Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Temporarily Suspending the Requirements of Exchange Rule 311-Equities and Related Exchange Equities Rules Concerning the Approval of New Member Organizations and Exchange Rule 353 and Related Exchange Rules Concerning the Approval of New ATP Holders in Order To Approve Apex Clearing Corporation, f/k/a Ridge Clearing and Outsourcing Solutions, Inc. as an Exchange Equities Member Organization and ATP Holder, Subject to Apex Clearing Complying With Exchange Rules for a New Member Organization and ATP Holder Within 30 Calendar Days of the Date That Apex Clearing Is Provisionally Approved as an Exchange Equities Member Organization and ATP Holder, 34442-34445 [2012-14067]

Download as PDF 34442 Federal Register / Vol. 77, No. 112 / Monday, June 11, 2012 / Notices higher level of commitment to transacting business on the Exchange and using Exchange facilities than Sponsored Users. Finally, these increases maintain the same proportionate amounts that are paid by regular users relative to Sponsored Users. Clarifying that the current $500 monthly fee for a Network Access Port ($1,000 for Sponsored Users) is for a 1 Gbps connection removes impediments to and to perfect the mechanism for a free and open market and a national market system, and, in general, protects investors and the public interest by eliminating any confusion about which connection will be assessed which fee (now that the Exchange will be offering both the 1 Gbps and 10 Gbps connection options). B. Self-Regulatory Organization’s Statement on Burden on Competition C2 does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) 7 of the Act and paragraph (f) of Rule 19b–4 8 thereunder. 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. srobinson on DSK4SPTVN1PROD with NOTICES 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–C2–2012–017 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–C2–2012–017. 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 such filing also will be available for inspection and copying at the principal offices 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–C2– 2012–017, and should be submitted on or before July 2, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–14033 Filed 6–8–12; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–67129; File No. SR– NYSEMKT–2012–06] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Temporarily Suspending the Requirements of Exchange Rule 311—Equities and Related Exchange Equities Rules Concerning the Approval of New Member Organizations and Exchange Rule 353 and Related Exchange Rules Concerning the Approval of New ATP Holders in Order To Approve Apex Clearing Corporation, f/k/a Ridge Clearing and Outsourcing Solutions, Inc. as an Exchange Equities Member Organization and ATP Holder, Subject to Apex Clearing Complying With Exchange Rules for a New Member Organization and ATP Holder Within 30 Calendar Days of the Date That Apex Clearing Is Provisionally Approved as an Exchange Equities Member Organization and ATP Holder 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 on June 5, 2012, NYSE MKT LLC (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) 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 (1) Exchange Rule 311—Equities and related Exchange Equities rules concerning the approval of new member organizations and (2) Exchange Rule 353 and related Exchange rules concerning the approval of new ATP Holders in order to approve Apex Clearing Corporation, f/k/a Ridge Clearing and Outsourcing Solutions, Inc. (‘‘Apex Clearing’’) as an Exchange Equities member organization and ATP Holder, subject to Apex Clearing complying with Exchange rules for a new member organization and ATP Holder within 30 calendar days of the date that Apex BILLING CODE 8011–01–P 1 15 U.S.C. 78s(b)(3)(A). 8 17 CFR 240.19b–4(f). U.S.C.78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 7 15 VerDate Mar<15>2010 20:21 Jun 08, 2012 2 15 9 17 Jkt 226001 PO 00000 CFR 200.30–3(a)(12). Frm 00106 Fmt 4703 Sfmt 4703 E:\FR\FM\11JNN1.SGM 11JNN1 Federal Register / Vol. 77, No. 112 / Monday, June 11, 2012 / Notices Clearing is provisionally approved as an Exchange Equities member organization and ATP Holder. 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 Exchange Equities member organizations and ATP Holders 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 (1) Exchange Rule 311—Equities and related rules regarding the approval of member organizations and (2) Exchange Rule 353 and related rules regarding the approval of ATP Holders in order to immediately approve Apex Clearing as an Exchange Equities member organization and ATP Holder. 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 Exchange Equities member organizations and ATP Holders. The proposed temporary suspension is contingent upon Apex Clearing having complied with all new member organization and ATP Holder Exchange rules within 30 calendar days of the date Apex Clearing is provisionally approved as an Exchange Equities member organization and ATP Holder pursuant to this filing. On May 31, 2012, Apex Clearing Holdings, LLC (‘‘Apex Holdings’’), Apex VerDate Mar<15>2010 20:21 Jun 08, 2012 Jkt 226001 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 As a result of the transaction, Apex Clearing, which is not an Exchange Equities member organization or an ATP Holder, 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 Exchange Equities member organization and as an ATP Holder. However because of the expedited nature of the transaction, Apex Clearing was unable to fully comply with Exchange Rule 311—Equities and related new member organization rules and Exchange Rule 353 and related new ATP Holder 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 and ATP Holder 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 and ATP Holder requirements within 30 calendar days after provisional approval. Exchange Rules 311—Equities and 353 require any person who proposes to form a member organization or an ATP Holder to notify the Exchange in writing and submit such information as may be required by Exchange rules. When a corporate acquisition concerns an asset transfer only, and not an acquisition of the corporate entity, Exchange Equities member organization or ATP Holder status cannot be transferred to the acquiring entity. The entity that 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. PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 34443 proposes to continue the acquired business operations of a member organization must be separately approved as an Exchange Equities member organization or ATP Holder. Equities Among other things, to be approved as an Exchange Equities 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 Exchange Rules 304—Equities and 311—Equities (Rule 311.11—Equities). • Ensure that all persons associated with the applicant who meet the requirements of approved persons under Exchange Rule 304—Equities, consent to Exchange Equities jurisdiction as a member or approved person (Exchange Rules 304—Equities and 311(b)— Equities). • Submit to the Exchange partnership or corporate documents as may be applicable including certificate of incorporation, by-laws, and other corporate documents (Exchange Rule 313.10—Equities and .20—Equities). • 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 (Exchange Rule 313.20—Equities). In addition, the Exchange reviews whether the applicant meets federal and Exchange capital requirements and whether it has adopted controls and procedures to comply with Exchange rules. Options Among other things, to be approved as an ATP Holder, 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 Exchange Rules 353 and 356. • Ensure that all persons associated with the applicant who meet the requirements of allied members and approved persons be approved (Exchange Rules 353, 355 and 356). • Submit to the Exchange partnership or corporate documents as may be applicable including certificate of incorporation, by-laws, and other corporate documents (Exchange Rules 353 and 356). E:\FR\FM\11JNN1.SGM 11JNN1 srobinson on DSK4SPTVN1PROD with NOTICES 34444 Federal Register / Vol. 77, No. 112 / Monday, June 11, 2012 / Notices In addition, the Exchange reviews whether the applicant meets federal and Exchange 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 or ATP Holder, the member organization and ATP Holder 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 Equities member organizations and ATP Holders, the Exchange believes that Apex Clearing should be approved immediately as an Exchange Equities member organization and ATP Holder. The Exchange notes that Apex Clearing is already a registered broker dealer and FINRA member, which are prerequisites for becoming an Exchange Equities member organization. See Exchange Rule 2(b)— Equities. The Exchange therefore proposes providing Apex Clearing with a temporary suspension of Exchange Rule 311—Equities and related membership rules as they relate to approval to operate an Exchange Equities member organization and approval of a proposed member organization’s approved persons, and immediately approve Apex Clearing as a member organization. Similarly, the Exchange proposes providing Apex Clearing with a temporary suspension of Exchange Rule 353 and related ATP Holder rules as they relate to approval to operate as an ATP Holder and approval of a proposed ATP Holder’s approved persons, and immediately approve Apex Clearing as an ATP Holder. As proposed this temporary suspension is contingent upon: • Apex Clearing providing the Exchange with sufficient information to confirm that Apex Clearing will meet its capital requirements as an Exchange Equities member organization and ATP Holder; and • Within 30 calendar days of Apex Clearing’s approval as an Exchange Equities member organization and ATP Holder under this proposed filing, Apex Clearing and its approved persons will have complied with the Exchange’s new member organization and ATP Holder requirements as set forth in Exchange VerDate Mar<15>2010 20:21 Jun 08, 2012 Jkt 226001 Rules 304—Equities, 311—Equities through 313—Equities, 353, 355 and 356. As proposed, if Apex Clearing does not comply with all applicable Exchange Equities member organization application requirements and ATP Holder requirements within 30 calendar days of the effective date of this filing, its status as an approved Exchange Equities member organization and ATP Holder 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 Exchange Equities member organizations and ATP Holders by execution of global agreements thereto.6 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) 7 of the Securities Exchange Act of 1934 (the ‘‘Act’’), in general, and furthers the objectives of Section 6(b)(5) 8 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 Exchange Equities member organization and an ATP Holder will avoid interruption of the services PFSI currently provides to other Exchange member organizations and ATP Holders. Based on information and representations provided by Apex Clearing, a temporary suspension of certain Exchange membership rules is needed based on the expedited nature of the transaction to enable seamless continuity with respect to the transferring accounts. Consequently, the Exchange believes that temporary suspension of its member organization and ATP Holder requirements so that Apex Clearing can be approved immediately as an Exchange Equities member organization and an ATP Holder will help to foster cooperation and coordination with persons engaged 6 See Exchange 954NY. U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). 7 15 PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 in 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 competition that is not necessary or appropriate in furtherance of the purposes of the Act. 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 9 and Rule 19b–4(f)(6) thereunder.10 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 11 and Rule 19b–4(f)(6)(iii) thereunder.12 A proposed rule change filed under Rule 19b–4(f)(6) 13 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),14 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 9 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 11 15 U.S.C. 78s(b)(3)(A). 12 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. 13 17 CFR 240.19b–4(f)(6). 14 17 CFR 240.19b–4(f)(6)(iii). 10 17 E:\FR\FM\11JNN1.SGM 11JNN1 Federal Register / Vol. 77, No. 112 / Monday, June 11, 2012 / Notices temporarily suspended so that Apex Clearing can be provisionally approved as an Exchange Equities member organization and ATP Holder. The proposed relief does not exempt Apex Clearing from Exchange rule requirements governing Exchange Equities member organizations and ATP 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.15 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: All submissions should refer to File Number SR–NYSEMKT–2012–06. 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– NYSEMKT–2012–06 and should be submitted on or before July 2, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–14067 Filed 6–8–12; 8:45 am] BILLING CODE 8011–01–P srobinson on DSK4SPTVN1PROD with NOTICES 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–NYSEMKT–2012–06 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. 15 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). VerDate Mar<15>2010 20:21 Jun 08, 2012 Jkt 226001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–67128; File No. SR– NYSEArca–2012–58] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Temporarily Suspending the Requirements of NYSE Arca Equities Rule 2.3, NYSE Arca Options Rule 2.4 and All Related NYSE Arca Equities and NYSE Arca Options Rules Concerning the Approval of New ETP Holders and OTP Holders in Order To Approve Apex Clearing Corporation, f/k/a Ridge Clearing and Outsourcing Solutions, Inc. as an NYSE Arca ETP Holder and OTP Holder, 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 for Membership 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, on June 5, 2012, NYSE Arca, Inc. (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 Arca Equities Rule 2.3, NYSE Arca Options Rule 2.4 and all related NYSE Arca Equities and NYSE Arca Options rules concerning the approval of new ETP Holders and OTP Holders in order to approve Apex Clearing Corporation, f/k/a Ridge Clearing and Outsourcing Solutions, Inc. (‘‘Apex Clearing’’) as an NYSE Arca ETP Holder and OTP Holder, 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 for membership. The Exchange is also proposing to accept Apex Clearing’s assumption of all of the existing clearing agreements and arrangements currently 1 15 U.S.C.78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 16 17 PO 00000 CFR 200.30–3(a)(12). Frm 00109 Fmt 4703 Sfmt 4703 34445 E:\FR\FM\11JNN1.SGM 11JNN1

Agencies

[Federal Register Volume 77, Number 112 (Monday, June 11, 2012)]
[Notices]
[Pages 34442-34445]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14067]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67129; File No. SR-NYSEMKT-2012-06]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Temporarily Suspending 
the Requirements of Exchange Rule 311--Equities and Related Exchange 
Equities Rules Concerning the Approval of New Member Organizations and 
Exchange Rule 353 and Related Exchange Rules Concerning the Approval of 
New ATP Holders in Order To Approve Apex Clearing Corporation, f/k/a 
Ridge Clearing and Outsourcing Solutions, Inc. as an Exchange Equities 
Member Organization and ATP Holder, Subject to Apex Clearing Complying 
With Exchange Rules for a New Member Organization and ATP Holder Within 
30 Calendar Days of the Date That Apex Clearing Is Provisionally 
Approved as an Exchange Equities Member Organization and ATP Holder

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 on June 5, 2012, NYSE MKT LLC (the ``Exchange'' or ``NYSE 
MKT'') 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 
(1) Exchange Rule 311--Equities and related Exchange Equities rules 
concerning the approval of new member organizations and (2) Exchange 
Rule 353 and related Exchange rules concerning the approval of new ATP 
Holders in order to approve Apex Clearing Corporation, f/k/a Ridge 
Clearing and Outsourcing Solutions, Inc. (``Apex Clearing'') as an 
Exchange Equities member organization and ATP Holder, subject to Apex 
Clearing complying with Exchange rules for a new member organization 
and ATP Holder within 30 calendar days of the date that Apex

[[Page 34443]]

Clearing is provisionally approved as an Exchange Equities member 
organization and ATP Holder. 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 Exchange Equities member 
organizations and ATP Holders 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 (1) Exchange Rule 311--Equities and related rules 
regarding the approval of member organizations and (2) Exchange Rule 
353 and related rules regarding the approval of ATP Holders in order to 
immediately approve Apex Clearing as an Exchange Equities member 
organization and ATP Holder. 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 Exchange Equities member organizations and ATP Holders. 
The proposed temporary suspension is contingent upon Apex Clearing 
having complied with all new member organization and ATP Holder 
Exchange rules within 30 calendar days of the date Apex Clearing is 
provisionally approved as an Exchange Equities member organization and 
ATP Holder 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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    As a result of the transaction, Apex Clearing, which is not an 
Exchange Equities member organization or an ATP Holder, 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 Exchange Equities member organization 
and as an ATP Holder. However because of the expedited nature of the 
transaction, Apex Clearing was unable to fully comply with Exchange 
Rule 311--Equities and related new member organization rules and 
Exchange Rule 353 and related new ATP Holder 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 and ATP Holder 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 and ATP Holder requirements within 
30 calendar days after provisional approval.
    Exchange Rules 311--Equities and 353 require any person who 
proposes to form a member organization or an ATP Holder to notify the 
Exchange in writing and submit such information as may be required by 
Exchange rules. When a corporate acquisition concerns an asset transfer 
only, and not an acquisition of the corporate entity, Exchange Equities 
member organization or ATP Holder status cannot be transferred to the 
acquiring entity. The entity that proposes to continue the acquired 
business operations of a member organization must be separately 
approved as an Exchange Equities member organization or ATP Holder.
Equities
    Among other things, to be approved as an Exchange Equities 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 Exchange 
Rules 304--Equities and 311--Equities (Rule 311.11--Equities).
     Ensure that all persons associated with the applicant who 
meet the requirements of approved persons under Exchange Rule 304--
Equities, consent to Exchange Equities jurisdiction as a member or 
approved person (Exchange Rules 304--Equities and 311(b)--Equities).
     Submit to the Exchange partnership or corporate documents 
as may be applicable including certificate of incorporation, by-laws, 
and other corporate documents (Exchange Rule 313.10--Equities and .20--
Equities).
     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 
(Exchange Rule 313.20--Equities).
    In addition, the Exchange reviews whether the applicant meets 
federal and Exchange capital requirements and whether it has adopted 
controls and procedures to comply with Exchange rules.
Options
    Among other things, to be approved as an ATP Holder, 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 Exchange 
Rules 353 and 356.
     Ensure that all persons associated with the applicant who 
meet the requirements of allied members and approved persons be 
approved (Exchange Rules 353, 355 and 356).
     Submit to the Exchange partnership or corporate documents 
as may be applicable including certificate of incorporation, by-laws, 
and other corporate documents (Exchange Rules 353 and 356).

[[Page 34444]]

    In addition, the Exchange reviews whether the applicant meets 
federal and Exchange 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 or ATP Holder, the member organization and ATP Holder 
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 
Equities member organizations and ATP Holders, the Exchange believes 
that Apex Clearing should be approved immediately as an Exchange 
Equities member organization and ATP Holder. The Exchange notes that 
Apex Clearing is already a registered broker dealer and FINRA member, 
which are prerequisites for becoming an Exchange Equities member 
organization. See Exchange Rule 2(b)--Equities.
    The Exchange therefore proposes providing Apex Clearing with a 
temporary suspension of Exchange Rule 311--Equities and related 
membership rules as they relate to approval to operate an Exchange 
Equities member organization and approval of a proposed member 
organization's approved persons, and immediately approve Apex Clearing 
as a member organization. Similarly, the Exchange proposes providing 
Apex Clearing with a temporary suspension of Exchange Rule 353 and 
related ATP Holder rules as they relate to approval to operate as an 
ATP Holder and approval of a proposed ATP Holder's approved persons, 
and immediately approve Apex Clearing as an ATP Holder. As proposed 
this temporary suspension is contingent upon:
     Apex Clearing providing the Exchange with sufficient 
information to confirm that Apex Clearing will meet its capital 
requirements as an Exchange Equities member organization and ATP 
Holder; and
     Within 30 calendar days of Apex Clearing's approval as an 
Exchange Equities member organization and ATP Holder under this 
proposed filing, Apex Clearing and its approved persons will have 
complied with the Exchange's new member organization and ATP Holder 
requirements as set forth in Exchange Rules 304--Equities, 311--
Equities through 313--Equities, 353, 355 and 356.
    As proposed, if Apex Clearing does not comply with all applicable 
Exchange Equities member organization application requirements and ATP 
Holder requirements within 30 calendar days of the effective date of 
this filing, its status as an approved Exchange Equities member 
organization and ATP Holder 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 Exchange Equities member organizations and ATP 
Holders by execution of global agreements thereto.\6\ 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.
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    \6\ See Exchange 954NY.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) \7\ of the Securities Exchange Act of 1934 (the ``Act''), 
in general, and furthers the objectives of Section 6(b)(5) \8\ 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 Exchange 
Equities member organization and an ATP Holder will avoid interruption 
of the services PFSI currently provides to other Exchange member 
organizations and ATP Holders. Based on information and representations 
provided by Apex Clearing, a temporary suspension of certain Exchange 
membership rules is needed based on the expedited nature of the 
transaction to enable seamless continuity with respect to the 
transferring accounts. Consequently, the Exchange believes that 
temporary suspension of its member organization and ATP Holder 
requirements so that Apex Clearing can be approved immediately as an 
Exchange Equities member organization and an ATP Holder will help to 
foster cooperation and coordination with persons engaged in 
facilitating transactions in securities and is consistent with the Act.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 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 competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

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 \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
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 \11\ and Rule 19b-
4(f)(6)(iii) thereunder.\12\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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) \13\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
---------------------------------------------------------------------------

    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    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

[[Page 34445]]

temporarily suspended so that Apex Clearing can be provisionally 
approved as an Exchange Equities member organization and ATP Holder. 
The proposed relief does not exempt Apex Clearing from Exchange rule 
requirements governing Exchange Equities member organizations and ATP 
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.\15\
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    \15\ 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).
---------------------------------------------------------------------------

    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-NYSEMKT-2012-06 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-NYSEMKT-2012-06. 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-NYSEMKT-2012-06 and should 
be submitted on or before July 2, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-14067 Filed 6-8-12; 8:45 am]
BILLING CODE 8011-01-P
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