Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 6.69(a) To Provide That a Pattern or Practice of Late Reporting of Option Transactions to the Exchange for Dissemination to the Options Price Reporting Authority Is Subject to Disciplinary Action, 69497-69499 [2013-27627]

Download as PDF Federal Register / Vol. 78, No. 223 / Tuesday, November 19, 2013 / Notices with additional advance notice of changes to that fee. 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. The proposed change is not intended to address a competitive issue but rather to provide BOX Options Participants with better notice of any change that the Exchange may make to the ORF. In any event, because competitors are free to modify their own fees and credits in response, and because market participants may readily adjust their trading practices, the Exchange believes that the degree to which fee or credit changes in this market may impose any burden on competition is extremely limited. As a result of all of these considerations, the Exchange does not believe that the proposed change will impair the ability of BOX Options Participants, or competing order execution venues to maintain their competitive standing in the financial markets. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. TKELLEY on DSK3SPTVN1PROD with NOTICES 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)(ii) of the Exchange Act 6 and Rule 19b–4(f)(2) thereunder,7 because it establishes or changes a due, or fee. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend the rule change if it appears to the Commission that the action is necessary or appropriate in the public interest, for the protection of investors, or would otherwise further the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– BOX–2013–52 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–BOX–2013–52. 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 (http://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–BOX– 2013–52 and should be submitted on or before December 10, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–27624 Filed 11–18–13; 8:45 am] BILLING CODE 8011–01–P U.S.C. 78s(b)(3)(A)(ii). 7 17 CFR 240.19b–4(f)(2). VerDate Mar<15>2010 17:21 Nov 18, 2013 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70861; File No. SR– NYSEArca–2013–119] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 6.69(a) To Provide That a Pattern or Practice of Late Reporting of Option Transactions to the Exchange for Dissemination to the Options Price Reporting Authority Is Subject to Disciplinary Action November 13, 2013. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on November 4, 2013, NYSE Arca, Inc. (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 6.69(a) to provide that a pattern or practice of late reporting of option transactions to the Exchange for dissemination to the Options Price Reporting Authority is subject to disciplinary action. 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, at the Commission’s Public Reference Room, and on the Commission’s Web site at http://www.sec.gov. 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. 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 6 15 2 15 8 17 Jkt 232001 PO 00000 CFR 200.30–3(a)(12). Frm 00136 Fmt 4703 Sfmt 4703 69497 E:\FR\FM\19NON1.SGM 19NON1 69498 Federal Register / Vol. 78, No. 223 / Tuesday, November 19, 2013 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change TKELLEY on DSK3SPTVN1PROD with NOTICES 1. Purpose The Exchange proposes to amend Rule 6.69(a) to provide that a pattern or practice of late reporting of option transactions to the Exchange for dissemination to the Options Price Reporting Authority (‘‘OPRA’’) is subject to disciplinary action, including fines. Current Rule 6.69(a) requires an OTP Holder or OTP Firm to immediately report option transactions to the Exchange for dissemination to OPRA. The rule further provides that transactions not reported to OPRA within 90 seconds after execution will be designated ‘‘late,’’ and that an OTP Holder or OTP Firm who is responsible for late reporting of an option transaction, without reasonable justification or excuse, will be subject to a fine under Rule 10.12. Thus, under current rule 6.69(a), a single latereported transaction is subject to a fine. To have more flexibility in evaluating whether late reporting of option transactions should be subject to a fine, the Exchange proposes to amend the rule to provide that ‘‘a pattern or practice’’ of late reporting of option transactions to the Exchange would constitute a violation of the 90-second reporting requirement. While the Exchange’s proposal does not expressly define what a ‘‘pattern or practice’’ of late reporting is, the Exchange will apply its existing Sanctioning Guidelines, which are contained in Rule 10.16. Rule 10.16 contains both general guidelines for considering and determining the applicability of sanctions under various Exchange rules, and guidelines specific to violations of Rule 6.69, among other rules.4 Moreover, in determining appropriate 4 Rule 10.16(b) General Principles Applicable to All Sanction Determinations includes an aggregation provision under Rule 10.16(b)(4) to guide the Exchange in determining whether to aggregate, or ‘‘batch’’ violations together, thereby treating them as one ‘‘violation’’ for purposes of determining sanctions if the misconduct meets certain objective parameters, such as ‘‘[w]hether the violations involved unintentional or negligent misconduct or manipulative, fraudulent, or deceptive intent. (If aggregated, the violations should not have involved manipulative, fraudulent, or deceptive intent).’’ Rule 10.16(d) Principal Considerations in Determining Sanctions includes ‘‘(6) whether the named party engaged in numerous acts and/or a pattern of misconduct.’’ Additionally, Rule 10.16(e) Specific Sanctioning Guidelines for Options Order Handling Rules provides in subparagraph (3) Trade Reporting—NYSE Arca Rule 6.69 that ‘‘(ii) the extent of the abuse, i.e. whether a pattern of abuse exists, and the number of transactions involved’’ are to be considered among additional principal considerations in determining sanctions. VerDate Mar<15>2010 17:21 Nov 18, 2013 Jkt 232001 disciplinary action for late reporting of option transactions, the Exchange may apply, at its discretion, the Minor Rule Plan contained in Rule 10.12 for minor violations of Rule 6.69,5 which would result in a fine of not more than $5,000, or Rule 10.16 in the case of more serious late reporting violations. Rule 10.16(e)(3)(B) lists suggested monetary sanctions for violations of Rule 6.69 that range from $10,000 to $100,000. Because violations of Rule 6.69 may be adjudicated pursuant to either Rule 10.12 or Rule 10.16, the Exchange proposes to further amend Rule 6.69(a) by adding a cite to Rule 10.16. The Exchange notes that the proposed rule change is substantially similar to current rules of the Chicago Board Options Exchange (‘‘CBOE’’) Rule 6.51(a) and NASDAQ OMX PHLX LLC (‘‘PHLX’’) Rule 1051(a).6 Both CBOE and PHLX rules utilize the ‘‘pattern or practice’’ standard for evaluating late trade reporting violations. 2. Statutory Basis The Exchange believes that the proposal is consistent with Section 6(b) of the Act,7 in general, and furthers the objectives of Section 6(b)(5),8 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, 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, and, in general, to protect investors and the public interest. Specifically, the Exchange believes that the proposed amendment providing the Exchange with flexibility in determining whether an OTP Holder’s late reporting of option transactions to the Exchange constitutes a pattern or practice that should subject the late reporter to disciplinary action addresses an inconsistency between in [sic] the processes for adjudication of late-trade reporting on the Exchange and those of other self-regulatory organizations. Eliminating this inconsistency will help foster cooperation and coordination with 5 Violations of Rule 6.69 are listed as eligible for adjudication under the Minor Rule Plan in Rule 10.12(h)(38). 6 See CBOE Rule 6.51(a); PHLX Rule 1051(a). PHLX rules also permit, but do not require the exchange, in evaluating whether a pattern or practice of rules violations exists, to aggregate or ‘‘batch’’ individual order handling violations as a single occurrence of a violation of a specific order handling rule by a member or member organization over a specific time period. See PHLX Rule 970.01. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 persons engaged in facilitating transactions in securities. Moreover, the proposed rule change would not result in any material diminution of the Exchange’s overall enforcement authority or any material change in surveillance of late-trade reporting. As such, the proposed rule change is consistent with the Act because it would continue to protect investors and the public interest. In addition, amending Rule 6.69 by including references to rules governing the adjudication of late trade violations is designed to add clarity to the rules of the Exchange. Providing clear and well defined rules helps to remove impediments to, and perfect the mechanism of a free and open market and a national market system. 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’s proposal allows the Exchange to compete more effectively with other options exchanges that currently have rules in effect substantially similar to what the Exchange now proposes. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 9 and Rule 19b– 4(f)(6) thereunder.10 Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 11 and Rule 19b–4(f)(6) thereunder.12 9 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 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 the Exchange to give the 10 17 E:\FR\FM\19NON1.SGM 19NON1 Federal Register / Vol. 78, No. 223 / Tuesday, November 19, 2013 / Notices At any time within 60 days of the filing of such 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: inspection and copying at the Exchange’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–2013–119 and should be submitted on or before December 10, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Kevin M. O’Neill, Deputy Secretary. TKELLEY on DSK3SPTVN1PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEArca–2013–119 on the subject line. [FR Doc. 2013–27627 Filed 11–18–13; 8:45 am] 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–NYSEArca–2013–119. 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 (http://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 the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing will also be available for Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 957NY To Provide That a Pattern or Practice of Late Reporting of Option Transactions to the Exchange for Dissemination to the Options Price Reporting Authority Is Subject to Disciplinary Action Commission written notice of the Exchange’s 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. VerDate Mar<15>2010 17:21 Nov 18, 2013 Jkt 232001 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70864; File No. SR– NYSEMKT–2013–89] November 13, 2013. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on October 31, 2013, NYSE MKT LLC (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 957NY to provide that a pattern or practice of late reporting of option transactions to the Exchange for dissemination to the Options Price Reporting Authority is subject to disciplinary action. The text of the 13 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 PO 00000 Frm 00138 Fmt 4703 Sfmt 4703 69499 proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, at the Commission’s Public Reference Room, and on the Commission’s Web site at http://www.sec.gov. 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rule 957NY to provide that a pattern or practice of late reporting of option transactions to the Exchange for dissemination to the Options Price Reporting Authority (‘‘OPRA’’) is subject to disciplinary action, including fines. Current Rule 957NY requires an ATP Holder to immediately report option transactions to the Exchange. The rule further provides that transactions not reported to OPRA within 90 seconds after execution will be designated ‘‘late,’’ and that an ATP Holder who is responsible for late reporting of an option transaction, without reasonable justification or excuse, will be subject to a fine under Section 9A. Thus, under current rule 957NY, a single late-reported transaction is subject to a fine. To have more flexibility in evaluating whether late reporting of option transactions should be subject to a fine, the Exchange proposes to amend the rule to provide that ‘‘a pattern or practice’’ of late reporting of option transactions to the Exchange would constitute a violation of the 90-second reporting requirement. While the Exchange’s proposal does not expressly define what a ‘‘pattern or practice’’ of late reporting is, the Exchange will apply its existing Sanctions Guidelines, which are contained in Rule 476, Supplementary Material .10. Rule 476, Supplementary Material .10 contains both general guidelines for considering and determining the applicability of E:\FR\FM\19NON1.SGM 19NON1

Agencies

[Federal Register Volume 78, Number 223 (Tuesday, November 19, 2013)]
[Notices]
[Pages 69497-69499]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-27627]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70861; File No. SR-NYSEArca-2013-119]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Rule 
6.69(a) To Provide That a Pattern or Practice of Late Reporting of 
Option Transactions to the Exchange for Dissemination to the Options 
Price Reporting Authority Is Subject to Disciplinary Action

November 13, 2013.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on November 4, 2013, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 6.69(a) to provide that a 
pattern or practice of late reporting of option transactions to the 
Exchange for dissemination to the Options Price Reporting Authority is 
subject to disciplinary action. 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, at the Commission's Public Reference Room, and 
on the Commission's Web site at http://www.sec.gov.

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.

[[Page 69498]]

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 6.69(a) to provide that a 
pattern or practice of late reporting of option transactions to the 
Exchange for dissemination to the Options Price Reporting Authority 
(``OPRA'') is subject to disciplinary action, including fines. Current 
Rule 6.69(a) requires an OTP Holder or OTP Firm to immediately report 
option transactions to the Exchange for dissemination to OPRA. The rule 
further provides that transactions not reported to OPRA within 90 
seconds after execution will be designated ``late,'' and that an OTP 
Holder or OTP Firm who is responsible for late reporting of an option 
transaction, without reasonable justification or excuse, will be 
subject to a fine under Rule 10.12. Thus, under current rule 6.69(a), a 
single late-reported transaction is subject to a fine.
    To have more flexibility in evaluating whether late reporting of 
option transactions should be subject to a fine, the Exchange proposes 
to amend the rule to provide that ``a pattern or practice'' of late 
reporting of option transactions to the Exchange would constitute a 
violation of the 90-second reporting requirement. While the Exchange's 
proposal does not expressly define what a ``pattern or practice'' of 
late reporting is, the Exchange will apply its existing Sanctioning 
Guidelines, which are contained in Rule 10.16. Rule 10.16 contains both 
general guidelines for considering and determining the applicability of 
sanctions under various Exchange rules, and guidelines specific to 
violations of Rule 6.69, among other rules.\4\ Moreover, in determining 
appropriate disciplinary action for late reporting of option 
transactions, the Exchange may apply, at its discretion, the Minor Rule 
Plan contained in Rule 10.12 for minor violations of Rule 6.69,\5\ 
which would result in a fine of not more than $5,000, or Rule 10.16 in 
the case of more serious late reporting violations. Rule 10.16(e)(3)(B) 
lists suggested monetary sanctions for violations of Rule 6.69 that 
range from $10,000 to $100,000. Because violations of Rule 6.69 may be 
adjudicated pursuant to either Rule 10.12 or Rule 10.16, the Exchange 
proposes to further amend Rule 6.69(a) by adding a cite to Rule 10.16.
---------------------------------------------------------------------------

    \4\ Rule 10.16(b) General Principles Applicable to All Sanction 
Determinations includes an aggregation provision under Rule 
10.16(b)(4) to guide the Exchange in determining whether to 
aggregate, or ``batch'' violations together, thereby treating them 
as one ``violation'' for purposes of determining sanctions if the 
misconduct meets certain objective parameters, such as ``[w]hether 
the violations involved unintentional or negligent misconduct or 
manipulative, fraudulent, or deceptive intent. (If aggregated, the 
violations should not have involved manipulative, fraudulent, or 
deceptive intent).'' Rule 10.16(d) Principal Considerations in 
Determining Sanctions includes ``(6) whether the named party engaged 
in numerous acts and/or a pattern of misconduct.'' Additionally, 
Rule 10.16(e) Specific Sanctioning Guidelines for Options Order 
Handling Rules provides in subparagraph (3) Trade Reporting--NYSE 
Arca Rule 6.69 that ``(ii) the extent of the abuse, i.e. whether a 
pattern of abuse exists, and the number of transactions involved'' 
are to be considered among additional principal considerations in 
determining sanctions.
    \5\ Violations of Rule 6.69 are listed as eligible for 
adjudication under the Minor Rule Plan in Rule 10.12(h)(38).
---------------------------------------------------------------------------

    The Exchange notes that the proposed rule change is substantially 
similar to current rules of the Chicago Board Options Exchange 
(``CBOE'') Rule 6.51(a) and NASDAQ OMX PHLX LLC (``PHLX'') Rule 
1051(a).\6\ Both CBOE and PHLX rules utilize the ``pattern or 
practice'' standard for evaluating late trade reporting violations.
---------------------------------------------------------------------------

    \6\ See CBOE Rule 6.51(a); PHLX Rule 1051(a). PHLX rules also 
permit, but do not require the exchange, in evaluating whether a 
pattern or practice of rules violations exists, to aggregate or 
``batch'' individual order handling violations as a single 
occurrence of a violation of a specific order handling rule by a 
member or member organization over a specific time period. See PHLX 
Rule 970.01.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Section 
6(b)(5),\8\ in particular, in that it is designed to prevent fraudulent 
and manipulative acts and practices, 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, and, in general, to protect 
investors and the public interest. Specifically, the Exchange believes 
that the proposed amendment providing the Exchange with flexibility in 
determining whether an OTP Holder's late reporting of option 
transactions to the Exchange constitutes a pattern or practice that 
should subject the late reporter to disciplinary action addresses an 
inconsistency between in [sic] the processes for adjudication of late-
trade reporting on the Exchange and those of other self-regulatory 
organizations. Eliminating this inconsistency will help foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities. Moreover, the proposed rule change would 
not result in any material diminution of the Exchange's overall 
enforcement authority or any material change in surveillance of late-
trade reporting. As such, the proposed rule change is consistent with 
the Act because it would continue to protect investors and the public 
interest. In addition, amending Rule 6.69 by including references to 
rules governing the adjudication of late trade violations is designed 
to add clarity to the rules of the Exchange. Providing clear and well 
defined rules helps to remove impediments to, and perfect the mechanism 
of a free and open market and a national market system.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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's 
proposal allows the Exchange to compete more effectively with other 
options exchanges that currently have rules in effect substantially 
similar to what the Exchange now proposes.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\ Because 
the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires the Exchange to give the Commission written notice of the 
Exchange's 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.

---------------------------------------------------------------------------

[[Page 69499]]

    At any time within 60 days of the filing of such 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2013-119 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-NYSEArca-2013-119. 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 (http://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 the 
hours of 10:00 a.m. and 3:00 p.m. Copies of the filing will also be 
available for inspection and copying at the Exchange'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-2013-119 and should be 
submitted on or before December 10, 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. 2013-27627 Filed 11-18-13; 8:45 am]
BILLING CODE 8011-01-P