Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Sections 401 and 402 of the NYSE MKT Company Guide To Harmonize the Exchange's Immediate Release and Trading Halt Policies, 14506-14509 [2016-05972]

Download as PDF 14506 Federal Register / Vol. 81, No. 52 / Thursday, March 17, 2016 / Notices environment, the Exchange must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. In this instance, the proposed changes to the fees and rebates provided to member firms under the market quality incentive programs of Rule 7014 do not impose a burden on competition because the Exchange’s execution services are completely voluntary and subject to extensive competition both from other exchanges and from offexchange venues. Rather than placing a burden on competition, the proposed fees and rebates are reflective of the fierce competition among market venues to attract order flow, including displayed liquidity, to the benefit of all market participants. All of the proposed changes to the incentive programs under Rule 7014 are designed to improve their effectiveness in achieving their stated purposes. If any of the changes proposed herein are unattractive to market participants, it is likely that the Exchange will lose market share as a result. Accordingly, the Exchange does not believe that the proposed changes will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets. asabaliauskas on DSK3SPTVN1PROD with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and paragraph (f) of Rule 19b–4 thereunder. 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. VerDate Sep<11>2014 17:03 Mar 16, 2016 Jkt 238001 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: [FR Doc. 2016–05978 Filed 3–16–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION 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– NASDAQ–2016–032 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–NASDAQ–2016–032. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NASDAQ–2016–032 and should be submitted on or before April 7, 2016. PO 00000 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Lynn M. Powalski, Deputy Secretary. [Release No. 34–77348; File No. SR– NYSEMKT–2016–29] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Sections 401 and 402 of the NYSE MKT Company Guide To Harmonize the Exchange’s Immediate Release and Trading Halt Policies March 11, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b-4 thereunder,2 notice is hereby given that on February 29, 2016, NYSE MKT LLC (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Sections 401 and 402 of the NYSE MKT Company Guide (the ‘‘Company Guide’’) to harmonize the Exchange’s immediate release and trading halt policies with recent changes made to the comparable policies of the New York Stock Exchange (‘‘NYSE’’). 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 18 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 Frm 00097 Fmt 4703 Sfmt 4703 E:\FR\FM\17MRN1.SGM 17MRN1 Federal Register / Vol. 81, No. 52 / Thursday, March 17, 2016 / Notices The Exchange proposes to amend Sections 401 and 402 of the Company Guide to harmonize the Exchange’s immediate release and trading halt policies with recent changes made to the comparable policies of the NYSE (referred to herein as the ‘‘NYSE Amendment’’).3 Consistent with the NYSE Amendment, the Exchange proposes to amend Sections 401 and 402 of the Company Guide to (i) expand the premarket hours during which listed companies are required to notify the Exchange prior to disseminating material news, and (ii) provide the Exchange with authority to halt trading (a) during pre-market hours at the request of a listed company, (b) when the Exchange believes it is necessary to request certain information from listed companies, and (c) when an Exchangelisted security is also listed on another national or foreign securities exchange and such other exchange halts trading in such security for regulatory reasons. The Exchange also proposes to add commentary to Section 402 of the Company Guide to provide guidance related to the release of material news after the close of trading on the Exchange. Sections 401 and 402 of the Company Guide give the Exchange authority to halt trading in a listed company’s security under certain circumstances. Currently, the Exchange may impose a regulatory trading halt when a listed company announces material news 4 shortly before the opening of trading on the Exchange or during the Exchange trading session (currently 9:30 a.m. to 4:00 p.m.). When that happens, the Exchange will typically institute a regulatory halt in trading, which halts trading on all market centers, to ensure full dissemination of the news to investors. The Exchange proposes to expand the hours and circumstances under which it can declare a regulatory trading halt. Currently, Sections 401 and 402 of the Company Guide require listed companies to notify the Exchange at least ten minutes in advance of releasing material news if such release will take place shortly before the opening of trading on the Exchange or during Exchange market hours (the ‘‘Material News Policy’’). The Exchange proposes to amend Sections 401 and 402 to require companies to comply with the Material News Policy between 7:00 a.m. and 4:00 p.m. Eastern Time. In the Exchange’s experience, most companies release news related to corporate actions and other material events between 7:00 a.m. and 9:30 a.m. Although trading on the Exchange does not begin until 9:30 a.m., the Exchange believes that material news released between 7:00 a.m. and 9:30 a.m. has the potential to cause volatility in both price and volume during pre-market trading that occurs on other market centers as well as once trading opens on the Exchange. However, because there is a lower volume of trading in such pre-market hours, the Exchange believes that a listed company is most well positioned to determine whether a trading halt is appropriate given the news it intends to release. Therefore, to facilitate an orderly opening and ensure thorough dissemination of material news, the Exchange believes it is beneficial to require companies to comply with the Material News Policy and advise whether a trading halt is appropriate during pre-market hours. As discussed above, when a listed company releases material news during the course of the trading day, the Exchange will typically halt trading temporarily to ensure full dissemination of the news. Under the proposed rules, between 7:00 a.m. and the opening of trading on the Exchange, the Exchange may implement a regulatory halt in circumstances where (i) the listed company has informed Exchange staff that it intends to make a public announcement of material news and (ii) the listed company requests that trading in its listed securities be halted pending dissemination of the public announcement (a ‘‘Pre-Market Halt’’).5 While trading on the Exchange does not begin until 9:30 a.m. Eastern Time, trading (including trading in Exchange listed securities) begins on NYSE Arca Equities, Inc., the Nasdaq Stock Market and other national securities exchanges at 4:00 a.m. Eastern Time. When the Exchange implements a regulatory trading halt to allow for the release of material news, other national securities exchanges that trade Exchange-listed securities also halt trading in such security until the Exchange lifts the halt.6 The Exchange notes that the volume of trading in the hours before trading begins on the Exchange is generally lighter and conducted predominantly by professional investors. Because of this reduced trading volume and the fact that the Exchange itself is not yet open for trading during these hours, the Exchange believes it is appropriate to institute a Pre-Market Halt only at the request of a listed company. The Exchange notes that the NYSE Amendment contains a similar provision and Nasdaq Stock Market (‘‘Nasdaq’’) has adopted a comparable rule with respect to trading halts between the hours of 7:00 a.m. and 9:30 a.m.7 Lastly, when a trading halt is implemented during Exchange market hours, Rule 123D—Equities specifies that a Floor Governor or two Floor Officials must approve the halt in trading. However, because a Pre-Market Halt will only be instituted at the request of a listed company and because Floor Governors and Floor Officials are not typically on the trading floor during pre-market hours, the Exchange proposes to include a statement that, notwithstanding anything to the contrary in Rule 123D(1)—Equities, the approval of the Floor Governors or Floor Officials is not required for a Pre-Market Halt. The Exchange proposes to further amend Section 402 of the Company Guide to add proposed Commentary .02, which will set forth circumstances in which it may institute a regulatory halt while it awaits information requested from a listed company. Sections 401 and 402 currently limit the Exchange’s authority to halt trading to situations when a listed company intends to release material news shortly before and during market hours. However, in the Exchange’s experience there are other scenarios when it may be advisable to halt trading for the protection of investors. For example, if there is 3 See Securities Exchange Release No. 75809 (September 2, 2015); 80 FR 54362 (September 9, 2015) (SR–NYSE–2015–38). 4 The Exchange considers material news to be any news that is reasonably likely to have a material impact on the price or trading volume of a listed security. 5 However, the proposed rule will state that if it appears that dissemination of material news will not be complete prior to the opening of trading on the Exchange at 9:30 a.m., the Exchange may temporarily halt trading in order to facilitate an orderly opening process. This is consistent with the Exchange’s current practice. 6 See, for example, NYSE Arca Equities Rule 7.18 and Nasdaq Stock Market Rule 4120(a)(2) for the authority to initiate a trading halt. 7 See Section 202.06(B) of the NYSE Listed Company Manual and Nasdaq Stock Market Rule 4120(a)(1) (which applies between the hours of 4:00 a.m. and 9:30 a.m.). 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 asabaliauskas on DSK3SPTVN1PROD with NOTICES 14507 VerDate Sep<11>2014 17:03 Mar 16, 2016 Jkt 238001 PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 E:\FR\FM\17MRN1.SGM 17MRN1 asabaliauskas on DSK3SPTVN1PROD with NOTICES 14508 Federal Register / Vol. 81, No. 52 / Thursday, March 17, 2016 / Notices uncertainty surrounding material news issued by a listed company or a company’s compliance with the Exchange’s continued listing standards, the Exchange believes it may be appropriate to halt trading while it gathers information to resolve such ambiguity. Accordingly, the Exchange proposes to add proposed Commentary .02 to Section 402 to state that if it is necessary to request information from a listed company relating to (i) material news, (ii) the listed company’s compliance with Exchange continued listing requirements, or (iii) any other information which is necessary to protect investors and the public interest, the Exchange may halt trading in such listed company’s security until it has received and evaluated the requested information.8 As discussed above, the Exchange believes that the release of material news immediately prior to the commencement of trading on the Exchange has the potential to cause significant volatility to the opening process. Similarly, material news released immediately after 4:00 p.m. Eastern Time can interfere with the closing process. Although trading on the Exchange stops at 4:00 p.m. Eastern Time, the order book for each listed security is manually closed by the security’s Designated Market Maker (‘‘DMM’’), a process that can take several minutes before the closing auction is completed. Because trading continues after 4:00 p.m. Eastern Time on other exchanges, if a listed company releases material news immediately after 4:00 p.m. Eastern Time there can be significant price movement on other markets when compared to the last sale price on the Exchange. The result, therefore, is that a DMM can be executing trades at the Exchange closing price while the same security is simultaneously trading on other exchanges at a very different price. As this discrepancy can cause confusion to investors, the Exchange proposes to include advisory text as proposed new Commentary .03 to Section 402 of the Company Guide requesting that listed companies intending to release material news after the close of trading on the Exchange wait until the earlier of the publication of their security’s official closing price on the Exchange or 15 minutes after the scheduled closing time on the Exchange.9 The Exchange 8 The proposed change in this regard mirrors Section 202.06(B) of the NYSE Listed Company Manual and Nasdaq Stock Market Rule 4120(a)(5). 9 Although the Exchange typically closes at 4:00 p.m. Eastern Time, there are certain days each year when it closes at 1:00 p.m. Eastern Time. The VerDate Sep<11>2014 17:03 Mar 16, 2016 Jkt 238001 issue material news between 7:00 a.m. and 9.30 a.m. Eastern Time, (ii) halt trading when it believes it is necessary to request certain information from listed companies, and (iii) halt trading in an ADR or other Exchange-listed security when the Exchange-listed security or the security underlying the ADR is listed on or registered with another national securities exchange or foreign exchange or market and is halted on such other exchange or market for regulatory reasons. Additionally, the Exchange proposes to include advisory text in Section 402 of the Company Guide requesting that listed companies intending to release material news after the close of trading on the Exchange wait until the earlier of the publication of their security’s official closing price 2. Statutory Basis on the Exchange or 15 minutes after the The Exchange believes that the scheduled closing time on the proposed rule change is consistent with Exchange. The Exchange believes this Section 6(b) 11 of the Act, in general, and change will eliminate confusion to furthers the objectives of Section 6(b)(5) investors when a DMM is executing a of the Act,12 in particular in that it is trade at the Exchange closing price designed to promote just and equitable while the same security is principles of trade, to foster cooperation simultaneously trading on other and coordination with persons engaged exchanges at a very different price. in regulating, clearing, settling, The Exchange believes that each of processing information with respect to, the proposed changes enumerated above and facilitating transactions in is consistent with the investor securities, to remove impediments to protection objectives of section 6(b)(5) and perfect the mechanism of a free and because they provide the Exchange with open market and a national market additional authority to halt trading in system, and, in general, to protect circumstances where material news that investors and the public interest and is may impact trading is to be released by not designed to permit unfair listed companies or has not yet been discrimination between customers, fully disseminated. The Exchange issuers, brokers, or dealers. believes that material news is highly The Exchange believes that the relevant to investors when deciding to proposed amendment is consistent with buy or sell securities and thus providing the investor protection objectives of the Exchange with additional authority section 6(b)(5) because it gives the to halt trading while such news is Exchange greater flexibility to released and disseminated is protective implement regulatory trading halts in a of investors. In addition, the Exchange listed security when such halts may be believes the proposed rule change is necessary for the protection of investors. consistent with the protection of Specifically, the proposed rule change investors because it will specify in will alter the hours in which listed Exchange rules the scenarios in which companies are required to comply with a trading halt may be necessary, thereby the Material News Policy such that the promoting transparency in Exchange hours are from 7:00 a.m. to 4:00 p.m. rules and making them easier to Eastern Time (rather than just shortly navigate. In giving the Exchange before the opening of trading on the authority to declare regulatory trading Exchange and during the Exchange halts in situations described herein, the trading session, as is currently the case). proposed rule change enables the The proposed rule change will also Exchange to act in the best interest of enable the Exchange to (i) implement a protecting investors. Pre-Market Halt at the request of a listed B. Self-Regulatory Organization’s company when the company intends to Statement on Burden on Competition The Exchange believes that the phrase ‘‘15 minutes after the scheduled closing time’’ will account for these early closings. proposed amendments to Sections 401 10 The Exchange notes that the NYSE follows this and 402 of the Company Guide do not practice under Section 202.06(B) of the Listed impose any burden on competition that Company Manual and Nasdaq does so under is not necessary or appropriate in Nasdaq Stock Market Rule 4120(a)(4). 11 15 U.S.C. 78f(b). furtherance of the purposes of the Act. 12 15 U.S.C. 78f(b)(5). As discussed herein, the Exchange’s proposes to specify that trading on the Exchange typically closes at 4:00 p.m. Eastern Time, except that on certain days trading closes early at 1:00 p.m. Eastern Time. Lastly, the Exchange proposes to include in proposed Commentary .02 to Section 402 a provision stating that it may halt trading in an American Depositary Receipt (‘‘ADR’’) or other security listed on the Exchange, when the Exchange-listed security (or the security underlying the ADR) is listed on or registered with another national securities exchange or foreign exchange or market and such other exchange (or regulatory authority overseeing such exchange) halts trading in such security for regulatory reasons.10 PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 E:\FR\FM\17MRN1.SGM 17MRN1 Federal Register / Vol. 81, No. 52 / Thursday, March 17, 2016 / Notices proposed amendments to Sections 401 and 402 are designed to give the Exchange greater flexibility to halt trading in a particular listed security when the Exchange believes a halt is necessary or appropriate. Currently, Sections 401 and 402 only permit the Exchange to implement regulatory trading halts for the dissemination of material news. As currently drafted, the Exchange believes these rules are unnecessarily restrictive and do not cover the full spectrum of situations where a trading halt may be necessary for the protection of investors. In addition, the Exchange believes that its proposed changes are consistent with the NYSE and Nasdaq rules with respect to trading halts. For the foregoing reasons, therefore, the Exchange does not believe that such changes impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. 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. asabaliauskas on DSK3SPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing 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, it has become effective pursuant to Section 19(b)(3)(A) of the Act 13 and Rule 19b–4(f)(6) 14 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) of the Act 15 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Lynn M. Powalski, Deputy Secretary. [FR Doc. 2016–05972 Filed 3–16–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION 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–2016–29 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–NYSEMKT–2016–29. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEMKT–2016–29, and should be submitted on or before April 7, 2016. U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 15 15 U.S.C. 78s(b)(2)(B). [Release No. 34–77351; File No. SR–Phlx– 2016–33] Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Rebates and Fees for Adding and Removing Liquidity in SPY March 11, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 29, 2016, NASDAQ PHLX LLC (‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Exchange’s Pricing Schedule at Section I, entitled ‘‘Rebates and Fees for Adding and Removing Liquidity in SPY.’’ While changes to the Pricing Schedule pursuant to this proposal are effective upon filing, the Exchange has designated these changes to be operative on March 1, 2016. The text of the proposed rule change is available on the Exchange’s Web site at https:// nasdaqomxphlx.cchwallstreet.com/, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed 13 15 16 17 14 17 1 15 VerDate Sep<11>2014 17:03 Mar 16, 2016 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. Jkt 238001 PO 00000 Frm 00100 Fmt 4703 14509 Sfmt 4703 E:\FR\FM\17MRN1.SGM 17MRN1

Agencies

[Federal Register Volume 81, Number 52 (Thursday, March 17, 2016)]
[Notices]
[Pages 14506-14509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-05972]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77348; File No. SR-NYSEMKT-2016-29]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending Sections 401 
and 402 of the NYSE MKT Company Guide To Harmonize the Exchange's 
Immediate Release and Trading Halt Policies

March 11, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on February 29, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the Exchange. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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 Sections 401 and 402 of the NYSE MKT 
Company Guide (the ``Company Guide'') to harmonize the Exchange's 
immediate release and trading halt policies with recent changes made to 
the comparable policies of the New York Stock Exchange (``NYSE''). 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

[[Page 14507]]

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 Sections 401 and 402 of the Company 
Guide to harmonize the Exchange's immediate release and trading halt 
policies with recent changes made to the comparable policies of the 
NYSE (referred to herein as the ``NYSE Amendment'').\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Release No. 75809 (September 2, 
2015); 80 FR 54362 (September 9, 2015) (SR-NYSE-2015-38).
---------------------------------------------------------------------------

    Consistent with the NYSE Amendment, the Exchange proposes to amend 
Sections 401 and 402 of the Company Guide to (i) expand the pre-market 
hours during which listed companies are required to notify the Exchange 
prior to disseminating material news, and (ii) provide the Exchange 
with authority to halt trading (a) during pre-market hours at the 
request of a listed company, (b) when the Exchange believes it is 
necessary to request certain information from listed companies, and (c) 
when an Exchange-listed security is also listed on another national or 
foreign securities exchange and such other exchange halts trading in 
such security for regulatory reasons. The Exchange also proposes to add 
commentary to Section 402 of the Company Guide to provide guidance 
related to the release of material news after the close of trading on 
the Exchange.
    Sections 401 and 402 of the Company Guide give the Exchange 
authority to halt trading in a listed company's security under certain 
circumstances. Currently, the Exchange may impose a regulatory trading 
halt when a listed company announces material news \4\ shortly before 
the opening of trading on the Exchange or during the Exchange trading 
session (currently 9:30 a.m. to 4:00 p.m.). When that happens, the 
Exchange will typically institute a regulatory halt in trading, which 
halts trading on all market centers, to ensure full dissemination of 
the news to investors. The Exchange proposes to expand the hours and 
circumstances under which it can declare a regulatory trading halt.
---------------------------------------------------------------------------

    \4\ The Exchange considers material news to be any news that is 
reasonably likely to have a material impact on the price or trading 
volume of a listed security.
---------------------------------------------------------------------------

    Currently, Sections 401 and 402 of the Company Guide require listed 
companies to notify the Exchange at least ten minutes in advance of 
releasing material news if such release will take place shortly before 
the opening of trading on the Exchange or during Exchange market hours 
(the ``Material News Policy''). The Exchange proposes to amend Sections 
401 and 402 to require companies to comply with the Material News 
Policy between 7:00 a.m. and 4:00 p.m. Eastern Time. In the Exchange's 
experience, most companies release news related to corporate actions 
and other material events between 7:00 a.m. and 9:30 a.m. Although 
trading on the Exchange does not begin until 9:30 a.m., the Exchange 
believes that material news released between 7:00 a.m. and 9:30 a.m. 
has the potential to cause volatility in both price and volume during 
pre-market trading that occurs on other market centers as well as once 
trading opens on the Exchange. However, because there is a lower volume 
of trading in such pre-market hours, the Exchange believes that a 
listed company is most well positioned to determine whether a trading 
halt is appropriate given the news it intends to release. Therefore, to 
facilitate an orderly opening and ensure thorough dissemination of 
material news, the Exchange believes it is beneficial to require 
companies to comply with the Material News Policy and advise whether a 
trading halt is appropriate during pre-market hours.
    As discussed above, when a listed company releases material news 
during the course of the trading day, the Exchange will typically halt 
trading temporarily to ensure full dissemination of the news. Under the 
proposed rules, between 7:00 a.m. and the opening of trading on the 
Exchange, the Exchange may implement a regulatory halt in circumstances 
where (i) the listed company has informed Exchange staff that it 
intends to make a public announcement of material news and (ii) the 
listed company requests that trading in its listed securities be halted 
pending dissemination of the public announcement (a ``Pre-Market 
Halt'').\5\ While trading on the Exchange does not begin until 9:30 
a.m. Eastern Time, trading (including trading in Exchange listed 
securities) begins on NYSE Arca Equities, Inc., the Nasdaq Stock Market 
and other national securities exchanges at 4:00 a.m. Eastern Time. When 
the Exchange implements a regulatory trading halt to allow for the 
release of material news, other national securities exchanges that 
trade Exchange-listed securities also halt trading in such security 
until the Exchange lifts the halt.\6\
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    \5\ However, the proposed rule will state that if it appears 
that dissemination of material news will not be complete prior to 
the opening of trading on the Exchange at 9:30 a.m., the Exchange 
may temporarily halt trading in order to facilitate an orderly 
opening process. This is consistent with the Exchange's current 
practice.
    \6\ See, for example, NYSE Arca Equities Rule 7.18 and Nasdaq 
Stock Market Rule 4120(a)(2) for the authority to initiate a trading 
halt.
---------------------------------------------------------------------------

    The Exchange notes that the volume of trading in the hours before 
trading begins on the Exchange is generally lighter and conducted 
predominantly by professional investors. Because of this reduced 
trading volume and the fact that the Exchange itself is not yet open 
for trading during these hours, the Exchange believes it is appropriate 
to institute a Pre-Market Halt only at the request of a listed company. 
The Exchange notes that the NYSE Amendment contains a similar provision 
and Nasdaq Stock Market (``Nasdaq'') has adopted a comparable rule with 
respect to trading halts between the hours of 7:00 a.m. and 9:30 
a.m.\7\ Lastly, when a trading halt is implemented during Exchange 
market hours, Rule 123D--Equities specifies that a Floor Governor or 
two Floor Officials must approve the halt in trading. However, because 
a Pre-Market Halt will only be instituted at the request of a listed 
company and because Floor Governors and Floor Officials are not 
typically on the trading floor during pre-market hours, the Exchange 
proposes to include a statement that, notwithstanding anything to the 
contrary in Rule 123D(1)--Equities, the approval of the Floor Governors 
or Floor Officials is not required for a Pre-Market Halt.
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    \7\ See Section 202.06(B) of the NYSE Listed Company Manual and 
Nasdaq Stock Market Rule 4120(a)(1) (which applies between the hours 
of 4:00 a.m. and 9:30 a.m.).
---------------------------------------------------------------------------

    The Exchange proposes to further amend Section 402 of the Company 
Guide to add proposed Commentary .02, which will set forth 
circumstances in which it may institute a regulatory halt while it 
awaits information requested from a listed company. Sections 401 and 
402 currently limit the Exchange's authority to halt trading to 
situations when a listed company intends to release material news 
shortly before and during market hours. However, in the Exchange's 
experience there are other scenarios when it may be advisable to halt 
trading for the protection of investors. For example, if there is

[[Page 14508]]

uncertainty surrounding material news issued by a listed company or a 
company's compliance with the Exchange's continued listing standards, 
the Exchange believes it may be appropriate to halt trading while it 
gathers information to resolve such ambiguity. Accordingly, the 
Exchange proposes to add proposed Commentary .02 to Section 402 to 
state that if it is necessary to request information from a listed 
company relating to (i) material news, (ii) the listed company's 
compliance with Exchange continued listing requirements, or (iii) any 
other information which is necessary to protect investors and the 
public interest, the Exchange may halt trading in such listed company's 
security until it has received and evaluated the requested 
information.\8\
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    \8\ The proposed change in this regard mirrors Section 202.06(B) 
of the NYSE Listed Company Manual and Nasdaq Stock Market Rule 
4120(a)(5).
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    As discussed above, the Exchange believes that the release of 
material news immediately prior to the commencement of trading on the 
Exchange has the potential to cause significant volatility to the 
opening process. Similarly, material news released immediately after 
4:00 p.m. Eastern Time can interfere with the closing process. Although 
trading on the Exchange stops at 4:00 p.m. Eastern Time, the order book 
for each listed security is manually closed by the security's 
Designated Market Maker (``DMM''), a process that can take several 
minutes before the closing auction is completed. Because trading 
continues after 4:00 p.m. Eastern Time on other exchanges, if a listed 
company releases material news immediately after 4:00 p.m. Eastern Time 
there can be significant price movement on other markets when compared 
to the last sale price on the Exchange. The result, therefore, is that 
a DMM can be executing trades at the Exchange closing price while the 
same security is simultaneously trading on other exchanges at a very 
different price. As this discrepancy can cause confusion to investors, 
the Exchange proposes to include advisory text as proposed new 
Commentary .03 to Section 402 of the Company Guide requesting that 
listed companies intending to release material news after the close of 
trading on the Exchange wait until the earlier of the publication of 
their security's official closing price on the Exchange or 15 minutes 
after the scheduled closing time on the Exchange.\9\ The Exchange 
proposes to specify that trading on the Exchange typically closes at 
4:00 p.m. Eastern Time, except that on certain days trading closes 
early at 1:00 p.m. Eastern Time.
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    \9\ Although the Exchange typically closes at 4:00 p.m. Eastern 
Time, there are certain days each year when it closes at 1:00 p.m. 
Eastern Time. The phrase ``15 minutes after the scheduled closing 
time'' will account for these early closings.
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    Lastly, the Exchange proposes to include in proposed Commentary .02 
to Section 402 a provision stating that it may halt trading in an 
American Depositary Receipt (``ADR'') or other security listed on the 
Exchange, when the Exchange-listed security (or the security underlying 
the ADR) is listed on or registered with another national securities 
exchange or foreign exchange or market and such other exchange (or 
regulatory authority overseeing such exchange) halts trading in such 
security for regulatory reasons.\10\
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    \10\ The Exchange notes that the NYSE follows this practice 
under Section 202.06(B) of the Listed Company Manual and Nasdaq does 
so under Nasdaq Stock Market Rule 4120(a)(4).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \11\ of the Act, in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\12\ in particular in that it 
is designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed amendment is consistent 
with the investor protection objectives of section 6(b)(5) because it 
gives the Exchange greater flexibility to implement regulatory trading 
halts in a listed security when such halts may be necessary for the 
protection of investors. Specifically, the proposed rule change will 
alter the hours in which listed companies are required to comply with 
the Material News Policy such that the hours are from 7:00 a.m. to 4:00 
p.m. Eastern Time (rather than just shortly before the opening of 
trading on the Exchange and during the Exchange trading session, as is 
currently the case). The proposed rule change will also enable the 
Exchange to (i) implement a Pre-Market Halt at the request of a listed 
company when the company intends to issue material news between 7:00 
a.m. and 9.30 a.m. Eastern Time, (ii) halt trading when it believes it 
is necessary to request certain information from listed companies, and 
(iii) halt trading in an ADR or other Exchange-listed security when the 
Exchange-listed security or the security underlying the ADR is listed 
on or registered with another national securities exchange or foreign 
exchange or market and is halted on such other exchange or market for 
regulatory reasons. Additionally, the Exchange proposes to include 
advisory text in Section 402 of the Company Guide requesting that 
listed companies intending to release material news after the close of 
trading on the Exchange wait until the earlier of the publication of 
their security's official closing price on the Exchange or 15 minutes 
after the scheduled closing time on the Exchange. The Exchange believes 
this change will eliminate confusion to investors when a DMM is 
executing a trade at the Exchange closing price while the same security 
is simultaneously trading on other exchanges at a very different price.
    The Exchange believes that each of the proposed changes enumerated 
above is consistent with the investor protection objectives of section 
6(b)(5) because they provide the Exchange with additional authority to 
halt trading in circumstances where material news that may impact 
trading is to be released by listed companies or has not yet been fully 
disseminated. The Exchange believes that material news is highly 
relevant to investors when deciding to buy or sell securities and thus 
providing the Exchange with additional authority to halt trading while 
such news is released and disseminated is protective of investors. In 
addition, the Exchange believes the proposed rule change is consistent 
with the protection of investors because it will specify in Exchange 
rules the scenarios in which a trading halt may be necessary, thereby 
promoting transparency in Exchange rules and making them easier to 
navigate. In giving the Exchange authority to declare regulatory 
trading halts in situations described herein, the proposed rule change 
enables the Exchange to act in the best interest of protecting 
investors.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed amendments to Sections 401 
and 402 of the Company Guide do not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act. As discussed herein, the Exchange's

[[Page 14509]]

proposed amendments to Sections 401 and 402 are designed to give the 
Exchange greater flexibility to halt trading in a particular listed 
security when the Exchange believes a halt is necessary or appropriate. 
Currently, Sections 401 and 402 only permit the Exchange to implement 
regulatory trading halts for the dissemination of material news. As 
currently drafted, the Exchange believes these rules are unnecessarily 
restrictive and do not cover the full spectrum of situations where a 
trading halt may be necessary for the protection of investors. In 
addition, the Exchange believes that its proposed changes are 
consistent with the NYSE and Nasdaq rules with respect to trading 
halts. For the foregoing reasons, therefore, the Exchange does not 
believe that such changes impose any burden on competition that is not 
necessary or appropriate in furtherance of the purposes of the Act.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing 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, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) \14\ thereunder.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) of the Act \15\ 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).
---------------------------------------------------------------------------

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-2016-29 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-NYSEMKT-2016-29. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEMKT-2016-29, and should 
be submitted on or before April 7, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Lynn M. Powalski,
Deputy Secretary.
[FR Doc. 2016-05972 Filed 3-16-16; 8:45 am]
BILLING CODE 8011-01-P
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