
[Federal Register Volume 80, Number 198 (Wednesday, October 14, 2015)]
[Notices]
[Pages 61879-61880]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-26032]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76091; File No. SR-EDGX-2015-43]


Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Rule 3.13 (Payments Involving Publications that Influence the Market 
Price of a Security)

October 7, 2015.
    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 September 23, 2015, EDGX Exchange, Inc. (``Exchange'' or ``EDGX'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been substantially prepared by the Exchange. The Exchange has 
designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with 
the Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend EDGX Rule 3.13 to update 
references to recently amended FINRA rules and make a ministerial, non-
substantive change. The text of the proposed rule change is available 
at the Exchange's Web site at www.batstrading.com, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange 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. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant parts of such 
statements.

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

1. Purpose
    The Exchange proposes to amend Rule 3.13 to update references to a 
recently amended FINRA rule and make a ministerial, non-substantive 
change. Rule 3.13(a) prohibits Exchange members from ``directly or 
indirectly, giv[ing], permit[ting] to be given, or offer[ing] to give 
anything of value to any person for the purpose of influencing or 
rewarding the action of such person in connection with the publication 
or circulation in any electronic or other public media, including any 
investment service or similar publication, Web site, newspaper, 
magazine or other periodical, radio, or television program of any 
matter that has, or is intended to have, an effect upon the market 
price of any security.'' The Exchange proposes to amend paragraph (a) 
by replacing the term ``Web site'' with ``Web site''.
    Rule 3.13(b) sets forth exceptions to the prohibitions under 
paragraph (a) set forth above. These exceptions allow for compensation 
paid to a person in connection with the publication or circulation of: 
(i) A communication that is clearly distinguishable as paid 
advertising; (ii) a communication that discloses the receipt of 
compensation and the amount thereof in accordance with Section 17(b) of 
the Securities Act of 1933; or (iii) a research report, as that term is 
defined in NASD Rule 2711. Rule 3.13 also states that FINRA is in the 
process of consolidating certain NASD rules into a new FINRA rulebook. 
This provision also states that ``[i]f the provisions of NASD Rule 2711 
are transferred into the FINRA rulebook, then Rule 2711 shall be 
construed to require Exchange members to comply with FINRA rule 
corresponding to NASD Rule 2711 (regardless of whether such rule is 
renumbered or amended) as if such rule were part of the Rules of the 
Exchange.''
    The Commission recently approved a proposed rule change by FINRA to 
transfer NASD Rule 2711 to the FINRA rulebook and redesignate it as 
FINRA Rule 2241.\5\ This was proposed as part of FIRNA's process of 
consolidating certain NASD rules into the new FINRA rulebook. To 
reflect the approval of this recent FINRA proposed rule change, the 
Exchange proposes to replace the reference to NASD Rule 2711 with FINRA 
2241 under paragraph (b)(3). The Exchange also proposes to delete the 
provision within Rule 3.13 referencing the transferring of NASD Rule 
2711 to the FINRA rulebook as NASD Rule 2711 was transferred to the 
FINRA rule book as Rule 2241 (described above), as no longer necessary.
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    \5\ See Exchange Act Release No. 75471 (July 16, 2015), 80 FR 
43482 (July 22, 2015) (SR-FINRA-2014-047).
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2. Statutory Basis
    The Exchange believes that proposed rule change is consistent with 
section 6(b)(5) of the Act,\6\ which requires, among other things, that 
the Exchange's rules be designed to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
to foster cooperation and coordination with persons engaged in 
facilitating transactions in securities,

[[Page 61880]]

and to remove impediments to and perfect the mechanism of a free and 
open market and a national market system. The Exchange does not propose 
to amend the prohibition or exceptions of any of its Rule 3.13. The 
Exchange believes that by updating cross references to FINRA rules as a 
result of the transfer of NASD Rule 2711 to the FINRA rulebook as FINRA 
Rule 2241 and making a ministerial, non-substantive change the proposed 
rule change would remove impediments to and perfect the mechanism of a 
free and open market and a national market system by avoiding potential 
investor and member confusion. The Exchange believes that these 
clarifying changes also would, in general, protect investors and the 
public interest.
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    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange does not 
propose to amend the prohibition or exceptions of any of its Rule 3.13. 
The proposed rule change is not designed to address any competitive 
issues but rather update Rule 3.13 to reflect the recent amendment to a 
referenced FINRA rule and make a ministerial, non-substantive change.

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 written comments on 
the proposal.

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

    The Exchange has designated this rule filing as non-controversial 
under section 19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6) 
thereunder.\8\ Because the 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 after the date of the filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest, the proposed rule 
change has become effective pursuant to section 19(b)(3)(A) of the Act 
and Rule 19b-4(f)(6) thereunder.\9\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4.
    \9\ Rule 19b-4(f)(6) also requires that the Exchange give the 
Commission written notice of its intent to file the proposed rule 
change, along with a brief description and text of the proposed rule 
change, at least five business days prior to the date of filing of 
the proposed rule change, or such shorter time as designated by the 
Commission. The Exchange satisfied this requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily temporarily suspend the rule 
change if it appears to the Commission that this action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes this action, the 
Commission shall institute proceedings under section 19(b)(2)(B) of the 
Act \10\ to determine whether the proposed rule should be approved or 
disapproved.
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    \10\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal 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 rule-comments@sec.gov. Please include 
File No. SR-EDGX-2015-43 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 No. SR-EDGX-2015-43. 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 will also 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 No. SR-EDGX-2015-43 and should be 
submitted on or before November 4, 2015.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-26032 Filed 10-13-15; 8:45 am]
BILLING CODE 8011-01-P


