Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 13, 19850-19853 [2018-09441]

Download as PDF 19850 Federal Register / Vol. 83, No. 87 / Friday, May 4, 2018 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing 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 for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and Rule 19b– 4(f)(6) thereunder.9 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 10 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 11 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposed rule change may become operative upon filing. Waiver of the operative delay would allow the Exchange to prevent MPPOs and Midpoint Pegged Orders from participating in the Nasdaq Halt Cross without delay. The Commission also notes that the proposal would ensure that MPPOs and Midpoint Pegged Orders do not participate in any cross (i.e., Nasdaq Opening Cross, Nasdaq Halt Cross, and Nasdaq Closing Cross). According to the Exchange, MPPOs and Midpoint Pegged Orders are designed for regular trading on the Exchange’s continuous market, and the proposal would ensure that these orders behave in a manner consistent with members’ expectations. Moreover, waiver of the operative delay would allow the Exchange to immediately correct its rules to reflect that Open Eligible Interest and Close Eligible Interest (i.e., interest that is available to execute in the crosses if remaining on the book at the time of the cross price calculation) are included in tie-breakers for the Nasdaq Opening Cross and Nasdaq Closing Cross price calculations, respectively, thus reducing any potential member confusion surrounding the cross price calculations. The Commission believes that waiver of the 30-day operative 8 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). As required under Rule 19b–4(f)(6)(iii), the Exchange provided 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. 10 17 CFR 240.19b–4(f)(6). 11 17 CFR 240.19b–4(f)(6)(iii). amozie on DSK3GDR082PROD with NOTICES 9 17 VerDate Sep<11>2014 18:16 May 03, 2018 Jkt 244001 delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposed rule change operative upon filing.12 At any time within 60 days of the filing of the 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 to determine whether the proposed rule change should be approved or disapproved. available for website 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NASDAQ–2018–031 and should be submitted on or before May 25, 2018. 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Eduardo A. Aleman, Assistant Secretary. 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– NASDAQ–2018–031 on the subject line. SECURITIES AND EXCHANGE COMMISSION 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–NASDAQ–2018–031. 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 website (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 12 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). PO 00000 Frm 00171 Fmt 4703 Sfmt 4703 [FR Doc. 2018–09448 Filed 5–3–18; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–83134; File No. SR–NYSE– 2018–17] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 13 April 30, 2018. 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 April 20, 2018, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the preamble to Rule 13 to provide that the definition of ‘‘retail’’ in subsection (f)(2) be applicable to trading of UTP 13 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\04MYN1.SGM 04MYN1 Federal Register / Vol. 83, No. 87 / Friday, May 4, 2018 / Notices Securities on Pillar trading platform. The proposed rule change is available on the Exchange’s website 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 amozie on DSK3GDR082PROD with NOTICES 1. Purpose On April 9, 2018, the Exchange introduced trading of UTP Securities on the Exchange on the Pillar trading platform.4 As described in the UTP Trading Rules Filing, for each current Exchange rule that is not applicable for trading on the Pillar trading platform, the Exchange added a preamble to such rule providing that ‘‘this rule is not applicable to trading UTP Securities on the Pillar trading platform.’’ Exchange rules governing equities trading that do not have this preamble currently govern Exchange operations on Pillar.5 The Exchange proposes to amend the preamble to Rule 13 to provide that the definition of ‘‘retail’’ modifier in subsection (f)(2) would be applicable to the trading of UTP Securities on the Pillar trading platform. Under Rule 13(f)(2)(A), an order designated with a ‘‘retail’’ modifier is an agency order or a riskless principal order that meets the criteria of FINRA Rule 5320.03 that originates from a natural person and is submitted to the Exchange by a member organization, provided that no change is made to the terms of the order with respect to price or side of market and the order does not 4 See Securities Exchange Act Release No.82945 (March 26, 2018), 83 FR 13553, 13555 (March 29, 2018) (SR–NYSE–2017–36) (the ‘‘UTP Trading Rules Filing’’). The term ‘‘UTP Security’’ means a security that is listed on a national securities exchange other than the Exchange and that trades on the Exchange pursuant to unlisted trading privileges. See Rule 1.1(ii). 5 See UTP Trading Rules Filing, 83 FR at 13554, n.17. VerDate Sep<11>2014 18:16 May 03, 2018 Jkt 244001 originate from a trading algorithm or any other computerized methodology. An order with a ‘‘retail’’ modifier is separate and distinct from a ‘‘Retail Order’’ under Rule 107C. Under subsection (C), to submit a ‘‘retail’’ order, a member organization must also submit an attestation, in a form prescribed by the Exchange, that substantially all orders submitted as ‘‘retail’’ will qualify as such. Finally, a member organization must have written policies and procedures reasonably designed to assure that it will only designate orders as ‘‘retail’’ if all requirements of paragraph (f)(4)(A) are met.6 The Exchange would determine if and when a member organization is disqualified from submitting ‘‘retail’’ orders and, when disqualification determinations are made, the Exchange would provide a written disqualification notice to the member organization.7 A disqualified member organization may (1) appeal such disqualification, and/or (B) resubmit the attestation described in Rule 13(f)(4)(C) 90 days after the date of the disqualification notice from the Exchange.8 The proposed applicability of the definition of ‘‘retail’’ modifier to the trading of UTP Securities on the Pillar trading platform would enable the Exchange to propose transaction pricing 6 Rule 13(f)(2)(D) provides that such written policies and procedures must require the member organization to (i) exercise due diligence before entering a ‘‘retail’’ order to assure that entry as a ‘‘retail’’ order is in compliance with the requirements of Rule 13(f)(4)(A), and (ii) monitor whether orders entered as ‘‘retail’’ orders meet the applicable requirements. If a member organization represents ‘‘retail’’ orders from another brokerdealer customer, the member organization’s supervisory procedures must be reasonably designed to assure that the orders it receives from such broker-dealer customer that it designates as ‘‘retail’’ orders meet the definition of a ‘‘retail’’ order in Rule 13(f)(4)(A). Further, the member organization must (i) obtain an annual written representation, in a form acceptable to the Exchange, from each broker-dealer customer that sends it orders to be designated as ‘‘retail’’ orders that entry of such orders as ‘‘retail’’ orders will be in compliance with the requirements of Rule 13(f)(4)(A); and (ii) monitor whether its brokerdealer customer’s ‘‘retail’’ order flow meets the applicable requirements. 7 See Rule 13(f)(4)(E). 8 If a member organization disputes the Exchange’s decision to disqualify it from submitting ‘‘retail’’ orders, the member organization may request, within five business days after notice of the decision is issued by the Exchange, that the ‘‘retail’’ order ‘‘Hearing Panel’’ review the decision to determine if it was correct. The Hearing Panel would consist of the NYSE’s Chief Regulatory Officer (‘‘CRO’’), or a designee of the CRO, and two officers of the Exchange designated by the Chief Executive Officer of ICE Group. The Hearing Panel would review the facts and render a decision within the time frame prescribed by the Exchange. The Hearing Panel may overturn or modify an action taken by the Exchange under this Rule. A determination by the Hearing Panel shall constitute final action by the Exchange. See Rule 13(f)(4)(F). PO 00000 Frm 00172 Fmt 4703 Sfmt 4703 19851 related to retail orders in UTP Securities that add liquidity to the Exchange, as is currently the case for orders designated as ‘‘retail’’ in Tape A securities.9 As is also the case with orders designated as ‘‘retail’’ in Tape A securities, member organizations not wishing to be eligible for the proposed pricing would be free to not designate orders in UTP Securities as ‘‘retail.’’ The Exchange believes providing member organizations with the ability to submit orders designated as ‘‘retail’’ in UTP Securities would incentivize the submission of additional retail order flow to a public market, to the benefit of the marketplace and all market participants. To effect this change, the Exchange proposes to amend the preamble to Rule 13 by adding the clause ‘‘With the exception of the definition of a ‘‘retail’’ modifier in Rule 13(f)(2)’’ immediately before the phrase ‘‘This Rule is not applicable to trading UTP Securities on the Pillar trading platform.’’ 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, promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest and because it is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange believes that the proposed rule change is consistent with these principles because it would increase competition among execution venues by enabling the Exchange to file a separate proposed rule change to establish fees and credits relating to orders in UTP Securities designated as ‘‘retail,’’ thereby encouraging the submission of retail order flow in UTP Securities to a public market. The Exchange believes that promoting submission of orders designated as ‘‘retail’’ in UTP Securities would attract additional retail order flow to a public market and that such a process would contribute to perfecting the mechanisms of a free and open market and a national market system. The Exchange further 9 See page 5 of the current Price List, available at https://www.nyse.com/publicdocs/nyse/markets/ nyse/NYSE_Price_List.pdf. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). E:\FR\FM\04MYN1.SGM 04MYN1 19852 Federal Register / Vol. 83, No. 87 / Friday, May 4, 2018 / Notices believes that promoting such orders in UTP Securities would not permit unfair discrimination between customers, issuers, brokers, or dealers because, as is currently the case for orders designated as ‘‘retail’’ in Tape A securities, promoting orders designated as ‘‘retail’’ in UTP Securities would promote a competitive process around retail executions and would result in greater transparency and competitiveness surrounding executions of retail flow.12 The Exchange believes that the proposed change is designed to prevent fraudulent and manipulative acts and practices and to promote just and equitable principles of trade because it would contribute to increasing the proportion of retail flow in UTP Securities that are executed on a registered national securities exchange and would protect investors and the public interest by contributing to investors’ confidence in the fairness of their transactions and because it would benefit all investors by deepening the Exchange’s liquidity pool, supporting the quality of price discovery, promoting market transparency and improving investor protection. For these reasons, the Exchange believes that the proposal is consistent with the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition amozie on DSK3GDR082PROD with NOTICES 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. Instead, the Exchange believes that the proposed change would increase competition among execution venues and encourage additional liquidity in UTP Securities. In this regard, the Exchange believes that the transparency and competitiveness of attracting additional executions on an exchange market would encourage competition. The proposal would also promote competition on the Exchange because the ability to designate an order as ‘‘retail’’ would be available to all member organizations that submit qualifying orders and satisfy the other related requirements. 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. 12 See Securities Exchange Act Release No.72253 (May 27, 2014), 79 FR 31353, 31355 (June 2, 2014) (SR–NYSE–2014–26) (Notice). VerDate Sep<11>2014 18:16 May 03, 2018 Jkt 244001 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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 for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 13 and Rule 19b– 4(f)(6) thereunder.14 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 15 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 16 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. According to the Exchange, waiver of the operative delay would allow the Exchange to implement, without undue delay, a process that is already in place for Tape A securities that would incentivize the submission of retail order flow in UTP securities to a public market to the benefit of the marketplace and all market participants. The Commission believes that the proposal raises no new or novel issues and that waiver of the operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the operative delay and designates the proposal operative upon filing.17 At any time within 60 days of the filing of the 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 13 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). As required under Rule 19b–4(f)(6)(iii), the Exchange provided 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. 15 17 CFR 240.19b–4(f)(6). 16 17 CFR 240.19b–4(f)(6)(iii). 17 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). 14 17 PO 00000 Frm 00173 Fmt 4703 Sfmt 4703 Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSE–2018–17 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–2018–17. 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 website (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 website 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSE–2018–17 and should be submitted on or before May 25, 2018. E:\FR\FM\04MYN1.SGM 04MYN1 Federal Register / Vol. 83, No. 87 / Friday, May 4, 2018 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–09441 Filed 5–3–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Advisers Act Release No. 4902/ 803–00239] 1112 Partners, LLC May 1, 2018. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice. amozie on DSK3GDR082PROD with NOTICES AGENCY: Cozen O’Connor, One Liberty Place, 1650 Market Street, Suite 2800, Philadelphia, PA 19103. FOR FURTHER INFORMATION CONTACT: James D. McGinnis, Senior Counsel, at (202) 551–3025 or Holly L. Hunter-Ceci, Assistant Chief Counsel, at (202) 551– 6825 (Division of Investment Management, Chief Counsel’s Office). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission’s website either at https://www.sec.gov/ rules/iareleases.shtml or by calling (202) 551–8090. Applicant’s Representations: 1. The Applicant is a recently-formed, multi-generational single-family office Notice of application for an exemptive that provides or intends to provide order under section 202(a)(11)(H) of the services to the family and descendants of William Render Ford. The Applicant Investment Advisers Act of 1940 is wholly-owned by Family Clients and (‘‘Advisers Act’’). is exclusively controlled (directly and Applicant: 1112 Partners, LLC (the indirectly) by one or more Family ‘‘Applicant’’). Members and/or Family Entities in Relevant Advisers Act Sections: compliance with Rule 202(a)(11)(G)–1 Exemption requested under section (the ‘‘Family Office Rule’’). For 202(a)(11)(H) of the Advisers Act from purposes of the application, the term section 202(a)(11) of the Advisers Act. ‘‘Ford Family’’ means the lineal Summary of Application: The Applicant requests that the Commission descendants of William Render Ford, issue an order declaring it to be a person their spouses or spousal equivalents, and all other persons and entities that not within the intent of Section qualify as ‘‘Family Clients’’ as defined 202(a)(11) of the Advisers Act, which in paragraph (d)(4) of the Family Office defines the term ‘‘investment adviser.’’ Filing Dates: The application was Rule. Unless otherwise indicated, filed on January 17, 2017, and amended capitalized terms herein have the same on May 8, 2017; September 15, 2017; meaning as defined in the Family Office and March 9, 2018. Rule. Hearing or Notification of Hearing: An 2. The Applicant provides both order granting the application will be advisory and non-advisory services issued unless the Commission orders a (collectively, ‘‘Services’’) to members of hearing. Interested persons may request the Ford Family. Any Service provided a hearing by writing to the by the Applicant that relates to Commission’s Secretary and serving the investment advice about securities or Applicant with a copy of the request, may otherwise be construed as advisory personally or by mail. Hearing requests in nature is considered an ‘‘Advisory should be received by the Commission Service.’’ by 5:30 p.m. on May 25, 2018, and 3. Prior to forming the Applicant, should be accompanied by proof of David B. Ford, Jr. was associated with service on the Applicant, in the form of a third-party registered investment an affidavit or, for lawyers, a certificate adviser (‘‘RIA’’) that for approximately of service. Pursuant to Rule 0–5 under eleven (11) years managed substantially the Advisers Act, hearing requests all of the advisory accounts of the Ford should state the nature of the writer’s Family managed or intended to be interest, any facts bearing upon the managed by the Applicant, and among desirability of a hearing on the matter, these accounts were accounts of the the reason for the request, and the issues Additional Family Clients (as defined contested. Persons may request below). Effective as of October 1, 2016, notification of a hearing by writing to David B. Ford, Jr.’s association with RIA the Commission’s Secretary. was terminated. Commencing October 1, 2016, the advisory accounts of the ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street NE, Family Clients managed by RIA were Washington, DC 20549. Applicant, 1112 transition to the Applicant. 4. The Applicant represents that: (i) Partners, LLC, c/o Ingrid R. Welch, Esq., Each of the persons served by the 18 17 CFR 200.30–3(a)(12). Applicant is a Family Client (i.e., the VerDate Sep<11>2014 18:16 May 03, 2018 Jkt 244001 PO 00000 Frm 00174 Fmt 4703 Sfmt 4703 19853 Applicant has no investment advisory clients other than Family Clients as required by paragraph (b)(1) of the Family Office Rule); (ii) the Applicant is owned and controlled in a manner that complies in all respects with paragraph (b)(2) of the Family Office Rule; and (iii) the Applicant does not hold itself out to the public as an investment adviser as required by paragraph (b)(3) of the Family Office Rule. At the time of the application, the Applicant represents that Family Members account for approximately 100% of the natural persons to whom the Applicant provides Advisory Services. 5. In addition to the Family Clients, the Applicant desires to provide Services (including Advisory Services) to the parents of a spouse of a lineal descendant of William Render Ford (‘‘Parents-in-Law’’), the brother of a spouse of a lineal descendant of William Render Ford and his spouse and children (‘‘Brother-in-Law’’) and retirement plan accounts of the Parentsin-Law or Brother-in-Law (collectively, the ‘‘Additional Family Clients’’). 6. The Additional Family Clients do not have an ownership interest in the Applicant. The Applicant represents that the assets beneficially owned by Family Members and/or Family Entities (excluding the Additional Family Clients) would make up at least 90% of the total assets for which the Applicant provides Advisory Services. 7. The Applicant represents that the Parents-in-Law and Brother-in-Law have important familial ties to and are an integral part of the Ford Family. The Applicant maintains that including the Additional Family Clients in the ‘‘family’’ simply recognizes and memorializes the familial ties and intrafamilial relationships that already exist, and have existed for fifteen (15) years and that the inclusion of the Additional Family Clients as members of the Ford Family for which the Applicant may provide Services would be consistent with the existing familial relationship among the family members. The Applicant’s Legal Analysis 1. Section 202(a)(11) of the Advisers Act defines the term ‘‘investment adviser’’ to mean ‘‘any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities. . . .’’ 2. The Applicant falls within the definition of an investment adviser E:\FR\FM\04MYN1.SGM 04MYN1

Agencies

[Federal Register Volume 83, Number 87 (Friday, May 4, 2018)]
[Notices]
[Pages 19850-19853]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-09441]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83134; File No. SR-NYSE-2018-17]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Rule 13

April 30, 2018.
    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 April 20, 2018, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II 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 the preamble to Rule 13 to provide 
that the definition of ``retail'' in subsection (f)(2) be applicable to 
trading of UTP

[[Page 19851]]

Securities on Pillar trading platform. The proposed rule change is 
available on the Exchange's website 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
    On April 9, 2018, the Exchange introduced trading of UTP Securities 
on the Exchange on the Pillar trading platform.\4\ As described in the 
UTP Trading Rules Filing, for each current Exchange rule that is not 
applicable for trading on the Pillar trading platform, the Exchange 
added a preamble to such rule providing that ``this rule is not 
applicable to trading UTP Securities on the Pillar trading platform.'' 
Exchange rules governing equities trading that do not have this 
preamble currently govern Exchange operations on Pillar.\5\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No.82945 (March 26, 
2018), 83 FR 13553, 13555 (March 29, 2018) (SR-NYSE-2017-36) (the 
``UTP Trading Rules Filing''). The term ``UTP Security'' means a 
security that is listed on a national securities exchange other than 
the Exchange and that trades on the Exchange pursuant to unlisted 
trading privileges. See Rule 1.1(ii).
    \5\ See UTP Trading Rules Filing, 83 FR at 13554, n.17.
---------------------------------------------------------------------------

    The Exchange proposes to amend the preamble to Rule 13 to provide 
that the definition of ``retail'' modifier in subsection (f)(2) would 
be applicable to the trading of UTP Securities on the Pillar trading 
platform.
    Under Rule 13(f)(2)(A), an order designated with a ``retail'' 
modifier is an agency order or a riskless principal order that meets 
the criteria of FINRA Rule 5320.03 that originates from a natural 
person and is submitted to the Exchange by a member organization, 
provided that no change is made to the terms of the order with respect 
to price or side of market and the order does not originate from a 
trading algorithm or any other computerized methodology. An order with 
a ``retail'' modifier is separate and distinct from a ``Retail Order'' 
under Rule 107C. Under subsection (C), to submit a ``retail'' order, a 
member organization must also submit an attestation, in a form 
prescribed by the Exchange, that substantially all orders submitted as 
``retail'' will qualify as such. Finally, a member organization must 
have written policies and procedures reasonably designed to assure that 
it will only designate orders as ``retail'' if all requirements of 
paragraph (f)(4)(A) are met.\6\ The Exchange would determine if and 
when a member organization is disqualified from submitting ``retail'' 
orders and, when disqualification determinations are made, the Exchange 
would provide a written disqualification notice to the member 
organization.\7\ A disqualified member organization may (1) appeal such 
disqualification, and/or (B) resubmit the attestation described in Rule 
13(f)(4)(C) 90 days after the date of the disqualification notice from 
the Exchange.\8\
---------------------------------------------------------------------------

    \6\ Rule 13(f)(2)(D) provides that such written policies and 
procedures must require the member organization to (i) exercise due 
diligence before entering a ``retail'' order to assure that entry as 
a ``retail'' order is in compliance with the requirements of Rule 
13(f)(4)(A), and (ii) monitor whether orders entered as ``retail'' 
orders meet the applicable requirements. If a member organization 
represents ``retail'' orders from another broker-dealer customer, 
the member organization's supervisory procedures must be reasonably 
designed to assure that the orders it receives from such broker-
dealer customer that it designates as ``retail'' orders meet the 
definition of a ``retail'' order in Rule 13(f)(4)(A). Further, the 
member organization must (i) obtain an annual written 
representation, in a form acceptable to the Exchange, from each 
broker-dealer customer that sends it orders to be designated as 
``retail'' orders that entry of such orders as ``retail'' orders 
will be in compliance with the requirements of Rule 13(f)(4)(A); and 
(ii) monitor whether its broker-dealer customer's ``retail'' order 
flow meets the applicable requirements.
    \7\ See Rule 13(f)(4)(E).
    \8\ If a member organization disputes the Exchange's decision to 
disqualify it from submitting ``retail'' orders, the member 
organization may request, within five business days after notice of 
the decision is issued by the Exchange, that the ``retail'' order 
``Hearing Panel'' review the decision to determine if it was 
correct. The Hearing Panel would consist of the NYSE's Chief 
Regulatory Officer (``CRO''), or a designee of the CRO, and two 
officers of the Exchange designated by the Chief Executive Officer 
of ICE Group. The Hearing Panel would review the facts and render a 
decision within the time frame prescribed by the Exchange. The 
Hearing Panel may overturn or modify an action taken by the Exchange 
under this Rule. A determination by the Hearing Panel shall 
constitute final action by the Exchange. See Rule 13(f)(4)(F).
---------------------------------------------------------------------------

    The proposed applicability of the definition of ``retail'' modifier 
to the trading of UTP Securities on the Pillar trading platform would 
enable the Exchange to propose transaction pricing related to retail 
orders in UTP Securities that add liquidity to the Exchange, as is 
currently the case for orders designated as ``retail'' in Tape A 
securities.\9\ As is also the case with orders designated as ``retail'' 
in Tape A securities, member organizations not wishing to be eligible 
for the proposed pricing would be free to not designate orders in UTP 
Securities as ``retail.'' The Exchange believes providing member 
organizations with the ability to submit orders designated as 
``retail'' in UTP Securities would incentivize the submission of 
additional retail order flow to a public market, to the benefit of the 
marketplace and all market participants.
---------------------------------------------------------------------------

    \9\ See page 5 of the current Price List, available at https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf.
---------------------------------------------------------------------------

    To effect this change, the Exchange proposes to amend the preamble 
to Rule 13 by adding the clause ``With the exception of the definition 
of a ``retail'' modifier in Rule 13(f)(2)'' immediately before the 
phrase ``This Rule is not applicable to trading UTP Securities on the 
Pillar trading platform.''
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, 
promote just and equitable principles of trade, remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system, and protect investors and the public interest and 
because it is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is consistent 
with these principles because it would increase competition among 
execution venues by enabling the Exchange to file a separate proposed 
rule change to establish fees and credits relating to orders in UTP 
Securities designated as ``retail,'' thereby encouraging the submission 
of retail order flow in UTP Securities to a public market. The Exchange 
believes that promoting submission of orders designated as ``retail'' 
in UTP Securities would attract additional retail order flow to a 
public market and that such a process would contribute to perfecting 
the mechanisms of a free and open market and a national market system. 
The Exchange further

[[Page 19852]]

believes that promoting such orders in UTP Securities would not permit 
unfair discrimination between customers, issuers, brokers, or dealers 
because, as is currently the case for orders designated as ``retail'' 
in Tape A securities, promoting orders designated as ``retail'' in UTP 
Securities would promote a competitive process around retail executions 
and would result in greater transparency and competitiveness 
surrounding executions of retail flow.\12\
---------------------------------------------------------------------------

    \12\ See Securities Exchange Act Release No.72253 (May 27, 
2014), 79 FR 31353, 31355 (June 2, 2014) (SR-NYSE-2014-26) (Notice).
---------------------------------------------------------------------------

    The Exchange believes that the proposed change is designed to 
prevent fraudulent and manipulative acts and practices and to promote 
just and equitable principles of trade because it would contribute to 
increasing the proportion of retail flow in UTP Securities that are 
executed on a registered national securities exchange and would protect 
investors and the public interest by contributing to investors' 
confidence in the fairness of their transactions and because it would 
benefit all investors by deepening the Exchange's liquidity pool, 
supporting the quality of price discovery, promoting market 
transparency and improving investor protection.
    For these reasons, the Exchange believes that the proposal is 
consistent with the Act.

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. Instead, the Exchange 
believes that the proposed change would increase competition among 
execution venues and encourage additional liquidity in UTP Securities. 
In this regard, the Exchange believes that the transparency and 
competitiveness of attracting additional executions on an exchange 
market would encourage competition. The proposal would also promote 
competition on the Exchange because the ability to designate an order 
as ``retail'' would be available to all member organizations that 
submit qualifying orders and satisfy the other related requirements.

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

    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 for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(6) thereunder.\14\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided 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.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \15\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \16\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. According to 
the Exchange, waiver of the operative delay would allow the Exchange to 
implement, without undue delay, a process that is already in place for 
Tape A securities that would incentivize the submission of retail order 
flow in UTP securities to a public market to the benefit of the 
marketplace and all market participants. The Commission believes that 
the proposal raises no new or novel issues and that waiver of the 
operative delay is consistent with the protection of investors and the 
public interest. Therefore, the Commission hereby waives the operative 
delay and designates the proposal operative upon filing.\17\
---------------------------------------------------------------------------

    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ 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).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the 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 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 [email protected]. Please include 
File Number SR-NYSE-2018-17 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-2018-17. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSE-2018-17 and should be submitted on 
or before May 25, 2018.


[[Page 19853]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
---------------------------------------------------------------------------

    \18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-09441 Filed 5-3-18; 8:45 am]
 BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.