Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Temporary Suspension of Those Aspects of Rules 36.20 and 36.21 That Would Not Permit Floor Brokers To Use Personal Portable Phone Devices on the Trading Floor Following the Aftermath of Hurricane Sandy Until the Earlier of When Phone Service Is Fully Restored or Friday, January 18, 2013, 75683-75686 [2012-30795]
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Federal Register / Vol. 77, No. 246 / Friday, December 21, 2012 / Notices
Exchange further believes that without
the requested relief, Floor brokers
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.
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,
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 16 and Rule 19b–4(f)(6)(iii)
thereunder.17
A proposed rule change filed under
Rule 19b–4(f)(6) 18 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),19 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
mstockstill on DSK4VPTVN1PROD with
16 15
U.S.C. 78s(b)(3)(A).
17 17 CFR 240.19b–4(f)(6)(iii). 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.
18 17 CFR 240.19b–4(f)(6).
19 17 CFR 240.19b–4(f)(6)(iii).
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75683
operative delay so that the proposal may
become operative immediately upon
filing. 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, for Floor brokers, the
emergency temporary relief necessitated
by Hurricane Sandy’s disruption of
telephone service, as described herein
and in the Exchange’s prior filings
seeking such relief, and to help
maintain the status quo, until the earlier
of when phone service for Floor brokers
is fully restored or January 18, 2013.
Therefore, the Commission hereby
waives the 30-day operative delay and
designates the proposal operative upon
filing.20
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.
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–2012–82 and should be
submitted on or before January 11, 2013.
IV. Solicitation of Comments
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Kevin M. O’Neill,
Deputy Secretary.
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–2012–82 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–2012–82. 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/
20 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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[FR Doc. 2012–30794 Filed 12–20–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68452; File No. SR–NYSE–
2012–73]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Extending the
Temporary Suspension of Those
Aspects of Rules 36.20 and 36.21 That
Would Not Permit Floor Brokers To
Use Personal Portable Phone Devices
on the Trading Floor Following the
Aftermath of Hurricane Sandy Until the
Earlier of When Phone Service Is Fully
Restored or Friday, January 18, 2013
December 17, 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 December 13,
2012, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with
21 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. 246 / Friday, December 21, 2012 / Notices
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 extend the
temporary suspension of those aspects
of Rules 36.20 and 36.21 that would not
permit Floor brokers to use personal
portable phone devices on the Trading
Floor following the aftermath of
Hurricane Sandy until the earlier of
when phone service is fully restored or
Friday, January 18, 2013. 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
mstockstill on DSK4VPTVN1PROD with
1. Purpose
On Thursday, November 1, 2012, the
Exchange filed a rule proposal to
temporarily suspend those aspects of
Rules 36.20, 36.21, and 36.30 that
would not permit Floor brokers and
Designated Market Makers (‘‘DMMs’’) to
use personal portable phone devices on
the Trading Floor 4 following the
aftermath of Hurricane Sandy and
during the period that phone service
was not fully functional.5 Pursuant to
4 Pursuant to Rule 6A, 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.
5 See Securities Exchange Act Release No. 68137
(Nov. 1, 2012), 77 FR 66893 (Nov. 7, 2012) (SR–
NYSE–2012–58).
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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.
On November 5, 2012, although
power had been restored to the
downtown Manhattan vicinity, other
services were not yet fully operational.
Among other things, the telephone
services provided by third-party carriers
to the Exchange were still not fully
operational on the Trading Floor, which
continued to impact the ability of Floor
members to communicate from the
Trading Floor as permitted by Rule 36.
Accordingly, the Exchange filed to
extend the temporary suspension of
those aspects of Rules 36.20, 36.21, and
36.30 that would not permit Floor
brokers and DMMs to use personal
portable phone devices on the Trading
Floor to the earlier of phone service
being restored or November 9, 2012,6
which was subject 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.7 On November 9, 2012, the
Exchange filed an additional extension
of the temporary suspension of those
aspects of Rules 36.20 and 36.21 that
would not permit Floor brokers to use
personal portable phone devices on the
Trading Floor to the earlier of phone
service being restored or November 16,
2012, again subject to the same terms
and conditions of the original temporary
suspension that was filed.8 On
November 19, 2012, the Exchange filed
to extend the temporary suspension of
those aspects of Rules 36.20 and 36.21
that would not permit Floor brokers to
use personal portable phone devices on
the Trading Floor to the earlier of when
phone service is fully restored or Friday,
December 14, 2012, again subject to the
same terms and conditions of the
original temporary suspension that was
filed.9 The continued extension of the
temporary suspension was needed
6 See Securities Exchange Act Release No. 68161
(Nov. 5, 2012), 77 FR 67704 (Nov. 12, 2012) (SR–
NYSE–2012–61).
7 See supra note 5 (notice that describes the terms
and conditions of the temporary suspension).
8 See Securities Exchange Act Release No. 68211
(Nov. 9, 2012), 77 FR 69534 (Nov. 19, 2012) (SR–
NYSE–2012–64). Because the telephone lines for
the DMMs were operational, the Exchange did not
need to extend the temporary suspension of Rule
36.30 as it related to DMMs.
9 See Securities Exchange Act Release No. 68271
(Nov. 20, 2012), 77 FR 70862 (Nov. 27, 2012) (SR–
NYSE–2012–67). Relief was not extended for
DMM’s. [sic] See infra note 11.
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because of the ongoing intermittent
phone and internet service. Specifically,
the wired telephone lines and internet
connections for Floor brokers continue
to not be functional, many Exchange
authorized and provided portable
phones continue to not be functional
and therefore Floor brokers still could
not consistently use the Exchange
authorized and provided portable
phones, pursuant to Rules 36.20 and
36.21. The Exchange now seeks another
extension of the temporary suspension
of those aspects of Rules 36.20 and
36.21 because of ongoing telephone and
Internet issues.
The Exchange has been advised by its
third-party carrier that the damage to
the telephone connections continues to
be more extensive than previously
anticipated. In addition, there has been
damage to the internet connections
available to Floor brokers on the
Trading Floor, which has adversely
impacted service. In particular, the
Exchange notes that the lines that
support both the wired and wireless
phone connections and internet
connections for the Floor brokers are
based in an area of lower Manhattan
that suffered extensive damage as a
result of Hurricane Sandy. The type of
damage that was sustained will, in some
cases, require the third-party carrier to
rebuild the infrastructure that supports
these services, rather than engage in
repairs of existing lines. While such
rebuilding and repairs are in process,
the telephone line and internet
connections for Floor brokers still are
not fully operational and may not be so
for at least another month, possibly
more given the type of work that needs
to be completed to restore the telephone
services.
Because of the ongoing intermittent
phone and internet service, many
Exchange authorized and provided
portable phones continue to not be
functional and therefore many Floor
brokers still cannot consistently use the
Exchange authorized and provided
portable phones, pursuant to Rules
36.20 and 36.21. In addition, many of
the wired telephone lines and internet
connections for Floor brokers continue
to not be functional. 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 and internet service continues to
be intermittent, Floor brokers should be
permitted to use personal portable
phone devices in lieu of the non-
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Federal Register / Vol. 77, No. 246 / Friday, December 21, 2012 / Notices
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operational Exchange authorized and
provided portable phones, wired phone
lines, or internet connections.10
Accordingly, the Exchange proposes
to extend the temporary suspension of
those aspects of Rules 36.20 and 36.21
that would not permit Floor brokers to
use personal portable phone devices on
the Trading Floor to the earlier of when
phone service is fully restored or Friday,
January 18, 2013.11 The Exchange
proposes that the extension of the
temporary suspension of those aspects
of Rules 36.20 and 36.21 to permit use
of the personal portable phones by Floor
brokers 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.12
In particular, as set forth in the prior
filings, Floor brokers that use a portable
personal phone must provide the
Exchange with the names of all Floorbased personnel who used personal
portable phones during this temporary
suspension period, together with the
phone number and applicable carrier for
each number. Floor broker 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 thirdparty carrier, the Floor broker 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
10 To the extent that Exchange-approved
telephone or electronic communications are
operational, Floor brokers must use those
connections rather than use a personal portable
phone. Specifically, the Exchange states that Floor
brokers must return to pre-Hurricane Sandy
communications at any point when service is
restored even if temporary.
11 Consistent with the existing relief, Exchange is
not proposing to provide any relief to DMMs in this
proposal. Because phone service to DMMs has been
restored, the existing relief does not provide for a
temporary suspension of Rule 36.30—Equities,
which prohibits DMMs from using personal
portable phones on the Trading Floor. Similarly,
because the off-Floor locations for DMMs have been
restored, the existing relief does not provide for the
temporary suspension for DMMs to be permitted to
communicate with off-Floor personnel who may not
be located at their regular physical location. The
Exchange is not proposing to provide such relief in
this proposal. See supra notes 5 and 6 (notices
describing the relief previously requested for
DMMs).
12 See supra note 5 (notice that describes the
terms and conditions of the temporary suspension).
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Financial Industry Regulatory Authority
(‘‘FINRA’’), on request.
In addition, to the extent that personal
portable phones are used to replicate
internet connections previously
approved pursuant to Rule 36 that are
not operational on the Trading Floor
because of damage sustained by
Hurricane Sandy, such use is subject to
the same requirements that would
otherwise be applicable, including
record-retention requirements. This
emergency relief is solely meant to
maintain the status quo to the extent
provided in Rule 36 and not intended to
broaden the scope of the activities
allowed pursuant to the Rule (e.g.,
accessing internet only at the booth). As
with all member organization records,
such cell phone data records must be
provided to Exchange regulatory staff,
including without limitation staff of the
Financial Industry Regulatory Authority
(‘‘FINRA’’), on request. To the extent
that Exchange-approved telephone or
electronic communications are
operational, Floor brokers must use
those connections rather than use a
personal portable phone. Specifically,
the Exchange states that Floor brokers
must return to pre-Hurricane Sandy
communications at any point when
service is restored even if temporary.
As noted above, because the Exchange
is dependent on third-party carriers for
both wired and wireless phone service
and internet connections on the Trading
Floor, the Exchange does not know how
long the proposed temporary
suspension of Rules 36.20 and 36.21
will be required. However, based on
current estimates, the Exchange
understands that phone service may not
be fully restored for at least another
month, possibly more.
Accordingly, the Exchange proposes
that the extension of the temporary
suspensions of those aspects of Rule 36
that do not permit Floor brokers to use
personal portable phones on the Trading
Floor continue until the earlier of when
phone service is fully restored or Friday,
January 18, 2013.13
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,14 in general, and
furthers the objectives of Section 6(b)(5)
13 The Exchange will provide notice of this rule
filing to Floor brokers, including the applicable
recordkeeping and other requirements. If telephone
service is fully restored prior to January 18, 2013,
the Exchange will notify 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.
14 15 U.S.C. 78f(b).
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Frm 00080
Fmt 4703
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75685
of the Act,15 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 that
restrict Floor broker’s 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
Floor brokers to conduct their regular
business, notwithstanding the ongoing
issues with telephone service. The
Exchange further believes that without
the requested relief, Floor brokers
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.
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
15 15
E:\FR\FM\21DEN1.SGM
U.S.C. 78f(b)(5).
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75686
Federal Register / Vol. 77, No. 246 / Friday, December 21, 2012 / Notices
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 16 and Rule 19b–4(f)(6)(iii)
thereunder.17
A proposed rule change filed under
Rule 19b–4(f)(6) 18 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),19 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 proposal may
become operative immediately upon
filing. 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, for Floor brokers, the
emergency temporary relief necessitated
by Hurricane Sandy’s disruption of
telephone service, as described herein
and in the Exchange’s prior filings
seeking such relief, and to help
maintain the status quo, until the earlier
of when phone service for Floor brokers
is fully restored or January 18, 2013.
Therefore, the Commission hereby
waives the 30-day operative delay and
designates the proposal operative upon
filing.20
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
16 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii). 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.
18 17 CFR 240.19b–4(f)(6).
19 17 CFR 240.19b–4(f)(6)(iii).
20 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).
mstockstill on DSK4VPTVN1PROD with
17 17
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18:28 Dec 20, 2012
Jkt 229001
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:
[FR Doc. 2012–30795 Filed 12–20–12; 8:45 am]
Electronic Comments
BILLING CODE 8011–01–P
• 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–2012–73 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–2012–73. 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–NYSE–
2012–73 and should be submitted on or
before January 11, 2013.
PO 00000
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Fmt 4703
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Kevin M. O’Neill,
Deputy Secretary.
Sfmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68450; File No. SR–BYX–
2012–024]
Self-Regulatory Organizations; BATS
Y-Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Related to Fees for Use
of BATS Y-Exchange, Inc.
December 17, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
6, 2012, BATS Y-Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BYX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the Exchange. The Exchange has
designated the proposed rule change as
one establishing or changing a member
due, fee, or other charge imposed by the
Exchange under Section 19(b)(3)(A)(ii)
of the Act 3 and Rule 19b–4(f)(2)
thereunder,4 which renders the
proposed rule change effective upon
filing with the Commission. 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 amend the
fee schedule applicable to Members 5
and non-members of the Exchange
pursuant to BYX Rules 15.1(a) and (c).
Changes to the fee schedule pursuant to
this proposal will be effective upon
filing.
The text of the proposed rule change
is available at the Exchange’s Web site
at https://www.batstrading.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
21 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
5 A Member is any registered broker or dealer that
has been admitted to membership in the Exchange.
1 15
E:\FR\FM\21DEN1.SGM
21DEN1
]]>Agencies
[Federal Register Volume 77, Number 246 (Friday, December 21, 2012)]
[Notices]
[Pages 75683-75686]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-30795]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68452; File No. SR-NYSE-2012-73]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Extending the Temporary Suspension of Those Aspects of Rules 36.20 and
36.21 That Would Not Permit Floor Brokers To Use Personal Portable
Phone Devices on the Trading Floor Following the Aftermath of Hurricane
Sandy Until the Earlier of When Phone Service Is Fully Restored or
Friday, January 18, 2013
December 17, 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 December 13, 2012, New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') filed with
[[Page 75684]]
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 extend the temporary suspension of those
aspects of Rules 36.20 and 36.21 that would not permit Floor brokers to
use personal portable phone devices on the Trading Floor following the
aftermath of Hurricane Sandy until the earlier of when phone service is
fully restored or Friday, January 18, 2013. 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, 36.21, and 36.30
that would not permit Floor brokers and Designated Market Makers
(``DMMs'') to use personal portable phone devices on the Trading Floor
\4\ following the aftermath of Hurricane Sandy and during the period
that phone service was not fully functional.\5\ 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.
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\4\ Pursuant to Rule 6A, 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.
\5\ See Securities Exchange Act Release No. 68137 (Nov. 1,
2012), 77 FR 66893 (Nov. 7, 2012) (SR-NYSE-2012-58).
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On November 5, 2012, although power had been restored to the
downtown Manhattan vicinity, other services were not yet fully
operational. Among other things, the telephone services provided by
third-party carriers to the Exchange were still not fully operational
on the Trading Floor, which continued to impact the ability of Floor
members to communicate from the Trading Floor as permitted by Rule 36.
Accordingly, the Exchange filed to extend the temporary suspension of
those aspects of Rules 36.20, 36.21, and 36.30 that would not permit
Floor brokers and DMMs to use personal portable phone devices on the
Trading Floor to the earlier of phone service being restored or
November 9, 2012,\6\ which was subject 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.\7\ On November 9, 2012, the Exchange filed
an additional extension of the temporary suspension of those aspects of
Rules 36.20 and 36.21 that would not permit Floor brokers to use
personal portable phone devices on the Trading Floor to the earlier of
phone service being restored or November 16, 2012, again subject to the
same terms and conditions of the original temporary suspension that was
filed.\8\ On November 19, 2012, the Exchange filed to extend the
temporary suspension of those aspects of Rules 36.20 and 36.21 that
would not permit Floor brokers to use personal portable phone devices
on the Trading Floor to the earlier of when phone service is fully
restored or Friday, December 14, 2012, again subject to the same terms
and conditions of the original temporary suspension that was filed.\9\
The continued extension of the temporary suspension was needed because
of the ongoing intermittent phone and internet service. Specifically,
the wired telephone lines and internet connections for Floor brokers
continue to not be functional, many Exchange authorized and provided
portable phones continue to not be functional and therefore Floor
brokers still could not consistently use the Exchange authorized and
provided portable phones, pursuant to Rules 36.20 and 36.21. The
Exchange now seeks another extension of the temporary suspension of
those aspects of Rules 36.20 and 36.21 because of ongoing telephone and
Internet issues.
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\6\ See Securities Exchange Act Release No. 68161 (Nov. 5,
2012), 77 FR 67704 (Nov. 12, 2012) (SR-NYSE-2012-61).
\7\ See supra note 5 (notice that describes the terms and
conditions of the temporary suspension).
\8\ See Securities Exchange Act Release No. 68211 (Nov. 9,
2012), 77 FR 69534 (Nov. 19, 2012) (SR-NYSE-2012-64). Because the
telephone lines for the DMMs were operational, the Exchange did not
need to extend the temporary suspension of Rule 36.30 as it related
to DMMs.
\9\ See Securities Exchange Act Release No. 68271 (Nov. 20,
2012), 77 FR 70862 (Nov. 27, 2012) (SR-NYSE-2012-67). Relief was not
extended for DMM's. [sic] See infra note 11.
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The Exchange has been advised by its third-party carrier that the
damage to the telephone connections continues to be more extensive than
previously anticipated. In addition, there has been damage to the
internet connections available to Floor brokers on the Trading Floor,
which has adversely impacted service. In particular, the Exchange notes
that the lines that support both the wired and wireless phone
connections and internet connections for the Floor brokers are based in
an area of lower Manhattan that suffered extensive damage as a result
of Hurricane Sandy. The type of damage that was sustained will, in some
cases, require the third-party carrier to rebuild the infrastructure
that supports these services, rather than engage in repairs of existing
lines. While such rebuilding and repairs are in process, the telephone
line and internet connections for Floor brokers still are not fully
operational and may not be so for at least another month, possibly more
given the type of work that needs to be completed to restore the
telephone services.
Because of the ongoing intermittent phone and internet service,
many Exchange authorized and provided portable phones continue to not
be functional and therefore many Floor brokers still cannot
consistently use the Exchange authorized and provided portable phones,
pursuant to Rules 36.20 and 36.21. In addition, many of the wired
telephone lines and internet connections for Floor brokers continue to
not be functional. 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 and
internet service continues to be intermittent, Floor brokers should be
permitted to use personal portable phone devices in lieu of the non-
[[Page 75685]]
operational Exchange authorized and provided portable phones, wired
phone lines, or internet connections.\10\
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\10\ To the extent that Exchange-approved telephone or
electronic communications are operational, Floor brokers must use
those connections rather than use a personal portable phone.
Specifically, the Exchange states that Floor brokers must return to
pre-Hurricane Sandy communications at any point when service is
restored even if temporary.
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Accordingly, the Exchange proposes to extend the temporary
suspension of those aspects of Rules 36.20 and 36.21 that would not
permit Floor brokers to use personal portable phone devices on the
Trading Floor to the earlier of when phone service is fully restored or
Friday, January 18, 2013.\11\ The Exchange proposes that the extension
of the temporary suspension of those aspects of Rules 36.20 and 36.21
to permit use of the personal portable phones by Floor brokers 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.\12\
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\11\ Consistent with the existing relief, Exchange is not
proposing to provide any relief to DMMs in this proposal. Because
phone service to DMMs has been restored, the existing relief does
not provide for a temporary suspension of Rule 36.30--Equities,
which prohibits DMMs from using personal portable phones on the
Trading Floor. Similarly, because the off-Floor locations for DMMs
have been restored, the existing relief does not provide for the
temporary suspension for DMMs to be permitted to communicate with
off-Floor personnel who may not be located at their regular physical
location. The Exchange is not proposing to provide such relief in
this proposal. See supra notes 5 and 6 (notices describing the
relief previously requested for DMMs).
\12\ See supra note 5 (notice that describes the terms and
conditions of the temporary suspension).
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In particular, as set forth in the prior filings, Floor brokers
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 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 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, to the extent that personal portable phones are used
to replicate internet connections previously approved pursuant to Rule
36 that are not operational on the Trading Floor because of damage
sustained by Hurricane Sandy, such use is subject to the same
requirements that would otherwise be applicable, including record-
retention requirements. This emergency relief is solely meant to
maintain the status quo to the extent provided in Rule 36 and not
intended to broaden the scope of the activities allowed pursuant to the
Rule (e.g., accessing internet only at the booth). As with all member
organization records, such cell phone data records must be provided to
Exchange regulatory staff, including without limitation staff of the
Financial Industry Regulatory Authority (``FINRA''), on request. To the
extent that Exchange-approved telephone or electronic communications
are operational, Floor brokers must use those connections rather than
use a personal portable phone. Specifically, the Exchange states that
Floor brokers must return to pre-Hurricane Sandy communications at any
point when service is restored even if temporary.
As noted above, because the Exchange is dependent on third-party
carriers for both wired and wireless phone service and internet
connections on the Trading Floor, the Exchange does not know how long
the proposed temporary suspension of Rules 36.20 and 36.21 will be
required. However, based on current estimates, the Exchange understands
that phone service may not be fully restored for at least another
month, possibly more.
Accordingly, the Exchange proposes that the extension of the
temporary suspensions of those aspects of Rule 36 that do not permit
Floor brokers to use personal portable phones on the Trading Floor
continue until the earlier of when phone service is fully restored or
Friday, January 18, 2013.\13\
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\13\ The Exchange will provide notice of this rule filing to
Floor brokers, including the applicable recordkeeping and other
requirements. If telephone service is fully restored prior to
January 18, 2013, the Exchange will notify 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,\14\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\15\ 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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\14\ 15 U.S.C. 78f(b).
\15\ 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 that restrict Floor broker's 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 Floor brokers to conduct
their regular business, notwithstanding the ongoing issues with
telephone service. The Exchange further believes that without the
requested relief, Floor brokers 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.
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
[[Page 75686]]
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 \16\ and Rule 19b-4(f)(6)(iii) thereunder.\17\
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(6)(iii). 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 under Rule 19b-4(f)(6) \18\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\19\ 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 proposal
may become operative immediately upon filing. 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, for
Floor brokers, the emergency temporary relief necessitated by Hurricane
Sandy's disruption of telephone service, as described herein and in the
Exchange's prior filings seeking such relief, and to help maintain the
status quo, until the earlier of when phone service for Floor brokers
is fully restored or January 18, 2013. Therefore, the Commission hereby
waives the 30-day operative delay and designates the proposal operative
upon filing.\20\
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\18\ 17 CFR 240.19b-4(f)(6).
\19\ 17 CFR 240.19b-4(f)(6)(iii).
\20\ 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-NYSE-2012-73 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-2012-73. 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-NYSE-2012-73 and should be
submitted on or before January 11, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-30795 Filed 12-20-12; 8:45 am]
BILLING CODE 8011-01-P
