Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving Proposed Rule Change Amending Rule 98, 16458-16459 [2017-06567]
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Federal Register / Vol. 82, No. 63 / Tuesday, April 4, 2017 / Notices
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–80334; File No. SR–NYSE–
2017–03]
• 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 SR–IEX–
2017–08 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.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
All submissions should refer to File
Number SR–IEX–2017–08. 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–IEX–
2017–08 and should be submitted on or
before April 25, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–06566 Filed 4–3–17; 8:45 am]
BILLING CODE 8011–01–P
15 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
16:21 Apr 03, 2017
Jkt 241001
Self-Regulatory Organizations; New
York Stock Exchange LLC; Order
Approving Proposed Rule Change
Amending Rule 98
March 29, 2017.
I. Introduction
On January 26, 2017, New York Stock
Exchange LLC (‘‘Exchange’’ or ‘‘NYSE’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend NYSE Rule 98. The
proposed rule change was published for
comment in the Federal Register on
February 16, 2017.3 The Commission
received no comments on the proposed
rule change. The Commission is
approving the proposed rule change.
II. Description of the Proposal
The Exchange proposes to amend
Rule 98 to provide that, while on the
Trading Floor, DMMs must trade DMM
securities at their assigned stock trading
post location and may not trade any
security that is a related product of their
DMM securities.4
A. Background
Rule 98 governs the operation of a
DMM unit and paragraph (c)(3) of that
rule specifies restrictions on trading for
member organizations operating a DMM
unit. More specifically, Rule 98(c)(3)(B)
provides that, while on the Trading
Floor of the Exchange,5 employees of
the DMM unit:
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 80019
(Feb. 10, 2017), 82 FR 10942 (Feb. 16, 2017).
4 As defined in Rule 2(i), the term ‘‘DMM’’ means
an individual member, officer, partner, employee or
associated person of a Designated Market Maker
Unit who is approved by the Exchange to act in the
capacity of a DMM. The term ‘‘DMM securities’’ is
defined in Rule 98(a)(2) to mean any securities
allocated to the DMM unit pursuant to Rule 103B
or other applicable rules. The term ‘‘related
products’’ is defined in Rule 98(a)(7) to mean any
derivative instrument that is related to a DMM
security, including options, warrants, hybrid
securities, single-stock futures, security-based swap
agreement, a forward contract, or any other
instrument that is exercisable into or whose price
is based upon or derived from a security traded at
the Exchange.
5 As defined in Rule 6A, the term ‘‘Trading Floor’’
means the restricted-access physical areas
designated by the Exchange for the trading of
securities, commonly known as the ‘‘Main Room’’
and the ‘‘Buttonwood Room’’ and does not include
(i) the areas in the ‘‘Buttonwood Room’’ designated
by the Exchange where NYSE Amex-listed options
2 17
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Frm 00125
Fmt 4703
Sfmt 4703
(i) Except as provided for in Rule
36.30,6 may trade only DMM securities
only on or through the systems and
facilities of the Exchange as permitted
by Exchange rules.
(ii) except as provided for in Rule
36.30, may not communicate with
individuals or systems responsible for
making trading decisions for related
products or for away-market trading in
their assigned DMM securities.
(iii) shall not have access to customer
information or the DMM unit’s position
in related products.
Accordingly, under current Rule 98,
while on the Trading Floor, DMMs may
only trade DMM securities and, thus,
may not trade any other securities,
including securities that are related
products to their DMM securities.
B. Proposed Rule Change
The Exchange proposes to amend
Rule 98 to remove restrictions on DMM
operations on the Trading Floor that are
unrelated to the role of DMMs at the
Exchange. Specifically, as described in
Rule 104, DMMs have specified
obligations with respect to their DMM
securities and have access to specified
non-public order information regarding
their DMM securities.7 However, the
Exchange states that DMMs do not have
a unique role or access to any nonpublic order information with respect to
securities that are not assigned to them
under Rule 103B. The Exchange
therefore believes that the current Rule
98 restrictions are unnecessarily broad.
Accordingly, the Exchange proposes
to amend Rule 98(c)(3)(B)(i) to provide
that, while on the Trading Floor,
employees of the DMM unit may trade
DMM securities only on or through the
systems and facilities of the Exchange at
the DMM unit’s assigned stock trading
post location and as permitted by
Exchange rules. Because the proposed
rule would no longer specify the only
securities that a DMM is permitted to
trade, the Exchange proposes to delete
are traded, which, for the purposes of the
Exchange’s Rules, is referred to as the ‘‘NYSE Amex
Options Trading Floor’’ or (ii) the physical area
within fully enclosed telephone booths located in
18 Broad Street at the Southeast wall of the Trading
Floor.
6 Rule 36.30 permits a DMM unit that is registered
in an Investment Company Unit (as defined in
Section 703.16 of the Listed Company Manual) or
a Trust Issued Receipt (as that term is defined in
Rule 1200) to use a telephone connection or order
entry terminal at the DMM unit’s post to enter
proprietary orders in the Unit or receipt in another
market center, in a Component Security of such a
Unit or receipt, or an options or futures contract
related to such Unit or receipt, and may use the
post telephone to obtain market information with
respect to such Units, receipts, options, futures or
Component Securities.
7 See, e.g., Rule 104(a) and (j).
E:\FR\FM\04APN1.SGM
04APN1
Federal Register / Vol. 82, No. 63 / Tuesday, April 4, 2017 / Notices
the clause ‘‘except as provided for in
Rule 36.30.’’ The Exchange also
proposes to add new Rule 98(c)(3)(B)(ii)
to provide that while on the Trading
Floor of the Exchange, employees of the
DMM unit may not trade any security
that is a related product of its DMM
securities. The Exchange would
renumber current Rules 98(c)(3)(B)(ii)
and (iii) as new Rules 98(c)(3)(B)(iii)
and (iv).
As a result of these proposed changes,
DMMs would no longer be restricted
from trading securities that are
unrelated to DMM securities while on
the Trading Floor. However, the
proposed amendments would continue
to require that, while on the Trading
Floor, DMMs would not be able to trade
any securities that are related products
to DMM securities. The proposed
amendment would also add a new
requirement that DMMs may only trade
their DMM securities at their assigned
stock trading post.
The proposed rule change would
allow Exchange DMMs that are also
NYSE MKT LLC (‘‘NYSE MKT’’) DMMs
to continue to operate. Currently, NYSE
MKT’s cash equities trading operations
share a Floor with the Exchange. DMMs
who are also approved as NYSE MKT
DMMs currently trade in both NYSElisted DMM securities and NYSE MKTlisted DMM securities from the same
physical location on the exchanges’
respective Trading Floors.8 NYSE MKT
has proposed to transition from a Floorbased trading model to a fully
automated trading model.9 After this
transition, NYSE MKT would continue
to have electronic-access DMMs that
would be the same member
organizations that are currently
operating as Floor-based NYSE MKT
DMMs. The proposed amendment to
Rule 98 would permit NYSE DMMs to
continue to support their electronic
NYSE MKT DMM functions in the same
physical location where they are
currently operating.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.10 In particular, the
8 NYSE MKT DMMs operate under the NYSE
MKT Rule 98—Equities.
9 See Securities Exchange Act Release No. 79993
(Feb. 9, 2017), 82 FR 10814 (Feb. 15, 2017) (notice
of filing of SR–NYSEMKT–2017–1 (‘‘NYSE MKT
Trading Rules Filing’’)). Subject to rule approval,
NYSE MKT anticipates transitioning off of its Floor
in the second quarter of 2017.
10 In approving this proposed rule change, the
Commission has considered the proposed rule’s
VerDate Sep<11>2014
16:21 Apr 03, 2017
Jkt 241001
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,11 which requires,
among other things, that the rules of a
national securities exchange be
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.
Under the proposal, DMMs would be
permitted to trade securities that are
unrelated to DMM securities while on
the Trading Floor. The Exchange
represents that DMMs do not have a
unique role or access to any non-public
order information with respect to
securities that are not assigned to them
under Rule 103B. The Commission
notes that, while on the Trading Floor,
DMMs would continue to be prohibited
from trading securities that are related
products to DMM securities. In
addition, the Commission notes that,
while on the Trading Floor, employees
of the DMM unit would be permitted to
trade DMM securities only on or
through the systems and facilities of the
Exchange at the DMM unit’s assigned
stock trading post location and as
permitted by Exchange rules.
For the above reasons, the
Commission finds that the proposal is
consistent with the requirements of the
Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,12 that the
proposed rule change (NYSEMKT–
2017–03) be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–06567 Filed 4–3–17; 8:45 am]
BILLING CODE 8011–01–P
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
11 15 U.S.C. 78f(b)(5).
12 Id.
13 17 CFR 200.30–3(a)(12).
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Fmt 4703
Sfmt 4703
16459
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80337; File No. SR–
NYSEMKT–2017–01]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Designation of a
Longer Period for Commission Action
on a Proposed Rule Change To Adopt
New Equities Trading Rules To
Transition Trading on the Exchange
From a Floor Based Market With a
Parity Allocation Model to Fully
Automated Price-Time Priority Model
on the Exchange’s New Trading
Technology Platform, Pillar
March 29, 2017.
On January 25, 2017, NYSE MKT LLC
(‘‘Exchange’’ or ‘‘NYSE MKT’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to transition trading on the
Exchange to Pillar, the Exchange’s new
trading technology platform, and to
operate as a fully automated cash
equities market. The proposed rule
change was published for comment in
the Federal Register on February 15,
2017.3 The Commission received no
comments on the proposed rule change.
Section 19(b)(2) of the Act 4 provides
that, within 45 days of the publication
of notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
approved or disapproved. The 45th day
after publication of the notice for this
proposed rule change is April 1, 2017.
The Commission is extending this 45day time period.
The Commission finds that it is
appropriate to designate a longer period
within which to take action on the
proposed rule change so that it has
sufficient time to consider the proposed
rule change. Accordingly, the
Commission, pursuant to Section
19(b)(2) of the Act,5 designates May 16,
2017, as the date by which the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 79993
(Feb. 9, 2017), 82 FR 10814.
4 15 U.S.C. 78s(b)(2).
5 Id.
2 17
E:\FR\FM\04APN1.SGM
04APN1
Agencies
[Federal Register Volume 82, Number 63 (Tuesday, April 4, 2017)]
[Notices]
[Pages 16458-16459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-06567]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80334; File No. SR-NYSE-2017-03]
Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Approving Proposed Rule Change Amending Rule 98
March 29, 2017.
I. Introduction
On January 26, 2017, New York Stock Exchange LLC (``Exchange'' or
``NYSE'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend NYSE Rule 98. The proposed rule change
was published for comment in the Federal Register on February 16,
2017.\3\ The Commission received no comments on the proposed rule
change. The Commission is approving the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 80019 (Feb. 10,
2017), 82 FR 10942 (Feb. 16, 2017).
---------------------------------------------------------------------------
II. Description of the Proposal
The Exchange proposes to amend Rule 98 to provide that, while on
the Trading Floor, DMMs must trade DMM securities at their assigned
stock trading post location and may not trade any security that is a
related product of their DMM securities.\4\
---------------------------------------------------------------------------
\4\ As defined in Rule 2(i), the term ``DMM'' means an
individual member, officer, partner, employee or associated person
of a Designated Market Maker Unit who is approved by the Exchange to
act in the capacity of a DMM. The term ``DMM securities'' is defined
in Rule 98(a)(2) to mean any securities allocated to the DMM unit
pursuant to Rule 103B or other applicable rules. The term ``related
products'' is defined in Rule 98(a)(7) to mean any derivative
instrument that is related to a DMM security, including options,
warrants, hybrid securities, single-stock futures, security-based
swap agreement, a forward contract, or any other instrument that is
exercisable into or whose price is based upon or derived from a
security traded at the Exchange.
---------------------------------------------------------------------------
A. Background
Rule 98 governs the operation of a DMM unit and paragraph (c)(3) of
that rule specifies restrictions on trading for member organizations
operating a DMM unit. More specifically, Rule 98(c)(3)(B) provides
that, while on the Trading Floor of the Exchange,\5\ employees of the
DMM unit:
---------------------------------------------------------------------------
\5\ As defined in Rule 6A, the term ``Trading Floor'' means the
restricted-access physical areas designated by the Exchange for the
trading of securities, commonly known as the ``Main Room'' and the
``Buttonwood Room'' and does not include (i) the areas in the
``Buttonwood Room'' designated by the Exchange where NYSE Amex-
listed options are traded, which, for the purposes of the Exchange's
Rules, is referred to as the ``NYSE Amex Options Trading Floor'' or
(ii) the physical area within fully enclosed telephone booths
located in 18 Broad Street at the Southeast wall of the Trading
Floor.
---------------------------------------------------------------------------
(i) Except as provided for in Rule 36.30,\6\ may trade only DMM
securities only on or through the systems and facilities of the
Exchange as permitted by Exchange rules.
---------------------------------------------------------------------------
\6\ Rule 36.30 permits a DMM unit that is registered in an
Investment Company Unit (as defined in Section 703.16 of the Listed
Company Manual) or a Trust Issued Receipt (as that term is defined
in Rule 1200) to use a telephone connection or order entry terminal
at the DMM unit's post to enter proprietary orders in the Unit or
receipt in another market center, in a Component Security of such a
Unit or receipt, or an options or futures contract related to such
Unit or receipt, and may use the post telephone to obtain market
information with respect to such Units, receipts, options, futures
or Component Securities.
---------------------------------------------------------------------------
(ii) except as provided for in Rule 36.30, may not communicate with
individuals or systems responsible for making trading decisions for
related products or for away-market trading in their assigned DMM
securities.
(iii) shall not have access to customer information or the DMM
unit's position in related products.
Accordingly, under current Rule 98, while on the Trading Floor,
DMMs may only trade DMM securities and, thus, may not trade any other
securities, including securities that are related products to their DMM
securities.
B. Proposed Rule Change
The Exchange proposes to amend Rule 98 to remove restrictions on
DMM operations on the Trading Floor that are unrelated to the role of
DMMs at the Exchange. Specifically, as described in Rule 104, DMMs have
specified obligations with respect to their DMM securities and have
access to specified non-public order information regarding their DMM
securities.\7\ However, the Exchange states that DMMs do not have a
unique role or access to any non-public order information with respect
to securities that are not assigned to them under Rule 103B. The
Exchange therefore believes that the current Rule 98 restrictions are
unnecessarily broad.
---------------------------------------------------------------------------
\7\ See, e.g., Rule 104(a) and (j).
---------------------------------------------------------------------------
Accordingly, the Exchange proposes to amend Rule 98(c)(3)(B)(i) to
provide that, while on the Trading Floor, employees of the DMM unit may
trade DMM securities only on or through the systems and facilities of
the Exchange at the DMM unit's assigned stock trading post location and
as permitted by Exchange rules. Because the proposed rule would no
longer specify the only securities that a DMM is permitted to trade,
the Exchange proposes to delete
[[Page 16459]]
the clause ``except as provided for in Rule 36.30.'' The Exchange also
proposes to add new Rule 98(c)(3)(B)(ii) to provide that while on the
Trading Floor of the Exchange, employees of the DMM unit may not trade
any security that is a related product of its DMM securities. The
Exchange would renumber current Rules 98(c)(3)(B)(ii) and (iii) as new
Rules 98(c)(3)(B)(iii) and (iv).
As a result of these proposed changes, DMMs would no longer be
restricted from trading securities that are unrelated to DMM securities
while on the Trading Floor. However, the proposed amendments would
continue to require that, while on the Trading Floor, DMMs would not be
able to trade any securities that are related products to DMM
securities. The proposed amendment would also add a new requirement
that DMMs may only trade their DMM securities at their assigned stock
trading post.
The proposed rule change would allow Exchange DMMs that are also
NYSE MKT LLC (``NYSE MKT'') DMMs to continue to operate. Currently,
NYSE MKT's cash equities trading operations share a Floor with the
Exchange. DMMs who are also approved as NYSE MKT DMMs currently trade
in both NYSE-listed DMM securities and NYSE MKT-listed DMM securities
from the same physical location on the exchanges' respective Trading
Floors.\8\ NYSE MKT has proposed to transition from a Floor-based
trading model to a fully automated trading model.\9\ After this
transition, NYSE MKT would continue to have electronic-access DMMs that
would be the same member organizations that are currently operating as
Floor-based NYSE MKT DMMs. The proposed amendment to Rule 98 would
permit NYSE DMMs to continue to support their electronic NYSE MKT DMM
functions in the same physical location where they are currently
operating.
---------------------------------------------------------------------------
\8\ NYSE MKT DMMs operate under the NYSE MKT Rule 98--Equities.
\9\ See Securities Exchange Act Release No. 79993 (Feb. 9,
2017), 82 FR 10814 (Feb. 15, 2017) (notice of filing of SR-NYSEMKT-
2017-1 (``NYSE MKT Trading Rules Filing'')). Subject to rule
approval, NYSE MKT anticipates transitioning off of its Floor in the
second quarter of 2017.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\10\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\11\ which
requires, among other things, that the rules of a national securities
exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest.
---------------------------------------------------------------------------
\10\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
Under the proposal, DMMs would be permitted to trade securities
that are unrelated to DMM securities while on the Trading Floor. The
Exchange represents that DMMs do not have a unique role or access to
any non-public order information with respect to securities that are
not assigned to them under Rule 103B. The Commission notes that, while
on the Trading Floor, DMMs would continue to be prohibited from trading
securities that are related products to DMM securities. In addition,
the Commission notes that, while on the Trading Floor, employees of the
DMM unit would be permitted to trade DMM securities only on or through
the systems and facilities of the Exchange at the DMM unit's assigned
stock trading post location and as permitted by Exchange rules.
For the above reasons, the Commission finds that the proposal is
consistent with the requirements of the Act.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\12\ that the proposed rule change (NYSEMKT-2017-03) be, and it
hereby is, approved.
---------------------------------------------------------------------------
\12\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-06567 Filed 4-3-17; 8:45 am]
BILLING CODE 8011-01-P