Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending Rule 36 To Permit Exchange Floor Brokers To Use Non-Exchange Provided Telephones on the Floor, 17306-17311 [2017-07048]
Download as PDF
<![CDATA[
asabaliauskas on DSK3SPTVN1PROD with NOTICES
17306
Federal Register / Vol. 82, No. 67 / Monday, April 10, 2017 / Notices
of proposed Rule 36 and therefore
subject to Exchange jurisdiction. If a call
is forwarded to a telephone located off
of the Floor, Rule 36 would not be
implicated because the person on the
phone would not be physically located
on the Floor. In addition, the Exchange
believes that if Floor brokers use
cellular or wireless telephones that
include call conferencing features, any
such use would be captured on the
records of use of such telephones that
Floor brokers would be required to
maintain pursuant to proposed
paragraph (d) of Rule 36.21.
The Exchange believes that including
a provision in proposed Rule 36.21
providing that the Exchange assumes no
liability to Floor brokers due to conflicts
between phones in use on the Floor or
due to electronic interference problems
resulting from the use of telephones on
the Floor removes impediments to and
perfects the mechanism of a free and
open market by adding transparency to
the Exchange’s rules regarding use of
personal telephone equipment on
Exchange premises.
The Exchange also believes that the
proposed amendments to Rule 36
support the mechanism of free and open
markets by continuing to provide a
means for increased communication by
Floor brokers to and from the Floor.
Finally, the Exchange believes that
replacing the outdated word ‘‘portable’’
with ‘‘cellular or wireless’’ in Rule 36.20
and .21 and replacing ‘‘personal
portable’’ with ‘‘cellular’’ in Rule 36.23
removes impediments to and perfects
the mechanism of a free and open
market by removing confusion that may
result from having obsolete and
outdated references in the Exchange’s
rulebook. Similarly, the Exchange
further believes that the proposal
removes impediments to and perfects
the mechanism of a free and open
market by ensuring that persons subject
to the Exchange’s jurisdiction,
regulators, and the investing public can
more easily navigate and understand the
Exchange’s rulebook. The Exchange
believes that eliminating obsolete and
outdated references would be consistent
with the public interest and the
protection of investors because investors
will not be harmed and in fact would
benefit from increased transparency,
thereby reducing potential confusion.
Removing such obsolete and outdated
references will also further the goal of
transparency and add clarity to the
Exchange’s rules.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
VerDate Sep<11>2014
20:02 Apr 07, 2017
Jkt 241001
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe that the
proposed rule change will impose any
burden on competition because the
proposed change relates to how Floor
brokers are permitted to communicate
on the Floor and proposes no change for
other market participants. In addition,
the Exchange does not believe that the
proposed changes will impose any
competitive burden because Floor
brokers will operate in the same manner
but with telephone equipment that is
not Exchange-issued.
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–2017–16 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEMKT–2017–16. This
file number should be included on the
subject line if email is used. To help the
PO 00000
Frm 00129
Fmt 4703
Sfmt 4703
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–2017–16, and should be
submitted on or before May 1, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–07049 Filed 4–7–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80374; File No. SR–NYSE–
2017–07]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change
Amending Rule 36 To Permit Exchange
Floor Brokers To Use Non-Exchange
Provided Telephones on the Floor
April 4, 2017.
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
31, 2017, New York Stock Exchange
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
23 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\10APN1.SGM
10APN1
Federal Register / Vol. 82, No. 67 / Monday, April 10, 2017 / Notices
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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 36 to permit Exchange Floor
brokers to use non-Exchange provided
telephones on the Floor of the Exchange
and make related changes modeled on
rules of the Exchange’s affiliates NYSE
MKT LLC and NYSE Arca, Inc.,
governing telephone use on those
markets’ options trading floors. The
proposed rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
asabaliauskas on DSK3SPTVN1PROD with NOTICES
1. Purpose
The Exchange proposes to amend
Rule 36 (Communication Between
Exchange and Members’ Offices) to
permit Exchange Floor brokers to use
non-Exchange provided telephones on
the Floor of the Exchange (the ‘‘Floor’’) 4
and make related changes modeled on
rules of the Exchange’s affiliates, NYSE
MKT LLC (‘‘NYSE MKT’’) and NYSE
Arca, Inc. (‘‘NYSE Arca’’), governing
telephone use on those markets’ options
trading floors.
4 Rule 6 defines the Floor as the trading Floor of
the Exchange and the premises immediately
adjacent thereto, such as the various entrances and
lobbies of the 11 Wall Street, 18 New Street, 8
Broad Street, 12 Broad Street and 18 Broad Street
Buildings, and also means the telephone facilities
available in these locations.
VerDate Sep<11>2014
20:02 Apr 07, 2017
Jkt 241001
Background
Overview of Rule 36 Requirements
Rule 36 governs the establishment of
telephone or electronic communications
between the Floor and any other
location, which requires Exchange
approval. Supplementary Material .20,
.21 and .23 to Rule 36 outline the
conditions under which Floor brokers
are permitted to use Exchange
authorized and provided portable
telephones with the approval of the
Exchange. These provisions of Rule 36
were originally implemented as a sixmonth pilot in 2003,5 which pilots were
extended and then made permanent in
2008.6
Pursuant to Rule 36.20(a), with
Exchange approval, Floor brokers may
maintain a telephone line or use
Exchange authorized and provided
portable phones, which permit a nonmember off the Floor to communicate
with a member or member organization
on the Floor. Subject to the exception
contained in Rule 36.23, discussed
below, Rule 36.20(a) expressly prohibits
the use of a portable telephone on the
Floor other than one authorized and
issued by the Exchange.
The use of Exchange authorized and
issued portable phones is governed by
Rule 36.21, which provides that when
using an Exchange authorized and
provided portable phone, a Floor broker:
(i) May engage in direct voice
communications from the point of sale
on the Floor to an off-Floor location;
(ii) may provide status and oral
execution reports as to orders
previously received, as well as ‘‘market
look’’ observations as historically have
been routinely transmitted from a
broker’s booth location;
(iii) must comply with Exchange Rule
123(e);
(iv) must comply with all other rules,
policies, and procedures of both the
Exchange and the federal securities law,
including the record retention
requirements, as set forth in Exchange
Rule 440 and SEC Rules 17a–3 and 17a–
4; 7 and
(v) may not use call-forwarding or
conference calling. Exchange authorized
and provided portable phones used by
Floor brokers shall not have these
capabilities.
Rule 36.21(b) further provides that
Floor brokers and their member
5 See Securities Exchange Act Release No. 47671
(April 11, 2003), 68 FR 19048 (April 17, 2003) (SR–
NYSE–2002–11); Securities Exchange Act Release
No. 47992 (June 5, 2003), 68 FR 35047 (June 11,
2003) (SR–NYSE–2003–19).
6 See Securities Exchange Act Release No. 58068
(June 30, 2008), 73 FR 39363 (July 9, 2008) (SR–
NYSE–2008–20) (‘‘Release No. 58068’’).
7 See 17 CFR 240.17a–3; 17 CFR 240.17a–4.
PO 00000
Frm 00130
Fmt 4703
Sfmt 4703
17307
organizations must implement
procedures designed to deter anyone
calling their portable phones from using
caller ID block or other means to
conceal the phone number from which
a call is being made. Members and
member organizations are required to
make and retain records demonstrating
compliance with such procedures.
Rule 36.23 provides that,
notwithstanding any other provision of
Rule 36, members and employees of
member organizations may use personal
portable communications devices
outside the Trading Floor 8 consistent
with Exchange Rules and the federal
securities laws and the rules thereunder,
and are prohibited from using personal
portable or wireless communications
devices while on the NYSE Amex
Options Trading Floor.9 The Rule
further provides that those members and
employees of member organizations that
are also registered to trade options on
NYSE Amex are permitted to use
personal portable or wireless
communication devices while on the
NYSE Amex Options Trading Floor 10 in
accordance with applicable NYSE Amex
Options rules and regulations.
Rules Governing Telephones on the
NYSE MKT and NYSE Arca Options
Trading Floors
The Exchange’s affiliates, NYSE MKT
and NYSE Arca, operate physical
options trading floors in New York and
San Francisco, respectively.11 NYSE
MKT Rule 902NY (Admission and
Conduct on the Options Trading Floor),
governing phone use on the NYSE
Amex Options Trading Floor, was
adopted in 2009 and modeled on NYSE
Arca Rule 6.2(h) (Admission to and
Conduct on the Options Trading
Floor).12 Both exchanges allow Floorbased permit holders and their
employees to use personal phones on
8 Rule 6A defines the Trading Floor as the
restricted-access physical areas designated by the
Exchange for the trading of securities, commonly
known as the Main Room and the Buttonwood
Room but does not include 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
the physical area within fully enclosed telephone
booths located in 18 Broad Street at the Southeast
wall of the Trading Floor.
9 See Rule 6A(b)(i) & notes 10–11, infra.
10 Rule 6A(b) defines ‘‘NYSE Amex Options
Trading Floor’’ as the areas in the Buttonwood
Room designated by the Exchange where NYSE
Amex-listed options are traded. See note 8, supra.
11 NYSE MKT operates the NYSE Amex Options
Trading Floor in New York, while NYSE Arca
Options operates an options trading floor in San
Francisco.
12 See Securities Exchange Act Release No. 59939
(May 19, 2009), 74 FR 25779 (May 29, 2009) (SR–
NYSEAmex–2009–17).
E:\FR\FM\10APN1.SGM
10APN1
17308
Federal Register / Vol. 82, No. 67 / Monday, April 10, 2017 / Notices
asabaliauskas on DSK3SPTVN1PROD with NOTICES
the options trading floors subject to the
same types of restrictions proposed for
the Exchange. Neither NYSE MKT nor
NYSE Arca provides exchange-issued
and approved telephones for use on the
options trading floors.
Specifically, NYSE MKT Rule
902NY(i)(1) and NYSE Arca Rule
6.2(h)(1) require permit holders to
register, prior to use, any new
telephones to be used on the options
trading floor by sending a registered
email to the Operations Department,
which includes the number of the
telephone being registered.13 Similarly,
both rules require trading permit holder
representatives to attest at the time of
registration that they are aware of and
understand the rules governing the use
of telephones on the options trading
floor. NYSE MKT Rule 902NY(i)(1) and
NYSE Arca Rule 6.2(h)(1) provide that
no trading permit holder or employee
thereof may employ any alternative
communication device (other than
telephones as described herein) on the
trading floor without prior approval of
the respective exchange.14
13 On the NYSE Amex Options market, a permit
holder is known as an ‘‘Amex Trading Permit
Holder’’ or ‘‘ATP Holder,’’ which is defined in
NYSE MKT Rule 900.2NY(5) as a natural person,
sole proprietorship, partnership, corporation,
limited liability company or other organization, in
good standing, that has been issued an ATP. See
also Rule 900.2NY(4) (defining ‘‘ATP’’ as a permit
issued by NYSE MKT for effecting securities
transactions on the Exchange’s Trading Facilities,
defined in Rule 900.2NY(81) as, among places,
NYSE MKT’s facilities for the trading of options 11
Wall Street, New York, NY). An ATP Holder must
be registered as a broker or dealer. Similarly, on the
NYSE Arca options market, permit holders are OTP
Holders or OTP Firms, which are defined in NYSE
Arca Rules 1.1(q) and (r), respectively.
14 The Exchange does not propose to include the
requirements of NYSE MKT Rule 902NY(i)(2)
(Functionality) and NYSE Arca Rule 6.2(h)(2)
(Functionality) or NYSE MKT Rule 902NY(i)(3)
(Requirements and Conditions) and NYSE Arca
Rule 6.2(h)(3) (Requirements and Conditions) in its
Rule 36.
NYSE MKT Rule 902NY(i)(2) and NYSE Arca
Rule 6.2(h)(2) prohibit maintenance of an open line
of continuous communication whereby a person not
located in the trading crowd may continuously
monitor the activities in the trading crowd, and
covers intercoms, walkie-talkies and any similar
devices. Similarly, NYSE MKT Rule 902NY(i)(3)(A)
and NYSE Arca Rule 6.2(h)(3)(A) provide that only
quotations that have been publicly disseminated
may be provided over telephones in trading areas.
In today’s largely automated trading environment
on the Exchange, where pricing decisions have
moved away from market participants on the
Trading Floor and there is greater availability to all
market participants of real-time trade and quote
information, importing these requirements into
Rule 36 would serve no purpose. The traditional
trading ‘‘crowd’’ at the DMM post has virtually
disappeared, and along with it much of the
informational imbalance that existed prior to the
implementation of Regulation NMS. The Exchange
also believes that these requirements would be
incompatible with current Rule 36, which explicitly
permits Floor brokers to engage in direct voice
communication from the point of sale on the Floor
VerDate Sep<11>2014
20:02 Apr 07, 2017
Jkt 241001
Further, NYSE MKT Rule
902NY(i)(4)(A) and NYSE Arca Rule
6.2(h)(4)(A) provide that permit holders
and employees of permit holders may
use their own cellular and wireless
phones to place calls to any person at
any location (whether on or off the
trading floor). Neither exchange
prohibits or restricts the use of
conference call or call forwarding
features by permit holders and their
employees when using personal cellular
and wireless phones on the trading
floor.
NYSE MKT Rule 902NY(i)(5) and
NYSE Arca Rule 6.2(h)(5) also provide
that permit holders must maintain
records of the use of telephones and all
other approved alternative
communication devices, including logs
of calls placed, for a period of not less
than three years, the first two years in
to an off-Floor location and, more importantly,
provide status and oral execution reports as to
orders previously received, as well as ‘‘market
look’’ observations as historically have been
routinely transmitted from a broker’s booth
location.
Further, NYSE MKT Rule 902NY(i)(3)(B) and
NYSE Arca Rule 6.2(h)(3)(B) require telephone
orders to be entered directly to the trading zone
(NYSE MKT) or trading post (NYSE Arca) only
during outgoing telephone calls that are initiated
from the trading crowd (NYSE MKT) or option
posts (NYSE Arca), and that all such orders be
immediately recorded in the Electronic Order
Capture System (EOC). For the same reasons noted
above, the Exchange believes that importing these
requirements into Rule 36 would serve no purpose.
Moreover, comparable Exchange system entry
requirements to those in NYSE MKT Rule
902NY(i)(3)(B) and NYSE Arca Rule 6.2(h)(3)(B) are
set forth in Rule 123(e).
NYSE MKT Rule 902NY(i)(3)(C) and NYSE Arca
Rule 6.2(h)(3)(C) provide that the relevant exchange
may require the taping of any telephone line into
the trading zone (NYSE MKT) or trading post
(NYSE Arca) or may require permit holders to
provide for the tape recording of a dedicated line
in the trading zone or trading post at any time.
NYSE MKT Rule 902NY(i)(3)(C) and NYSE Arca
Rule 6.2(h)(3)(C), however, relates to the taping of
land lines, not cellular or wireless phones.
Accordingly, the Exchange does not propose to
include this requirement in Rule 36.
Finally, the Exchange does not propose to include
the requirements found in NYSE MKT Rule
902NY(i)(4)(B) and (C) and NYSE Arca Rule
6.2(h)(4)(B) and (C) in its Rule 36. NYSE MKT Rule
902NY(i)(4)(B) and NYSE Arca Rule 6.2(h)(4)(B)
provide that Floor brokers and permit holders may
receive orders over their phones subject to the
provisions of NYSE MKT Rule 902NY(i)(3)(B) and
NYSE Arca Rule 6.2(h)(3)(B), respectively, and that
telephonic orders entered from off the Trading
Floor must be placed with a person located in an
ATP Holder booth. Similarly, NYSE MKT Rule
902NY(i)(4)(C) and NYSE Arca Rule 6.2(h)(4)(C)
provide that Floor brokers receiving orders from a
permit holder representative on the Trading Floor
may immediately represent that order in the trading
crowd provided that such orders are immediately
recorded in EOC. As noted, current Rule 36 already
contemplates that Floor brokers can accept orders
via telephone consistent with NYSE rules,
including the requirement in NYSE Rule 123(e) to
first record order details in an electronic system on
the Floor before representing or executing the order.
PO 00000
Frm 00131
Fmt 4703
Sfmt 4703
an accessible place. Both exchanges
reserve the right to inspect such records
pursuant to NYSE MKT Rule 31 and
NYSE Arca Rule 10.2, respectively.15
NYSE MKT Rule 902NY(i)(6) and
NYSE Arca Rule 6.2(h)(6) provide that
each exchange may deny, limit or
revoke the registration of any telephone
used on the trading floor whenever it
determines that use of such device is
inconsistent with the public interest, the
protection of investors, or just and
equitable principles of trade, or such
device has been or is being used to
facilitate any violation of the Act, as
amended, or rules thereunder, or the
rules of the respective exchange.
Finally, NYSE MKT Rule 902NY(i)(7)
and NYSE Arca Rule 6.2(h)(7) provide
that the respective exchanges assume no
liability to permit holders due to
conflicts between phones in use on the
options trading floor or due to electronic
interference problems resulting from the
use of telephones on the trading floor.
Proposed Rule Change
The Exchange proposes to amend
Rule 36 to permit Floor brokers to use
any cellular or wireless telephone
properly registered with the Exchange
on the Floor, thereby eliminating the
requirement that Floor brokers only use
Exchange-approved and provided
portable phones. The proposed changes
are based on the rules of NYSE MKT
and NYSE Arca governing use of
cellular phones on the options trading
floors of those exchanges and include
proposed safeguards surrounding the
use of non-Exchange issued devices
modeled on the rules of those Exchange
affiliates.
To effect these changes, the Exchange
proposes the following amendments to
Rule 36.20(a):
• First, the requirement for prior
Exchange approval to utilize cellular or
wireless telephones on the Floor would
remain unchanged and would be
strengthened by the Exchange’s
proposal to add the phrase ‘‘and subject
to the registration requirements set forth
in Supplementary Material .21’’ in the
first sentence of subparagraph (a).
• Second, the Exchange proposes to
delete the phrase ‘‘an Exchange
authorized and provided portable’’
before the word ‘‘telephone’’ in the first
sentence of subparagraph (a) and
replace it with the term ‘‘a cellular or
wireless.’’ 16 The Exchange also
proposes a non-substantive grammatical
15 See NYSE MKT Rule 902NY(i)(5); NYSE Arca
Rule 6.2(h)(5).
16 NYSE MKT Rule 902NY and NYSE Arca Rule
6.2(h) utilize the phrase ‘‘cellular and cordless.’’
The Exchange proposes to instead use the more
modern synonym, ‘‘wireless.’’
E:\FR\FM\10APN1.SGM
10APN1
Federal Register / Vol. 82, No. 67 / Monday, April 10, 2017 / Notices
asabaliauskas on DSK3SPTVN1PROD with NOTICES
change to replace the word ‘‘which’’
with ‘‘that’’ before the word ‘‘permits.’’
• Third, the Exchange would change
the reference to ‘‘portable’’ phones to
‘‘cellular or wireless’’ in the second
sentence of subparagraph (a). The
Exchange also proposes non-substantive
changes at the end of the second
sentence to replace a capital ‘‘S’’ with a
lower case ‘‘s’’ in the word ‘‘See’’ and
to delete the word ‘‘for’’ following the
word ‘‘See’’ before ‘‘e.g.,’’
• Finally, in the last sentence of
subparagraph (a), the Exchange would
replace the word ‘‘portable’’ with
‘‘cellular or wireless.’’ The Exchange
would also replace the phrase
‘‘authorized and issued by’’ with
‘‘registered with’’ before ‘‘the Exchange’’
and add the clause ‘‘as provided in .21
of this Rule’’ after ‘‘the Exchange’’ and
before ‘‘is prohibited.’’
To continue to enable the Exchange to
regulate and control equipment and
communications on the Floor, the
Exchange proposes the following
amendments to Rules 36.21 and 36.23,
which are modeled on the rules of the
Exchange’s affiliates. The proposed rule
changes would set forth the conditions
under which Floor brokers would be
permitted to use their own cellular or
wireless telephones on the Floor.
• First, the Exchange proposes to
replace ‘‘an Exchange authorized and
provided portable’’ in the heading to
Rule 36.21 with ‘‘a cellular or wireless’’
before ‘‘phone.’’
• Second, the Exchange proposes a
new subparagraph (a) to Rule 36.21
requiring Floor brokers to register, prior
to use, any cellular or wireless
telephone proposed to be used on the
Floor by submitting a request in writing
to the Exchange in a format acceptable
to the Exchange.17 Proposed Rule
36.21(a) would further require that Floor
brokers attest at the time of registration
that they are aware of and understand
the rules governing the use of
telephones on the Floor.18 Finally,
17 The Exchange does not propose to specify in
the Rule that an email or other writing be sent to
a specific Exchange department. Rather, the
Exchange will specify where the email should be
sent in regulatory guidance that the Exchange
would issue following approval of this rule filing.
The guidance would also specify that the
registration email identify the telephone number of
the phone being registered.
18 A proposed attestation is attached as Exhibit
5A. The Exchange previously developed an
acknowledgement for Floor brokers to sign
providing specified terms of usage in connection
with the use of Exchange authorized and issued
portable phones that was filed with the
Commission. See Release No. 58068, 73 FR at
39363, n. 10. The proposed attestation requirements
would supersede and replace the previously filed
acknowledgment form. Similarly, the Exchange
filed regulatory guidance with the Commission
VerDate Sep<11>2014
20:02 Apr 07, 2017
Jkt 241001
separate from the registration and use of
telephones, under the proposed Rule, no
Floor broker may employ any
alternative communication device on
the Floor (other than telephones as
described in the proposed rule) without
prior Exchange approval. The Exchange
would thus retain the authority to
review and approve any alternative
communication device prior to use. The
requirements in proposed Rule 36.21(a)
are based on the requirements specified
in NYSE MKT Rule 902NY(i)(1) and
NYSE Arca Rule 6.2(h)(1), described
above. The language of proposed Rule
36.21(a) is different than the NYSE MKT
and NYSE Arca rules on which it is
based because of the inclusion of
conforming references to ‘‘Floor
brokers,’’ ‘‘cellular or wireless
telephone,’’ one reference to ‘‘devices’’
rather than ‘‘telephones,’’ and the use of
‘‘Floor’’ rather than ‘‘Trading Floor.’’
The proposed Rule also requires Floor
brokers and not Floor broker
‘‘representatives’’ to attest.19
• Third, current subparagraph (a) of
Rule 36.21 would become new
subparagraph (b) and the Exchange
would delete ‘‘an Exchange authorized
and provided portable’’ before ‘‘phone,’’
replace it with ‘‘a cellular or wireless,’’
and add the phrase ‘‘on the Floor’’ after
‘‘phone.’’ The Exchange would also
retain current subparts (i)–(iv) and
delete current subpart (v), which
prohibits the use of call-forwarding or
conference calling. These requirements
were added to Rule 36 in 2006.20 As
noted above, the rules of NYSE MKT
and NYSE Arca, both of which permit
non-exchange issued telephones to be
used on the options trading floors, do
not contain similar prohibitions on callforwarding or conference calling. The
Exchange believes that the current
prohibitions on use of call-forwarding or
conference calling are no longer
necessary and that it would be
consistent with the Act to eliminate
these prohibitions. First, the prohibition
on forwarding calls prevented Floor
brokers from forwarding calls placed to
an Exchange-issued device to a nonExchange issued device. Once Floor
brokers are able to use non-Exchange
regarding the use of portable phones on the Floor.
See id.; Member Education Bulletins 2005–20
(November 28, 2005) and 2005–23 (December 2,
2005). This filing would supersede that guidance,
and the Exchange would issue appropriate
regulatory guidance prior to the effective date of
this rule filing.
19 See NYSE MKT Rule 902NY(i)(1) and NYSE
Arca Rule 6.2(h)(1) (imposing the attestation
requirement on ‘‘ATP Holder representatives’’ and
‘‘OTP Holder and OTP Firm representatives’’).
20 See Securities Exchange Act Release No. 53213
(Feb. 2, 2006), 71 FR 7103 (Feb. 10, 2006) (SR–
NYSE–2005–80).
PO 00000
Frm 00132
Fmt 4703
Sfmt 4703
17309
issued telephones, the rationale for the
prohibition would no longer apply.
Moreover, the Exchange believes that, if
this feature were used to forward calls
from one registered cell phone to
another registered cell phone on the
Floor, both phones would
independently be subject to the
obligations of proposed Rule 36 and
therefore subject to Exchange
jurisdiction. To the extent such calls are
forwarded to a telephone that is not
located on the Floor, Rule 36 would not
apply to a telephone that was not
physically present on the Floor. With
respect to the call conferencing feature,
current Rule 36.21 does not restrict with
whom a Floor broker may communicate
when using a portable phone at the
point of sale. Moreover, if this feature
were used, any records of such calls
would be captured pursuant to
paragraph (d) of Rule 36.21 below and
would be available to the Exchange
upon request.
• Fourth, current subparagraph (b)
would become proposed subparagraph
(c).21 The Exchange would also replace
the word ‘‘portable’’ in proposed
subparagraph (c) with ‘‘cellular or
wireless.’’
• Fifth, the Exchange proposes a new
subparagraph (d) of Rule 36.21
providing that Floor brokers must
maintain records of the use of
telephones and all other approved
communication devices, including logs
of calls placed, for a period of not less
than three years, the first two years in
an accessible place, and that the
Exchange reserves the right to
periodically inspect such records.
Proposed new subparagraph (d) is based
on NYSE MKT Rule 902NY(i)(5) and
NYSE Arca Rule 6.2(h)(5). Proposed
Rule 36.21(d) is different than the NYSE
MKT and NYSE Arca rules on which it
is based because of the inclusion of
conforming references to ‘‘Floor
brokers.’’ The last sentence of the
proposed Rule also provides that the
Exchange reserves the right to
periodically inspect records pursuant to
Rule 8210, which governs provision of
information and testimony and
inspection and copying of books, and is
analogous to NYSE MKT Rule 31 and
NYSE Arca Rule 10.2.
• Sixth, the Exchange proposes a new
subparagraph (e) that provides the
21 Rule 36.21(b) provides that Floor brokers and
their member organizations must implement
procedures designed to deter anyone calling their
portable phone from using caller ID block or other
means to conceal the phone number from which a
call is being made. Members and member
organizations are required to make and retain
records demonstrating compliance with such
procedures.
E:\FR\FM\10APN1.SGM
10APN1
17310
Federal Register / Vol. 82, No. 67 / Monday, April 10, 2017 / Notices
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Exchange with the ability to deny, limit
or revoke registration of any device used
on the Floor whenever it determines, in
accordance with the procedures set
forth in Rule 9558,22 that use of such a
device is inconsistent with the public
interest, the protection of investors, or
just and equitable principles of trade, or
such device has been or is being used
to facilitate any violation of the Act, as
amended, the rules thereunder, or the
Exchange’s rules. Proposed Rule
36.21(e) is based on NYSE MKT Rule
902NY(i)(6) and NYSE Arca Rule
6.2(h)(6). Proposed Rule 36.21(e) is
different than the NYSE MKT and NYSE
Arca rules on which it is based because
of the inclusion of conforming
references to ‘‘device’’ rather than
‘‘telephone’’ and ‘‘Floor’’ rather than
‘‘Trading Floor.’’ The proposed Rule
also omits the reference to Rule 475 in
NYSE MKT Rule 902NY(i)(6) and the
reference to NYSE Arca Rule 10.14 in
NYSE Arca Rule 6.2(h)(6). NYSE Rule
475 has been superseded by NYSE Rule
9558, which is referenced in the
proposed Rule. Rule 9558 is also the
closest Exchange analogue to NYSE
Arca Rule 10.14.
• Seventh, the Exchange would adopt
a new subparagraph (f) providing that
the Exchange assumes no liability to
Floor brokers due to conflicts between
phones in use on the Floor or due to
electronic interference problems
resulting from the use of telephones on
the Floor. Proposed Rule 36.21(f) is
based on NYSE MKT Rule 902NY(i)(7)
and NYSE Arca Rule 6.2(h)(7) and,
except for conforming references to
‘‘Floor brokers’’ and ‘‘Floor’’ rather than
‘‘Trading Floor,’’ is identical to the
NYSE MKT and NYSE Arca Rules.23
• Finally, the Exchange would
replace three references to ‘‘personal
portable’’ with ‘‘cellular’’ in current
Rule 36.23.
The proposed changes to Rule 36,
with the exception of current Rule
36.23, would not apply to Designated
Market Makers, who would continue to
be subject to Rules 36.30 and 36.31.
22 Rule 9558 relates to summary proceedings for
actions authorized by Section 6(d)(3) of the Act.
23 The Exchange notes that proposed Rule 36.21(f)
is similar to the rules of other exchanges that seek
to limit or cap liability for losses arising from the
use of an exchange’s facilities, systems, or
equipment. See, e.g., Nasdaq Rule 4626 (Limitation
of Liability); NYSE Arca Rules 2.8 (No Liability for
Using Exchange Facilities) and 14.2 (Liability of
Exchange); NYSE Arca Equities Rule 2.7 (No
Liability for Using Trading Facilities) and 13.2
(Liability of Corporation). See generally NYSE Rule
17 (Use of Exchange Facilities and Vendor Services)
and 18 (Compensation in Relation to Exchange
Failure).
VerDate Sep<11>2014
20:02 Apr 07, 2017
Jkt 241001
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,24 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,25 in particular, in that it is
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,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system.
In particular, the Exchange believes
that permitting Floor brokers to use any
cellular or wireless telephone properly
registered with the Exchange on the
Floor and eliminating the requirement
that Floor brokers only use Exchangeapproved and provided portable phones
are designed to prevent fraudulent and
manipulative acts and practices and
would be consistent with the public
interest and the protection of investors
because of the numerous safeguards
surrounding the use of non-Exchange
issued devices also proposed for
inclusion in Rule 36. The proposed
safeguards would include:
• Requiring Floor brokers to register
personal communication devices prior
to use;
• attesting at the time of registration
that they are aware of and understand
the rules governing the use of
telephones on the Floor;
• prohibiting employment of
alternative communication devices on
the Floor without prior Exchange
approval;
• requiring Floor brokers to maintain
records of the use of telephones and all
other approved alternative
communication devices, including logs
of calls placed, for a period of not less
than three years, the first two years in
an accessible place, for inspection by
the Exchange at any time; and
• empowering the Exchange to deny,
limit or revoke registration of any device
used on the Floor whenever it
determines that use of such a device is
inconsistent with the public interest, the
protection of investors, or just and
equitable principles of trade, or such
device.
The Exchange believes that these
proposed safeguards, modeled on the
rules of the Exchange’s affiliates,
establish an appropriate regulatory
framework for supervising and
monitoring use of communication
24 15
25 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00133
Fmt 4703
Sfmt 4703
devices on the Exchange’s trading Floor
consistent with the objectives of Section
6(b)(5) of the Act.
The Exchange further believes that
deleting the current requirement in Rule
36 prohibiting the use of call-forwarding
or conference calling would be
consistent with the public interest and
the protection of investors because, as
noted above, such requirements are not
currently in place on the NYSE MKT
and NYSE Arca options trading floors.
As noted above, the rationale for the
prohibition was aimed at preventing
Floor brokers from forwarding calls to
non-Exchange issued phones and would
be moot if Floor brokers are only using
non-Exchange issued devices. If a call is
forwarded from a registered cellular or
wireless phone to another registered
telephone (wired or not) on the Floor,
the phone that received the calls would
separately be subject to the obligations
of proposed Rule 36 and therefore
subject to Exchange jurisdiction. If a call
is forwarded to a telephone located off
of the Floor, Rule 36 would not be
implicated because the person on the
phone would not be physically located
on the Floor. In addition, the Exchange
believes that if Floor brokers use
cellular or wireless telephones that
include call conferencing features, any
such use would be captured on the
records of use of such telephones that
Floor brokers would be required to
maintain pursuant to proposed
paragraph (d) of Rule 36.21.
The Exchange believes that including
a provision in proposed Rule 36.21
providing that the Exchange assumes no
liability to Floor brokers due to conflicts
between phones in use on the Floor or
due to electronic interference problems
resulting from the use of telephones on
the Floor removes impediments to and
perfects the mechanism of a free and
open market by adding transparency to
the Exchange’s rules regarding use of
personal telephone equipment on
Exchange premises.
The Exchange also believes that the
proposed amendments to Rule 36
support the mechanism of free and open
markets by continuing to provide a
means for increased communication by
Floor brokers to and from the Floor.
Finally, the Exchange believes that
replacing the outdated word ‘‘portable’’
with ‘‘cellular or wireless’’ in Rule 36.20
and .21 and replacing ‘‘personal
portable’’ with ‘‘cellular’’ in Rule 36.23
removes impediments to and perfects
the mechanism of a free and open
market by removing confusion that may
result from having obsolete and
outdated references in the Exchange’s
rulebook. Similarly, the Exchange
further believes that the proposal
E:\FR\FM\10APN1.SGM
10APN1
Federal Register / Vol. 82, No. 67 / Monday, April 10, 2017 / Notices
removes impediments to and perfects
the mechanism of a free and open
market by ensuring that persons subject
to the Exchange’s jurisdiction,
regulators, and the investing public can
more easily navigate and understand the
Exchange’s rulebook. The Exchange
believes that eliminating obsolete and
outdated references would be consistent
with the public interest and the
protection of investors because investors
will not be harmed and in fact would
benefit from increased transparency,
thereby reducing potential confusion.
Removing such obsolete and outdated
references will also further the goal of
transparency and add clarity to the
Exchange’s rules.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe that the
proposed rule change will impose any
burden on competition because the
proposed change relates to how Floor
brokers are permitted to communicate
on the Floor and proposes no change for
other market participants. In addition,
the Exchange does not believe that the
proposed changes will impose any
competitive burden because Floor
brokers will operate in the same manner
but with telephone equipment that is
not Exchange-issued.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were 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
VerDate Sep<11>2014
20:02 Apr 07, 2017
Jkt 241001
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
17311
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80372; File No. SR–OCC–
2017–003]
• 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–2017–07 on the subject line.
Options Clearing Corporation SelfRegulatory Organizations; the Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change Concerning
the Requirement for Clearing Members
To Participate in Default Management
Testing
Paper Comments
April 4, 2017.
• 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–2017–07. 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–2017–07, and should be
submitted on or before May 1, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 29,
2017, The Options Clearing Corporation
(‘‘OCC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II and III below; Items I and
II have been prepared by OCC. OCC
filed the proposed rule change pursuant
to Section 19(b)(3)(A)(iii) 3 of the Act
and Rule 19b–4(f)(6) 4 thereunder so that
the proposal was effective upon filing
with the Commission. The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.26
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–07048 Filed 4–7–17; 8:45 am]
BILLING CODE 8011–01–P
26 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00134
Fmt 4703
Sfmt 4703
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
This proposed rule change by OCC
codifies the requirement for Clearing
Members to participate in default
management testing.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission,
OCC 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 these statements
may be examined at the places specified
in Item IV below. OCC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements. All terms
with initial capitalization that are not
otherwise defined herein have the same
meaning as set forth in the OCC ByLaws and Rules.5
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
5 OCC’s By-Laws and Rules can be found on
OCC’s public Web site: https://optionsclearing.com/
about/publications/bylaws.jsp.
2 17
E:\FR\FM\10APN1.SGM
10APN1
]]>Agencies
[Federal Register Volume 82, Number 67 (Monday, April 10, 2017)]
[Notices]
[Pages 17306-17311]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-07048]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80374; File No. SR-NYSE-2017-07]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change Amending Rule 36 To Permit
Exchange Floor Brokers To Use Non-Exchange Provided Telephones on the
Floor
April 4, 2017.
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 31, 2017, New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') filed with the Securities and Exchange
[[Page 17307]]
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.
---------------------------------------------------------------------------
\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 Rule 36 to permit Exchange Floor
brokers to use non-Exchange provided telephones on the Floor of the
Exchange and make related changes modeled on rules of the Exchange's
affiliates NYSE MKT LLC and NYSE Arca, Inc., governing telephone use on
those markets' options trading floors. The proposed rule change is
available on the Exchange's Web site at www.nyse.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 36 (Communication Between
Exchange and Members' Offices) to permit Exchange Floor brokers to use
non-Exchange provided telephones on the Floor of the Exchange (the
``Floor'') \4\ and make related changes modeled on rules of the
Exchange's affiliates, NYSE MKT LLC (``NYSE MKT'') and NYSE Arca, Inc.
(``NYSE Arca''), governing telephone use on those markets' options
trading floors.
---------------------------------------------------------------------------
\4\ Rule 6 defines the Floor as the trading Floor of the
Exchange and the premises immediately adjacent thereto, such as the
various entrances and lobbies of the 11 Wall Street, 18 New Street,
8 Broad Street, 12 Broad Street and 18 Broad Street Buildings, and
also means the telephone facilities available in these locations.
---------------------------------------------------------------------------
Background
Overview of Rule 36 Requirements
Rule 36 governs the establishment of telephone or electronic
communications between the Floor and any other location, which requires
Exchange approval. Supplementary Material .20, .21 and .23 to Rule 36
outline the conditions under which Floor brokers are permitted to use
Exchange authorized and provided portable telephones with the approval
of the Exchange. These provisions of Rule 36 were originally
implemented as a six-month pilot in 2003,\5\ which pilots were extended
and then made permanent in 2008.\6\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 47671 (April 11,
2003), 68 FR 19048 (April 17, 2003) (SR-NYSE-2002-11); Securities
Exchange Act Release No. 47992 (June 5, 2003), 68 FR 35047 (June 11,
2003) (SR-NYSE-2003-19).
\6\ See Securities Exchange Act Release No. 58068 (June 30,
2008), 73 FR 39363 (July 9, 2008) (SR-NYSE-2008-20) (``Release No.
58068'').
---------------------------------------------------------------------------
Pursuant to Rule 36.20(a), with Exchange approval, Floor brokers
may maintain a telephone line or use Exchange authorized and provided
portable phones, which permit a non-member off the Floor to communicate
with a member or member organization on the Floor. Subject to the
exception contained in Rule 36.23, discussed below, Rule 36.20(a)
expressly prohibits the use of a portable telephone on the Floor other
than one authorized and issued by the Exchange.
The use of Exchange authorized and issued portable phones is
governed by Rule 36.21, which provides that when using an Exchange
authorized and provided portable phone, a Floor broker:
(i) May engage in direct voice communications from the point of
sale on the Floor to an off-Floor location;
(ii) may provide status and oral execution reports as to orders
previously received, as well as ``market look'' observations as
historically have been routinely transmitted from a broker's booth
location;
(iii) must comply with Exchange Rule 123(e);
(iv) must comply with all other rules, policies, and procedures of
both the Exchange and the federal securities law, including the record
retention requirements, as set forth in Exchange Rule 440 and SEC Rules
17a-3 and 17a-4; \7\ and
---------------------------------------------------------------------------
\7\ See 17 CFR 240.17a-3; 17 CFR 240.17a-4.
---------------------------------------------------------------------------
(v) may not use call-forwarding or conference calling. Exchange
authorized and provided portable phones used by Floor brokers shall not
have these capabilities.
Rule 36.21(b) further provides that Floor brokers and their member
organizations must implement procedures designed to deter anyone
calling their portable phones from using caller ID block or other means
to conceal the phone number from which a call is being made. Members
and member organizations are required to make and retain records
demonstrating compliance with such procedures.
Rule 36.23 provides that, notwithstanding any other provision of
Rule 36, members and employees of member organizations may use personal
portable communications devices outside the Trading Floor \8\
consistent with Exchange Rules and the federal securities laws and the
rules thereunder, and are prohibited from using personal portable or
wireless communications devices while on the NYSE Amex Options Trading
Floor.\9\ The Rule further provides that those members and employees of
member organizations that are also registered to trade options on NYSE
Amex are permitted to use personal portable or wireless communication
devices while on the NYSE Amex Options Trading Floor \10\ in accordance
with applicable NYSE Amex Options rules and regulations.
---------------------------------------------------------------------------
\8\ Rule 6A defines the Trading Floor as the restricted-access
physical areas designated by the Exchange for the trading of
securities, commonly known as the Main Room and the Buttonwood Room
but does not include 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 the physical area within fully
enclosed telephone booths located in 18 Broad Street at the
Southeast wall of the Trading Floor.
\9\ See Rule 6A(b)(i) & notes 10-11, infra.
\10\ Rule 6A(b) defines ``NYSE Amex Options Trading Floor'' as
the areas in the Buttonwood Room designated by the Exchange where
NYSE Amex-listed options are traded. See note 8, supra.
---------------------------------------------------------------------------
Rules Governing Telephones on the NYSE MKT and NYSE Arca Options
Trading Floors
The Exchange's affiliates, NYSE MKT and NYSE Arca, operate physical
options trading floors in New York and San Francisco, respectively.\11\
NYSE MKT Rule 902NY (Admission and Conduct on the Options Trading
Floor), governing phone use on the NYSE Amex Options Trading Floor, was
adopted in 2009 and modeled on NYSE Arca Rule 6.2(h) (Admission to and
Conduct on the Options Trading Floor).\12\ Both exchanges allow Floor-
based permit holders and their employees to use personal phones on
[[Page 17308]]
the options trading floors subject to the same types of restrictions
proposed for the Exchange. Neither NYSE MKT nor NYSE Arca provides
exchange-issued and approved telephones for use on the options trading
floors.
---------------------------------------------------------------------------
\11\ NYSE MKT operates the NYSE Amex Options Trading Floor in
New York, while NYSE Arca Options operates an options trading floor
in San Francisco.
\12\ See Securities Exchange Act Release No. 59939 (May 19,
2009), 74 FR 25779 (May 29, 2009) (SR-NYSEAmex-2009-17).
---------------------------------------------------------------------------
Specifically, NYSE MKT Rule 902NY(i)(1) and NYSE Arca Rule
6.2(h)(1) require permit holders to register, prior to use, any new
telephones to be used on the options trading floor by sending a
registered email to the Operations Department, which includes the
number of the telephone being registered.\13\ Similarly, both rules
require trading permit holder representatives to attest at the time of
registration that they are aware of and understand the rules governing
the use of telephones on the options trading floor. NYSE MKT Rule
902NY(i)(1) and NYSE Arca Rule 6.2(h)(1) provide that no trading permit
holder or employee thereof may employ any alternative communication
device (other than telephones as described herein) on the trading floor
without prior approval of the respective exchange.\14\
---------------------------------------------------------------------------
\13\ On the NYSE Amex Options market, a permit holder is known
as an ``Amex Trading Permit Holder'' or ``ATP Holder,'' which is
defined in NYSE MKT Rule 900.2NY(5) as a natural person, sole
proprietorship, partnership, corporation, limited liability company
or other organization, in good standing, that has been issued an
ATP. See also Rule 900.2NY(4) (defining ``ATP'' as a permit issued
by NYSE MKT for effecting securities transactions on the Exchange's
Trading Facilities, defined in Rule 900.2NY(81) as, among places,
NYSE MKT's facilities for the trading of options 11 Wall Street, New
York, NY). An ATP Holder must be registered as a broker or dealer.
Similarly, on the NYSE Arca options market, permit holders are OTP
Holders or OTP Firms, which are defined in NYSE Arca Rules 1.1(q)
and (r), respectively.
\14\ The Exchange does not propose to include the requirements
of NYSE MKT Rule 902NY(i)(2) (Functionality) and NYSE Arca Rule
6.2(h)(2) (Functionality) or NYSE MKT Rule 902NY(i)(3) (Requirements
and Conditions) and NYSE Arca Rule 6.2(h)(3) (Requirements and
Conditions) in its Rule 36.
NYSE MKT Rule 902NY(i)(2) and NYSE Arca Rule 6.2(h)(2) prohibit
maintenance of an open line of continuous communication whereby a
person not located in the trading crowd may continuously monitor the
activities in the trading crowd, and covers intercoms, walkie-
talkies and any similar devices. Similarly, NYSE MKT Rule
902NY(i)(3)(A) and NYSE Arca Rule 6.2(h)(3)(A) provide that only
quotations that have been publicly disseminated may be provided over
telephones in trading areas. In today's largely automated trading
environment on the Exchange, where pricing decisions have moved away
from market participants on the Trading Floor and there is greater
availability to all market participants of real-time trade and quote
information, importing these requirements into Rule 36 would serve
no purpose. The traditional trading ``crowd'' at the DMM post has
virtually disappeared, and along with it much of the informational
imbalance that existed prior to the implementation of Regulation
NMS. The Exchange also believes that these requirements would be
incompatible with current Rule 36, which explicitly permits Floor
brokers to engage in direct voice communication from the point of
sale on the Floor to an off-Floor location and, more importantly,
provide status and oral execution reports as to orders previously
received, as well as ``market look'' observations as historically
have been routinely transmitted from a broker's booth location.
Further, NYSE MKT Rule 902NY(i)(3)(B) and NYSE Arca Rule
6.2(h)(3)(B) require telephone orders to be entered directly to the
trading zone (NYSE MKT) or trading post (NYSE Arca) only during
outgoing telephone calls that are initiated from the trading crowd
(NYSE MKT) or option posts (NYSE Arca), and that all such orders be
immediately recorded in the Electronic Order Capture System (EOC).
For the same reasons noted above, the Exchange believes that
importing these requirements into Rule 36 would serve no purpose.
Moreover, comparable Exchange system entry requirements to those in
NYSE MKT Rule 902NY(i)(3)(B) and NYSE Arca Rule 6.2(h)(3)(B) are set
forth in Rule 123(e).
NYSE MKT Rule 902NY(i)(3)(C) and NYSE Arca Rule 6.2(h)(3)(C)
provide that the relevant exchange may require the taping of any
telephone line into the trading zone (NYSE MKT) or trading post
(NYSE Arca) or may require permit holders to provide for the tape
recording of a dedicated line in the trading zone or trading post at
any time. NYSE MKT Rule 902NY(i)(3)(C) and NYSE Arca Rule
6.2(h)(3)(C), however, relates to the taping of land lines, not
cellular or wireless phones. Accordingly, the Exchange does not
propose to include this requirement in Rule 36.
Finally, the Exchange does not propose to include the
requirements found in NYSE MKT Rule 902NY(i)(4)(B) and (C) and NYSE
Arca Rule 6.2(h)(4)(B) and (C) in its Rule 36. NYSE MKT Rule
902NY(i)(4)(B) and NYSE Arca Rule 6.2(h)(4)(B) provide that Floor
brokers and permit holders may receive orders over their phones
subject to the provisions of NYSE MKT Rule 902NY(i)(3)(B) and NYSE
Arca Rule 6.2(h)(3)(B), respectively, and that telephonic orders
entered from off the Trading Floor must be placed with a person
located in an ATP Holder booth. Similarly, NYSE MKT Rule
902NY(i)(4)(C) and NYSE Arca Rule 6.2(h)(4)(C) provide that Floor
brokers receiving orders from a permit holder representative on the
Trading Floor may immediately represent that order in the trading
crowd provided that such orders are immediately recorded in EOC. As
noted, current Rule 36 already contemplates that Floor brokers can
accept orders via telephone consistent with NYSE rules, including
the requirement in NYSE Rule 123(e) to first record order details in
an electronic system on the Floor before representing or executing
the order.
---------------------------------------------------------------------------
Further, NYSE MKT Rule 902NY(i)(4)(A) and NYSE Arca Rule
6.2(h)(4)(A) provide that permit holders and employees of permit
holders may use their own cellular and wireless phones to place calls
to any person at any location (whether on or off the trading floor).
Neither exchange prohibits or restricts the use of conference call or
call forwarding features by permit holders and their employees when
using personal cellular and wireless phones on the trading floor.
NYSE MKT Rule 902NY(i)(5) and NYSE Arca Rule 6.2(h)(5) also provide
that permit holders must maintain records of the use of telephones and
all other approved alternative communication devices, including logs of
calls placed, for a period of not less than three years, the first two
years in an accessible place. Both exchanges reserve the right to
inspect such records pursuant to NYSE MKT Rule 31 and NYSE Arca Rule
10.2, respectively.\15\
---------------------------------------------------------------------------
\15\ See NYSE MKT Rule 902NY(i)(5); NYSE Arca Rule 6.2(h)(5).
---------------------------------------------------------------------------
NYSE MKT Rule 902NY(i)(6) and NYSE Arca Rule 6.2(h)(6) provide that
each exchange may deny, limit or revoke the registration of any
telephone used on the trading floor whenever it determines that use of
such device is inconsistent with the public interest, the protection of
investors, or just and equitable principles of trade, or such device
has been or is being used to facilitate any violation of the Act, as
amended, or rules thereunder, or the rules of the respective exchange.
Finally, NYSE MKT Rule 902NY(i)(7) and NYSE Arca Rule 6.2(h)(7)
provide that the respective exchanges assume no liability to permit
holders due to conflicts between phones in use on the options trading
floor or due to electronic interference problems resulting from the use
of telephones on the trading floor.
Proposed Rule Change
The Exchange proposes to amend Rule 36 to permit Floor brokers to
use any cellular or wireless telephone properly registered with the
Exchange on the Floor, thereby eliminating the requirement that Floor
brokers only use Exchange-approved and provided portable phones. The
proposed changes are based on the rules of NYSE MKT and NYSE Arca
governing use of cellular phones on the options trading floors of those
exchanges and include proposed safeguards surrounding the use of non-
Exchange issued devices modeled on the rules of those Exchange
affiliates.
To effect these changes, the Exchange proposes the following
amendments to Rule 36.20(a):
First, the requirement for prior Exchange approval to
utilize cellular or wireless telephones on the Floor would remain
unchanged and would be strengthened by the Exchange's proposal to add
the phrase ``and subject to the registration requirements set forth in
Supplementary Material .21'' in the first sentence of subparagraph (a).
Second, the Exchange proposes to delete the phrase ``an
Exchange authorized and provided portable'' before the word
``telephone'' in the first sentence of subparagraph (a) and replace it
with the term ``a cellular or wireless.'' \16\ The Exchange also
proposes a non-substantive grammatical
[[Page 17309]]
change to replace the word ``which'' with ``that'' before the word
``permits.''
---------------------------------------------------------------------------
\16\ NYSE MKT Rule 902NY and NYSE Arca Rule 6.2(h) utilize the
phrase ``cellular and cordless.'' The Exchange proposes to instead
use the more modern synonym, ``wireless.''
---------------------------------------------------------------------------
Third, the Exchange would change the reference to
``portable'' phones to ``cellular or wireless'' in the second sentence
of subparagraph (a). The Exchange also proposes non-substantive changes
at the end of the second sentence to replace a capital ``S'' with a
lower case ``s'' in the word ``See'' and to delete the word ``for''
following the word ``See'' before ``e.g.,''
Finally, in the last sentence of subparagraph (a), the
Exchange would replace the word ``portable'' with ``cellular or
wireless.'' The Exchange would also replace the phrase ``authorized and
issued by'' with ``registered with'' before ``the Exchange'' and add
the clause ``as provided in .21 of this Rule'' after ``the Exchange''
and before ``is prohibited.''
To continue to enable the Exchange to regulate and control
equipment and communications on the Floor, the Exchange proposes the
following amendments to Rules 36.21 and 36.23, which are modeled on the
rules of the Exchange's affiliates. The proposed rule changes would set
forth the conditions under which Floor brokers would be permitted to
use their own cellular or wireless telephones on the Floor.
First, the Exchange proposes to replace ``an Exchange
authorized and provided portable'' in the heading to Rule 36.21 with
``a cellular or wireless'' before ``phone.''
Second, the Exchange proposes a new subparagraph (a) to
Rule 36.21 requiring Floor brokers to register, prior to use, any
cellular or wireless telephone proposed to be used on the Floor by
submitting a request in writing to the Exchange in a format acceptable
to the Exchange.\17\ Proposed Rule 36.21(a) would further require that
Floor brokers attest at the time of registration that they are aware of
and understand the rules governing the use of telephones on the
Floor.\18\ Finally, separate from the registration and use of
telephones, under the proposed Rule, no Floor broker may employ any
alternative communication device on the Floor (other than telephones as
described in the proposed rule) without prior Exchange approval. The
Exchange would thus retain the authority to review and approve any
alternative communication device prior to use. The requirements in
proposed Rule 36.21(a) are based on the requirements specified in NYSE
MKT Rule 902NY(i)(1) and NYSE Arca Rule 6.2(h)(1), described above. The
language of proposed Rule 36.21(a) is different than the NYSE MKT and
NYSE Arca rules on which it is based because of the inclusion of
conforming references to ``Floor brokers,'' ``cellular or wireless
telephone,'' one reference to ``devices'' rather than ``telephones,''
and the use of ``Floor'' rather than ``Trading Floor.'' The proposed
Rule also requires Floor brokers and not Floor broker
``representatives'' to attest.\19\
---------------------------------------------------------------------------
\17\ The Exchange does not propose to specify in the Rule that
an email or other writing be sent to a specific Exchange department.
Rather, the Exchange will specify where the email should be sent in
regulatory guidance that the Exchange would issue following approval
of this rule filing. The guidance would also specify that the
registration email identify the telephone number of the phone being
registered.
\18\ A proposed attestation is attached as Exhibit 5A. The
Exchange previously developed an acknowledgement for Floor brokers
to sign providing specified terms of usage in connection with the
use of Exchange authorized and issued portable phones that was filed
with the Commission. See Release No. 58068, 73 FR at 39363, n. 10.
The proposed attestation requirements would supersede and replace
the previously filed acknowledgment form. Similarly, the Exchange
filed regulatory guidance with the Commission regarding the use of
portable phones on the Floor. See id.; Member Education Bulletins
2005-20 (November 28, 2005) and 2005-23 (December 2, 2005). This
filing would supersede that guidance, and the Exchange would issue
appropriate regulatory guidance prior to the effective date of this
rule filing.
\19\ See NYSE MKT Rule 902NY(i)(1) and NYSE Arca Rule 6.2(h)(1)
(imposing the attestation requirement on ``ATP Holder
representatives'' and ``OTP Holder and OTP Firm representatives'').
---------------------------------------------------------------------------
Third, current subparagraph (a) of Rule 36.21 would become
new subparagraph (b) and the Exchange would delete ``an Exchange
authorized and provided portable'' before ``phone,'' replace it with
``a cellular or wireless,'' and add the phrase ``on the Floor'' after
``phone.'' The Exchange would also retain current subparts (i)-(iv) and
delete current subpart (v), which prohibits the use of call-forwarding
or conference calling. These requirements were added to Rule 36 in
2006.\20\ As noted above, the rules of NYSE MKT and NYSE Arca, both of
which permit non-exchange issued telephones to be used on the options
trading floors, do not contain similar prohibitions on call-forwarding
or conference calling. The Exchange believes that the current
prohibitions on use of call-forwarding or conference calling are no
longer necessary and that it would be consistent with the Act to
eliminate these prohibitions. First, the prohibition on forwarding
calls prevented Floor brokers from forwarding calls placed to an
Exchange-issued device to a non-Exchange issued device. Once Floor
brokers are able to use non-Exchange issued telephones, the rationale
for the prohibition would no longer apply. Moreover, the Exchange
believes that, if this feature were used to forward calls from one
registered cell phone to another registered cell phone on the Floor,
both phones would independently be subject to the obligations of
proposed Rule 36 and therefore subject to Exchange jurisdiction. To the
extent such calls are forwarded to a telephone that is not located on
the Floor, Rule 36 would not apply to a telephone that was not
physically present on the Floor. With respect to the call conferencing
feature, current Rule 36.21 does not restrict with whom a Floor broker
may communicate when using a portable phone at the point of sale.
Moreover, if this feature were used, any records of such calls would be
captured pursuant to paragraph (d) of Rule 36.21 below and would be
available to the Exchange upon request.
---------------------------------------------------------------------------
\20\ See Securities Exchange Act Release No. 53213 (Feb. 2,
2006), 71 FR 7103 (Feb. 10, 2006) (SR-NYSE-2005-80).
---------------------------------------------------------------------------
Fourth, current subparagraph (b) would become proposed
subparagraph (c).\21\ The Exchange would also replace the word
``portable'' in proposed subparagraph (c) with ``cellular or
wireless.''
---------------------------------------------------------------------------
\21\ Rule 36.21(b) provides that Floor brokers and their member
organizations must implement procedures designed to deter anyone
calling their portable phone from using caller ID block or other
means to conceal the phone number from which a call is being made.
Members and member organizations are required to make and retain
records demonstrating compliance with such procedures.
---------------------------------------------------------------------------
Fifth, the Exchange proposes a new subparagraph (d) of
Rule 36.21 providing that Floor brokers must maintain records of the
use of telephones and all other approved communication devices,
including logs of calls placed, for a period of not less than three
years, the first two years in an accessible place, and that the
Exchange reserves the right to periodically inspect such records.
Proposed new subparagraph (d) is based on NYSE MKT Rule 902NY(i)(5) and
NYSE Arca Rule 6.2(h)(5). Proposed Rule 36.21(d) is different than the
NYSE MKT and NYSE Arca rules on which it is based because of the
inclusion of conforming references to ``Floor brokers.'' The last
sentence of the proposed Rule also provides that the Exchange reserves
the right to periodically inspect records pursuant to Rule 8210, which
governs provision of information and testimony and inspection and
copying of books, and is analogous to NYSE MKT Rule 31 and NYSE Arca
Rule 10.2.
Sixth, the Exchange proposes a new subparagraph (e) that
provides the
[[Page 17310]]
Exchange with the ability to deny, limit or revoke registration of any
device used on the Floor whenever it determines, in accordance with the
procedures set forth in Rule 9558,\22\ that use of such a device is
inconsistent with the public interest, the protection of investors, or
just and equitable principles of trade, or such device has been or is
being used to facilitate any violation of the Act, as amended, the
rules thereunder, or the Exchange's rules. Proposed Rule 36.21(e) is
based on NYSE MKT Rule 902NY(i)(6) and NYSE Arca Rule 6.2(h)(6).
Proposed Rule 36.21(e) is different than the NYSE MKT and NYSE Arca
rules on which it is based because of the inclusion of conforming
references to ``device'' rather than ``telephone'' and ``Floor'' rather
than ``Trading Floor.'' The proposed Rule also omits the reference to
Rule 475 in NYSE MKT Rule 902NY(i)(6) and the reference to NYSE Arca
Rule 10.14 in NYSE Arca Rule 6.2(h)(6). NYSE Rule 475 has been
superseded by NYSE Rule 9558, which is referenced in the proposed Rule.
Rule 9558 is also the closest Exchange analogue to NYSE Arca Rule
10.14.
---------------------------------------------------------------------------
\22\ Rule 9558 relates to summary proceedings for actions
authorized by Section 6(d)(3) of the Act.
---------------------------------------------------------------------------
Seventh, the Exchange would adopt a new subparagraph (f)
providing that the Exchange assumes no liability to Floor brokers due
to conflicts between phones in use on the Floor or due to electronic
interference problems resulting from the use of telephones on the
Floor. Proposed Rule 36.21(f) is based on NYSE MKT Rule 902NY(i)(7) and
NYSE Arca Rule 6.2(h)(7) and, except for conforming references to
``Floor brokers'' and ``Floor'' rather than ``Trading Floor,'' is
identical to the NYSE MKT and NYSE Arca Rules.\23\
---------------------------------------------------------------------------
\23\ The Exchange notes that proposed Rule 36.21(f) is similar
to the rules of other exchanges that seek to limit or cap liability
for losses arising from the use of an exchange's facilities,
systems, or equipment. See, e.g., Nasdaq Rule 4626 (Limitation of
Liability); NYSE Arca Rules 2.8 (No Liability for Using Exchange
Facilities) and 14.2 (Liability of Exchange); NYSE Arca Equities
Rule 2.7 (No Liability for Using Trading Facilities) and 13.2
(Liability of Corporation). See generally NYSE Rule 17 (Use of
Exchange Facilities and Vendor Services) and 18 (Compensation in
Relation to Exchange Failure).
---------------------------------------------------------------------------
Finally, the Exchange would replace three references to
``personal portable'' with ``cellular'' in current Rule 36.23.
The proposed changes to Rule 36, with the exception of current Rule
36.23, would not apply to Designated Market Makers, who would continue
to be subject to Rules 36.30 and 36.31.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\24\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\25\ in particular, in that it
is 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, and to remove impediments to and perfect
the mechanism of a free and open market and a national market system.
---------------------------------------------------------------------------
\24\ 15 U.S.C. 78f(b).
\25\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
In particular, the Exchange believes that permitting Floor brokers
to use any cellular or wireless telephone properly registered with the
Exchange on the Floor and eliminating the requirement that Floor
brokers only use Exchange-approved and provided portable phones are
designed to prevent fraudulent and manipulative acts and practices and
would be consistent with the public interest and the protection of
investors because of the numerous safeguards surrounding the use of
non-Exchange issued devices also proposed for inclusion in Rule 36. The
proposed safeguards would include:
Requiring Floor brokers to register personal communication
devices prior to use;
attesting at the time of registration that they are aware
of and understand the rules governing the use of telephones on the
Floor;
prohibiting employment of alternative communication
devices on the Floor without prior Exchange approval;
requiring Floor brokers to maintain records of the use of
telephones and all other approved alternative communication devices,
including logs of calls placed, for a period of not less than three
years, the first two years in an accessible place, for inspection by
the Exchange at any time; and
empowering the Exchange to deny, limit or revoke
registration of any device used on the Floor whenever it determines
that use of such a device is inconsistent with the public interest, the
protection of investors, or just and equitable principles of trade, or
such device.
The Exchange believes that these proposed safeguards, modeled on
the rules of the Exchange's affiliates, establish an appropriate
regulatory framework for supervising and monitoring use of
communication devices on the Exchange's trading Floor consistent with
the objectives of Section 6(b)(5) of the Act.
The Exchange further believes that deleting the current requirement
in Rule 36 prohibiting the use of call-forwarding or conference calling
would be consistent with the public interest and the protection of
investors because, as noted above, such requirements are not currently
in place on the NYSE MKT and NYSE Arca options trading floors. As noted
above, the rationale for the prohibition was aimed at preventing Floor
brokers from forwarding calls to non-Exchange issued phones and would
be moot if Floor brokers are only using non-Exchange issued devices. If
a call is forwarded from a registered cellular or wireless phone to
another registered telephone (wired or not) on the Floor, the phone
that received the calls would separately be subject to the obligations
of proposed Rule 36 and therefore subject to Exchange jurisdiction. If
a call is forwarded to a telephone located off of the Floor, Rule 36
would not be implicated because the person on the phone would not be
physically located on the Floor. In addition, the Exchange believes
that if Floor brokers use cellular or wireless telephones that include
call conferencing features, any such use would be captured on the
records of use of such telephones that Floor brokers would be required
to maintain pursuant to proposed paragraph (d) of Rule 36.21.
The Exchange believes that including a provision in proposed Rule
36.21 providing that the Exchange assumes no liability to Floor brokers
due to conflicts between phones in use on the Floor or due to
electronic interference problems resulting from the use of telephones
on the Floor removes impediments to and perfects the mechanism of a
free and open market by adding transparency to the Exchange's rules
regarding use of personal telephone equipment on Exchange premises.
The Exchange also believes that the proposed amendments to Rule 36
support the mechanism of free and open markets by continuing to provide
a means for increased communication by Floor brokers to and from the
Floor.
Finally, the Exchange believes that replacing the outdated word
``portable'' with ``cellular or wireless'' in Rule 36.20 and .21 and
replacing ``personal portable'' with ``cellular'' in Rule 36.23 removes
impediments to and perfects the mechanism of a free and open market by
removing confusion that may result from having obsolete and outdated
references in the Exchange's rulebook. Similarly, the Exchange further
believes that the proposal
[[Page 17311]]
removes impediments to and perfects the mechanism of a free and open
market by ensuring that persons subject to the Exchange's jurisdiction,
regulators, and the investing public can more easily navigate and
understand the Exchange's rulebook. The Exchange believes that
eliminating obsolete and outdated references would be consistent with
the public interest and the protection of investors because investors
will not be harmed and in fact would benefit from increased
transparency, thereby reducing potential confusion. Removing such
obsolete and outdated references will also further the goal of
transparency and add clarity to the Exchange's rules.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe that the proposed rule change will impose any burden on
competition because the proposed change relates to how Floor brokers
are permitted to communicate on the Floor and proposes no change for
other market participants. In addition, the Exchange does not believe
that the proposed changes will impose any competitive burden because
Floor brokers will operate in the same manner but with telephone
equipment that is not Exchange-issued.
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-NYSE-2017-07 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-2017-07. 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-2017-07, and should
be submitted on or before May 1, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
---------------------------------------------------------------------------
\26\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-07048 Filed 4-7-17; 8:45 am]
BILLING CODE 8011-01-P
