Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change That Constitutes a Stated Interpretation With Respect to the Meaning, Administration, and Enforcement of Rule 46-Equities, 61355-61357 [2014-24226]
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Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Notices
which any purchase in an Affiliated
Underwriting occurred, the first two
years in an easily accessible place, a
written record of each purchase of
securities in Affiliated Underwritings
once an investment by a Fund of Funds
in the securities of the Fund exceeds the
limit of section 12(d)(1)(A)(i) of the Act,
setting forth from whom the securities
were acquired, the identity of the
underwriting syndicate’s members, the
terms of the purchase, and the
information or materials upon which
the Board’s determinations were made.
9. Before investing in a Fund in
excess of the limit in section
12(d)(1)(A), a Fund of Funds and the
applicable Trust will execute a FOF
Participation Agreement stating without
limitation that their respective boards of
directors or trustees and their
investment advisers, or trustee and
Sponsor, as applicable, understand the
terms and conditions of the order, and
agree to fulfill their responsibilities
under the order. At the time of its
investment in Shares of a Fund in
excess of the limit in section
12(d)(1)(A)(i), a Fund of Funds will
notify the Fund of the investment. At
such time, the Fund of Funds will also
transmit to the Fund a list of the names
of each Fund of Funds Affiliate and
Underwriting Affiliate. The Fund of
Funds will notify the Fund of any
changes to the list of the names as soon
as reasonably practicable after a change
occurs. The Fund and the Fund of
Funds will maintain and preserve a
copy of the order, the FOF Participation
Agreement, and the list with any
updated information for the duration of
the investment and for a period of not
less than six years thereafter, the first
two years in an easily accessible place.
10. Before approving any advisory
contract under section 15 of the Act, the
board of directors or trustees of each
Investing Management Company
including a majority of the disinterested
directors or trustees, will find that the
advisory fees charged under such
contract are based on services provided
that will be in addition to, rather than
duplicative of, the services provided
under the advisory contract(s) of any
Fund, or its respective Master Fund, in
which the Investing Management
Company may invest. These findings
and their basis will be fully recorded in
the minute books of the appropriate
Investing Management Company.
11. Any sales charges and/or service
fees charged with respect to shares of a
Fund of Funds will not exceed the
limits applicable to a fund of funds as
set forth in NASD Conduct Rule 2830.
12. No Fund, or its respective Master
Fund, will acquire securities of an
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investment company or company
relying on section 3(c)(1) or 3(c)(7) of
the Act in excess of the limits contained
in section 12(d)(1)(A) of the Act, except
to the extent (i) the Fund, or its
respective Master Fund, acquires
securities of another investment
company pursuant to exemptive relief
from the Commission permitting the
Fund, or its respective Master Fund, to
acquire securities of one or more
investment companies for short-term
cash management purposes or (ii) the
Fund acquires securities of the Master
Fund pursuant to the Master-Feeder
Relief.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–24209 Filed 10–9–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73302; File No. SR–
NYSEMKT–2014–85]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change That Constitutes a Stated
Interpretation With Respect to the
Meaning, Administration, and
Enforcement of Rule 46—Equities
October 6, 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 October
2, 2014, NYSE MKT LLC (the
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory 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 the Substance
of the Proposed Rule Change
The Exchange proposes a rule change
that constitutes a stated interpretation
with respect to the meaning,
administration, and enforcement of Rule
46—Equities. The Exchange is not
proposing any changes to the text of the
current version of Rule 46– Equities.
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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61355
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
NYSE MKT LLC (‘‘NYSE MKT’’ or the
‘‘Exchange’’) proposes a rule change that
constitutes a stated interpretation with
respect to the meaning, administration,
and enforcement of Rule 46—Equities
(‘‘Rule 46’’) in connection with the
transfer of qualified Intercontinental
Exchange, Inc. (‘‘ICE’’) staff Floor
Governors to NYSE Regulation, Inc.
(‘‘NYSE Regulation’’).
Rule 46 permits the Exchange to
appoint active NYSE MKT members 4 as
Floor Officials.5 Rule 46 also permits
the Exchange to appoint ‘‘qualified’’ ICE
employees to act as Floor Governors,
one of the more senior types of Floor
Officials.6 Supplementary Material .10
4 Rule 2(a)—Equities states that the term
‘‘member,’’ when referring to a natural person,
means a natural person associated with a member
organization who has been approved by the
Exchange and designated by such member
organization to effect transactions on the Exchange
trading Floor or any facility thereof.
5 Floor Officials are delegated certain authority
from the Board of Directors of the Exchange to
supervise and regulate active openings and unusual
situations that arise in connection with the making
of bids, offers or transactions on the trading Floor,
and to review and approve certain trading actions,
such as trades to be effected at wide variations in
price and delayed openings and trading halts.
6 Pursuant to Rules 46 and 46A—Equities, Floor
Governors are one of several ranks of the broader
category of Floor Officials, including, in order of
increasing seniority, Floor Officials, Senior Floor
Officials, Executive Floor Officials, Floor Governors
and Executive Floor Governors. See Securities
Exchange Act Release No. 57627 (April 4, 2008), 73
FR 19919 (April 11, 2008) (SR–NYSE–2008–19)
(discussing New York Stock Exchange LLC
(‘‘NYSE’’) Rules 46 and 46A that NYSE MKT
adopted following the NYSE’s acquisition of the
Continued
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Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Notices
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defines ‘‘qualified’’ employees as
‘‘employees of ICE or any of its
subsidiaries, excluding employees of
NYSE Regulation, Inc., who shall have
satisfied any applicable testing or
qualification required by the Exchange
for all Floor Governors.’’
The prohibition on appointing NYSE
Regulation employees to act as Floor
Governors was put in place when the
‘‘qualified Exchange employee’’
category of Floor Official was adopted
in 2008.7 The prohibition was necessary
to avoid potential conflicts of interest
insofar as the process for qualifying
Floor Officials, including Floor
Governors, was performed by NYSE
Regulation.8 However, while Rule 46
prohibits appointment of NYSE
Regulation employees to act as Floor
Governors, the Exchange believes that
the Rule does not prohibit already
qualified Floor Governors from
becoming NYSE Regulation employees.
The hiring by NYSE Regulation of ICE
employees or members who are already
qualified to act as Floor Governors
would not involve NYSE Regulation in
qualifying those individuals to act as
Floor Governors under Rule 46 and
would therefore not give rise to the real
or apparent conflict of interest the
prohibition was intended to avoid.
The Exchange believes that the
proposed interpretation would facilitate
the contemplated transfer of existing
ICE staff Floor Governors to NYSE
Regulation. The individuals that would
transfer to NYSE Regulation are
experienced former Floor members who
served as senior-level Floor Officials
before becoming employees of ICE and
are already qualified and have been
Exchange. See Securities Exchange Act Release No.
58705 (October 1, 2008), 73 FR 46075 (July 30,
2008) (SR–Amex–2008–63)).
7 See Securities Exchange Act Release No. 34–
57627 (April 4, 2008), 73 FR 19919 (April 11, 2008)
(SR–NYSE–2007–2). As noted, NYSE’s version of
Rule 46 was later adopted by the Exchange.
8 NYSE Regulation examined the fitness of
prospective Floor Officials and administered a
mandatory education program, which all candidates
for Floor Official, including Floor Governor, had to
complete. NYSE Regulation also administered a
qualifying examination. See Securities Exchange
Act Release No. 34–57627 (April 4, 2008), 73 FR
19919 (April 11, 2008) (SR–NYSE–2007–2). NYSE
Regulation performed these tasks for Exchange
Floor Officials following the NYSE’s acquisition of
NYSE MKT in late 2008. On June 14, 2010, the
Exchange, NYSE Regulation and FINRA [sic]
retained the Financial Industry Regulatory
Authority (‘‘FINRA’’) pursuant to a Regulatory
Services Agreement (‘‘RSA’’) to perform the market
surveillance, enforcement and other miscellaneous
functions that up to that point had been performed
by NYSE Regulation, including all education and
testing-related regulatory services on behalf of
NYSE Regulation, including the Floor Official
mandatory education program and qualification
testing. See Securities Exchange Act Release No.
62354 (June 22, 2010), 75 FR 36730 (June 28, 2010)
(SR–NYSEAmex–2010–57).
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appointed to act as staff Floor
Governors. Because NYSE Regulation is
not proposing to qualify additional staff
not already approved as Floor
Governors, the Exchange believes there
would be no violation of Rule 46.
In addition, the interpretation does
not in any way affect the role of Floor
Officials or alter the safeguards in place
to ensure that staff Floor Governors are
knowledgeable and able to effectively
intervene when needed on the Exchange
trading Floor.9 Finally, NYSE
Regulation does not propose to seek to
qualify existing NYSE Regulation
employees as staff Floor Governors.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,10 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,11 in particular, because it is
designed to prevent fraudulent and
manipulative acts and practices,
promote just and equitable principles of
trade, remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and protect investors and the
public interest. The Exchange believes
that the proposed stated interpretation
helps prevent fraudulent and
manipulative acts and practices by
continuing to require high standards for
qualified Exchange employees to act as
Floor Governors in addition to
members. Similarly, the proposed stated
interpretation promotes just and
equitable principles of trade and
removes impediments to and perfects
the mechanism of a free and open
market by ensuring that qualified
Exchange employees are knowledgeable
and able to effectively intervene on the
Exchange trading Floor as needed. For
the same reasons, the proposal is also
designed to protect investors as well as
the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change is intended to
9 See Securities Exchange Act Release No. 34–
57627 (April 4, 2008), 73 FR 19919 (April 11, 2008)
(SR–NYSE–2007–2) (discussing NYSE Rule later
adopted by the Exchange). These safeguards
include, among other things, that qualified
Exchange employees, like qualified members, need
to be appointed by the Exchange’s chairman in
consultation with the Executive Floor Governors
and NYSE Regulation Board of Directors and
approved by the Board of Directors.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
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effect a change that constitutes a stated
policy, practice or interpretation with
respect to the meaning, administration,
or enforcement of an existing rule and
therefore would not impose any burden
on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A) 12 of the Act and Rule 19b–
4(f)(1) 13 thereunder. The proposed rule
change effects a change that constitutes
a stated policy, practice or
interpretation with respect to the
meaning, administration, or
enforcement of an existing rule.
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
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–
NYSEMKT–2014–85 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEMKT–2014–85. 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
12 15
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E:\FR\FM\10OCN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
10OCN1
Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Notices
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
offices of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEMKT–2014–85, and should be
submitted on or before October 31,
2014.
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2014–24226 Filed 10–9–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73306; File No. SR–C2–
2014–025]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend the Fees Schedule
mstockstill on DSK4VPTVN1PROD with NOTICES
October 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
September 30, 2014, C2 Options
Exchange, Incorporated (the ‘‘Exchange’’
or ‘‘C2’’) filed with the Securities and
Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to amend its
Fees Schedule. The text of the proposed
rule change is available on the
Exchange’s Web site (https://
www.c2exchange.com/Legal/), at the
Exchange’s Office of the Secretary, 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.
1. Purpose
The Exchange proposes to amend its
Fees Schedule.3 Specifically, the
Exchange proposes to increase the
Linkage Routing fee from $0.50 per
contract to $0.65 per contract in
addition to the applicable C2 taker fee.
The Linkage Routing fee is assessed to
all orders routed pursuant to the
Options Order Protection and Locked/
Crossed Market Plan, excluding Public
Customer orders in equity option
classes. The purpose of the proposed
change is to cover increased costs
associated with routing orders through
Linkage and paying the transaction fees
for such executions at other exchanges.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
3 C2 initially filed the proposed fee change on
September 2, 2014 (SR–C2–2014–021). On
September 10, 2014, C2 withdrew that filing and
submitted filing SR–C2–2014–022. On September
18, 2014, C2 withdrew SR–C2–2014–022 and
submitted SR–C2–2014–023. On September 30,
2014, C2 withdrew SR–C2–2014–023 and submitted
this filing.
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61357
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.4 Specifically,
the Exchange believes the proposed rule
change is consistent with Section 6(b)(4)
of the Act,5 which requires that
Exchange rules provide for the equitable
allocation of reasonable dues, fees, and
other charges among its Trading Permit
Holders and other persons using its
facilities.
In particular, the Exchange’s proposal
to increase the Linkage Routing fee from
$0.50 per contract to $0.65 per contract
is reasonable because such increase will
help offset the costs associated with
routing orders through Linkage and
paying the transaction fees for such
executions at other exchanges.
Additionally, the Exchange notes that if
a non-customer market participant
wishes to avoid the Linkage fee, it may
choose to specify that C2 not route
orders away on its behalf or designate
the order as Immediate or Cancel, which
would prevent the order from linking
[sic] away to another Exchange [sic].
Moreover, a non-customer market
participant may route directly to
exchanges posting the best market if
desired to avoid Linkage routing fees.
The Exchange next notes that this fee
amount will be assessed to all orders
routed via Linkage (excluding Public
Customer orders in equity options
classes). The Exchange believes that this
proposed change is equitable and not
unfairly discriminatory because noncustomer (e.g., broker-dealer
proprietary) orders originate from
broker-dealers who are by and large
more sophisticated than public
customers and can readily control the
exchange to which their orders are
routed. While there may be some
sophisticated customers who are
capable of directing the exchange to
which their orders are routed, generally,
retail customers submit orders to their
brokerages but do not or cannot specify
the exchange to which a customer order
is sent. Therefore, non-customer order
flow can, in most cases, more easily
route directly to other markets if desired
and thus avoid Linkage routing fees.
Therefore, it is equitable to assess a
reasonable fee to cover the costs
incurred for processing non-customer
Linkage orders while continuing to
exempt such Public Customer orders.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
C2 does not believe that the proposed
rule change will impose any burden on
competition that is not necessary or
4 15
5 15
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U.S.C. 78f(b).
U.S.C. 78f(b)(4).
10OCN1
Agencies
[Federal Register Volume 79, Number 197 (Friday, October 10, 2014)]
[Notices]
[Pages 61355-61357]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-24226]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73302; File No. SR-NYSEMKT-2014-85]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change That Constitutes a
Stated Interpretation With Respect to the Meaning, Administration, and
Enforcement of Rule 46--Equities
October 6, 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 October 2, 2014, NYSE MKT LLC (the ``Exchange'' or ``NYSE
MKT'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C.78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange proposes a rule change that constitutes a stated
interpretation with respect to the meaning, administration, and
enforcement of Rule 46--Equities. The Exchange is not proposing any
changes to the text of the current version of Rule 46- Equities. 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
NYSE MKT LLC (``NYSE MKT'' or the ``Exchange'') proposes a rule
change that constitutes a stated interpretation with respect to the
meaning, administration, and enforcement of Rule 46--Equities (``Rule
46'') in connection with the transfer of qualified Intercontinental
Exchange, Inc. (``ICE'') staff Floor Governors to NYSE Regulation, Inc.
(``NYSE Regulation'').
Rule 46 permits the Exchange to appoint active NYSE MKT members \4\
as Floor Officials.\5\ Rule 46 also permits the Exchange to appoint
``qualified'' ICE employees to act as Floor Governors, one of the more
senior types of Floor Officials.\6\ Supplementary Material .10
[[Page 61356]]
defines ``qualified'' employees as ``employees of ICE or any of its
subsidiaries, excluding employees of NYSE Regulation, Inc., who shall
have satisfied any applicable testing or qualification required by the
Exchange for all Floor Governors.''
---------------------------------------------------------------------------
\4\ Rule 2(a)--Equities states that the term ``member,'' when
referring to a natural person, means a natural person associated
with a member organization who has been approved by the Exchange and
designated by such member organization to effect transactions on the
Exchange trading Floor or any facility thereof.
\5\ Floor Officials are delegated certain authority from the
Board of Directors of the Exchange to supervise and regulate active
openings and unusual situations that arise in connection with the
making of bids, offers or transactions on the trading Floor, and to
review and approve certain trading actions, such as trades to be
effected at wide variations in price and delayed openings and
trading halts.
\6\ Pursuant to Rules 46 and 46A--Equities, Floor Governors are
one of several ranks of the broader category of Floor Officials,
including, in order of increasing seniority, Floor Officials, Senior
Floor Officials, Executive Floor Officials, Floor Governors and
Executive Floor Governors. See Securities Exchange Act Release No.
57627 (April 4, 2008), 73 FR 19919 (April 11, 2008) (SR-NYSE-2008-
19) (discussing New York Stock Exchange LLC (``NYSE'') Rules 46 and
46A that NYSE MKT adopted following the NYSE's acquisition of the
Exchange. See Securities Exchange Act Release No. 58705 (October 1,
2008), 73 FR 46075 (July 30, 2008) (SR-Amex-2008-63)).
---------------------------------------------------------------------------
The prohibition on appointing NYSE Regulation employees to act as
Floor Governors was put in place when the ``qualified Exchange
employee'' category of Floor Official was adopted in 2008.\7\ The
prohibition was necessary to avoid potential conflicts of interest
insofar as the process for qualifying Floor Officials, including Floor
Governors, was performed by NYSE Regulation.\8\ However, while Rule 46
prohibits appointment of NYSE Regulation employees to act as Floor
Governors, the Exchange believes that the Rule does not prohibit
already qualified Floor Governors from becoming NYSE Regulation
employees. The hiring by NYSE Regulation of ICE employees or members
who are already qualified to act as Floor Governors would not involve
NYSE Regulation in qualifying those individuals to act as Floor
Governors under Rule 46 and would therefore not give rise to the real
or apparent conflict of interest the prohibition was intended to avoid.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 34-57627 (April 4,
2008), 73 FR 19919 (April 11, 2008) (SR-NYSE-2007-2). As noted,
NYSE's version of Rule 46 was later adopted by the Exchange.
\8\ NYSE Regulation examined the fitness of prospective Floor
Officials and administered a mandatory education program, which all
candidates for Floor Official, including Floor Governor, had to
complete. NYSE Regulation also administered a qualifying
examination. See Securities Exchange Act Release No. 34-57627 (April
4, 2008), 73 FR 19919 (April 11, 2008) (SR-NYSE-2007-2). NYSE
Regulation performed these tasks for Exchange Floor Officials
following the NYSE's acquisition of NYSE MKT in late 2008. On June
14, 2010, the Exchange, NYSE Regulation and FINRA [sic] retained the
Financial Industry Regulatory Authority (``FINRA'') pursuant to a
Regulatory Services Agreement (``RSA'') to perform the market
surveillance, enforcement and other miscellaneous functions that up
to that point had been performed by NYSE Regulation, including all
education and testing-related regulatory services on behalf of NYSE
Regulation, including the Floor Official mandatory education program
and qualification testing. See Securities Exchange Act Release No.
62354 (June 22, 2010), 75 FR 36730 (June 28, 2010) (SR-NYSEAmex-
2010-57).
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The Exchange believes that the proposed interpretation would
facilitate the contemplated transfer of existing ICE staff Floor
Governors to NYSE Regulation. The individuals that would transfer to
NYSE Regulation are experienced former Floor members who served as
senior-level Floor Officials before becoming employees of ICE and are
already qualified and have been appointed to act as staff Floor
Governors. Because NYSE Regulation is not proposing to qualify
additional staff not already approved as Floor Governors, the Exchange
believes there would be no violation of Rule 46.
In addition, the interpretation does not in any way affect the role
of Floor Officials or alter the safeguards in place to ensure that
staff Floor Governors are knowledgeable and able to effectively
intervene when needed on the Exchange trading Floor.\9\ Finally, NYSE
Regulation does not propose to seek to qualify existing NYSE Regulation
employees as staff Floor Governors.
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\9\ See Securities Exchange Act Release No. 34-57627 (April 4,
2008), 73 FR 19919 (April 11, 2008) (SR-NYSE-2007-2) (discussing
NYSE Rule later adopted by the Exchange). These safeguards include,
among other things, that qualified Exchange employees, like
qualified members, need to be appointed by the Exchange's chairman
in consultation with the Executive Floor Governors and NYSE
Regulation Board of Directors and approved by the Board of
Directors.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\10\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\11\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
promote just and equitable principles of trade, remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and protect investors and the public interest. The
Exchange believes that the proposed stated interpretation helps prevent
fraudulent and manipulative acts and practices by continuing to require
high standards for qualified Exchange employees to act as Floor
Governors in addition to members. Similarly, the proposed stated
interpretation promotes just and equitable principles of trade and
removes impediments to and perfects the mechanism of a free and open
market by ensuring that qualified Exchange employees are knowledgeable
and able to effectively intervene on the Exchange trading Floor as
needed. For the same reasons, the proposal is also designed to protect
investors as well as the public interest.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
intended to effect a change that constitutes a stated policy, practice
or interpretation with respect to the meaning, administration, or
enforcement of an existing rule and therefore would not impose any
burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) \12\ of the Act and Rule 19b-4(f)(1) \13\ thereunder. The
proposed rule change effects a change that constitutes a stated policy,
practice or interpretation with respect to the meaning, administration,
or enforcement of an existing rule.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate 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-NYSEMKT-2014-85 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEMKT-2014-85. 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
[[Page 61357]]
post all comments on the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent
amendments, all written statements with respect to the proposed rule
change that are filed with the Commission, and all written
communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for Web site viewing and printing in the Commission's Public
Reference Room, 100 F Street NE., Washington, DC 20549 on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
such filing also will be available for inspection and copying at the
principal offices of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSEMKT-2014-85, and should be submitted on or before
October 31, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-24226 Filed 10-9-14; 8:45 am]
BILLING CODE 8011-01-P