Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Making Effective as of January 1, 2014 Recently Approved Changes to NYSE Rules 451 and 465, and the Related Provisions of Section 402.10 of the NYSE Listed Company Manual Concerning Charges by Member Organizations for Processing and Forwarding Proxy and Other Issuer Communications to Beneficial Owners, and Establishing a Fee Under Certain Conditions for an Enhanced Brokers' Internet Platform, 2702-2705 [2014-00582]
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Federal Register / Vol. 79, No. 10 / Wednesday, January 15, 2014 / Notices
wreier-aviles on DSK5TPTVN1PROD with NOTICES
Pool Cooling,’’ TS 3.6.2.4, ‘‘RHR
Suppression Pool Spray,’’ TS 3.9.8,
‘‘RHR—High Water Level,’’ and TS
3.9.9, ‘‘RHR—Low Water Level,’’
respectively. Associated Bases changes
were proposed for the respective LCOs,
SR changes, and SR additions.
For General Electric BWR/6 Plants,
changes were proposed for SRs 3.5.1.1,
3.5.1.2, 3.5.2.3, 3.5.2.4, 3.5.3.1, 3.5.3.2,
and 3.6.1.7.1, as well as the addition of
new SRs 3.4.9.2, 3.4.10.2, 3.6.1.7.2,
3.6.2.3.2, 3.9.8.2, and 3.9.9.2 to TS 3.4.9,
‘‘RHR Shutdown Cooling System—Hot
Shutdown,’’ TS 3.4.10, ‘‘RHR Shutdown
Cooling System—Cold Shutdown,’’ TS
3.5.1, ‘‘ECCS Operating,’’ TS 3.5.2,
‘‘ECCS—Shutdown,’’ TS 3.5.3, ‘‘RCIC
System,’’ TS 3.6.1.7, ‘‘RHR Containment
Spray System,’’ TS 3.6.2.3, ‘‘RHR
Suppression Pool Cooling,’’ TS 3.9.8,
‘‘RHR High Water Level,’’ and TS 3.9.9,
‘‘RHR—Low Water Level,’’ respectively.
Associated Bases changes were
proposed for the respective LCOs, SR
changes, and SR additions.
The NRC staff has reviewed the model
application for TSTF–523 and has found
it acceptable for use by licensees.
Licensees opting to apply for this TS
change are responsible for reviewing the
NRC’s staff safety evaluation and the
applicable technical bases, providing
any necessary plant-specific
information, and assessing the
completeness and accuracy of their
license amendment request (LAR). The
NRC will process each amendment
application responding to the Notice of
Availability according to applicable
NRC rules and procedures.
The proposed changes do not prevent
licensees from requesting an alternate
approach or proposing changes other
than those proposed in TSTF–523,
Revision 2. However, significant
deviations from the approach
recommended in this notice or the
inclusion of additional changes to the
license require additional NRC staff
review. This may increase the time and
resources needed for the review or
result in NRC staff rejection of the LAR.
Licensees desiring significant deviations
or additional changes should instead
submit an LAR that does not claim to
adopt TSTF–523, Revision 2.
Dated at Rockville, Maryland, this 23rd day
of December, 2013.
For the Nuclear Regulatory Commission.
Anthony J. Mendiola,
Chief, Licensing Processes Branch, Division
of Policy and Rulemaking, Office of Nuclear
Reactor Regulation.
[FR Doc. 2014–00644 Filed 1–14–14; 8:45 am]
BILLING CODE 7590–01–P
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PRESIDIO TRUST
Notice of Public Meeting of Fort Scott
Council
The Presidio Trust.
Notice of public meeting of Fort
Scott Council.
AGENCY:
ACTION:
Pursuant to the Federal
Advisory Committee Act, as amended (5
U.S.C. Appendix 2), notice is hereby
given that a public meeting of the Fort
Scott Council (Council) will be held
from 1:00 p.m. to 4:30 p.m. on Tuesday,
January 28, 2014. The meeting is open
to the public, and oral public comment
will be received at the meeting. The
Council was formed to advise the
Executive Director of the Presidio Trust
(Trust) on matters pertaining to the
rehabilitation and reuse of Fort Winfield
Scott as a new national center focused
on service and leadership development.
SUPPLEMENTARY INFORMATION: The
Trust’s Executive Director, in
consultation with the Chair of the Board
of Directors, has determined that the
Council is in the public interest and
supports the Trust in performing its
duties and responsibilities under the
Presidio Trust Act, 16 U.S.C. 460bb
appendix.
The Council will advise on the
establishment of a new national center
(Center) focused on service and
leadership development, with specific
emphasis on: (a) Assessing the role and
key opportunities of a national center
dedicated to service and leadership at
Fort Scott in the Presidio of San
Francisco; (b) providing
recommendations related to the Center’s
programmatic goals, target audiences,
content, implementation and
evaluation; (c) providing guidance on a
phased development approach that
leverages a combination of funding
sources including philanthropy; and (d)
making recommendations on how to
structure the Center’s business model to
best achieve the Center’s mission and
ensure long-term financial selfsufficiency.
Meeting Agenda: In this meeting of
the Council, the Acting Director will
provide an update on the Cross Sector
Leadership Fellows program. There will
be a discussion about a strategic plan for
the Presidio Institute. The period from
4:00 p.m. to 4:30 p.m. will be reserved
for public comments.
Public Comment: Individuals who
would like to offer comments are
invited to sign-up at the meeting and
speaking times will be assigned on a
first-come, first-served basis. Written
comments may be submitted on cards
that will be provided at the meeting, via
SUMMARY:
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mail to Linh Tran, Presidio Trust, 1201
Ralston Avenue, San Francisco, CA
94129–0052, or via email to institute@
presidiotrust.gov. If individuals
submitting written comments request
that their address or other contact
information be withheld from public
disclosure, it will be honored to the
extent allowable by law. Such requests
must be stated prominently at the
beginning of the comments. The Trust
will make available for public
inspection all submissions from
organizations or businesses and from
persons identifying themselves as
representatives or officials of
organizations and businesses.
Time: The meeting will be held from
1:00 p.m. to 4:30 p.m. on Tuesday,
January 28, 2014.
Location: The meeting will be held at
1202 Ralston Avenue, The Presidio of
San Francisco, San Francisco, CA
94129.
FOR FURTHER INFORMATION CONTACT:
Additional information is available
online at https://www.presidio.gov/
explore/Pages/presidio-institute.aspx.
Dated: January 7, 2014.
Karen A. Cook,
General Counsel.
[FR Doc. 2014–00492 Filed 1–14–14; 8:45 am]
BILLING CODE 4310–4R–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71273; File No. SR–NYSE–
2013–83]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Making
Effective as of January 1, 2014
Recently Approved Changes to NYSE
Rules 451 and 465, and the Related
Provisions of Section 402.10 of the
NYSE Listed Company Manual
Concerning Charges by Member
Organizations for Processing and
Forwarding Proxy and Other Issuer
Communications to Beneficial Owners,
and Establishing a Fee Under Certain
Conditions for an Enhanced Brokers’
Internet Platform
January 9, 2014.
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 December
31, 2013, New York Stock Exchange
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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Federal Register / Vol. 79, No. 10 / Wednesday, January 15, 2014 / Notices
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 make
effective as of January 1, 2014 recently
approved changes to NYSE Rules 451
and 465, and the related provisions of
Section 402.10 of the NYSE Listed
Company Manual, which (i) provide a
schedule for the reimbursement of
expenses by issuers to NYSE member
organizations for the processing of
proxy materials and other issuer
communications provided to investors
holding securities in street name, (ii)
establish a supplemental fee for each
account that elects or converts to
electronic delivery while having access
to an Enhanced Brokers’ Internet
Platform (‘‘EBIP’’) and (iii) set forth
further conditions to collection of the
EBIP fee. 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.
wreier-aviles on DSK5TPTVN1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Following a multi-year effort that
began with the formation of the
Exchange’s Proxy Fee Advisory
Committee in September 2010, the
Securities and Exchange Commission by
order dated October 18, 2013 approved
the proposed changes to the schedule
for the reimbursement of expenses by
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issuers to NYSE member organizations
for the processing of proxy materials
and other issuer communications
provided to investors holding securities
in street name.4 Neither the Exchange’s
rule filing nor the SEC Approval Order
made reference to a specific effective
date for the new rules, which means
that the amended rules took effect on
the date of SEC approval.
Representatives of the intermediaries
that serve almost all the NYSE member
organizations involved in effecting
proxy distributions to street name
shareholders have now brought to the
Exchange’s attention that they require
some lead time in order to be able to
prepare to meet the new requirements
and implement the new price schedule
contained in the amended rules. For the
reasons explained more fully below, the
Exchange proposes to specify that the
rule amendments shall become effective
on January 1, 2014 and shall apply to
shareholder communication and proxy
distributions with respect to which the
record date occurs on and after that
date. In addition the Exchange proposes
that the new supplemental fee of 99
cents for each new account that elects,
and each full package recipient among
a brokerage firm’s accounts that
converts to, electronic delivery while
having access to an EBIP 5 will be
charged in relation to any such election
or conversion occurring on or after
January 1, 2014.6 The Exchange also
proposes that the changes regarding fees
for providing non-objecting beneficial
owner information shall apply to
requests with respect to record dates
occurring on or after January 1, 2014.
As noted in the Proxy Fee Rule Filing,
a single intermediary, Broadridge
Financial Solutions, Inc. (‘‘Broadridge’’),
currently handles almost all proxy
processing and distribution to street
name shareholders in the U.S.
Broadridge enters into contracts with
NYSE member organizations to provide
distribution and vote collection services
to those firms, and acts as billing and
collection agent for these NYSE member
organizations in connection with
reimbursements provided by the issuers
4 Securities Exchange Act Release No. 70720,
October 18, 2013, 78 FR 63530 (‘‘SEC Approval
Order’’), approving SR–NYSE–2013–07 (‘‘Proxy Fee
Rule Filing’’).
5 The EBIP fee does not apply to electronic
delivery consents captured by issuers. For
additional restrictions on collection of the EBIP fee,
see Part 7 of NYSE Rule 451 and Section 402.10 of
the Listed Company Manual.
6 The Exchange notes that the Proxy Fee Rule
Filing contained a placeholder to specify the date
on which the EBIP fee will cease to be in effect. The
Exchange proposes to amend Rule 451 and Section
402.10 to specify that the EBIP fee will cease to be
in effect on December 31, 2018.
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2703
whose materials are distributed.
Subsequent to issuance of the SEC
Approval Order, Broadridge informed
the Exchange that the fee changes
effected by the Proxy Fee Rule Filing
will require significant changes to
Broadridge’s financial reporting,
collection and billing systems.
Broadridge estimates that these changes
will require over 6100 hours of work,
including testing and quality assurance.
Specifically Broadridge has advised
the Exchange that implementation of the
new fee schedule will involve changes
to invoicing applications and financial
reporting systems to reflect all the
multiple changes to the fee schedule,
including changes in some twenty-five
modules within the billing platform for
invoicing, accruals, reporting and
interfaces to front-end systems to source
the data. This work is estimated to take
approximately 1,200 hours.
Additionally, systems work of
approximately 2,250 hours will be
needed regarding share range and voted/
unvoted shares data to handle the
change that permits issuers to request
stratified NOBO lists. Broadridge also
expects to implement a tracking system
for broker clients with qualified EBIPs
to identify eligible positions that may
trigger the one-time EBIP fee and ensure
that the fee is only charged one-time,
and maintain five years of historical
data, e-consent and vote participation
records. Broadridge estimates that this
work will require approximately 2,000
hours. Broadridge will also do
development work on its client
reporting systems, including
incorporation of fee schedule changes
for invoice presentment, and display of
financial information for client and
internal web-services, estimating that
this will require approximately 700
hours.
Broadridge also notes that its NYSE
member organization clients will be
required to program their systems to
distinguish managed accounts of five
shares or less and fractional shares in all
accounts to support the rule change that
requires that such accounts be
processed at no charge to the issuer.
Broadridge also notes that it will have
to review its contracts with all its NYSE
member organization clients to
determine what amendments may be
necessary, for example to update fee
schedules that are included within the
contracts.
Broadridge notes that it will expect to
test the system changes it is required to
make to the same high standards it uses
for all its systems conversions. The
impact of Broadridge’s systems is
widespread, covering a significant
number of member organizations that
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Federal Register / Vol. 79, No. 10 / Wednesday, January 15, 2014 / Notices
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are its clients, and the approximately
12,000 issuers whose materials are
distributed.
The Exchange did address the issue of
whether to specify an effective date for
the proxy fee rule changes in its
response to comments dated May 17,
2013.7 It noted that it had requested
Broadridge to specify whether they
required a specific amount of lead time
to implement the proposed changes, and
that Broadridge had stated in their
comment letter that ‘‘Broadridge is
prepared to implement the new fee
structure soon after the proposal is
approved by the SEC.’’ 8 Broadridge now
indicates that it does in fact require lead
time for the reasons noted herein.
At the Exchange’s request, Broadridge
estimated the impact of a delay in the
effective date on issuers.9 Looking at all
corporate issuers that have (or are likely
to have) record dates between October
18, 2013 and December 31, 2013,
Broadridge estimated there were 774
issuers in this category, of whom 92%
would experience a fee impact, up or
down, of less than $1,000. Of the
remaining 8% of issuers that Broadridge
estimates would experience a fee
impact, up or down, of more than
$1,000, approximately 6.6%, (or 51
issuers) 10 will pay higher fees as a
result of the delay and 1.7% (or 13
issuers) 11 will pay lower fees as a result
of the delay.
The Exchange notes that a large
majority of record dates will occur after
the January 1, 2014 implementation date
for meetings occurring during 2014 and
that the impacted companies represent
only a small minority of issuers that
distribute proxies.
In light of the foregoing, the Exchange
believes that an effective date of January
1, 2014 would be suitable to allow time
for industry development work needed
to implement the new fees in an orderly
manner, while still permitting the
changes to go into effect promptly.
7 See letter to Elizabeth M. Murphy, Secretary,
Commission from Janet McGinnis, EVP & Corporate
Secretary, NYSE Euronext, dated May 17, 2013
(‘‘NYSE Letter’’).
8 In the NYSE Letter, the Exchange also noted that
SIFMA, in a March 18, 2013 comment letter, had
suggested an effective date in January 2014. The
Exchange did not believe that such an extensive
lead time would be necessary, given that Broadridge
appeared able to be ready more quickly.
9 Broadridge based its fee impact estimates on
invoices from the prior year’s proxy season.
10 The impact on the 6.6% of issuers is that they
will not benefit during this period from the new fee
schedule which will result in their paying higher
fees, in the aggregate, of 13.2%. The median
percentage impact on this group will be higher fees
of 13.0%.
11 The fees of the 13 issuers whose fees will
benefit from the delay will be a reduction of fees,
in the aggregate, by 4.1%, with a median fee
decrease of 5.0%.
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2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Securities Exchange Act of 1934
(the ‘‘Act’’) generally 12 and Sections
6(b)(5) 13 and 6(b)(8) 14 of the Act in
particular. Section 6(b)(5) 15 requires,
among other things, that exchange rules
promote just and equitable principles of
trade and that they are not designed to
permit unfair discrimination between
issuers, brokers or dealers. Section
6(b)(8) prohibits any exchange rule from
imposing any burden on competition
that is not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange believes that the
proposed amendment is not designed to
permit unfair discrimination within the
meaning of Section 6(b)(5), as all issuers
are subject to the same fee schedule and
the Exchange attempted to estimate the
impact of a short delay of the
effectiveness of the new fees, and found
that impact on the vast majority of
issuers to be relatively minimal. Nor
will member organizations and their
agents derive any significant financial
benefit from that delay. Rather, for
member organizations the sole purpose
and sole significant effect of the
proposed delay in implementing the
amended fees would be to provide such
member organizations and their agents
with an opportunity to accomplish the
development work necessary to
administer the new fees in an orderly
fashion.
The Exchange believes that the
proposed amendment does not impose
any unnecessary burden on competition
within the meaning of Section 6(b)(8).
The short delay in effectiveness will
provide all industry participants with
time to prepare to operate under the
new fees. Broadridge, as the largest of
the intermediaries will have the largest
number of clients impacted by the new
fees, but presumably also has the
significant resources needed to
accomplish the work necessary. Other
intermediaries have much smaller
numbers of clients, and so presumably
some greater ability to handle billing
and client support in a more manual
fashion for the time needed to transition
their systems. For the foregoing reasons,
the Exchange believes that its proposed
fee schedule does not place any
unnecessary burden on competition.
12 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
14 15 U.S.C. 78f(b)(8).
15 15 U.S.C. 78f(b)(5).
13 15
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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. All of the
NYSE member organizations and their
service providers will benefit from the
additional time to prepare for the
implementation of the amended fees
and none of them will derive any
advantage from that delay in relation to
any other market participant.
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 for 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)
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
16 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
Exchange give the Commission written notice of its
intent to file the proposed rule change, along with
a brief description and the 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).
17 17
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Federal Register / Vol. 79, No. 10 / Wednesday, January 15, 2014 / Notices
because such waiver should help
minimize the potential for investor
confusion as to the applicable proxy
fees as well as ensure that the rules are
clear on which fees apply, and when.
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. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 21 of the Act 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:
wreier-aviles on DSK5TPTVN1PROD with NOTICES
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–2013–83 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–2013–83. 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
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).
21 15 U.S.C. 78s(b)(2)(B).
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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–
2013–83 and should be submitted on or
before February 5, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–00582 Filed 1–14–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71266; File No. SR–
NYSEArca–2013–144]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change Relating To Listing and
Trading of Shares of the ETSpreads HY
Long Credit Fund, the ETSpreads HY
Short Credit Fund, the ETSpreads IG
Long Credit Fund and the ETSpreads
IG Short Credit Fund Under NYSE Arca
Equities Rule 8.600
January 9, 2014.
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 December
27, 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.
22 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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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to list and
trade shares of the following under
NYSE Arca Equities Rule 8.600
(‘‘Managed Fund Shares’’): the
ETSpreads HY Long Credit Fund, the
ETSpreads HY Short Credit Fund, the
ETSpreads IG Long Credit Fund and the
ETSpreads IG Short Credit Fund. 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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to list and
trade shares (‘‘Shares’’) of the following
under NYSE Arca Equities Rule 8.600
which governs the listing and trading of
Managed Fund Shares 4: the ETSpreads
HY Long Credit Fund, the ETSpreads
HY Short Credit Fund, the ETSpreads IG
Long Credit Fund and the ETSpreads IG
Short Credit Fund (each, a ‘‘Fund’’ and
collectively, the ‘‘Funds’’).5 The Shares
4 A Managed Fund Share is a security that
represents an interest in an investment company
registered under the Investment Company Act of
1940 (15 U.S.C. 80a–1) (‘‘1940 Act’’) organized as
an open-end investment company or similar entity
that invests in a portfolio of securities selected by
its investment adviser consistent with its
investment objectives and policies. In contrast, an
open-end investment company that issues
Investment Company Units, listed and traded on
the Exchange under NYSE Arca Equities Rule
5.2(j)(3), seeks to provide investment results that
correspond generally to the price and yield
performance of a specific foreign or domestic stock
index, fixed income securities index or combination
thereof.
5 The Commission previously approved listing
and trading on the Exchange of actively managed
funds under Rule 8.600. See Securities Exchange
Act Release Nos. 57801 (May 8, 2008), 73 FR 27878
(May 14, 2008) (SR–NYSEArca–2008–31) (order
Continued
E:\FR\FM\15JAN1.SGM
15JAN1
]]>Agencies
[Federal Register Volume 79, Number 10 (Wednesday, January 15, 2014)]
[Notices]
[Pages 2702-2705]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-00582]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71273; File No. SR-NYSE-2013-83]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Making Effective as of January 1, 2014 Recently Approved Changes to
NYSE Rules 451 and 465, and the Related Provisions of Section 402.10 of
the NYSE Listed Company Manual Concerning Charges by Member
Organizations for Processing and Forwarding Proxy and Other Issuer
Communications to Beneficial Owners, and Establishing a Fee Under
Certain Conditions for an Enhanced Brokers' Internet Platform
January 9, 2014.
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 December 31, 2013, New York Stock Exchange LLC (``NYSE''
or the ``Exchange'') filed
[[Page 2703]]
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.
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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 make effective as of January 1, 2014
recently approved changes to NYSE Rules 451 and 465, and the related
provisions of Section 402.10 of the NYSE Listed Company Manual, which
(i) provide a schedule for the reimbursement of expenses by issuers to
NYSE member organizations for the processing of proxy materials and
other issuer communications provided to investors holding securities in
street name, (ii) establish a supplemental fee for each account that
elects or converts to electronic delivery while having access to an
Enhanced Brokers' Internet Platform (``EBIP'') and (iii) set forth
further conditions to collection of the EBIP fee. 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
Following a multi-year effort that began with the formation of the
Exchange's Proxy Fee Advisory Committee in September 2010, the
Securities and Exchange Commission by order dated October 18, 2013
approved the proposed changes to the schedule for the reimbursement of
expenses by issuers to NYSE member organizations for the processing of
proxy materials and other issuer communications provided to investors
holding securities in street name.\4\ Neither the Exchange's rule
filing nor the SEC Approval Order made reference to a specific
effective date for the new rules, which means that the amended rules
took effect on the date of SEC approval. Representatives of the
intermediaries that serve almost all the NYSE member organizations
involved in effecting proxy distributions to street name shareholders
have now brought to the Exchange's attention that they require some
lead time in order to be able to prepare to meet the new requirements
and implement the new price schedule contained in the amended rules.
For the reasons explained more fully below, the Exchange proposes to
specify that the rule amendments shall become effective on January 1,
2014 and shall apply to shareholder communication and proxy
distributions with respect to which the record date occurs on and after
that date. In addition the Exchange proposes that the new supplemental
fee of 99 cents for each new account that elects, and each full package
recipient among a brokerage firm's accounts that converts to,
electronic delivery while having access to an EBIP \5\ will be charged
in relation to any such election or conversion occurring on or after
January 1, 2014.\6\ The Exchange also proposes that the changes
regarding fees for providing non-objecting beneficial owner information
shall apply to requests with respect to record dates occurring on or
after January 1, 2014.
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\4\ Securities Exchange Act Release No. 70720, October 18, 2013,
78 FR 63530 (``SEC Approval Order''), approving SR-NYSE-2013-07
(``Proxy Fee Rule Filing'').
\5\ The EBIP fee does not apply to electronic delivery consents
captured by issuers. For additional restrictions on collection of
the EBIP fee, see Part 7 of NYSE Rule 451 and Section 402.10 of the
Listed Company Manual.
\6\ The Exchange notes that the Proxy Fee Rule Filing contained
a placeholder to specify the date on which the EBIP fee will cease
to be in effect. The Exchange proposes to amend Rule 451 and Section
402.10 to specify that the EBIP fee will cease to be in effect on
December 31, 2018.
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As noted in the Proxy Fee Rule Filing, a single intermediary,
Broadridge Financial Solutions, Inc. (``Broadridge''), currently
handles almost all proxy processing and distribution to street name
shareholders in the U.S. Broadridge enters into contracts with NYSE
member organizations to provide distribution and vote collection
services to those firms, and acts as billing and collection agent for
these NYSE member organizations in connection with reimbursements
provided by the issuers whose materials are distributed. Subsequent to
issuance of the SEC Approval Order, Broadridge informed the Exchange
that the fee changes effected by the Proxy Fee Rule Filing will require
significant changes to Broadridge's financial reporting, collection and
billing systems. Broadridge estimates that these changes will require
over 6100 hours of work, including testing and quality assurance.
Specifically Broadridge has advised the Exchange that
implementation of the new fee schedule will involve changes to
invoicing applications and financial reporting systems to reflect all
the multiple changes to the fee schedule, including changes in some
twenty-five modules within the billing platform for invoicing,
accruals, reporting and interfaces to front-end systems to source the
data. This work is estimated to take approximately 1,200 hours.
Additionally, systems work of approximately 2,250 hours will be needed
regarding share range and voted/unvoted shares data to handle the
change that permits issuers to request stratified NOBO lists.
Broadridge also expects to implement a tracking system for broker
clients with qualified EBIPs to identify eligible positions that may
trigger the one-time EBIP fee and ensure that the fee is only charged
one-time, and maintain five years of historical data, e-consent and
vote participation records. Broadridge estimates that this work will
require approximately 2,000 hours. Broadridge will also do development
work on its client reporting systems, including incorporation of fee
schedule changes for invoice presentment, and display of financial
information for client and internal web-services, estimating that this
will require approximately 700 hours.
Broadridge also notes that its NYSE member organization clients
will be required to program their systems to distinguish managed
accounts of five shares or less and fractional shares in all accounts
to support the rule change that requires that such accounts be
processed at no charge to the issuer. Broadridge also notes that it
will have to review its contracts with all its NYSE member organization
clients to determine what amendments may be necessary, for example to
update fee schedules that are included within the contracts.
Broadridge notes that it will expect to test the system changes it
is required to make to the same high standards it uses for all its
systems conversions. The impact of Broadridge's systems is widespread,
covering a significant number of member organizations that
[[Page 2704]]
are its clients, and the approximately 12,000 issuers whose materials
are distributed.
The Exchange did address the issue of whether to specify an
effective date for the proxy fee rule changes in its response to
comments dated May 17, 2013.\7\ It noted that it had requested
Broadridge to specify whether they required a specific amount of lead
time to implement the proposed changes, and that Broadridge had stated
in their comment letter that ``Broadridge is prepared to implement the
new fee structure soon after the proposal is approved by the SEC.'' \8\
Broadridge now indicates that it does in fact require lead time for the
reasons noted herein.
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\7\ See letter to Elizabeth M. Murphy, Secretary, Commission
from Janet McGinnis, EVP & Corporate Secretary, NYSE Euronext, dated
May 17, 2013 (``NYSE Letter'').
\8\ In the NYSE Letter, the Exchange also noted that SIFMA, in a
March 18, 2013 comment letter, had suggested an effective date in
January 2014. The Exchange did not believe that such an extensive
lead time would be necessary, given that Broadridge appeared able to
be ready more quickly.
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At the Exchange's request, Broadridge estimated the impact of a
delay in the effective date on issuers.\9\ Looking at all corporate
issuers that have (or are likely to have) record dates between October
18, 2013 and December 31, 2013, Broadridge estimated there were 774
issuers in this category, of whom 92% would experience a fee impact, up
or down, of less than $1,000. Of the remaining 8% of issuers that
Broadridge estimates would experience a fee impact, up or down, of more
than $1,000, approximately 6.6%, (or 51 issuers) \10\ will pay higher
fees as a result of the delay and 1.7% (or 13 issuers) \11\ will pay
lower fees as a result of the delay.
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\9\ Broadridge based its fee impact estimates on invoices from
the prior year's proxy season.
\10\ The impact on the 6.6% of issuers is that they will not
benefit during this period from the new fee schedule which will
result in their paying higher fees, in the aggregate, of 13.2%. The
median percentage impact on this group will be higher fees of 13.0%.
\11\ The fees of the 13 issuers whose fees will benefit from the
delay will be a reduction of fees, in the aggregate, by 4.1%, with a
median fee decrease of 5.0%.
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The Exchange notes that a large majority of record dates will occur
after the January 1, 2014 implementation date for meetings occurring
during 2014 and that the impacted companies represent only a small
minority of issuers that distribute proxies.
In light of the foregoing, the Exchange believes that an effective
date of January 1, 2014 would be suitable to allow time for industry
development work needed to implement the new fees in an orderly manner,
while still permitting the changes to go into effect promptly.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Securities Exchange Act of 1934 (the ``Act'') generally
\12\ and Sections 6(b)(5) \13\ and 6(b)(8) \14\ of the Act in
particular. Section 6(b)(5) \15\ requires, among other things, that
exchange rules promote just and equitable principles of trade and that
they are not designed to permit unfair discrimination between issuers,
brokers or dealers. Section 6(b)(8) prohibits any exchange rule from
imposing any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ 15 U.S.C. 78f(b)(8).
\15\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed amendment is not designed
to permit unfair discrimination within the meaning of Section 6(b)(5),
as all issuers are subject to the same fee schedule and the Exchange
attempted to estimate the impact of a short delay of the effectiveness
of the new fees, and found that impact on the vast majority of issuers
to be relatively minimal. Nor will member organizations and their
agents derive any significant financial benefit from that delay.
Rather, for member organizations the sole purpose and sole significant
effect of the proposed delay in implementing the amended fees would be
to provide such member organizations and their agents with an
opportunity to accomplish the development work necessary to administer
the new fees in an orderly fashion.
The Exchange believes that the proposed amendment does not impose
any unnecessary burden on competition within the meaning of Section
6(b)(8). The short delay in effectiveness will provide all industry
participants with time to prepare to operate under the new fees.
Broadridge, as the largest of the intermediaries will have the largest
number of clients impacted by the new fees, but presumably also has the
significant resources needed to accomplish the work necessary. Other
intermediaries have much smaller numbers of clients, and so presumably
some greater ability to handle billing and client support in a more
manual fashion for the time needed to transition their systems. For the
foregoing reasons, the Exchange believes that its proposed fee schedule
does not place any unnecessary burden on competition.
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. All of the NYSE member
organizations and their service providers will benefit from the
additional time to prepare for the implementation of the amended fees
and none of them will derive any advantage from that delay in relation
to any other market participant.
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 for 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)
thereunder.\17\
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to Exchange give the
Commission written notice of its intent to file the proposed rule
change, along with a brief description and the 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.
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\18\ 17 CFR 240.19b-4(f)(6).
\19\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
[[Page 2705]]
because such waiver should help minimize the potential for investor
confusion as to the applicable proxy fees as well as ensure that the
rules are clear on which fees apply, and when. Therefore, the
Commission hereby waives the 30-day operative delay and designates the
proposal operative upon filing.\20\
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\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. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \21\ of the Act to determine whether the proposed
rule should be approved or disapproved.
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\21\ 15 U.S.C. 78s(b)(2)(B).
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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-2013-83 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-2013-83. 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-2013-83 and should be
submitted on or before February 5, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-00582 Filed 1-14-14; 8:45 am]
BILLING CODE 8011-01-P
