Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Temporary Suspension of Those Aspects of Rules 36.20-Equities, 36.21-Equities, and 36.30-Equities That Would Not Permit Designated Market Makers and Floor Brokers To Use Personal Portable Phone Devices on the Trading Floor Following the Aftermath of Hurricane Sandy From November 5, 2012 Until the Earlier of When Phone Service Is Fully Restored or Friday, November 9, 2012, 67720-67722 [2012-27549]
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Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Notices
All submissions should refer to File
Number SR–NYSEArca–2012–120. 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 Section, 100 F Street NE.,
Washington, DC 20549–1090, on official
business days between 10:00 a.m. and
3:00 p.m. Copies of the filing will also
be available for inspection and copying
at the NYSE’s principal office and on its
Internet Web site at www.nyse.com. 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–NYSEArca–2012–120 and
should be submitted on or before
December 4, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–27551 Filed 11–9–12; 8:45 am]
srobinson on DSK4SPTVN1PROD with
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68162; File No. SR–
NYSEMKT–2012–62]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the Temporary
Suspension of Those Aspects of Rules
36.20—Equities, 36.21—Equities, and
36.30—Equities That Would Not Permit
Designated Market Makers and Floor
Brokers To Use Personal Portable
Phone Devices on the Trading Floor
Following the Aftermath of Hurricane
Sandy From November 5, 2012 Until
the Earlier of When Phone Service Is
Fully Restored or Friday, November 9,
2012
November 5, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
5, 2012, NYSE MKT LLC (‘‘NYSE MKT’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘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 extend the
temporary suspension of those aspects
of Rules 36.20—Equities, 36.21—
Equities, and 36.30—Equities that
would not permit Designated Market
Makers (‘‘DMMs’’) and Floor brokers to
use personal portable phone devices on
the Trading Floor following the
aftermath of Hurricane Sandy from
November 5, 2012 until the earlier of
when phone service is fully restored or
Friday, November 9, 2012. 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
1 15
27 17
CFR 200.30–3(a)(12).
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2 17
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PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00094
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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
On Thursday, November 1, 2012, the
Exchange filed a rule proposal to
temporarily suspend those aspects of
Rules 36.20—Equities, 36.21—Equities,
and 36.30—Equities that would not
permit Floor brokers and Designated
Market Makers (‘‘DMMs’’) to use
personal portable phone devices on the
Trading Floor 3 following the aftermath
of Hurricane Sandy and during the
period that phone service was not fully
functional.4 Pursuant to that filing, all
other aspects of those rules remained
applicable and the temporary
suspensions of Rule 36 requirements
were in effect beginning the first day
trading resumed following Hurricane
Sandy until Friday, November 2, 2012.
As of Monday, November 5, 2012,
although power has been restored to the
downtown Manhattan vicinity, other
services are not yet fully operational.
Among other things, the telephone
services provided by third-party carriers
to the Exchange are still not fully
operational on the Trading Floor, which
impacts the ability of Floor members to
communicate from the Trading Floor as
permitted by Rule 36—Equities.
Because of intermittent cell phone
service, many Exchange authorized and
provided portable phones continue to
not be functional and therefore Floor
brokers still cannot use the Exchange
authorized and provided portable
phones, pursuant to Rules 36.20—
Equities and 36.21—Equities. In certain
instances, however, the personal cell
phones of Floor brokers are operational
on the Trading Floor. The Exchange
believes that because communications
with customers is a vital part of a Floor
broker’s role as agent and therefore
contributes to maintaining a fair and
orderly market, during the period when
phone service continues to be
intermittent, Floor brokers should be
3 Pursuant to Rule 6A—Equities, the Trading
Floor is defined as the restricted-access physical
areas designated by the Exchange for the trading of
securities, but does not include the physical
locations where NYSE Amex Options are traded.
4 See Securities Exchange Act Release No. 68138
(Nov. 1, 2012) (SR–NYSEMKT–2012–59).
E:\FR\FM\13NON1.SGM
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srobinson on DSK4SPTVN1PROD with
Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Notices
permitted to use personal portable
phone devices in lieu of the nonoperational Exchange authorized and
provided portable phones.
Similarly, the Exchange continues to
experience problems with the DMM
unit wired telephone lines, which are
permitted pursuant to Rule 36.30—
Equities. In some circumstances, the
DMM unit location at the Trading Floor
post may receive incoming calls, but the
phones are not capable of making
outgoing calls. The continued inability
of a DMM unit to use its telephone lines
could impact the ability of a DMM unit
to comply with its obligations in
securities registered to the DMM unit.
For example, if a DMM unit experiences
connectivity issues or problems with its
algorithms and needs to speak with one
of its back-office support teams, with
the current phone limitations, the DMM
would not be able to do so.
Accordingly, the Exchange proposes
to extend the temporary suspension of
those aspects of Rules 36.20—Equities,
36.21—Equities, and 36.30—Equities
that would not permit Floor brokers and
DMMs to use personal portable phone
devices on the Trading Floor. The
Exchange proposes that the extension of
the temporary suspension of those
aspects of Rules 36.20—Equities,
36.21—Equities, and 36.30—Equities to
permit use of the personal portable
phones on the Trading Floor be
pursuant to the same terms and
conditions of the temporary suspension
filed for October 31, 2012 through
November 2, 2012, including the record
retention requirements related to any
use of personal portable phones.5
In particular, as set forth in the prior
filing, Floor brokers and DMMs that use
a portable personal phone must provide
the Exchange with the names of all
Floor-based personnel who used
personal portable phones during this
temporary suspension period, together
with the phone number and applicable
carrier for each number. Floor broker
and DMM member organizations must
maintain in their books and records all
cell phone records that show both
incoming and outgoing calls that were
made during the period that a personal
portable phone was used on the Trading
Floor. To the extent the records are
unavailable from the third-party carrier,
the Floor broker and DMM member
organizations must maintain
contemporaneous records of all calls
made or received on a personal portable
phone while on the Trading Floor. As
with all member organization records,
such cell phone records must be
5 See id. (notice that describes the terms and
conditions of the temporary suspension).
VerDate Mar<15>2010
17:08 Nov 09, 2012
Jkt 229001
provided to Exchange regulatory staff,
including without limitation staff of the
Financial Industry Regulatory Authority
(‘‘FINRA’’), on request.
In addition, the Exchange further
notes that DMM units and their Floorbased personnel would remain subject
to both the Rule 36.30—Equities and
98—Equities limitations of whom they
may contact directly from the Trading
Floor.6 However, because of the
extensive, ongoing issues with power
and phone lines in the New York City
area and vicinity, the persons with
whom a DMM may be permitted to
communicate from the Trading Floor
may not be at their regular physical
location. Accordingly, the Exchange
proposes to continue to temporarily
permit DMMs to use their personal
portable phones to contact the off-Floor
persons that they are permitted to
contact by rule, even if such off-Floor
personnel are not located in their
regular office locations. The Exchange
believes that this relief is consistent
with guidance issued by FINRA, which
recognizes that in the aftermath of
Hurricane Sandy, a FINRA member may
relocate displaced office personnel to
temporary locations.7
As noted above, because the Exchange
is dependent on third-party carriers for
both wired and wireless phone service
on the Trading Floor, the Exchange does
not know how long the proposed
temporary suspension will be required.
However, based on current estimates,
the Exchange understands that phone
service may not be fully restored until
at least Wednesday, November 7, 2012,
and most likely later than that date.
Accordingly, the Exchange proposes
that the extension of the temporary
suspensions of those aspects of Rule
36—Equities that do not permit DMMs
or Floor brokers to use personal portable
phones on the Trading Floor continue
until the earlier of when phone service
is fully restored or Friday, November 9,
2012.8
6 Rule 36.30—Equities restricts a DMM unit from
using the post telephone lines to transmit to the
Floor orders for the purchase or sale of securities.
In addition, Rule 98 sets forth restrictions on
communications between the Floor-based personnel
of a DMM unit and off-Floor personnel. See, e.g.,
Rules 98(c)(2)(A)—Equities, (d)(2)(B)(iii)—Equities,
(f)(1)(A)(ii)—Equities, and (f)(2)(A)—Equities.
7 See FINRA Regulatory Notice 12–45. The
Exchange notes that all member organizations
operating a DMM unit are also FINRA members,
and therefore subject to the guidance set forth in
FINRA Regulatory Notice 12–45.
8 The Exchange will provide notice of this rule
filing to the DMMs and Floor brokers, including the
applicable recordkeeping and other requirements. If
telephone service is fully restored prior to
November 9, 2012, the Exchange will notify DMMs
and Floor brokers that the temporary suspension of
those aspects of Rule 36 that do not permit the use
PO 00000
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Sfmt 4703
67721
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,9 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,10 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system.
In particular, in the aftermath of
Hurricane Sandy, while the Exchange
was able to open for trading, many of
the services that the Exchange depends
on from third-party carriers, such as
wired and wireless telephone
connections, are not fully restored. The
Exchange believes that the proposed
extension of the temporary suspensions
from those aspects of Rule 36—Equities
that restrict the use of personal portable
phones on the Trading Floor removes
impediments to and perfects the
mechanism of a free and open market
and national market system because the
proposed relief will enable both Floor
brokers and DMMs to conduct their
regular business, notwithstanding the
ongoing issues with telephone service.
The Exchange further believes that
without the requested relief, both Floor
brokers and DMMs would be
compromised in their ability to conduct
their regular course of business on the
Trading Floor, which could adversely
impact the market generally and
investor confidence during this time of
unprecedented weather disruptions. In
particular, for Floor brokers, because
they operate as agents for customers,
their inability to communicate with
customers could compromise their
ability to represent public orders on the
Trading Floor. For DMM units, any
inability to communicate with
personnel from their off-Floor offices,
clearing firms, or non-trading related
support staff, regardless of where such
off-Floor personnel may be located in
the aftermath of Hurricane Sandy, could
compromise the DMM unit’s ability to
meet their obligations, particularly if the
DMM unit experiences issues with
connectivity or its algorithms.
of personal portable phones on the Trading Floor
has expired as of the time that phone service is fully
restored.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
E:\FR\FM\13NON1.SGM
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67722
Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Notices
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
IV. Solicitation of Comments
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
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,
the proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 11 and Rule 19b–4(f)(6)
thereunder.12
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 13 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6) 14
permits the Commission to 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. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest. The Commission notes that
doing so will allow the Exchange to
continue uninterrupted the emergency
temporary relief necessitated by
Hurricane Sandy’s disruption of
telephone service, as described herein
and in the Exchange’s prior filing
seeking such relief, until the earlier of
when phone service is fully restored or
Friday, November 9, 2012. Therefore,
the Commission hereby waives the 3011 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
13 17 CFR 240.19b–4(f)(6).
14 17 CFR 240.19b–4(f)(6).
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12 17
VerDate Mar<15>2010
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day operative delay and designates the
proposal 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.
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–NYSEMKT–2012–62 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–2012–62. 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
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).
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
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–2012–62 and should be
submitted on or before December 4,
2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–27549 Filed 11–9–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68170; File No. 4–655]
Self-Regulatory Organizations; BOX
Options Exchange LLC; Notice of
Filing of Proposed Minor Rule
Violation Plan
November 6, 2012.
Pursuant to Section 19(d)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19d–1(c)(2)
thereunder,2 notice is hereby given that
on October 15, 2012, BOX Options
Exchange LLC (the ‘‘Exchange’’), filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) a
proposed minor rule violation plan
(‘‘MRVP’’) with sanctions not exceeding
$2,500 which would not be subject to
the provisions of Rule 19d–1(c)(1) of the
Act 3 requiring that a self-regulatory
organization (‘‘SRO’’) promptly file
notice with the Commission of any final
disciplinary action taken with respect to
any person or organization.4 In
accordance with Rule 19d–1(c)(2) under
the Act, the Exchange proposed to
designate certain specified rule
16 17
CFR 200.30–3(a)(12).
U.S.C. 78s(d)(1).
2 17 CFR 240.19d–1(c)(2).
3 17 CFR 240.19d–1(c)(1).
4 The Commission adopted amendments to
paragraph (c) of Rule 19d–1 to allow SROs to
submit for Commission approval plans for the
abbreviated reporting of minor disciplinary
infractions. See Securities Exchange Act Release
No. 21013 (June 1, 1984), 49 FR 23828 (June 8,
1984). Any disciplinary action taken by an SRO
against any person for violation of a rule of the SRO
which has been designated as a minor rule violation
pursuant to such a plan filed with and declared
effective by the Commission shall not be considered
‘‘final’’ for purposes of Section 19(d)(1) of the Act
if the sanction imposed consists of a fine not
exceeding $2,500 and the sanctioned person has not
sought an adjudication, including a hearing, or
otherwise exhausted his administrative remedies.
1 15
E:\FR\FM\13NON1.SGM
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]]>Agencies
[Federal Register Volume 77, Number 219 (Tuesday, November 13, 2012)]
[Notices]
[Pages 67720-67722]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27549]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68162; File No. SR-NYSEMKT-2012-62]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change To Extend the Temporary
Suspension of Those Aspects of Rules 36.20--Equities, 36.21--Equities,
and 36.30--Equities That Would Not Permit Designated Market Makers and
Floor Brokers To Use Personal Portable Phone Devices on the Trading
Floor Following the Aftermath of Hurricane Sandy From November 5, 2012
Until the Earlier of When Phone Service Is Fully Restored or Friday,
November 9, 2012
November 5, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 5, 2012, NYSE MKT LLC (``NYSE MKT'' or ``Exchange'') filed
with the Securities and Exchange Commission (``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\ 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 extend the temporary suspension of those
aspects of Rules 36.20--Equities, 36.21--Equities, and 36.30--Equities
that would not permit Designated Market Makers (``DMMs'') and Floor
brokers to use personal portable phone devices on the Trading Floor
following the aftermath of Hurricane Sandy from November 5, 2012 until
the earlier of when phone service is fully restored or Friday, November
9, 2012. 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
On Thursday, November 1, 2012, the Exchange filed a rule proposal
to temporarily suspend those aspects of Rules 36.20--Equities, 36.21--
Equities, and 36.30--Equities that would not permit Floor brokers and
Designated Market Makers (``DMMs'') to use personal portable phone
devices on the Trading Floor \3\ following the aftermath of Hurricane
Sandy and during the period that phone service was not fully
functional.\4\ Pursuant to that filing, all other aspects of those
rules remained applicable and the temporary suspensions of Rule 36
requirements were in effect beginning the first day trading resumed
following Hurricane Sandy until Friday, November 2, 2012.
---------------------------------------------------------------------------
\3\ Pursuant to Rule 6A--Equities, the Trading Floor is defined
as the restricted-access physical areas designated by the Exchange
for the trading of securities, but does not include the physical
locations where NYSE Amex Options are traded.
\4\ See Securities Exchange Act Release No. 68138 (Nov. 1, 2012)
(SR-NYSEMKT-2012-59).
---------------------------------------------------------------------------
As of Monday, November 5, 2012, although power has been restored to
the downtown Manhattan vicinity, other services are not yet fully
operational. Among other things, the telephone services provided by
third-party carriers to the Exchange are still not fully operational on
the Trading Floor, which impacts the ability of Floor members to
communicate from the Trading Floor as permitted by Rule 36--Equities.
Because of intermittent cell phone service, many Exchange
authorized and provided portable phones continue to not be functional
and therefore Floor brokers still cannot use the Exchange authorized
and provided portable phones, pursuant to Rules 36.20--Equities and
36.21--Equities. In certain instances, however, the personal cell
phones of Floor brokers are operational on the Trading Floor. The
Exchange believes that because communications with customers is a vital
part of a Floor broker's role as agent and therefore contributes to
maintaining a fair and orderly market, during the period when phone
service continues to be intermittent, Floor brokers should be
[[Page 67721]]
permitted to use personal portable phone devices in lieu of the non-
operational Exchange authorized and provided portable phones.
Similarly, the Exchange continues to experience problems with the
DMM unit wired telephone lines, which are permitted pursuant to Rule
36.30--Equities. In some circumstances, the DMM unit location at the
Trading Floor post may receive incoming calls, but the phones are not
capable of making outgoing calls. The continued inability of a DMM unit
to use its telephone lines could impact the ability of a DMM unit to
comply with its obligations in securities registered to the DMM unit.
For example, if a DMM unit experiences connectivity issues or problems
with its algorithms and needs to speak with one of its back-office
support teams, with the current phone limitations, the DMM would not be
able to do so.
Accordingly, the Exchange proposes to extend the temporary
suspension of those aspects of Rules 36.20--Equities, 36.21--Equities,
and 36.30--Equities that would not permit Floor brokers and DMMs to use
personal portable phone devices on the Trading Floor. The Exchange
proposes that the extension of the temporary suspension of those
aspects of Rules 36.20--Equities, 36.21--Equities, and 36.30--Equities
to permit use of the personal portable phones on the Trading Floor be
pursuant to the same terms and conditions of the temporary suspension
filed for October 31, 2012 through November 2, 2012, including the
record retention requirements related to any use of personal portable
phones.\5\
---------------------------------------------------------------------------
\5\ See id. (notice that describes the terms and conditions of
the temporary suspension).
---------------------------------------------------------------------------
In particular, as set forth in the prior filing, Floor brokers and
DMMs that use a portable personal phone must provide the Exchange with
the names of all Floor-based personnel who used personal portable
phones during this temporary suspension period, together with the phone
number and applicable carrier for each number. Floor broker and DMM
member organizations must maintain in their books and records all cell
phone records that show both incoming and outgoing calls that were made
during the period that a personal portable phone was used on the
Trading Floor. To the extent the records are unavailable from the
third-party carrier, the Floor broker and DMM member organizations must
maintain contemporaneous records of all calls made or received on a
personal portable phone while on the Trading Floor. As with all member
organization records, such cell phone records must be provided to
Exchange regulatory staff, including without limitation staff of the
Financial Industry Regulatory Authority (``FINRA''), on request.
In addition, the Exchange further notes that DMM units and their
Floor-based personnel would remain subject to both the Rule 36.30--
Equities and 98--Equities limitations of whom they may contact directly
from the Trading Floor.\6\ However, because of the extensive, ongoing
issues with power and phone lines in the New York City area and
vicinity, the persons with whom a DMM may be permitted to communicate
from the Trading Floor may not be at their regular physical location.
Accordingly, the Exchange proposes to continue to temporarily permit
DMMs to use their personal portable phones to contact the off-Floor
persons that they are permitted to contact by rule, even if such off-
Floor personnel are not located in their regular office locations. The
Exchange believes that this relief is consistent with guidance issued
by FINRA, which recognizes that in the aftermath of Hurricane Sandy, a
FINRA member may relocate displaced office personnel to temporary
locations.\7\
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\6\ Rule 36.30--Equities restricts a DMM unit from using the
post telephone lines to transmit to the Floor orders for the
purchase or sale of securities. In addition, Rule 98 sets forth
restrictions on communications between the Floor-based personnel of
a DMM unit and off-Floor personnel. See, e.g., Rules 98(c)(2)(A)--
Equities, (d)(2)(B)(iii)--Equities, (f)(1)(A)(ii)--Equities, and
(f)(2)(A)--Equities.
\7\ See FINRA Regulatory Notice 12-45. The Exchange notes that
all member organizations operating a DMM unit are also FINRA
members, and therefore subject to the guidance set forth in FINRA
Regulatory Notice 12-45.
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As noted above, because the Exchange is dependent on third-party
carriers for both wired and wireless phone service on the Trading
Floor, the Exchange does not know how long the proposed temporary
suspension will be required. However, based on current estimates, the
Exchange understands that phone service may not be fully restored until
at least Wednesday, November 7, 2012, and most likely later than that
date. Accordingly, the Exchange proposes that the extension of the
temporary suspensions of those aspects of Rule 36--Equities that do not
permit DMMs or Floor brokers to use personal portable phones on the
Trading Floor continue until the earlier of when phone service is fully
restored or Friday, November 9, 2012.\8\
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\8\ The Exchange will provide notice of this rule filing to the
DMMs and Floor brokers, including the applicable recordkeeping and
other requirements. If telephone service is fully restored prior to
November 9, 2012, the Exchange will notify DMMs and Floor brokers
that the temporary suspension of those aspects of Rule 36 that do
not permit the use of personal portable phones on the Trading Floor
has expired as of the time that phone service is fully restored.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\10\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, and to remove impediments to and perfect
the mechanism of a free and open market and a national market system.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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In particular, in the aftermath of Hurricane Sandy, while the
Exchange was able to open for trading, many of the services that the
Exchange depends on from third-party carriers, such as wired and
wireless telephone connections, are not fully restored. The Exchange
believes that the proposed extension of the temporary suspensions from
those aspects of Rule 36--Equities that restrict the use of personal
portable phones on the Trading Floor removes impediments to and
perfects the mechanism of a free and open market and national market
system because the proposed relief will enable both Floor brokers and
DMMs to conduct their regular business, notwithstanding the ongoing
issues with telephone service. The Exchange further believes that
without the requested relief, both Floor brokers and DMMs would be
compromised in their ability to conduct their regular course of
business on the Trading Floor, which could adversely impact the market
generally and investor confidence during this time of unprecedented
weather disruptions. In particular, for Floor brokers, because they
operate as agents for customers, their inability to communicate with
customers could compromise their ability to represent public orders on
the Trading Floor. For DMM units, any inability to communicate with
personnel from their off-Floor offices, clearing firms, or non-trading
related support staff, regardless of where such off-Floor personnel may
be located in the aftermath of Hurricane Sandy, could compromise the
DMM unit's ability to meet their obligations, particularly if the DMM
unit experiences issues with connectivity or its algorithms.
[[Page 67722]]
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
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, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \13\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6) \14\ permits the Commission to
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. The Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. The Commission notes
that doing so will allow the Exchange to continue uninterrupted the
emergency temporary relief necessitated by Hurricane Sandy's disruption
of telephone service, as described herein and in the Exchange's prior
filing seeking such relief, until the earlier of when phone service is
fully restored or Friday, November 9, 2012. Therefore, the Commission
hereby waives the 30-day operative delay and designates the proposal
operative upon filing.\15\
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6).
\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).
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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.
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-2012-62 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-2012-62. 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-2012-62 and should
be submitted on or before December 4, 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. 2012-27549 Filed 11-9-12; 8:45 am]
BILLING CODE 8011-01-P
