[Federal Register Volume 79, Number 249 (Tuesday, December 30, 2014)]
[Notices]
[Pages 78507-78509]
[FR Doc No: 2014-30437]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73911; File No. 10-214]

Automated Matching Systems Exchange, LLC; Notice of Filing of
Amendment No. 1 to an Application for Limited Volume Exemption From
Registration as a National Securities Exchange Under Section 5 of the
Securities Exchange Act of 1934

December 22, 2014.
    On July 7, 2014, Automated Matching Systems Exchange, LLC
(``AMSE'') submitted to the Securities and Exchange Commission (``SEC''
or ``Commission'') an application seeking a limited volume exemption
under Section 5 of the Securities Exchange Act (``Exchange Act'') from
registration as a national securities exchange under Section 6 of the
Exchange Act.\1\ Notice of AMSE's exemption application was published
for comment in the Federal Register on July 29, 2014.\2\ On October 23,
2014, the Commission issued an order instituting proceedings to
determine whether to grant or deny AMSE's exemption application.\3\ On
November 10, 2014, AMSE submitted Amendment No. 1 to its exemption
application. The Commission is publishing this notice in order to
solicit views of interested persons on AMSE's exemption application as
amended by Amendment No. 1.
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    \1\ The Commission notes that AMSE's application only seeks a
limited volume exemption under Section 5 of the Exchange Act from
registration as a national securities exchange under Section 6 of
the Exchange Act. AMSE's application does not seek to register as a
national securities exchange.
    \2\ See Securities Exchange Act Release No. 72661 (July 23,
2014), 79 FR 44070 (``Notice'').
    \3\ See Securities Exchange Act Release No. 73419 (October 23,
2014), 79 FR 64421 (October 29, 2014) (``Order Instituting
Proceedings'').
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I. Description of AMSE's System

    AMSE proposes to conduct business in reliance upon an exemption
from registration as a national securities exchange pursuant to Section
5 of the Exchange Act.\4\ In general, AMSE seeks to operate as an
exchange for alternative trading systems.\5\ AMSE proposes to operate
solely on an ``off-order-book'' trading basis. AMSE does not intend to
have a physical exchange trading floor, centralized order book, or
specialists or market makers with affirmative and negative market
making obligations. Each member of AMSE would maintain its own
automated matching system or electronic order book. Each member of AMSE
would adopt its own rules governing the execution and priority of
orders on its system. Trades would occur when an order to buy and an
order to sell match on a member's electronic order book. Each member
would report its transactions to AMSE at such intervals as required by
AMSE.
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    \4\ 15 U.S.C. 78e.
    \5\ For more detail on AMSE's proposed system, see AMSE's full
amended exemption application and exhibits, which are published with
this notice on the Commission's Web site at http://www.sec.gov/rules/other.shtml.
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II. Amendment No. 1 to AMSE's Exemption Application

    On November 10, 2014, AMSE submitted Amendment No. 1 to its
exemption application. AMSE has represented that the only substantive
change to its exemption application made by Amendment No. 1 is the
addition of the following paragraph to Exhibit E: \6\
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    \6\ See email from Michael Stegawski, Chief Regulatory Officer,
AMSE, to SEC staff, dated November 14, 2014.

    The Exchange will bring together orders for multiple buyers and
sellers and such will be done by the use of consolidated quotation
systems which effect transactions for multiple buyers and sellers.
The consolidated quotation systems will display, or otherwise
represent, trading interests entered on the AMSE system to its
system users. AMSE may use a centralized order router which would
match trading interests on the electronic order book of one member
with the trading interests on the electronic order book of a second
member.

III. Additional Grounds for Denial Under Consideration

    In the Order Instituting Proceedings, the Commission provided
notice of the grounds for denial under consideration.\7\ Specifically,
the Commission noted that it was concerned that AMSE's exemption
application does not meet a key threshold requirement for being granted
an exemption from exchange registration--namely, that the applicant
actually be an ``exchange'' as defined under Section 3(a)(1) of the
Exchange Act and Rule 3b-16 thereunder.\8\ The Commission continues to
have this concern.
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    \7\ See Order Instituting Proceedings, supra note 3, at 64422.
    \8\ See Regulation ATS Adopting Release, 63 FR at 70898-70901
(discussing the Commission's revised interpretation of the
``exchange'' definition). Among other things, the Commission stated
that ``the first essential element of an exchange is the bringing
together of orders of multiple buyers and sellers.'' Id. at 70900.
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    The Commission is providing notice of additional grounds for denial
under consideration. Specifically, the Commission is concerned that it
would not be necessary or appropriate in the public interest or for the
protection of investors to grant a limited volume exemption under
Section 5 of the Exchange Act because it appears from the exemption
application that the operation of the proposed exchange would be
inconsistent with the Exchange Act.

    AMSE's exemption application states that AMSE would operate as a
self-regulatory organization that would exercise self-regulatory
authority over its members.\9\ A ``self-regulatory organization'' is
defined under Section 3(a)(26) of the Exchange Act as ``any national
securities exchange, registered securities association, or registered
clearing agency. . . .'' \10\ Section 5 of the Exchange Act provides
that an exchange must be either (1) registered as a national securities
exchange under Section 6 of the Exchange Act or (2) exempted from such
registration on the basis of limited volume of transactions effected on
the exchange.\11\ An exchange can only become a ``national securities
exchange,'' and thus a self-regulatory organization, by registering
under Section 6 of the Exchange Act.\12\ An exchange that is exempt
under Section 5 of the Exchange Act on the basis of limited volume of
transactions, however, is relieved from registering as a national
securities exchange under Section 6 of the Exchange Act and therefore
is not a self-regulatory organization.\13\ If the Commission were to
grant AMSE's exemption application, however, AMSE would not be a
registered national securities exchange and, therefore, would not
become a self-regulatory organization as defined under Section 3(a)(26)
of the Exchange Act.\14\ Accordingly, it appears that any attempts by
AMSE to hold itself out as a self-regulatory organization while
simultaneously seeking an exemption under Section 5 would be contrary
to the Exchange Act.
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    \9\ See, e.g., AMSE Operating Agreement Article III, Section
1(e) (``In light of the unique nature of the Company, its
operations, its status as a SRO. . . .'' (emphasis added)); Article
XI, Section 2 (``All meetings of the Board (and any committees of
the Board) pertaining to the self-regulatory function of the Company
(including disciplinary matters). . . .'' (emphasis added)); and
Article XI, Section 3 (``to the extent necessary or appropriate to
discharge properly the self-regulatory responsibilities of the
Company.'' (emphasis added)).
    \10\ 15 U.S.C. 78c(a)(26).
    \11\ 15 U.S.C. 78e.
    \12\ 15 U.S.C. 78f(a).
    \13\ In an order granting a limited volume exemption from
registration as a national securities exchange under Section 5 of
the Exchange Act to Wunsch Auction Systems Inc., the Commission
stated ``[b]y virtue of this exemption from registration, the Wunsch
System falls outside the definition of a national securities
exchange because the term ``national securities exchange'' implies a
registered entity (see, e.g., sections 3(a)(26) of the [Exchange]
Act (defining the term ``self-regulatory organization'') and section
6(a) of the [Exchange] Act.'' See Securities Exchange Act Release
No. 28899 (February 20, 1991), 56 FR 8377, 8382 (February 28, 1991)
(File No. 10-100).
    \14\ The Commission notes that, even if AMSE's exemption
application were to be approved, the broker-dealer members of AMSE
would not be able to satisfy their requirement to be members of a
self-regulatory organization by their membership with AMSE; rather
such broker-dealers would be required to be members of a registered
securities association or a national securities exchange if such
broker-dealers effect transactions solely on that exchange, pursuant
to Section 15(b)(1)(B) of the Exchange Act. See 15 U.S.C.
78o(b)(1)(B).
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    The Commission notes that it has not reached any conclusions with
respect to AMSE's exemption application. Rather, the Commission seeks
and encourages interested persons to provide additional comment on the
exemption application as amended by Amendment No. 1.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning AMSE's exemption application as amended by
Amendment No. 1, including whether AMSE's exemption application as
amended by Amendment No. 1 is consistent with the Exchange Act.
    1. While the Commission requests comment on all aspects of AMSE's
exemption application as amended by Amendment No. 1, the Commission
specifically requests comment on whether statements made in Amendment
No. 1 are consistent with other statements in the exemption
application, including those made in Exhibit E thereto. For example:
     In Amendment No. 1, in Exhibit E, AMSE states that ``[t]he
Exchange will bring together orders for multiple buyers and sellers and
such will be done by the use of consolidated quotation systems which
effect transactions for multiple buyers and sellers. The consolidated
quotation systems will display, or otherwise represent, trading
interests entered on the AMSE system to its system users. AMSE may use
a centralized order router which would match trading interests on the
electronic order book of one member with the trading interests on the
electronic order book of a second member.'' \15\
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    \15\ See supra note 5.
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     But Exhibit E to AMSE's exemption application also states
``[t]he Exchange has designed its System to allow its Exchange Members
to individually determine the best method for display of quotations and
entry of orders through the Exchange. Thus, Exchange Members may
develop their own customized electronic order books and routing
systems, but shall report their transactions to the Exchange at such
intervals as required by the Exchange.'' In addition, Exhibit E states
``[t]rades shall occur when an order to buy and an order to sell match
on the Exchange Member's electronic order book. Each Exchange Member
shall adopt rules to govern the execution and priority of orders.''
    2. The Commission specifically requests comment on whether the
following are sufficiently clear from AMSE's exemption application, as
amended by Amendment No. 1:
     How would AMSE's consolidated quotation systems, which
according to AMSE ``will display, or otherwise represent, trading
interests entered on the AMSE system to its system users,'' effect
transactions?
     If AMSE's consolidated quotation systems do effect
transactions, how is that consistent with the statement in Exhibit E
that ``[t]rades shall occur when an order to buy and an order to sell
match on the Exchange Member's electronic order book?''
     If AMSE's consolidated quotation systems do effect
transactions, what are the established non-discretionary methods (e.g.,
execution priority rules) by which orders from members interact with
each other through AMSE's consolidated quotation systems?
     Amendment No. 1 states that ``AMSE may use a centralized
order router'' (emphasis added). Under what circumstances would AMSE
use or not use the centralized order router? How would the centralized
order router function? What methods (discretionary or non-
discretionary) would determine how the centralized order router ``would
match trading interests on the electronic order book of one member with
the trading interests on the electronic order book of a second
member?''
     What does it mean for AMSE's centralized order router to
``match trading interest?'' Does ``match trading interest'' mean
bringing together orders using established non-discretionary methods in
the consolidated quotation system, or does it mean routing an order
from one member's order book to another member's order book for a
transaction to occur on the member's order book? If the former, what
are the established non-discretionary methods by which orders from
members interact with each other through the centralized router (e.g.,
execution priority rules)?
     What other functions, if any, does the centralized order
router do other than provide the technology and systems to route
trading interest from one member's order book to another member's order
book? In particular, does the centralized order router decide when to
send trading interest from one member's electronic order book to
another member's electronic order book, or does the AMSE member have to
take action to route the trading interest? If the centralized order
router decides when to route trading interest from one

member's book to another member's book, under what rules or protocols
does it make such decisions?
     Would an AMSE member be required to use AMSE's
consolidated quotations systems or would the AMSE member be allowed to
display trading interest submitted to its order book through other
means, including its own data feed?
     Are members required to use AMSE's centralized order
router? Are members required to route trading interest to other members
if an execution could occur, or is routing between members
discretionary? For example, assume Member 1's order book has no sell
interest in XYZ stock. If Member 1 receives buy interest in XYZ stock
that could execute against sell interest in XYZ stock on Member 2's
order book, would Member 1 be required to route such buy interest to
Member 2 or could Member 1 post such buy interest to its order book?
    3. The Commission specifically requests comment on whether
statements made in AMSE's exemption application pertaining to its
intent to operate as an SRO are consistent with statements in the
application pertaining to its exemption request. As noted above, AMSE's
application states that it intends to operate as an SRO. But, AMSE's
application also states that it is seeking an exemption from
registering as a national securities exchange. If AMSE were granted an
exemption from registering as a national securities exchange, AMSE
would not be a registered national securities exchange and hence would
not be an SRO. The Commission seeks comment on the inconsistencies
between these statements in AMSE's application.
    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_ADDRESS>Please include
File Number 10-214 on the subject line.

Paper Comments

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

All submissions should refer to File Number 10-214. 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 AMSE's exemption application filed with the
Commission, and all written communications relating to the application
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. 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 10-214
and should be submitted on or before January 20, 2015.
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    \16\ 17 CFR 200.30-3(a)(71)(ii).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-30437 Filed 12-29-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 23 (Friday, February 3, 2012)]
[Notices]
[Page 5502]
[FR Doc No: 2012-2380]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 2696-033]

Stuyvesant Falls Hydroelectric Project; Notice of Application
Ready for Environmental Analysis and Soliciting Comments,
Recommendations, Terms and Conditions, and Prescriptions

    Take notice that the following hydroelectric application has been
filed with the Commission and is available for public inspection.
    a. Type of Application: New Major License.
    b. Project No.: P-2696-033.
    c. Date filed: July 31, 2009.
    d. Applicants: Albany Engineering Corporation and the Town of
Stuyvesant, New York.
    e. Name of Project: Stuyvesant Falls Hydroelectric Project.
    f. Location: On Kinderhook Creek, near the Town of Stuyvesant, in
Columbia County, New York. The project does not occupy any Federal
lands.
    g. Filed Pursuant to: Federal Power Act, 16 U.S.C. 791 (a)-825(r).
    h. Applicant Contact: Mr. James A. Besha, P.E., Albany Engineering
Corporation, 5 Washington Square, Albany, New York 12205. Tel: (518)
456-7712.
    i. FERC Contact: Andy Bernick,<PHONE_NUMBER> or
<EMAIL_ADDRESS>    j. Deadline for filing comments, recommendations, terms and
conditions, and prescriptions: 60 days from the issuance date of this
notice; reply comments are due 105 days from the issuance date of this
notice.
    All documents may be filed electronically via the Internet. See 18
CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web
site http://www.ferc.gov/docs-filing/efiling.asp. Commenters can submit
brief comments up to 6,000 characters, without prior registration,
using the eComment system at http://www.ferc.gov/docs-filing/ecomment.asp. You must include your name and contact information at the
end of your comments. For assistance, please contact FERC Online
Support at<EMAIL_ADDRESS>or toll free at 1-866-208-3676,
or for TTY,<PHONE_NUMBER>. Although the Commission strongly encourages
electronic filing, documents may also be paper-filed. To paper-file,
mail an original and seven copies to: Kimberly D. Bose, Secretary,
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426.
    The Commission's Rules of Practice require all intervenors filing
documents with the Commission to serve a copy of that document on each
person on the official service list for the project. Further, if an
intervenor files comments or documents with the Commission relating to
the merits of an issue that may affect the responsibilities of a
particular resource agency, they must also serve a copy of the document
on that resource agency.
    k. This application has been accepted and is now ready for
environmental analysis.
    l. The existing Stuyvesant Falls Hydroelectric Project is currently
being restored to operation under the existing license. The proposed
project would consist of: (1) An existing 13-foot-high, 240-foot-long,
masonry gravity dam (Stuyvesant Falls dam) on Kinderhook Creek; (2) an
existing 46-acre impoundment with a normal water surface elevation of
174.3 feet National Geodetic Vertical Datum 1929; (3) an existing stone
and concrete intake structure, Taintor gate, and trash sluice located
near the south abutment of the gravity dam; (4) a proposed 120-kilowatt
(kW) minimum flow turbine located adjacent to the intake structure; (5)
two existing 7.5-foot-diameter, 2,860-foot-long, riveted-steel
penstocks; (6) an existing concrete, steel, and brick powerhouse,
approximately 144 feet long, 84 feet wide, and 60 feet high; (7) two
single-runner Francis turbines, each with a nameplate capacity of 4,511
kW, connected to two 2,100-kW generators; (8) an existing 34.5-kilovolt
(kV) primary circuit breaker, step up transformer, and 34.5-kV, 20-
foot-long primary leads supplying an existing National Grid substation
adjacent to the powerhouse, and a new station service line connecting
the minimum flow turbine to the powerhouse; and (9) ancillary plant
equipment. The existing project, following restoration, is expected to
generate an estimated 11,133 megawatt-hours (MWh) annually. The
proposed project would generate an estimated 14,945 megawatt-hours
annually.
    m. A copy of the application is available for review at the
Commission in the Public Reference Room or may be viewed on the
Commission's Web site at http://www.ferc.gov using the ``eLibrary''
link. Enter the docket number excluding the last three digits in the
docket number field to access the document. For assistance, contact
FERC Online Support. A copy is also available for inspection and
reproduction at the address in item h above.
    All filings must (1) Bear in all capital letters the title
``COMMENTS'', ``REPLY COMMENTS,'' ``RECOMMENDATIONS,'' ``TERMS AND
CONDITIONS,'' or ``PRESCRIPTIONS;'' (2) set forth in the heading the
name of the applicant and the project number of the application to
which the filing responds; (3) furnish the name, address, and telephone
number of the person submitting the filing; and (4) otherwise comply
with the requirements of 18 CFR 385.2001 through 385.2005. All
comments, recommendations, terms and conditions or prescriptions must
set forth their evidentiary basis and otherwise comply with the
requirements of 18 CFR 4.34(b). Agencies may obtain copies of the
application directly from the applicant. Each filing must be
accompanied by proof of service on all persons listed on the service
list prepared by the Commission in this proceeding, in accordance with
18 CFR 4.34(b), and 385.2010.
    You may also register online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via email of new filings and issuances
related to this or other pending projects. For assistance, contact FERC
Online Support.
    n. Public notice of the filing of the initial development
application, which has already been given, established the due date for
filing competing applications or notices of intent. Under the
Commission's regulations, any competing development application must be
filed in response to and in compliance with public notices of the
initial development application. No competing applications or notices
of intent may be filed in response to this notice.
    o. A license applicant must file no later than 60 days following
the date of issuance of this notice: (1) A copy of the water quality
certification; (2) a copy of the request for certification, including
proof of the date on which the certifying agency received the request;
or (3) evidence of wavier of water quality certification.

    Dated: January 27, 2012.
Kimberly D. Bose,
Secretary.
[FR Doc. 2012-2380 Filed 2-2-12; 8:45 am]
BILLING CODE 6717-01-P