[Federal Register Volume 75, Number 59 (Monday, March 29, 2010)]
[Notices]
[Pages 15475-15476]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-6774]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61752; File No. 4-594]
Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of
Filing of Proposed Minor Rule Violation Plan
March 22, 2010.
Pursuant to Section 19(d)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19d-1(c)(2) thereunder,\2\ notice is hereby
given that on March 19, 2010, EDGX Exchange, Inc. (``EDGX Exchange'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') copies of proposed minor rule violations with
sanctions not exceeding $2,500 which would not be subject to the
provisions of Rule 19d-1(c)(1) of the Act \3\ requiring that a self-
regulatory organization promptly file notice with the Commission of any
final disciplinary action taken with respect to any person or
organization.\4\ In accordance with paragraph (c)(2) of Rule 19d-1 of
the Act, the Exchange proposed to designate certain specified rule
violations as minor rule violations, and requests that it be relieved
of the reporting requirements regarding such violations, provided it
gives notice of such violations to the Commission on a quarterly basis.
EDGX Exchange proposes to include in its proposed MRVP the policies and
procedures currently included in EDGX Exchange Rule 8.15 (``Imposition
of Fines for Minor Violation(s) of Rules'').\5\
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\1\ 15 U.S.C. 78s(d)(1).
\2\ 17 CFR 240.19d-1(c)(2).
\3\ 17 CFR 240.19d-1(c)(1).
\4\ The Commission adopted amendments to paragraph (c) of Rule
19d-1 to allow self-regulatory organizations (``SROs'') to submit
for Commission approval plans for the abbreviated reporting of minor
disciplinary infractions. See Securities Exchange Act Release No.
21013 (June 1, 1984), 49 FR 23828 (June 8, 1984). Any disciplinary
action taken by an SRO against any person for violation of a rule of
the SRO which has been designated as a minor rule violation pursuant
to such a plan filed with the Commission shall not be considered
``final'' for purposes of Section 19(d)(1) of the Act if the
sanction imposed consists of a fine not exceeding $2,500 and the
sanctioned person has not sought an adjudication, including a
hearing, or otherwise exhausted his administrative remedies.
\5\ On March 12, 2010, the Commission approved EDGX Exchange's
application for registration as a national securities exchange,
including the rules governing EDGX Exchange. See Securities Exchange
Act Release No. 61698, 75 FR 13151 (March 18, 2010). In the approval
order, the Commission noted that EDGX Exchange Rule 8.15 provides
for the imposition of fines for minor rule violations pursuant to a
minor rule violation plan. Accordingly, the Commission noted that as
a condition to the operation of EDGX Exchange, the Exchange must
file a minor rule violation plan with the Commission.
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According to the Exchange's proposed MRVP, under Rule 8.15, the
Exchange may impose a fine (not to exceed $2,500) on a member or an
associated person with respect to any rule listed in Rule 8.15.01. The
Exchange shall serve the person against whom a fine is imposed with a
written statement setting forth the rule or rules violated, the act or
omission constituting each such violation, the fine imposed, and the
date by which such determination becomes final or by which such
determination must be contested. If the person against whom the fine is
imposed pays the fine, such payment shall be deemed to be a waiver of
such person's right to a disciplinary proceeding and any review of the
matter under EDGX Exchange rules. Any person against whom a fine is
imposed may contest the Exchange's determination by filing with the
Exchange a written response, at which point the matter shall become a
disciplinary proceeding. Under Rule 8.15.01, violations of the
following rules would be appropriate for disposition under the minor
rule violations plan: Rule 2.5. Interpretation .04, Firm Element
Continuing Education Requirement; Rule 3.5 Advertising Practices; Rule
4.2 and Interpretations thereunder, requiring the submission of
responses to Exchange requests for trading data within specified time
period; Rule 4.2 and Interpretations thereunder, related to the
requirement to furnish Exchange-related order, market and transaction
data, as well as financial or regulatory records and information; Rule
11.15, requirement to identify short sale orders as such; Rule 11.16,
requirement to comply with locked and crossed market rules; and Rule
12.11, Interpretation .01 and Exchange Act Rule 604--Failure to
properly display limit orders.
EDGX Exchange proposed to include the rule violations listed in
Rule 8.15.01 in its minor rule violation plan. Upon approval of the
plan, the Exchange will provide the Commission a quarterly report of
actions taken on minor rule violations under the plan. The quarterly
report will include: The Exchange's internal file number for the case,
the name of the individual and/or organization, the nature of the
violation, the specific rule provision violated, the sanction imposed,
the number of times the rule violation has occurred, and the date of
disposition.\6\
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\6\ EDGX Exchange attached a sample form of the quarterly report
with its submission to the Commisision.
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I. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning EDGX Exchange's proposed Minor Rule Violation
Plan, including whether the proposed plan is consistent with the Act.
Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/other.shtml); or
Send an e-mail to [email protected]. Please include
File No. 4-594 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549.
All submissions should refer to File No. 4-594. This file number should
be included on the subject line if e-mail 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).
[[Page 15476]]
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed Minor Rule Violation Plan that
are filed with the Commission, and all written communications relating
to the proposed Minor Rule Violation 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, 100 F Street, NE., Washington, DC 20549. All comments received
will be posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File No. 4-594 and should be submitted on or before
April 28, 2010.
II. Date of Effectiveness of the Proposed Minor Rule Violation Plan and
Timing for Commission Action
Pursuant to Section 19(d)(1) of the Act and Rule 19d-1(c)(2)
thereunder,\7\ after April 28, 2010, the Commission may, by order,
declare EDGX Exchange's proposed Minor Rule Violation Plan effective if
the plan is consistent with the public interest, the protection of
investors, or otherwise in furtherance of the purposes of the Act. The
Commission in its order may restrict the categories of violations to be
designated as minor rule violations and may impose any other terms or
conditions to the proposed Minor Rule Violation Plan, File No. 4-594,
and to the period of its effectiveness which the Commission deems
necessary or appropriate in the public interest, for the protection of
investors or otherwise in furtherance of the purposes of this Act.
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\7\ 15 U.S.C. 78s(d)(1) and 17 CFR 240.19d-1(c)(2).
\8\ 17 CFR 200.30-3(a)(44).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-6774 Filed 3-26-10; 8:45 am]
BILLING CODE 8011-01-P