Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Temporarily Suspending the Requirements of NYSE Rule 311 and Related NYSE Rules Concerning the Approval of New Member Organizations in Order To Approve Apex Clearing Corporation, f/k/a Ridge Clearing and Outsourcing Solutions, Inc. as an NYSE Member Organization, Subject to Apex Clearing Complying With Exchange Rules for a New Member Organization Within 30 Calendar Days of the Date That Apex Clearing Is Provisionally Approved as an NYSE Member Organization, 34450-34453 [2012-14064]
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34450
Federal Register / Vol. 77, No. 112 / Monday, June 11, 2012 / Notices
of the Act 9 and Rule 19b–4(f)(6)(iii)
thereunder.10
A proposed rule change filed under
Rule 19b–4(f)(6) 11 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),12 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest.
The Exchange has asked the
Commission to waive the five-day prefiling requirement and the 30-day
operative delay so that the proposed
rule change may become operative
immediately upon filing. The
Commission notes that the Exchange is
proposing that certain of its rules
relating to membership requirements be
temporarily suspended so that Apex
Clearing can be provisionally approved
as an NSX ETP Holder. The proposed
relief does not exempt Apex Clearing
from Exchange rule requirements
governing NSX ETP Holders. Apex
Clearing would have a 30 calendar day
grace period within which to apply for
and be approved under relevant
Exchange rules. Moreover, the
Commission believes that waiver of the
30-day operative delay is appropriate to
ensure a smooth transition of PFSI
operations to Apex Clearing. In
particular, given the rapidity with
which events have developed, waiver of
the 30-day operative delay is necessary
to avoid significant disruption to PFSI’s
existing customers and the market
generally. Therefore, the Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest and designates the proposed
rule change as operative upon filing.13
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires a self-regulatory
organization to give the Commission written notice
of its intent to file the proposed rule change at least
five business days prior to the date of filing of the
proposed rule change, or such shorter time as
designated by the Commission. The Commission is
waiving this five-day pre-filing requirement.
11 17 CFR 240.19b–4(f)(6).
12 17 CFR 240.19b–4(f)(6)(iii).
13 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
srobinson on DSK4SPTVN1PROD with NOTICES
10 17
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Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–NSX–2012–08 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–NSX–2012–08. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (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
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–NSX–
2012–08 and should be submitted on or
before July 2, 2012.
PO 00000
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–14065 Filed 6–8–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67126; File No. SR–NYSE–
2012–16]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Temporarily
Suspending the Requirements of NYSE
Rule 311 and Related NYSE Rules
Concerning the Approval of New
Member Organizations in Order To
Approve Apex Clearing Corporation,
f/k/a Ridge Clearing and Outsourcing
Solutions, Inc. as an NYSE Member
Organization, Subject to Apex Clearing
Complying With Exchange Rules for a
New Member Organization Within 30
Calendar Days of the Date That Apex
Clearing Is Provisionally Approved as
an NYSE Member Organization
June 5, 2012.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that June 5, 2012,
New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to temporarily
suspend the requirements of NYSE Rule
311 and related NYSE rules concerning
the approval of new member
organizations in order to approve Apex
Clearing Corporation, f/k/a Ridge
Clearing and Outsourcing Solutions,
Inc. (‘‘Apex Clearing’’) as an NYSE
member organization, subject to Apex
Clearing complying with Exchange rules
for a new member organization within
30 calendar days of the date that Apex
14 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 77, No. 112 / Monday, June 11, 2012 / Notices
Clearing is provisionally approved as an
NYSE member organization. The
Exchange is also proposing to accept
Apex Clearing’s assumption of all of the
existing clearing agreements and
arrangements currently in effect
between Penson Financial Services Inc.
(‘‘PFSI’’) and various other NYSE
member organizations by execution of a
global agreement thereto. The text of the
proposed rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
srobinson on DSK4SPTVN1PROD with NOTICES
1. Purpose
The Exchange proposes this rule filing
to temporarily suspend the
requirements of NYSE Rule 311 and
related rules regarding the approval of
member organizations in order to
immediately approve Apex Clearing as
an NYSE member organization. The
Exchange proposes this temporary
suspension on an emergency basis to
ensure that Apex Clearing can continue
the clearing operations of PFSI without
unnecessary disruption, which could
have a significant collateral impact to a
number of other member organizations.
The proposed temporary suspension is
contingent upon Apex Clearing having
complied with all new member
organization Exchange rules within 30
calendar days of the date Apex Clearing
is provisionally approved as an NYSE
member organization pursuant to this
filing.
On May 31, 2012, Apex Clearing
Holdings, LLC (‘‘Apex Holdings’’), Apex
Clearing Solutions, LLC, Broadridge
Financial Solutions, Inc. (‘‘Broadridge’’),
PFSI and Penson Worldwide, Inc.
(‘‘PWI’’) (together, the ‘‘Parties’’)
consummated a transaction resulting in
a change in ownership of Apex
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Clearing.4 Broadridge, Apex Holdings,
PWI and PFSI each made capital
investments in Apex Holdings, the
holding company parent of Apex
Clearing. PFSI also assigned all of its
U.S. clearing contracts and all customer
and introducing broker proprietary
accounts along with key personnel to
Apex Clearing (the ‘‘Transferring
Accounts’’).5
As a result of the transaction, Apex
Clearing, which is not an NYSE member
organization, will provide the clearing
and execution services currently
provided to the Transferring Accounts
by PFSI. On May 31, 2012, Apex
Clearing submitted an application for
approval as an NYSE member
organization. However because of the
expedited nature of the transaction,
Apex Clearing was unable to fully
comply with NYSE Rule 311 and related
new member organization rules.
Because of the need for seamless
continuity with respect to the
Transferring Accounts, Apex Clearing
has requested that the Exchange
temporarily suspend its new
membership organization rules in order
to enable Apex Clearing’s approval as a
member organization on an expedited
basis. Pursuant to its request, Apex
Clearing will fully comply with the
Exchange’s new member organization
requirements within 30 calendar days
after provisional approval.
NYSE Rule 311 requires any person
who proposes to form a member
organization to notify the Exchange in
writing and submit such information as
may be required by NYSE rules. When
a corporate acquisition concerns an
asset transfer only, and not an
acquisition of the corporate entity,
NYSE member organization status
cannot be transferred to the acquiring
entity. The entity that proposes to
continue acquired business operations
of a member organization must be
separately approved as an NYSE
member organization.
Among other things, to be approved
as an NYSE member organization, the
applicant must:
• Provide the Exchange with a
written application with the name and
address of the applicant as well as a list
of all proposed parties required to be
4 Prior to the Transaction, Apex Clearing’s name
was Ridge Clearing & Outsourcing Solutions, Inc.
Prior to the transaction, Ridge Clearing &
Outsourcing Solutions, Inc. contributed its
outsourcing operations and all associated personnel
and systems to its affiliated entity, Broadridge
Securities Processing Solutions, LLC (‘‘BSPS’’)
where it will continue to provide operations
support and outsourcing services to a number of
broker-dealers, including Apex Clearing.
5 See Penson Worldwide, Inc. Form 8–K dated
May 31, 2012.
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34451
approved or identified pursuant to
NYSE Rules 304 and 311 (NYSE Rule
311.11).
• Ensure that all persons associated
with the applicant who meet the
requirements of approved persons under
NYSE Rule 304, consent to NYSE
jurisdiction as a member or approved
person (NYSE Rules 304 and 311(b)).
• Submit to the Exchange partnership
or corporate documents as may be
applicable including certificate of
incorporation, by-laws, and other
corporate documents (NYSE Rule
313.10 and .20).
• Provide the Exchange with an
opinion of counsel that, among other
things, the corporation is duly organized
and its existing stock is validly issued
and outstanding, and that the
restrictions and provisions required by
the Exchange on the transfer, issuance,
conversion and redemption of its stock
have been made legally effective (NYSE
Rule 313.20).
In addition, the Exchange reviews
whether the applicant meets federal and
NYSE capital requirements and whether
it has adopted controls and procedures
to comply with Exchange rules.
Due to the amount of information an
applicant is required to provide and
have completed prior to being approved
as a member organization, the member
organization approval process generally
takes several months to complete. The
length of time varies based on the
timing of the applicant’s response to
requests for information and
documentation.
As proposed, Apex Clearing will
continue the clearing and certain other
operations of PFSI as of June 6, 2012. In
order to avoid interruption of the
services PFSI currently provides to
other Exchange member organizations,
the NYSE believes that Apex Clearing
should be approved immediately as an
NYSE member organization. The
Exchange notes that Apex Clearing is
already a registered broker dealer and
FINRA member, which are prerequisites
for becoming an NYSE member
organization. See NYSE Rule 2(b).
The Exchange therefore proposes
providing Apex Clearing with a
temporary suspension of NYSE Rule 311
and related membership rules as they
relate to approval to operate an NYSE
member organization and approval of a
proposed member organization’s
approved persons, and immediately
approve Apex Clearing as a member
organization. As proposed this
temporary suspension is contingent
upon:
• Apex Clearing providing the
Exchange with sufficient information to
confirm that Apex Clearing will meet its
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34452
Federal Register / Vol. 77, No. 112 / Monday, June 11, 2012 / Notices
capital requirements as an NYSE
member organization; and
• Within 30 calendar days of Apex
Clearing’s approval as an NYSE member
organization under this proposed filing,
Apex Clearing and its approved persons
will have complied with the Exchange’s
new member organization requirements
as set forth in NYSE Rules 304 and 311–
313.
As proposed, if Apex Clearing does
not comply with all applicable NYSE
member organization application
requirements within 30 calendar days of
the effective date of this filing, its status
as an approved NYSE member
organization will no longer be effective.
In addition, the Exchange proposes to
accept Apex Clearing to assume all
existing clearing agreements and
arrangements currently in effect with
other NYSE member organizations by
execution of global agreements thereto.
Notice of such assumption will be
provided to impacted member
organizations through issuance of
Trader and/or Information Notices prior
to the effective date thereof.
srobinson on DSK4SPTVN1PROD with NOTICES
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with Section
6(b) 6 of the Securities Exchange Act of
1934 (the ‘‘Act’’), in general, and
furthers the objectives of Section
6(b)(5) 7 in particular in that it is
designed to promote just and equitable
principles of trade, to prevent
fraudulent and manipulative acts, to
remove impediments to and to perfect
the mechanism for a free and open
market and a national market system
and, in general, to protect investors and
the public interest. The Exchange
believes that permitting the expeditious
approval of Apex Clearing as an NYSE
member organization will avoid
interruption of the services PFSI
currently provides to other Exchange
member organizations. Based on
information and representations
provided by Apex Clearing, a temporary
suspension of certain NYSE
membership rules is needed based on
the expedited nature of the transaction
to enable seamless continuity with
respect to the transferring accounts.
Consequently, the NYSE believes that
temporary suspension of its member
organization requirements so that Apex
Clearing can be approved immediately
as an NYSE member organization will
help to foster cooperation and
coordination with persons engaged in
6 15
7 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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facilitating transactions in securities and
is consistent with the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competion.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 8 and Rule
19b–4(f)(6) thereunder.9 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 10 and Rule 19b–4(f)(6)(iii)
thereunder.11
A proposed rule change filed under
Rule 19b–4(f)(6) 12 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),13 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest.
The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposed
rule change may become operative
immediately upon filing. The
Commission notes that the Exchange is
proposing that certain of its rules
relating to membership requirements be
temporarily suspended so that Apex
Clearing can be provisionally approved
8 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
10 15 U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b-4(f)(6)(iii) requires a self-regulatory
organization to give the Commission written notice
of its intent to file the proposed rule change at least
five business days prior to the date of filing of the
proposed rule change, or such shorter time as
designated by the Commission. The Commission is
waiving this five-day pre-filing requirement.
12 17 CFR 240.19b–4(f)(6).
13 17 CFR 240.19b–4(f)(6)(iii).
9 17
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Fmt 4703
Sfmt 4703
as an NYSE member organization. The
proposed relief does not exempt Apex
Clearing from Exchange rule
requirements governing member
organizations. Apex Clearing would
have a 30 calendar day grace period
within which to apply for and be
approved under relevant Exchange
rules. Moreover, the Commission
believes that waiver of the 30-day
operative delay is appropriate to ensure
a smooth transition of PFSI operations
to Apex Clearing. In particular, given
the rapidity with which events have
developed, waiver of the 30-day
operative delay is necessary to avoid
significant disruption to PFSI’s existing
customers and the market generally.
Therefore, the Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest and
designates the proposed rule change as
operative upon filing.14
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–NYSE–2012–16 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–NYSE–2012–16. This file
14 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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Federal Register / Vol. 77, No. 112 / Monday, June 11, 2012 / Notices
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (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
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–NYSE–
2012–16 and should be submitted on or
before July 2, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–14064 Filed 6–8–12; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–67122; File No. SR–
NASDAQ–2012–067]
srobinson on DSK4SPTVN1PROD with NOTICES
June 5, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 2 thereunder,
notice is hereby given that, on May 29,
2012, The NASDAQ Stock Market LLC
(‘‘NASDAQ’’) filed with the Securities
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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20:21 Jun 08, 2012
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NASDAQ is filing with the
Commission a proposal for the
NASDAQ Options Market (‘‘NOM’’ or
‘‘Exchange’’) to update its quote
mitigation rule. Specifically, NASDAQ
proposes to amend Chapter VI, Section
17, Message Traffic Mitigation, by
deleting paragraph (c) and renumbering
paragraphs (d) and (e).
The text of the proposed rule change
is available from NASDAQ’s Web site at
https://nasdaq.cchwallstreet.com/Filings,
at NASDAQ’s principal office, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
NASDAQ included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below.
NASDAQ has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
1. Purpose
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Update
the NASDAQ Options Market Message
Traffic Mitigation Rule
1 15
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
15 17
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by NASDAQ. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
The purpose of the proposed rule
change is to update NOM rules to
eliminate a message traffic mitigation
provision that NASDAQ no longer
intends to implement. Currently,
Chapter VI, Section 17 provides that for
the purpose of message traffic
mitigation, based on NOM’s traffic with
respect to target traffic levels and in
accordance with NOM’s overall
objective of reducing both peak and
overall traffic, certain strategies may be
implemented, which are listed in
paragraphs (a)–(d). Of course, because
NOM is a newer options market,
launching in 2008 with a certain suite
of products and participants, NOM did
not immediately face message traffic
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34453
concerns requiring mitigation under this
rule. Accordingly, NOM has not
employed all of these features to date.
Specifically, paragraph (c) has never
been employed.
At this time, NASDAQ proposes to
eliminate one aspect of its traffic
mitigation rule that provides that NOM
will prioritize price update messages
and send out price updates before
sending size update messages; the rule
further provides that this functionality
will be applied to all options series
listed on NOM and in conjunction with
the previously described replace on
queue functionality 3 will ensure that
NOM quote update messages are the
most current and relevant available.4
NASDAQ believes that the concept in
paragraph (c) of ‘‘prioritizing’’ messages
is not necessary because the replace on
queue functionality in paragraph (b)
accomplishes the same goal of
mitigation.
Specifically, NASDAQ proposes to
remove paragraph (c), because if the
replace on queue functionality in
paragraph (b) is operating, paragraph (c)
cannot operate to prioritize price update
messages over size update messages.
The latest update message would have
already been sent due to the
replacement on queue functionality,
which replaces the updated size
message for the original message. For
example, if the following three quotes in
an options series are outbound as
follows:
First message—$1.00 bid for 10
contracts
Second message—$1.01 bid for 5
contracts
Third message—$1.01 bid for 6
contracts
In this situation, the operation of
paragraph (b) would result in only the
third message being sent, as it replaced
both the first and second messages. In
contrast, the operation of paragraph (c)
would result in the second message
being sent, because it is a price update;
the third message would also be sent,
because the prioritizing concept in
paragraph (c) only prevents size changes
from being sent if they are followed by
a price change. Thus, two messages
rather than one are sent if paragraph (c)
is operating.
Similarly, if the fourth message was
$1.05 bid for 6 contracts, the operation
of paragraph (b) would still result in
3 The replace on queue functionality is a process
by which an outbound quote message that has not
been sent, but is about to be sent, will not be sent
if a more current quote message for the same series
is available for sending. See Chapter VI, Section
17(b).
4 See Chapter VI, Section 17(c).
E:\FR\FM\11JNN1.SGM
11JNN1
]]>Agencies
[Federal Register Volume 77, Number 112 (Monday, June 11, 2012)]
[Notices]
[Pages 34450-34453]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14064]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67126; File No. SR-NYSE-2012-16]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Temporarily Suspending the Requirements of NYSE Rule 311 and Related
NYSE Rules Concerning the Approval of New Member Organizations in Order
To Approve Apex Clearing Corporation, f/k/a Ridge Clearing and
Outsourcing Solutions, Inc. as an NYSE Member Organization, Subject to
Apex Clearing Complying With Exchange Rules for a New Member
Organization Within 30 Calendar Days of the Date That Apex Clearing Is
Provisionally Approved as an NYSE Member Organization
June 5, 2012.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that June 5, 2012, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C.78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to temporarily suspend the requirements of
NYSE Rule 311 and related NYSE rules concerning the approval of new
member organizations in order to approve Apex Clearing Corporation, f/
k/a Ridge Clearing and Outsourcing Solutions, Inc. (``Apex Clearing'')
as an NYSE member organization, subject to Apex Clearing complying with
Exchange rules for a new member organization within 30 calendar days of
the date that Apex
[[Page 34451]]
Clearing is provisionally approved as an NYSE member organization. The
Exchange is also proposing to accept Apex Clearing's assumption of all
of the existing clearing agreements and arrangements currently in
effect between Penson Financial Services Inc. (``PFSI'') and various
other NYSE member organizations by execution of a global agreement
thereto. The text of the proposed rule change is available on the
Exchange's Web site at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes this rule filing to temporarily suspend the
requirements of NYSE Rule 311 and related rules regarding the approval
of member organizations in order to immediately approve Apex Clearing
as an NYSE member organization. The Exchange proposes this temporary
suspension on an emergency basis to ensure that Apex Clearing can
continue the clearing operations of PFSI without unnecessary
disruption, which could have a significant collateral impact to a
number of other member organizations. The proposed temporary suspension
is contingent upon Apex Clearing having complied with all new member
organization Exchange rules within 30 calendar days of the date Apex
Clearing is provisionally approved as an NYSE member organization
pursuant to this filing.
On May 31, 2012, Apex Clearing Holdings, LLC (``Apex Holdings''),
Apex Clearing Solutions, LLC, Broadridge Financial Solutions, Inc.
(``Broadridge''), PFSI and Penson Worldwide, Inc. (``PWI'') (together,
the ``Parties'') consummated a transaction resulting in a change in
ownership of Apex Clearing.\4\ Broadridge, Apex Holdings, PWI and PFSI
each made capital investments in Apex Holdings, the holding company
parent of Apex Clearing. PFSI also assigned all of its U.S. clearing
contracts and all customer and introducing broker proprietary accounts
along with key personnel to Apex Clearing (the ``Transferring
Accounts'').\5\
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\4\ Prior to the Transaction, Apex Clearing's name was Ridge
Clearing & Outsourcing Solutions, Inc. Prior to the transaction,
Ridge Clearing & Outsourcing Solutions, Inc. contributed its
outsourcing operations and all associated personnel and systems to
its affiliated entity, Broadridge Securities Processing Solutions,
LLC (``BSPS'') where it will continue to provide operations support
and outsourcing services to a number of broker-dealers, including
Apex Clearing.
\5\ See Penson Worldwide, Inc. Form 8-K dated May 31, 2012.
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As a result of the transaction, Apex Clearing, which is not an NYSE
member organization, will provide the clearing and execution services
currently provided to the Transferring Accounts by PFSI. On May 31,
2012, Apex Clearing submitted an application for approval as an NYSE
member organization. However because of the expedited nature of the
transaction, Apex Clearing was unable to fully comply with NYSE Rule
311 and related new member organization rules. Because of the need for
seamless continuity with respect to the Transferring Accounts, Apex
Clearing has requested that the Exchange temporarily suspend its new
membership organization rules in order to enable Apex Clearing's
approval as a member organization on an expedited basis. Pursuant to
its request, Apex Clearing will fully comply with the Exchange's new
member organization requirements within 30 calendar days after
provisional approval.
NYSE Rule 311 requires any person who proposes to form a member
organization to notify the Exchange in writing and submit such
information as may be required by NYSE rules. When a corporate
acquisition concerns an asset transfer only, and not an acquisition of
the corporate entity, NYSE member organization status cannot be
transferred to the acquiring entity. The entity that proposes to
continue acquired business operations of a member organization must be
separately approved as an NYSE member organization.
Among other things, to be approved as an NYSE member organization,
the applicant must:
Provide the Exchange with a written application with the
name and address of the applicant as well as a list of all proposed
parties required to be approved or identified pursuant to NYSE Rules
304 and 311 (NYSE Rule 311.11).
Ensure that all persons associated with the applicant who
meet the requirements of approved persons under NYSE Rule 304, consent
to NYSE jurisdiction as a member or approved person (NYSE Rules 304 and
311(b)).
Submit to the Exchange partnership or corporate documents
as may be applicable including certificate of incorporation, by-laws,
and other corporate documents (NYSE Rule 313.10 and .20).
Provide the Exchange with an opinion of counsel that,
among other things, the corporation is duly organized and its existing
stock is validly issued and outstanding, and that the restrictions and
provisions required by the Exchange on the transfer, issuance,
conversion and redemption of its stock have been made legally effective
(NYSE Rule 313.20).
In addition, the Exchange reviews whether the applicant meets
federal and NYSE capital requirements and whether it has adopted
controls and procedures to comply with Exchange rules.
Due to the amount of information an applicant is required to
provide and have completed prior to being approved as a member
organization, the member organization approval process generally takes
several months to complete. The length of time varies based on the
timing of the applicant's response to requests for information and
documentation.
As proposed, Apex Clearing will continue the clearing and certain
other operations of PFSI as of June 6, 2012. In order to avoid
interruption of the services PFSI currently provides to other Exchange
member organizations, the NYSE believes that Apex Clearing should be
approved immediately as an NYSE member organization. The Exchange notes
that Apex Clearing is already a registered broker dealer and FINRA
member, which are prerequisites for becoming an NYSE member
organization. See NYSE Rule 2(b).
The Exchange therefore proposes providing Apex Clearing with a
temporary suspension of NYSE Rule 311 and related membership rules as
they relate to approval to operate an NYSE member organization and
approval of a proposed member organization's approved persons, and
immediately approve Apex Clearing as a member organization. As proposed
this temporary suspension is contingent upon:
Apex Clearing providing the Exchange with sufficient
information to confirm that Apex Clearing will meet its
[[Page 34452]]
capital requirements as an NYSE member organization; and
Within 30 calendar days of Apex Clearing's approval as an
NYSE member organization under this proposed filing, Apex Clearing and
its approved persons will have complied with the Exchange's new member
organization requirements as set forth in NYSE Rules 304 and 311-313.
As proposed, if Apex Clearing does not comply with all applicable
NYSE member organization application requirements within 30 calendar
days of the effective date of this filing, its status as an approved
NYSE member organization will no longer be effective.
In addition, the Exchange proposes to accept Apex Clearing to
assume all existing clearing agreements and arrangements currently in
effect with other NYSE member organizations by execution of global
agreements thereto. Notice of such assumption will be provided to
impacted member organizations through issuance of Trader and/or
Information Notices prior to the effective date thereof.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) \6\ of the Securities Exchange Act of 1934 (the ``Act''),
in general, and furthers the objectives of Section 6(b)(5) \7\ in
particular in that it is designed to promote just and equitable
principles of trade, to prevent fraudulent and manipulative acts, to
remove impediments to and to perfect the mechanism for a free and open
market and a national market system and, in general, to protect
investors and the public interest. The Exchange believes that
permitting the expeditious approval of Apex Clearing as an NYSE member
organization will avoid interruption of the services PFSI currently
provides to other Exchange member organizations. Based on information
and representations provided by Apex Clearing, a temporary suspension
of certain NYSE membership rules is needed based on the expedited
nature of the transaction to enable seamless continuity with respect to
the transferring accounts. Consequently, the NYSE believes that
temporary suspension of its member organization requirements so that
Apex Clearing can be approved immediately as an NYSE member
organization will help to foster cooperation and coordination with
persons engaged in facilitating transactions in securities and is
consistent with the Act.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competion.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6)(iii) thereunder.\11\
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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires a self-regulatory organization to give the
Commission written notice of its intent to file the proposed rule
change at least five business days prior to the date of filing of
the proposed rule change, or such shorter time as designated by the
Commission. The Commission is waiving this five-day pre-filing
requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\12\ 17 CFR 240.19b-4(f)(6).
\13\ 17 CFR 240.19b-4(f)(6)(iii).
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The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposed rule change may become operative immediately
upon filing. The Commission notes that the Exchange is proposing that
certain of its rules relating to membership requirements be temporarily
suspended so that Apex Clearing can be provisionally approved as an
NYSE member organization. The proposed relief does not exempt Apex
Clearing from Exchange rule requirements governing member
organizations. Apex Clearing would have a 30 calendar day grace period
within which to apply for and be approved under relevant Exchange
rules. Moreover, the Commission believes that waiver of the 30-day
operative delay is appropriate to ensure a smooth transition of PFSI
operations to Apex Clearing. In particular, given the rapidity with
which events have developed, waiver of the 30-day operative delay is
necessary to avoid significant disruption to PFSI's existing customers
and the market generally. Therefore, the Commission believes that
waiving the 30-day operative delay is consistent with the protection of
investors and the public interest and designates the proposed rule
change as operative upon filing.\14\
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\14\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSE-2012-16 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-NYSE-2012-16. This file
[[Page 34453]]
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (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 those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSE-2012-16 and should be
submitted on or before July 2, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-14064 Filed 6-8-12; 8:45 am]
BILLING CODE 8011-01-P
