Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Cease Trading on Its Trading System, 27017-27020 [2014-10785]

Download as PDF Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Notices providing them with additional investment alternatives. B. Self-Regulatory Organization’s Statement on Burden on Competition The [sic] 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 change does not impose any burden on intramarket competition because it applies to all Participants. There is no burden on intermarket competition as the proposed change is merely attempting to update the new ticker for Google class A for Mini Options. As a result, there will be no substantive changes to the Exchange’s operations or its rules. 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. 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 7 and Rule 19b–4(f)(6) thereunder.8 A proposed rule change filed under Rule 19b–4(f)(6) 9 normally does not become operative for 30 days after the date of filing. However, pursuant to Rule 19b–4(f)(6)(iii) 10 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 emcdonald on DSK67QTVN1PROD with NOTICES 7 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). As required under Rule 19b–4(f)(6)(iii), the Exchange provided the Commission with 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. 9 17 CFR 240.19b–4(f)(6). 10 17 CFR 240.19b–4(f)(6)(iii). 8 17 VerDate Mar<15>2010 18:00 May 09, 2014 Jkt 232001 consistent with the protection of investors and the public interest as it will help to ensure that market participants are properly informed as to the underlying securities eligible for trading of Mini Options contracts on the Exchange. For this reason, the Commission designates the proposed rule change to be operative upon filing.11 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– BX–2014–020 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–BX–2014–020. 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 11 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 27017 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–BX– 2014–020 and should be submitted on or before June 2, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–10777 Filed 5–9–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–72107; File No. SR–NSX– 2014–14] Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Cease Trading on Its Trading System May 6, 2014. 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 1, 2014, National Stock Exchange, Inc. (‘‘NSX’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The 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 is proposing to amend Exchange Rule 11.1 to add new section .01 under Interpretations and Policies to permit NSX to cease trading activity on the Exchange’s Trading System (the 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\12MYN1.SGM 12MYN1 27018 Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Notices ‘‘System’’) 3 as of the close of business on May 30, 2014 (the ‘‘Closing Date’’). The text of the proposed rule change is also available on the Exchange’s Web site at www.nsx.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 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 these 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 aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose emcdonald on DSK67QTVN1PROD with NOTICES NSX, a corporation organized under the laws of the State of Delaware, is a registered national securities exchange under Section 6 of the Exchange Act 4 and operates as a self-regulatory organization governed by the requirements of Section 19 of the Exchange Act.5 Pursuant to a transaction approved by the Commission on December 29, 2011, NSX has operated as a wholly-owned subsidiary of CBOE Stock Exchange, LLC (‘‘CBSX’’).6 This rule filing is not proposing any change to the ownership structure of the Exchange and is not intended to alter any of the existing obligations of CBSX or its owners, directors, officers, employees or agents with respect to CBSX’s ownership of NSX, or with respect to the selfregulatory responsibilities of NSX, as described, inter alia, in Sections 5.7(b) and 6.15 of the Third Amended and Restated Operating Agreement of CBOE 3 Exchange Rule 1.5S.(4) defines the ‘‘System’’ as the electronic securities communications and trading facility designated by the Board through which orders of Users are consolidated for ranking and execution. 4 15 U.S.C. 78f. 5 15 U.S.C. 78s. 6 See Exchange Act Release No. 66071 (December 29, 2011), 77 FR 521 (January 5, 2012)(SR–CBOE– 2011–107 and SR–NSX–2011–14) (Order Granting Accelerated Approval to Proposed Rule Changes in Connection with the Proposed Acquisition of the National Stock Exchange, Inc. by the CBOE Stock Exchange, LLC). VerDate Mar<15>2010 18:00 May 09, 2014 Jkt 232001 Stock Exchange, LLC, dated December 30, 2011 (the ‘‘Operating Agreement’’).7 The Exchange is proposing to cease trading activity on the System as of the close of business on the Closing Date. In that regard, the Exchange proposes to add new .01, Interpretations and Policies under Rule 11.1 (Hours of Trading). The new text will provide that, as of the close of business on May 30, 2014, NSX shall cease trading activity on the System; that all NSX Rules will remain in full force and effect through and after the Closing Date; and that the Exchange shall file a proposed rule change pursuant to Rule 19b–4 of the Exchange Act prior to any resumption of trading on the Exchange pursuant to Chapter XI (Trading Rules). After trading ceases on the System as of the close of business on the Closing Date, the Exchange will continue to be registered as a national securities exchange and will continue to retain its status as a self-regulatory organization. The Exchange represents that it will fully discharge all of its obligations as a self-regulatory organization pursuant to the Act through and after the Closing Date, and will assure that it maintains adequate funding for this purpose. The 7 Section 5.7(b) of the Operating Agreement generally provides that for so long as CBSX shall control NSX, and only to the extent related to the activities of NSX, the Owners, Board of Directors, officers and employees of CBSX shall give due regard to the preservation of the independence of the self-regulatory function of NSX and its obligations to investors and the general public and shall not take actions that any such person knows or reasonably should have known would interfere with the decisions of NSX relating to its regulatory functions (including disciplinary matters) or which would interfere with NSX’s ability to fulfill its obligations under the Act. Section 5.7(b) further requires CBSX, its officers, directors and employees to cooperate with the Commission and NSX with respect to the Commission’s oversight responsibilities regarding NSX. Section 6.15 of the Operating Agreement (Books, Records and Jurisdiction), subsections (a) and (b) generally provide that the books, records, premises, officers, directors, agents and employees of CBSX are deemed to be those of NSX, to the extent they relate to the activities of NSX, for the purpose of and subject to oversight pursuant to the Act. Section 6.15(c) of the Operating Agreement provides that CBSX, its Owners and their respective officers, directors, agents, and employees irrevocably submit to the jurisdiction of the U.S. federal courts, the SEC, CBOE, and NSX, for the purposes of any suit, action or proceeding pursuant to U.S. federal securities laws or the rules or regulations thereunder, commenced or initiated by the SEC arising out of, or relating to, CBSX or the Company’s control of NSX, as applicable (and shall be deemed to agree that CBSX may serve as the U.S. agent for purposes of service of process in such suit, action or proceeding), and that they waive, and agree not to assert by way of motion, as a defense or otherwise in any such suit, action or proceeding, any claims that they are not personally subject to the jurisdiction of the SEC, that the suit, action or proceeding is an inconvenient forum or that the venue of the suit, action or proceeding is improper, or that the subject matter thereof may not be enforced in or by such courts or agency. PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 Exchange is not the Designated Examining Authority (‘‘DEA’’) for any of its ETP Holders and there are no ‘‘NSX only’’ ETP Holders (i.e., all NSX ETP Holders are members of other selfregulatory organizations).8 Further, all NSX rules shall remain in full force and effect through and after the Closing Date and the Exchange will retain disciplinary jurisdiction over all ETP Holders and persons associated with ETP Holders 9 pursuant to Chapter VIII. of the Exchange’s Rules and, specifically, Rule 8.1(b). That rule generally provides that any ETP Holder or person associated with an ETP Holder shall continue to be subject to the disciplinary jurisdiction of the Exchange following the termination of such person’s ETP status or association with an ETP Holder with respect to matters that occurred prior to such termination; provided that written notice of the commencement of an inquiry into such matters is given by the Exchange to such former ETP Holder or former associated person within one year of receipt by the Exchange of the latest written notice of the termination of such person’s status as an ETP Holder or person associated with an ETP Holder. Such notice requirement does not apply to a person who at any time after a termination again becomes subject to the disciplinary jurisdiction of the Exchange by becoming an ETP Holder or a person associated with an ETP Holder.10 Pursuant to this rule, after the Closing Date, the Exchange will enforce any rule violation that occurred prior to the close of business on the System on the Closing Date. Upon the filing of the instant rule proposal with the Commission, the Exchange will inform all ETP Holders by Information Circular that NSX will end trading operations as of the close of business on the Closing Date. The Information Circular will also inform all 8 The Exchange represents that it will move to amend or cancel its participation in any existing Exchange Act Rule 17d–2 Plans for Allocation of Regulatory Responsibilities for NSX as appropriate in connection with the conclusion of all open matters relating to the Exchange’s regulatory responsibilities with respect to NSX. 9 Exchange Rule 1.5P.(1) provides that ‘‘[t]he terms ‘‘person associated with an ETP Holder’’ or ‘‘associated person of an ETP Holder’’ mean any partner, officer, director, or branch manager of an ETP Holder (or any person occupying a similar status or performing similar functions), any person directly or indirectly controlling, controlled by, or under common control with an ETP Holder, or any employee of such ETP Holder, except that any person associated with an ETP Holder whose functions are solely clerical or ministerial shall not be included in the meaning of such terms.’’ 10 The Exchange notes that, because all NSX rules will remain in effect after the Closing Date, NSX Rule 11.18, which limits the liability of the Exchange, will also remain in effect. E:\FR\FM\12MYN1.SGM 12MYN1 Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Notices emcdonald on DSK67QTVN1PROD with NOTICES ETP Holders that the Exchange will terminate the ETP status of any remaining ETP Holders as of May 30, 2014. Once the proposed rule change is operative, NSX will no longer accept new ETP applications or further consider any pending ETP applications. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Exchange Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) 11 of the Exchange Act. Specifically, the Exchange believes that the proposed rule change is consistent with the requirement of Section 6(b)(5) 12 that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, 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. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. In particular, the proposed rule change will allow NSX to cease trading activity on the System as of the close of business on the Closing Date and continue to maintain adequate funding to fulfill its regulatory obligations under the Exchange Act, including enforcing any rule violations that occurred through the close of trading on the Closing Date. Because all ETP Holders are members of other exchanges, after the Closing Date they will to be able to direct their orders to other national securities exchanges and other trading venues, including alternative trading systems and the over-the-counter market generally. Under the proposal, in addition to this rule filing being made available on the NSX Web site, www.nsx.com, ETP Holders will receive written notice by Information Circular, issued upon the instant rule filing being filed with the Commission, advising them of the Exchange’s intention to cease trading activity on the System as of the close of business on the Closing Date. Accordingly, the Exchange believes that 11 15 12 15 U.S.C. 78(f)(b) [sic]. U.S.C. 78(f)(b)(5) [sic]. VerDate Mar<15>2010 18:00 May 09, 2014 Jkt 232001 ETP Holders will have sufficient time prior to the Closing Date to determine the exchanges and trading venues to which they will direct their orders after the Closing Date and make any necessary adjustments in their respective trading systems. Moreover, all ETP Holders will receive prior notice that NSX will terminate their ETP Status as of May 30, 2014, unless the ETP Holder voluntarily terminates its status as such prior to such date in accordance with Exchange rules. The Exchange submits that proposed rule change is therefore consistent with the requirements of Section 6(b)(5) of the Exchange Act that rules of an exchange be designed to facilitate transactions in securities, 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. 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 Exchange Act. The NSX’s decision to cease trading activity on the System as of the close of business on the Closing Date will result in one less operational trading venue for equity securities. The Exchange notes that there are numerous stock exchanges and trading platforms on which market participants may trade equity securities. NSX currently has approximately .20% of market share among national stock exchanges. In light of the trading volume on NSX and the ability of ETP Holders to trade equity securities on other trading venues, the Exchange does not believe that its proposal will have any substantial competitive impact. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited or received written comments on the proposed rule change from ETP Holders or others. 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 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 27019 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 13 and Rule 19b–4(f)(6)(iii) thereunder.14 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of 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 (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NSX–2014–14 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NSX–2014–14. 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 13 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6)(iii). As required under Rule 19b–4(f)(6)(iii), the Exchange provided the Commission with 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. 14 17 E:\FR\FM\12MYN1.SGM 12MYN1 27020 Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Notices 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–NSX– 2014–14, and should be submitted on or before June 2, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–10785 Filed 5–9–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–72102; File No. SR– NYSEARCA–2014–50] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Commentary .01 to Rule 6.3. To Replace the Reference to ‘‘GOOG’’ With ‘‘GOOGL’’ May 6, 2014. emcdonald on DSK67QTVN1PROD with NOTICES 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 April 23, 2014, 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 Commentary .01 to Rule 6.3. to replace the reference to ‘‘GOOG’’ with 15 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. 18:00 May 09, 2014 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 Commentary .01 to Rule 6.3 (Options Contracts to [sic] Traded) to replace the reference to ‘‘GOOG’’ with GOOGL’’. This filing is based on a proposal recently submitted by the Chicago Board Options Exchange, Inc. (‘‘CBOE’’).4 The Exchange is proposing to amend Commentary .01 to Rule 6.3 to reflect a change to the ticker symbol for Class A shares of Google Inc. (‘‘Google’’). On April 2, 2014, Google issued a new class of shares (Class C) to its shareholders in lieu of a cash dividend payment. Additionally, this new Class C of shares was given the former Google ticker symbol, ‘‘GOOG’’. As a result, a new ticker symbol, ‘‘GOOGL’’, was assigned to the Class A shares. The Exchange proposes to change the Google ticker symbol referenced in Rule 6.3 from ‘‘GOOG’’ to ‘‘GOOGL’’. The purpose of this change is to ensure that Exchange rules properly reflect the intention and practice of the Exchange to trade mini options on a specified list of underlying securities outlined in Commentary .01 of Rule 6.3. This change will make it clear that the current list of underlying securities that mini options can be traded on includes the Google Class A shares, while at the same time making it clear that Google Class C shares are not part of that list. The Exchange therefore believes that the proposed rule 4 See Securities Exchange Act Release No.71848 (April 2, 2014) 79 FR 19405 (April 8, 2014) (Notice of Filing and Immediate Effectiveness of SR–CBOE– 2014–030). 1 15 VerDate Mar<15>2010 ‘‘GOOGL’’. 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. Jkt 232001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 change will help avoid confusion regarding which Google shares are eligible for mini options. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act,5 in general, and furthers the objectives of Section 6(b)(5),6 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. In particular, the proposed rule change to revise the Google Class A ticker symbol to its new designation is consistent with the Act because the proposed change is merely updating the corresponding ticker symbol to properly reflect the applicable ticker symbol for Google’s Class A shares. This change should provide clarity to market participants when making investment decisions regarding mini options contracts overlying Google Class A shares. 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. In this regard and as indicated above, the Exchange notes that the rule change being proposed is substantially similar in all material respects to a rule change recently adopted by the CBOE.7 The proposed change does not impose any burden on intramarket competition because it applies to all Participants. There is no burden on intermarket competition as the proposed change is merely attempting to update the new ticker symbol for Google Class A shares. As a result, there will be no substantive changes to the Exchange’s operations or its rules. 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. 5 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 7 Supra n.4. 6 15 E:\FR\FM\12MYN1.SGM 12MYN1

Agencies

[Federal Register Volume 79, Number 91 (Monday, May 12, 2014)]
[Notices]
[Pages 27017-27020]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10785]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72107; File No. SR-NSX-2014-14]


Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Cease Trading on Its Trading System

May 6, 2014.
    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 1, 2014, National Stock Exchange, Inc. (``NSX'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange is proposing to amend Exchange Rule 11.1 to add new 
section .01 under Interpretations and Policies to permit NSX to cease 
trading activity on the Exchange's Trading System (the

[[Page 27018]]

``System'') \3\ as of the close of business on May 30, 2014 (the 
``Closing Date'').
---------------------------------------------------------------------------

    \3\ Exchange Rule 1.5S.(4) defines the ``System'' as the 
electronic securities communications and trading facility designated 
by the Board through which orders of Users are consolidated for 
ranking and execution.
---------------------------------------------------------------------------

    The text of the proposed rule change is also available on the 
Exchange's Web site at www.nsx.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 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 these 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 aspects of such 
statements.

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

1. Purpose
    NSX, a corporation organized under the laws of the State of 
Delaware, is a registered national securities exchange under Section 6 
of the Exchange Act \4\ and operates as a self-regulatory organization 
governed by the requirements of Section 19 of the Exchange Act.\5\ 
Pursuant to a transaction approved by the Commission on December 29, 
2011, NSX has operated as a wholly-owned subsidiary of CBOE Stock 
Exchange, LLC (``CBSX'').\6\ This rule filing is not proposing any 
change to the ownership structure of the Exchange and is not intended 
to alter any of the existing obligations of CBSX or its owners, 
directors, officers, employees or agents with respect to CBSX's 
ownership of NSX, or with respect to the self-regulatory 
responsibilities of NSX, as described, inter alia, in Sections 5.7(b) 
and 6.15 of the Third Amended and Restated Operating Agreement of CBOE 
Stock Exchange, LLC, dated December 30, 2011 (the ``Operating 
Agreement'').\7\
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78s.
    \6\ See Exchange Act Release No. 66071 (December 29, 2011), 77 
FR 521 (January 5, 2012)(SR-CBOE-2011-107 and SR-NSX-2011-14) (Order 
Granting Accelerated Approval to Proposed Rule Changes in Connection 
with the Proposed Acquisition of the National Stock Exchange, Inc. 
by the CBOE Stock Exchange, LLC).
    \7\ Section 5.7(b) of the Operating Agreement generally provides 
that for so long as CBSX shall control NSX, and only to the extent 
related to the activities of NSX, the Owners, Board of Directors, 
officers and employees of CBSX shall give due regard to the 
preservation of the independence of the self-regulatory function of 
NSX and its obligations to investors and the general public and 
shall not take actions that any such person knows or reasonably 
should have known would interfere with the decisions of NSX relating 
to its regulatory functions (including disciplinary matters) or 
which would interfere with NSX's ability to fulfill its obligations 
under the Act. Section 5.7(b) further requires CBSX, its officers, 
directors and employees to cooperate with the Commission and NSX 
with respect to the Commission's oversight responsibilities 
regarding NSX. Section 6.15 of the Operating Agreement (Books, 
Records and Jurisdiction), subsections (a) and (b) generally provide 
that the books, records, premises, officers, directors, agents and 
employees of CBSX are deemed to be those of NSX, to the extent they 
relate to the activities of NSX, for the purpose of and subject to 
oversight pursuant to the Act. Section 6.15(c) of the Operating 
Agreement provides that CBSX, its Owners and their respective 
officers, directors, agents, and employees irrevocably submit to the 
jurisdiction of the U.S. federal courts, the SEC, CBOE, and NSX, for 
the purposes of any suit, action or proceeding pursuant to U.S. 
federal securities laws or the rules or regulations thereunder, 
commenced or initiated by the SEC arising out of, or relating to, 
CBSX or the Company's control of NSX, as applicable (and shall be 
deemed to agree that CBSX may serve as the U.S. agent for purposes 
of service of process in such suit, action or proceeding), and that 
they waive, and agree not to assert by way of motion, as a defense 
or otherwise in any such suit, action or proceeding, any claims that 
they are not personally subject to the jurisdiction of the SEC, that 
the suit, action or proceeding is an inconvenient forum or that the 
venue of the suit, action or proceeding is improper, or that the 
subject matter thereof may not be enforced in or by such courts or 
agency.
---------------------------------------------------------------------------

    The Exchange is proposing to cease trading activity on the System 
as of the close of business on the Closing Date. In that regard, the 
Exchange proposes to add new .01, Interpretations and Policies under 
Rule 11.1 (Hours of Trading). The new text will provide that, as of the 
close of business on May 30, 2014, NSX shall cease trading activity on 
the System; that all NSX Rules will remain in full force and effect 
through and after the Closing Date; and that the Exchange shall file a 
proposed rule change pursuant to Rule 19b-4 of the Exchange Act prior 
to any resumption of trading on the Exchange pursuant to Chapter XI 
(Trading Rules).
    After trading ceases on the System as of the close of business on 
the Closing Date, the Exchange will continue to be registered as a 
national securities exchange and will continue to retain its status as 
a self-regulatory organization. The Exchange represents that it will 
fully discharge all of its obligations as a self-regulatory 
organization pursuant to the Act through and after the Closing Date, 
and will assure that it maintains adequate funding for this purpose. 
The Exchange is not the Designated Examining Authority (``DEA'') for 
any of its ETP Holders and there are no ``NSX only'' ETP Holders (i.e., 
all NSX ETP Holders are members of other self-regulatory 
organizations).\8\
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    \8\ The Exchange represents that it will move to amend or cancel 
its participation in any existing Exchange Act Rule 17d-2 Plans for 
Allocation of Regulatory Responsibilities for NSX as appropriate in 
connection with the conclusion of all open matters relating to the 
Exchange's regulatory responsibilities with respect to NSX.
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    Further, all NSX rules shall remain in full force and effect 
through and after the Closing Date and the Exchange will retain 
disciplinary jurisdiction over all ETP Holders and persons associated 
with ETP Holders \9\ pursuant to Chapter VIII. of the Exchange's Rules 
and, specifically, Rule 8.1(b). That rule generally provides that any 
ETP Holder or person associated with an ETP Holder shall continue to be 
subject to the disciplinary jurisdiction of the Exchange following the 
termination of such person's ETP status or association with an ETP 
Holder with respect to matters that occurred prior to such termination; 
provided that written notice of the commencement of an inquiry into 
such matters is given by the Exchange to such former ETP Holder or 
former associated person within one year of receipt by the Exchange of 
the latest written notice of the termination of such person's status as 
an ETP Holder or person associated with an ETP Holder. Such notice 
requirement does not apply to a person who at any time after a 
termination again becomes subject to the disciplinary jurisdiction of 
the Exchange by becoming an ETP Holder or a person associated with an 
ETP Holder.\10\ Pursuant to this rule, after the Closing Date, the 
Exchange will enforce any rule violation that occurred prior to the 
close of business on the System on the Closing Date.
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    \9\ Exchange Rule 1.5P.(1) provides that ``[t]he terms ``person 
associated with an ETP Holder'' or ``associated person of an ETP 
Holder'' mean any partner, officer, director, or branch manager of 
an ETP Holder (or any person occupying a similar status or 
performing similar functions), any person directly or indirectly 
controlling, controlled by, or under common control with an ETP 
Holder, or any employee of such ETP Holder, except that any person 
associated with an ETP Holder whose functions are solely clerical or 
ministerial shall not be included in the meaning of such terms.''
    \10\ The Exchange notes that, because all NSX rules will remain 
in effect after the Closing Date, NSX Rule 11.18, which limits the 
liability of the Exchange, will also remain in effect.
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    Upon the filing of the instant rule proposal with the Commission, 
the Exchange will inform all ETP Holders by Information Circular that 
NSX will end trading operations as of the close of business on the 
Closing Date. The Information Circular will also inform all

[[Page 27019]]

ETP Holders that the Exchange will terminate the ETP status of any 
remaining ETP Holders as of May 30, 2014. Once the proposed rule change 
is operative, NSX will no longer accept new ETP applications or further 
consider any pending ETP applications.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Exchange Act and the rules and regulations thereunder applicable to 
the Exchange and, in particular, the requirements of Section 6(b) \11\ 
of the Exchange Act. Specifically, the Exchange believes that the 
proposed rule change is consistent with the requirement of Section 
6(b)(5) \12\ that the rules of an exchange be designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, 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. Additionally, the Exchange 
believes the proposed rule change is consistent with the Section 
6(b)(5) requirement that the rules of an exchange not be designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78(f)(b) [sic].
    \12\ 15 U.S.C. 78(f)(b)(5) [sic].
---------------------------------------------------------------------------

    In particular, the proposed rule change will allow NSX to cease 
trading activity on the System as of the close of business on the 
Closing Date and continue to maintain adequate funding to fulfill its 
regulatory obligations under the Exchange Act, including enforcing any 
rule violations that occurred through the close of trading on the 
Closing Date. Because all ETP Holders are members of other exchanges, 
after the Closing Date they will to be able to direct their orders to 
other national securities exchanges and other trading venues, including 
alternative trading systems and the over-the-counter market generally.
    Under the proposal, in addition to this rule filing being made 
available on the NSX Web site, www.nsx.com, ETP Holders will receive 
written notice by Information Circular, issued upon the instant rule 
filing being filed with the Commission, advising them of the Exchange's 
intention to cease trading activity on the System as of the close of 
business on the Closing Date. Accordingly, the Exchange believes that 
ETP Holders will have sufficient time prior to the Closing Date to 
determine the exchanges and trading venues to which they will direct 
their orders after the Closing Date and make any necessary adjustments 
in their respective trading systems. Moreover, all ETP Holders will 
receive prior notice that NSX will terminate their ETP Status as of May 
30, 2014, unless the ETP Holder voluntarily terminates its status as 
such prior to such date in accordance with Exchange rules.
    The Exchange submits that proposed rule change is therefore 
consistent with the requirements of Section 6(b)(5) of the Exchange Act 
that rules of an exchange be designed to facilitate transactions in 
securities, 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.

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 Exchange Act. The NSX's decision 
to cease trading activity on the System as of the close of business on 
the Closing Date will result in one less operational trading venue for 
equity securities. The Exchange notes that there are numerous stock 
exchanges and trading platforms on which market participants may trade 
equity securities. NSX currently has approximately .20% of market share 
among national stock exchanges. In light of the trading volume on NSX 
and the ability of ETP Holders to trade equity securities on other 
trading venues, the Exchange does not believe that its proposal will 
have any substantial competitive impact.

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

    The Exchange has not solicited or received written comments on the 
proposed rule change from ETP Holders or others.

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 \13\ and Rule 19b-
4(f)(6)(iii) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with 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.
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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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NSX-2014-14 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NSX-2014-14. 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

[[Page 27020]]

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-NSX-2014-14, 
and should be submitted on or before June 2, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-10785 Filed 5-9-14; 8:45 am]
BILLING CODE 8011-01-P
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