because the demand on the Floor was not sufficient to absorb the
block at a particular price or prices; or (2) to purchase or sell an
option for an account in which the Options Participant is directly
or indirectly interested if the Options Participant was invited to
participate on the opposite side of a block transaction by another
Options Participant or a partner or stockholder therein because the
market on the Floor could not readily absorb the block at a
particular price or prices; or (3) to purchase or sell an option for
an account in which the Participant is directly or indirectly
interested if the transaction is on the opposite side of a block
order being executed by the Participant for the account of its
customer and the transaction is made to facilitate the execution of
such order.
---------------------------------------------------------------------------

    The Exchange is proposing that an on-Floor order given by a Floor
Market Maker to a commission broker, for an account in which the Floor
Market Maker has an interest, is subject to all the rules restricting
Floor Market Makers.\119\
---------------------------------------------------------------------------

    \119\ See proposed IM-8510-5. Proposed IM-8510-5 is based on
PHLX Rule 1014.09.
---------------------------------------------------------------------------

    The Exchange is proposing that the number of Floor Market Makers in
the trading crowd who are establishing or increasing a position may
temporarily be limited when, in the judgment of an Options Exchange
Official, the interests of a fair and orderly market are served by such
limitation.\120\ Additionally, the Exchange is proposing that the
Exchange may adopt policies affecting the location of Floor
Participants on the Trading Floor in the interest of a fair and orderly
market.\121\ Lastly, the Exchange is proposing that a Floor Market
Maker cannot acquire a ``long'' position by pairing off with a sell
order before the opening, unless all off-Floor bids at that price are
filled.\122\
---------------------------------------------------------------------------

    \120\ See proposed IM-8510-6. Proposed IM-8510-6 is based on
PHLX Rule 1014.12.
    \121\ See proposed IM-8510-7. Proposed IM-8510-7 is based on
PHLX Rule 1014.17.
    \122\ See proposed IM-8510-9. Proposed IM-8510-9 is based on
PHLX Rule 1014.11.
---------------------------------------------------------------------------

    The proposed rules applicable to Floor Market Makers are based
predominately on the rules of PHLX. However, BOX omitted certain PHLX
rules from the proposed rules due to certain differences with how the
Exchange is designing the Trading Floor. The Exchange is not including
any of PHLX's waiver provisions in the proposed rules.\123\ The
Exchange does not believe that waiver provisions are necessary because
the Exchange is not having specialists who have entitlement guarantees
that they could waive on the Trading Floor. Additionally, BOX is not
including rules related to foreign currency options because the
Exchange does not list for trading options on foreign currencies.
---------------------------------------------------------------------------

    \123\ See PHLX Rule 1014(g)(v)(D).
---------------------------------------------------------------------------

    The Exchange is not including certain PHLX rules related to
participation guarantees, allocation and priority. PHLX participant
guarantee rules are designed to provide a guarantee entitlement to
specialists on the trading floor. BOX is not proposing to have
specialists on the Trading Floor and therefore there is no reason to
include these PHLX rules. Additionally, BOX's proposed allocation and
priority rules for orders executed on the Trading Floor are based on
the rules of NYSE Arca \124\ and not those of PHLX. The Exchange
proposes Rule 8530 which details the resolution of an uncompared
trade.\125\ Specifically, when a disagreement between Floor
Participants arising from an uncompared Exchange options transaction
cannot be resolved by mutual agreement prior to 10:00 a.m. on the first
business day following the trade date, the parties shall promptly, but
not later than 3:30 p.m. on such day close out the transaction in the
following manner. The Floor Participant representing the purchaser in
the uncompared Exchange options transaction shall promptly enter into a
new Exchange options transaction on the Floor of the Exchange to
purchase the option contract that was the subject of the uncompared
Exchange options

transaction. The Floor Participant representing the writer in the
uncompared Exchange options transaction shall promptly enter into a new
Exchange options transaction on the Floor of the Exchange to sell
(write) the option contract that was the subject of the uncompared
Exchange options transaction. Any claims for damages resulting from
such transactions must be made promptly for the accounts of the Floor
Participants involved and not for the accounts of their respective
customers. Notwithstanding the foregoing, if either Floor Participant
is acting for a firm account in an uncompared Exchange options
transaction and not for the account of a Public Customer, such Floor
Participant need not enter into a new transaction, in which event money
differences will be based solely on the closing transaction of the
other party to the uncompared transaction. In the event an uncompared
transaction involves an option contract of a series in which trading
has been terminated or suspended before a new Exchange options
transaction can be effected to establish the amount of any loss, the
Floor Participant not at fault may claim damages against the other
Floor Participant involved in the transaction based on the terms of
such transaction. All such claims for damages shall be made promptly.
---------------------------------------------------------------------------

    \124\ See NYSE Arca Rules 6.47(a) and 6.75.
    \125\ Proposed Rule 8530 is based on PHLX Rule 1039.
---------------------------------------------------------------------------

Fees
    The Exchange has not yet determined the fees for transactions
executed on the Trading Floor. Prior to commencing trading on the
Trading Floor, the Exchange will file proposed fees with the
Commission. However, the Exchange is currently proposing to amend Rule
7010 Fees and Charges. Specifically, the Exchange is proposing that the
Board may, from time to time, fix and impose a charge upon Participants
measured by their respective net commissions on transactions effected
on the Trading Floor or the Exchange.\126\
---------------------------------------------------------------------------

    \126\ See proposed Rule 7010(d). Proposed Rule 7010(d) is based
on PHLX Rule 714.
---------------------------------------------------------------------------

Additional Changes
    The Exchange is also proposing minor edits to other sections of the
Exchange's Rulebook in order to accommodate the various changes.
Specifically, the Exchange is proposing several new definitions which
results in the renumbering of numerous other definitions. Therefore,
the Exchange is amending various references to definitions in the
Rulebook.\127\
---------------------------------------------------------------------------

    \127\ See proposed changes to Rules 7130, 7150, and 7245.
---------------------------------------------------------------------------

    Lastly, the Exchange notes that it will submit a separate filing to
the SEC which will cover minor rule violations on the Trading Floor.
Specifically, the Exchange will file with the SEC to amend the
Exchange's Minor Rule Violation Plan in Rule 12140.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \128\ in general, and furthers the objectives of
Section 6(b)(5) of the Act \129\ in particular, in that it is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest.
---------------------------------------------------------------------------

    \128\ 15 U.S.C. 78f(b).
    \129\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

General
    BOX believes that the proposal is consistent with the Act and
furthers the foregoing objectives by increasing the opportunities for
Participants to execute orders and provide an additional venue for
seeking liquidity. The Exchange believes the adoption of the proposed
rules allowing for an open-outcry floor is consistent with the goals of
the Act to remove the impediments to and perfect the mechanism of a
free and open market because it will benefit Participants by providing
an additional mechanism for Participants to provide and seek liquidity
for large and complex orders. The Exchange believes that the nature of
open outcry transactions lends itself better to larger-sized
transactions than the liquidity that is generally available
electronically and the proposed rules would encourage greater
participation in such large trades. Therefore, the proposed rule
changes will benefit the market as a whole by providing an additional
venue for market participants to seek liquidity for large-sized and
complex orders. Providing an additional venue for these orders will
benefit investors, the national market system, Participants, and the
Exchange market by increasing competition for order flow and
executions, and thereby spur product enhancements and lower prices. The
Exchange believes that the proposal is designed to prevent fraudulent
and manipulative acts and practices because all surveillance coverage
currently performed by the Exchange will cover trading on the Trading
Floor. Additionally, the Exchange will have surveillance coverage in
place to monitor issues unique to the Trading Floor.
    The Exchange believes the proposed changes to Rule 100(a) to
include definitions of Floor Participant and Trading Floor are
consistent with the goals of the Act. Specifically, the proposed
changes are designed to protect investors and the public interest by
providing background and clarity in the Rulebook. Additionally,
proposed Rule 100(b) will provide additional clarity in the Rulebook.
Specifically, the definition for Presiding Exchange Officials provides
Floor Participants with notice of who is responsible for monitoring and
regulating the Trading Floor. The other sections of proposed Rule
100(b) provide general background for Floor Participants in the
beginning of the Rulebook that will aid in understanding the applicable
rules throughout, which will protect investors and the public by making
the Exchange's Rulebook simpler to understand. Additionally, the
Exchange notes that the various sections of proposed Rule 100(b) are
based on the rules of another exchange with an open-outcry floor.\130\
---------------------------------------------------------------------------

    \130\ See PHLX Rules 1000(e), 1000(f), 1000(g),1080.06 and CBOE
Rule 6.74(a).
---------------------------------------------------------------------------

Participant Eligibility and Registration
    The Exchange believes that the proposed registration requirements,
including floor trading examinations, if required, for Floor Brokers,
Floor Market Makers and registered representatives on the Trading
Floor, are reasonable and further the objectives of the Act.\131\
Specifically, these examinations address industry topics that establish
the foundation for the regulatory and procedural knowledge necessary
for individuals required to register as Floor Brokers or Floor Market
Makers and for such individuals to appropriately register under the
Exchange's Rules. Requiring these examinations will help promote
consistency in examination requirements and uniformity across the
markets. Additionally, the registration requirements for Floor
Participants are reasonable because they will help the Exchange to
determine if a registrant is qualified to be a Floor Broker or Floor
Market Maker and therefore will protect investors and the public
interest.
---------------------------------------------------------------------------

    \131\ See proposed Rules 2020(h) and (i).
---------------------------------------------------------------------------

    Similarly, the Exchange believes that prescribing appropriate
registration requirements including floor trading

examinations for all other Trading Floor personnel, including clerks,
interns, stock execution clerks and other associated persons, are
reasonable as well. Specifically, these examinations address industry
topics that establish the foundation for the regulatory and procedural
knowledge necessary to appropriately register under the Exchange rules.
The proposed registration requirements for associated persons are
reasonable because they will help the Exchange to determine if a
registrant is qualified to be on the Trading Floor and therefore will
protect investors and the public interest. Additionally, the proposed
Rules covering eligibility and registration are based on the rules of
another exchange that has an open-outcry floor.\132\
---------------------------------------------------------------------------

    \132\ See PHLX Rule 620(a) and (b).
---------------------------------------------------------------------------

Sanctions for Breach of Regulations on the Trading Floor
    The proposed rule dealing with breaches of regulations on the
Trading Floor \133\ is consistent with, and furthers the objectives of
the Act, because the proposed Rule should facilitate prompt,
appropriate, and effective discipline for violations of the Exchange's
Rules and the regulations thereunder designed to maintain order on the
Trading Floor. In addition, the proposed rule is consistent with
Section 6(b)(6) of the Act \134\ which requires the rules of an
exchange provide that its members be appropriately disciplined for
violations of the Act as well as the rules and regulations thereunder,
by imposing increased fine amounts for breaches of order and decorum to
better reflect the severity of the violation and provide an appropriate
form of deterrence for violations of the Exchange's Rules and the
regulations thereunder. The Exchange believes that the proposed Rule
provides adequate notice and process for a Floor Participant that is
subject to sanctions for breach of the Exchange's Rules and
regulations. The Exchange believes that the proposal to exclude Floor
Participants for up to five (5) days and conduct an expedited hearing
will provide a fair process for Floor Participants to present their
arguments surrounding a removal, while also allowing the Exchange to
operate without disruption and threat of safety to Floor Participants
on the Trading Floor. Additionally, the proposed Rules covering
sanctions for breaches of regulations are based on the rules of another
exchange with an open-outcry floor.\135\
---------------------------------------------------------------------------

    \133\ See proposed Rule 2110.
    \134\ 15 U.S.C. 78f(b)(6).
    \135\ See PHLX Rule 60.
---------------------------------------------------------------------------

    In addition, the Exchange believes that its proposal is consistent
with Section 6(b) of the Act in general, and furthers the objective of
Section 6(b)(4) of the Act \136\ in particular, in that it is an
equitable allocation of reasonable fees and other charges among
Exchange members. The Exchange believes that this proposal is equitable
in that the forum fee would apply to all Participants equally. The
addition of the forum fee will help the Exchange offset costs
associated with reviewing contested citations.
---------------------------------------------------------------------------

    \136\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

Trading on the Exchange Floor
    The Exchange believes that the proposed rules governing activity on
the Trading Floor, including Trading Floor hours, opening the market,
admittance, joint accounts, and dealings on the Trading Floor,\137\ are
reasonable restrictions that are designed to further the objectives of
the Act. Specifically, the proposed rules are designed to maintain
order and structure on the Trading Floor and apply to all Floor
Participants. Additionally, these rules are based on those of competing
options exchanges that also have open-outcry floors.\138\
---------------------------------------------------------------------------

    \137\ See proposed Rules 7070(d), 7500, 7510, 7520, and 7650.
    \138\ See PHLX Rules 1017(c), 102, 104, 443, and 772.
---------------------------------------------------------------------------

    The Exchange believes the proposal to require each Options
Participant that physically conducts a business on the Trading Floor to
procure and maintain liability insurance \139\ should assist the
Exchange in limiting its resources, which can be easily diverted to
defending litigation claims and responding to non-Exchange related
litigation matters on behalf of its Participants. The proposal is meant
to prevent the Exchange from diverting valued resources away from its
main regulatory responsibilities and being consumed in litigation
designed to siphon Exchange monies and staff. The Exchange notes the
proposal to require liability insurance is based on the rules of
another exchange.\140\
---------------------------------------------------------------------------

    \139\ See proposed Rule 7230(f).
    \140\ See PHLX Rule 652(c)(2).
---------------------------------------------------------------------------

    The Exchange is proposing various rules related to Clerks on the
Trading Floor \141\ that the Exchange believes are reasonable and
further the objectives of the Act. Specifically, the proposal relates
to restrictions and conduct of Clerks on the Trading Floor that are
designed to maintain order on the Trading Floor. Additionally, the
proposal will make clear the rights and responsibilities of Clerks on
the Trading Floor. The Exchange notes the proposed rule related to
Clerks on the Trading Floor is based on the rule of another
exchange.\142\
---------------------------------------------------------------------------

    \141\ See proposed Rule 7630.
    \142\ See PHLX Rule 1090.
---------------------------------------------------------------------------

    The Exchange believes the proposed rule relating to disputes on the
Trading Floor will provide clarity and direction for the resolution of
such disputes.\143\ The proposed rule will contribute to the
maintenance of a fair and orderly market by clearly laying out the
dispute resolution process. Additionally, by first allowing the
interested Floor Participants an opportunity to settle the
disagreement, the Exchange is providing a reasonable opportunity for
the interested parties to reach an equitable agreement. The Exchange
believes that allowing an Options Exchange Official to settle disputes
is reasonable and is designed to promote just and equitable principles
of trade by having an independent third party settle the dispute. The
Exchange believes that the dispute resolution process is further
strengthened by allowing Floor Participants the ability to appeal an
Options Exchange Official's ruling. In addition, the Exchange believes
that its proposal is consistent with Section 6(b) of the Act \144\ in
general, and furthers the objective of Section 6(b)(4) of the Act \145\
in particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members. The Exchange believes that
this proposal is equitable in that the appeal fee would apply to all
Participants equally. The addition of the appeal fee will help the
Exchange offset costs associated with reviewing contested rulings by an
Options Exchange Official.
---------------------------------------------------------------------------

    \143\ See proposed Rule 7640.
    \144\ 15 U.S.C. 78f(b).
    \145\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes it is reasonable to exclude Floor Market
Makers and Floor Brokers from Rule 4180 when they do not conduct
business with the public.\146\ Rule 4180 deals with requirements for
Participants that are approved to transact business with the public;
therefore the proposed rule is simply clarifying that Rule 4180 will
not apply to Floor Market Makers and Floor Brokers who do not conduct
business with the Public. The Exchange notes the proposed rule is based
on the rule of another exchange.\147\
---------------------------------------------------------------------------

    \146\ See proposed Rule 4180(g).
    \147\ See PHLX Rule 705(f)(1)(B).
---------------------------------------------------------------------------

    The Exchange believes that the proposal to allow the Board the
authority to fix and impose a charge upon Participants conducting
business on the Trading Floor is consistent with the Act. Specifically,
the Exchange will

file a separate proposal with the SEC prior to establishing separate
fees for Trading Floor based transactions. The Exchange notes that the
proposal is based on the rules of another exchange.\148\
---------------------------------------------------------------------------

    \148\ See PHLX Rule 714.
---------------------------------------------------------------------------

    The proposal outlining bids and offers made on the Trading Floor
and the solicitation of quotations on the Trading Floor \149\ provides
clarifying information to Floor Participants on how bidding and
offering on the Trading Floor will work; therefore, the proposal is
designed to protect investors and the public interest by making the
proposed operation of the Trading Floor clear in the Exchange's rules.
The proposal is based on the rules of another exchange.\150\
---------------------------------------------------------------------------

    \149\ See proposed Rule 7040(d).
    \150\ See PHLX Rule 1033(a).
---------------------------------------------------------------------------

Floor Brokers
    The Exchange believes that the proposed rules applicable to Floor
Brokers,\151\ including responsibilities and restrictions, are designed
to promote just and equitable principles of trade, remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest. Specifically, the proposed rules will provide guidance and
restrictions for Floor Brokers operating on the Trading Floor. The
proposed registration requirements for Floor Brokers will protect
investors and the public interest by ensuring that all Floor Brokers
are registered with the Exchange and that the Exchange approved each
Floor Broker before they were admitted to the Trading Floor.
---------------------------------------------------------------------------

    \151\ See proposed Rules 7540, 7550, 7570, 7580, and 7590.
---------------------------------------------------------------------------

    The proposed responsibilities for Floor Brokers \152\ are designed
to further the goals of the Act. Specifically, the requirement that a
Floor Broker use due diligence in handling an order and the requirement
to ascertain that, if possible, at least one Floor Market Maker is
present when the order is announced on the Trading Floor, are designed
to promote just and equitable principles of trade, and, in general to
protect investors and the public interest by providing the opportunity
for additional interaction and price improvement from any Floor Market
Makers. The Exchange believes the various restrictions on Floor Brokers
are reasonable and are in line with those on another exchange with an
open-outcry floor.\153\
---------------------------------------------------------------------------

    \152\ See proposed Rule 7580.
    \153\ See PHLX Rules 155, 1063 and 1065.
---------------------------------------------------------------------------

    Additionally, the Exchange believes that the proposal to not
require a Floor Market Maker to be present in the Crowd Area \154\ is
consistent with Section 6(b)(5) of the Act, in particular, the
requirement is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general to protect investors and the
public interest. Specifically, the Exchange believes this proposal will
benefit market participants and promote just and equitable principles
of trade by allowing Floor Brokers to execute orders even if the Floor
Market Maker in a class is absent, thereby increasing execution
opportunities for Floor Brokers. Additionally, the Exchange believes
the proposal will remove impediments to and perfect the mechanism of a
free and open market and a national market system by giving Floor
Brokers the ability to execute orders on the Trading Floor at all
times, thereby benefiting all market participants by providing an
additional venue for having their orders executed. Floor Brokers have
no control over the schedule of Floor Market Makers, and the Exchange
believes a Floor Brokers trading strategy should not be controlled by
or dependent upon the presence of the Floor Market Maker. The Exchange
notes that even if a Floor Market Maker is not present, any orders
executed by Floor Brokers will still have to respect priority interest
on the BOX Book, and that all classes listed on BOX must have at least
one Market Maker quoting electronically; therefore there will still be
electronic quotes in the particular class even if no Floor Market Maker
is present. Additionally, the Exchange notes that all orders executed
on the Trading Floor must, at the very least, trade at a price equal to
or better than the NBBO regardless of whether a Floor Market Maker is
present in the Crowd Area when the order is executed. The Exchange
believes that the robust electronic quoting of options that will be
traded on the Trading Floor eliminates any concerns of not having a
Floor Market Maker present when the order is executed by the Floor
Broker due to the fact that there are other Market Makers providing
electronic quotations. The Exchange also believes that requiring an
Options Exchange Official to certify that all orders on the Trading
Floor are announced will ensure a Floor Broker is following all
required rules related to open outcry even if the Floor Market Maker is
not present. Additionally, the Exchange notes that IM-7580-4 will
further strengthen the Exchange's ability to ensure that Floor Brokers
and Floor Market Makers comply with all applicable rules on the Trading
Floor. The Exchange notes that other options exchanges do not require
the presence of a Floor Market Maker at the time the Floor Broker is
executing the order.\155\
---------------------------------------------------------------------------

    \154\ See proposed Rule 7580(a).
    \155\ See NYSE Arca, NYSE MKT and CBOE.
---------------------------------------------------------------------------

Executions and Priority
    The proposed rule change is consistent with Section 11(a) of the
Act and the rules thereunder. The Commission has stated various times
that it believes transactions executed against interest on the BOX Book
are consistent with the requirements of Section 11(a) of the Act,
including Section 11(a)(1)(G) thereof and the rules thereunder.\156\
QOO Orders executing against interest on the BOX Book, as discussed
above, present no novel issues under Section 11(a) and the rules
thereunder from a compliance, surveillance or enforcement perspective.
However, under the proposed rules, Floor Participants will be required
to comply, and are subject to review for compliance, with Section 11(a)
and the rules thereunder when executing QOO Orders against bids and
offers in the trading crowd in accordance with the priority rules
discussed above. For example, if a non-Market Maker Floor Participant
is trading for its own account, the account of an associated person, or
an account with respect to which it or an associated person thereof
exercises investment discretion and, consistent with the otherwise
applicable priority rules, seeks to execute a transaction with the
trading crowd at the same price, the Floor Participant must comply with
Rule 11a1-1(T) under Section 11(a)(1)(G) of the Act by first announcing
that a bid or offer is for its account and then yielding priority to
all orders in the trading crowd for the account of non-Participants
unless it can qualify for and rely upon another exception to Section
11(a)(1) of the Act. If the Floor Participant cannot rely upon another
exception to Section 11(a)(1) of the Act and is unable to determine
whether an executable order from the trading crowd at the same price is
for the account of a Participant, the Floor Participant must also yield
priority to that order. The proposed rule changes would not limit in
any way the obligation of a BOX Participant, while acting as a Floor
Broker or otherwise, to

comply with Section 11(a) or the rules thereunder.
---------------------------------------------------------------------------

    \156\ See Amendment 1 to SR-BOX-2013-43.
---------------------------------------------------------------------------

    The Exchange believes that the proposed rules applicable to
executions and priority on the Trading Floor \157\ are designed to
promote just and equitable principles of trade, remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest. As explained above, executions on the Trading Floor will be
consistent with options Trade-Through and priority rules and the
Exchange's systems are designed to help ensure that an execution on the
Trading Floor cannot occur in violation of those rules. Specifically,
when a QOO Order is submitted to the BOG for execution, the Exchange's
system will evaluate the current market conditions to ensure that the
execution price is equal to or better than the NBBO. Additionally, by
having the QOO Order execute when it is received by the Trading Host,
the Exchange is providing a system that will prevent executions that
appear to be at prices that are worse than the NBBO due to the time
they are reported.
---------------------------------------------------------------------------

    \157\ See proposed Rules 7600, 7610, and 7620.
---------------------------------------------------------------------------

    The Exchange further believes that protecting non-Public Customer
interest on the BOX Book that is ranked ahead of Public Customer
interest is consistent with just and equitable principles of trade
because it maintains the Exchange's existing price/time priority rules
by protecting interest that has time priority over Public Customer
interest that has priority. The Exchange also notes that this proposed
priority interaction with the BOX Book is the same as NYSE Arca.\158\
Additionally, the Exchange's proposed interaction with orders on the
BOX Book actually provides additional opportunities for orders on the
BOX Book to interact with trades on the Trading Floor as compared to
other exchanges with open-outcry floors. Specifically, other exchanges
with open-outcry floors only require floor trades to yield priority to
Public Customer Orders on the electronic book.\159\
---------------------------------------------------------------------------

    \158\ See NYSE Arca Rule 6.47 and 6.75.
    \159\ See PHLX Rule 1014.05(c), CBOE Rule 6.45(a) and NYSE MKT
Rule 963NY(a).
---------------------------------------------------------------------------

    The Exchange believes that the proposal to provide a Floor Broker
with a guarantee for certain orders executed on the Trading Floor \160\
is reasonable and is consistent with the Act. Specifically, the
proposal will reward Floor Brokers who bring large orders to the
Exchange by guaranteeing them the ability to cross a certain
percentage. The Exchange notes that another options exchange provides a
guarantee on their trading floor.\161\ Additionally, the Exchange
currently provides a guarantee with respect to auction transactions
executed on the Exchange.\162\
---------------------------------------------------------------------------

    \160\ See proposed Rule 7600(f).
    \161\ See PHLX Rule 1064.02.
    \162\ See Rule 7150 Price Improvement Period.
---------------------------------------------------------------------------

    The Exchange believes that the proposed priority provisions for
Complex Orders executed on the Trading Floor are reasonable because it
aligns the Exchange's Rules for Complex Orders executed on the Trading
Floor with that of other exchanges with open-outcry floors.\163\
Specifically, the Exchange will allow Complex Orders executed on the
Trading Floor to execute without giving priority to equivalent bids
(offers) in the individual series legs, provided at least one options
leg betters the corresponding Public Customer bid (offer) in the BOX
Book by at least $0.01.\164\ BOX believes this is consistent with the
Act because it is providing at least one leg with an improved price
compared to Public Customer orders on the BOX Book. Additionally, the
Exchange notes that these Complex Orders executed on trading floors can
be large and complex and the proposed treatment of Complex Orders on
the Trading Floor will increase the ability for Floor Brokers to
execute these complex trades to the benefit of market participants. The
Exchange believes that allowing Floor Brokers to disable the current
Complex Order Filter on orders executed on the Trading Floor is
reasonable because other exchanges do not have NBBO protection for
complex orders.\165\
---------------------------------------------------------------------------

    \163\ See NYSE Arca Rule 6.75(g).
    \164\ See proposed Rule 7610(e).
    \165\ See ISE Rule 722(b)(3).
---------------------------------------------------------------------------

    BOX believes the adoption of split price priority rules \166\ is
consistent with the Act. In particular, the proposed rules are designed
to promote just and equitable principles of trade, foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, and remove impediments to and perfect the mechanisms of a
free and open market and a national market system because the purpose
of split price priority is to induce Floor Participants to bid (offer)
at better prices for an order that may require execution at multiple
prices (such as large orders), which will result in a better average
price for the originating Participant (or its customer).
---------------------------------------------------------------------------

    \166\ See proposed Rule 7610(f).
---------------------------------------------------------------------------

    The Exchange believes that the BOG \167\ will further the
objectives and goals of the Act. Specifically, the ability of the BOG
to provide an electronic audit trail will help prevent fraudulent and
manipulative acts and practices, promote just and equitable principles
of trade, and remove impediments to and perfect the mechanisms of a
free and open market and a national market system. All transactions on
the Trading Floor must be processed through the BOG, which will allow
the Exchange to provide a complete and accurate audit trail and
minimize the occurrences of disputes and regulatory violations. The BOG
is designed to minimize Trade-Through violations by preventing an
execution at a price worse than the NBBO.
---------------------------------------------------------------------------

    \167\ See proposed Rule 100(b)(2).
---------------------------------------------------------------------------

    The Exchange believes that requiring that all transactions on the
Trading Floor must be executed through the BOG will increase the speed
and efficiency in which Floor Brokers handle orders, thereby making the
Exchange's market more efficient, to the benefit of the investing
public and consistent with promoting just and equitable principles of
trade.
    The Exchange believes that the proposal to adopt a new order type
\168\ for all executions on the Trading Floor is consistent with the
Act. Specifically, as mentioned above, the new order type will help
Floor Brokers executing orders on the Trading Floor. The various
elements of the QOO Order are designed to aid Floor Brokers in their
duties on the Trading Floor. For example, by having the QOO Order
execute when submitted to the BOG, the Exchange is providing an
accurate timestamp of when the order was actually executed by the Floor
Broker and not just when it is submitted. Additionally, the QOO Order
and the BOG are designed to ensure that all orders executed on the
Trading Floor by Floor Brokers are systematized before they are
represented to the trading crowd.\169\ The Exchange believes that the
features of the QOO Order are designed to promote just and equitable
principles of trade, to remove impediments to and protect the mechanism
of a free and open market and a national market system, and, in general
to protect investors and the public interest.
---------------------------------------------------------------------------

    \168\ See proposed Rule 7600.
    \169\ In order to execute a QOO Order on the Trading Floor, it
must be sent from a Floor Broker's system to the BOG. This requires
that the Floor Broker adequately systemized the QOO Order. The
Exchange also notes that Floor Brokers will be subject to regulatory
oversight by the Exchange to review whether Floor Brokers are
properly systematizing orders.
---------------------------------------------------------------------------

    The Exchange believes that the book sweep size in proposed Rule
7600(h) is consistent with Section 6(b)(5) of the

Act.\170\ In particular, the book sweep size promotes just and
equitable principles of trade, removes impediments to and perfects the
mechanism of a free and open market and a national market system and,
in general protects investors and the public interest by increasing the
interaction of the Trading Floor with the BOX Book, which will be
beneficial to all market participants. Specifically, the Exchange
believes that the book sweep functionality will enhance execution
efficiency and regulatory oversight on the Trading Floor by making
certain that a Floor Broker's order will first trade with all available
Public Customer interest on the BOX Book. The Exchange believes that
without the book sweep size, the Exchange Act's goal of creating an
efficient market system will not be supported, as a Floor Broker may
attempt to execute an order without first exhausting priority interest.
Instead, the proposed book sweep size removes impediments to and
perfects the mechanism of a free and open market and a national market
system by providing an alternative that will increase the opportunity
for orders on the Trading Floor to interact with interest on the BOX
Book, which in turn has the potential to increase liquidity for all
orders on the BOX Book. The Exchange notes that this approach is not
entirely novel; as mentioned above, PHLX's FBMS contains a
functionality that will help a Floor Broker clear PHLX's electronic
book so a floor based order can execute.\171\ Specifically, if a Floor
Broker on PHLX enters a two-sided order through the FBMS, and there is
interest on the PHLX electronic book at a price that would prevent the
Floor Broker's order from executing, the FBMS will provide the Floor
Broker with the quantity of contracts on the electronic book that have
priority and need to be satisfied before the Floor Broker's order can
execute at the agreed upon price.\172\ If the Floor Broker wishes to
still execute his order, he can cause a portion of the floor based
order to trade against this priority interest on the electronic book,
thereby clearing the interest and permitting the remainder of the Floor
Broker's order to trade at the desired price. The PHLX FBMS
functionality is optional, and a Floor Broker can decide not to trade
against the electronic book and therefore not execute his two-sided
order at the particular price. The Exchange believes that the Trading
Floor book sweep size improves upon PHLX's FBMS functionality by either
immediately executing or rejecting the order depending on the book
sweep size provided and the level of priority interest on the BOX Book.
The Exchange believes the immediate execute or reject feature will
allow for more execution certainty and incentivize Floor Brokers on BOX
to provide an adequate book sweep size if they want the order to be
eligible for execution. The Exchange believes that the proposed book
sweep size will protect investors and the public interest generally by
establishing more execution oversight. Specifically, the Exchange
believes that the book sweep size will allow BOX to electronically link
in a single audit trail the Floor Broker execution and any execution
with interest on the BOX Book.
---------------------------------------------------------------------------

    \170\ 15 U.S.C. 78(f)(b)(5).
    \171\ See PHLX Rule 1063(e)(iv).
    \172\ See Securities Exchange Act Release No. 68960 (February
20, 2013), 78 FR 13132 (February 26, 2013) (SR- Phlx-2013-09) at
13134.
---------------------------------------------------------------------------

Communications and Equipment
    The Exchange believes the proposed rule involving communications
and equipment on the Trading Floor \173\ includes reasonable
restrictions that are consistent with the requirements of the Act.
Specifically, the proposed rule will provide the Exchange with the
ability to monitor equipment on the Trading Floor and therefore provide
adequate oversight of the Trading Floor. Additionally, the proposal
will allow the Exchange to limit use of a communication device when
such device interferes with normal operation of the Exchange's own
systems or facilities or with the Exchange's regulatory duties, is
inconsistent with the public interest, the protection of investors or
just and equitable principles of trade, or interferes with the
obligations of a Participant to fulfill its duties under, or is used to
facilitate any violation of the Act or rules thereunder, or Exchange
rules. Additionally, the Exchange notes that the proposal is consistent
with rules of other exchanges.\174\
---------------------------------------------------------------------------

    \173\ See proposed Rule 7660.
    \174\ See PHLX Rule 606 and CBOE Rule 6.23.
---------------------------------------------------------------------------

Market Makers
    The Exchange believes that the proposed Rules applicable to Floor
Market Makers \175\ are reasonable and will foster cooperation and
coordination with persons engaged in facilitating transactions in
securities and will remove impediments to and perfect the mechanism of
a free and open market and a national market system. The Exchange also
believes the proposed changes enhance the Exchange's ability to fairly
and efficiently regulate its Floor Market Makers by utilizing a
consistent rule set of obligations and restrictions. The Exchange
believes the proposed changes reflect similar Market Maker obligations
and restrictions already in place on BOX's electronic exchange.\176\
The proposed changes simply align the existent obligations and
restrictions of Market Makers with the use of a trading floor with
certain exceptions. Specifically, instead of providing $5 bid/ask
differentials as provided in Rule 8040(a)(7), the Exchange is proposing
stricter bid/ask differentials. The Exchange believes that the proposed
bid/ask differentials for Floor Market Makers are reasonable and will
protect investors and the public interest by providing the opportunity
for better execution prices on the Trading Floor when a Floor Market
Maker is involved. Additionally, the Exchange believes that the
proposed changes fall in line with similar trading floor rules at other
exchanges.\177\
---------------------------------------------------------------------------

    \175\ See proposed Rules 8500 and 8510.
    \176\ See BOX Rules 8000, 8030, 8040, and 8050.
    \177\ See PHLX Rules 1020 and 1014.
---------------------------------------------------------------------------

    The Exchange believes that the proposed electronic quoting
requirements for Floor Market Makers in proposed Rule 8510(c)(1) are
consistent with Section 6(b)(5) of the Act, in particular, the
electronic quoting requirements are designed to promote just and
equitable principles of trade, remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general to protect investors and the public interest. Specifically,
the Exchange believes that the electronic quoting requirements for
Floor Maker Makers will benefit investors, the national market system,
Participants, and the Exchange by ensuring the liquidity directed
toward BOX's electronic marketplace does not decrease with the launch
of BOX's Trading Floor. Instead, Options Participants wishing to
register as Floor Market Makers will also be required to register as a
Market Maker on BOX's electronic book, with the same electronic quoting
obligations as Market Makers on BOX who only quote electronically.
Further, the Exchange believes the electronic quoting requirements will
protect investors and the public interests by ensuring that robust
quoting on BOX electronic book continues, which may lead to increased
liquidity, tighter spreads and better executions with lower execution
costs, which will benefit all market participants. The Exchange also
believes that the proposed electronic quoting requirements are
reasonable as they are

already in place on BOX's electronic book, as well as non-
discriminatory because they will uniformly apply to all BOX Market
Makers, both floor and electronic.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule changes will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange notes that other
exchanges currently offer open-outcry floors. The Exchange believes
that the proposed rules will allow the Exchange to compete with these
other exchanges. Additionally, while the proposed rule changes would
permit BOX to operate a Trading Floor, the Exchange is not requiring
that Participants register and have a presence on the Trading Floor.
Therefore, the proposed rule changes do not impose a burden on intra-
market competition.
    Overall, the proposal is pro-competitive for several reasons. In
particular, by helping Floor Brokers at the Exchange compete for
executions against floor brokers at other exchanges, it also helps them
to be more efficient and provide a better audit trail of their
executions on the Trading Floor. This, in turn, helps the Exchange
compete against other exchanges in a deeply competitive landscape. The
Exchange believes its proposed unique features for open-outcry trading
will provide value to Floor Participants, which in turn, will help the
Exchange compete.\178\
---------------------------------------------------------------------------

    \178\ Unique features include proposed Rules 7600(h) and
8510(c)(1).
---------------------------------------------------------------------------

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received comments on the
proposed rule change.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change 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/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-BOX-2016-48 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BOX-2016-48. 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/sro.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 such filing also will be available
for inspection and copying at the principal office of the Exchange. 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 SR-BOX-2016-48 and should be
submitted on or before December 27, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\179\
---------------------------------------------------------------------------

    \179\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-29042 Filed 12-2-16; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: December 31, 2009 (Volume 74, Number 250)]
[Notices]
[Page 69376-69377]
[DOCID:fr31de09-80]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2008-0167; Notice 2]

Volvo Cars of North America, LLC, Grant of Petition for Decision
of Inconsequential Noncompliance

    Volvo Cars of North America, LLC (Volvo), has determined that
certain model year 2003-2009 multipurpose passenger vehicles (MPV) did
not fully comply with paragraphs S4.4.2(a) and 4.4.2(c) of 49 CFR
571.110, Federal Motor Vehicle Safety Standard (FMVSS) No. 110, Tire
Selection and Rims for Motor Vehicles With a GVWR of 4,536 Kilograms
(10,000 pounds) or Less. Volvo has filed an appropriate report pursuant
to 49 CFR Part 573, Defect and Noncompliance Responsibility and
Reports.
    Pursuant to 49 U.S.C. 30118(d) and 30120(h) and the rule
implementing those provisions at 49 CFR Part 556, Volvo has petitioned
for an exemption from the notification and remedy requirements of 49
U.S.C. Chapter 301 on the basis that this noncompliance is
inconsequential to motor vehicle safety. Notice of receipt of the
petition was published, with a 30-day public comment period, on
November 17, 2008 in the Federal Register (73 FR 67926). No comments
were received.
    To view the petition and all supporting documents log onto the
Federal Docket Management System (FDMS) Web site at: http://
www.regulations.gov/. Then follow the online search instructions to
locate docket number ``NHTSA-2008-0167.''
    For further information on this decision, contact Mr. John
Finneran, Office of Vehicle Safety Compliance, the National Highway
Traffic Safety Administration (NHTSA), telephone<PHONE_NUMBER>,
facsimile<PHONE_NUMBER>.
    Affected are approximately 201,914 model years 2003-2009 XC90 MPV
manufactured from August 5, 2002 through March 28, 2008, and 14,147
model years 2008-2009 XC70 MPV manufactured from May 21, 2007 through
March 28, 2008. Paragraphs S4.4.2(a) and 4.4.2(c) of FMVSS No. 110
require in pertinent part:

    S4.4.2. Rim markings for vehicles other than passenger cars.
Each rim or, at the option of the manufacturer in the case of a
single-piece wheel, each wheel disc shall be marked with the
information listed in S4.4.2(a) through (e), in lettering not less
than 3 millimeters in height, impressed to a depth, or at the option
of the manufacturer, embossed to a height of not less than 0.125
millimeters. The information listed in S4.4.2(a) through (c) shall
appear on the outward side. In the case of rims of multi-piece
construction, the information listed in S4.4.2(a) through (e) shall
appear on the rim base and the information listed in S4.4.2(b) and
(d) shall also appear on each other part of the rim.
    (a) A designation that indicates the source of the rim's
published nominal dimensions, as follows:
    (1) ``T'' indicates The Tire and Rim Association.
    (2) ``E'' indicates The European Tyre and Rim Technical
Organization.
    (3) ``J'' indicates Japan Automobile Tire Manufacturers
Association, Inc.
    (4) ``L'' indicates ABPA (Brazil), a.k.a. Associacao Latino
Americana De Pneus E Aros.
    (5) ``F'' indicates Tire and Rim Engineering Data Committee of
South Africa (Tredco).
    (6) ``S'' indicates Scandinavian Tire and Rim Organization
(STRO).
    (7) ``A'' indicates The Tyre and Rim Association of Australia.
    (8) ``I'' indicates Indian Tyre Technical Advisory Committee
(ITTAC).
    (9) ``R'' indicates Argentine Institute of Rationalization of
Materials, a.k.a. Instituto Argentino de Racionalizacion de
Materiales, (ARAM).
    (10) ``N'' indicates an independent listing pursuant to S4.1 of
Sec. 571.139 or S5.1(a) of Sec. 571.119 * * *
    (c) The symbol DOT, constituting a certification by the
manufacturer of the rim that the rim complies with all applicable
Federal motor vehicle safety standards.

    In its petition, Volvo described the noncompliance as the omission
of two markings from the subject vehicles' wheels, the certification
symbol (``DOT'') and the designation symbol (in this case ``E'') which
indicates the source of the rims' published nominal dimensions.
    Volvo argues that this noncompliance is inconsequential to motor
vehicle safety for the following reasons: apart from S4.4.2(a) and
S4.4.2(c), the subject rims contain all information required within
FMVSS No. 110; the tires and rims of the affected vehicles are properly
matched, and are appropriate for the load-carrying characteristics of
these vehicles; the information on the wheel provides users with the
information necessary to ensure that the wheel is mounted on the
appropriate vehicle; and the omission of the ``DOT-E'' stamping will
not result in misapplication of the wheels. Also, the rim markings and
vehicle labeling, which are used to identify the correct replacement
rim, both contain the correct and complete size of rims installed on
the subject vehicles.
    Volvo stated that it is unaware of any accidents or injuries or
customer complaints related to the lack of these markings and that the
missing markings do not affect the performance of the wheels or the
tire and wheel assemblies.
    In addition, Volvo states that it has corrected the problem that
caused these errors so that they will not be repeated in future
production and that it believes that because the noncompliance is
inconsequential to motor vehicle safety that no corrective action is
warranted.

NHTSA Decision

    The purpose of the labeling requirements in paragraphs S4.4.2(a)
and S4.4.2(c) of FMVSS No. 110 is to provide safe operation of vehicles
by ensuring that vehicles are equipped with rims of appropriate size
and type designation mounted with compatible tires of appropriate size
and load rating.
    The purpose of the ``DOT'' marking is to certify that the rims
comply with all applicable standards, the failure to mark rims with a
DOT symbol is considered a violation of 49 U.S.C. 30115, Certification,
which does not require notification or remedy. Consequently, that
portion of Volvo's inconsequentiality petition is moot.
    While NHTSA strongly encourages manufacturers to include the
designation symbol required by S4.4.2(a), its omission does not prevent
the proper matching of tires and rims in this unique situation because
sufficient information about rim size is available from other markings
on the rims as well as information available from the certification
label required by 49 CFR Part 567 and the vehicle placard (tire
information label) required by FMVSS No. 110 that are present on the
affected vehicles. In addition, the omitted marking does not affect the
ability to identify the rims in the event of recall and is not likely
to have any affect on motor vehicle safety.
    In consideration of the foregoing, NHTSA has decided that Volvo has
met its burden of persuasion that the failure to provide the
designation symbol, as required by paragraph S4.4.2(a) of FMVSS No.
110, is inconsequential to motor vehicle safety. Accordingly, Volvo's
application is granted, and it is exempted from providing the
notification of noncompliance that is required by 49 U.S.C. 30118, and
from remedying the noncompliance, as required by 49 U.S.C. 30120.

    Authority:  49 U.S.C. 30118, 30120; delegations of authority at
49 CFR 1.50 and 501.8 otherwise required by the subject
noncompliance.

    Issued on: December 23, 2009.
Claude Harris,
Director, Office of Vehicle Safety Compliance.
[FR Doc. E9-31079 Filed 12-30-09; 8:45 am]

BILLING CODE 4910-59-P


Appendix B

Sample Transmittal Email Requesting Fish Advisory Information and Fish Tissue Data on a Voluntary Basis

You are receiving this email because you have been previously identified as the Fish Advisory Program Coordinator for your State, Territory or Tribe. Please notify me if you have received this email in error by replying to this message.

The United States Environmental Protection Agency (EPA) plans to update the national fish advisory and fish tissue data databases with new, revised and rescinded advisories issued by jurisdictions in the past three years, together with the fish tissue data that served as the basis for such advisories or other fish tissue data collected in your jurisdiction. We are asking for your support to help ensure the accuracy and completeness of your state, territory and tribal information/data in the national databases.

Please note this information/data collection request is authorized under the U.S. Office of Management and Budget Information Collection Request 2040-0226. The annual public reporting and record keeping burden for this voluntary collection of information is estimated to average 1.5 labor hours per respondent. Burden is defined as the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a federal agency.

EPA is interested in active and rescinded advisories issued and the fish tissue data associated with these advisories or any other fish tissue data (even if it was not used to issue an advisory) in the past three years. This information will allow us to evaluate the combined extent of monitoring and assessment efforts on a national basis. EPA will analyze the collected information to determine what science, guidance, technical assistance, and nationwide information are needed to help state and tribes have equitable and effective fish advisory programs. In addition, EPA will also use the information provided to facilitate information sharing and to ensure guidance documents are useful and technically accurate.

For the fish advisory updates, we are asking that you provide the following:

Waterbodies assessed with locational data
Advisory information
Species-specific information
Population affected by the fish advisory
Contaminant causing the advisory

The list of the key parameters we are requesting for the fish tissue data are:
Waterbody name
Locational information
Contaminant information
Fish species and length
Composite or individual sampling information
Sample information (e.g., date, sample ID, fillet, whole, plug)
Method detection limits for the contaminant

Two templates, one for fish advisory information and the other for fish tissue data, are attached. Both templates include examples and additional descriptive tabs for various fields in the templates. Although you have the flexibility to provide the information/data in any format (except PDF), EPA requests (not requires) using the Excel worksheet to submit your data because this will facilitate an easier transfer of the data to the databases. When using other formats we ask that you include the requested parameters. States also have the option of submitting their tissue data directly to the Water Quality Exchange using the WQX web biological template.

We would like to receive your data by [insert date]. All files should be submitted to [TBD] by email or via their file exchange server at [TBD].  If you have any questions regarding this request or the National Fish Advisory Program, please contact me by replying to this email or at<PHONE_NUMBER>.

Once again, we greatly appreciate your assistance and thank you for your continued support of USEPA's National Fish Program.

Samantha Fontenelle
National Program Manager
National Fish and Wildlife Contamination Program
Office of Science and Technology
U.S. Environmental Protection Agency
<EMAIL_ADDRESS>Phone:<PHONE_NUMBER>


[Federal Register Volume 81, Number 109 (Tuesday, June 7, 2016)]
[Notices]
[Pages 36628-36632]
[FR Doc No: 2016-13318]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77963; File No. SR-FINRA-2016-017]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend FINRA Rule 2242 (Debt Research Analysts
and Debt Research Reports)

June 1, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 24, 2016, Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by FINRA. FINRA has
designated the proposed rule change as constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under
the Act,\3\ which renders the proposal effective upon receipt of this
filing by the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    FINRA is proposing to amend FINRA Rule 2242 (Debt Research Analysts
and Debt Research Reports) to clarify the application of the rule in
four respects: (1) The consent requirement for institutional debt
research reports distributed to non-U.S. investors by non-U.S.
affiliates of members; (2) the consent requirement for institutional
debt research reports distributed to specified persons for
informational purposes unrelated to investing in debt securities; (3)
the scope of the institutional debt research report exemption when
distributing third-party debt research reports to eligible
institutional investors; and (4) the disclosure requirements for debt
research analysts in public appearances.
    Below is the text of the proposed rule change. Proposed new
language is in italics; proposed deletions are in brackets.
* * * * *
    2240. CONFLICTS OF INTEREST
* * * * *
    2242. Debt Research Analysts and Debt Research Reports
    (a) through (i) No Change.
    (j) Exemption for Debt Research Reports Provided to Institutional
Investors
    (1) Except as provided in paragraphs (j)(2) and (j)(3) of this
Rule, the provisions of this Rule shall not apply to the distribution
of a debt research report to:
    (A) through (B) No Change.
    (2) Notwithstanding paragraph (j)(1) of this Rule, a member must
establish, maintain and enforce written policies and procedures
reasonably designed to identify and effectively manage conflicts of
interest described in paragraphs (b)(2)(A)(i), (b)(2)(H) (with respect
to pressuring), (b)(2)(I), (b)(2)(K), (b)(2)(L), (b)(2)(M), (b)(2)(N)
and Supplementary Material .02(a) of this Rule.
    (3) Notwithstanding paragraph (j)(1) of this Rule, a member that
distributes third-party debt research reports to institutional
investors pursuant to this exemption must establish, maintain and
enforce written policies and procedures reasonably designed to comply
with paragraphs (g)(1), (g)(2), (g)(4) and (g)(6) of this Rule.
    [(3)] (4) Debt research reports provided to institutional investors
pursuant to this exemption (``institutional debt research'') must
disclose prominently on the first page that:
    (A) ``This document is intended for institutional investors and is
not subject to all of the independence and disclosure standards
applicable to debt research reports prepared for retail investors.''
    (B) If applicable, ``The views expressed in this report may differ
from the views offered in [Firm's] debt research reports prepared for
retail investors.''
    (C) If applicable, ``This report may not be independent of [Firm's]
proprietary interests. [Firm] trades the securities covered in this
report for its own account and on a discretionary basis on behalf of
certain clients. Such trading interests may be contrary to the
recommendation(s) offered in this report.''
    (5) Notwithstanding paragraph (j)(4) of this Rule, a member that
distributes third-party debt research reports to institutional
investors pursuant to this exemption must disclose prominently the
disclosures required by paragraphs (j)(4)(A) and (j)(4)(C) of this
Rule.
    [(4)] (6) A member must establish, maintain and enforce written
policies and procedures reasonably designed to ensure that
institutional debt research is made available only to eligible
institutional investors. A member may not rely on this exemption with
respect to a debt research report that the member has reason to believe
will be redistributed to a retail investor.
    [(5)] (7) This paragraph (j) does not relieve a member of its
obligations to comply with the antifraud provisions of the federal
securities laws and FINRA rules.
    (k) No Change.
       Supplementary Material: ------
    .01 through .11 No Change.
    .12 Distribution of Institutional Debt Research to Non-U.S.
Investors. The requirements of paragraphs (j)(1)(A) and (B) of this
Rule shall not apply to the distribution of an institutional debt
research report by a non-U.S. affiliate of a member to a non-U.S.
investor, provided that:
    (a) The non-U.S. investor is not a customer of the member;
    (b) The non-U.S. investor is a customer of the non-U.S. affiliate
of the member; and
    (c) The non-U.S. affiliate of the member has a reasonable basis to
believe that the customer meets the definition of ``institutional
account'' in Rule 4512(c).
    .13 Distribution of Institutional Debt Research for Informational
Purposes
    (a) A member may distribute institutional debt research reports to
the persons described in paragraph (c) of this Supplementary Material
.13 for informational purposes unrelated to

investing in debt securities, provided that the member does not
distribute the reports prior to their publication and the member has
disclosed that:
    (1) The member may provide the recipient debt research reports that
were prepared for institutional investors and are not subject to all of
the independence and disclosure standards applicable to debt research
reports prepared for retail investors; and
    (2) The institutional debt research reports would be provided only
for informational purposes and not for the purpose of making an
investment decision related to debt securities.
    (b) If the person receiving institutional debt research pursuant to
this Supplementary Material .13 does not contact the member to request
that such institutional debt research not be provided, the member may
reasonably conclude that the person has consented to receiving debt
institutional research according to the terms of this Supplementary
Material .13.
    (c) Institutional debt research may be distributed for
informational purposes unrelated to investing in debt securities
pursuant to this Supplementary Material .13 to:
    (1) Regulators for regulatory purposes;
    (2) Academics for academic purposes;
    (3) Issuers for the purpose of enhancing knowledge of their
industry and competitors and market and economic factors; and
    (4) Media organizations for news gathering purposes.
    .14 Public Appearances by Research Analysts. A member or debt
research analyst will not be required to make a disclosure required by
paragraph (d) of this Rule where attendance at the public appearance is
limited to institutional investors eligible to receive institutional
debt research pursuant to paragraph (j) of this Rule. Members must
maintain records of public appearances by debt research analysts
sufficient to demonstrate that attendance at the public appearance was
limited to institutional investors eligible to receive institutional
debt research pursuant to paragraph (j) of this Rule. Such records must
be maintained for at least three years from the date of the public
appearance.
* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, FINRA included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. FINRA has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On November 14, 2014, FINRA filed SR-FINRA-2014-048 to adopt new
Rule 2242 to address conflicts of interest relating to the publication
and distribution of debt research reports.\4\ On February 19, 2015,
FINRA filed Amendment No. 1 responding to the comments received to the
proposal as well as to propose amendments in response to these
comments.\5\ The proposed rule change, as modified by Amendment No. 1
thereto, was approved by the Commission on July 16, 2015.\6\
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    \4\ See Securities Exchange Act Release No. 73623 (November 18,
2014), 79 FR 69905 (November 24, 2014) (Notice of Filing of File No.
SR-FINRA-2014-048).
    \5\ See Securities Exchange Act Release No. 74490 (March 12,
2015), 80 FR 14198 (March 18, 2015) (Notice of Filing of Amendment
No. 1 to File No. SR-FINRA-2014-048).
    \6\ See Securities Exchange Act Release No. 75472 (July 16,
2015), 80 FR 43528 (July 22, 2015) (Order Approving File No. SR-
FINRA-2014-048).
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    Consistent with the proposed rule change, FINRA announced an
effective date for Rule 2242 of February 22, 2016 in a Regulatory
Notice published on August 26, 2015.\7\ FINRA subsequently delayed
implementation of the Rule until July 16, 2016 to give members
additional time to implement the requirements of the Rule, including
incorporating some guidance published by FINRA in some Frequently Asked
Questions.\8\
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    \7\ See Regulatory Notice 15-31 (August 2015).
    \8\ See Securities Exchange Act Release No. 77158 (February 17,
2016), 81 FR 9065 (February 23, 2016) (Notice of Filing and
Immediate Effectiveness of File No. SR-FINRA-2016-008). See also
Securities Exchange Act Release No. 77726 (April 27, 2016), 81 FR
26593 (May 3, 2016) (Notice of Filing and Immediate Effectiveness of
File No. SR-FINRA-2016-013).
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Distribution to Non-U.S. Investors by Non-U.S. Affiliates of Members
    Rule 2242(j) exempts debt research reports distributed solely to
eligible institutional investors from most of the provisions regarding
supervision, coverage determinations, budget and compensation
determinations, and all of the disclosure requirements applicable to
debt research reports distributed to retail investors. Rule 2242(j)(2)
sets out the provisions of the Rule to which institutional debt
research remains subject, and Rule 2242(j)(3) specifies a ``health
warning'' that must be prominently disclosed on the first page of
institutional debt research, alerting recipients that, among other
things, the research report is not subject to all of the protections of
retail debt research. Rule 2242(j)(1) requires either negative or
affirmative written consent for eligible institutional investors to
receive institutional debt research pursuant to the exemption.
    FINRA is proposing to clarify the application of Rule 2242(j) to
non-U.S. investors that are customers of a member's U.S. affiliate but
not customers of the member. Specifically, FINRA is proposing to amend
Rule 2242 to include Supplementary Material providing that the
requirements of paragraphs (j)(1)(A) and (B) of the Rule \9\ shall not
apply to the distribution of an institutional debt research report by a
non-U.S. affiliate of a member to a non-U.S. investor, provided that:
(a) The non-U.S. investor is not a customer of the member; (b) the non-
U.S. investor is a customer of the non-U.S. affiliate of the member;
and (c) the non-U.S. affiliate of the member has a reasonable basis to
believe that the customer meets the definition of ``institutional
account'' in Rule 4512(c). A member's research reports, including
globally branded research reports, may be distributed by a non-U.S.
affiliate of the member to its non-U.S. customers pursuant to proposed
Supplementary Material .12.
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    \9\ Rule 2242(j)(1)(A) allows distribution of institutional debt
research via negative written consent to a person who meets the
definition of a qualified institutional buyer (QIB) and where,
pursuant to FINRA Rule 2111(b): (1) The member or associated person
has a reasonable basis to believe that the QIB is capable of
evaluating investment risks independently, both in general and with
regard to particular transactions and investment strategies
involving a debt security or debt securities; and (2) the QIB has
affirmatively indicated that it is exercising independent judgment
in evaluating the member's recommendations pursuant to FINRA Rule
2111 and such affirmation is broad enough to encompass transactions
in debt securities. Rule 2242(j)(1)(B) allows distribution of
institutional debt research via affirmative written consent to a
person who meets the definition of ``institutional account'' in
FINRA Rule 4512(c).
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    FINRA drafted the institutional debt research exemption with U.S.
customers in mind. FINRA is concerned that, absent the proposed
amendment, the exemption may be impractical for some U.S. member firms
with global operations. These firms typically have non-U.S. affiliates
that distribute the member research to those affiliates' non-U.S.
customers. In many cases, the U.S. member and its non-U.S. affiliates
will produce a single globally branded research product, which the non-
U.S.

affiliates will distribute to their own customers. Rule 2242(j)(4)
states that a member may not rely on the institutional debt research
exemption with respect to a debt research report that the member has
reason to believe will be redistributed to a retail investor. Thus, to
the extent these member firms with global research operations cannot
obtain the required consents from all non-U.S. customers of their non-
U.S. affiliates, they would lose the ability to use the exemption with
respect to institutional debt research distributed to their U.S.
customers--the intended purpose of the Rule. Alternatively, the non-
U.S. affiliates would be required to cut off distribution of such
research to non-U.S. customers that could not or would not give the
required consent,\10\ notwithstanding that receipt of the research is
permitted and subject to applicable regulations in the home
jurisdiction. Under these circumstances, FINRA believes where these
customers are not also customers of the U.S. broker-dealers, the
regulatory concerns addressed by the consent requirements of the
exemption are far more attenuated.
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    \10\ FINRA understands that firms have had difficulty obtaining
consents from non-U.S. entities for several reasons, including the
absence of the QIB standard in other jurisdictions and confusion
from the customer as to why it must provide affirmative written
consent under a U.S.-based rule regime to continue to receive a
valued product from the non-U.S. affiliate of which it is a
customer.
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    Importantly, the proposed rule change would have no investor
protection impact on either U.S. institutional investors or non-U.S.
customers of the U.S. broker-dealer, as the consent requirements would
continue to apply under those circumstances. Moreover, FINRA believes
the proposed rule change would have minimal investor protection impact
on the non-U.S. institutional investors, as the institutional debt
research they would receive would still be subject to all other aspects
of Rule 2242(j), including notably the ``health warning'' that
identifies the intended institutional audience and highlights the key
conflicts associated with the research report.
Distribution to Persons for Informational Purposes
    The requirements of Rule 2242 are premised on the idea that debt
research reports are distributed to investors that may base their
investment decisions on the debt research reports or may incorporate
elements of the debt research reports into their investment decisions.
FINRA is aware that some members make their research reports available
to some persons for specific informational purposes unrelated to
investing in debt securities. The institutional exemption in Rule
2242(j) does not currently expressly contemplate distributing
institutional debt research reports to these ``non-investors.'' FINRA
believes that it is appropriate to permit members to distribute
institutional debt research reports to these persons, provided that the
persons negatively consent to receiving institutional debt research
with the understanding that the research is not being provided for
investment purposes.
    The proposed rule change would amend Rule 2242 to include
Supplementary Material .13 permitting a member to distribute
institutional debt research reports to specified persons for
informational purposes unrelated to investing in debt securities,
provided that the member does not distribute the reports prior to their
publication and the member has disclosed that: (1) The member may
provide to institutional investors debt research reports that are not
subject to all of the independence and disclosure standards applicable
to debt research reports prepared for retail investors; and (2) the
debt research reports would be provided only for informational purposes
and not for the purpose of making an investment decision related to
debt securities. The proposed Supplementary Material would also provide
that, if the person receiving institutional debt research does not
contact the member to request that such institutional debt research
reports not be provided, the member may reasonably conclude that the
person has consented to receiving debt institutional research reports
according to the terms of the Supplementary Material.
    The proposed Supplementary Material sets out the circumstances
where institutional debt research may be distributed for informational
purposes unrelated to investing in debt securities: (1) Regulators for
regulatory purposes; (2) academics for academic purposes; (3) issuers
for the purpose of enhancing knowledge of their industry and
competitors and market and economic factors; and (4) media
organizations for news gathering purposes.
    FINRA believes that permitting the provision of institutional debt
research to these persons for the specified informational purposes
serves the public interest without investor protection implications.
Distribution of Third-Party Debt Research Reports to Institutional
Investors
    FINRA previously stated that the institutional exemption in Rule
2242(j) applies to the content and disclosure requirements for third-
party debt research reports.\11\ FINRA is proposing to amend Rule 2242
to clarify the requirements applicable to the distribution of third-
party debt research reports pursuant to the institutional debt research
exemption.
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    \11\ See Securities Exchange Act Release No. 75472 (July 16,
2015), 80 FR 43528 (July 22, 2015) (Order Approving File No. SR-
FINRA-2014-048).
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    The proposed rule change would amend Rule 2242 to clarify that a
member that distributes third-party debt research reports to
institutional investors pursuant to the exemption must establish,
maintain and enforce written policies and procedures reasonably
designed to comply with paragraphs (g)(1), (g)(2), (g)(4) and (g)(6) of
the Rule.\12\ The review requirements in paragraphs (g)(2) and (g)(4)
for third-party debt research reports and independent third-party debt
research reports, respectively, would apply to reports distributed to
retail investors or to institutional investors. Accordingly, third-
party debt research reports distributed pursuant to the exemption would
be subject to the same review requirements as third-party debt research
reports distributed to retail investors.\13\
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    \12\ See proposed Rule 2242(j)(3).
    \13\ FINRA notes that, consistent with FINRA Rule 2210(b)(3)
(Communications with the Public), third-party debt research reports
that are subject to review under Rule 2242(g)(2) (i.e., non-
independent third-party debt research reports) do not require a
registered principal to approve the communication prior to
distribution, provided that the firm establishes and implements
written procedures for the supervision and review of such
communications. See FINRA Rule 2210 Questions and Answers at http://www.finra.org/industry/finra-rule-2210-questions-and-answers.
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    With respect to disclosures, the proposed rule change would clarify
that third-party debt research reports distributed pursuant to the
institutional exemption are not required to carry the specific
disclosures applicable to retail debt research set forth in paragraph
(g)(3) of the Rule. FINRA believes that it is consistent with the
exemption not to require specific disclosures when distributing third-
party research reports, but instead to require a ``health warning.''
Accordingly, the proposed rule change would amend Rule 2242 to clarify
that third-party debt research reports distributed to institutional
investors must disclose prominently: (A) ``This document is intended
for institutional investors and is not subject

to all of the independence and disclosure standards applicable to debt
research reports prepared for retail investors''; and (B) if
applicable, ``This report may not be independent of [Firm's]
proprietary interests. [Firm] trades the securities covered in this
report for its own account and on a discretionary basis on behalf of
certain clients. Such trading interests may be contrary to the
recommendation(s) offered in this report.'' \14\
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    \14\ See proposed Rule 2242(j)(5).
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    FINRA has not proposed requiring that third-party debt research
reports distributed to institutional investors disclose prominently the
disclosure required by paragraph (j)(4)(B) of the Rule.\15\ FINRA
intended the disclosure in paragraph (j)(4)(B) of the Rule to apply
only when the research report was produced by the member.\16\ FINRA
notes that the Rule does not require similar disclosure for third-party
research reports distributed to retail investors, nor is there such a
requirement in Rule 2241 with respect to third-party equity research
reports. FINRA believes that it is commonly understood that the views
in third-party research reports may differ from the views of the member
or from other third-party research reports. For these reasons, FINRA
believes that it is appropriate not to require third-party debt
research reports distributed to institutional investors to disclose
prominently the disclosure required by paragraph (j)(4)(B) of the Rule.
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    \15\ Rule 2242(j)(4)(B) requires that debt research reports
provided to institutional investors pursuant to the exemption
disclose prominently on the first page, if applicable, that ``[t]he
views expressed in this report may differ from the views offered in
[Firm's] debt research reports prepared for retail investors.''
    \16\ FINRA has previously stated that the disclosure is required
only if the member produces both retail and institutional debt
research reports that sometimes differ in their views. See
Securities Exchange Act Release No. 75472 (July 16, 2015), 80 FR
43528 (July 22, 2015) (Order Approving File No. SR-FINRA-2014-048).
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    In addition, FINRA has not proposed to include paragraph (g)(5) of
the Rule in the list of applicable paragraphs of the Rule set forth in
proposed paragraph (j)(3). Paragraph (g)(5) of the Rule dictates the
circumstances in which paragraph (g)(3) of the Rule does not apply to
third-party research reports.\17\ Because FINRA is proposing not to
require the specific disclosures set forth in paragraph (g)(3) of the
Rule when distributing third-party research reports, but instead to
require a ``health warning,'' FINRA believes that paragraph (g)(5) of
the Rule should not apply to third-party debt research reports
distributed via the exemption to institutional investors.
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    \17\ Rule 2242(g)(5) states that ``[a] member shall not be
considered to have distributed a third-party debt research report
for the purposes of paragraph (g)(3) where the research is an
independent third-party debt research report and made available by a
member (a) upon request; (b) through a member-maintained Web site;
or (c) to a customer in connection with a solicited order in which
the registered representative has informed the customer, during the
solicitation, of the availability of independent debt research on
the solicited debt security and the customer requests such
independent debt research.''
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Public Appearances by Debt Research Analysts
    Rule 2242(d) requires disclosures from debt research analysts in
public appearances, including debt research analysts that only prepare
debt research reports pursuant to the institutional debt research
exemption. FINRA has previously stated that it would be inconsistent
with the rationale of the institutional exemption--i.e., that all
recipients of debt research have sufficient sophistication to
understand the conflicts of interest without the specific disclosures
and other protections afforded retail debt research--to allow debt
research analysts to make public appearances before an audience that
could include retail investors.\18\
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    \18\ See FINRA Research Rules Frequently Asked Questions at
https://www.finra.org/industry/faq-research-rules-frequently-asked-questions-faq.
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    However, based on the same rationale, FINRA believes that it is
consistent with the institutional exemption in paragraph (j) of the
Rule to exempt public appearances by debt research analysts from the
disclosure requirements in paragraph (d) of the Rule where attendance
is limited to institutional investors eligible to receive institutional
debt research reports. Accordingly, FINRA is proposing new
Supplementary Material .14 to clarify that the public appearance
disclosure requirements do not apply in those circumstances. The
proposed rule change would require that the member maintain records
sufficient to demonstrate that attendance at the public appearance was
limited to institutional investors eligible to receive institutional
debt research. The proposed rule change would require that the records
be maintained for at least three years from the date of the public
appearance.
    The disclosure requirements of paragraph (d) of the Rule would
apply where attendance at the public appearance was not limited to
institutional investors eligible to receive institutional debt research
reports.
    FINRA has filed the proposed rule change for immediate
effectiveness. The implementation date of the proposed rule change will
be July 16, 2016.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\19\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. FINRA believes that the proposed rule change is
consistent with the Act in that it clarifies the requirements of Rule
2242, which addresses conflicts of interest relating to the publication
and distribution of debt research reports. Specifically, FINRA believes
the proposed rule change is consistent with the Act in that it
clarifies: (1) The consent requirement for institutional debt research
reports distributed to non-U.S. investors by non-U.S. affiliates of
members; (2) the consent requirement for institutional debt research
reports distributed to specified persons for informational purposes
unrelated to investing in debt securities; (3) the scope of the
exemption for third-party debt research reports distributed via the
exemption to institutional investors and the applicable requirements;
and (4) the disclosure requirements for debt research analysts in
public appearances. FINRA further believes that the proposed rule
change would facilitate the flow of valued information to sophisticated
U.S. investors, while maintaining the investor protections intended by
the Rule for those investors.
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    \19\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The clarifications in the
proposed rule change will result in reduced burdens for members to
comply with the requirements of Rule 2242. The proposed rule change
does not impose any material new obligations on members.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \20\ and Rule 19b-
4(f)(6) thereunder.\21\
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    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change 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/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-FINRA-2016-017 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2016-017. 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/sro.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 such filing also will be available
for inspection and copying at the principal office of 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 SR-FINRA-2016-017, and should
be submitted on or before June 28, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-13318 Filed 6-6-16; 8:45 am]
BILLING CODE 8011-01-P