Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Price List Effective March 1, 2016, 14902-14905 [2016-06090]
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14902
Federal Register / Vol. 81, No. 53 / Friday, March 18, 2016 / Notices
an amendment to Priority Mail Express,
Priority Mail & First-Class Package
Service Contract 7 negotiated service
agreement. This notice informs the
public of the filing, invites public
comment, and takes other
administrative steps.
DATES: Comments are due: March 21,
2016.
ADDRESSES: Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Notice of Filings
III. Ordering Paragraphs
asabaliauskas on DSK3SPTVN1PROD with NOTICES
I. Introduction
On March 11, 2016, the Postal Service
filed notice that it has agreed to an
amendment to the existing Priority Mail
Express, Priority Mail & First-Class
Package Service Contract 7 negotiated
service agreement approved in this
docket.1 In support of its Notice, the
Postal Service includes a redacted copy
of the amendment and a certification of
compliance with 39 U.S.C. 3633(a), as
required by 39 CFR 3015.5.
The Postal Service also filed the
unredacted amendment and supporting
financial information under seal. The
Postal Service seeks to incorporate by
reference the Application for NonPublic Treatment originally filed in this
docket for the protection of information
that it has filed under seal. Notice at 1.
The amendment changes prices as
contemplated by the contract’s terms.
Id. The Postal Service intends for the
amendment to become effective two
business days after the date that the
Commission completes its review of the
Notice. Id.
II. Notice of Filings
The Commission invites comments on
whether the changes presented in the
Postal Service’s Notice are consistent
with the policies of 39 U.S.C. 3632,
3633, or 3642, 39 CFR 3015.5, and 39
CFR part 3020, subpart B. Comments are
1 Notice of United States Postal Service of Change
in Prices Pursuant to Amendment to Priority Mail
Express, Priority Mail & First-Class Package Service
Contract 7, with Portions Filed Under Seal, March
11, 2016 (Notice).
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due no later than March 21, 2016. The
public portions of these filings can be
accessed via the Commission’s Web site
(https://www.prc.gov).
The Commission appoints Jennaca D.
Upperman to represent the interests of
the general public (Public
Representative) in this docket.
III. Ordering Paragraphs
It is ordered:
1. The Commission reopens Docket
No. CP2016–70 for consideration of
matters raised by the Postal Service’s
Notice.
2. Pursuant to 39 U.S.C. 505, the
Commission appoints Jennaca D.
Upperman to serve as an officer of the
Commission (Public Representative) to
represent the interests of the general
public in this proceeding.
3. Comments are due no later than
March 21, 2016.
4. The Secretary shall arrange for
publication of this order in the Federal
Register.
By the Commission.
Stacy L. Ruble,
Secretary.
[FR Doc. 2016–06071 Filed 3–17–16; 8:45 am]
BILLING CODE 7710–FW–P
POSTAL SERVICE
Product Change—First-Class Package
Service Negotiated Service Agreement
Postal ServiceTM.
Notice.
AGENCY:
ACTION:
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Effective date: March 18, 2016.
FOR FURTHER INFORMATION CONTACT:
Elizabeth A. Reed, 202–268–3179.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on March 11, 2016,
it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service to Add First-Class
Package Service Contract 45 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2016–96, CP2016–121.
SUMMARY:
Stanley F. Mires,
Attorney, Federal Compliance.
[FR Doc. 2016–06107 Filed 3–17–16; 8:45 am]
BILLING CODE 7710–12–P
POSTAL SERVICE
Product Change—Priority Mail
Negotiated Service Agreement
Postal ServiceTM.
Notice.
SECURITIES AND EXCHANGE
COMMISSION
AGENCY:
ACTION:
[Release No. 34–77363; File No. SR–NYSE–
2016–20]
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Effective date: March 18, 2016.
FOR FURTHER INFORMATION CONTACT:
Elizabeth A. Reed, 202–268–3179.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on March 11, 2016,
it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service to Add Priority
Mail Contract 196 to Competitive
Product List. Documents are available at
www.prc.gov, Docket Nos. MC2016–95,
CP2016–120.
SUMMARY:
Stanley F. Mires,
Attorney, Federal Compliance.
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March 14, 2016.
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 March 1,
2016, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
1 15
[FR Doc. 2016–06108 Filed 3–17–16; 8:45 am]
BILLING CODE 7710–12–P
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Its
Price List Effective March 1, 2016
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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Federal Register / Vol. 81, No. 53 / Friday, March 18, 2016 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Price List to exclude from its average
daily volume and certain other
calculations any trading day on which
the Exchange is not open for the entire
trading day and/or a disruption affects
an Exchange system that lasts for more
than 60 minutes during regular trading
hours. The Exchange proposes to
implement the fee change effective
March 1, 2016. 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,
on the Commission’s Web site at
https://www.sec.gov, 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.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
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 its
Price List to exclude from its average
daily volume (‘‘ADV’’) 4 and certain
other calculations any trading day on
which the Exchange is not open for the
entire trading day and/or a disruption
affects an Exchange system that lasts for
more than 60 minutes during regular
trading hours. The Exchange proposes
to implement the fee change effective
March 1, 2016.
As provided in the Exchange’s Price
List, many of the Exchange’s transaction
fees and credits are based on trading,
quoting and liquidity thresholds that
member organizations, including
Designated Market Makers (‘‘DMMs’’),
Supplemental Liquidity Providers
(‘‘SLPs’’), and Retail Liquidity Providers
(‘‘RLPs’’), must satisfy in order to
qualify for the particular rates. The
Exchange believes that trading
4 The defined term ‘‘ADV’’ is used here as defined
in footnote 2 to the Price List.
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suspensions or disruptions can prevent
member organizations, including
DMMs, SLPs and RLPs, from engaging
in normal trading, quoting and liquidity
in their assigned securities, leading to
decreased quoting and trading volume
compared to ADV. Accordingly, for
purposes of determining transaction fees
and credits for these market participants
based on quoting and/or liquidity levels,
ADV, and consolidated ADV
(‘‘CADV’’),5 the Exchange proposes to
add a new footnote to the Price List
designated with an asterisk that would
permit the Exchange to exclude any
trading day on which (1) the Exchange
is not open for the entire trading day
and/or (2) a disruption affects an
Exchange system that lasts for more
than 60 minutes during regular trading
hours. The Exchange’s proposal is
consistent with the rules of the options
trading facility of its affiliates NYSE
MKT LLC 6 and NYSE Arca, Inc.7
The proposed change would allow the
Exchange to exclude days where the
Exchange declares a trading halt in all
securities or honors a market-wide
trading halt declared by another market.
The Exchange’s proposal would be
similar to the current provision in the
Price List whereby, for purposes of
transaction fees and SLP credits, ADV
calculations can exclude early closing
days.8 Generally, this applies to certain
days before or after a holiday observed
by the Exchange.9 The Exchange’s
proposal is consistent with the rules of
other self-regulatory organizations.10
5 NYSE CADV is defined in the Price List as the
consolidated average daily volume of NYSE-listed
securities.
6 See NYSE Amex Options Fee Schedule (‘‘The
Exchange may exclude from its monthly
calculations of contract volume any day that (1) the
Exchange is not open for the entire trading day and/
or (2) a disruption affects an Exchange system that
lasts for more than 60 minutes during regular
trading hours’’).
7 See NYSE Arca Options Fees and Charges (‘‘The
Exchange may exclude from the calculation of ADV
contracts traded any day that (1) the Exchange is
not open for the entire trading day and/or (2) a
disruption affects an Exchange system that lasts for
more than 60 minutes during regular trading hours
(‘‘Exchange System Disruption’’)).
8 See footnote 4 in the Price List.
9 For example, the Exchange is closed on
Thanksgiving Day and closes early on the Friday
immediately following Thanksgiving Day (e.g.,
Friday, November 25, 2016).
10 See notes 6–7, supra; see also NASDAQ Stock
Market LLC Rule 7018(j) (‘‘For purposes of
determining average daily volume and total
consolidated volume under this rule, any day that
the market is not open for the entire trading day
will be excluded from such calculation.’’);
International Securities Exchange, LLC Fee
Schedule (‘‘For purposes of determining Priority
Customer ADV, any day that the regular order book
is not open for the entire trading day or the
Exchange instructs members in writing to route
their orders to other markets may be excluded from
such calculation; provided that the Exchange will
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The Exchange believes that artificially
low volumes of trading on days when
the Exchange is not open for the entire
trading day reduces the average daily
activity of member organizations both
daily and monthly. Given the decreased
trading volumes, the numerator for the
monthly calculation (e.g., trading
volume) would be correspondingly
lower, but the denominator for the
threshold calculations (e.g., the number
of trading days) would not necessarily
be decreased, and could result in an
unintended increase in the cost of
trading on the Exchange, a result that is
unintended and undesirable to the
Exchange and its member organizations.
The Exchange believes that the
authority to exclude days when the
Exchange is not open for the entire
trading day would provide member
organizations with greater certainty as to
their monthly costs and diminish the
likelihood of an effective increase in the
cost of trading.11
Similarly, the Exchange proposes to
modify its Price List to permit the
Exchange to exclude from the above
calculations shares traded on a trading
day where a disruption affects an
Exchange system that lasts for more
than 60 minutes during regular trading
hours even if such disruption would not
be categorized as a complete outage of
the Exchange’s system. Such a
disruption may occur where a certain
securities traded on the Exchange are
unavailable for trading due to an
Exchange system issue or where, while
the Exchange may be able to perform
certain functions with respect to
accepting and processing orders, the
Exchange may be experiencing a failure
to another significant process, such as
routing to other market centers, that
would lead member organizations that
rely on such process to avoid utilizing
the Exchange until the Exchange’s entire
system was operational. Once again, the
Exchange’s proposal is consistent with
the rules of other self-regulatory
organizations.12
The Exchange is not proposing any
changes to the level of rebates currently
being provided on the Exchange, or to
only remove the day for members that would have
a lower ADV with the day included.’’).
11 See, e.g., Securities Exchange Act Release No.
70657 (October 10, 2013), 78 FR 62899 (October 22,
2103) (SR–ISE–2013–51).
12 See notes 6–7, supra; see also BATS BZX
Exchange Fee Schedule (‘‘The Exchange excludes
from its calculation of ADAV and ADV shares
added or removed on any day that the Exchange’s
system experiences a disruption that lasts for more
than 60 minutes during regular trading hours
(‘‘Exchange System Disruption’’), on any day with
a scheduled early market close and on the last
Friday in June (the ‘‘Russell Reconstitution Day’’).
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the thresholds required to achieve each
rebate tier.
The proposed change is also not
otherwise intended to address any other
issues, and the Exchange is not aware of
any problems that member
organizations would have in complying
with the proposed change.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,13 in general, and
furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,14 in
particular, because it provides for the
equitable allocation of reasonable dues,
fees, and other charges among its
members, issuers and other persons
using its facilities and does not unfairly
discriminate between customers,
issuers, brokers or dealers.
The Exchange believes that it is
reasonable to permit the Exchange to
eliminate from the calculation days on
which the market is not open the entire
trading day because it preserves the
Exchange’s intent behind adopting
volume-based pricing. Similarly, the
Exchange believes that its proposal is
reasonable because it will help provide
member organizations with a greater
level of certainty as to their level of
rebates and costs for trading in any
month where the Exchange experiences
such a system disruption on one or
more trading days. The Exchange is not
proposing to amend the thresholds
member organizations must achieve to
become eligible for, or the dollar value
associated with, the tiered rebates or
fees. By eliminating the inclusion of a
trading day on which a system
disruption occurs, the Exchange would
almost certainly be excluding a day that
would otherwise lower member
organization’s trading volume, thereby
making it more likely for member
organizations to meet the minimum or
higher tier thresholds and thus
incentivizing member organizations to
increase their participation on the
Exchange in order to meet the next
highest tier.
The Exchange further believes that the
proposal is reasonable because the
proposed exclusion seeks to avoid
penalizing member organizations that
might otherwise qualify for certain
tiered pricing but that, because of a
significant Exchange system problem,
would not participate to the extent that
they might have otherwise participated.
The Exchange believes that certain
systems disruptions could preclude
some member organizations from
submitting orders to the Exchange even
if such issue is not actually a complete
systems outage.
Finally, the Exchange believes that
the proposal is equitable and not
unfairly discriminatory because the
methodology for the monthly
calculations would apply equally to all
member organizations and to all volume
tiers. The Exchange notes that, although
unlikely, there is some possibility that
a certain small proportion of member
organizations may have a higher ADV as
a percentage of average daily volume
with their activity included from days
where the Exchange experiences a
system disruption. The Exchange
believes that the proposal would still be
equitable and not unfairly
discriminatory given that the impacted
universe is potentially quite small and
that the proposal would benefit the
overwhelming majority of market
participants and would make the overall
cost of trading on the Exchange more
predictable for the membership as a
whole.
For the foregoing reasons, the
Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,15 the Exchange believes that the
proposed rule change would not impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
The Exchange believes that, with
respect to monthly calculations for
rebates, there are very few instances
where the exclusion would be invoked,
and if invoked, would have little or no
impact on trading decisions or
execution quality. On the contrary, the
Exchange believes that the proposal
fosters competition by avoiding a
penalty to member organizations for
days when trading on the Exchange is
disrupted for a significant portion of the
day and would result in lower total
costs to end users, a positive outcome of
competitive markets. Further, other
options exchanges have adopted rules
that are substantially similar to the
change in ADV calculation being
proposed by the Exchange.16
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 17 of the Act and
subparagraph (f)(2) of Rule 19b–4 18
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
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) 19 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2016–20 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–NYSE–2016–20. 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
17 15
13 15
U.S.C. 78f(b).
14 15 U.S.C. 78f(b)(4) and (5).
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
19 15 U.S.C. 78s(b)(2)(B).
15 15
U.S.C. 78f(b)(8).
16 See note 5, supra.
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Federal Register / Vol. 81, No. 53 / Friday, March 18, 2016 / Notices
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–NYSE–
2016–20 and should be submitted on or
before April 8, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–06090 Filed 3–17–16; 8:45 am]
BILLING CODE 8011–01–P
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COMMISSION
[Securities Act of 1933; Release No. 10054/
March 14, 2016; Securities Exchange Act
of 1934; Release No. 77367/March 14, 2016]
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Order Approving Public Company
Accounting Oversight Board Budget
and Annual Accounting Support Fee
for Calendar Year 2016
The Sarbanes-Oxley Act of 2002, as
amended (the ‘‘Sarbanes-Oxley Act’’),1
established the Public Company
Accounting Oversight Board (‘‘PCAOB’’)
to oversee the audits of companies that
are subject to the securities laws, and
related matters, in order to protect the
interests of investors and further the
public interest in the preparation of
informative, accurate and independent
audit reports. The Dodd-Frank Wall
Street Reform and Consumer Protection
Act 2 amended the Sarbanes-Oxley Act
to provide the PCAOB with explicit
authority to oversee auditors of brokerdealers registered with the Commission.
The PCAOB is to accomplish these goals
through registration of public
accounting firms and standard setting,
inspection, and disciplinary programs.
The PCAOB is subject to the
comprehensive oversight of the
20 17
CFR 200.30–3(a)(12).
U.S.C. 7201 et seq.
2 Public Law 111–203, 124 Stat. 1376 (2010).
1 15
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Securities and Exchange Commission
(the ‘‘Commission’’).
Section 109 of the Sarbanes-Oxley Act
provides that the PCAOB shall establish
a reasonable annual accounting support
fee, as may be necessary or appropriate
to establish and maintain the PCAOB.
Under Section 109(f) of the SarbanesOxley Act, the aggregate annual
accounting support fee shall not exceed
the PCAOB’s aggregate ‘‘recoverable
budget expenses,’’ which may include
operating, capital and accrued items.
The PCAOB’s annual budget and
accounting support fee are subject to
approval by the Commission. In
addition, the PCAOB must allocate the
annual accounting support fee among
issuers and among brokers and dealers.3
Section 109(b) of the Sarbanes-Oxley
Act directs the PCAOB to establish a
budget for each fiscal year in accordance
with the PCAOB’s internal procedures,
subject to approval by the Commission.
Rule 190 of Regulation P facilitates the
Commission’s review and approval of
PCAOB budgets and annual accounting
support fees.4 This budget rule
provides, among other things, a
timetable for the preparation and
submission of the PCAOB budget and
for Commission actions related to each
budget, a description of the information
that should be included in each budget
submission, limits on the PCAOB’s
ability to incur expenses and obligations
except as provided in the approved
budget, procedures relating to
supplemental budget requests,
requirements for the PCAOB to furnish
on a quarterly basis certain budgetrelated information, and a list of
definitions that apply to the rule and to
general discussions of PCAOB budget
matters.
In accordance with the budget rule, in
March 2015 the PCAOB provided the
Commission with a narrative
description of its program issues and
outlook for the 2016 budget year. In
response, the Commission provided the
PCAOB with economic assumptions and
budgetary guidance for the 2016 budget
year. The PCAOB subsequently
delivered a preliminary budget and
budget justification to the Commission.
Staff from the Commission’s Offices of
the Chief Accountant and Financial
Management dedicated a substantial
amount of time to the review and
analysis of the PCAOB’s programs,
projects and budget estimates; reviewed
3 Separately the Commission is responsible for
review of an accounting support fee for the FASB
pursuant to Section 109(e) of the Sarbanes-Oxley
Act that is allocated among issuers. This separate
accounting support fee is not addressed by this
order.
4 17 CFR 202.190.
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the PCAOB’s estimates of 2015 actual
spending; and attended several meetings
with management and staff of the
PCAOB to further develop the
Commission staff’s understanding of the
PCAOB’s budget and operations. During
the course of this review, Commission
staff relied upon representations and
supporting documentation from the
PCAOB. Based on this review, the
Commission authorized the staff to issue
a ‘‘pass back’’ letter to the PCAOB. On
November 24, 2015, the PCAOB
approved its 2016 budget during an
open meeting, and subsequently
submitted that budget to the
Commission for approval.
After considering the above, the
Commission did not identify any
proposed disbursements in the 2016
budget adopted by the PCAOB that are
not properly recoverable through the
annual accounting support fee, and the
Commission believes that the aggregate
proposed 2016 annual accounting
support fee does not exceed the
PCAOB’s aggregate recoverable budget
expenses for 2016. The Commission also
acknowledges the PCAOB’s updated
strategic plan and encourages the
PCAOB to continue keeping the
Commission and its staff apprised of
significant new developments. The
Commission looks forward to providing
views to the PCAOB as future updates
are made to the plan.
We understand that the PCAOB has
taken significant steps to advance its
assessments of the performance and
management of the PCAOB’s standardsetting process, including the
engagement of an external consultant.
The Commission directs the PCAOB to
continue to provide timely updates
throughout the year on the progress of
the Board’s review of the PCAOB’s
standard setting process, including
anticipated changes to processes or
funding.
The Commission recognizes that in
recent years, the PCAOB has taken
significant steps to establish the Center
for Economic Analysis (‘‘Center’’). The
Commission directs the PCAOB to
continue providing quarterly updates to
the Commission on the Center’s
activities and progress towards its stated
goals.
The Commission directs the Board to
continue to provide in its quarterly
reports to the Commission detailed
information about the state of the
PCAOB’s IT program, including
planned, estimated, and actual costs for
IT projects, and the level of involvement
of consultants. These reports also
should continue to include: (a) A
discussion of the Board’s assessment of
the IT program; and (b) the quarterly IT
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[Federal Register Volume 81, Number 53 (Friday, March 18, 2016)]
[Notices]
[Pages 14902-14905]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-06090]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77363; File No. SR-NYSE-2016-20]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Price List Effective March 1, 2016
March 14, 2016.
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 March 1, 2016, New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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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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[[Page 14903]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its Price List to exclude from its
average daily volume and certain other calculations any trading day on
which the Exchange is not open for the entire trading day and/or a
disruption affects an Exchange system that lasts for more than 60
minutes during regular trading hours. The Exchange proposes to
implement the fee change effective March 1, 2016. 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, on the
Commission's Web site at https://www.sec.gov, 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its Price List to exclude from its
average daily volume (``ADV'') \4\ and certain other calculations any
trading day on which the Exchange is not open for the entire trading
day and/or a disruption affects an Exchange system that lasts for more
than 60 minutes during regular trading hours. The Exchange proposes to
implement the fee change effective March 1, 2016.
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\4\ The defined term ``ADV'' is used here as defined in footnote
2 to the Price List.
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As provided in the Exchange's Price List, many of the Exchange's
transaction fees and credits are based on trading, quoting and
liquidity thresholds that member organizations, including Designated
Market Makers (``DMMs''), Supplemental Liquidity Providers (``SLPs''),
and Retail Liquidity Providers (``RLPs''), must satisfy in order to
qualify for the particular rates. The Exchange believes that trading
suspensions or disruptions can prevent member organizations, including
DMMs, SLPs and RLPs, from engaging in normal trading, quoting and
liquidity in their assigned securities, leading to decreased quoting
and trading volume compared to ADV. Accordingly, for purposes of
determining transaction fees and credits for these market participants
based on quoting and/or liquidity levels, ADV, and consolidated ADV
(``CADV''),\5\ the Exchange proposes to add a new footnote to the Price
List designated with an asterisk that would permit the Exchange to
exclude any trading day on which (1) the Exchange is not open for the
entire trading day and/or (2) a disruption affects an Exchange system
that lasts for more than 60 minutes during regular trading hours. The
Exchange's proposal is consistent with the rules of the options trading
facility of its affiliates NYSE MKT LLC \6\ and NYSE Arca, Inc.\7\
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\5\ NYSE CADV is defined in the Price List as the consolidated
average daily volume of NYSE-listed securities.
\6\ See NYSE Amex Options Fee Schedule (``The Exchange may
exclude from its monthly calculations of contract volume any day
that (1) the Exchange is not open for the entire trading day and/or
(2) a disruption affects an Exchange system that lasts for more than
60 minutes during regular trading hours'').
\7\ See NYSE Arca Options Fees and Charges (``The Exchange may
exclude from the calculation of ADV contracts traded any day that
(1) the Exchange is not open for the entire trading day and/or (2) a
disruption affects an Exchange system that lasts for more than 60
minutes during regular trading hours (``Exchange System
Disruption'')).
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The proposed change would allow the Exchange to exclude days where
the Exchange declares a trading halt in all securities or honors a
market-wide trading halt declared by another market. The Exchange's
proposal would be similar to the current provision in the Price List
whereby, for purposes of transaction fees and SLP credits, ADV
calculations can exclude early closing days.\8\ Generally, this applies
to certain days before or after a holiday observed by the Exchange.\9\
The Exchange's proposal is consistent with the rules of other self-
regulatory organizations.\10\
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\8\ See footnote 4 in the Price List.
\9\ For example, the Exchange is closed on Thanksgiving Day and
closes early on the Friday immediately following Thanksgiving Day
(e.g., Friday, November 25, 2016).
\10\ See notes 6-7, supra; see also NASDAQ Stock Market LLC Rule
7018(j) (``For purposes of determining average daily volume and
total consolidated volume under this rule, any day that the market
is not open for the entire trading day will be excluded from such
calculation.''); International Securities Exchange, LLC Fee Schedule
(``For purposes of determining Priority Customer ADV, any day that
the regular order book is not open for the entire trading day or the
Exchange instructs members in writing to route their orders to other
markets may be excluded from such calculation; provided that the
Exchange will only remove the day for members that would have a
lower ADV with the day included.'').
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The Exchange believes that artificially low volumes of trading on
days when the Exchange is not open for the entire trading day reduces
the average daily activity of member organizations both daily and
monthly. Given the decreased trading volumes, the numerator for the
monthly calculation (e.g., trading volume) would be correspondingly
lower, but the denominator for the threshold calculations (e.g., the
number of trading days) would not necessarily be decreased, and could
result in an unintended increase in the cost of trading on the
Exchange, a result that is unintended and undesirable to the Exchange
and its member organizations. The Exchange believes that the authority
to exclude days when the Exchange is not open for the entire trading
day would provide member organizations with greater certainty as to
their monthly costs and diminish the likelihood of an effective
increase in the cost of trading.\11\
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\11\ See, e.g., Securities Exchange Act Release No. 70657
(October 10, 2013), 78 FR 62899 (October 22, 2103) (SR-ISE-2013-51).
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Similarly, the Exchange proposes to modify its Price List to permit
the Exchange to exclude from the above calculations shares traded on a
trading day where a disruption affects an Exchange system that lasts
for more than 60 minutes during regular trading hours even if such
disruption would not be categorized as a complete outage of the
Exchange's system. Such a disruption may occur where a certain
securities traded on the Exchange are unavailable for trading due to an
Exchange system issue or where, while the Exchange may be able to
perform certain functions with respect to accepting and processing
orders, the Exchange may be experiencing a failure to another
significant process, such as routing to other market centers, that
would lead member organizations that rely on such process to avoid
utilizing the Exchange until the Exchange's entire system was
operational. Once again, the Exchange's proposal is consistent with the
rules of other self-regulatory organizations.\12\
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\12\ See notes 6-7, supra; see also BATS BZX Exchange Fee
Schedule (``The Exchange excludes from its calculation of ADAV and
ADV shares added or removed on any day that the Exchange's system
experiences a disruption that lasts for more than 60 minutes during
regular trading hours (``Exchange System Disruption''), on any day
with a scheduled early market close and on the last Friday in June
(the ``Russell Reconstitution Day'').
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The Exchange is not proposing any changes to the level of rebates
currently being provided on the Exchange, or to
[[Page 14904]]
the thresholds required to achieve each rebate tier.
The proposed change is also not otherwise intended to address any
other issues, and the Exchange is not aware of any problems that member
organizations would have in complying with the proposed change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\13\ in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\14\ in
particular, because it provides for the equitable allocation of
reasonable dues, fees, and other charges among its members, issuers and
other persons using its facilities and does not unfairly discriminate
between customers, issuers, brokers or dealers.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that it is reasonable to permit the Exchange
to eliminate from the calculation days on which the market is not open
the entire trading day because it preserves the Exchange's intent
behind adopting volume-based pricing. Similarly, the Exchange believes
that its proposal is reasonable because it will help provide member
organizations with a greater level of certainty as to their level of
rebates and costs for trading in any month where the Exchange
experiences such a system disruption on one or more trading days. The
Exchange is not proposing to amend the thresholds member organizations
must achieve to become eligible for, or the dollar value associated
with, the tiered rebates or fees. By eliminating the inclusion of a
trading day on which a system disruption occurs, the Exchange would
almost certainly be excluding a day that would otherwise lower member
organization's trading volume, thereby making it more likely for member
organizations to meet the minimum or higher tier thresholds and thus
incentivizing member organizations to increase their participation on
the Exchange in order to meet the next highest tier.
The Exchange further believes that the proposal is reasonable
because the proposed exclusion seeks to avoid penalizing member
organizations that might otherwise qualify for certain tiered pricing
but that, because of a significant Exchange system problem, would not
participate to the extent that they might have otherwise participated.
The Exchange believes that certain systems disruptions could preclude
some member organizations from submitting orders to the Exchange even
if such issue is not actually a complete systems outage.
Finally, the Exchange believes that the proposal is equitable and
not unfairly discriminatory because the methodology for the monthly
calculations would apply equally to all member organizations and to all
volume tiers. The Exchange notes that, although unlikely, there is some
possibility that a certain small proportion of member organizations may
have a higher ADV as a percentage of average daily volume with their
activity included from days where the Exchange experiences a system
disruption. The Exchange believes that the proposal would still be
equitable and not unfairly discriminatory given that the impacted
universe is potentially quite small and that the proposal would benefit
the overwhelming majority of market participants and would make the
overall cost of trading on the Exchange more predictable for the
membership as a whole.
For the foregoing reasons, the Exchange believes that the proposal
is consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\15\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.
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\15\ 15 U.S.C. 78f(b)(8).
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The Exchange believes that, with respect to monthly calculations
for rebates, there are very few instances where the exclusion would be
invoked, and if invoked, would have little or no impact on trading
decisions or execution quality. On the contrary, the Exchange believes
that the proposal fosters competition by avoiding a penalty to member
organizations for days when trading on the Exchange is disrupted for a
significant portion of the day and would result in lower total costs to
end users, a positive outcome of competitive markets. Further, other
options exchanges have adopted rules that are substantially similar to
the change in ADV calculation being proposed by the Exchange.\16\
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\16\ See note 5, supra.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \17\ of the Act and subparagraph (f)(2) of Rule
19b-4 \18\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 17 CFR 240.19b-4(f)(2).
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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) \19\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\19\ 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-NYSE-2016-20 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-NYSE-2016-20. 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
[[Page 14905]]
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-NYSE-2016-20 and should be submitted on or before April
8, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
Robert W. Errett,
Deputy Secretary.
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\20\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2016-06090 Filed 3-17-16; 8:45 am]
BILLING CODE 8011-01-P
