Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of a Proposed Rule Change Proposing an Amendment to the Bylaws of Its Wholly-Owned Subsidiary, NYSE Regulation, Inc. (“NYSE Regulation”), To Eliminate a Requirement That Not Less Than Two Members of the Board of Directors of NYSE Regulation Must Qualify as “Fair Representation Candidates”, 30378-30380 [2013-12159]
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30378
Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Notices
to limit logical port fess to logical port
fees at the primary data center is not a
substantive change in that Exchange
constituents currently receive without
charge a corresponding port at the
secondary data center for any port
established at the primary data center.
The Exchange also believes that
providing financial incentives to use
Exchange technology that the Exchange
believes is the most technologically
efficient for the Exchange and its
constituents is a fair and equitable
approach to pricing. Accordingly, the
Exchange believes that promotion of its
Multicast PITCH data feed through the
continued offering of free logical ports
is fair and equitable. The Multicast
PITCH data feed is available to all
Members, and as such, all Members
have the ability to receive applicable
Multicast PITCH ports free of charge.
Further, the Exchange believes that
promoting the use of redundant
connectivity is reasonable, fair and
equitable and not unreasonably
discriminatory as it is uniform in
application amongst Members and nonmembers and should enable such
participants to enhance their business
continuity planning.
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 not
necessary or appropriate in furtherance
of the purposes of the Act. To the
contrary, the Exchange will not assess
new fees as part of the proposal. Instead,
the proposal is focused on enhancing
the clarity of the fee schedule and
reducing barriers to Exchange Members
and non-member constituents that may
be seeking to establish redundant
connections to the Exchange.
TKELLEY on DSK3SPTVN1PROD with NOTICES
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.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 12 and paragraph (f) of Rule
19b–4 thereunder.13 At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
12 15
U.S.C. 78s(b)(3)(A)(ii).
13 17 CFR 240.19b–4(f).
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16:59 May 21, 2013
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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 rulecomments@sec.gov. Please include File
Number SR–BYX–2013–014 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–BYX–2013–014. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
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–BYX–
2013–014 and should be submitted on
or before June 12, 2013.
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–12161 Filed 5–21–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69590; File No. SR–NYSE–
2013–32]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of a Proposed Rule Change
Proposing an Amendment to the
Bylaws of Its Wholly-Owned
Subsidiary, NYSE Regulation, Inc.
(‘‘NYSE Regulation’’), To Eliminate a
Requirement That Not Less Than Two
Members of the Board of Directors of
NYSE Regulation Must Qualify as ‘‘Fair
Representation Candidates’’
May 16, 2013.
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 May 8,
2013, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II and III below, which Items
have been prepared by the Exchange.
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 the Substance
of the Proposed Rule Change
The Exchange proposes to amend an
amendment to the bylaws of its whollyowned subsidiary NYSE Regulation, Inc.
(‘‘NYSE Regulation’’) to eliminate a
requirement that not less than two
members of the board of directors of
NYSE Regulation must qualify as ‘‘fair
representation candidates’’ (as that term
is defined in those bylaws). A
requirement that such directors
constitute a minimum of 20% of the
board would remain in place. 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.
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Notices
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
Exchange 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
TKELLEY on DSK3SPTVN1PROD with NOTICES
1. Purpose
The Exchange is proposing to amend
the Fourth Amended and Restated
Bylaws of NYSE Regulation (‘‘NYSE
Regulation Bylaws’’) to eliminate the
requirement that not less than two
members of the NYSE Regulation board
of directors must be ‘‘fair representation
candidates’’ (as defined in the NYSE
Regulation Bylaws).3 However, the
current requirement that such directors
constitute a minimum of 20% of the
board will continue to apply. If the
number that is equal to 20% of the
entire board of directors is not a whole
number, such number will be rounded
up to the next whole number, and a
provision so stating would be added to
the NYSE Regulation Bylaws.
As defined in the NYSE Regulation
Bylaws, fair representation candidates
are Board members who are determined
by member organizations of the
Exchange through a specified petition
process (‘‘Petition Candidates’’) or, in
the absence of a sufficient number of
Petition Candidates, candidates
recommended by the Director Candidate
Recommendation Committee (the
‘‘DCRC’’) of NYSE Regulation. In
addition, fair representation candidates
for the NYSE Regulation Board must
qualify as ‘‘non-affiliated directors’’ (as
such term is defined in the NYSE
Regulation Bylaws), i.e., U.S. Persons
who are not members of the board of
directors of NYSE Euronext and qualify
as independent under the director
independence policy of NYSE
3 Section
6(b)(3) of the Act requires, as a
condition for registration of a national securities
exchange, the Commission to determine that, ‘‘[t]he
rules of the exchange assure a fair representation of
its members in the selection of its directors and
administration of its affairs . . . .’’ See 15 U.S.C.
78f(b)(3).
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16:59 May 21, 2013
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Regulation.4 Finally, like all members of
the NYSE Regulation Board except for
the Chief Executive Officer, fair
representation candidates must qualify
as independent under the director
independence policy of NYSE
Regulation.5
The NYSE Regulation Bylaws also
provide that the Board shall consist of
not less than three persons and that the
number of directors shall be fixed from
time to time by the Exchange, as sole
equity member of NYSE Regulation. The
size of the NYSE Regulation Board is
currently fixed at five members, of
which four positions are currently filled
and one is open.6 The Exchange and
NYSE Regulation believe that a Board
consisting of five members is
sufficiently large to effectively perform
the Board’s oversight responsibilities. In
addition, with a Board size of five
directors, the Exchange believes that
retaining the requirement that at least
two directors must be ‘‘fair
representation candidates’’ is now
unwarranted since such directors would
constitute 40% of the Board rather than
20% as was the case when the number
of directors was ten. The Exchange
believes that the current process for
selecting the 20% of directors who meet
the fair representation requirement in
Section 6(b)(3), is consistent with the
Act.7 The Exchange is not proposing to
change the NYSE Regulation
independence requirements.
The Exchange believes that
elimination of the two-director
minimum requirement for fair
representation candidates is consistent
with the governance structures of other
national securities exchanges that have
been approved by the Securities and
4 See Securities Act Release No. 67564 (August 1,
2012), 77 FR 47161 (August 7, 2012) (SR–NYSE–
2012–17) (approving the creation of the director
independence policy of NYSE Regulation).
5 The Bylaws of NYSE Regulation require that a
majority of its Board consist of non-affiliated
directors. The remaining directors are comprised of
the Chief Executive Officer of NYSE Regulation and
members of the board of directors of NYSE
Euronext that qualify as independent under the
NYSE Euronext independence policy. The Bylaws
do not require any affiliated directors other than the
Chief Executive Officer of NYSE Regulation.
6 The number of directors on the NYSE
Regulation board was reduced from ten to five in
early 2013 in connection with the Financial
Industry Regulatory Authority’s (‘‘FINRA’’)
completion of specified milestones in the regulatory
services agreement by and among FINRA, NYSE
Group, Inc., NYSE, NYSE Regulation, NYSE Arca,
Inc., and NYSE MKT LLC pursuant to which FINRA
assumed responsibility for performing the market
surveillance and enforcement functions previously
conducted by NYSE Regulation.
7 The Exchange represents that the DCRC of NYSE
Regulation is aware of and is in agreement with the
proposed plan of implementation. There is
otherwise no change to the ‘‘fair representation’’
candidate selection and petition process.
PO 00000
Frm 00113
Fmt 4703
Sfmt 4703
30379
Exchange Commission (the
‘‘Commission’’). For example, Article
III, Section 5(e) of the By-Laws of the
NASDAQ Stock Market LLC
(‘‘NASDAQ’’) requires that the
Regulatory Oversight Committee of the
NASDAQ Board of Directors (the
‘‘NASDAQ ROC’’), which has an
oversight role comparable to that of the
NYSE Regulation Board, must consist of
three members, each of whom must be
a Public Director (i.e., ‘‘a Director who
has no material business relationship
with a broker or dealer, [NASDAQ] or
its affiliates, or FINRA’’) and
‘‘independent director’’ as defined by
NASDAQ Marketplace Rule 4200. There
is no requirement that the NASDAQ
ROC have any members who would be
the equivalent of a fair representation
candidate on the NYSE Regulation
Board.
More recently, the Commission has
approved a similar change to that
proposed herein to the Operating
Agreement of the Exchange and to the
Bylaws of the Exchange’s wholly owned
subsidiary, NYSE Market, Inc.8 These
changes were approved subsequent to
the Commission’s approval of a
structure for the board of NYSE
Alternext US LLC (what is now NYSE
MKT LLC), an affiliate of the Exchange,
that included a requirement that at least
20% of the board of that organization
constitute fair representation directors,
but without the requirement that there
be no less than two such directors.9
Accordingly, approval of the change
to the NYSE Regulation Bylaws
proposed herein will leave NYSE
Regulation with a governance structure
that is completely consistent with
similar structures that the Commission
has approved for the Exchange, for other
subsidiaries and affiliates of the
Exchange and for other national
securities exchanges.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) 10 of the Act, in general, and
furthers the objectives of Section 6(b)(3)
of the Act 11 in particular in that it will
assure a fair representation of the
members of the Exchange in the
selection of NYSE Regulation directors
and in the administration of the affairs
of the Exchange and NYSE Regulation.
More specifically, the NYSE believes
8 Securities Exchange Act Release No. 59683
(April 1, 2009), 74 FR 15799–01 (April 7, 2009 (SR–
NYSE–2009–12).
9 See Securities Exchange Act Release No. 58673
(September 29, 2008), 73 FR 57707, at 57711–12
(October 3, 2008) (SR–Amex–2008–62).
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(3).
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30380
Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Notices
that, by eliminating the current NYSE
Regulation Bylaw requirement for a
minimum of two fair representation
candidates on the NYSE Regulation
Board, it will be able to improve
administrative efficiency and
effectiveness by operating with a
smaller number of directors while
continuing to fulfill its statutory
obligations regarding the fair
representation of members of the
Exchange. The Exchange believes that
the proposed rule change will also
further the objectives of Section 6(b)(5)
of the Act 12 as it will contribute to
perfecting the mechanism of a free and
open market and a national market
system, in a manner that is consistent
with the protection of investors and the
public interest.
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. The
proposed rule change relates solely to
the implementation of a more efficient
and effective governance structure for
NYSE Regulation and will have no
effect on the NYSE’s business
operations or competitive position.
TKELLEY on DSK3SPTVN1PROD with NOTICES
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
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–69583; File No. SR–Phlx–
2013–53]
• 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–2013–32 on the
subject line.
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Extend a
Pilot Program To Allow Cabinet
Trading To Take Place Below $1 per
Option Contract
Paper Comments
May 15, 2013.
• 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–2013–32. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
offices of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–NYSE–
2013–32, and should be submitted on or
before June 12, 2013.
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 May 8,
2013, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I and
II below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–12159 Filed 5–21–13; 8:45 am]
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to extend the
pilot program in Rule 1059,
Accommodation Transactions, to allow
cabinet trading to take place below $1
per option contract under specified
circumstances (the ‘‘pilot program’’).
The text of the proposed rule change
is set forth below. Proposed new
language is underlined; proposed
deletions are in brackets.
*
*
*
*
*
NASDAQ OMX PHLX Rules
*
*
U.S.C. 78f(b)(5).
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16:59 May 21, 2013
*
*
*
*
*
*
Rule 1059. Accommodation
Transactions
(a)–(b) No change.
. . . Commentary: lllll
.01 No change.
.02 Limit Orders Priced Below $1:
Limit orders with a price of at least $0
but less than $1 per option contract may
trade under the terms and conditions in
Rule 1059 above in each series of option
contracts open for trading on the
Exchange, except that:
(a)–(c) No change.
(d) Unless otherwise extended, the
effectiveness of the Commentary .02
BILLING CODE 8011–01–P
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*
Options Rules
1 15
12 15
*
PO 00000
CFR 200.30–3(a)(12).
Frm 00114
Fmt 4703
Sfmt 4703
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
E:\FR\FM\22MYN1.SGM
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]]>Agencies
[Federal Register Volume 78, Number 99 (Wednesday, May 22, 2013)]
[Notices]
[Pages 30378-30380]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-12159]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69590; File No. SR-NYSE-2013-32]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of a Proposed Rule Change Proposing an Amendment to
the Bylaws of Its Wholly-Owned Subsidiary, NYSE Regulation, Inc.
(``NYSE Regulation''), To Eliminate a Requirement That Not Less Than
Two Members of the Board of Directors of NYSE Regulation Must Qualify
as ``Fair Representation Candidates''
May 16, 2013.
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 May 8, 2013, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the Exchange. 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 the
Substance of the Proposed Rule Change
The Exchange proposes to amend an amendment to the bylaws of its
wholly-owned subsidiary NYSE Regulation, Inc. (``NYSE Regulation'') to
eliminate a requirement that not less than two members of the board of
directors of NYSE Regulation must qualify as ``fair representation
candidates'' (as that term is defined in those bylaws). A requirement
that such directors constitute a minimum of 20% of the board would
remain in place. 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.
[[Page 30379]]
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 Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of those statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to amend the Fourth Amended and Restated
Bylaws of NYSE Regulation (``NYSE Regulation Bylaws'') to eliminate the
requirement that not less than two members of the NYSE Regulation board
of directors must be ``fair representation candidates'' (as defined in
the NYSE Regulation Bylaws).\3\ However, the current requirement that
such directors constitute a minimum of 20% of the board will continue
to apply. If the number that is equal to 20% of the entire board of
directors is not a whole number, such number will be rounded up to the
next whole number, and a provision so stating would be added to the
NYSE Regulation Bylaws.
---------------------------------------------------------------------------
\3\ Section 6(b)(3) of the Act requires, as a condition for
registration of a national securities exchange, the Commission to
determine that, ``[t]he rules of the exchange assure a fair
representation of its members in the selection of its directors and
administration of its affairs . . . .'' See 15 U.S.C. 78f(b)(3).
---------------------------------------------------------------------------
As defined in the NYSE Regulation Bylaws, fair representation
candidates are Board members who are determined by member organizations
of the Exchange through a specified petition process (``Petition
Candidates'') or, in the absence of a sufficient number of Petition
Candidates, candidates recommended by the Director Candidate
Recommendation Committee (the ``DCRC'') of NYSE Regulation. In
addition, fair representation candidates for the NYSE Regulation Board
must qualify as ``non-affiliated directors'' (as such term is defined
in the NYSE Regulation Bylaws), i.e., U.S. Persons who are not members
of the board of directors of NYSE Euronext and qualify as independent
under the director independence policy of NYSE Regulation.\4\ Finally,
like all members of the NYSE Regulation Board except for the Chief
Executive Officer, fair representation candidates must qualify as
independent under the director independence policy of NYSE
Regulation.\5\
---------------------------------------------------------------------------
\4\ See Securities Act Release No. 67564 (August 1, 2012), 77 FR
47161 (August 7, 2012) (SR-NYSE-2012-17) (approving the creation of
the director independence policy of NYSE Regulation).
\5\ The Bylaws of NYSE Regulation require that a majority of its
Board consist of non-affiliated directors. The remaining directors
are comprised of the Chief Executive Officer of NYSE Regulation and
members of the board of directors of NYSE Euronext that qualify as
independent under the NYSE Euronext independence policy. The Bylaws
do not require any affiliated directors other than the Chief
Executive Officer of NYSE Regulation.
---------------------------------------------------------------------------
The NYSE Regulation Bylaws also provide that the Board shall
consist of not less than three persons and that the number of directors
shall be fixed from time to time by the Exchange, as sole equity member
of NYSE Regulation. The size of the NYSE Regulation Board is currently
fixed at five members, of which four positions are currently filled and
one is open.\6\ The Exchange and NYSE Regulation believe that a Board
consisting of five members is sufficiently large to effectively perform
the Board's oversight responsibilities. In addition, with a Board size
of five directors, the Exchange believes that retaining the requirement
that at least two directors must be ``fair representation candidates''
is now unwarranted since such directors would constitute 40% of the
Board rather than 20% as was the case when the number of directors was
ten. The Exchange believes that the current process for selecting the
20% of directors who meet the fair representation requirement in
Section 6(b)(3), is consistent with the Act.\7\ The Exchange is not
proposing to change the NYSE Regulation independence requirements.
---------------------------------------------------------------------------
\6\ The number of directors on the NYSE Regulation board was
reduced from ten to five in early 2013 in connection with the
Financial Industry Regulatory Authority's (``FINRA'') completion of
specified milestones in the regulatory services agreement by and
among FINRA, NYSE Group, Inc., NYSE, NYSE Regulation, NYSE Arca,
Inc., and NYSE MKT LLC pursuant to which FINRA assumed
responsibility for performing the market surveillance and
enforcement functions previously conducted by NYSE Regulation.
\7\ The Exchange represents that the DCRC of NYSE Regulation is
aware of and is in agreement with the proposed plan of
implementation. There is otherwise no change to the ``fair
representation'' candidate selection and petition process.
---------------------------------------------------------------------------
The Exchange believes that elimination of the two-director minimum
requirement for fair representation candidates is consistent with the
governance structures of other national securities exchanges that have
been approved by the Securities and Exchange Commission (the
``Commission''). For example, Article III, Section 5(e) of the By-Laws
of the NASDAQ Stock Market LLC (``NASDAQ'') requires that the
Regulatory Oversight Committee of the NASDAQ Board of Directors (the
``NASDAQ ROC''), which has an oversight role comparable to that of the
NYSE Regulation Board, must consist of three members, each of whom must
be a Public Director (i.e., ``a Director who has no material business
relationship with a broker or dealer, [NASDAQ] or its affiliates, or
FINRA'') and ``independent director'' as defined by NASDAQ Marketplace
Rule 4200. There is no requirement that the NASDAQ ROC have any members
who would be the equivalent of a fair representation candidate on the
NYSE Regulation Board.
More recently, the Commission has approved a similar change to that
proposed herein to the Operating Agreement of the Exchange and to the
Bylaws of the Exchange's wholly owned subsidiary, NYSE Market, Inc.\8\
These changes were approved subsequent to the Commission's approval of
a structure for the board of NYSE Alternext US LLC (what is now NYSE
MKT LLC), an affiliate of the Exchange, that included a requirement
that at least 20% of the board of that organization constitute fair
representation directors, but without the requirement that there be no
less than two such directors.\9\
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\8\ Securities Exchange Act Release No. 59683 (April 1, 2009),
74 FR 15799-01 (April 7, 2009 (SR-NYSE-2009-12).
\9\ See Securities Exchange Act Release No. 58673 (September 29,
2008), 73 FR 57707, at 57711-12 (October 3, 2008) (SR-Amex-2008-62).
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Accordingly, approval of the change to the NYSE Regulation Bylaws
proposed herein will leave NYSE Regulation with a governance structure
that is completely consistent with similar structures that the
Commission has approved for the Exchange, for other subsidiaries and
affiliates of the Exchange and for other national securities exchanges.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) \10\ of the Act, in general, and furthers the
objectives of Section 6(b)(3) of the Act \11\ in particular in that it
will assure a fair representation of the members of the Exchange in the
selection of NYSE Regulation directors and in the administration of the
affairs of the Exchange and NYSE Regulation. More specifically, the
NYSE believes
[[Page 30380]]
that, by eliminating the current NYSE Regulation Bylaw requirement for
a minimum of two fair representation candidates on the NYSE Regulation
Board, it will be able to improve administrative efficiency and
effectiveness by operating with a smaller number of directors while
continuing to fulfill its statutory obligations regarding the fair
representation of members of the Exchange. The Exchange believes that
the proposed rule change will also further the objectives of Section
6(b)(5) of the Act \12\ as it will contribute to perfecting the
mechanism of a free and open market and a national market system, in a
manner that is consistent with the protection of investors and the
public interest.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(3).
\12\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change
relates solely to the implementation of a more efficient and effective
governance structure for NYSE Regulation and will have no effect on the
NYSE's business operations or competitive position.
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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
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-2013-32 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-2013-32. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal offices of the Exchange.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-NYSE-2013-32,
and should be submitted on or before June 12, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-12159 Filed 5-21-13; 8:45 am]
BILLING CODE 8011-01-P
