Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Exchange's Authority To Grant Exemptions From the OATS Requirements, 27736-27738 [2017-12454]
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27736
Federal Register / Vol. 82, No. 115 / Friday, June 16, 2017 / Notices
sradovich on DSK3GMQ082PROD with NOTICES
dividends because shareholders of
different classes would pay different
fees and expenses.
3. Section 18(i) of the Act provides
that each share of stock issued by a
registered management investment
company will be a voting stock and
have equal voting rights with every
other outstanding voting stock.
Applicants state that permitting
multiple classes of Shares of the Fund
may violate section 18(i) of the Act
because each class would be entitled to
exclusive voting rights with respect to
matters solely related to that class.
4. Section 6(c) of the Act provides that
the Commission may exempt any
person, security or transaction or any
class or classes of persons, securities or
transactions from any provision of the
Act, or from any rule or regulation
under the Act, if and to the extent such
exemption is necessary or appropriate
in the public interest and consistent
with the protection of investors and the
purposes fairly intended by the policy
and provisions of the Act. Applicants
request an exemption under section 6(c)
from sections 18(a)(2), 18(c) and 18(i) to
permit the Fund to issue multiple
classes of Shares.
5. Applicants submit that the
proposed allocation of expenses relating
to distribution and voting rights among
multiple classes is equitable and will
not discriminate against any group or
class of shareholders. Applicants submit
that the proposed arrangements would
permit the Fund to facilitate the
distribution of its Shares and provide
investors with a broader choice of
shareholder options. Applicants assert
that the proposed closed-end
investment company multiple class
structure does not raise the concerns
underlying section 18 of the Act to any
greater degree than open-end
investment companies’ multiple class
structures that are permitted by rule
18f–3 under the Act. Applicants state
that the Fund will comply with the
provisions of rule 18f–3 as if it were an
open-end investment company.
Asset-Based Service and/or Distribution
Fees
1. Section 17(d) of the Act and rule
17d–1 under the Act prohibit an
affiliated person of a registered
investment company or an affiliated
person of such person, acting as
principal, from participating in or
effecting any transaction in connection
with any joint enterprise or joint
arrangement in which the investment
company participates unless the
Commission issues an order permitting
the transaction. In reviewing
applications submitted under section
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17(d) and rule 17d–1, the Commission
considers whether the participation of
the investment company in a joint
enterprise or joint arrangement is
consistent with the provisions, policies
and purposes of the Act, and the extent
to which the participation is on a basis
different from or less advantageous than
that of other participants.
2. Rule 17d–3 under the Act provides
an exemption from section 17(d) and
rule 17d–1 to permit open-end
investment companies to enter into
distribution arrangements pursuant to
rule 12b–1 under the Act. Applicants
request an order under section 17(d) and
rule 17d–1 under the Act to permit the
Fund to impose asset-based service and/
or distribution fees. Applicants have
agreed to comply with rules 12b–1 and
17d–3 as if those rules applied to
closed-end investment companies,
which they believe will resolve any
concerns that might arise in connection
with a Fund financing the distribution
of its shares through asset-based service
and/or distribution fees.
3. For the reasons stated above,
applicants submit that the exemptions
requested under section 6(c) are
necessary and appropriate in the public
interest and are consistent with the
protection of investors and the purposes
fairly intended by the policy and
provisions of the Act. Applicants further
submit that the Funds’ imposition of
asset-based service and/or distribution
fees is consistent with the provisions,
policies and purposes of the Act and
does not involve participation on a basis
different from or less advantageous than
that of other participants.
Applicants’ Condition
The Fund agrees that any order
granting the requested relief will be
subject to the following condition:
Applicants will comply with the
provisions of rules 6c–10, 12b–1, 17d–
3, 18f–3, 22d–1, and where applicable,
11a–3 under the Act, as amended from
time to time or replaced, as if those
rules applied to closed-end management
investment companies, and will comply
with FINRA Rule 2341, as amended
from time to time, as if that rule applied
to all closed-end management
investment companies.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–12548 Filed 6–15–17; 8:45 am]
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[Release No. 34–80902; File No. SR–
NYSEMKT–2017–35]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the
Exchange’s Authority To Grant
Exemptions From the OATS
Requirements
June 12, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 2,
2017, NYSE MKT LLC (the ‘‘Exchange’’
or ‘‘NYSE MKT’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 7470—Equities (Exemption to the
Order Recording and Data Transmission
Requirements) to extend until
November 15, 2019 the ability to exempt
certain members from the recording and
order data transmission requirements of
Rules 7440—Equities and 7450—
Equities, respectively, for manual
orders. 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.
1 15
2 17
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U.S.C. 78s(b)(1).
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Federal Register / Vol. 82, No. 115 / Friday, June 16, 2017 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange’s Rule 7400 Series
consists of Rules 7410—Equities
through 7470—Equities and sets forth
the recording and reporting
requirements of the Order Audit Trail
System (‘‘OATS’’) Rules. The OATS
Rules require all Exchange member
organizations and associated persons to
record in electronic form and report to
the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’), on a daily
basis, certain information with respect
to orders originated, received,
transmitted, modified, canceled, or
executed by members in all NMS stocks,
as that term is defined in Rule
600(b)(47) of Regulation NMS,3 traded
on the Exchange. This information is
used by FINRA staff to conduct
surveillance and investigations of
member firms for violations of FINRA
rules and federal securities laws. Rule
7470—Equities provide the Exchange
with the authority to exempt certain
members from the recording and
reporting requirements and from the
recording and order data transmission
requirements of Rules 7440—Equities
and 7450—Equities, respectively, for
manual orders, if such exemption is
consistent with the protection of
investors and the public interest, and
the member organization meets the
criteria set forth in paragraph (a) of the
Rule.4
Rule 7470—Equities contains a sunset
provision, which was July 10, 2015. In
June 2015, FINRA filed a proposed rule
change to extend the sunset provision
until July 10, 2019.5 The Exchange
proposes to amend Rule 7470 to extend
the provision until November 15, 2019.
The proposed change would correct an
oversight in not filing when the sunset
provision [sic] in 2015.
3 17
CFR 242.600(b)(47).
criteria are as follows: (1) The member
organization and current control affiliates and
associated persons have not been subject within the
last five years to any final disciplinary action, and
within the last ten years to any disciplinary action
involving fraud; (2) the member organization has
annual revenues of less than $2 million; (3) the
member organization does not conduct any market
making activities in NMS stocks; (4) the member
organization does not execute principal transactions
with its customers (with limited exception for
principal transactions executed pursuant to error
corrections); and (5) the member organization does
not conduct clearing or carrying activities for other
firms.
5 See Securities Exchange Act Release No. 75160
(June 11, 2015), 80 FR 34727 (June 17, 2015) (SR–
FINRA–2015–016).
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4 The
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The Exchange believes it would be
appropriate to extend the sunset
provision in Rule 7470—Equities to
November 15, 2019 rather than the July
10, 2019 date in the FINRA Rule. At the
time FINRA filed its proposed rule
change, the National Market System
Plan Governing the Consolidated Audit
Trail (the ‘‘CAT NMS Plan’’) 6 had not
been approved by the Commission. The
CAT NMS Plan was approved by the
Commission, as modified, on November
15, 2016.7 On March 21, 2017, the
Commission approved the Exchange’s
new Rule 6800 Series to implement
provisions of the CAT NMS Plan that
are applicable to Exchange member
organizations.8 Rule 6895(c)(2) requires
each Industry Member that is a Small
Industry Member to record and report
the Industry Member Data to the Central
Repository by November 15, 2019.
The Exchange believes that extending
the sunset provision in Rule 7470 to the
same date that all Small Industry
Members must report to the CAT is
appropriate and would permit such
firms relying on the exemption to
continue to do so provided they meet
the criteria to qualify until that time.
The Exchange is not proposing any
substantive changes to the criteria
necessary for firms to qualify for an
exemption and notes that all of those
member organizations currently
reporting to OATS or relying on an
exemption from OATS reporting will be
reporting to the CAT by November 15,
2019.9
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,10 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,11 in particular, because 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,
6 Unless otherwise specified, capitalized terms
used in this rule filing are defined as set forth
herein or in the CAT NMS Plan.
7 Securities Exchange Act Release No. 79318
(November 15, 2016), 81 FR 84696 (November 23,
2016) (Order Approving the National Market
System Plan Governing the Consolidated Audit
Trail).
8 See Securities Exchange Act Release No. 80256
(March 15, 2017), 82 FR 14526 (March 21, 2017)
(SR–NYSEMKT–2017–02) (Order Approving
Proposed Rule Changes to Adopt Consolidated
Audit Trail Compliance Rules).
9 Rule 6895(c)(1) requires each Industry Member
(other than a Small Industry Member) to record and
report the Industry Member Data to the Central
Repository by November 15, 2018.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
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27737
and 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.
In particular, the Exchange believes
that amending Rule 7470—Equities to
extend until November 15, 2019 the
ability to exempt certain members from
the recording and order data
transmission requirements of Rules
7440—Equities and 7450—Equities,
respectively, for manual orders, is
consistent with Section 6(b)(5) of the
Act 12 because it would enable the
Exchange to exempt manual orders
received by certain small firms from the
OATS Rules and avoid imposing
potentially unnecessary expense or
hardship on those firms that qualify for
the exemption as they transition to
reporting order information to the CAT
Central Repository. As noted, the
proposed sunset provision is the same
date that all Small Industry Members
must report to the CAT. Further, the
Exchange is not proposing any
substantive changes to the criteria
necessary for firms to qualify for an
exemption, which will continue to
ensure that only those firms with
limited revenue, no recent final
disciplinary actions, and limited
business models will remain eligible for
the exemption. The Exchange
accordingly believes that the proposed
rule change is consistent with the
protection of investors and the public
interest.
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
proposed change is not designed to
address any competitive issue but
rather, as noted above, would enable the
Exchange to exempt manual orders
received by certain small firms from the
OATS reporting requirements through
November 15, 2019, the same date that
all Small Industry Members must report
to the CAT, and thereby avoid imposing
potentially unnecessary expense or
hardship on those firms that qualify for
the exemption as they transition to
reporting order information to the CAT
Central Repository.
12 15
E:\FR\FM\16JNN1.SGM
U.S.C. 78f(b)(5).
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27738
Federal Register / Vol. 82, No. 115 / Friday, June 16, 2017 / 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
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 13 and Rule
19b–4(f)(6) thereunder.14 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.15
The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposed
rule change will become operative
immediately upon filing. In support of
its request, the Exchange stated that
waiver of the operative delay would
continue to enable the Exchange to grant
small firms exemptions from the OATS
requirements as those firms are
preparing to report information to the
CAT Central Repository, thereby
avoiding potentially unnecessary
expense or hardship on firms that
qualify for the exemption.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest. Absent
such action, a small firm that otherwise
would qualify for an exemption would
have to comply with the Exchange
requirements to record and report
manual orders to OATS because the
Exchange would not have the authority
to grant an exemption during the 30-day
pre-operative period. The Commission
agrees with the Exchange that waiving
the 30-day operative delay would enable
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13 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
15 In addition, Rule 19b–4(f)(6)(iii) requires the
Exchange to provide the Commission with written
notice of its intent to file the proposed rule change,
along with a brief description and the text of the
proposed rule change, at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has complied with this
requirement.
14 17
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the Exchange, in appropriate cases, to
prevent unnecessary expense being
imposed on small firms. Therefore, the
Commission hereby waives the
operative delay and designates the
proposed rule change operative upon
filing.16
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) of the Act 17 to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEMKT–2017–35 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEMKT–2017–35. 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
16 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
17 15 U.S.C. 78s(b)(2)(B).
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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–2017–35 and should be
submitted on or before July 7, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–12454 Filed 6–15–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE., Washington, DC
20549–2736
Extension:
Rule 15c2–11; SEC File No. 270–196, OMB
Control No. 3235–0202
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.) (‘‘PRA’’), the
Securities and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
Rule 15c2–11, (17 CFR 240.15c2–11),
under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.) (‘‘Exchange
Act’’).
Rule 15c2–11 under the Exchange Act
regulates the initiation or resumption of
quotations in a quotation medium by a
broker-dealer for over-the-counter
(‘‘OTC’’) securities. The Rule was
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with the distribution and trading of
unregistered securities issued by shell
18 17
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CFR 200.30–3(a)(12).
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]]>Agencies
[Federal Register Volume 82, Number 115 (Friday, June 16, 2017)]
[Notices]
[Pages 27736-27738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-12454]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80902; File No. SR-NYSEMKT-2017-35]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change To Extend the
Exchange's Authority To Grant Exemptions From the OATS Requirements
June 12, 2017.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 2, 2017, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'')
filed with the Securities and Exchange Commission (the ``Commission'')
the proposed rule change as described in Items I and II below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 7470--Equities (Exemption to
the Order Recording and Data Transmission Requirements) to extend until
November 15, 2019 the ability to exempt certain members from the
recording and order data transmission requirements of Rules 7440--
Equities and 7450--Equities, respectively, for manual orders. 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.
[[Page 27737]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange's Rule 7400 Series consists of Rules 7410--Equities
through 7470--Equities and sets forth the recording and reporting
requirements of the Order Audit Trail System (``OATS'') Rules. The OATS
Rules require all Exchange member organizations and associated persons
to record in electronic form and report to the Financial Industry
Regulatory Authority, Inc. (``FINRA''), on a daily basis, certain
information with respect to orders originated, received, transmitted,
modified, canceled, or executed by members in all NMS stocks, as that
term is defined in Rule 600(b)(47) of Regulation NMS,\3\ traded on the
Exchange. This information is used by FINRA staff to conduct
surveillance and investigations of member firms for violations of FINRA
rules and federal securities laws. Rule 7470--Equities provide the
Exchange with the authority to exempt certain members from the
recording and reporting requirements and from the recording and order
data transmission requirements of Rules 7440--Equities and 7450--
Equities, respectively, for manual orders, if such exemption is
consistent with the protection of investors and the public interest,
and the member organization meets the criteria set forth in paragraph
(a) of the Rule.\4\
---------------------------------------------------------------------------
\3\ 17 CFR 242.600(b)(47).
\4\ The criteria are as follows: (1) The member organization and
current control affiliates and associated persons have not been
subject within the last five years to any final disciplinary action,
and within the last ten years to any disciplinary action involving
fraud; (2) the member organization has annual revenues of less than
$2 million; (3) the member organization does not conduct any market
making activities in NMS stocks; (4) the member organization does
not execute principal transactions with its customers (with limited
exception for principal transactions executed pursuant to error
corrections); and (5) the member organization does not conduct
clearing or carrying activities for other firms.
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Rule 7470--Equities contains a sunset provision, which was July 10,
2015. In June 2015, FINRA filed a proposed rule change to extend the
sunset provision until July 10, 2019.\5\ The Exchange proposes to amend
Rule 7470 to extend the provision until November 15, 2019. The proposed
change would correct an oversight in not filing when the sunset
provision [sic] in 2015.
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\5\ See Securities Exchange Act Release No. 75160 (June 11,
2015), 80 FR 34727 (June 17, 2015) (SR-FINRA-2015-016).
---------------------------------------------------------------------------
The Exchange believes it would be appropriate to extend the sunset
provision in Rule 7470--Equities to November 15, 2019 rather than the
July 10, 2019 date in the FINRA Rule. At the time FINRA filed its
proposed rule change, the National Market System Plan Governing the
Consolidated Audit Trail (the ``CAT NMS Plan'') \6\ had not been
approved by the Commission. The CAT NMS Plan was approved by the
Commission, as modified, on November 15, 2016.\7\ On March 21, 2017,
the Commission approved the Exchange's new Rule 6800 Series to
implement provisions of the CAT NMS Plan that are applicable to
Exchange member organizations.\8\ Rule 6895(c)(2) requires each
Industry Member that is a Small Industry Member to record and report
the Industry Member Data to the Central Repository by November 15,
2019.
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\6\ Unless otherwise specified, capitalized terms used in this
rule filing are defined as set forth herein or in the CAT NMS Plan.
\7\ Securities Exchange Act Release No. 79318 (November 15,
2016), 81 FR 84696 (November 23, 2016) (Order Approving the National
Market System Plan Governing the Consolidated Audit Trail).
\8\ See Securities Exchange Act Release No. 80256 (March 15,
2017), 82 FR 14526 (March 21, 2017) (SR-NYSEMKT-2017-02) (Order
Approving Proposed Rule Changes to Adopt Consolidated Audit Trail
Compliance Rules).
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The Exchange believes that extending the sunset provision in Rule
7470 to the same date that all Small Industry Members must report to
the CAT is appropriate and would permit such firms relying on the
exemption to continue to do so provided they meet the criteria to
qualify until that time. The Exchange is not proposing any substantive
changes to the criteria necessary for firms to qualify for an exemption
and notes that all of those member organizations currently reporting to
OATS or relying on an exemption from OATS reporting will be reporting
to the CAT by November 15, 2019.\9\
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\9\ Rule 6895(c)(1) requires each Industry Member (other than a
Small Industry Member) to record and report the Industry Member Data
to the Central Repository by November 15, 2018.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\10\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\11\ in particular, because 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,
and, in general to protect investors and the public interest.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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In particular, the Exchange believes that amending Rule 7470--
Equities to extend until November 15, 2019 the ability to exempt
certain members from the recording and order data transmission
requirements of Rules 7440--Equities and 7450--Equities, respectively,
for manual orders, is consistent with Section 6(b)(5) of the Act \12\
because it would enable the Exchange to exempt manual orders received
by certain small firms from the OATS Rules and avoid imposing
potentially unnecessary expense or hardship on those firms that qualify
for the exemption as they transition to reporting order information to
the CAT Central Repository. As noted, the proposed sunset provision is
the same date that all Small Industry Members must report to the CAT.
Further, the Exchange is not proposing any substantive changes to the
criteria necessary for firms to qualify for an exemption, which will
continue to ensure that only those firms with limited revenue, no
recent final disciplinary actions, and limited business models will
remain eligible for the exemption. The Exchange accordingly believes
that the proposed rule change is consistent with the protection of
investors and the public interest.
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\12\ 15 U.S.C. 78f(b)(5).
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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 proposed change is not
designed to address any competitive issue but rather, as noted above,
would enable the Exchange to exempt manual orders received by certain
small firms from the OATS reporting requirements through November 15,
2019, the same date that all Small Industry Members must report to the
CAT, and thereby avoid imposing potentially unnecessary expense or
hardship on those firms that qualify for the exemption as they
transition to reporting order information to the CAT Central
Repository.
[[Page 27738]]
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \13\ and Rule 19b-4(f)(6) thereunder.\14\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.\15\
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 240.19b-4(f)(6).
\15\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to
provide the Commission with written notice of its intent to file the
proposed rule change, along with a brief description and the text of
the proposed rule change, at least five business days prior to the
date of filing of the proposed rule change, or such shorter time as
designated by the Commission. The Exchange has complied with this
requirement.
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The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposed rule change will become operative
immediately upon filing. In support of its request, the Exchange stated
that waiver of the operative delay would continue to enable the
Exchange to grant small firms exemptions from the OATS requirements as
those firms are preparing to report information to the CAT Central
Repository, thereby avoiding potentially unnecessary expense or
hardship on firms that qualify for the exemption.
The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
Absent such action, a small firm that otherwise would qualify for an
exemption would have to comply with the Exchange requirements to record
and report manual orders to OATS because the Exchange would not have
the authority to grant an exemption during the 30-day pre-operative
period. The Commission agrees with the Exchange that waiving the 30-day
operative delay would enable the Exchange, in appropriate cases, to
prevent unnecessary expense being imposed on small firms. Therefore,
the Commission hereby waives the operative delay and designates the
proposed rule change operative upon filing.\16\
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\16\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) of the Act \17\ to determine whether the proposed
rule change should be approved or disapproved.
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\17\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEMKT-2017-35 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEMKT-2017-35. 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-2017-35 and should
be submitted on or before July 7, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
Eduardo A. Aleman,
Assistant Secretary.
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\18\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2017-12454 Filed 6-15-17; 8:45 am]
BILLING CODE 8011-01-P
