[Federal Register Volume 77, Number 238 (Tuesday, December 11, 2012)]
[Notices]
[Pages 73711-73716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-29843]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68363; File No. S7-966]


Program for Allocation of Regulatory Responsibilities Pursuant to 
Rule 17d-2; Notice of Filing and Order Approving and Declaring 
Effective an Amendment to the Plan for the Allocation of Regulatory 
Responsibilities Among the 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, NYSE MKT 
LLC, NYSE Arca, Inc., The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., 
and NASDAQ OMX PHLX, LLC. Concerning Options-Related Sales Practice 
Matters

December 5, 2012.
    Notice is hereby given that the Securities and Exchange Commission 
(``Commission'') has issued an Order, pursuant to Section 17(d) of the 
Securities Exchange Act of 1934 (``Act''),\1\ approving and declaring 
effective an amendment to the plan for allocating regulatory 
responsibility filed on November 20, 2012, pursuant to Rule 17d-2 of 
the Act,\2\ by the BATS Exchange, Inc. (``BATS''), BOX Options 
Exchange, LLC (``BOX'') the Chicago Board Options Exchange, 
Incorporated (``CBOE''), C2 Options Exchange, Incorporated (``C2''), 
the International Securities Exchange, LLC (``ISE''), Financial 
Industry Regulatory Authority, Inc. (``FINRA''), Miami International 
Securities Exchange, LLC (``MIAX''), the New York Stock Exchange LLC 
(``NYSE''), NYSE MKT LLC (``NYSE MKT''), NYSE Arca, Inc. (``Arca''), 
The NASDAQ Stock Market LLC (``NASDAQ''), NASDAQ OMX BX, Inc. (``BX''), 
and NASDAQ OMX PHLX, Inc. (``Phlx'') (collectively, ``SRO 
participants'').
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    \1\ 15 U.S.C. 78q(d).
    \2\ 17 CFR 240.17d-2.
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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) \4\ or Section 19(g)(2) \5\ of the Act. 
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.
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    \3\ 15 U.S.C. 78s(g)(1).
    \4\ 15 U.S.C. 78q(d).
    \5\ 15 U.S.C. 78s(g)(2).
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    Section 17(d)(1) of the Act \6\ was intended, in part, to eliminate 
unnecessary multiple examinations and regulatory duplication.\7\ 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.
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    \6\ 15 U.S.C. 78q(d)(1).
    \7\ 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).
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    To implement Section 17(d)(1), the Commission adopted two rules: 
Rule 17d-1 and Rule 17d-2 under the Act.\8\ 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.\9\ 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.
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    \8\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
    \9\ See Securities Exchange Act Release No. 12352 (April 20, 
1976), 41 FR 18808 (May 7, 1976).
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    To address regulatory duplication in these and other areas, the 
Commission adopted Rule 17d-2 under the Act.\10\ 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 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.
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    \10\ See Securities Exchange Act Release No. 12935 (October 28, 
1976), 41 FR 49091 (November 8, 1976).
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II. The Plan

    On September 8, 1983, the Commission approved the SRO participants' 
plan for allocating regulatory responsibilities pursuant to Rule 17d-
2.\11\ On May 23, 2000, the Commission approved an amendment to the 
plan that added the ISE as a participant.\12\ On November 8, 2002, the

[[Page 73712]]

Commission approved another amendment that replaced the original plan 
in its entirety and, among other things, allocated regulatory 
responsibilities among all the participants in a more equitable 
manner.\13\ On February 5, 2004, the parties submitted an amendment to 
the plan, primarily to include the Boston Stock Exchange, which was 
establishing a new options trading facility to be known as the Boston 
Options Exchange (``BOX''), as an SRO participant.\14\ On December 5, 
2007, the parties submitted an amendment to the plan to, among other 
things, provide that the National Association of Securities Dealers 
(``NASD'') (n/k/a the Financial Industry Regulatory Authority, Inc. or 
``FINRA'') and NYSE are Designated Options Examining Authorities under 
the plan.\15\ On June 5, 2008, the parties submitted an amendment to 
the plan primarily to remove the NYSE as a Designated Options Examining 
Authority, leaving FINRA as the sole Designated Options Examining 
Authority for all common members that are members of FINRA.\16\ On 
February 9, 2010, the parties submitted a proposed amendment to the 
plan to add BATS and C2 as SRO participants and to reflect the name 
changes of the American Stock Exchange LLC to the NYSE Amex LLC, the 
Boston Stock Exchange, Inc., to the NASDAQ OMX BX, Inc. and the 
Philadelphia Stock Exchange, Inc. to the NASDAQ OMX PHLX, Inc. \17\ On 
May 2, 2012, the parties submitted a proposed plan amendment to add BOX 
as an SRO participant, and to amend Section XIII of the plan to set 
forth a revised procedure for adding new participants to the plan.\18\
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    \11\ See Securities Exchange Act Release No. 20158 (September 8, 
1983), 48 FR 41256 (September 14, 1983).
    \12\ See Securities Exchange Act Release No. 42816 (May 23, 
2000), 65 FR 34759 (May 31, 2000).
    \13\ See Securities Exchange Act Release No. 46800 (November 8, 
2002), 67 FR 69774 (November 19, 2002).
    \14\ See Securities Exchange Act Release No. 49197 (February 5, 
2004), 69 FR 7046 (February 12, 2004).
    \15\ See Securities Exchange Act Release No. 55532 (March 26, 
2007), 72 FR 15729 (April 2, 2007).
    \16\ See Securities Exchange Act Release No. 57987 (June 18, 
2008), 73 FR 36156 (June 25, 2008).
    \17\ See Securities Exchange Act Release No. 61589 (February 25, 
2010), 75 FR 9976 (March 4, 2010).
    \18\ See Securities Exchange Act Release No. 66974 (May 11, 
2012), 77 FR 29705 (May 18, 2012).
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    The plan reduces regulatory duplication for a large number of firms 
currently members of two or more of the SRO participants by allocating 
regulatory responsibility for certain options-related sales practice 
matters to one of the SRO participants. Generally, under the plan, the 
SRO participant responsible for conducting options-related sales 
practice examinations of a firm, and investigating options-related 
customer complaints and terminations for cause of associated persons of 
that firm, is known as the firm's ``Designated Options Examining 
Authority'' (``DOEA''). Pursuant to the plan, any other SRO of which 
the firm is a member is relieved of these responsibilities during the 
period in which the firm is assigned to another SRO acting as that 
firm's DOEA.

III. Proposed Amendment to the Plan

    On November 20, 2012, the parties submitted a proposed amendment to 
the plan. The primary purpose of the amendment is to add MIAX as an SRO 
participant. The amendment also reflects the name change of the NYSE 
Amex LLC to NYSE MKT LLC. The text of the proposed amended 17d-2 plan 
is as follows (additions are italicized; deletions are [bracketed]):
* * * * *

Agreement by and 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., [the] Miami International 
Securities Exchange, LLC, the New York Stock Exchange LLC, the NYSE 
[Amex] MKT LLC, the NYSE Arca, Inc., The NASDAQ Stock Market LLC, 
NASDAQ OMX BX, Inc. and the NASDAQ OMX PHLX LLC Pursuant to Rule 17d-2 
under the Securities Exchange Act of 1934.

    This agreement (``Agreement''), by and 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. 
(``FINRA''), Miami International Securities Exchange, LLC, The NASDAQ 
Stock Market LLC (``NASDAQ''), NASDAQ OMX BX, Inc., the New York Stock 
Exchange LLC (``NYSE''), the NYSE [Amex] MKT LLC, the NYSE Arca, Inc., 
and the NASDAQ OMX PHLX LLC, hereinafter collectively referred to as 
the Participants, is made this [25th] 19th day of [April] November, 
2012, pursuant to the provisions of Rule 17d-2 under the Securities 
Exchange Act of 1934 (the ``Exchange Act''), which allows for plans 
among self-regulatory organizations to allocate regulatory 
responsibility. This Agreement shall be administered by a committee 
known as the Options Self-Regulatory Council (the ``Council'').
    This Agreement amends and restates the agreement entered into among 
the Participants on [February 5, 2010] April 25, 2012, entitled 
``Agreement by and 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., the New York Stock 
Exchange LLC, NYSE Amex LLC, the NYSE Arca, Inc., the NASDAQ Stock 
Market LLC, NASDAQ OMX BX, Inc. and the NASDAQ OMX PHLX, Inc., Pursuant 
to Rule 17d-2 under the Securities Exchange Act of 1934.''
    WHEREAS, the Participants are desirous of allocating regulatory 
responsibilities with respect to broker-dealers, and persons associated 
therewith, that are members \1\ of more than one Participant (the 
``Common Members'') and conduct a public business for compliance with 
Common Rules (as hereinafter defined) relating to the conduct by 
broker-dealers of accounts for listed options, index warrants, currency 
index warrants and currency warrants (collectively, ``Covered 
Securities''); and
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    \1\ In the case of BOX Options Exchange, LLC (``BOX''), NASDAQ 
OMX BX, Inc. (``BX'') and NASDAQ members are those persons who are 
options participants (as defined in the BOX, BX and NASDAQ Options 
Market Rules).
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    WHEREAS, the Participants are desirous of executing a plan for this 
purpose pursuant to the provisions of Rule 17d-2 and filing such plan 
with the Securities and Exchange Commission (``SEC'' or the 
``Commission'') for its approval;
    NOW, THEREFORE, in consideration of the mutual covenants contained 
hereafter, the Participants agree as follows:

    I. As used herein the term Designated Options Examining 
Authority (``DOEA'') shall mean: (1) FINRA insofar as it shall 
perform Regulatory Responsibility (as hereinafter defined) for its 
broker-dealer members that also are members of another Participant 
or (2) the Designated Examination Authority (``DEA'') pursuant to 
SEC Rule 17d-1 under the Securities Exchange Act (``Rule 17d-1'') 
for a broker-dealer that is a member of a more than one Participant 
(but not a member of FINRA).
    II. As used herein, the term ``Regulatory Responsibility'' shall 
mean the examination and enforcement responsibilities relating to 
compliance by Common Members with the rules of the applicable 
Participant that are substantially similar to the rules of the other 
Participants (the ``Common Rules''), insofar as they apply to the 
conduct of accounts for Covered Securities. A list of the current 
Common Rules of each Participant applicable to the conduct of 
accounts for Covered Securities is attached hereto as Exhibit A. 
Each year within 30 days of the anniversary date of the commencement 
of operation of this Agreement, each Participant shall submit in 
writing to FINRA and each DEA

[[Page 73713]]

performing as a DOEA for any members of such Participant any 
revisions to Exhibit A reflecting changes in the rules of the 
Participant, and confirm that all other rules of the Participant 
listed in Exhibit A continue to meet the definition of Common Rules 
as defined in this Agreement. Within 30 days from the date that 
FINRA and each DEA performing as a DOEA has received revisions and/
or confirmation that no change has been made to Exhibit A from all 
Participants, FINRA and each DEA performing as a DOEA shall confirm 
in writing to each Participant whether the rules listed in any 
updated Exhibit A are Common Rules as defined in this Agreement. 
Notwithstanding anything herein to the contrary, it is explicitly 
understood that the term ``Regulatory Responsibility'' does not 
include, and each of the Participants shall (unless allocated 
pursuant to Rule 17d-2 otherwise than under this Agreement) retain 
full responsibility for, each of the following:
    (a) Surveillance and enforcement with respect to trading 
activities or practices involving its own marketplace, including 
without limitation its rules relating to the rights and obligations 
of specialists and other market makers;
    (b) Registration pursuant to its applicable rules of associated 
persons;
    (c) Discharge of its duties and obligations as a DEA; and
    (d) Evaluation of advertising, responsibility for which shall 
remain with the Participant to which a Common Member submits same 
for approval.
    III. Apparent violations of another Participant's rules 
discovered by a DOEA, but which rules are not within the scope of 
the discovering DOEA's Regulatory Responsibility, shall be referred 
to the relevant Participant for such action as the Participant to 
which such matter has been referred deems appropriate. 
Notwithstanding the foregoing, nothing contained herein shall 
preclude a DOEA in its discretion from requesting that another 
Participant conduct an enforcement proceeding on a matter for which 
the requesting DOEA has Regulatory Responsibility. If such other 
Participants agree, the Regulatory Responsibility in such case shall 
be deemed transferred to the accepting Participant and confirmed in 
writing by the Participants involved. Each Participant agrees, upon 
request, to make available promptly all relevant files, records and/
or witnesses necessary to assist another Participant in an 
investigation or enforcement proceeding.
    IV. The Council shall be composed of one representative 
designated by each of the Participants. Each Participant shall also 
designate one or more persons as its alternate representative(s). In 
the absence of the representative of a Participant, such alternate 
representative shall have the same powers, duties and 
responsibilities as the representative. Each Participant may, at any 
time, by notice to the then Chair of the Council, replace its 
representative and/or its alternate representative on such Council. 
A majority of the Council shall constitute a quorum and, unless 
specifically otherwise required, the affirmative vote of a majority 
of the Council members present (in person, by telephone or by 
written consent) shall be necessary to constitute action by the 
Council. The representative from FINRA shall serve as Chair of the 
Council. All notices and other communications for the Council shall 
be sent to it in care of the Chair or to each of the 
representatives.
    V. The Council shall determine the times and locations of 
Council meetings, provided that the Chair, acting alone, may also 
call a meeting of the Council in the event the Chair determines that 
there is good cause to do so. To the extent reasonably possible, 
notice of any meeting shall be given at least ten-business days 
prior thereto. Notwithstanding anything herein to the contrary, 
representatives shall always be given the option of participating in 
any meeting telephonically at their own expense rather than in 
person.
    VI. FINRA shall have Regulatory Responsibility for all Common 
Members that are members of FINRA. For the purpose of fulfilling the 
Participants' Regulatory Responsibilities for Common Members that 
are not members of FINRA, the Participant that is the DEA shall 
serve as the DOEA. All Participants shall promptly notify the DOEAs 
no later than the next scheduled meeting of any change in membership 
of Common Members. A DOEA may request that a Common Member that is 
allocated to it be reallocated to another DOEA by giving thirty days 
written notice thereof. The DOEAs in their discretion may approve 
such request and reallocate such Common Member to another DOEA.
    VII. Each DOEA shall conduct an examination of each Common 
Member. The Participants agree that, upon request, relevant 
information in their respective files relative to a Common Member 
will be made available to the applicable DOEA. At each meeting of 
the Council, each DOEA shall be prepared to report on the status of 
its examination program for the previous quarter and any period 
prior thereto that has not previously been reported to the Council.
    VIII. Each DOEA will promptly furnish a copy of the Examination 
report, relating to Covered Securities, of any examination made 
pursuant to the provisions of this Agreement to each other 
Participant of which the Common Member examined is a member.
    IX. Each DOEA's Regulatory Responsibility shall for each Common 
Member allocated to it include investigations into terminations 
``for cause'' of associated persons relating to Covered Securities, 
unless such termination is related solely to another Participant's 
market. In the latter instance, that Participant to whose market the 
termination for cause relates shall discharge Regulatory 
Responsibility with respect to such termination for cause. In 
connection with a DOEA's examination, investigation and/or 
enforcement proceeding regarding a Covered Security-related 
termination for cause, the other Participants of which the Common 
Member is a member shall furnish, upon request, copies of all 
pertinent materials related thereto in their possession. As used in 
this Section, ``for cause'' shall include, without limitation, 
terminations characterized on Form U5 under the label ``Permitted to 
Resign,'' ``Discharge'' or ``Other.''
    X. Each DOEA shall discharge the Regulatory Responsibility for 
each Common Member allocated to it relative to a Covered Securities-
related customer complaint \2\ unless such complaint is uniquely 
related to another Participant's market. In the latter instance, the 
DOEA shall forward the matter to that Participant to whose market 
the matter relates, and the latter shall discharge Regulatory 
Responsibility with respect thereto. If a Participant receives a 
customer complaint for a Common Member related to a Covered Security 
for which the Participant is not the DOEA, the Participant shall 
promptly forward a copy of such complaint to the DOEA.
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    \2\ For purposes of complaints, they can be reported pursuant to 
Form U4, Form U5 or RE-3 and any amendments thereto.
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    XI. Any written notice required or permitted to be given under 
this Agreement shall be deemed given if sent by certified mail, 
return receipt requested, or by a comparable means of electronic 
communication to each Participant entitled to receipt thereof, to 
the attention of the Participant's representative on the Council at 
the Participant's then principal office or by email at such address 
as the representative shall have filed in writing with the Chair.
    XII. The Participants shall notify the Common Members of this 
Agreement by means of a uniform joint notice approved by the 
Council.
    XIII. This Agreement may be amended to add a new Participant 
provided that such Participant does not assume Regulatory 
Responsibility, solely by an amendment by FINRA and such new 
Participant. All other Participants expressly consent to allow FINRA 
to add new Participants to this Agreement as provided above. FINRA 
will promptly notify all Participants of any such amendments to add 
new Participants. All other amendments to this Agreement must be 
approved in writing by each Participant. All amendments, including 
adding a new Participant, must be filed with and approved by the SEC 
before they become effective.
    XIV. Any of the Participants may manifest its intention to 
cancel its participation in this Agreement at any time by giving the 
Council written notice thereof at least 90 days prior to the 
effective date of such cancellation. Upon receipt of such notice the 
Council shall allocate, in accordance with the provisions of this 
Agreement, any Common Members for which the petitioning party was 
the DOEA. Until such time as the Council has completed the 
reallocation described above; the petitioning Participant shall 
retain all its rights, privileges, duties and obligations hereunder.
    XV. The cancellation of its participation in this Agreement by 
any Participant shall not terminate this Agreement as to the 
remaining Participants. This Agreement will only terminate following 
notice to the Commission, in writing, by the then Participants that 
they intend to terminate the Agreement and the expiration of the 
applicable notice period. Such notice shall be given at least six 
months prior to the intended date of termination, provided that in 
the event a notice of cancellation is

[[Page 73714]]

received from a Participant that, assuming the effectiveness 
thereof, would result in there being just one remaining member of 
the Council, notice to the Commission of termination of this 
Agreement shall be given promptly upon the receipt of such notice of 
cancellation, which termination shall be effective upon the 
effectiveness of the cancellation that triggered the notice of 
termination to the Commission.
    XVI. No Participant nor the Council nor any of their respective 
directors, governors, officers, employees or representatives shall 
be liable to any other Participant in 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 Responsibility 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 more of the Participants and caused by the willful misconduct 
of one or more of the other participants or their respective 
directors, governors, officers, employees or representatives. No 
warranties, express or implied, are made by any or all of the 
Participants or the Council with respect to any Regulatory 
Responsibility to be performed by each of them hereunder.
    XVII. Pursuant to Section 17(d)(1)(A) of the Securities Exchange 
Act of 1934 and Rule 17d-2 promulgated pursuant thereto, the 
Participants join in requesting the Securities and Exchange 
Commission, upon its approval of this Agreement or any part thereof, 
to relieve those Participants which are from time to time 
participants in this Agreement which are not the DOEA as to a Common 
Member of any and all Regulatory Responsibility with respect to the 
matters allocated to the DOEA.

REVISED November 19, 2012

EXHIBIT A

RULES ENFORCED UNDER 17d-2 AGREEMENT

    Pursuant to Section II of the Agreement by and among BATS Exchange, 
Inc. (``BATS''), BOX Options Exchange, LLC (``BOX''), the Chicago Board 
Options Exchange, Incorporated (``CBOE''), C2 Options Exchange, 
Incorporated (``C2''), the International Securities Exchange, LLC 
(``ISE''), Financial Industry Regulatory Authority, Inc. (``FINRA''), 
Miami International Securities Exchange, LLC (``MIAX''), The NASDAQ 
Stock Market LLC (``NASDAQ''), NASDAQ OMX BX, Inc. (``BX''), the New 
York Stock Exchange LLC (``NYSE''), the NYSE [Amex] MKT LLC (``NYSE 
[Amex] MKT''), the NYSE Arca, Inc. (``NYSE ARCA''), and the NASDAQ OMX 
PHLX LLC (``PHLX'') pursuant to Rule 17d-2 under the Securities 
Exchange Act of 1934 dated November 19, 2012 (the ``Agreement''), a 
revised list of the current Common Rules of each Participant, as 
compared to those of FINRA, applicable to the conduct of accounts for 
Covered Securities is set forth in this Exhibit A.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
                           Opening of Accounts
------------------------------------------------------------------------
NYSE [Amex] MKT......................  Rules 411, 921 and 1101
BATS.................................  Rule 26.2
BOX..................................  Rule 4020 \1\
CBOE.................................  Rule 9.7
C2*..................................  CBOE Rule 9.7
ISE..................................  Rule 608
FINRA................................  Rules 2360(b)(16) and 2352
NYSE.................................  Rule 721 \2\
MIAX.................................  Rule 1307
PHLX.................................  Rule 1024(b) and (c) \3\
NYSE ARCA............................  Options Rules 9.2(a) and 9.18(b)
                                        and Equities Rule 8.4
BX...................................  Chapter XI, Section 9
NASDAQ...............................  Chapter XI, Section 7
------------------------------------------------------------------------
                               Supervision
------------------------------------------------------------------------
NYSE [Amex] MKT......................  Rules 411, 922 and 1104
BATS.................................  Rule 26.3
BOX..................................  Rule 4030
CBOE.................................  Rule 9.8
C2...................................  CBOE Rule 9.8
ISE..................................  Rule 609
FINRA................................  Rules 2360(b)(20),
                                        2360(b)(17)(B), 2360(b)(16)(E),
                                        2355 and 2358
MIAX.................................  Rule 1308
NYSE.................................  N/A
PHLX.................................  Rule 1025
NYSE ARCA............................  Options Rules 9.2(b) and
                                        9.18(d)(2)(G) and Equities Rule
                                        8.7
BX...................................  Chapter XI, Section 10
NASDAQ...............................  Chapter XI, Section 8
------------------------------------------------------------------------
                               Suitability
------------------------------------------------------------------------
NYSE [Amex] MKT......................  Rules 923 and 1102
BATS.................................  Rule 26.4
BOX..................................  Rule 4040
CBOE.................................  Rule 9.9
C2...................................  CBOE Rule 9.9
ISE..................................  Rule 610
FINRA................................  Rule 2360(b)(19) and 2353
MIAX.................................  Rule 1309
NYSE.................................  Rule 723
PHLX.................................  Rule 1026
NYSE ARCA............................  Options Rule 9.18(c) and Equities
                                        Rule 8.5
BX...................................  Chapter XI, Section 11
NASDAQ...............................  Chapter XI, Section 9
------------------------------------------------------------------------
                         Discretionary Accounts
------------------------------------------------------------------------
NYSE MKT [Amex]......................  Rules 421, 924 and 1103
BATS.................................  Rule 26.5 \4\
BOX..................................  Rule 4050 \4\
CBOE.................................  Rule 9.10
C2...................................  CBOE Rule 9.10
ISE..................................  Rule 611
FINRA................................  Rules 2360(b)(18) and 2354
MIAX.................................  Rule 1310
NYSE.................................  N/A
PHLX.................................  Rule 1027
NYSE ARCA............................  Options Rule 9.18(e) and Equities
                                        Rule 8.6
BX...................................  Chapter XI, Section 12
NASDAQ...............................  Chapter XI, Section 10
------------------------------------------------------------------------
                  Customer Communications (Advertising)
------------------------------------------------------------------------
NYSE MKT [Amex]......................  Rules 991 and 1106
BATS.................................  Rule 26.16
BOX..................................  Rule 4170
CBOE.................................  Rule 9.21 \5\
C2...................................  CBOE Rule 9.21 \5\
ISE..................................  Rule 623 \6\
FINRA................................  Rules 2220 and 2357
MIAX.................................  Rule 1322
NYSE.................................  N/A
PHLX.................................  N/A
NYSE ARCA............................  Options Rules 9.21(a) and 9.21(b)
BX...................................  Chapter XI, Section 24
NASDAQ...............................  Chapter XI, Section 22
------------------------------------------------------------------------
                           Customer Complaints
------------------------------------------------------------------------
NYSE MKT [Amex]......................  Rules 932 and 1105
BATS.................................  Rule 26.17
BOX..................................  Rule 4190
CBOE.................................  Rule 9.23
C2...................................  CBOE Rule 9.23
ISE..................................  Rule 625
FINRA................................  FINRA Rules 2360(b)(17)(A) and
                                        2356
MIAX.................................  Rule 1324
NYSE.................................  Rules 732
PHLX.................................  Rule 1070
NYSE ARCA............................  Options Rule 9.18(I) and Equities
                                        Rule 8.8
BX...................................  Chapter XI, Section 26
NASDAQ...............................  Chapter XI, Section 24
------------------------------------------------------------------------
                           Customer Statements
------------------------------------------------------------------------
NYSE MKT [Amex]......................  Rules 419 and 930
BATS.................................  Rule 26.7
BOX..................................  Rule 4070
CBOE.................................  Rule 9.12
C2...................................  CBOE Rule 9.12
ISE..................................  Rules 613
FINRA................................  Rule 2360(b)(15)
MIAX.................................  Rule 1312
NYSE.................................  Rules 730
PHLX.................................  Rule 1032
NYSE ARCA............................  Options Rule 9.18(j)
BX...................................  Chapter XI, Sections 14
NASDAQ...............................  Chapter XI, Section 12
------------------------------------------------------------------------
                              Confirmations
------------------------------------------------------------------------
NYSE MKT [Amex]......................  Rule 925
BATS.................................  Rule 26.6
BOX..................................  Rule 4060 \7\
CBOE.................................  Rule 9.11
C2...................................  CBOE Rule 9.11
ISE..................................  Rule 612
FINRA................................  Rule 2360(b)(12)
MIAX.................................  Rule 1311
NYSE.................................  Rules 725\8\
PHLX.................................  Rule 1028
NYSE ARCA............................  Options Rule 9.18(f)
BX...................................  Chapter XI, Section 13
NASDAQ...............................  Chapter XI, Section 11
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[[Page 73715]]

 
                Allocation of Exercise Assignment Notices
------------------------------------------------------------------------
NYSE MKT [Amex]......................  Rule 981
BATS.................................  Rule 23.2
BOX..................................  Rule 9010
CBOE.................................  Rule 11.2
C2...................................  CBOE Rule 11.2
ISE..................................  Rule1101
FINRA................................  Rule 2360(b)(23)(C)
MIAX.................................  Rule 701
NYSE.................................  Rule 781
PHLX.................................  Rule 1043
NYSE ARCA............................  Options Rule 6.25(a)
BX...................................  Chapter VII, Section 2
NASDAQ...............................  Chapter VIII, Section 2
------------------------------------------------------------------------
                          Disclosure Documents
------------------------------------------------------------------------
NYSE MKT [Amex]......................  Rules 921 and 926
BATS.................................  Rule 26.10
BOX..................................  Rule 4100
CBOE.................................  Rule 9.15
C2...................................  CBOE Rule 9.15
ISE..................................  Rule 616
FINRA................................  Rule 2360(b)(11)
MIAX.................................  Rule 1315
NYSE.................................  Rule 726 (a) and (c)
PHLX.................................  Rule 1024(b)(v), 1029
NYSE ARCA............................  Options Rule 9.18(g)
BX...................................  Chapter XI, Section 17
NASDAQ...............................  Chapter XI, Section 15
------------------------------------------------------------------------
                 Branch Offices of Member Organizations
------------------------------------------------------------------------
NYSE MKT [Amex]......................  Rule 922(d) \9\
BOX..................................  Rule 4010(b)
CBOE.................................  Rule 9.6
C2...................................  CBOE Rule 9.6
ISE..................................  Rule 607
FINRA................................  Rules 2360(b)(20)(B) and 2355
MIAX.................................  1306
NYSE.................................  N/A
PHLX.................................  N/A
NYSE ARCA............................  Options Rule 9.18(m)
BX...................................  Chapter XI, Section 8
NASDAQ...............................  Chapter XI, Section 6
------------------------------------------------------------------------
                     Prohibition Against Guarantees
------------------------------------------------------------------------
NYSE MKT [Amex]......................  Rule 390
BATS.................................  Rule 26.13
BOX..................................  Rule 4130
CBOE.................................  Rule 9.18
C2...................................  CBOE Rule 9.18
ISE..................................  Rules 619
FINRA................................  Rule 2150(b)
MIAX.................................  Rule 1318
NYSE.................................  Rule 2150(b)
PHLX.................................  Rule 777
NYSE ARCA............................  Options Rule 9.1(e)
BX...................................  Chapter XI, Sections 20 and 21
NASDAQ...............................  Chapter XI, Sections 18 and 19
------------------------------------------------------------------------
                           Sharing in Accounts
------------------------------------------------------------------------
NYSE MKT [Amex]......................  Rule 390
BATS.................................  Rule 26.14
BOX..................................  Rule 4140
CBOE.................................  Rule 9.18(b)
C2...................................  CBOE Rule 9.18(b)
ISE..................................  Rule 620 \10\
FINRA................................  Rule 2150(c)
MIAX.................................  Rule 1319
NYSE.................................  Rules 2150(c)
PHLX.................................  N/A
NYSE ARCA............................  Options Rule 9.1(f)
BX...................................  Chapter XI, Section 21
NASDAQ...............................  Chapter XI, Section 19 \11\
------------------------------------------------------------------------
                           Registration of Rop
------------------------------------------------------------------------
NYSE MKT [Amex]......................  Rule 920
BATS.................................  17.2(g)(1), (2), (6) and (7)
BOX..................................  Rule 2020(c)(1), (e)(1) and IM-
                                        2040-4 and IM-2040-5(b)
CBOE.................................  Rule 9.2
C2...................................  CBOE Rule 9.2
ISE..................................  Rule 601
FINRA................................  NASD Rules 1022(f) & IM-1022-1
MIAX.................................  Rule 1301
NYSE.................................  N/A
PHLX.................................  Rule 1024(a)(i)
NYSE ARCA............................  Options Rule 9.26
BX...................................  Chapter XI, Section 2
NASDAQ...............................  Chapter XI, Section 2
------------------------------------------------------------------------
                  Certification of Registered Personnel
------------------------------------------------------------------------
NYSE MKT [Amex]......................  Rule 920
BATS.................................  Rule 2.5 Interpretation .01(c)
                                        and 11.4(e)
BOX..................................  IM-2040-3
CBOE.................................  Rule 9.3
C2...................................  CBOE Rule 9.3
ISE..................................  Rule 602
FINRA................................  NASD Rule 1032(d)
MIAX.................................  Rule 1302
NYSE.................................  N/A
PHLX.................................  Rule 1024
NYSE ARCA............................  Options Rule 9.27(a)
BX...................................  Chapter XI, Section 3
NASDAQ...............................  Chapter XI, Section 3
------------------------------------------------------------------------
* Pursuant to C2 Chapters 9 and 11, the rules contained in CBOE Chapters
  IX and XI and referenced herein shall apply to C2.
\1\ FINRA shall not have any Regulatory Responsibility regarding the
  requirement for designation of Senior Options Principal and Compliance
  Options Principal.
\2\ FINRA shall not have any Regulatory Responsibility regarding opening
  short uncovered option accounts requirements.
\3\ FINRA shall not have any Regulatory Responsibility regarding foreign
  currency option requirements specified in any of the PHLX rules in
  this Exhibit A.
\4\ FINRA shall not have any Regulatory Responsibility to enforce this
  rule as to time and price discretion in institutional accounts. In
  addition FINRA shall not have any Regulatory Responsibility regarding
  BOX Rule 4050(a)(2).
\5\ FINRA shall not have any Regulatory Responsibility regarding CBOE's
  and C2's requirements to the extent that a customer would meet FINRA's
  definition of Institutional Investor and Institutional Sales Material
  but would not meet the requirements for such definitions in under
  CBOE's and C2's rule.
\6\ FINRA shall not have any Regulatory Responsibility regarding ISE's
  requirements to the extent that a customer would meet FINRA's
  definition of Institutional Investor and Institutional Sales Material
  but would not meet the requirements for such definitions in under such
  rule. In addition, FINRA shall not have any Regulatory Responsibility
  regarding ISE's requirements regarding approval of all market letters.
\7\ FINRA shall not have any Regulatory Responsibility regarding the
  requirement in confirmations to distinguish between BOX option
  transactions and other transactions in option contracts.
\8\ FINRA shall not have any Regulatory Responsibility regarding the
  requirement in confirmations to distinguish between NYSE option
  transactions and other transactions in option contracts.
\9\ FINRA shall only have Regulatory Responsibility for the first
  paragraph and shall not have any Regulatory Responsibility regarding
  the requirements for debt options.
\10\ FINRA shall not have any Regulatory Responsibility regarding ISE's
  requirements to the extent its rule does not contain an exception to
  permit sharing in the profits and losses of an account.
\11\ FINRA shall not have any Regulatory Responsibility regarding
  NASDAQ's requirements to the extent such rules do not contain an
  exception addressing immediate family.

IV. Solicitation of Comments

    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 [email protected]. Please include 
File Number S7-966 on the subject line.

Paper Comments

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

All submissions should refer to File Number S7-966. 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

[[Page 73716]]

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 BATS, BOX, CBOE, C2, ISE, FINRA, MIAX, NYSE, 
NYSE MKT, Arca, NASDAQ, BX and the Phlx. 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 S7-966 and should be submitted on or before 
January 2, 2013.

V. Discussion

    The Commission continues to believe that the proposed plan is an 
achievement in cooperation among the SRO participants. The Plan, as 
amended, will reduce unnecessary regulatory duplication by allocating 
to the designated SRO the responsibility for certain options-related 
sales practice matters that would otherwise be performed by multiple 
SROs. The plan promotes efficiency by reducing costs to firms that are 
members of more than one of the SRO participants. In addition, because 
the SRO participants coordinate their regulatory functions in 
accordance with the plan, the plan promotes, and will continue to 
promote, investor protection.
    Under paragraph (c) of Rule 17d-2, the Commission may, after 
appropriate notice and comment, declare a plan, or any part of a plan, 
effective. In this instance, the Commission believes that appropriate 
notice and comment can take place after the proposed amendment is 
effective. The primary purpose of the amendment is to add MIAX as an 
SRO participant. By declaring it effective today, the amended Plan can 
become effective and be implemented without undue delay.\19\ The 
Commission notes that the prior version of this plan immediately prior 
to this proposed amendment was published for comment and the Commission 
did not receive any comments thereon.\20\ Furthermore, the Commission 
does not believe that the amendment to the plan raises any new 
regulatory issues that the Commission has not previously considered.
---------------------------------------------------------------------------

    \19\ On December 3, 2012, the Commission granted MIAX's 
application for registration as a national securities exchange. See 
Securities Exchange Act Release No. 68341 (File No. 10-207).
    \20\ See supra note 18 (citing to Securities Exchange Act 
Release No. 66974).
---------------------------------------------------------------------------

VI. Conclusion

    This order gives effect to the amended plan submitted to the 
Commission that is contained in File No. S7-966.
    It is therefore ordered, pursuant to Section 17(d) of the Act,\21\ 
that the amended plan dated November 19, 2012, by and between the BATS, 
BOX, CBOE, C2, ISE, FINRA, MIAX, NYSE, NYSE MKT, Arca, NASDAQ, BX and 
the Phlx filed pursuant to Rule 17d-2 on November 20, 2012 is hereby 
approved and declared effective.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78q(d).
---------------------------------------------------------------------------

    It is further ordered that those SRO participants that are not the 
DOEA as to a particular common member are relieved of those regulatory 
responsibilities allocated to the common member's DOEA under the 
amended plan to the extent of such allocation.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
---------------------------------------------------------------------------

    \22\ 17 CFR 200.30-3(a)(34).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-29843 Filed 12-10-12; 8:45 am]
BILLING CODE 8011-01-P