Order Temporarily Exempting the Floor Broker Operations of Broker-Dealers With Market Access That Handle Orders on a Manual Basis From the Automated Controls Requirement of Rule 15c3-5(c)(1)(ii) and Rule 15c3-5(c)(2) Under the Securities Exchange Act of 1934, 51457-51458 [2011-21099]
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Federal Register / Vol. 76, No. 160 / Thursday, August 18, 2011 / Notices
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
mstockstill on DSK4VPTVN1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2011–105 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
20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2011–105. 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 (https://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
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provisions of 5 U.S.C. 552, will be
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submissions should refer to File
VerDate Mar<15>2010
16:04 Aug 17, 2011
Jkt 223001
Number SR–NASDAQ–2011–105 and
should be submitted on or before
September 8, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–21034 Filed 8–17–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65132]
Order Temporarily Exempting the Floor
Broker Operations of Broker-Dealers
With Market Access That Handle
Orders on a Manual Basis From the
Automated Controls Requirement of
Rule 15c3–5(c)(1)(ii) and Rule
15c3–5(c)(2) Under the Securities
Exchange Act of 1934
August 15, 2011.
I. Introduction
Pursuant to Rule 15c3–5(f) under the
Securities Exchange Act of 1934
(‘‘Exchange Act’’),1 the Securities and
Exchange Commission (‘‘Commission’’),
by order, may exempt from the
provisions of Rule 15c3–5 (‘‘Rule’’),
either unconditionally or on specified
terms and conditions, any broker or
dealer, if the Commission determines
that such exemption is necessary or
appropriate in the public interest, and is
consistent with the protection of
investors.2 As discussed below, the
Commission temporarily is exempting
the floor broker operations of brokerdealers with market access that handle
orders on a manual basis (‘‘Floor
Brokers’’) from the automated controls
requirement of Rules 15c3–5(c)(1)(ii) 3
and (c)(2) 4 until November 30, 2011.5
II. Background
On November 3, 2010, the
Commission adopted Rule 15c3–5 under
14 17
CFR 200.30–3(a)(12).
17 CFR 240.15c3–5(f).
2 See also Exchange Act Section 36(a)(1), 15
U.S.C. 78mm(a)(1) (providing general authority for
Commission to grant exemptions from provisions of
Exchange Act and rules thereunder, provided the
Commission makes certain required findings).
3 See 17 CFR 240.15c3–5(c)(1)(ii).
4 See 17 CFR 240.15c3–5(c)(2).
5 On June 27, 2011, the Commission extended the
compliance date, until November 30, 2011, for all
of the requirements of Rule 15c3–5 for fixed income
securities, and the requirements of Rule 15c3–
5(c)(1)(i) for all securities. See Securities Exchange
Act Release No. 64748 (June 27, 2011), 76 FR 38293
(June 30, 2011).
1 See
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Fmt 4703
Sfmt 4703
51457
the Exchange Act.6 Among other things,
Rule 15c3–5 requires each broker-dealer
with access to trading securities 7
directly on an exchange or ATS,
including a broker-dealer providing
sponsored or direct market access to
customers or other persons, and each
broker-dealer operator of an ATS that
provides access to trading securities
directly on its ATS to a person other
than a broker-dealer, to establish,
document, and maintain a system of risk
management controls and supervisory
procedures that, among other things, is
reasonably designed to (1)
Systematically limit the financial
exposure of the broker-dealer that could
arise as a result of market access,8 and
(2) ensure compliance with all
regulatory requirements that are
applicable in connection with market
access.9 The required financial risk
management controls and supervisory
procedures must be reasonably designed
to prevent the entry of orders that
exceed appropriate pre-set credit or
capital thresholds,10 or that appear to be
erroneous.11 The regulatory risk
management controls and supervisory
procedures must also be reasonably
designed to prevent the entry of orders
unless there has been compliance with
all regulatory requirements that must be
satisfied on a pre-order entry basis,12
prevent the entry of orders that the
broker-dealers or customer is restricted
from trading,13 restrict market access
technology and systems to authorized
persons,14 and assure appropriate
surveillance personnel receive
immediate post-trade execution
reports.15
The Commission has received a
request from NYSE Amex LLC (‘‘NYSE
Amex’’), NYSE Arca, Inc. (‘‘NYSE
Arca’’), and New York Stock Exchange
LLC (‘‘NYSE’’) (collectively, ‘‘NYSE
Euronext’’) to extend the compliance
date for the automated controls
requirement pursuant to Rules 15c3–
5(c)(1)(ii) and (c)(2) for Floor Brokers
until November 30, 2011.16 Specifically,
6 See Exchange Act Release No. 63241 (Nov. 3,
2010), 75 FR 69792 (Nov. 15, 2010) (‘‘Rule 15c3–
5 Adopting Release’’).
7 Rule 15c3–5 applies to trading in all securities
on an exchange or ATS. Id. at 69765.
8 See 17 CFR 240.15c3–5(c)(1).
9 See 17 CFR 240.15c3–5(c)(2).
10 See 17 CFR 240.15c3–5(c)(1)(i).
11 See 17 CFR 240.15c3–5(c)(1)(ii).
12 See 17 CFR 240.15c3–5(c)(2)(i).
13 See 17 CFR 240.15c3–5(c)(2)(ii).
14 See 17 CFR 240.15c3–5(c)(2)(iii).
15 See 17 CFR 240.15c3–5(c)(2)(iv).
16 See letter from Janet McGinness, Senior Vice
President—Legal and Corporate Secretary, NYSE
Euronext, on behalf of NYSE Amex, NYSE Arca,
and NYSE, to Elizabeth Murphy, Secretary,
E:\FR\FM\18AUN1.SGM
Continued
18AUN1
51458
Federal Register / Vol. 76, No. 160 / Thursday, August 18, 2011 / Notices
NYSE Euronext indicated that more
time is needed to complete the
implementation of the automated
controls required pursuant to Rules
15c3–5(c)(1)(ii) and (c)(2) for orders
handled on a manual basis because the
floor broker operations of broker-dealers
with market access historically have
used manual systematic controls for
their risk management and regulatory
purposes with respect to manual orders,
and they will need additional time to
complete the development and
implementation of automated controls
for such manual orders.17 NYSE
Euronext explained that certain Floor
Brokers initially believed that their
existing combination of automated and
manual controls would be sufficient for
compliance with Rule 15c3–5,18 and
only recently became aware that the
required pre-trade controls under the
Rule must be systemic and automated
for compliance purposes.19 NYSE
Euronext also explained that additional
time would provide the NYSE Euronext
with an opportunity to update Floor
Broker-related systems and thereby
facilitate compliance with the Rule by
Floor Brokers.20
mstockstill on DSK4VPTVN1PROD with NOTICES
III. Discussion
The Commission is temporarily
exempting Floor Brokers from the
automated controls requirement of
Rules 15c3–5(c)(1)(ii) 21 and (c)(2) 22
until November 30, 2011. The
Commission believes that providing
additional time for such Floor Brokers
to complete the development and
implementation of automated controls
pursuant to Rules 15c3–5(c)(1)(ii) and
(c)(2) for orders handled on a manual
basis, where manual systematic controls
historically were used for risk
management and regulatory purposes, is
reasonable. In addition, the Commission
believes that temporarily exempting
Floor Brokers from the automated
controls requirement of Rules 15c3–
5(c)(1)(ii) and (c)(2) until November 30,
2011, should facilitate the orderly and
meaningful implementation of the
required automated risk management
controls for those Floor Brokers that
need more time to be in compliance
with the Rule.
For the foregoing reasons, the
Commission finds that granting the
foregoing temporary exemption is
necessary and appropriate in the public
Commission, dated June 29, 2011 (‘‘NYSE Euronext
Letter’’).
17 Id.
18 Id. at 2.
19 See Rule 15c3–5 Adopting Release.
20 NYSE Euronext Letter at 2.
21 See 17 CFR 240.15c3–5(c)(1)(ii).
22 See 17 CFR 240.15c3–5(c)(2).
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16:04 Aug 17, 2011
Jkt 223001
interest, and is consistent with the
protection of investors.
IV. Conclusion
It Is Hereby Ordered, pursuant to Rule
15c3–5(f),23 that the floor broker
operations of broker-dealers with market
access that handle orders on a manual
basis are temporarily exempted from the
automated controls requirement of
Rules 15c3–5(c)(1)(ii) 24 and (c)(2) 25
until November 30, 2011.
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–21099 Filed 8–17–11; 8:45 am]
BILLING CODE 8011–01–P
State (telephone: 202–632–6469). The
mailing address is U.S. Department of
State, SA–5, L/PD, Fifth Floor (Suite
5H03), Washington, DC 20522–0505.
Dated: August 11, 2011.
J. Adam Ereli,
Principal Deputy Assistant Secretary, Bureau
of Educational and Cultural Affairs,
Department of State.
[FR Doc. 2011–21129 Filed 8–17–11; 8:45 am]
BILLING CODE 4710–05–P
DEPARTMENT OF TRANSPORTATION
Office of the Secretary
DEPARTMENT OF STATE
[Public Notice 7557]
Culturally Significant Objects Imported
for Exhibition Determinations:
‘‘Wonder of the Age: Master Painters
of India, 1100–1900’’
Notice is hereby given of the
following determinations: Pursuant to
the authority vested in me by the Act of
October 19, 1965 (79 Stat. 985; 22 U.S.C.
2459), Executive Order 12047 of March
27, 1978, the Foreign Affairs Reform and
Restructuring Act of 1998 (112 Stat.
2681, et seq.; 22 U.S.C. 6501 note, et
seq.), Delegation of Authority No. 234 of
October 1, 1999, and Delegation of
Authority No. 236–3 of August 28, 2000
(and, as appropriate, Delegation of
Authority No. 257 of April 15, 2003), I
hereby determine that the objects to be
included in the exhibition ‘‘Wonder of
the Age: Master Painters of India, 1100–
1900,’’ imported from abroad for
temporary exhibition within the United
States, are of cultural significance. The
objects are imported pursuant to loan
agreements with the foreign owners or
custodians. I also determine that the
exhibition or display of the exhibit
objects at the Metropolitan Museum of
Art, New York, New York, from on or
about September 28, 2011, until on or
about January 8, 2012, and at possible
additional exhibitions or venues yet to
be determined, is in the national
interest. I have ordered that Public
Notice of these Determinations be
published in the Federal Register.
FOR FURTHER INFORMATION CONTACT: For
further information, including a list of
the exhibit objects, contact Paul W.
Manning, Attorney-Adviser, Office of
the Legal Adviser, U.S. Department of
SUMMARY:
Notice of Applications for Certificates
of Public Convenience and Necessity
and Foreign Air Carrier Permits Filed
Under Subpart B (Formerly Subpart Q)
During the Week Ending July 30, 2011
The following Applications for
Certificates of Public Convenience and
Necessity and Foreign Air Carrier
Permits were filed under subpart B
(formerly subpart Q) of the Department
of Transportation’s Procedural
Regulations (See 14 CFR 301.201 et.
seq.). The due date for Answers,
Conforming Applications, or Motions to
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each application. Following the Answer
period DOT may process the application
by expedited procedures. Such
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of a show-cause order, a tentative order,
or in appropriate cases a final order
without further proceedings.
Docket Number: DOT–OST–2011–
0143.
Date Filed: July 29, 2011.
Due Date for Answers, Conforming
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Scope: August 19, 2011.
Description: Application of TwinAir
Calypso Limited, Inc. requesting
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carrier.
Renee V. Wright,
Program Manager, Docket Operations,
Federal Register Liaison.
[FR Doc. 2011–21083 Filed 8–17–11; 8:45 am]
BILLING CODE 4910–9X–P
23 See
17 CFR 240.15c3–5(f).
17 CFR 240.15c3–5(c)(1)(ii).
25 See 17 CFR 240.15c3–5(c)(2).
24 See
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18AUN1
]]>Agencies
[Federal Register Volume 76, Number 160 (Thursday, August 18, 2011)]
[Notices]
[Pages 51457-51458]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-21099]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65132]
Order Temporarily Exempting the Floor Broker Operations of
Broker-Dealers With Market Access That Handle Orders on a Manual Basis
From the Automated Controls Requirement of Rule 15c3-5(c)(1)(ii) and
Rule 15c3-5(c)(2) Under the Securities Exchange Act of 1934
August 15, 2011.
I. Introduction
Pursuant to Rule 15c3-5(f) under the Securities Exchange Act of
1934 (``Exchange Act''),\1\ the Securities and Exchange Commission
(``Commission''), by order, may exempt from the provisions of Rule
15c3-5 (``Rule''), either unconditionally or on specified terms and
conditions, any broker or dealer, if the Commission determines that
such exemption is necessary or appropriate in the public interest, and
is consistent with the protection of investors.\2\ As discussed below,
the Commission temporarily is exempting the floor broker operations of
broker-dealers with market access that handle orders on a manual basis
(``Floor Brokers'') from the automated controls requirement of Rules
15c3-5(c)(1)(ii) \3\ and (c)(2) \4\ until November 30, 2011.\5\
---------------------------------------------------------------------------
\1\ See 17 CFR 240.15c3-5(f).
\2\ See also Exchange Act Section 36(a)(1), 15 U.S.C. 78mm(a)(1)
(providing general authority for Commission to grant exemptions from
provisions of Exchange Act and rules thereunder, provided the
Commission makes certain required findings).
\3\ See 17 CFR 240.15c3-5(c)(1)(ii).
\4\ See 17 CFR 240.15c3-5(c)(2).
\5\ On June 27, 2011, the Commission extended the compliance
date, until November 30, 2011, for all of the requirements of Rule
15c3-5 for fixed income securities, and the requirements of Rule
15c3-5(c)(1)(i) for all securities. See Securities Exchange Act
Release No. 64748 (June 27, 2011), 76 FR 38293 (June 30, 2011).
---------------------------------------------------------------------------
II. Background
On November 3, 2010, the Commission adopted Rule 15c3-5 under the
Exchange Act.\6\ Among other things, Rule 15c3-5 requires each broker-
dealer with access to trading securities \7\ directly on an exchange or
ATS, including a broker-dealer providing sponsored or direct market
access to customers or other persons, and each broker-dealer operator
of an ATS that provides access to trading securities directly on its
ATS to a person other than a broker-dealer, to establish, document, and
maintain a system of risk management controls and supervisory
procedures that, among other things, is reasonably designed to (1)
Systematically limit the financial exposure of the broker-dealer that
could arise as a result of market access,\8\ and (2) ensure compliance
with all regulatory requirements that are applicable in connection with
market access.\9\ The required financial risk management controls and
supervisory procedures must be reasonably designed to prevent the entry
of orders that exceed appropriate pre-set credit or capital
thresholds,\10\ or that appear to be erroneous.\11\ The regulatory risk
management controls and supervisory procedures must also be reasonably
designed to prevent the entry of orders unless there has been
compliance with all regulatory requirements that must be satisfied on a
pre-order entry basis,\12\ prevent the entry of orders that the broker-
dealers or customer is restricted from trading,\13\ restrict market
access technology and systems to authorized persons,\14\ and assure
appropriate surveillance personnel receive immediate post-trade
execution reports.\15\
---------------------------------------------------------------------------
\6\ See Exchange Act Release No. 63241 (Nov. 3, 2010), 75 FR
69792 (Nov. 15, 2010) (``Rule 15c3-5 Adopting Release'').
\7\ Rule 15c3-5 applies to trading in all securities on an
exchange or ATS. Id. at 69765.
\8\ See 17 CFR 240.15c3-5(c)(1).
\9\ See 17 CFR 240.15c3-5(c)(2).
\10\ See 17 CFR 240.15c3-5(c)(1)(i).
\11\ See 17 CFR 240.15c3-5(c)(1)(ii).
\12\ See 17 CFR 240.15c3-5(c)(2)(i).
\13\ See 17 CFR 240.15c3-5(c)(2)(ii).
\14\ See 17 CFR 240.15c3-5(c)(2)(iii).
\15\ See 17 CFR 240.15c3-5(c)(2)(iv).
---------------------------------------------------------------------------
The Commission has received a request from NYSE Amex LLC (``NYSE
Amex''), NYSE Arca, Inc. (``NYSE Arca''), and New York Stock Exchange
LLC (``NYSE'') (collectively, ``NYSE Euronext'') to extend the
compliance date for the automated controls requirement pursuant to
Rules 15c3-5(c)(1)(ii) and (c)(2) for Floor Brokers until November 30,
2011.\16\ Specifically,
[[Page 51458]]
NYSE Euronext indicated that more time is needed to complete the
implementation of the automated controls required pursuant to Rules
15c3-5(c)(1)(ii) and (c)(2) for orders handled on a manual basis
because the floor broker operations of broker-dealers with market
access historically have used manual systematic controls for their risk
management and regulatory purposes with respect to manual orders, and
they will need additional time to complete the development and
implementation of automated controls for such manual orders.\17\ NYSE
Euronext explained that certain Floor Brokers initially believed that
their existing combination of automated and manual controls would be
sufficient for compliance with Rule 15c3-5,\18\ and only recently
became aware that the required pre-trade controls under the Rule must
be systemic and automated for compliance purposes.\19\ NYSE Euronext
also explained that additional time would provide the NYSE Euronext
with an opportunity to update Floor Broker-related systems and thereby
facilitate compliance with the Rule by Floor Brokers.\20\
---------------------------------------------------------------------------
\16\ See letter from Janet McGinness, Senior Vice President--
Legal and Corporate Secretary, NYSE Euronext, on behalf of NYSE
Amex, NYSE Arca, and NYSE, to Elizabeth Murphy, Secretary,
Commission, dated June 29, 2011 (``NYSE Euronext Letter'').
\17\ Id.
\18\ Id. at 2.
\19\ See Rule 15c3-5 Adopting Release.
\20\ NYSE Euronext Letter at 2.
---------------------------------------------------------------------------
III. Discussion
The Commission is temporarily exempting Floor Brokers from the
automated controls requirement of Rules 15c3-5(c)(1)(ii) \21\ and
(c)(2) \22\ until November 30, 2011. The Commission believes that
providing additional time for such Floor Brokers to complete the
development and implementation of automated controls pursuant to Rules
15c3-5(c)(1)(ii) and (c)(2) for orders handled on a manual basis, where
manual systematic controls historically were used for risk management
and regulatory purposes, is reasonable. In addition, the Commission
believes that temporarily exempting Floor Brokers from the automated
controls requirement of Rules 15c3-5(c)(1)(ii) and (c)(2) until
November 30, 2011, should facilitate the orderly and meaningful
implementation of the required automated risk management controls for
those Floor Brokers that need more time to be in compliance with the
Rule.
---------------------------------------------------------------------------
\21\ See 17 CFR 240.15c3-5(c)(1)(ii).
\22\ See 17 CFR 240.15c3-5(c)(2).
---------------------------------------------------------------------------
For the foregoing reasons, the Commission finds that granting the
foregoing temporary exemption is necessary and appropriate in the
public interest, and is consistent with the protection of investors.
IV. Conclusion
It Is Hereby Ordered, pursuant to Rule 15c3-5(f),\23\ that the
floor broker operations of broker-dealers with market access that
handle orders on a manual basis are temporarily exempted from the
automated controls requirement of Rules 15c3-5(c)(1)(ii) \24\ and
(c)(2) \25\ until November 30, 2011.
---------------------------------------------------------------------------
\23\ See 17 CFR 240.15c3-5(f).
\24\ See 17 CFR 240.15c3-5(c)(1)(ii).
\25\ See 17 CFR 240.15c3-5(c)(2).
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-21099 Filed 8-17-11; 8:45 am]
BILLING CODE 8011-01-P
