Legal Case Summary

All right. Well, why don't you come forward to the lectern so we can hear you loud and clear. And I apologize. If you'd like for me to speak up at any point, please, please let me know. Your honours, we have a motion to supplement the administrative record pending. This regards certain prior rules manuals for the other limited volume exchanges. And this morning we received a document package with a CD enclosed. This was provided by the Securities and Exchange Commission in its post-marked February 3rd. This here contains the rules manuals for the trade point limited volume exchange, as well as the successor entities, which would be the VerdeTech Stock Exchange and then SWX Europe. These are very material documents and these were provided in response to our full requests. We've been fighting for these documents since August. And you say there is a motion pending. Is that what you said? Correct, Your Honor. Does it cover the documents that you and refer to the documents which you are now mentioning? It does. What we had done is through our own independent research, we had investigated the trade point financial networks prior history and the rules manuals. And we had obtained copies through our own research and then also through prior FOA requests. And those copies are unsertificed on, there are simply copies that we have obtained from our own research as well as FOA. But we've asked for certified copies to be filed in the motion to supplement

. And there are additional manuals here that range to 2009, which we believe are material and likely dispositive of this appeal. Okay. Now what's the motion precisely? What precisely is the motion? Let's stop the argument time and we'll give you, we'll restore those minutes. But what precisely is the motion that she said has already been filed and is pending? I believe it's entitled motion to supplement the administrative record. Okay. You know when that was filed. Ah, looks like November, November the 24th. All right. Well, once you proceed with your argument, the motion, I don't, frankly, don't recall whether that motion, there's been any disposition, whether there's been an order to take it. I don't know if that was the case, but the court will consider the motion and your comments this morning. But why don't you proceed with your argument? And if I made before we begin, we've made a copy for our own records. I mean, I submit this as evidence for this proceeding. Well, I'm not sure that that would be appropriate. And particularly at this late point in time before argument, I think your best course is simply to proceed with your argument and let any filings that you may have made speak for themselves and the court will, will, will take those up when the case is considered. Thank you, Your Honours. It's your contention that this material decides the case, the outcome of this case. I'm falling

. I'm not falling what you're saying. Correct, Your Honour. The primary argument on appeal is the exercise of self-regulatory powers. Thank you. May it please the court? Councillor, you might proceed. I am Michael Stagowski, Council for Automated Matching Systems Exchange. Mr. Stagowski, are you the author of the brief we have in this case? I am, Your Honour. Yes. We have a colleague who's not a member of this panel who frequently tells the litig-of people that are here to argue that he never reads footnotes so that if you have something of importance that you think in the case ought to be presented, put it in the body of the brief. And as I was reading your brief, I noticed that in 56 pages you have 46 footnotes, some of which take up a little more than a half a page. I tell you that I read all of the footnotes, but when they're reduced size type, it gets a little teagious as you go along, so I would suggest that you might take that into consideration the next time you appear before our court at least because you may get our colleague and he won't be able to know what you've said about the half of the time. And thank you for your patience, Your Honour. I will definitely take your note under advisement for the future. Your Honours, throughout life, we all have an opportunity to speak about what it is we do for a living. At times I have an opportunity to discuss this case generally with friends and colleagues. And the first thing I suggest is we are litigating against a federal government agency and the question that I receive in response is, well, what did you do wrong? Nothing I say

. In fact, we initiated a lawsuit. The next question would be, well, how much money are you seeking? And I respond? None. In fact, we're not seeking any monetary damages. All we're seeking is for an agency to process an application and we're fighting to be regulated. I am the Chief Regulatory Officer of Ampsi sitting to my right. It's Gregory Wilson. He is the Chief Executive Officer. Now, in the record below, you will notice reference to two other entities, one of which is Convergent Securities. I am the former Chief Executive Officer that was a registered broker dealer. I headed the private placement of securities. Mr. Wilson owns and operates a second broker dealer to this day. That broker dealer is a variable investment advisor's ink. And one of the business lines, including with that firm, is the operation of an alternative trading system. In fact, Mr. Wilson has been operating one for 15 years and is one of the first applicants for an ATS. Automation has changed our lives

. It continues to change our lives every day. And many years ago, if you were planning a business trip or vacation, you may speak to a travel agent and seek a recommendation. Where to go, where to stay, maybe even in what activities to undertake while you're there. Today, the vast majority of us go online. We make our own trip. We decide our own hotels and activities. This is the core of AMC, fully automated matching systems. In essence, we operate as an exchange, a virtual stock exchange, where each one of the member firms will be fully automated matching systems. This will be a portal by which are multiple portals, by which an investor can enter on into this exchange and enter into security transactions on one member site, or through what we call an order routing functionality. Enter a transaction onto one member site and have that routed for execution to a second member site. Now, this entire process would happen underneath the umbrella, this regulatory structure we call AMC. If there's only two things that I'll ask of this panel, above all else, after all the documents you reviewed, all the arguments you've heard, they're the following. Number one, remain this matter with instructions to the SEC to indicate what conditions on approval they would require. Well, they have told you haven't they that you need to be a self-regulating organization, but you don't qualify for that, right? And, or have I missed something in your 56 pages here? Well, we spent a great deal of time in our briefs criticizing what the SEC has done in this particular instance. Now, I acknowledge that, and in fact, I think there's a great agency, but in this particular instance, I believe they failed, and they failed repetitively. Now, the best way that I can respond is to tell you what should have the SEC done, and what should they still do? In the first of which, the first part of the exercise will be to identify whether any statute rule or regulation is being violated. They've sat on this application for two years, and they can't identify a single one

. Number two, what they should do, the second, is identify the specific regulatory gaps, the specific concerns they have with the application, and once they identify those specific concerns, those specific regulatory gaps, then they should set specific conditions on approval. Maybe I'm not understanding this completely, but as I understand it, you've applied to be an exempt exchange. Is that correct? Correct, Your Honor. And it's the SEC's position that an exempt exchange cannot have the self-regulatory powers. Do I understand that correctly? I'm not asking you to speak for the SEC, but is that understanding? That is their primary argument on appeal, yes. Why do you want the self-regulatory powers? What if you just submitted the application for exempt status and stopped there? Explain to me what's in it for you. Absolutely. And the answer involves regulation ATS. Since the adoption of regulation ATS, any system which discharges all of the regulatory functions is required to register as a broker dealer, and then submit to the disciplinary powers and oversight of a second entity. This is a key distinction between what is a limited volume exchange and an alternative trading system. As an exchange, we would be self-regulating our members, and hence we would report directly to the SEC. So if you were simply a limited volume exempt exchange, who would regulate you without the self-regulatory? That's a great question, Your Honor. The best example we can provide is in the trade point manuals, and you'll find that in the motion to supplement administrative record. The statement that a limited volume exchange has never exercised these powers as false. What not exercised what powers? The self-regulation. Well, let me ask the question in a different way then. Are there limited volume exempt exchanges that do not exercise self-regulatory powers in existence right now? There's only one limited volume exchange that we are aware of in existence now, and from our research, every limited volume exchange has exercised to some degree self-regulatory powers

. And since the adoption of regulation ATS, the commission has made clear that that is a requirement for any exchange. So if you become a limited volume organization, you, in essence, will be your own regulator, how does that work? Great question, and there's a two-tier regulatory structure. Here, and this is, it predates the commission's own existence, and you'll see references to treatise material as well as an 1888 case of Belton vHatch. Stock exchanges have been regulating their members before the SEC even came into existence. Now that the commission is there, the way that it works is that we self-regulate our members subject to the commission's oversight. So you would become a SRO? Well, the commission is taking objection to that specific term, and hence we suggested the limited volume. The number of facts, similarly, there, is that right? That is correct. Now we're not asking for anything novel. If you look back at the trade point and the lunch exemptions, the orders granting them, this is exactly what the commission had done. These are the only two applicants in the last 80 years, and what they had done is set up specific conditions on which these exchanges could operate. And if the exchange violated any one of those conditions, well, then the commission can revoke the exemption. The given a sense of the volume difference between a limited volume exchange and an exchange. Great question, Your Honor, and the SEC has answered that in the trade point of filings. The way that they've interpreted limited volume is staying below the lowest average daily trading volume of any registered and national exchange. So hence, this is a temporary, it's a conditional exemption, it's a startup provision. It gives us an opportunity to begin operations until we hit that level of transaction volume where would be required to register. So your description of a limited volume, the exempt exchange, is a temporary transitional phase before you become the big boy exchange? And going back historically, this provision, this limited volume exemption was designed for the regional stock exchanges

. Stock exchanges like the St. Paul Minneapolis Stock Exchange, and following the adoption of the Exchange Act, this would be a provision to allow them to continue to operate without all the burden of registering as a full national securities exchange. And so who would look over their work product or activities in that situation, beyond just internally? And you're asking me with respect to the original, the 1930s exchanges? No, you mentioned the St. Paul Stock Exchange. I guess I'm not understanding what your point was with that. These were regional stock exchanges. And they were allowed to continue to operate when the Exchange Act was adopted. So this was a temporary provision to allow them to continue without the disproportionate burden of registering as a national exchange. So they are self-regulating organizations without any connection of oversight outside of themselves, is that right? Well, we believe that to be true. Now, we requested the FOA manuals with respect to these earliest exchanges, including the Honolulu Exchange, which continued to 1977. The Commission does not have any support in the record that these exchanges had not exercised self-regulatory powers. But we believe that they had. We believe that this is the core. These were run as private clubs. So if a member didn't meet their commitments or engage in, let's say, unscrupulous behavior, they would be sanctioned internally by the Exchange. Is there anything prohibiting you from registering as an exchange? Is there something about the limited volume exemption that you're seeking for a reason or because you're too small? Or what's stopping you from just saying, all right, we'll register them. We can have all of these powers, these SRO

. We will be in SRO and they'll call us that and we'll call us that. And I'm going to answer that question and I'll reserve the remainder of my time. But there are various reasons that we've chosen this and as the applicant, we're entitled to decide what form of application we'd like to file. There are certain economic benefits for us, things such as allowing unregistered securities to trade on this platform. And hence, this is the decision we've made and the form of application we've identified as the appropriate one. Thank you. Mr. Shirey. Good day, Your Honours. Good day, Your Honours. William Shirey for the Securities and Exchange Commission. The Commission rejected AMC's exemption, exemptive application because the Commission determined that it was inconsistent with the Exchange Act. AMC wants to be what's called a self-regulatory organization. That's an organization that has the ability to enforce the Federal Securities laws. It's an organization that is essentially deputized under the close supervision of the Commission to regulate its members. You have lots of self-regulating organizations now, don't you? We have approximately 20 right now. All of them are registered exchanges, registered clearing agencies or registered national securities exchange

. The critical defining term there is registered. AMC, however, has determined that it wants to be an exempt exchange. But Congress in 1975 was very concerned about the exercise of self-regulatory quasi-governmental authority that we're talking about. And Congress overhauled the Exchange Act. And as we discussed in the exemptive order and as we discussed in our briefs, Congress carefully defined what organizations could be SROs. And not surprisingly, all of these are registered entities. Has relevant here it's a registered exchange. Is there something about that registration that is some addition? Maybe that's where you're going, but is there some additional screening, backgrounding? What's involved in the registration that makes the SEC feel more comfortable about giving these self-regulatory powers to the registered? Well, first of all, you're on it. It's the SEC's contingent that Congress looked at this area very closely and Congress actually decided what entities would exercise. And the Congress didn't actually allow the Commission to expand the list that's in 3A26. But you're on it precisely correct. There are considerations that even if the Commission did have the authority to allow an entity to be an SRO that wasn't in that list, Congress provided why the Commission wouldn't. And it includes what's specified in Section 6 of the Exchange Act that was substantially overhauled by Congress in 1975. And very rigorous and demanding standards were imposed for exchanges that want to register and become so-called national securities exchanges. Perhaps even more importantly, there are vast number of powers were added for the Commission to exercise oversight over registered exchanges. And other SROs in Section 19, Section 19 B through Section 19 H that was a substantial overhaul that Congress did in 1975. And as well in Section 21D and E of the Exchange Act, Congress added additional powers for the Commission to exercise with respect to SROs

. Those powers include, among other things, the ability to go into federal court and order an SRO to enforce its rules on its members. It includes the ability to review and to no exchange. No SRO rule can take effect until the Commission approves it. It includes the ability to, without asking the SRO first to modify any of their rules, it includes the ability to review any disciplinary decisions. It includes the ability to mandamus members of an SRO's Board of Directors and other officers. So what Amcis proposed, their self-regulatory powers, the SEC would not have that same governing oversight? Correct. Section 19 is limited. Our authority under Section 19 is limited to those entities that are SROs under the statute. That's only registered exchanges. Amcis would be an exempt exchange and it sort of makes rumblings of opting into Section 19. The regime doesn't work that way. Congress, first of all, specified who could exercise these quasi-governmental powers and who could not. And then it provided extensive registration mechanisms and oversight mechanisms to make sure that the Commission was constantly monitoring the exercise of these powers. And that only appropriate private entities were exercising these quasi-governmental powers. And so, Your Honor, the Commission looked at what Congress did in 1975 and it decided that Amcis proposal to be an exempt exchange is inconsistent with it. And moreover, Your Honor, Amcis made mention of the watch, I think I'm saying that correctly, the 1991 exemptive exchange. There's only been two exemptions granted since those 1975 amendments. One was watched, now called the, or subsequently called the Arizona exchange. That was in 1991. The second one was in the late 1990s. That's trade point. That was actually a UK registered exchange that wanted limited operations in the United States, essentially to make its trading platform in the UK available to a limited number of US participants. What the Commission said in both of those exemptive orders, and it has been the Commission's consistent view since those 1975 amendments, is that the Section 5 exemption exists to relieve small exchanges of the SRO obligations. The Commission said that in both the watch and the trade point orders. So, what you have here, Your Honor, is a situation where Amcis seeking an exemptive application that in the Commission's view exists to actually relieve an exchange that otherwise would have to register of those SRO obligations to allow them not to register to seek an exemption. But as a result, they also become subject to less registration. They avoid the demanding registration requirements, and they also avoid the extensive oversight mechanisms that Congress established. It's a trade-off. Who does, who does, who has the oversight over the limited volume exempt exchanges? Well, first Your Honor, I should clarify that in our understanding, neither of those limited volume exempt exchanges are still in operation, both ceased operating under exemptive orders in approximately 2009 period. Did they transition into? I believe that trade point actually just now operates in the UK and Switzerland, and I am not perfectly sure about the Arizona Exchange. I'd be on dangerous territory if I started to speculate. That's good, and he's finished here. Oh, sorry. So, the critical point is that with respect to those two exempt exchanges, they were subject to direct commission oversight themselves, but they did not possess, neither of them possess authority to investigate, examine, prosecute, and adjudicate enforcement, enforcement actions against their members for violations of the exchange act

. One was watched, now called the, or subsequently called the Arizona exchange. That was in 1991. The second one was in the late 1990s. That's trade point. That was actually a UK registered exchange that wanted limited operations in the United States, essentially to make its trading platform in the UK available to a limited number of US participants. What the Commission said in both of those exemptive orders, and it has been the Commission's consistent view since those 1975 amendments, is that the Section 5 exemption exists to relieve small exchanges of the SRO obligations. The Commission said that in both the watch and the trade point orders. So, what you have here, Your Honor, is a situation where Amcis seeking an exemptive application that in the Commission's view exists to actually relieve an exchange that otherwise would have to register of those SRO obligations to allow them not to register to seek an exemption. But as a result, they also become subject to less registration. They avoid the demanding registration requirements, and they also avoid the extensive oversight mechanisms that Congress established. It's a trade-off. Who does, who does, who has the oversight over the limited volume exempt exchanges? Well, first Your Honor, I should clarify that in our understanding, neither of those limited volume exempt exchanges are still in operation, both ceased operating under exemptive orders in approximately 2009 period. Did they transition into? I believe that trade point actually just now operates in the UK and Switzerland, and I am not perfectly sure about the Arizona Exchange. I'd be on dangerous territory if I started to speculate. That's good, and he's finished here. Oh, sorry. So, the critical point is that with respect to those two exempt exchanges, they were subject to direct commission oversight themselves, but they did not possess, neither of them possess authority to investigate, examine, prosecute, and adjudicate enforcement, enforcement actions against their members for violations of the exchange act. That power existed either with other SROs to which these, their members also, members, or resided with the commission, but it never, it never resided with these entities. And, sorry, you're right. Amcades, in essence, saying to you that you are overusing your Chevron deference to promulgate rules under general legislative mandates to handcuff limited volume entities or proposed limited volume entities such as they propose. And since there's only been a couple since what you say 1975, that might be a fairly decent argument that we ought to think about here. Our first point is that you don't even need to get to Chevron deference. Congress spelled out in section 3A26 without even having to get to Chevron. Who could be an SRO? Who could exercise these powers? And it's a registered exchanges. It's registered national securities associations, and it's registered clearing agencies. It's not exempt exchanges. It's not as though in 1975, Congress wasn't aware that there were exempt exchanges out there. Congress certainly was aware of that. A, and B, you know, when one looks at that, say, for instance, the Senate report that is cited in both I think our brief and in the exemptive, the denial of the exemptive application, you actually read, read through that. It's, it's, it's frankly an extraordinary, it's extraordinary how concerned Congress was at that time about entities, private entities. That's what we're dealing with. Private entities exercising quasi-governmental powers being deputized to enforce the securities laws. Well, the New York Stock Exchange does that. And there are registered exchange runner

. That power existed either with other SROs to which these, their members also, members, or resided with the commission, but it never, it never resided with these entities. And, sorry, you're right. Amcades, in essence, saying to you that you are overusing your Chevron deference to promulgate rules under general legislative mandates to handcuff limited volume entities or proposed limited volume entities such as they propose. And since there's only been a couple since what you say 1975, that might be a fairly decent argument that we ought to think about here. Our first point is that you don't even need to get to Chevron deference. Congress spelled out in section 3A26 without even having to get to Chevron. Who could be an SRO? Who could exercise these powers? And it's a registered exchanges. It's registered national securities associations, and it's registered clearing agencies. It's not exempt exchanges. It's not as though in 1975, Congress wasn't aware that there were exempt exchanges out there. Congress certainly was aware of that. A, and B, you know, when one looks at that, say, for instance, the Senate report that is cited in both I think our brief and in the exemptive, the denial of the exemptive application, you actually read, read through that. It's, it's, it's frankly an extraordinary, it's extraordinary how concerned Congress was at that time about entities, private entities. That's what we're dealing with. Private entities exercising quasi-governmental powers being deputized to enforce the securities laws. Well, the New York Stock Exchange does that. And there are registered exchange runner. And they are a subject to every. The green exchange does that, right? Excuse me, your honor. Chicago green exchange. I believe, and I maybe you're on here, I believe there is a CFTC regulated entity. You don't deal with the green exchanges. That is my understanding, Your Honor. That's the commodity future trading commission that regulates those. But the critical point, Your Honor, is that the commission has never given any, either of these exempt exchanges that post 1975 be authority to enforce the securities laws, to make rules, to go on site and examine these entities, their members, books and records to make sure that they're complying with the securities laws, to then investigate potential securities law, exchange act violations, to prosecute their members for exchange act violations, and to then adjudicate them. You will not, you know, I know Mr. Stegowski has talked about the trade point manuals. You won't see that in the trade point manuals. The trade point was, if I just step back for saying, it was a UK exchange that the United States was, the SEC was granting a limited exemption for a limited volume exemption so that they could allow residents, certain members in the United States to trade on that platform. It was an exchange that was governed by UK law, even after the commission granted the exemption. It would be extraordinary for the United States Securities and the Staged Commission to empower a foreign registered exchange to actually enforce US securities laws. It didn't happen. And it didn't happen in the watch setting either. If, in this application, if it did not have this proposal for the self-regulatory provisions, as the SEC looked to, I mean, is that the, that's the reason it was denied

. And they are a subject to every. The green exchange does that, right? Excuse me, your honor. Chicago green exchange. I believe, and I maybe you're on here, I believe there is a CFTC regulated entity. You don't deal with the green exchanges. That is my understanding, Your Honor. That's the commodity future trading commission that regulates those. But the critical point, Your Honor, is that the commission has never given any, either of these exempt exchanges that post 1975 be authority to enforce the securities laws, to make rules, to go on site and examine these entities, their members, books and records to make sure that they're complying with the securities laws, to then investigate potential securities law, exchange act violations, to prosecute their members for exchange act violations, and to then adjudicate them. You will not, you know, I know Mr. Stegowski has talked about the trade point manuals. You won't see that in the trade point manuals. The trade point was, if I just step back for saying, it was a UK exchange that the United States was, the SEC was granting a limited exemption for a limited volume exemption so that they could allow residents, certain members in the United States to trade on that platform. It was an exchange that was governed by UK law, even after the commission granted the exemption. It would be extraordinary for the United States Securities and the Staged Commission to empower a foreign registered exchange to actually enforce US securities laws. It didn't happen. And it didn't happen in the watch setting either. If, in this application, if it did not have this proposal for the self-regulatory provisions, as the SEC looked to, I mean, is that the, that's the reason it was denied. In other words, are there other faults in the application that it's not limited volume? There's some other reason it can't be exempt. Did the SEC just focus on them? You're on, I want to be very sensitive here because I can only speak for the staff's review at this point because the commissioners decide what they decide and I want to be respectful of that. The commission, its exemptive order noted at least several, one other major threshold critical concerning. That's whether AMC's business model even qualifies as an exchange. There's various reasons because these ATSs that they're proposing would be members. They're actually the exchanges. So, so there's been a lot of revision to AMC's application throughout to sort of, I think, try to comply with the staff concern that look, these are the exchanges. That's what ATSs are essentially as we talk about in our brief. You're not actually proposing to operate an exchange. So there's that threshold issue that the commission would have to look at. Their proposal is kind of more like a shopping center for stocks. I think, you know, your honor, the AMC actually said in one of the early email exchanges. They actually said they were proposing to operate. There's was more like a shopping mall than the traditional auction center. I actually think that's not a fair thing where, you know, you go to the shopping mall, they're all these individual stores, but you don't actually think of all the buyers and sellers in each store always sort of constantly interacting with the same, within the same platform there. But there was that issue. Also, there was a comment letter during this period by first trade, I believe, where they identified a slew of other concerns with AMC's application

. In other words, are there other faults in the application that it's not limited volume? There's some other reason it can't be exempt. Did the SEC just focus on them? You're on, I want to be very sensitive here because I can only speak for the staff's review at this point because the commissioners decide what they decide and I want to be respectful of that. The commission, its exemptive order noted at least several, one other major threshold critical concerning. That's whether AMC's business model even qualifies as an exchange. There's various reasons because these ATSs that they're proposing would be members. They're actually the exchanges. So, so there's been a lot of revision to AMC's application throughout to sort of, I think, try to comply with the staff concern that look, these are the exchanges. That's what ATSs are essentially as we talk about in our brief. You're not actually proposing to operate an exchange. So there's that threshold issue that the commission would have to look at. Their proposal is kind of more like a shopping center for stocks. I think, you know, your honor, the AMC actually said in one of the early email exchanges. They actually said they were proposing to operate. There's was more like a shopping mall than the traditional auction center. I actually think that's not a fair thing where, you know, you go to the shopping mall, they're all these individual stores, but you don't actually think of all the buyers and sellers in each store always sort of constantly interacting with the same, within the same platform there. But there was that issue. Also, there was a comment letter during this period by first trade, I believe, where they identified a slew of other concerns with AMC's application. The commission hasn't even dealt into those yet. So there are potentially a number of concerns, but we have to get through this first date. If I may incorrect me if I'm wrong, but my understanding was that AMC was saying, look, all you need to look at is whether we'll learn whether we're limited volume and of analysis. And I think that's wrong. I mean, that's not certainly how the commission has ever approached any of the exemptive orders. The commission is always imposed some degree of conditions, for instance, even going back to the 1935 exemptive orders to make sure that the folks who are operating these exchange were doing so consistent with the public interest and the protection of investors. And we don't think that that's appropriate. That makes a third in any degree of sense. That's not how exemptive orders typically work, which are inherently discretionary. In your brief, you include table A, which is a, you prepare to chart it compares one form of application with amendments. And you point out that your conclusion is that what they did was take out SRO, Self-Regulatory Organization and Substitute Limited Volume, exempt regulatory organization. They just quit using that name. Right. They've sort of made their own terminology. But can you give me an example? Could you give the court example of what else you would have expected to see in the amended applications that would be more conducive to their, to this request? Again, I don't want to speak for the commission, but I think, you know, I think it's fair to say that the commission has since the 1975 amendments never deputized one of these exempt exchanges to actually go out and enforce the securities laws. And it am sees application. They actually say that they will enforce the securities laws as to their members and the associates of their members

. The commission hasn't even dealt into those yet. So there are potentially a number of concerns, but we have to get through this first date. If I may incorrect me if I'm wrong, but my understanding was that AMC was saying, look, all you need to look at is whether we'll learn whether we're limited volume and of analysis. And I think that's wrong. I mean, that's not certainly how the commission has ever approached any of the exemptive orders. The commission is always imposed some degree of conditions, for instance, even going back to the 1935 exemptive orders to make sure that the folks who are operating these exchange were doing so consistent with the public interest and the protection of investors. And we don't think that that's appropriate. That makes a third in any degree of sense. That's not how exemptive orders typically work, which are inherently discretionary. In your brief, you include table A, which is a, you prepare to chart it compares one form of application with amendments. And you point out that your conclusion is that what they did was take out SRO, Self-Regulatory Organization and Substitute Limited Volume, exempt regulatory organization. They just quit using that name. Right. They've sort of made their own terminology. But can you give me an example? Could you give the court example of what else you would have expected to see in the amended applications that would be more conducive to their, to this request? Again, I don't want to speak for the commission, but I think, you know, I think it's fair to say that the commission has since the 1975 amendments never deputized one of these exempt exchanges to actually go out and enforce the securities laws. And it am sees application. They actually say that they will enforce the securities laws as to their members and the associates of their members. And that's, that is, I think fair to say, sort of the, the north star of problematic issues here. But, but, but there are host of others, you know, AMC across the board, as they said, I believe it was in response to Judge Beams question, notwithstanding their, their nomenclosure change, they really want to be an SRO. And as you heard today from AMC, it's critical to their business model. They, they want to attract ATS, ATS is automated matching systems to, to be, you know, away from competitors, particularly what's called finna, the one national securities association, a registered securities association. That has our several powers. They want to attract members, ATS is away from that to the AMC regulatory model. AMC makes that very clear, even in their last correspondence dated April 2015, public comment that they submitted on their, a meant second amended application. They actually say they want to be a quote dedicated SRO for automated matching systems, notwithstanding this change in terminology, AMC proposes throughout their, throughout their rulebook, in their exemptive application, they've talked about it in the district court proceedings, and they talk about it even in their last public comment on this. AMC plans to be on SRO, they've, they've changed the names, but, but it's, it's an SRO they're talking about it. And that's the commission's position, both even, even without having to, having to get this Chevron, that that's not a permissible option. Right. Any further questions, you're on? All right. Thank you very much. Thank you. How much time does Mr. Stogowski? One minute, Your Honor. All right

. And that's, that is, I think fair to say, sort of the, the north star of problematic issues here. But, but, but there are host of others, you know, AMC across the board, as they said, I believe it was in response to Judge Beams question, notwithstanding their, their nomenclosure change, they really want to be an SRO. And as you heard today from AMC, it's critical to their business model. They, they want to attract ATS, ATS is automated matching systems to, to be, you know, away from competitors, particularly what's called finna, the one national securities association, a registered securities association. That has our several powers. They want to attract members, ATS is away from that to the AMC regulatory model. AMC makes that very clear, even in their last correspondence dated April 2015, public comment that they submitted on their, a meant second amended application. They actually say they want to be a quote dedicated SRO for automated matching systems, notwithstanding this change in terminology, AMC proposes throughout their, throughout their rulebook, in their exemptive application, they've talked about it in the district court proceedings, and they talk about it even in their last public comment on this. AMC plans to be on SRO, they've, they've changed the names, but, but it's, it's an SRO they're talking about it. And that's the commission's position, both even, even without having to, having to get this Chevron, that that's not a permissible option. Right. Any further questions, you're on? All right. Thank you very much. Thank you. How much time does Mr. Stogowski? One minute, Your Honor. All right. Mr. Stogowski, Mr. Shirey took a little extra time to complete his answer, so court will allow you an extra minute. Thank you. Thank you. You had a minute to your time there, and you can finish up. Thank you very much. Your honors. The commission is represented that they have never allowed a limited volume exempt exchange to exercise self regulatory powers after the 75 amendments. You'll see in the, in the docket below, that's false. They've exercised disciplinary powers over members, they can sanction members. And in fact, the trade point, you'll see reference that they would empower English arbitrators to apply U.S. Securities laws in their proceedings for any U.S. members. Now, we're not asking for much from the commission

. Mr. Stogowski, Mr. Shirey took a little extra time to complete his answer, so court will allow you an extra minute. Thank you. Thank you. You had a minute to your time there, and you can finish up. Thank you very much. Your honors. The commission is represented that they have never allowed a limited volume exempt exchange to exercise self regulatory powers after the 75 amendments. You'll see in the, in the docket below, that's false. They've exercised disciplinary powers over members, they can sanction members. And in fact, the trade point, you'll see reference that they would empower English arbitrators to apply U.S. Securities laws in their proceedings for any U.S. members. Now, we're not asking for much from the commission. We're willing to comply. We've offered several amendments. Just tell us what you need us to do, what amendments you need. If they're substantive or if it's just terminology, we'll comply. We're willing to. We spend a lot of resources to do it. Is that really the role? I was going to ask this question. I get the sense as I read the record that there was a continuing request from the appellant to the SEC to tell us what you, what we can do to be compliant. Is that actually the role, do you think, of the SEC and its staff to provide you with an applicant with detailed instruction or suggestions as to how to make your applications acceptable? Well, here's the problem with their current order. We have no idea what's wrong. We could submit 100 applications and have a moving target. The whole time it was about this definition of exchange and the eve of the processing period, they denied on another ground. All we're asking is to give us that opportunity to know how to correct it. What's worse, another exchange can come, rest our application, file it, and they can be approved. In essence, the commission doesn't want to create any precedent on this limited volume exemption. And that's all we're asking for. We want to comply

. We're willing to comply. We've offered several amendments. Just tell us what you need us to do, what amendments you need. If they're substantive or if it's just terminology, we'll comply. We're willing to. We spend a lot of resources to do it. Is that really the role? I was going to ask this question. I get the sense as I read the record that there was a continuing request from the appellant to the SEC to tell us what you, what we can do to be compliant. Is that actually the role, do you think, of the SEC and its staff to provide you with an applicant with detailed instruction or suggestions as to how to make your applications acceptable? Well, here's the problem with their current order. We have no idea what's wrong. We could submit 100 applications and have a moving target. The whole time it was about this definition of exchange and the eve of the processing period, they denied on another ground. All we're asking is to give us that opportunity to know how to correct it. What's worse, another exchange can come, rest our application, file it, and they can be approved. In essence, the commission doesn't want to create any precedent on this limited volume exemption. And that's all we're asking for. We want to comply. We just need to know how. I see my time is up just very briefly. We've also included a chart. I recommend this may be a helpful point. This is on page 78 of the August 31st brief. This is just kind of a quick summary of the self regulatory powers on the prior exchanges. Are there any further questions? I don't think so. Thank you very much. Thank you very much. Council interesting case and it's been well argued. It is submitted.

All right. Well, why don't you come forward to the lectern so we can hear you loud and clear. And I apologize. If you'd like for me to speak up at any point, please, please let me know. Your honours, we have a motion to supplement the administrative record pending. This regards certain prior rules manuals for the other limited volume exchanges. And this morning we received a document package with a CD enclosed. This was provided by the Securities and Exchange Commission in its post-marked February 3rd. This here contains the rules manuals for the trade point limited volume exchange, as well as the successor entities, which would be the VerdeTech Stock Exchange and then SWX Europe. These are very material documents and these were provided in response to our full requests. We've been fighting for these documents since August. And you say there is a motion pending. Is that what you said? Correct, Your Honor. Does it cover the documents that you and refer to the documents which you are now mentioning? It does. What we had done is through our own independent research, we had investigated the trade point financial networks prior history and the rules manuals. And we had obtained copies through our own research and then also through prior FOA requests. And those copies are unsertificed on, there are simply copies that we have obtained from our own research as well as FOA. But we've asked for certified copies to be filed in the motion to supplement. And there are additional manuals here that range to 2009, which we believe are material and likely dispositive of this appeal. Okay. Now what's the motion precisely? What precisely is the motion? Let's stop the argument time and we'll give you, we'll restore those minutes. But what precisely is the motion that she said has already been filed and is pending? I believe it's entitled motion to supplement the administrative record. Okay. You know when that was filed. Ah, looks like November, November the 24th. All right. Well, once you proceed with your argument, the motion, I don't, frankly, don't recall whether that motion, there's been any disposition, whether there's been an order to take it. I don't know if that was the case, but the court will consider the motion and your comments this morning. But why don't you proceed with your argument? And if I made before we begin, we've made a copy for our own records. I mean, I submit this as evidence for this proceeding. Well, I'm not sure that that would be appropriate. And particularly at this late point in time before argument, I think your best course is simply to proceed with your argument and let any filings that you may have made speak for themselves and the court will, will, will take those up when the case is considered. Thank you, Your Honours. It's your contention that this material decides the case, the outcome of this case. I'm falling. I'm not falling what you're saying. Correct, Your Honour. The primary argument on appeal is the exercise of self-regulatory powers. Thank you. May it please the court? Councillor, you might proceed. I am Michael Stagowski, Council for Automated Matching Systems Exchange. Mr. Stagowski, are you the author of the brief we have in this case? I am, Your Honour. Yes. We have a colleague who's not a member of this panel who frequently tells the litig-of people that are here to argue that he never reads footnotes so that if you have something of importance that you think in the case ought to be presented, put it in the body of the brief. And as I was reading your brief, I noticed that in 56 pages you have 46 footnotes, some of which take up a little more than a half a page. I tell you that I read all of the footnotes, but when they're reduced size type, it gets a little teagious as you go along, so I would suggest that you might take that into consideration the next time you appear before our court at least because you may get our colleague and he won't be able to know what you've said about the half of the time. And thank you for your patience, Your Honour. I will definitely take your note under advisement for the future. Your Honours, throughout life, we all have an opportunity to speak about what it is we do for a living. At times I have an opportunity to discuss this case generally with friends and colleagues. And the first thing I suggest is we are litigating against a federal government agency and the question that I receive in response is, well, what did you do wrong? Nothing I say. In fact, we initiated a lawsuit. The next question would be, well, how much money are you seeking? And I respond? None. In fact, we're not seeking any monetary damages. All we're seeking is for an agency to process an application and we're fighting to be regulated. I am the Chief Regulatory Officer of Ampsi sitting to my right. It's Gregory Wilson. He is the Chief Executive Officer. Now, in the record below, you will notice reference to two other entities, one of which is Convergent Securities. I am the former Chief Executive Officer that was a registered broker dealer. I headed the private placement of securities. Mr. Wilson owns and operates a second broker dealer to this day. That broker dealer is a variable investment advisor's ink. And one of the business lines, including with that firm, is the operation of an alternative trading system. In fact, Mr. Wilson has been operating one for 15 years and is one of the first applicants for an ATS. Automation has changed our lives. It continues to change our lives every day. And many years ago, if you were planning a business trip or vacation, you may speak to a travel agent and seek a recommendation. Where to go, where to stay, maybe even in what activities to undertake while you're there. Today, the vast majority of us go online. We make our own trip. We decide our own hotels and activities. This is the core of AMC, fully automated matching systems. In essence, we operate as an exchange, a virtual stock exchange, where each one of the member firms will be fully automated matching systems. This will be a portal by which are multiple portals, by which an investor can enter on into this exchange and enter into security transactions on one member site, or through what we call an order routing functionality. Enter a transaction onto one member site and have that routed for execution to a second member site. Now, this entire process would happen underneath the umbrella, this regulatory structure we call AMC. If there's only two things that I'll ask of this panel, above all else, after all the documents you reviewed, all the arguments you've heard, they're the following. Number one, remain this matter with instructions to the SEC to indicate what conditions on approval they would require. Well, they have told you haven't they that you need to be a self-regulating organization, but you don't qualify for that, right? And, or have I missed something in your 56 pages here? Well, we spent a great deal of time in our briefs criticizing what the SEC has done in this particular instance. Now, I acknowledge that, and in fact, I think there's a great agency, but in this particular instance, I believe they failed, and they failed repetitively. Now, the best way that I can respond is to tell you what should have the SEC done, and what should they still do? In the first of which, the first part of the exercise will be to identify whether any statute rule or regulation is being violated. They've sat on this application for two years, and they can't identify a single one. Number two, what they should do, the second, is identify the specific regulatory gaps, the specific concerns they have with the application, and once they identify those specific concerns, those specific regulatory gaps, then they should set specific conditions on approval. Maybe I'm not understanding this completely, but as I understand it, you've applied to be an exempt exchange. Is that correct? Correct, Your Honor. And it's the SEC's position that an exempt exchange cannot have the self-regulatory powers. Do I understand that correctly? I'm not asking you to speak for the SEC, but is that understanding? That is their primary argument on appeal, yes. Why do you want the self-regulatory powers? What if you just submitted the application for exempt status and stopped there? Explain to me what's in it for you. Absolutely. And the answer involves regulation ATS. Since the adoption of regulation ATS, any system which discharges all of the regulatory functions is required to register as a broker dealer, and then submit to the disciplinary powers and oversight of a second entity. This is a key distinction between what is a limited volume exchange and an alternative trading system. As an exchange, we would be self-regulating our members, and hence we would report directly to the SEC. So if you were simply a limited volume exempt exchange, who would regulate you without the self-regulatory? That's a great question, Your Honor. The best example we can provide is in the trade point manuals, and you'll find that in the motion to supplement administrative record. The statement that a limited volume exchange has never exercised these powers as false. What not exercised what powers? The self-regulation. Well, let me ask the question in a different way then. Are there limited volume exempt exchanges that do not exercise self-regulatory powers in existence right now? There's only one limited volume exchange that we are aware of in existence now, and from our research, every limited volume exchange has exercised to some degree self-regulatory powers. And since the adoption of regulation ATS, the commission has made clear that that is a requirement for any exchange. So if you become a limited volume organization, you, in essence, will be your own regulator, how does that work? Great question, and there's a two-tier regulatory structure. Here, and this is, it predates the commission's own existence, and you'll see references to treatise material as well as an 1888 case of Belton vHatch. Stock exchanges have been regulating their members before the SEC even came into existence. Now that the commission is there, the way that it works is that we self-regulate our members subject to the commission's oversight. So you would become a SRO? Well, the commission is taking objection to that specific term, and hence we suggested the limited volume. The number of facts, similarly, there, is that right? That is correct. Now we're not asking for anything novel. If you look back at the trade point and the lunch exemptions, the orders granting them, this is exactly what the commission had done. These are the only two applicants in the last 80 years, and what they had done is set up specific conditions on which these exchanges could operate. And if the exchange violated any one of those conditions, well, then the commission can revoke the exemption. The given a sense of the volume difference between a limited volume exchange and an exchange. Great question, Your Honor, and the SEC has answered that in the trade point of filings. The way that they've interpreted limited volume is staying below the lowest average daily trading volume of any registered and national exchange. So hence, this is a temporary, it's a conditional exemption, it's a startup provision. It gives us an opportunity to begin operations until we hit that level of transaction volume where would be required to register. So your description of a limited volume, the exempt exchange, is a temporary transitional phase before you become the big boy exchange? And going back historically, this provision, this limited volume exemption was designed for the regional stock exchanges. Stock exchanges like the St. Paul Minneapolis Stock Exchange, and following the adoption of the Exchange Act, this would be a provision to allow them to continue to operate without all the burden of registering as a full national securities exchange. And so who would look over their work product or activities in that situation, beyond just internally? And you're asking me with respect to the original, the 1930s exchanges? No, you mentioned the St. Paul Stock Exchange. I guess I'm not understanding what your point was with that. These were regional stock exchanges. And they were allowed to continue to operate when the Exchange Act was adopted. So this was a temporary provision to allow them to continue without the disproportionate burden of registering as a national exchange. So they are self-regulating organizations without any connection of oversight outside of themselves, is that right? Well, we believe that to be true. Now, we requested the FOA manuals with respect to these earliest exchanges, including the Honolulu Exchange, which continued to 1977. The Commission does not have any support in the record that these exchanges had not exercised self-regulatory powers. But we believe that they had. We believe that this is the core. These were run as private clubs. So if a member didn't meet their commitments or engage in, let's say, unscrupulous behavior, they would be sanctioned internally by the Exchange. Is there anything prohibiting you from registering as an exchange? Is there something about the limited volume exemption that you're seeking for a reason or because you're too small? Or what's stopping you from just saying, all right, we'll register them. We can have all of these powers, these SRO. We will be in SRO and they'll call us that and we'll call us that. And I'm going to answer that question and I'll reserve the remainder of my time. But there are various reasons that we've chosen this and as the applicant, we're entitled to decide what form of application we'd like to file. There are certain economic benefits for us, things such as allowing unregistered securities to trade on this platform. And hence, this is the decision we've made and the form of application we've identified as the appropriate one. Thank you. Mr. Shirey. Good day, Your Honours. Good day, Your Honours. William Shirey for the Securities and Exchange Commission. The Commission rejected AMC's exemption, exemptive application because the Commission determined that it was inconsistent with the Exchange Act. AMC wants to be what's called a self-regulatory organization. That's an organization that has the ability to enforce the Federal Securities laws. It's an organization that is essentially deputized under the close supervision of the Commission to regulate its members. You have lots of self-regulating organizations now, don't you? We have approximately 20 right now. All of them are registered exchanges, registered clearing agencies or registered national securities exchange. The critical defining term there is registered. AMC, however, has determined that it wants to be an exempt exchange. But Congress in 1975 was very concerned about the exercise of self-regulatory quasi-governmental authority that we're talking about. And Congress overhauled the Exchange Act. And as we discussed in the exemptive order and as we discussed in our briefs, Congress carefully defined what organizations could be SROs. And not surprisingly, all of these are registered entities. Has relevant here it's a registered exchange. Is there something about that registration that is some addition? Maybe that's where you're going, but is there some additional screening, backgrounding? What's involved in the registration that makes the SEC feel more comfortable about giving these self-regulatory powers to the registered? Well, first of all, you're on it. It's the SEC's contingent that Congress looked at this area very closely and Congress actually decided what entities would exercise. And the Congress didn't actually allow the Commission to expand the list that's in 3A26. But you're on it precisely correct. There are considerations that even if the Commission did have the authority to allow an entity to be an SRO that wasn't in that list, Congress provided why the Commission wouldn't. And it includes what's specified in Section 6 of the Exchange Act that was substantially overhauled by Congress in 1975. And very rigorous and demanding standards were imposed for exchanges that want to register and become so-called national securities exchanges. Perhaps even more importantly, there are vast number of powers were added for the Commission to exercise oversight over registered exchanges. And other SROs in Section 19, Section 19 B through Section 19 H that was a substantial overhaul that Congress did in 1975. And as well in Section 21D and E of the Exchange Act, Congress added additional powers for the Commission to exercise with respect to SROs. Those powers include, among other things, the ability to go into federal court and order an SRO to enforce its rules on its members. It includes the ability to review and to no exchange. No SRO rule can take effect until the Commission approves it. It includes the ability to, without asking the SRO first to modify any of their rules, it includes the ability to review any disciplinary decisions. It includes the ability to mandamus members of an SRO's Board of Directors and other officers. So what Amcis proposed, their self-regulatory powers, the SEC would not have that same governing oversight? Correct. Section 19 is limited. Our authority under Section 19 is limited to those entities that are SROs under the statute. That's only registered exchanges. Amcis would be an exempt exchange and it sort of makes rumblings of opting into Section 19. The regime doesn't work that way. Congress, first of all, specified who could exercise these quasi-governmental powers and who could not. And then it provided extensive registration mechanisms and oversight mechanisms to make sure that the Commission was constantly monitoring the exercise of these powers. And that only appropriate private entities were exercising these quasi-governmental powers. And so, Your Honor, the Commission looked at what Congress did in 1975 and it decided that Amcis proposal to be an exempt exchange is inconsistent with it. And moreover, Your Honor, Amcis made mention of the watch, I think I'm saying that correctly, the 1991 exemptive exchange. There's only been two exemptions granted since those 1975 amendments. One was watched, now called the, or subsequently called the Arizona exchange. That was in 1991. The second one was in the late 1990s. That's trade point. That was actually a UK registered exchange that wanted limited operations in the United States, essentially to make its trading platform in the UK available to a limited number of US participants. What the Commission said in both of those exemptive orders, and it has been the Commission's consistent view since those 1975 amendments, is that the Section 5 exemption exists to relieve small exchanges of the SRO obligations. The Commission said that in both the watch and the trade point orders. So, what you have here, Your Honor, is a situation where Amcis seeking an exemptive application that in the Commission's view exists to actually relieve an exchange that otherwise would have to register of those SRO obligations to allow them not to register to seek an exemption. But as a result, they also become subject to less registration. They avoid the demanding registration requirements, and they also avoid the extensive oversight mechanisms that Congress established. It's a trade-off. Who does, who does, who has the oversight over the limited volume exempt exchanges? Well, first Your Honor, I should clarify that in our understanding, neither of those limited volume exempt exchanges are still in operation, both ceased operating under exemptive orders in approximately 2009 period. Did they transition into? I believe that trade point actually just now operates in the UK and Switzerland, and I am not perfectly sure about the Arizona Exchange. I'd be on dangerous territory if I started to speculate. That's good, and he's finished here. Oh, sorry. So, the critical point is that with respect to those two exempt exchanges, they were subject to direct commission oversight themselves, but they did not possess, neither of them possess authority to investigate, examine, prosecute, and adjudicate enforcement, enforcement actions against their members for violations of the exchange act. That power existed either with other SROs to which these, their members also, members, or resided with the commission, but it never, it never resided with these entities. And, sorry, you're right. Amcades, in essence, saying to you that you are overusing your Chevron deference to promulgate rules under general legislative mandates to handcuff limited volume entities or proposed limited volume entities such as they propose. And since there's only been a couple since what you say 1975, that might be a fairly decent argument that we ought to think about here. Our first point is that you don't even need to get to Chevron deference. Congress spelled out in section 3A26 without even having to get to Chevron. Who could be an SRO? Who could exercise these powers? And it's a registered exchanges. It's registered national securities associations, and it's registered clearing agencies. It's not exempt exchanges. It's not as though in 1975, Congress wasn't aware that there were exempt exchanges out there. Congress certainly was aware of that. A, and B, you know, when one looks at that, say, for instance, the Senate report that is cited in both I think our brief and in the exemptive, the denial of the exemptive application, you actually read, read through that. It's, it's, it's frankly an extraordinary, it's extraordinary how concerned Congress was at that time about entities, private entities. That's what we're dealing with. Private entities exercising quasi-governmental powers being deputized to enforce the securities laws. Well, the New York Stock Exchange does that. And there are registered exchange runner. And they are a subject to every. The green exchange does that, right? Excuse me, your honor. Chicago green exchange. I believe, and I maybe you're on here, I believe there is a CFTC regulated entity. You don't deal with the green exchanges. That is my understanding, Your Honor. That's the commodity future trading commission that regulates those. But the critical point, Your Honor, is that the commission has never given any, either of these exempt exchanges that post 1975 be authority to enforce the securities laws, to make rules, to go on site and examine these entities, their members, books and records to make sure that they're complying with the securities laws, to then investigate potential securities law, exchange act violations, to prosecute their members for exchange act violations, and to then adjudicate them. You will not, you know, I know Mr. Stegowski has talked about the trade point manuals. You won't see that in the trade point manuals. The trade point was, if I just step back for saying, it was a UK exchange that the United States was, the SEC was granting a limited exemption for a limited volume exemption so that they could allow residents, certain members in the United States to trade on that platform. It was an exchange that was governed by UK law, even after the commission granted the exemption. It would be extraordinary for the United States Securities and the Staged Commission to empower a foreign registered exchange to actually enforce US securities laws. It didn't happen. And it didn't happen in the watch setting either. If, in this application, if it did not have this proposal for the self-regulatory provisions, as the SEC looked to, I mean, is that the, that's the reason it was denied. In other words, are there other faults in the application that it's not limited volume? There's some other reason it can't be exempt. Did the SEC just focus on them? You're on, I want to be very sensitive here because I can only speak for the staff's review at this point because the commissioners decide what they decide and I want to be respectful of that. The commission, its exemptive order noted at least several, one other major threshold critical concerning. That's whether AMC's business model even qualifies as an exchange. There's various reasons because these ATSs that they're proposing would be members. They're actually the exchanges. So, so there's been a lot of revision to AMC's application throughout to sort of, I think, try to comply with the staff concern that look, these are the exchanges. That's what ATSs are essentially as we talk about in our brief. You're not actually proposing to operate an exchange. So there's that threshold issue that the commission would have to look at. Their proposal is kind of more like a shopping center for stocks. I think, you know, your honor, the AMC actually said in one of the early email exchanges. They actually said they were proposing to operate. There's was more like a shopping mall than the traditional auction center. I actually think that's not a fair thing where, you know, you go to the shopping mall, they're all these individual stores, but you don't actually think of all the buyers and sellers in each store always sort of constantly interacting with the same, within the same platform there. But there was that issue. Also, there was a comment letter during this period by first trade, I believe, where they identified a slew of other concerns with AMC's application. The commission hasn't even dealt into those yet. So there are potentially a number of concerns, but we have to get through this first date. If I may incorrect me if I'm wrong, but my understanding was that AMC was saying, look, all you need to look at is whether we'll learn whether we're limited volume and of analysis. And I think that's wrong. I mean, that's not certainly how the commission has ever approached any of the exemptive orders. The commission is always imposed some degree of conditions, for instance, even going back to the 1935 exemptive orders to make sure that the folks who are operating these exchange were doing so consistent with the public interest and the protection of investors. And we don't think that that's appropriate. That makes a third in any degree of sense. That's not how exemptive orders typically work, which are inherently discretionary. In your brief, you include table A, which is a, you prepare to chart it compares one form of application with amendments. And you point out that your conclusion is that what they did was take out SRO, Self-Regulatory Organization and Substitute Limited Volume, exempt regulatory organization. They just quit using that name. Right. They've sort of made their own terminology. But can you give me an example? Could you give the court example of what else you would have expected to see in the amended applications that would be more conducive to their, to this request? Again, I don't want to speak for the commission, but I think, you know, I think it's fair to say that the commission has since the 1975 amendments never deputized one of these exempt exchanges to actually go out and enforce the securities laws. And it am sees application. They actually say that they will enforce the securities laws as to their members and the associates of their members. And that's, that is, I think fair to say, sort of the, the north star of problematic issues here. But, but, but there are host of others, you know, AMC across the board, as they said, I believe it was in response to Judge Beams question, notwithstanding their, their nomenclosure change, they really want to be an SRO. And as you heard today from AMC, it's critical to their business model. They, they want to attract ATS, ATS is automated matching systems to, to be, you know, away from competitors, particularly what's called finna, the one national securities association, a registered securities association. That has our several powers. They want to attract members, ATS is away from that to the AMC regulatory model. AMC makes that very clear, even in their last correspondence dated April 2015, public comment that they submitted on their, a meant second amended application. They actually say they want to be a quote dedicated SRO for automated matching systems, notwithstanding this change in terminology, AMC proposes throughout their, throughout their rulebook, in their exemptive application, they've talked about it in the district court proceedings, and they talk about it even in their last public comment on this. AMC plans to be on SRO, they've, they've changed the names, but, but it's, it's an SRO they're talking about it. And that's the commission's position, both even, even without having to, having to get this Chevron, that that's not a permissible option. Right. Any further questions, you're on? All right. Thank you very much. Thank you. How much time does Mr. Stogowski? One minute, Your Honor. All right. Mr. Stogowski, Mr. Shirey took a little extra time to complete his answer, so court will allow you an extra minute. Thank you. Thank you. You had a minute to your time there, and you can finish up. Thank you very much. Your honors. The commission is represented that they have never allowed a limited volume exempt exchange to exercise self regulatory powers after the 75 amendments. You'll see in the, in the docket below, that's false. They've exercised disciplinary powers over members, they can sanction members. And in fact, the trade point, you'll see reference that they would empower English arbitrators to apply U.S. Securities laws in their proceedings for any U.S. members. Now, we're not asking for much from the commission. We're willing to comply. We've offered several amendments. Just tell us what you need us to do, what amendments you need. If they're substantive or if it's just terminology, we'll comply. We're willing to. We spend a lot of resources to do it. Is that really the role? I was going to ask this question. I get the sense as I read the record that there was a continuing request from the appellant to the SEC to tell us what you, what we can do to be compliant. Is that actually the role, do you think, of the SEC and its staff to provide you with an applicant with detailed instruction or suggestions as to how to make your applications acceptable? Well, here's the problem with their current order. We have no idea what's wrong. We could submit 100 applications and have a moving target. The whole time it was about this definition of exchange and the eve of the processing period, they denied on another ground. All we're asking is to give us that opportunity to know how to correct it. What's worse, another exchange can come, rest our application, file it, and they can be approved. In essence, the commission doesn't want to create any precedent on this limited volume exemption. And that's all we're asking for. We want to comply. We just need to know how. I see my time is up just very briefly. We've also included a chart. I recommend this may be a helpful point. This is on page 78 of the August 31st brief. This is just kind of a quick summary of the self regulatory powers on the prior exchanges. Are there any further questions? I don't think so. Thank you very much. Thank you very much. Council interesting case and it's been well argued. It is submitted