1).
    \12\ 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 MIAX and MIAX PEARL 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 Number4-678 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number 4-678. 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 rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the plan also will be available for inspection and 
copying at the principal offices of MIAX, MIAX PEARL, 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 4-678 and should be submitted 
on or before February 3, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(34).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-01151 Filed 1-18-17; 8:45 am]
 BILLING CODE 8011-01-P