Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change Amending Rules 340, 341, and 359 To Extend the Time Within Which a Member or Member Organization or an ATP Holder Must File a Uniform Termination Notice for Securities Industry Registration, 44363-44365 [2016-16025]
Download as PDF
Federal Register / Vol. 81, No. 130 / Thursday, July 7, 2016 / Notices
price discovery process.’’ 17 Wharton
also states that it has received data with
masked broker identities for years from
data vendors and is unaware of any
cases where this availability has led to
successful reverse engineering and
public disclosure of broker identities.18
BDA and SIFMA raised concerns
around the inclusion of primary market
transaction information (for List or
Fixed Offering Price Transactions and
Takedown Transactions) in Academic
TRACE Data. FINRA confirms that List
or Fixed Offering Price Transactions and
Takedown Transactions will not be
included in the Academic Corporate
Bond TRACE Data product.19
BDA, CCI 20 and SIFMA raised the
issue of information leakage due to
potential data security breaches. FINRA
notes that the data usage agreement also
will address security measures. For
example, FINRA intends that the data
agreement require the use of
commercially reasonable measures to
protect the data and that users
administer reasonable security
procedures where the data is used,
accessed, processed, stored or
transmitted to ensure that the data
remains secure from unauthorized
access.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve or disapprove
such proposed rule change, or
17 See
Wharton letter.
provides in its letter examples of
vendor data that has been available with masked
broker IDs. Specifically, Wharton states that
‘‘Thomson-Reuters IBES analyst forecast and
recommendations database is a good example as it
has been providing masked IDs for both brokerage
houses as well as individual analysts since the early
80’s. Another example is Ancerno (Abel-Noser)
high-frequency database of institutional trades
which academic researchers have used mainly for
the reason that it contains a masked institution ID
(e.g., Arif, Rephael and Lee, 2015; Choi and Sias,
2012).’’ See Wharton letter.
19 See supra note 6.
20 CCI raises issues regarding the security of
customer information. FINRA notes that the
Academic TRACE Data would consist of securityfocused transaction information, not customer
information. CCI also raises other issues that are not
germane to the instant proposal and that, therefore,
are not addressed herein.
srobinson on DSK5SPTVN1PROD with NOTICES
18 Wharton
VerDate Sep<11>2014
17:23 Jul 06, 2016
Jkt 238001
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
44363
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Brent J. Fields,
Secretary.
[FR Doc. 2016–16109 Filed 7–6–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–78198; File No. SR–
NYSEMKT–2016–52]
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–
FINRA–2016–024 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–FINRA–2016–024. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of FINRA. 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–FINRA–
2016–024, and should be submitted on
or before July 28, 2016.
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing of Proposed
Rule Change Amending Rules 340,
341, and 359 To Extend the Time
Within Which a Member or Member
Organization or an ATP Holder Must
File a Uniform Termination Notice for
Securities Industry Registration
June 30, 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 June 16,
2016, NYSE MKT LLC (the ‘‘Exchange’’
or ‘‘NYSE MKT’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by NYSE MKT. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rules 340, 341 and 359 to harmonize
the requirement of when a member or
member organization or an ATP Holder
must file an Uniform Termination
Notice for Securities Industry
Registration (‘‘Form U–5’’) with the
rules of other exchanges and FINRA.
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
21 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
E:\FR\FM\07JYN1.SGM
07JYN1
44364
Federal Register / Vol. 81, No. 130 / Thursday, July 7, 2016 / Notices
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.
srobinson on DSK5SPTVN1PROD 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
Rules 340, 341 and 359 to harmonize
the requirement of when a member or
member organization or an ATP Holder
must file a Form U–5 with the
requirements on other exchanges and
the Financial Industry Regulatory
Authority (‘‘FINRA’’). This filing is not
intended to address any other
registration requirements in Exchange
rules.
Specifically, under current
Commentary .01 to Rule 340, members
and member organizations (collectively,
‘‘Members’’) are required to
electronically file a Form U–5 and any
amendment thereto to the Central
Registration Depository (‘‘CRD’’) within
ten (10) days of the date of termination
of an employee that has been approved
for admission to the trading floor. Under
current Commentary .09 to Rule 341,
Members must submit information
concerning the termination of
employment of a member, registered
employee or an officer on Form U–5
within ten (10) days of the date of
termination.4 Under current Rule 359(a),
an ATP Holder that terminates an ATP
Holder or approved person shall
electronically file a Form U–5 within
ten (10) days of such termination. While
each of these rules govern [sic] the same
topic, they do not use the same rule
language.
The Exchange proposes to amend
these three rules by replacing the
current requirements of when to
electronically file a Form U–5 with the
same requirement in each rule that a
member, member organization, or ATP
Holder (as applicable) promptly file a
Form U–5 electronically with CRD, but
not later than 30 calendar days after the
date of termination of a member, ATP
Holder, registered employee or
approved person (as applicable). The
proposed rule would further require that
any amendment to a Form U–5 must
also be promptly filed electronically
with CRD, but not later than 30 calendar
4 Commentary .09 to Rule 341 does not currently
specify electronic transmission, an absence that the
proposed amendment would also remedy.
VerDate Sep<11>2014
17:23 Jul 06, 2016
Jkt 238001
days after learning of the facts or
circumstances giving rise to the
amendment. Finally, the proposed rule
would provide that all Forms U–5 must
also be provided to the terminated
person concurrently with filing.
The proposed rule text is based on the
requirements of other exchanges and
FINRA and therefore would harmonize
the requirement of when a member or
member organization or an ATP Holder
must file a Form U–5 with the rules of
other exchanges and FINRA.5 The
Exchange believes that the proposed
rule changes will promote the
protection of investors by adding that a
Form U–5 be filed promptly, rather than
the current requirement that a Form U–
5 be filed within 10 days. The Exchange
believes that this proposed requirement
may lead to Form U–5s being filed
sooner than the current 10-day
requirement. Consistent with the rules
of other exchanges and FINRA, the rule
would further provide that a Form U–
5 should be filed not later than 30 days
after the date of termination. While this
date is longer than the current 10 day
requirement, the Exchange believes that
this timing, combined with the
requirement to file promptly, may still
lead to firms submitting Form U–5s on
a more prompt basis. In addition, the
proposed rule would harmonize the
standard, thus reducing the burden on
competition for member organizations
and ATP Holders that are members of
multiple exchanges and FINRA to meet
similar requirements. Such conformance
to the prevalent standard would both
harmonize the time period for filing the
requisite Form U–5 across multiple selfregulatory organizations and establish a
5 See New York Stock Exchange LLC (‘‘NYSE’’)
Rule 345(a).17(a) and (b) (requiring that a Form U–
5 shall be reported promptly, but in any event not
later than 30 days following termination, that any
amendment to the Form U–5 shall be filed not later
than 30 days after learning of the facts or
circumstances giving rise to the amendment, and
that any termination notice must be provided
concurrently to the person whose association has
been terminated); BATS BZX Exchange, Inc.
(‘‘BZX’’) Rule 2.5 Interpretations and Policies .04(a)
and (b) (requiring that a Form U–5 be reported
immediately following the date of termination, but
in no event later than 30 days following
termination, that any amendment to the Form U–
5 shall be filed no later than 30 days after learning
of the facts or circumstances giving rise to the
amendment, and that any termination notice or
amendment should [sic] be provided concurrently
to the person whose association has been
terminated); FINRA By-Laws Article 5 Sec. 3(a) and
(b) (requiring that notice of termination be filed not
later than 30 days after termination, that an
amendment to a Form U–5 be filed not later than
30 days after learning of the facts or circumstances
giving rise to the amendment, and that notice be
provided concurrently to the person whose
association has been terminated within the time
periods prescribed).
PO 00000
Frm 00107
Fmt 4703
Sfmt 4703
known consistent standard to further
ensure adherence.
2. Statutory Basis
The Exchange believes that the
proposed changes are consistent with
Section 6(b) of the Act,6 in general, and
furthers [sic] the objectives of Section
6(b)(5),7 in particular, in that they are
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, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule changes are consistent
with the Section 6(b)(5) 8 requirement
that the rules of an exchange not be
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
Specifically, the Exchange believes
that the proposed rule changes would
remove impediments to and perfect the
mechanisms of a free and open market
by conforming the time period within
which Members and ATP Holders must
file a Form U–5 to the requirement that
such forms be filed promptly, but not
later than 30 days after the termination
event. The Exchange believes that the
proposed rule changes would protect
investors and the public interest by
adding that Form U–5s should be filed
promptly, rather than requiring only
that they be filed within 10 days. In
addition, the Exchange believes that
adding the requirement that a Form U–
5 be filed not later than 30 days after the
event would eliminate the disparity
among the exchanges, other SROs and
the affected persons stemming from the
cessation of their employment. In this
regard, the proposed changes would
foster cooperation and coordination
with persons engaged in regulating,
clearing, settling, processing
information with respect to, and
facilitating transactions in securities as
they would both harmonize the time
period for filing the requisite Form U–
5 across multiple self-regulatory
organizations and establish a known
consistent standard to further ensure
adherence. Such action would not affect
nor diminish the abilities of the
Exchange, its Members or an ATP
Holder to fulfill their regulatory
responsibilities under the Act or the
rules promulgated thereunder,
6 15
7 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
8 Id.
E:\FR\FM\07JYN1.SGM
07JYN1
Federal Register / Vol. 81, No. 130 / Thursday, July 7, 2016 / Notices
including but not limited to the
responsibilities to monitor the activities
of such persons, nor would such
proposed amendment affect the rights of
such terminated persons.
The Exchange believes this additional
transparency and clarity removes a
potential impediment to, and would
contribute to perfecting, the mechanism
for a free and open market and a
national market system, and, in general,
would protect investors and the public
interest by harmonizing the time period
for filing the requisite Form U–5 across
multiple SROs, and by imposing the
requirement that such forms be filed
promptly.9
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
these proposed rule changes would
impose any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed changes are not designed to
address any competitive issue but rather
to harmonize Exchange time-filing
requirements to a standard prevalent
among other exchanges and FINRA,
thereby reducing any potential
confusion and making the Exchange’s
rules easier to understand and navigate.
The Exchange believes that the
proposed rule changes would serve to
promote regulatory clarity and
consistency, thereby reducing burdens
on the marketplace and facilitating
investor protection.
srobinson on DSK5SPTVN1PROD 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 solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or up to 90 days (i) as the
Commission may designate if it finds
such longer period to be appropriate
and publishes its reasons for so finding
or (ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
9 This filing is intended to address only the filing
requirements of Forms U–5; it is not intended to
address or affect any other mandatory filing
requirements or procedures.
VerDate Sep<11>2014
17:23 Jul 06, 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:
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–2016–52 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–2016–52. 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–2016–52 and
should be submitted on or before July
28, 2016.
PO 00000
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–16025 Filed 7–6–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE., Washington, DC
20549–0213.
Extension:
Rule 17Ad–10; SEC File No. 270–265,
OMB Control No. 3235–0273.
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
Rule 17Ad–10 (17 CFR 240.17Ad–10),
under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.).
Rule 17Ad–10 generally requires
registered transfer agents to: (1) Create
and maintain current and accurate
securityholder records; (2) promptly and
accurately record all transfers,
purchases, redemptions, and issuances,
and notify their appropriate regulatory
agency if they are unable to do so; (3)
exercise diligent and continuous
attention in resolving record
inaccuracies; (4) disclose to the issuers
for whom they perform transfer agent
functions and to their appropriate
regulatory agency information regarding
record inaccuracies; (5) buy-in certain
record inaccuracies that result in a
physical over issuance of securities; and
(6) communicate with other transfer
agents related to the same issuer. These
requirements assist in the creation and
maintenance of accurate securityholder
records, enhance the ability to research
errors, and ensure the transfer agent is
aware of the number of securities that
are properly authorized by the issuer,
thereby avoiding over issuance.
The rule also has specific
recordkeeping requirements. It requires
registered transfer agents to retain
certificate detail that has been deleted
for six years and keep current an
accurate record of the number of shares
10 17
Frm 00108
Fmt 4703
Sfmt 4703
44365
E:\FR\FM\07JYN1.SGM
CFR 200.30–3(a)(12).
07JYN1
Agencies
[Federal Register Volume 81, Number 130 (Thursday, July 7, 2016)]
[Notices]
[Pages 44363-44365]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-16025]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-78198; File No. SR-NYSEMKT-2016-52]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of
Proposed Rule Change Amending Rules 340, 341, and 359 To Extend the
Time Within Which a Member or Member Organization or an ATP Holder Must
File a Uniform Termination Notice for Securities Industry Registration
June 30, 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 June 16, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE
MKT'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by NYSE MKT. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C.78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rules 340, 341 and 359 to harmonize
the requirement of when a member or member organization or an ATP
Holder must file an Uniform Termination Notice for Securities Industry
Registration (``Form U-5'') with the rules of other exchanges and
FINRA. 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 44364]]
and discussed any comments it received on the proposed rule change. The
text of those statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rules 340, 341 and 359 to harmonize
the requirement of when a member or member organization or an ATP
Holder must file a Form U-5 with the requirements on other exchanges
and the Financial Industry Regulatory Authority (``FINRA''). This
filing is not intended to address any other registration requirements
in Exchange rules.
Specifically, under current Commentary .01 to Rule 340, members and
member organizations (collectively, ``Members'') are required to
electronically file a Form U-5 and any amendment thereto to the Central
Registration Depository (``CRD'') within ten (10) days of the date of
termination of an employee that has been approved for admission to the
trading floor. Under current Commentary .09 to Rule 341, Members must
submit information concerning the termination of employment of a
member, registered employee or an officer on Form U-5 within ten (10)
days of the date of termination.\4\ Under current Rule 359(a), an ATP
Holder that terminates an ATP Holder or approved person shall
electronically file a Form U-5 within ten (10) days of such
termination. While each of these rules govern [sic] the same topic,
they do not use the same rule language.
---------------------------------------------------------------------------
\4\ Commentary .09 to Rule 341 does not currently specify
electronic transmission, an absence that the proposed amendment
would also remedy.
---------------------------------------------------------------------------
The Exchange proposes to amend these three rules by replacing the
current requirements of when to electronically file a Form U-5 with the
same requirement in each rule that a member, member organization, or
ATP Holder (as applicable) promptly file a Form U-5 electronically with
CRD, but not later than 30 calendar days after the date of termination
of a member, ATP Holder, registered employee or approved person (as
applicable). The proposed rule would further require that any amendment
to a Form U-5 must also be promptly filed electronically with CRD, but
not later than 30 calendar days after learning of the facts or
circumstances giving rise to the amendment. Finally, the proposed rule
would provide that all Forms U-5 must also be provided to the
terminated person concurrently with filing.
The proposed rule text is based on the requirements of other
exchanges and FINRA and therefore would harmonize the requirement of
when a member or member organization or an ATP Holder must file a Form
U-5 with the rules of other exchanges and FINRA.\5\ The Exchange
believes that the proposed rule changes will promote the protection of
investors by adding that a Form U-5 be filed promptly, rather than the
current requirement that a Form U-5 be filed within 10 days. The
Exchange believes that this proposed requirement may lead to Form U-5s
being filed sooner than the current 10-day requirement. Consistent with
the rules of other exchanges and FINRA, the rule would further provide
that a Form U-5 should be filed not later than 30 days after the date
of termination. While this date is longer than the current 10 day
requirement, the Exchange believes that this timing, combined with the
requirement to file promptly, may still lead to firms submitting Form
U-5s on a more prompt basis. In addition, the proposed rule would
harmonize the standard, thus reducing the burden on competition for
member organizations and ATP Holders that are members of multiple
exchanges and FINRA to meet similar requirements. Such conformance to
the prevalent standard would both harmonize the time period for filing
the requisite Form U-5 across multiple self-regulatory organizations
and establish a known consistent standard to further ensure adherence.
---------------------------------------------------------------------------
\5\ See New York Stock Exchange LLC (``NYSE'') Rule 345(a).17(a)
and (b) (requiring that a Form U-5 shall be reported promptly, but
in any event not later than 30 days following termination, that any
amendment to the Form U-5 shall be filed not later than 30 days
after learning of the facts or circumstances giving rise to the
amendment, and that any termination notice must be provided
concurrently to the person whose association has been terminated);
BATS BZX Exchange, Inc. (``BZX'') Rule 2.5 Interpretations and
Policies .04(a) and (b) (requiring that a Form U-5 be reported
immediately following the date of termination, but in no event later
than 30 days following termination, that any amendment to the Form
U-5 shall be filed no later than 30 days after learning of the facts
or circumstances giving rise to the amendment, and that any
termination notice or amendment should [sic] be provided
concurrently to the person whose association has been terminated);
FINRA By-Laws Article 5 Sec. 3(a) and (b) (requiring that notice of
termination be filed not later than 30 days after termination, that
an amendment to a Form U-5 be filed not later than 30 days after
learning of the facts or circumstances giving rise to the amendment,
and that notice be provided concurrently to the person whose
association has been terminated within the time periods prescribed).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed changes are consistent with
Section 6(b) of the Act,\6\ in general, and furthers [sic] the
objectives of Section 6(b)(5),\7\ in particular, in that they are
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, in general, to
protect investors and the public interest. Additionally, the Exchange
believes the proposed rule changes are consistent with the Section
6(b)(5) \8\ requirement that the rules of an exchange not be designed
to permit unfair discrimination between customers, issuers, brokers, or
dealers.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ Id.
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Specifically, the Exchange believes that the proposed rule changes
would remove impediments to and perfect the mechanisms of a free and
open market by conforming the time period within which Members and ATP
Holders must file a Form U-5 to the requirement that such forms be
filed promptly, but not later than 30 days after the termination event.
The Exchange believes that the proposed rule changes would protect
investors and the public interest by adding that Form U-5s should be
filed promptly, rather than requiring only that they be filed within 10
days. In addition, the Exchange believes that adding the requirement
that a Form U-5 be filed not later than 30 days after the event would
eliminate the disparity among the exchanges, other SROs and the
affected persons stemming from the cessation of their employment. In
this regard, the proposed changes would foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities as they would both harmonize the time period for filing
the requisite Form U-5 across multiple self-regulatory organizations
and establish a known consistent standard to further ensure adherence.
Such action would not affect nor diminish the abilities of the
Exchange, its Members or an ATP Holder to fulfill their regulatory
responsibilities under the Act or the rules promulgated thereunder,
[[Page 44365]]
including but not limited to the responsibilities to monitor the
activities of such persons, nor would such proposed amendment affect
the rights of such terminated persons.
The Exchange believes this additional transparency and clarity
removes a potential impediment to, and would contribute to perfecting,
the mechanism for a free and open market and a national market system,
and, in general, would protect investors and the public interest by
harmonizing the time period for filing the requisite Form U-5 across
multiple SROs, and by imposing the requirement that such forms be filed
promptly.\9\
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\9\ This filing is intended to address only the filing
requirements of Forms U-5; it is not intended to address or affect
any other mandatory filing requirements or procedures.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that these proposed rule changes
would impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed changes are not
designed to address any competitive issue but rather to harmonize
Exchange time-filing requirements to a standard prevalent among other
exchanges and FINRA, thereby reducing any potential confusion and
making the Exchange's rules easier to understand and navigate. The
Exchange believes that the proposed rule changes would serve to promote
regulatory clarity and consistency, thereby reducing burdens on the
marketplace and facilitating investor protection.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or up to 90 days (i) as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or (ii) as to which the self-regulatory
organization consents, the Commission will:
(A) By order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEMKT-2016-52 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-2016-52. 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-2016-52 and
should be submitted on or before July 28, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-16025 Filed 7-6-16; 8:45 am]
BILLING CODE 8011-01-P