Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending Rules 311 and 313 To Add Limited Liability Companies as Eligible Member Organizations and Delineate the Information Limited Liability Companies Must Submit to the Exchange as Part of the Membership Process; Eliminate the Requirement That a Member Corporation Be Created or Organized, and Maintain Its Principal Place of Business, in the United States; and Make Additional Related Amendments To Update Its Membership Rules, 70909-70913 [2014-28084]
Download as PDF
<![CDATA[
Federal Register / Vol. 79, No. 229 / Friday, November 28, 2014 / Notices
19b–4(f)(6) thereunder.13 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 14 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),15 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 16 of the Act to
determine whether the proposed rule
change 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:
tkelley on DSK3SPTVN1PROD 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 No. SR–
NYSEArca–2014–133 on the subject
line.
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method.
The Commission will post all
comments on the Commission’s Internet
Web site (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all
subsequent amendments, all written
statements with respect to the proposed
rule change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
offices of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEArca–2014–133, and should be
submitted on or before December 19,
2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–28078 Filed 11–26–14; 8:45 am]
BILLING CODE 8011–01–P
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–NYSEArca–2014–133. This
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6).
15 17 CFR 240.19b–4(f)(6)(iii).
16 15 U.S.C. 78s(b)(2)(B).
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73672; File No. SR–NYSE–
2014–63]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change
Amending Rules 311 and 313 To Add
Limited Liability Companies as Eligible
Member Organizations and Delineate
the Information Limited Liability
Companies Must Submit to the
Exchange as Part of the Membership
Process; Eliminate the Requirement
That a Member Corporation Be Created
or Organized, and Maintain Its
Principal Place of Business, in the
United States; and Make Additional
Related Amendments To Update Its
Membership Rules
November 21, 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
November 12, 2014, New York Stock
Exchange LLC (‘‘NYSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been
substantially 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 Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rules 311 and 313 to add limited
liability companies as eligible member
organizations and delineate the
information limited liability companies
must submit to the Exchange as part of
the membership process; eliminate the
requirement that a member corporation
be created or organized, and maintain
its principal place of business, in the
United States; and make additional
related amendments to update its
membership rules. 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.
13 17
14 17
VerDate Sep<11>2014
16:58 Nov 26, 2014
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
17 17
Jkt 235001
PO 00000
CFR 200.30–3(a)(12).
Frm 00066
Fmt 4703
Sfmt 4703
70909
E:\FR\FM\28NON1.SGM
28NON1
70910
Federal Register / Vol. 79, No. 229 / Friday, November 28, 2014 / Notices
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
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
Rules 311 and 313 to add limited
liability companies (‘‘LLCs’’) to the
types of eligible member organizations
and delineate the information LLCs
must submit to the Exchange as part of
the membership process; eliminate the
requirement that a member corporation
be created or organized, and maintain
its principal place of business, in the
United States; and make additional
related amendments to update its
membership rules.
tkelley on DSK3SPTVN1PROD with NOTICES
Rule 311
NYSE Rule 311 governs the formation
and approval of member organizations.
The Exchange proposes to revise Rule
311 to explicitly provide for LLCs to
apply to become member organizations
and eliminate the requirement that a
member corporation be created or
organized, and maintain its principal
place of business, in the United States.
First, the Exchange’s membership
rules currently provide for member
organizations to be corporations or
partnerships, but have not explicitly
provided for LLCs.4 The Exchange
proposes to add LLCs to the types of
potential member organizations and
require LLCs to meet the same
requirements currently applicable to
partnerships and corporations set forth
in Rule 311(b). As part of the proposed
revision, the Exchange seeks to add a
new section (4) to Rule 311(b) requiring
every member of an LLC to be a
member, principal executive or
4 Current Rule 311(f) permits the Exchange to
approve ‘‘entities that have characteristics
essentially similar to corporations, partnerships, or
both’’ as a member organization ‘‘on such terms and
conditions as the Exchange may prescribe.’’
VerDate Sep<11>2014
16:58 Nov 26, 2014
Jkt 235001
approved person.5 Similarly, the
Exchange proposes to amend current
Rule 311(b)(6) to reflect that proposed
LLC member organizations must, like
corporations and partnerships, also
comply with any additional
requirements as the rules of the
Exchange may prescribe. The Exchange
also proposes to add new
Supplementary Material .16 to Rule 311
to specify that LLC applicants for
Exchange membership are subject to
Rule 313.24 regarding the submission of
copies of proposed or existing limited
liability company documents and other
agreements.
The Exchange also proposes to amend
Rule 311(f) to eliminate the geographic
limitation on incorporation and
domicile of corporation members and
delete the related interpretations of Rule
311(f). The first sentence of Rule 311(f)
currently provides that every member
corporation be a corporation ‘‘created or
organized under the laws of, and shall
maintain its principal place of business
in, the United States or any State
thereof.’’ 6 The Exchange does not
believe that the Exchange’s restriction
on whether foreign entities may be a
member organization is consistent with
either federal rules or those of other selfregulatory organizations (‘‘SRO’’). For
example supporting its belief, the
Exchange states that rules promulgated
pursuant to the Act require, under
certain circumstances, a foreign brokerdealer to register with the Commission.7
The Exchange also states that other
SROs, including the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’),
do not require their members to be
domiciled in the United States.8
5 Rule 311(b)(2) and (b)(3) currently impose the
same requirement on the relevant control persons
at corporations and partnerships, respectively.
6 The first sentence of Rule 311(f) also provides
that every member firm organization shall be a
partnership or corporation. This statement is
redundant to Rule 311(b), which the Exchange is
amending to add LLCs. Accordingly, the Exchange
proposes to delete the first sentence of Rule 311(f)
in its entirety.
7 See 17 CFR 240.15a-6 and Commission Guide to
Broker-Dealer Registration, Division of Trading and
Markets, available at https://www.sec.gov/divisions/
marketreg/bdguide.htm (foreign broker-dealers that,
from the outside of the United States, induce or
attempt to induce securities transactions by any
person in the United States, or that use the means
or instrumentalities of interstate commerce in the
United States for this purpose, must register as
broker-dealers with the Commission).
8 See e.g., NASD Membership and Registration
Rules (1000 Series). NASD Rule 1090 imposes
specific requirements on members that do not
maintain an office in the United States responsible
for preparing and maintaining financial and other
reports required to be filed with the SEC and the
Exchange, which the Exchange proposes to import
into Rule 313. See the discussion infra. See also
BATS Exchange, Inc. Rules 2.3, 2.5 and 2.6.
PO 00000
Frm 00067
Fmt 4703
Sfmt 4703
The Exchange believes that the
current restriction in Rule 311(f) puts it
at a competitive disadvantage because it
restricts foreign broker-dealers that are
registered with the Commission and are
members of another SRO from also
becoming Exchange member
organizations. The Exchange notes that
its rules already require member
organizations to meet prerequisites as
specified in Rule 2(b). Specifically,
regardless of corporate form, all member
organizations must be registered brokerdealers that are members of FINRA or
another registered securities exchange.
If a registered broker-dealer transacts
business with public customers or
conducts business on the Floor of the
Exchange, such member organization
must be a member of FINRA.
The Exchange further notes that a
member organization will be subject to
regulatory examination and jurisdiction
for misconduct whether or not it is
based in the United States. However, for
the avoidance of doubt, as discussed
below, the Exchange proposes to add
supplementary material to Rule 313
based on NASD Rule 1090 that imposes
certain requirements on foreign
members that do not maintain an office
in the United States.
Rule 313
NYSE Rule 313 sets forth certain
corporate or partnership documents that
each member organization must submit
to enter into and continue in NYSE
membership. The Rule also sets forth
certain restrictions on capital
withdrawals and distributions
applicable to member corporations and
partnerships. The Exchange proposes to
amend Rule 313 to delineate the types
of documents LLCs must submit that, as
noted, mirror the requirements currently
in place for member corporations and
partnerships.
First, the Exchange proposes to add a
subsection (d) to Rule 313 requiring all
articles of organization and operating
documents for LLCs to be submitted for
Exchange approval prior to becoming
effective. Relatedly, the Exchange
proposes to add Supplementary
Material .24 setting forth that existing
LLCs must promptly submit certified
copies (to the extent possible) of articles
of organization and operating
agreements to the Exchange.
Second, the Exchange proposes to add
Supplementary Material .25 providing
restrictions on capital withdrawals by
LLC members that are substantially the
same as those applicable to corporations
and partnerships. The Supplementary
Material would provide that the capital
contribution of any LLC member may
not be withdrawn on less than six
E:\FR\FM\28NON1.SGM
28NON1
Federal Register / Vol. 79, No. 229 / Friday, November 28, 2014 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
months’ written notice of withdrawal
given no sooner than six months after
such contribution was first made
without the prior written approval of
the Exchange. The Supplementary
Material would also specify that each
member firm shall promptly notify the
Exchange of the receipt of any notice of
withdrawal of any part of a member’s
capital contribution or if any
withdrawal is not made because
prohibited under the provisions of
Securities and Exchange Commission
Rule 15c3–1.
Third, the Exchange proposes to add
Supplementary Material .26 providing
that LLCs not organized under the laws
of New York State must subject
themselves to the following restrictions:
No distributions shall be declared or
paid that impair the LLC’s capital; and
no distribution of assets shall be made
to any member unless the value of the
LLC’s assets remaining after such
payment or distribution is at least equal
to the aggregate of its debts and
liabilities, including capital. These
proposed restrictions are based on
existing restrictions applicable to
member corporations and partnerships.
In addition, as noted above, the
Exchange proposes to add new
Supplementary Material .27 to Rule 313
specifying the requirements applicable
to Foreign Member Organizations. The
proposed new rule text would adopt,
without substantive change, paragraphs
(a), (b), and (c) of NASD Rule 1090
(Foreign Members), which impose
specific requirements on FINRA
members that do not maintain an office
in the United States responsible for
preparing and maintaining financial and
other reports required to be filed by the
SEC and FINRA.9 As proposed, foreign
member organizations that do not
maintain an office in the United States
responsible for preparing and
maintaining financial and other reports
9 The Exchange is not proposing to adopt a rule
similar to NASD Rule 1090(d), which requires
foreign members to ‘‘utilize, either directly or
indirectly, the services of a broker/dealer registered
with the Commission, a bank or a clearing agency
registered with the Commission located in the
United States in clearing all transactions involving
members of the Association, except where both
parties to a transaction agree otherwise.’’ The
Exchange agrees with FINRA, which similarly
recommended skipping paragraph (d) as part of its
contemplated adoption of NASD Rule 1090, that the
provision is ‘‘outdated’’ and that clearing
arrangements are better addressed by FINRA Rule
4311 (Carrying Agreements), which is based in part
on NYSE Rule 382 (including NYSE Rule
Interpretations 382/01 through 382/05 and 409(a)/
01), that FINRA Rule 4311 replaced. See FINRA
Regulatory Notice 13–29 (September 2013). FINRA
Rule 4311 governs the requirements applicable to
members when entering into agreements for the
carrying of any customer accounts in which
securities transactions can be effected.
VerDate Sep<11>2014
16:58 Nov 26, 2014
Jkt 235001
required to be filed with the
Commission and the Exchange would be
required to: (1) Prepare all such reports,
and maintain a general ledger chart of
account and any description thereof, in
English and U.S. dollars; (2) reimburse
the Exchange or its representatives for
expenses incurred in connection with
examinations of the member
organization to the extent that such
expenses exceed the cost of examining
a member organization located within
the continental United States in the
geographic location most distant from
the Exchange’s principal office or, in
such other amount as the Exchange may
deem to be an equitable allocation of
such expenses; and (3) ensure the
availability of an individual fluent in
English and knowledgeable in securities
and financial matters to assist
representatives of the Exchange during
examinations.
The Exchange also proposes to
eliminate certain restrictions, which the
Exchange considers redundant, on
member organizations and prospective
member organizations organized as
partnerships and corporations. The
Exchange proposes to eliminate the
requirement in Rule 313.11 that the
partnership articles of each member
firm provide that capital withdrawals by
partners cannot be made without the
prior written approval of the Exchange.
Rule 313.11 already requires the
Exchange’s prior written approval for
any such capital withdrawals, and
member organizations need to monitor
for and comply with the prohibition,
including whether particular
withdrawals violate net capital
requirements. The Exchange believes
that because Exchange rules already
govern this behavior, a partnership
seeking approval as a member
organization would not need to amend
its partnership articles to reflect this
existing rule requirement.10
Further, the Exchange proposes to
eliminate the requirement in Rule
313.20 that prospective member
corporations submit an opinion of
counsel stating, among other things, that
the corporation is duly organized and
existing, that its stock is validly issued
and outstanding, and that the
restrictions and provisions required by
the Exchange on the transfer, issuance,
conversion and redemption of its stock
have been made legally effective.
Corporate members are required under
the Rule to submit relevant corporate
documents, including articles of
incorporation, that contain the same
information required in the opinion of
counsel. The Exchange represents that
10 See
PO 00000
also footnote 11, infra.
Frm 00068
Fmt 4703
Sfmt 4703
70911
requiring a legal opinion attesting to
facts contained in a corporation’s public
filings is redundant and, given the
expense, potentially a disincentive to
smaller entities applying for Exchange
membership.
Similarly, the Exchange proposes to
remove the requirement in Rule 313.23
that the opinion of counsel submitted to
the Exchange at the time the corporation
applies for approval under Rule 313.20
state the extent to which the corporation
has made the following prohibitions
legally effective: The prohibition on
declaring or paying a dividend that
impairs the capital of the corporation
and the prohibition on distributing
assets to any stockholder unless the
value of the corporate assets remaining
after such payment or distribution is at
least equal to the aggregate of its debts
and liabilities, including capital. Rule
313.23 would continue to prohibit
corporation members from declaring or
paying dividends or distributing
corporate assets that impair the
corporation’s capital, and member
corporations would not be relieved of
the obligation to monitor and enforce
these prohibitions. The Exchange
believes that requiring these
representations in a separate legal
opinion is redundant and serves no
necessary regulatory or other purpose.11
Finally, the Exchange proposes to
make certain miscellaneous
amendments to Rule 313. Specifically,
the Exchange proposes to replace
outdated references to ‘‘Regulation and
Surveillance’’ with ‘‘the Exchange’’ in
Rules 313.10 and 313.20.12 Similarly,
the Exchange proposes to replace
outdated references to ‘‘photostatic’’
copies in Rules 313.10 and 313.20 in
connection with the submission of
documents to the Exchange and replace
them with ‘‘electronically or
mechanically reproduced.’’
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
11 FINRA Rule 4110 (Capital Compliance)
contains similar prohibitions on capital
withdrawals by FINRA members without requiring
that the prohibitions be reflected in a firm’s
partnership articles or requiring a legal opinion that
the member has made the prohibitions legally
effective. See FINRA Rule 4110 (c)(1) (‘‘No equity
capital of a member may be withdrawn for a period
of one year from the date such equity capital is
contributed, unless otherwise permitted by FINRA
in writing.’’).
12 Under Rule 0, references to the Exchange also
refer to FINRA staff and FINRA departments acting
on behalf of the Exchange pursuant to a Regulatory
Services Agreement (‘‘RSA’’). FINRA currently
provides member application proceedings services
to the Exchange pursuant to an RSA.
E:\FR\FM\28NON1.SGM
28NON1
tkelley on DSK3SPTVN1PROD with NOTICES
70912
Federal Register / Vol. 79, No. 229 / Friday, November 28, 2014 / Notices
Section 6(b) of the Act,13 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,14 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 adding LLCs to the list of eligible
member organizations would remove
impediments to and perfect the
mechanism of a free and open market
and a national market system by
expanding the types of organizational
forms a member organization may take.
The Exchange also believes that
permitting LLCs to become member
organizations subject to the same
restrictions and requirements currently
applicable to corporations and
partnerships also protects investors and
the public interest by holding LLCs to
the same high standards.
In addition, the Exchange believes
that permitting non-United States-based
registered broker-dealers that are
members of FINRA or another registered
securities exchange and that do not have
their principal place of business in the
United States to become Exchange
member organizations would remove
impediments to and perfect the
mechanism of a free and open market by
removing geographic restrictions on
Exchange membership that are not
required by FINRA or other exchanges.
The Exchange further believes that
broadening the Exchange membership
pool by facilitating the participation of
additional foreign-based U.S. registered
broker-dealers would benefit investors
and the public interest by increasing
market participation and depth at the
Exchange. Moreover, the Exchange
believes that adoption of specific
requirements for foreign members that
do not maintain an office in the United
States based on NASD Rule 1090 would
further assure that foreign Exchange
members, once approved, remain
subject to regulatory examination and
jurisdiction.
Similarly, the Exchange represents
that updating the Exchange’s rules to
remove requirements, which the
Exchange believes are redundant, that a
member firm’s partnership articles
provide that capital withdrawals by
partners cannot be made without the
prior written approval of the Exchange,
that prospective member corporations
submit an opinion of counsel reciting
facts contained in its public filings, and
13 15
14 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
VerDate Sep<11>2014
16:58 Nov 26, 2014
Jkt 235001
that certain prohibitions have been
made legally effective would remove
impediments to and perfect the
mechanism of a free and open market
and a national market system by
ensuring that potential member
organizations, persons subject to the
Exchange’s jurisdiction, regulators, and
the public could more easily navigate
the Exchange’s rulebook and better
understand what obligations attach and
when. Further, the Exchange represents
that updating the Exchange’s rules to
remove what the Exchange considers
redundant requirements is also designed
to protect investors as well as the public
interest by providing transparency and
reducing potential confusion regarding
the Exchange membership process that
may result from having what the
Exchange characterizes as obsolete rules
and outdated guidelines in the
Exchange’s rulebook. For the same
reasons, the Exchange represents that
updating the Exchange’s rules to remove
requirements that the Exchange
considers outdated would remove
impediments to and perfect the
mechanism of a free and open market
and a national market system and is
equally 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 would impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange believes that the proposed
rule change would foster competition by
expanding the types of organizational
forms a member organization may take
and, by removing geographic
restrictions on corporate Exchange
membership, permitting foreign brokerdealers that are members of FINRA or
another SRO and that do not have their
principal place of business in the
United States to become Exchange
member organizations. The Exchange
represents that, by removing outdated
and redundant provisions from the
Exchange membership rules not found
in the rules of other SROs and adding
a provision found in the rules of another
SRO, the proposed rule change also
would foster competition by providing
greater harmonization between
Exchange membership requirements
and the requirements of other SROs,
resulting in less burdensome and more
efficient and consistent standards for
prospective member organizations.
PO 00000
Frm 00069
Fmt 4703
Sfmt 4703
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or up to 90 days (i) as the
Commission may designate if it finds
such longer period to be appropriate
and publishes its reasons for so finding
or (ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2014–63 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–NYSE–2014–63. 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
E:\FR\FM\28NON1.SGM
28NON1
Federal Register / Vol. 79, No. 229 / Friday, November 28, 2014 / Notices
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Section, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing will also be available for
inspection and copying at the NYSE’s
principal office and on its Internet Web
site at www.nyse.com. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–NYSE–
2014–63 and should be submitted on or
before December 19, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Kevin M. O’Neill,
Deputy Secretary.
Nova Southeastern University Museum
of Art, Fort Lauderdale, Florida, from on
or about February 26, 2015, until on or
about May 31, 2015, and at possible
additional exhibitions or venues yet to
be determined, is in the national
interest. I have ordered that Public
Notice of these Determinations be
published in the Federal Register.
FOR FURTHER INFORMATION CONTACT: For
further information, including a list of
the imported objects, contact Paul W.
Manning, Attorney-Adviser, Office of
the Legal Adviser, U.S. Department of
State (telephone: 202–632–6469). The
mailing address is U.S. Department of
State, SA–5, L/PD, Fifth Floor (Suite
5H03), Washington, DC 20522–0505.
Dated: November 20, 2014.
Kelly Keiderling,
Principal Deputy Assistant Secretary, Bureau
of Educational and Cultural Affairs,
Department of State.
[FR Doc. 2014–28048 Filed 11–26–14; 8:45 am]
BILLING CODE 4710–05–P
BILLING CODE 8011–01–P
DEPARTMENT OF STATE
[Public Notice: 8956]
[Public Notice: 8958]
Culturally Significant Objects Imported
for Exhibition Determinations: ‘‘Frida
Kahlo and Diego Rivera From the
Jacques and Natasha Gelman
Collection and 20th Century Mexican
Art From the Stanley and Pearl
Goodman Collection’’
Notice is hereby given of the
following determinations: Pursuant to
the authority vested in me by the Act of
October 19, 1965 (79 Stat. 985; 22 U.S.C.
2459), Executive Order 12047 of March
27, 1978, the Foreign Affairs Reform and
Restructuring Act of 1998 (112 Stat.
2681, et seq.; 22 U.S.C. 6501 note, et
seq.), Delegation of Authority No. 234 of
October 1, 1999, and Delegation of
Authority No. 236–3 of August 28, 2000
(and, as appropriate, Delegation of
Authority No. 257 of April 15, 2003), I
hereby determine that the objects to be
included in the exhibition ‘‘Frida Kahlo
and Diego Rivera from the Jacques and
Natasha Gelman Collection and 20th
Century Mexican Art from the Stanley
and Pearl Goodman Collection,’’
imported from abroad for temporary
exhibition within the United States, are
of cultural significance. The objects are
imported pursuant to a loan agreement
with the foreign owner or custodian. I
also determine that the exhibition or
display of the exhibit objects at the
tkelley on DSK3SPTVN1PROD with NOTICES
SUMMARY:
15 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
16:58 Nov 26, 2014
Jkt 235001
Culturally Significant Objects Imported
for Exhibition Determinations:
‘‘Rembrandt: A Decade of Brilliance
(1648–1658)’’
Notice is hereby given of the
following determinations: Pursuant to
the authority vested in me by the Act of
October 19, 1965 (79 Stat. 985; 22 U.S.C.
2459), Executive Order 12047 of March
27, 1978, the Foreign Affairs Reform and
Restructuring Act of 1998 (112 Stat.
2681, et seq.; 22 U.S.C. 6501 note, et
seq.), Delegation of Authority No. 234 of
October 1, 1999, and Delegation of
Authority No. 236–3 of August 28, 2000
(and, as appropriate, Delegation of
Authority No. 257 of April 15, 2003), I
hereby determine that the objects to be
included in the exhibition ‘‘Rembrandt:
A Decade of Brilliance (1648–1658),’’
imported from abroad for temporary
exhibition within the United States, are
of cultural significance. The objects are
imported pursuant to a loan agreement
with the foreign owner or custodian. I
also determine that the exhibition or
display of the exhibit objects at the
University of San Diego’s University
Galleries, from on or about March 21,
2015, until on or about May 22, 2015,
and at possible additional exhibitions or
venues yet to be determined, is in the
national interest. I have ordered that
Public Notice of these Determinations
be published in the Federal Register.
FOR FURTHER INFORMATION CONTACT: For
further information, including a list of
SUMMARY:
PO 00000
Frm 00070
Fmt 4703
the imported objects, contact Paul W.
Manning, Attorney-Adviser, Office of
the Legal Adviser, U.S. Department of
State (telephone: 202–632–6469). The
mailing address is U.S. Department of
State, SA–5, L/PD, Fifth Floor (Suite
5H03), Washington, DC 20522–0505.
Dated: November 18, 2014.
Kelly Keiderling,
Principal Deputy Assistant Secretary, Bureau
of Educational and Cultural Affairs,
Department of State.
[FR Doc. 2014–28049 Filed 11–26–14; 8:45 am]
BILLING CODE 4710–05–P
DEPARTMENT OF STATE
[Public Notice: 8957]
Culturally Significant Objects Imported
for Exhibition Determinations: ‘‘Islamic
Galleries’’
Notice is hereby given of the
following determinations: Pursuant to
the authority vested in me by the Act of
October 19, 1965 (79 Stat. 985; 22 U.S.C.
2459), Executive Order 12047 of March
27, 1978, the Foreign Affairs Reform and
Restructuring Act of 1998 (112 Stat.
2681, et seq.; 22 U.S.C. 6501 note, et
seq.), Delegation of Authority No. 234 of
October 1, 1999, and Delegation of
Authority No. 236–3 of August 28, 2000
(and, as appropriate, Delegation of
Authority No. 257 of April 15, 2003), I
hereby determine that the objects to be
included in the exhibition ‘‘Islamic
Galleries,’’ imported from abroad for
temporary exhibition within the United
States, are of cultural significance. The
objects are imported pursuant to loan
agreements with the foreign owners or
custodians. I also determine that the
exhibition or display of the exhibit
objects at the Art Institute of Chicago,
Chicago, Illinois, from on or about
December 18, 2014, until on or about
November 17, 2017, and at possible
additional exhibitions or venues yet to
be determined, is in the national
interest. I have ordered that Public
Notice of these Determinations be
published in the Federal Register.
SUMMARY:
[FR Doc. 2014–28084 Filed 11–26–14; 8:45 am]
DEPARTMENT OF STATE
70913
Sfmt 4703
For
further information, including a list of
the imported objects, contact Paul W.
Manning, Attorney-Adviser, Office of
the Legal Adviser, U.S. Department of
State (telephone: 202–632–6469). The
mailing address is U.S. Department of
State, SA–5, L/PD, Fifth Floor (Suite
5H03), Washington, DC 20522–0505.
FOR FURTHER INFORMATION CONTACT:
E:\FR\FM\28NON1.SGM
28NON1
]]>Agencies
[Federal Register Volume 79, Number 229 (Friday, November 28, 2014)]
[Notices]
[Pages 70909-70913]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-28084]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73672; File No. SR-NYSE-2014-63]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change Amending Rules 311 and 313 To
Add Limited Liability Companies as Eligible Member Organizations and
Delineate the Information Limited Liability Companies Must Submit to
the Exchange as Part of the Membership Process; Eliminate the
Requirement That a Member Corporation Be Created or Organized, and
Maintain Its Principal Place of Business, in the United States; and
Make Additional Related Amendments To Update Its Membership Rules
November 21, 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 November 12, 2014, New York Stock Exchange LLC (``NYSE''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been substantially prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rules 311 and 313 to add limited
liability companies as eligible member organizations and delineate the
information limited liability companies must submit to the Exchange as
part of the membership process; eliminate the requirement that a member
corporation be created or organized, and maintain its principal place
of business, in the United States; and make additional related
amendments to update its membership rules. The text of the proposed
rule change is available on the Exchange's Web site at www.nyse.com, at
the principal office of the Exchange, and at the Commission's Public
Reference Room.
[[Page 70910]]
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 Rules 311 and 313 to add limited
liability companies (``LLCs'') to the types of eligible member
organizations and delineate the information LLCs must submit to the
Exchange as part of the membership process; eliminate the requirement
that a member corporation be created or organized, and maintain its
principal place of business, in the United States; and make additional
related amendments to update its membership rules.
Rule 311
NYSE Rule 311 governs the formation and approval of member
organizations. The Exchange proposes to revise Rule 311 to explicitly
provide for LLCs to apply to become member organizations and eliminate
the requirement that a member corporation be created or organized, and
maintain its principal place of business, in the United States.
First, the Exchange's membership rules currently provide for member
organizations to be corporations or partnerships, but have not
explicitly provided for LLCs.\4\ The Exchange proposes to add LLCs to
the types of potential member organizations and require LLCs to meet
the same requirements currently applicable to partnerships and
corporations set forth in Rule 311(b). As part of the proposed
revision, the Exchange seeks to add a new section (4) to Rule 311(b)
requiring every member of an LLC to be a member, principal executive or
approved person.\5\ Similarly, the Exchange proposes to amend current
Rule 311(b)(6) to reflect that proposed LLC member organizations must,
like corporations and partnerships, also comply with any additional
requirements as the rules of the Exchange may prescribe. The Exchange
also proposes to add new Supplementary Material .16 to Rule 311 to
specify that LLC applicants for Exchange membership are subject to Rule
313.24 regarding the submission of copies of proposed or existing
limited liability company documents and other agreements.
---------------------------------------------------------------------------
\4\ Current Rule 311(f) permits the Exchange to approve
``entities that have characteristics essentially similar to
corporations, partnerships, or both'' as a member organization ``on
such terms and conditions as the Exchange may prescribe.''
\5\ Rule 311(b)(2) and (b)(3) currently impose the same
requirement on the relevant control persons at corporations and
partnerships, respectively.
---------------------------------------------------------------------------
The Exchange also proposes to amend Rule 311(f) to eliminate the
geographic limitation on incorporation and domicile of corporation
members and delete the related interpretations of Rule 311(f). The
first sentence of Rule 311(f) currently provides that every member
corporation be a corporation ``created or organized under the laws of,
and shall maintain its principal place of business in, the United
States or any State thereof.'' \6\ The Exchange does not believe that
the Exchange's restriction on whether foreign entities may be a member
organization is consistent with either federal rules or those of other
self-regulatory organizations (``SRO''). For example supporting its
belief, the Exchange states that rules promulgated pursuant to the Act
require, under certain circumstances, a foreign broker-dealer to
register with the Commission.\7\ The Exchange also states that other
SROs, including the Financial Industry Regulatory Authority, Inc.
(``FINRA''), do not require their members to be domiciled in the United
States.\8\
---------------------------------------------------------------------------
\6\ The first sentence of Rule 311(f) also provides that every
member firm organization shall be a partnership or corporation. This
statement is redundant to Rule 311(b), which the Exchange is
amending to add LLCs. Accordingly, the Exchange proposes to delete
the first sentence of Rule 311(f) in its entirety.
\7\ See 17 CFR 240.15a-6 and Commission Guide to Broker-Dealer
Registration, Division of Trading and Markets, available at https://www.sec.gov/divisions/marketreg/bdguide.htm (foreign broker-dealers
that, from the outside of the United States, induce or attempt to
induce securities transactions by any person in the United States,
or that use the means or instrumentalities of interstate commerce in
the United States for this purpose, must register as broker-dealers
with the Commission).
\8\ See e.g., NASD Membership and Registration Rules (1000
Series). NASD Rule 1090 imposes specific requirements on members
that do not maintain an office in the United States responsible for
preparing and maintaining financial and other reports required to be
filed with the SEC and the Exchange, which the Exchange proposes to
import into Rule 313. See the discussion infra. See also BATS
Exchange, Inc. Rules 2.3, 2.5 and 2.6.
---------------------------------------------------------------------------
The Exchange believes that the current restriction in Rule 311(f)
puts it at a competitive disadvantage because it restricts foreign
broker-dealers that are registered with the Commission and are members
of another SRO from also becoming Exchange member organizations. The
Exchange notes that its rules already require member organizations to
meet prerequisites as specified in Rule 2(b). Specifically, regardless
of corporate form, all member organizations must be registered broker-
dealers that are members of FINRA or another registered securities
exchange. If a registered broker-dealer transacts business with public
customers or conducts business on the Floor of the Exchange, such
member organization must be a member of FINRA.
The Exchange further notes that a member organization will be
subject to regulatory examination and jurisdiction for misconduct
whether or not it is based in the United States. However, for the
avoidance of doubt, as discussed below, the Exchange proposes to add
supplementary material to Rule 313 based on NASD Rule 1090 that imposes
certain requirements on foreign members that do not maintain an office
in the United States.
Rule 313
NYSE Rule 313 sets forth certain corporate or partnership documents
that each member organization must submit to enter into and continue in
NYSE membership. The Rule also sets forth certain restrictions on
capital withdrawals and distributions applicable to member corporations
and partnerships. The Exchange proposes to amend Rule 313 to delineate
the types of documents LLCs must submit that, as noted, mirror the
requirements currently in place for member corporations and
partnerships.
First, the Exchange proposes to add a subsection (d) to Rule 313
requiring all articles of organization and operating documents for LLCs
to be submitted for Exchange approval prior to becoming effective.
Relatedly, the Exchange proposes to add Supplementary Material .24
setting forth that existing LLCs must promptly submit certified copies
(to the extent possible) of articles of organization and operating
agreements to the Exchange.
Second, the Exchange proposes to add Supplementary Material .25
providing restrictions on capital withdrawals by LLC members that are
substantially the same as those applicable to corporations and
partnerships. The Supplementary Material would provide that the capital
contribution of any LLC member may not be withdrawn on less than six
[[Page 70911]]
months' written notice of withdrawal given no sooner than six months
after such contribution was first made without the prior written
approval of the Exchange. The Supplementary Material would also specify
that each member firm shall promptly notify the Exchange of the receipt
of any notice of withdrawal of any part of a member's capital
contribution or if any withdrawal is not made because prohibited under
the provisions of Securities and Exchange Commission Rule 15c3-1.
Third, the Exchange proposes to add Supplementary Material .26
providing that LLCs not organized under the laws of New York State must
subject themselves to the following restrictions: No distributions
shall be declared or paid that impair the LLC's capital; and no
distribution of assets shall be made to any member unless the value of
the LLC's assets remaining after such payment or distribution is at
least equal to the aggregate of its debts and liabilities, including
capital. These proposed restrictions are based on existing restrictions
applicable to member corporations and partnerships.
In addition, as noted above, the Exchange proposes to add new
Supplementary Material .27 to Rule 313 specifying the requirements
applicable to Foreign Member Organizations. The proposed new rule text
would adopt, without substantive change, paragraphs (a), (b), and (c)
of NASD Rule 1090 (Foreign Members), which impose specific requirements
on FINRA members that do not maintain an office in the United States
responsible for preparing and maintaining financial and other reports
required to be filed by the SEC and FINRA.\9\ As proposed, foreign
member organizations that do not maintain an office in the United
States responsible for preparing and maintaining financial and other
reports required to be filed with the Commission and the Exchange would
be required to: (1) Prepare all such reports, and maintain a general
ledger chart of account and any description thereof, in English and
U.S. dollars; (2) reimburse the Exchange or its representatives for
expenses incurred in connection with examinations of the member
organization to the extent that such expenses exceed the cost of
examining a member organization located within the continental United
States in the geographic location most distant from the Exchange's
principal office or, in such other amount as the Exchange may deem to
be an equitable allocation of such expenses; and (3) ensure the
availability of an individual fluent in English and knowledgeable in
securities and financial matters to assist representatives of the
Exchange during examinations.
---------------------------------------------------------------------------
\9\ The Exchange is not proposing to adopt a rule similar to
NASD Rule 1090(d), which requires foreign members to ``utilize,
either directly or indirectly, the services of a broker/dealer
registered with the Commission, a bank or a clearing agency
registered with the Commission located in the United States in
clearing all transactions involving members of the Association,
except where both parties to a transaction agree otherwise.'' The
Exchange agrees with FINRA, which similarly recommended skipping
paragraph (d) as part of its contemplated adoption of NASD Rule
1090, that the provision is ``outdated'' and that clearing
arrangements are better addressed by FINRA Rule 4311 (Carrying
Agreements), which is based in part on NYSE Rule 382 (including NYSE
Rule Interpretations 382/01 through 382/05 and 409(a)/01), that
FINRA Rule 4311 replaced. See FINRA Regulatory Notice 13-29
(September 2013). FINRA Rule 4311 governs the requirements
applicable to members when entering into agreements for the carrying
of any customer accounts in which securities transactions can be
effected.
---------------------------------------------------------------------------
The Exchange also proposes to eliminate certain restrictions, which
the Exchange considers redundant, on member organizations and
prospective member organizations organized as partnerships and
corporations. The Exchange proposes to eliminate the requirement in
Rule 313.11 that the partnership articles of each member firm provide
that capital withdrawals by partners cannot be made without the prior
written approval of the Exchange. Rule 313.11 already requires the
Exchange's prior written approval for any such capital withdrawals, and
member organizations need to monitor for and comply with the
prohibition, including whether particular withdrawals violate net
capital requirements. The Exchange believes that because Exchange rules
already govern this behavior, a partnership seeking approval as a
member organization would not need to amend its partnership articles to
reflect this existing rule requirement.\10\
---------------------------------------------------------------------------
\10\ See also footnote 11, infra.
---------------------------------------------------------------------------
Further, the Exchange proposes to eliminate the requirement in Rule
313.20 that prospective member corporations submit an opinion of
counsel stating, among other things, that the corporation is duly
organized and existing, that its stock is validly issued and
outstanding, and that the restrictions and provisions required by the
Exchange on the transfer, issuance, conversion and redemption of its
stock have been made legally effective. Corporate members are required
under the Rule to submit relevant corporate documents, including
articles of incorporation, that contain the same information required
in the opinion of counsel. The Exchange represents that requiring a
legal opinion attesting to facts contained in a corporation's public
filings is redundant and, given the expense, potentially a disincentive
to smaller entities applying for Exchange membership.
Similarly, the Exchange proposes to remove the requirement in Rule
313.23 that the opinion of counsel submitted to the Exchange at the
time the corporation applies for approval under Rule 313.20 state the
extent to which the corporation has made the following prohibitions
legally effective: The prohibition on declaring or paying a dividend
that impairs the capital of the corporation and the prohibition on
distributing assets to any stockholder unless the value of the
corporate assets remaining after such payment or distribution is at
least equal to the aggregate of its debts and liabilities, including
capital. Rule 313.23 would continue to prohibit corporation members
from declaring or paying dividends or distributing corporate assets
that impair the corporation's capital, and member corporations would
not be relieved of the obligation to monitor and enforce these
prohibitions. The Exchange believes that requiring these
representations in a separate legal opinion is redundant and serves no
necessary regulatory or other purpose.\11\
---------------------------------------------------------------------------
\11\ FINRA Rule 4110 (Capital Compliance) contains similar
prohibitions on capital withdrawals by FINRA members without
requiring that the prohibitions be reflected in a firm's partnership
articles or requiring a legal opinion that the member has made the
prohibitions legally effective. See FINRA Rule 4110 (c)(1) (``No
equity capital of a member may be withdrawn for a period of one year
from the date such equity capital is contributed, unless otherwise
permitted by FINRA in writing.'').
---------------------------------------------------------------------------
Finally, the Exchange proposes to make certain miscellaneous
amendments to Rule 313. Specifically, the Exchange proposes to replace
outdated references to ``Regulation and Surveillance'' with ``the
Exchange'' in Rules 313.10 and 313.20.\12\ Similarly, the Exchange
proposes to replace outdated references to ``photostatic'' copies in
Rules 313.10 and 313.20 in connection with the submission of documents
to the Exchange and replace them with ``electronically or mechanically
reproduced.''
---------------------------------------------------------------------------
\12\ Under Rule 0, references to the Exchange also refer to
FINRA staff and FINRA departments acting on behalf of the Exchange
pursuant to a Regulatory Services Agreement (``RSA''). FINRA
currently provides member application proceedings services to the
Exchange pursuant to an RSA.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with
[[Page 70912]]
Section 6(b) of the Act,\13\ in general, and furthers the objectives of
Section 6(b)(5) of the Act,\14\ 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 adding LLCs to the list of eligible member organizations would
remove impediments to and perfect the mechanism of a free and open
market and a national market system by expanding the types of
organizational forms a member organization may take. The Exchange also
believes that permitting LLCs to become member organizations subject to
the same restrictions and requirements currently applicable to
corporations and partnerships also protects investors and the public
interest by holding LLCs to the same high standards.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
In addition, the Exchange believes that permitting non-United
States-based registered broker-dealers that are members of FINRA or
another registered securities exchange and that do not have their
principal place of business in the United States to become Exchange
member organizations would remove impediments to and perfect the
mechanism of a free and open market by removing geographic restrictions
on Exchange membership that are not required by FINRA or other
exchanges. The Exchange further believes that broadening the Exchange
membership pool by facilitating the participation of additional
foreign-based U.S. registered broker-dealers would benefit investors
and the public interest by increasing market participation and depth at
the Exchange. Moreover, the Exchange believes that adoption of specific
requirements for foreign members that do not maintain an office in the
United States based on NASD Rule 1090 would further assure that foreign
Exchange members, once approved, remain subject to regulatory
examination and jurisdiction.
Similarly, the Exchange represents that updating the Exchange's
rules to remove requirements, which the Exchange believes are
redundant, that a member firm's partnership articles provide that
capital withdrawals by partners cannot be made without the prior
written approval of the Exchange, that prospective member corporations
submit an opinion of counsel reciting facts contained in its public
filings, and that certain prohibitions have been made legally effective
would remove impediments to and perfect the mechanism of a free and
open market and a national market system by ensuring that potential
member organizations, persons subject to the Exchange's jurisdiction,
regulators, and the public could more easily navigate the Exchange's
rulebook and better understand what obligations attach and when.
Further, the Exchange represents that updating the Exchange's rules to
remove what the Exchange considers redundant requirements is also
designed to protect investors as well as the public interest by
providing transparency and reducing potential confusion regarding the
Exchange membership process that may result from having what the
Exchange characterizes as obsolete rules and outdated guidelines in the
Exchange's rulebook. For the same reasons, the Exchange represents that
updating the Exchange's rules to remove requirements that the Exchange
considers outdated would remove impediments to and perfect the
mechanism of a free and open market and a national market system and is
equally 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 would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
the proposed rule change would foster competition by expanding the
types of organizational forms a member organization may take and, by
removing geographic restrictions on corporate Exchange membership,
permitting foreign broker-dealers that are members of FINRA or another
SRO and that do not have their principal place of business in the
United States to become Exchange member organizations. The Exchange
represents that, by removing outdated and redundant provisions from the
Exchange membership rules not found in the rules of other SROs and
adding a provision found in the rules of another SRO, the proposed rule
change also would foster competition by providing greater harmonization
between Exchange membership requirements and the requirements of other
SROs, resulting in less burdensome and more efficient and consistent
standards for prospective member organizations.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or up to 90 days (i) as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or (ii) as to which the self-regulatory
organization consents, the Commission will:
(A) By order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSE-2014-63 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-NYSE-2014-63. 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
[[Page 70913]]
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Section, 100 F Street
NE., Washington, DC 20549 on official business days between the hours
of 10:00 a.m. and 3:00 p.m. Copies of the filing will also be available
for inspection and copying at the NYSE's principal office and on its
Internet Web site at www.nyse.com. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSE-2014-63 and should be submitted on or before
December 19, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-28084 Filed 11-26-14; 8:45 am]
BILLING CODE 8011-01-P
