
[Federal Register: March 29, 2010 (Volume 75, Number 59)]
[Notices]               
[Page 15475-15476]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29mr10-104]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61752; File No. 4-594]

 
Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of 
Filing of Proposed Minor Rule Violation Plan

March 22, 2010.
    Pursuant to Section 19(d)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19d-1(c)(2) thereunder,\2\ notice is hereby 
given that on March 19, 2010, EDGX Exchange, Inc. (``EDGX Exchange'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') copies of proposed minor rule violations with 
sanctions not exceeding $2,500 which would not be subject to the 
provisions of Rule 19d-1(c)(1) of the Act \3\ requiring that a self-
regulatory organization promptly file notice with the Commission of any 
final disciplinary action taken with respect to any person or 
organization.\4\ In accordance with paragraph (c)(2) of Rule 19d-1 of 
the Act, the Exchange proposed to designate certain specified rule 
violations as minor rule violations, and requests that it be relieved 
of the reporting requirements regarding such violations, provided it 
gives notice of such violations to the Commission on a quarterly basis. 
EDGX Exchange proposes to include in its proposed MRVP the policies and 
procedures currently included in EDGX Exchange Rule 8.15 (``Imposition 
of Fines for Minor Violation(s) of Rules'').\5\
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    \1\ 15 U.S.C. 78s(d)(1).
    \2\ 17 CFR 240.19d-1(c)(2).
    \3\ 17 CFR 240.19d-1(c)(1).
    \4\ The Commission adopted amendments to paragraph (c) of Rule 
19d-1 to allow self-regulatory organizations (``SROs'') to submit 
for Commission approval plans for the abbreviated reporting of minor 
disciplinary infractions. See Securities Exchange Act Release No. 
21013 (June 1, 1984), 49 FR 23828 (June 8, 1984). Any disciplinary 
action taken by an SRO against any person for violation of a rule of 
the SRO which has been designated as a minor rule violation pursuant 
to such a plan filed with the Commission shall not be considered 
``final'' for purposes of Section 19(d)(1) of the Act if the 
sanction imposed consists of a fine not exceeding $2,500 and the 
sanctioned person has not sought an adjudication, including a 
hearing, or otherwise exhausted his administrative remedies.
    \5\ On March 12, 2010, the Commission approved EDGX Exchange's 
application for registration as a national securities exchange, 
including the rules governing EDGX Exchange. See Securities Exchange 
Act Release No. 61698, 75 FR 13151 (March 18, 2010). In the approval 
order, the Commission noted that EDGX Exchange Rule 8.15 provides 
for the imposition of fines for minor rule violations pursuant to a 
minor rule violation plan. Accordingly, the Commission noted that as 
a condition to the operation of EDGX Exchange, the Exchange must 
file a minor rule violation plan with the Commission.
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    According to the Exchange's proposed MRVP, under Rule 8.15, the 
Exchange may impose a fine (not to exceed $2,500) on a member or an 
associated person with respect to any rule listed in Rule 8.15.01. The 
Exchange shall serve the person against whom a fine is imposed with a 
written statement setting forth the rule or rules violated, the act or 
omission constituting each such violation, the fine imposed, and the 
date by which such determination becomes final or by which such 
determination must be contested. If the person against whom the fine is 
imposed pays the fine, such payment shall be deemed to be a waiver of 
such person's right to a disciplinary proceeding and any review of the 
matter under EDGX Exchange rules. Any person against whom a fine is 
imposed may contest the Exchange's determination by filing with the 
Exchange a written response, at which point the matter shall become a 
disciplinary proceeding. Under Rule 8.15.01, violations of the 
following rules would be appropriate for disposition under the minor 
rule violations plan: Rule 2.5. Interpretation .04, Firm Element 
Continuing Education Requirement; Rule 3.5 Advertising Practices; Rule 
4.2 and Interpretations thereunder, requiring the submission of 
responses to Exchange requests for trading data within specified time 
period; Rule 4.2 and Interpretations thereunder, related to the 
requirement to furnish Exchange-related order, market and transaction 
data, as well as financial or regulatory records and information; Rule 
11.15, requirement to identify short sale orders as such; Rule 11.16, 
requirement to comply with locked and crossed market rules; and Rule 
12.11, Interpretation .01 and Exchange Act Rule 604--Failure to 
properly display limit orders.
    EDGX Exchange proposed to include the rule violations listed in 
Rule 8.15.01 in its minor rule violation plan. Upon approval of the 
plan, the Exchange will provide the Commission a quarterly report of 
actions taken on minor rule violations under the plan. The quarterly 
report will include: The Exchange's internal file number for the case, 
the name of the individual and/or organization, the nature of the 
violation, the specific rule provision violated, the sanction imposed, 
the number of times the rule violation has occurred, and the date of 
disposition.\6\
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    \6\ EDGX Exchange attached a sample form of the quarterly report 
with its submission to the Commisision.
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I. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning EDGX Exchange's proposed Minor Rule Violation 
Plan, including whether the proposed plan is consistent with the Act. 
Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/other.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. 4-594 on the subject line.

Paper Comments

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

All submissions should refer to File No. 4-594. This file number should 
be included on the subject line if e-mail is used. To help the 
Commission process and review your comments more efficiently, please 
use only one method. The Commission will post all comments on the 
Commission's Internet Web site (http://www.sec.gov/rules/other.shtml).

[[Page 15476]]

Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed Minor Rule Violation Plan that 
are filed with the Commission, and all written communications relating 
to the proposed Minor Rule Violation Plan between the Commission and 
any person, other than those that may be withheld from the public in 
accordance with the provisions of 5 U.S.C. 552, will be available for 
Web site viewing and printing in the Commission's Public Reference 
Room, 100 F Street, NE., Washington, DC 20549. All comments received 
will be posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File No. 4-594 and should be submitted on or before 
April 28, 2010.

II. Date of Effectiveness of the Proposed Minor Rule Violation Plan and 
Timing for Commission Action

    Pursuant to Section 19(d)(1) of the Act and Rule 19d-1(c)(2) 
thereunder,\7\ after April 28, 2010, the Commission may, by order, 
declare EDGX Exchange's proposed Minor Rule Violation Plan effective if 
the plan is consistent with the public interest, the protection of 
investors, or otherwise in furtherance of the purposes of the Act. The 
Commission in its order may restrict the categories of violations to be 
designated as minor rule violations and may impose any other terms or 
conditions to the proposed Minor Rule Violation Plan, File No. 4-594, 
and to the period of its effectiveness which the Commission deems 
necessary or appropriate in the public interest, for the protection of 
investors or otherwise in furtherance of the purposes of this Act.
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    \7\ 15 U.S.C. 78s(d)(1) and 17 CFR 240.19d-1(c)(2).
    \8\ 17 CFR 200.30-3(a)(44).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-6774 Filed 3-26-10; 8:45 am]
BILLING CODE 8011-01-P

