Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Members' Schedule as Defined in the Amended and Restated Limited Liability Company Agreement of NYSE Amex Options LLC Dated as of May 14, 2014 in Order to Reflect Changes to the Capital Structure of the Company, 37695-37698 [2015-16089]
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Federal Register / Vol. 80, No. 126 / Wednesday, July 1, 2015 / Notices
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 21 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 22
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has asked
the Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange stated that waiver
of the operative delay will permit the
Exchange to list and trade certain ETF
options on the same basis as other
options markets.23 Moreover, the
Exchange has represented that the
reorganizational changes are nonsubstantive and would assist market
participants by providing a clearer rule.
The Commission believes the waiver of
the operative delay is consistent with
the protection of investors and the
public interest. Therefore, the
Commission hereby waives the
operative delay and designates the
proposal operative upon filing.24
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
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:
Electronic Comments
tkelley on DSK3SPTVN1PROD with NOTICES
• 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–
CBOE–2015–052 on the subject line.
of filing of the proposed rule change, or such
shorter time as designated by the Commission.
21 17 CFR 240.19b–4(f)(6).
22 17 CFR 240.19b–4(f)(6)(iii).
23 See supra note 18.
24 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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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–CBOE–2015–052. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–CBOE–
2015–052, and should be submitted on
or before July 22, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–16085 Filed 6–30–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75301; File No. SR–
NYSEMKT–2015–44]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending the Members’
Schedule as Defined in the Amended
and Restated Limited Liability
Company Agreement of NYSE Amex
Options LLC Dated as of May 14, 2014
in Order to Reflect Changes to the
Capital Structure of the Company
June 25, 2015.
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 June 17,
2015, NYSE MKT LLC (the ‘‘Exchange’’
or ‘‘NYSE MKT’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Members’ Schedule (as defined in the
Amended and Restated Limited
Liability Company Agreement of NYSE
Amex Options LLC (the ‘‘Company’’)
dated as of May 14, 2014 (the ‘‘LLC
Agreement’’)) in order to reflect changes
to the capital structure of the Company
based on two transactions (such
amendment, the ‘‘Proposed Rule
Change’’). The first transaction involved
the issuance of Annual Incentive Shares
(as defined in the Members Agreement
(as defined below)) to the Founding
Firms (as defined below) consistent
with the formula set forth in Section 2.1
of that certain Amended and Restated
Members Agreement, dated as of May
14, 2014, by and among the Company,
NYSE MKT, NYSE Holdings LLC
(formerly known as NYSE Euronext)
(‘‘NYSE Holdings’’), NYSE Market (DE),
Inc. (formerly known as NYSE Market,
Inc.) (‘‘NYSE Market (DE)’’), Banc of
America Strategic Investments
Corporation (‘‘BAML’’), Barclays
Electronic Commerce Holdings Inc.
(‘‘Barclays’’), Citadel Securities LLC
(‘‘Citadel’’), Citigroup Financial
Strategies, Inc. (‘‘Citigroup’’), Goldman,
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
25 17
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CFR 200.30–3(a)(12).
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Federal Register / Vol. 80, No. 126 / Wednesday, July 1, 2015 / Notices
Sachs & Co. (‘‘Goldman Sachs’’), Datek
Online Management Corp. (‘‘TD
Ameritrade’’) and UBS Americas Inc.
(‘‘UBS’’) (collectively, excluding the
Company, NYSE MKT, NYSE Holdings
and NYSE Market (DE), the ‘‘Founding
Firms’’) (the ‘‘Members Agreement’’).
The second transaction will involve the
transfer of Interests (as defined in the
LLC Agreement) by the Founding Firms
to NYSE Market (DE), an affiliate of the
Exchange, as soon as reasonably
practicable following June 15, 2015
pursuant to Article XI of the LLC
Agreement and Section 3.1 of the
Members Agreement. The text of the
proposed rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Members’ Schedule as set forth herein.
The amendment reflects changes to the
capital structure of the Company due to
(i) the issuance of Annual Incentive
Shares to the Founding Firms pursuant
to Section 2.1 of the Members
Agreement and (ii) the transfer of
Interests by the Founding Firms to
NYSE Market (DE) pursuant to Article
XI of the LLC Agreement and Section
3.1 of the Members Agreement.
tkelley on DSK3SPTVN1PROD with NOTICES
Issuance of Annual Incentive Shares
Pursuant to Section 2.1 of the
Members Agreement, each year until
this year (unless extended by the board
of directors of the Company), the
Company must issue a number of Class
B Common Interests (as defined in the
LLC Agreement) equal to thirty percent
(30%) of the then-outstanding Class B
Common Interests as Annual Incentive
Shares. These Annual Incentive Shares
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are allocated among the Members (as
defined in the LLC Agreement) holding
Class B Common Interests (such
Members, the ‘‘Class B Members’’) based
on each Class B Member’s contribution
to the volume of the Exchange relative
to such Class B Member’s Individual
Target (as defined in the Members
Agreement). The Annual Incentive
Shares may change the relative
economic and voting rights among the
Class B Members but have no effect on
the relative economic and voting rights
as between Members holding Class A
Common Interests (as defined in the
LLC Agreement) and Class B Members.
Effective February 28, 2015, the
Company issued 10.5456 Annual
Incentive Shares in the aggregate to the
Founding Firms (the ‘‘Issuance of
Annual Incentive Shares’’). Five of the
Founding Firms did not achieve their
Individual Targets, which reduced the
five Founding Firms’ economic and
voting interests in the Company relative
to the other Founding Firms. In
addition, because only two Founding
Firms exceeded their Individual Targets,
1.0309 unallocated Reallocation Shares
(as defined in the Members Agreement)
were included in an Unearned Class B
Shares Pool (as defined in the Members
Agreement). In accordance with Section
2.2 of the Members Agreement, the
board of directors of the Company
allocated such Class B Shares between
those two Founding Firms that
exceeded their Individual Targets,
effective February 28, 2015. The
Exchange proposes to amend the
Members’ Schedule as set forth in
Exhibit 5A attached hereto 4 (marked
against the Members’ Schedule in effect
prior to such issuance) to reflect the
issuance of Annual Incentive Shares,
including the allocation of the
Reallocation Shares included in the
Unearned Class B Shares Pool.
Founding Firm Transfer
Pursuant to Article XI of the LLC
Agreement and Section 3.1 of the
Members Agreement, a Member may
transfer Interests to a third party or to
another Member in accordance with the
conditions and limitations set forth
therein. The Exchange is filing this
Proposed Rule Change, in part, to
provide notice that the Founding Firms
collectively intend to transfer an
aggregate equity interest [sic] 16.0000%
in the Company to NYSE Market (DE),
an affiliate of the Exchange (the
‘‘Founding Firm Transfer’’). Upon
consummation of the Founding Firm
Transfer and the acquisition by NYSE
4 The Commission notes that Exhibit 5A is
attached to the filing, not to this Notice.
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Market (DE) of the Class B Common
Interests transferred by the Founding
Firms, such Class B Common Interests
will automatically convert into an
appropriate number of Class A Common
Interests.
Immediately following the Founding
Firm Transfer, NYSE MKT will own an
equity interest of 47.2000% in the
Company, NYSE Market (DE) will own
an equity interest of 52.8000%, and the
Founding Firms, collectively, will no
longer have an equity interest in the
Company. The Exchange proposes,
upon consummation of the Founding
Firm Transfer, to amend the Members’
Schedule as set forth in Exhibit 5B
attached hereto 5 (marked against the
Members’ Schedule following the
Issuance of Annual Incentive Shares) to
reflect the Founding Firm Transfer.
2. Statutory Basis
The Proposed Rule Change is
consistent with Section 6(b) 6 of the
Act,7 in general, and furthers the
objectives of Section 6(b)(1) 8 of the Act,
which requires a national securities
exchange to be so organized and have
the capacity to carry out the purposes of
the Act and to comply, and to enforce
compliance by its members and persons
associated with its members, with the
provisions of the Act, the rules and
regulations promulgated thereunder and
the rules of the Exchange. The Proposed
Rule Change does not modify the
Company’s trading or compliance rules
and preserves the existing mechanisms
for ensuring the Exchange’s and the
Company’s compliance with the Act,
the rules and regulations promulgated
thereunder and the rules of the
Exchange. The Proposed Rule Change
also retains NYSE MKT’s regulatory
control over the Company and the
provisions specifically designed to
ensure the independence of its selfregulatory function and to ensure that
any regulatory determinations by NYSE
MKT, as the Company’s SRO, are
controlling with respect to the actions
and decisions of the Company.
Additionally, the Proposed Rule
Change continues to require the
Company, its Members and its directors
to comply with the federal securities
laws and the rules and regulations
promulgated thereunder and to engage
in conduct that fosters and does not
interfere with the Exchange’s or the
Company’s ability to carry out its
5 The Commission notes that Exhibit 5B is
attached to the filing, not to this Notice.
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78.
8 15 U.S.C. 78f(b)(1).
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Federal Register / Vol. 80, No. 126 / Wednesday, July 1, 2015 / Notices
respective responsibilities under the
Act.
The Proposed Rule Change is also
consistent with, and furthers the
objectives of, Section 6(b)(5) 9 of the Act,
in that it preserves all of NYSE MKT’s
existing rules and mechanisms to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, to remove
impediments to and perfect the
mechanisms of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the Proposed Rule Change will have any
impact on competition. The Proposed
Rule Change solely relates to changes in
the equity interests among the Members
of the Company pursuant to provisions
of the LLC Agreement and Members
Agreement that have been previously
filed and approved by the Commission.
In addition, neither the Issuance of
Annual Incentive Shares nor the
Founding Firm Transfer implicates the
Commission’s policies with respect to
permissible ownership. Furthermore,
because the Proposed Rule Change does
not affect the availability or pricing of
any goods or services, the Proposed
Rule Change will not affect competition
either between the Exchange and others
that provide the same goods and
services as the Exchange or among
market participants.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the Proposed
Rule Change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 10 and Rule
19b–4(f)(6) thereunder.11 Because the
9 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(3)(A)(iii).
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
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10 15
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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) 12 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),13 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange stated that an
immediate operative date is necessary to
permit the efficient consummation of
both the Issuance of Annual Incentive
Shares and the Founding Firm Transfer.
According to the Exchange,
accomplishing the Founding Firm
Transfer requires that the Members have
certainty as to the amount of Common
Interests owned by each, which in turn
requires timely consummation of the
Issuance of Annual Incentive Shares.
The Commission believes that waiving
the 30-day operative delay is consistent
with the protection of investors and the
public interest because such waiver
would allow the Company to
consummate the Issuance of Annual
Incentive Shares and the Founding Firm
Transfer in an efficient and predictable
manner. Accordingly, the Commission
hereby grants the Exchange’s request
and designates the proposal operative
upon filing.14
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) 15 of the Act to
12 17
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
14 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
15 15 U.S.C. 78s(b)(2)(B).
13 17
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37697
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:
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–2015–44 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–2015–44. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
publicly available. All submissions
should refer to File Number SR–
NYSEMKT–2015–44 and should be
submitted on or before July 22, 2015.
16 17
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CFR 200.30–3(a)(12).
01JYN1
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Federal Register / Vol. 80, No. 126 / Wednesday, July 1, 2015 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–16089 Filed 6–30–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75291; File No. SR–BX–
2015–015]
Self-Regulatory Organizations;
NASDAQ OMX BX Inc.; Notice of Filing
of Amendment No. 1 and Order
Granting Accelerated Approval of
Proposed Rule Change, as Modified by
Amendment No. 1, To Amend and
Restate Certain Rules That Govern the
NASDAQ OMX BX Equities Market
June 24, 2015.
I. Introduction
On March 20, 2015, NASDAQ OMX
BX, Inc. (‘‘BX’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend and restate certain BX
rules that govern the NASDAQ OMX BX
Equities Market in order to provide a
clearer and more detailed description of
certain aspects of its functionality. The
proposed rule change was published for
comment in the Federal Register on
April 6, 2015.3 The Commission
received no comment letters regarding
the proposed rule change. On May 12,
2015, the Commission extended to July
5, 2015, the time period in which to
approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether the proposed rule change
should be disapproved.4 On June 22,
2015, the Exchange filed Amendment
No. 1 to the proposed rule change.5 This
order approves the proposed rule
change, as amended, on an accelerated
basis.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 74617
(March 31, 2015), 80 FR 18473 (‘‘Notice’’).
4 See Securities Exchange Act Release No. 74934,
80 FR 28325 (May 18, 2015).
5 In Amendment No. 1, the Exchange proposed to
correct typographical errors in the original filing,
further improve the clarity of certain rule language,
and include additional explanation with regard to
the purpose of the proposed rule change.
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II. Description of the Amended
Proposal
The Exchange proposes to amend and
restate certain rules governing the
NASDAQ OMX BX Equities Market in
order to provide additional detail and
clarity regarding its order type
functionality.6 This proposed rule
change is a response to Chair White’s
request that each equities exchange
conduct a comprehensive review of the
operation of each of the order types that
it offers to members.7
While the Exchange believes that its
current rules and other public
disclosures provide a comprehensive
description of the operation of the
NASDAQ OMX BX Equities Market and
are sufficient for members and the
investing public to have an accurate
understanding of its market structure, it
also acknowledges that a restatement of
certain rules will further clarify the
operation of its system.8 For instance,
BX believes that adding examples of
order type operation to its rules will
promote greater understanding of the
Exchange’s market structure.9 In
addition, BX asserts that certain
functionality previously described as an
‘‘order type’’ is more precisely
characterized as an attribute that may be
added to a particular order.10
Accordingly, this proposed rule change
distinguishes between ‘‘Order Types’’
and ‘‘Order Attributes,’’ and provides
descriptions of the Order Attributes that
may be attached to particular Order
Types.11
Currently, BX Rule 4751 sets forth
most of the rules governing NASDAQ
OMX BX Equities Market Order Types
and Order Attributes, as well as other
defined terms that pertain to trading
securities on the NASDAQ OMX BX
Equities Market.12 BX proposes to
restate and amend Rule 4751 as new
Rule 4701.13 BX also proposes to amend
the definitions pertaining to Order
Types and Order Attributes and to
relocate them from Rule 4751 to new
Rules 4702 (Order Types) and 4703
(Order Attributes), respectively.14 In
addition, BX proposes to delete Rule
4755 as the information contained
6 See
Notice 80 FR at 18473.
id.; see also Mary Jo White, Chair,
Commission, Speech at the Sandler O’Neill &
Partners, L.P. Global Exchange and Brokerage
Conference (June 5, 2014), available at https://
www.sec.gov/News/Speech/Detail/Speech/
1370542004312.
8 See Notice, 80 FR at 18474.
9 Id.
10 Id.
11 Id.
12 See Rule 4751.
13 See proposed Rule 4701.
14 See proposed Rules 4702 and 4703.
7 See
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therein is superseded by proposed Rules
4702 and 4703.15 Lastly, BX proposes
certain conforming and technical
changes to Rules 4756, 4757, and
4780.16
BX represents that, except where
specifically stated otherwise, all
proposed rules are restatements of
existing rules and are not intended to
reflect substantive changes to rule text
or the operation of the NASDAQ OMX
BX Equities Market.17 Proposed Rule
4702 related to Order Types contains
definitions and descriptions of Price to
Comply Orders, Price to Display Orders
(referred to as ‘‘Price to Comply Post
Orders’’ in current Rule 4751),18 NonDisplayed Orders, Post-Only Orders,
Retail Price Improving Orders, and
Retail Orders. Proposed Rule 4703
related to Order Attributes contains
definitions and descriptions of time-inforce (‘‘TIF’’) modifiers, order size, order
price, pegging, minimum quantity,
routing, discretion, reserve size,
attribution, intermarket sweep order
designation, and display.19
In Amendment No. 1, the Exchange
proposes to add language further
explaining the operation of the
following order types: Post-Only Orders,
orders with a TIF of IOC, including
Routable Orders and Post-Only Orders;
orders with Midpoint Pegging, Primary
Pegging or Market Pegging; and orders
designated with both Pegging and
Routing attributes.20 For example, the
Exchange states that for Order Types
that list both Pegging and Routing as
possible Order Attributes, the two Order
Attributes may be combined since
Pegging serves to establish the price of
the order, while Routing establishes the
market center(s) to which the system’s
routing functionality may direct a
routed order if liquidity is available at
that price.21 The Exchange also
proposes to add further specification
regarding the availability of certain
order types only through certain
communication protocols by stating that
a Post-Only Order with a TIF of IOC
may not be entered through the RASH
or FIX protocols.22 In addition, the
Exchange proposes to add language
stating that one or more Order
15 See
Rule 4755.
states that, in subsequent proposed rule
changes, it plans to restate the remainder of its
Rules numbered 4752 through 4780 so that they
appear sequentially following Rule 4703. See.
Notice, 80 FR at 18474.
17 See. Notice, 80 FR at 18474.
18 See Notice, 80 FR at 18477 n.29.
19 The Notice contains additional details related
to proposed Rules 4702 and 4703. See Notice, 80
FR at 18473–90.
20 See Amendment No. 1.
21 Id.
22 Id.
16 BX
E:\FR\FM\01JYN1.SGM
01JYN1
]]>Agencies
[Federal Register Volume 80, Number 126 (Wednesday, July 1, 2015)]
[Notices]
[Pages 37695-37698]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-16089]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75301; File No. SR-NYSEMKT-2015-44]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Amending the Members'
Schedule as Defined in the Amended and Restated Limited Liability
Company Agreement of NYSE Amex Options LLC Dated as of May 14, 2014 in
Order to Reflect Changes to the Capital Structure of the Company
June 25, 2015.
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 June 17, 2015, NYSE MKT LLC (the ``Exchange'' or ``NYSE
MKT'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C.78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Members' Schedule (as defined in
the Amended and Restated Limited Liability Company Agreement of NYSE
Amex Options LLC (the ``Company'') dated as of May 14, 2014 (the ``LLC
Agreement'')) in order to reflect changes to the capital structure of
the Company based on two transactions (such amendment, the ``Proposed
Rule Change''). The first transaction involved the issuance of Annual
Incentive Shares (as defined in the Members Agreement (as defined
below)) to the Founding Firms (as defined below) consistent with the
formula set forth in Section 2.1 of that certain Amended and Restated
Members Agreement, dated as of May 14, 2014, by and among the Company,
NYSE MKT, NYSE Holdings LLC (formerly known as NYSE Euronext) (``NYSE
Holdings''), NYSE Market (DE), Inc. (formerly known as NYSE Market,
Inc.) (``NYSE Market (DE)''), Banc of America Strategic Investments
Corporation (``BAML''), Barclays Electronic Commerce Holdings Inc.
(``Barclays''), Citadel Securities LLC (``Citadel''), Citigroup
Financial Strategies, Inc. (``Citigroup''), Goldman,
[[Page 37696]]
Sachs & Co. (``Goldman Sachs''), Datek Online Management Corp. (``TD
Ameritrade'') and UBS Americas Inc. (``UBS'') (collectively, excluding
the Company, NYSE MKT, NYSE Holdings and NYSE Market (DE), the
``Founding Firms'') (the ``Members Agreement''). The second transaction
will involve the transfer of Interests (as defined in the LLC
Agreement) by the Founding Firms to NYSE Market (DE), an affiliate of
the Exchange, as soon as reasonably practicable following June 15, 2015
pursuant to Article XI of the LLC Agreement and Section 3.1 of the
Members Agreement. The text of the proposed rule change is available on
the Exchange's Web site at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Members' Schedule as set forth
herein. The amendment reflects changes to the capital structure of the
Company due to (i) the issuance of Annual Incentive Shares to the
Founding Firms pursuant to Section 2.1 of the Members Agreement and
(ii) the transfer of Interests by the Founding Firms to NYSE Market
(DE) pursuant to Article XI of the LLC Agreement and Section 3.1 of the
Members Agreement.
Issuance of Annual Incentive Shares
Pursuant to Section 2.1 of the Members Agreement, each year until
this year (unless extended by the board of directors of the Company),
the Company must issue a number of Class B Common Interests (as defined
in the LLC Agreement) equal to thirty percent (30%) of the then-
outstanding Class B Common Interests as Annual Incentive Shares. These
Annual Incentive Shares are allocated among the Members (as defined in
the LLC Agreement) holding Class B Common Interests (such Members, the
``Class B Members'') based on each Class B Member's contribution to the
volume of the Exchange relative to such Class B Member's Individual
Target (as defined in the Members Agreement). The Annual Incentive
Shares may change the relative economic and voting rights among the
Class B Members but have no effect on the relative economic and voting
rights as between Members holding Class A Common Interests (as defined
in the LLC Agreement) and Class B Members.
Effective February 28, 2015, the Company issued 10.5456 Annual
Incentive Shares in the aggregate to the Founding Firms (the ``Issuance
of Annual Incentive Shares''). Five of the Founding Firms did not
achieve their Individual Targets, which reduced the five Founding
Firms' economic and voting interests in the Company relative to the
other Founding Firms. In addition, because only two Founding Firms
exceeded their Individual Targets, 1.0309 unallocated Reallocation
Shares (as defined in the Members Agreement) were included in an
Unearned Class B Shares Pool (as defined in the Members Agreement). In
accordance with Section 2.2 of the Members Agreement, the board of
directors of the Company allocated such Class B Shares between those
two Founding Firms that exceeded their Individual Targets, effective
February 28, 2015. The Exchange proposes to amend the Members' Schedule
as set forth in Exhibit 5A attached hereto \4\ (marked against the
Members' Schedule in effect prior to such issuance) to reflect the
issuance of Annual Incentive Shares, including the allocation of the
Reallocation Shares included in the Unearned Class B Shares Pool.
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\4\ The Commission notes that Exhibit 5A is attached to the
filing, not to this Notice.
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Founding Firm Transfer
Pursuant to Article XI of the LLC Agreement and Section 3.1 of the
Members Agreement, a Member may transfer Interests to a third party or
to another Member in accordance with the conditions and limitations set
forth therein. The Exchange is filing this Proposed Rule Change, in
part, to provide notice that the Founding Firms collectively intend to
transfer an aggregate equity interest [sic] 16.0000% in the Company to
NYSE Market (DE), an affiliate of the Exchange (the ``Founding Firm
Transfer''). Upon consummation of the Founding Firm Transfer and the
acquisition by NYSE Market (DE) of the Class B Common Interests
transferred by the Founding Firms, such Class B Common Interests will
automatically convert into an appropriate number of Class A Common
Interests.
Immediately following the Founding Firm Transfer, NYSE MKT will own
an equity interest of 47.2000% in the Company, NYSE Market (DE) will
own an equity interest of 52.8000%, and the Founding Firms,
collectively, will no longer have an equity interest in the Company.
The Exchange proposes, upon consummation of the Founding Firm Transfer,
to amend the Members' Schedule as set forth in Exhibit 5B attached
hereto \5\ (marked against the Members' Schedule following the Issuance
of Annual Incentive Shares) to reflect the Founding Firm Transfer.
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\5\ The Commission notes that Exhibit 5B is attached to the
filing, not to this Notice.
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2. Statutory Basis
The Proposed Rule Change is consistent with Section 6(b) \6\ of the
Act,\7\ in general, and furthers the objectives of Section 6(b)(1) \8\
of the Act, which requires a national securities exchange to be so
organized and have the capacity to carry out the purposes of the Act
and to comply, and to enforce compliance by its members and persons
associated with its members, with the provisions of the Act, the rules
and regulations promulgated thereunder and the rules of the Exchange.
The Proposed Rule Change does not modify the Company's trading or
compliance rules and preserves the existing mechanisms for ensuring the
Exchange's and the Company's compliance with the Act, the rules and
regulations promulgated thereunder and the rules of the Exchange. The
Proposed Rule Change also retains NYSE MKT's regulatory control over
the Company and the provisions specifically designed to ensure the
independence of its self-regulatory function and to ensure that any
regulatory determinations by NYSE MKT, as the Company's SRO, are
controlling with respect to the actions and decisions of the Company.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78.
\8\ 15 U.S.C. 78f(b)(1).
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Additionally, the Proposed Rule Change continues to require the
Company, its Members and its directors to comply with the federal
securities laws and the rules and regulations promulgated thereunder
and to engage in conduct that fosters and does not interfere with the
Exchange's or the Company's ability to carry out its
[[Page 37697]]
respective responsibilities under the Act.
The Proposed Rule Change is also consistent with, and furthers the
objectives of, Section 6(b)(5) \9\ of the Act, in that it preserves all
of NYSE MKT's existing rules and mechanisms to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to remove
impediments to and perfect the mechanisms of a free and open market and
a national market system and, in general, to protect investors and the
public interest.
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\9\ 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
have any impact on competition. The Proposed Rule Change solely relates
to changes in the equity interests among the Members of the Company
pursuant to provisions of the LLC Agreement and Members Agreement that
have been previously filed and approved by the Commission. In addition,
neither the Issuance of Annual Incentive Shares nor the Founding Firm
Transfer implicates the Commission's policies with respect to
permissible ownership. Furthermore, because the Proposed Rule Change
does not affect the availability or pricing of any goods or services,
the Proposed Rule Change will not affect competition either between the
Exchange and others that provide the same goods and services as the
Exchange or among market participants.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
Proposed Rule Change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
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.
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\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Exchange stated that
an immediate operative date is necessary to permit the efficient
consummation of both the Issuance of Annual Incentive Shares and the
Founding Firm Transfer. According to the Exchange, accomplishing the
Founding Firm Transfer requires that the Members have certainty as to
the amount of Common Interests owned by each, which in turn requires
timely consummation of the Issuance of Annual Incentive Shares. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because such waiver would allow the Company to consummate the Issuance
of Annual Incentive Shares and the Founding Firm Transfer in an
efficient and predictable manner. Accordingly, the Commission hereby
grants the Exchange's request and designates the proposal operative
upon filing.\14\
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\12\ 17 CFR 240.19b-4(f)(6).
\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of 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) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEMKT-2015-44 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-2015-44. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make publicly available. All
submissions should refer to File Number SR-NYSEMKT-2015-44 and should
be submitted on or before July 22, 2015.
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\16\ 17 CFR 200.30-3(a)(12).
[[Page 37698]]
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For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-16089 Filed 6-30-15; 8:45 am]
BILLING CODE 8011-01-P
