80 FR 37695 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Members' Schedule as Defined in the Amended and Restated Limited Liability Company Agreement of NYSE Amex Options LLC Dated as of May 14, 2014 in Order to Reflect Changes to the Capital Structure of the Company
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 126 (July 1, 2015)
Federal Register Volume 80, Issue 126 (July 1, 2015)
| Page Range | 37695-37698 | |
| FR Document | 2015-16089 |
[Federal Register Volume 80, Number 126 (Wednesday, July 1, 2015)] [Notices] [Pages 37695-37698] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-16089] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75301; File No. SR-NYSEMKT-2015-44] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Members' Schedule as Defined in the Amended and Restated Limited Liability Company Agreement of NYSE Amex Options LLC Dated as of May 14, 2014 in Order to Reflect Changes to the Capital Structure of the Company June 25, 2015. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that on June 17, 2015, 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 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 Members' Schedule (as defined in the Amended and Restated Limited Liability Company Agreement of NYSE Amex Options LLC (the ``Company'') dated as of May 14, 2014 (the ``LLC Agreement'')) in order to reflect changes to the capital structure of the Company based on two transactions (such amendment, the ``Proposed Rule Change''). The first transaction involved the issuance of Annual Incentive Shares (as defined in the Members Agreement (as defined below)) to the Founding Firms (as defined below) consistent with the formula set forth in Section 2.1 of that certain Amended and Restated Members Agreement, dated as of May 14, 2014, by and among the Company, NYSE MKT, NYSE Holdings LLC (formerly known as NYSE Euronext) (``NYSE Holdings''), NYSE Market (DE), Inc. (formerly known as NYSE Market, Inc.) (``NYSE Market (DE)''), Banc of America Strategic Investments Corporation (``BAML''), Barclays Electronic Commerce Holdings Inc. (``Barclays''), Citadel Securities LLC (``Citadel''), Citigroup Financial Strategies, Inc. (``Citigroup''), Goldman, [[Page 37696]] Sachs & Co. (``Goldman Sachs''), Datek Online Management Corp. (``TD Ameritrade'') and UBS Americas Inc. (``UBS'') (collectively, excluding the Company, NYSE MKT, NYSE Holdings and NYSE Market (DE), the ``Founding Firms'') (the ``Members Agreement''). The second transaction will involve the transfer of Interests (as defined in the LLC Agreement) by the Founding Firms to NYSE Market (DE), an affiliate of the Exchange, as soon as reasonably practicable following June 15, 2015 pursuant to Article XI of the LLC Agreement and Section 3.1 of the Members Agreement. The text of 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 Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the Members' Schedule as set forth herein. The amendment reflects changes to the capital structure of the Company due to (i) the issuance of Annual Incentive Shares to the Founding Firms pursuant to Section 2.1 of the Members Agreement and (ii) the transfer of Interests by the Founding Firms to NYSE Market (DE) pursuant to Article XI of the LLC Agreement and Section 3.1 of the Members Agreement. Issuance of Annual Incentive Shares Pursuant to Section 2.1 of the Members Agreement, each year until this year (unless extended by the board of directors of the Company), the Company must issue a number of Class B Common Interests (as defined in the LLC Agreement) equal to thirty percent (30%) of the then- outstanding Class B Common Interests as Annual Incentive Shares. These Annual Incentive Shares are allocated among the Members (as defined in the LLC Agreement) holding Class B Common Interests (such Members, the ``Class B Members'') based on each Class B Member's contribution to the volume of the Exchange relative to such Class B Member's Individual Target (as defined in the Members Agreement). The Annual Incentive Shares may change the relative economic and voting rights among the Class B Members but have no effect on the relative economic and voting rights as between Members holding Class A Common Interests (as defined in the LLC Agreement) and Class B Members. Effective February 28, 2015, the Company issued 10.5456 Annual Incentive Shares in the aggregate to the Founding Firms (the ``Issuance of Annual Incentive Shares''). Five of the Founding Firms did not achieve their Individual Targets, which reduced the five Founding Firms' economic and voting interests in the Company relative to the other Founding Firms. In addition, because only two Founding Firms exceeded their Individual Targets, 1.0309 unallocated Reallocation Shares (as defined in the Members Agreement) were included in an Unearned Class B Shares Pool (as defined in the Members Agreement). In accordance with Section 2.2 of the Members Agreement, the board of directors of the Company allocated such Class B Shares between those two Founding Firms that exceeded their Individual Targets, effective February 28, 2015. The Exchange proposes to amend the Members' Schedule as set forth in Exhibit 5A attached hereto \4\ (marked against the Members' Schedule in effect prior to such issuance) to reflect the issuance of Annual Incentive Shares, including the allocation of the Reallocation Shares included in the Unearned Class B Shares Pool. --------------------------------------------------------------------------- \4\ The Commission notes that Exhibit 5A is attached to the filing, not to this Notice. --------------------------------------------------------------------------- Founding Firm Transfer Pursuant to Article XI of the LLC Agreement and Section 3.1 of the Members Agreement, a Member may transfer Interests to a third party or to another Member in accordance with the conditions and limitations set forth therein. The Exchange is filing this Proposed Rule Change, in part, to provide notice that the Founding Firms collectively intend to transfer an aggregate equity interest [sic] 16.0000% in the Company to NYSE Market (DE), an affiliate of the Exchange (the ``Founding Firm Transfer''). Upon consummation of the Founding Firm Transfer and the acquisition by NYSE Market (DE) of the Class B Common Interests transferred by the Founding Firms, such Class B Common Interests will automatically convert into an appropriate number of Class A Common Interests. Immediately following the Founding Firm Transfer, NYSE MKT will own an equity interest of 47.2000% in the Company, NYSE Market (DE) will own an equity interest of 52.8000%, and the Founding Firms, collectively, will no longer have an equity interest in the Company. The Exchange proposes, upon consummation of the Founding Firm Transfer, to amend the Members' Schedule as set forth in Exhibit 5B attached hereto \5\ (marked against the Members' Schedule following the Issuance of Annual Incentive Shares) to reflect the Founding Firm Transfer. --------------------------------------------------------------------------- \5\ The Commission notes that Exhibit 5B is attached to the filing, not to this Notice. --------------------------------------------------------------------------- 2. Statutory Basis The Proposed Rule Change is consistent with Section 6(b) \6\ of the Act,\7\ in general, and furthers the objectives of Section 6(b)(1) \8\ of the Act, which requires a national securities exchange to be so organized and have the capacity to carry out the purposes of the Act and to comply, and to enforce compliance by its members and persons associated with its members, with the provisions of the Act, the rules and regulations promulgated thereunder and the rules of the Exchange. The Proposed Rule Change does not modify the Company's trading or compliance rules and preserves the existing mechanisms for ensuring the Exchange's and the Company's compliance with the Act, the rules and regulations promulgated thereunder and the rules of the Exchange. The Proposed Rule Change also retains NYSE MKT's regulatory control over the Company and the provisions specifically designed to ensure the independence of its self-regulatory function and to ensure that any regulatory determinations by NYSE MKT, as the Company's SRO, are controlling with respect to the actions and decisions of the Company. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78f(b). \7\ 15 U.S.C. 78. \8\ 15 U.S.C. 78f(b)(1). --------------------------------------------------------------------------- Additionally, the Proposed Rule Change continues to require the Company, its Members and its directors to comply with the federal securities laws and the rules and regulations promulgated thereunder and to engage in conduct that fosters and does not interfere with the Exchange's or the Company's ability to carry out its [[Page 37697]] respective responsibilities under the Act. The Proposed Rule Change is also consistent with, and furthers the objectives of, Section 6(b)(5) \9\ of the Act, in that it preserves all of NYSE MKT's existing rules and mechanisms to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the Proposed Rule Change will have any impact on competition. The Proposed Rule Change solely relates to changes in the equity interests among the Members of the Company pursuant to provisions of the LLC Agreement and Members Agreement that have been previously filed and approved by the Commission. In addition, neither the Issuance of Annual Incentive Shares nor the Founding Firm Transfer implicates the Commission's policies with respect to permissible ownership. Furthermore, because the Proposed Rule Change does not affect the availability or pricing of any goods or services, the Proposed Rule Change will not affect competition either between the Exchange and others that provide the same goods and services as the Exchange or among market participants. 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 \10\ and Rule 19b-4(f)(6) thereunder.\11\ 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. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(b)(3)(A)(iii). \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires the Exchange to give the Commission written notice of the Exchange's intent to file the proposed rule change, along with a brief description and 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 satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission may 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. The Exchange stated that an immediate operative date is necessary to permit the efficient consummation of both the Issuance of Annual Incentive Shares and the Founding Firm Transfer. According to the Exchange, accomplishing the Founding Firm Transfer requires that the Members have certainty as to the amount of Common Interests owned by each, which in turn requires timely consummation of the Issuance of Annual Incentive Shares. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver would allow the Company to consummate the Issuance of Annual Incentive Shares and the Founding Firm Transfer in an efficient and predictable manner. Accordingly, the Commission hereby grants the Exchange's request and designates the proposal operative upon filing.\14\ --------------------------------------------------------------------------- \12\ 17 CFR 240.19b-4(f)(6). \13\ 17 CFR 240.19b-4(f)(6)(iii). \14\ For purposes only of waiving the 30-day operative delay, the Commission has 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 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) \15\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NYSEMKT-2015-44 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-2015-44. 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 (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of 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 publicly available. All submissions should refer to File Number SR-NYSEMKT-2015-44 and should be submitted on or before July 22, 2015. --------------------------------------------------------------------------- \16\ 17 CFR 200.30-3(a)(12). [[Page 37698]] --------------------------------------------------------------------------- For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\ Robert W. Errett, Deputy Secretary. [FR Doc. 2015-16089 Filed 6-30-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 126 / Wednesday, July 1, 2015 / Notices 37695
A proposed rule change filed Paper Comments SECURITIES AND EXCHANGE
pursuant to Rule 19b–4(f)(6) under the COMMISSION
Act 21 normally does not become • Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities [Release No. 34–75301; File No. SR–
operative for 30 days after the date of its NYSEMKT–2015–44]
filing. However, Rule 19b–4(f)(6)(iii) 22 and Exchange Commission, 100 F Street
permits the Commission to designate a NE., Washington, DC 20549–1090. Self-Regulatory Organizations; NYSE
shorter time if such action is consistent All submissions should refer to File MKT LLC; Notice of Filing and
with the protection of investors and the Number SR–CBOE–2015–052. This file Immediate Effectiveness of Proposed
public interest. The Exchange has asked number should be included on the Rule Change Amending the Members’
the Commission to waive the 30-day Schedule as Defined in the Amended
subject line if email is used. To help the
operative delay so that the proposal may and Restated Limited Liability
Commission process and review your
become operative immediately upon Company Agreement of NYSE Amex
filing. The Exchange stated that waiver comments more efficiently, please use
Options LLC Dated as of May 14, 2014
of the operative delay will permit the only one method. The Commission will
in Order to Reflect Changes to the
Exchange to list and trade certain ETF post all comments on the Commission’s
Capital Structure of the Company
options on the same basis as other Internet Web site (http://www.sec.gov/
options markets.23 Moreover, the rules/sro.shtml). Copies of the June 25, 2015.
Exchange has represented that the submission, all subsequent Pursuant to Section 19(b)(1) 1 of the
reorganizational changes are non- amendments, all written statements Securities Exchange Act of 1934 (the
substantive and would assist market with respect to the proposed rule ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
participants by providing a clearer rule. change that are filed with the notice is hereby given that on June 17,
The Commission believes the waiver of Commission, and all written 2015, NYSE MKT LLC (the ‘‘Exchange’’
the operative delay is consistent with communications relating to the or ‘‘NYSE MKT’’) filed with the
the protection of investors and the proposed rule change between the Securities and Exchange Commission
public interest. Therefore, the Commission and any person, other than (the ‘‘Commission’’) the proposed rule
Commission hereby waives the those that may be withheld from the change as described in Items I and II
operative delay and designates the below, which Items have been prepared
public in accordance with the
proposal operative upon filing.24 by the self-regulatory organization. The
provisions of 5 U.S.C. 552, will be
At any time within 60 days of the Commission is publishing this notice to
available for Web site viewing and solicit comments on the proposed rule
filing of the proposed rule change, the printing in the Commission’s Public
Commission summarily may change from interested persons.
Reference Room, 100 F Street NE.,
temporarily suspend such rule change if Washington, DC 20549 on official I. Self-Regulatory Organization’s
it appears to the Commission that such business days between the hours of Statement of the Terms of Substance of
action is necessary or appropriate in the the Proposed Rule Change
10:00 a.m. and 3:00 p.m. Copies of such
public interest, for the protection of
filing also will be available for The Exchange proposes to amend the
investors, or otherwise in furtherance of
inspection and copying at the principal Members’ Schedule (as defined in the
the purposes of the Act. If the
office of the Exchange. All comments Amended and Restated Limited
Commission takes such action, the
received will be posted without change; Liability Company Agreement of NYSE
Commission shall institute proceedings
the Commission does not edit personal Amex Options LLC (the ‘‘Company’’)
to determine whether the proposed rule
identifying information from dated as of May 14, 2014 (the ‘‘LLC
change should be approved or
submissions. You should submit only Agreement’’)) in order to reflect changes
disapproved.
information that you wish to make to the capital structure of the Company
IV. Solicitation of Comments available publicly. All submissions based on two transactions (such
Interested persons are invited to should refer to File Number SR–CBOE– amendment, the ‘‘Proposed Rule
submit written data, views, and 2015–052, and should be submitted on Change’’). The first transaction involved
arguments concerning the foregoing, or before July 22, 2015. the issuance of Annual Incentive Shares
including whether the proposed rule (as defined in the Members Agreement
For the Commission, by the Division of (as defined below)) to the Founding
change is consistent with the Act. Trading and Markets, pursuant to delegated
Comments may be submitted by any of Firms (as defined below) consistent
authority.25 with the formula set forth in Section 2.1
the following methods:
Robert W. Errett, of that certain Amended and Restated
Electronic Comments Deputy Secretary. Members Agreement, dated as of May
• Use the Commission’s Internet [FR Doc. 2015–16085 Filed 6–30–15; 8:45 am] 14, 2014, by and among the Company,
comment form (http://www.sec.gov/ BILLING CODE 8011–01–P
NYSE MKT, NYSE Holdings LLC
rules/sro.shtml); or (formerly known as NYSE Euronext)
• Send an email to rule-comments@ (‘‘NYSE Holdings’’), NYSE Market (DE),
sec.gov. Please include File Number SR– Inc. (formerly known as NYSE Market,
CBOE–2015–052 on the subject line. Inc.) (‘‘NYSE Market (DE)’’), Banc of
America Strategic Investments
of filing of the proposed rule change, or such Corporation (‘‘BAML’’), Barclays
shorter time as designated by the Commission. Electronic Commerce Holdings Inc.
tkelley on DSK3SPTVN1PROD with NOTICES
21 17 CFR 240.19b–4(f)(6).
(‘‘Barclays’’), Citadel Securities LLC
22 17 CFR 240.19b–4(f)(6)(iii).
(‘‘Citadel’’), Citigroup Financial
23 See supra note 18.
24 For purposes only of waiving the 30-day
Strategies, Inc. (‘‘Citigroup’’), Goldman,
operative delay, the Commission has also
1 15 U.S.C.78s(b)(1).
considered the proposed rule’s impact on
2 15 U.S.C. 78a.
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f). 25 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4.
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Sachs & Co. (‘‘Goldman Sachs’’), Datek are allocated among the Members (as Market (DE) of the Class B Common
Online Management Corp. (‘‘TD defined in the LLC Agreement) holding Interests transferred by the Founding
Ameritrade’’) and UBS Americas Inc. Class B Common Interests (such Firms, such Class B Common Interests
(‘‘UBS’’) (collectively, excluding the Members, the ‘‘Class B Members’’) based will automatically convert into an
Company, NYSE MKT, NYSE Holdings on each Class B Member’s contribution appropriate number of Class A Common
and NYSE Market (DE), the ‘‘Founding to the volume of the Exchange relative Interests.
Firms’’) (the ‘‘Members Agreement’’). to such Class B Member’s Individual Immediately following the Founding
The second transaction will involve the Target (as defined in the Members Firm Transfer, NYSE MKT will own an
transfer of Interests (as defined in the Agreement). The Annual Incentive equity interest of 47.2000% in the
LLC Agreement) by the Founding Firms Shares may change the relative Company, NYSE Market (DE) will own
to NYSE Market (DE), an affiliate of the economic and voting rights among the an equity interest of 52.8000%, and the
Exchange, as soon as reasonably Class B Members but have no effect on Founding Firms, collectively, will no
practicable following June 15, 2015 the relative economic and voting rights longer have an equity interest in the
pursuant to Article XI of the LLC as between Members holding Class A Company. The Exchange proposes,
Agreement and Section 3.1 of the Common Interests (as defined in the upon consummation of the Founding
Members Agreement. The text of the LLC Agreement) and Class B Members. Firm Transfer, to amend the Members’
proposed rule change is available on the Effective February 28, 2015, the
Schedule as set forth in Exhibit 5B
Exchange’s Web site at www.nyse.com, Company issued 10.5456 Annual
attached hereto 5 (marked against the
at the principal office of the Exchange, Incentive Shares in the aggregate to the
Members’ Schedule following the
and at the Commission’s Public Founding Firms (the ‘‘Issuance of
Issuance of Annual Incentive Shares) to
Reference Room. Annual Incentive Shares’’). Five of the
reflect the Founding Firm Transfer.
Founding Firms did not achieve their
II. Self-Regulatory Organization’s Individual Targets, which reduced the 2. Statutory Basis
Statement of the Purpose of, and five Founding Firms’ economic and
Statutory Basis for, the Proposed Rule voting interests in the Company relative The Proposed Rule Change is
Change to the other Founding Firms. In consistent with Section 6(b) 6 of the
addition, because only two Founding Act,7 in general, and furthers the
In its filing with the Commission, the
Firms exceeded their Individual Targets, objectives of Section 6(b)(1) 8 of the Act,
self-regulatory organization included
1.0309 unallocated Reallocation Shares which requires a national securities
statements concerning the purpose of,
(as defined in the Members Agreement) exchange to be so organized and have
and basis for, the proposed rule change
were included in an Unearned Class B the capacity to carry out the purposes of
and discussed any comments it received
Shares Pool (as defined in the Members the Act and to comply, and to enforce
on the proposed rule change. The text
Agreement). In accordance with Section compliance by its members and persons
of those statements may be examined at
2.2 of the Members Agreement, the associated with its members, with the
the places specified in Item IV below.
board of directors of the Company provisions of the Act, the rules and
The Exchange has prepared summaries,
allocated such Class B Shares between regulations promulgated thereunder and
set forth in sections A, B, and C below,
those two Founding Firms that the rules of the Exchange. The Proposed
of the most significant parts of such
exceeded their Individual Targets, Rule Change does not modify the
statements.
effective February 28, 2015. The Company’s trading or compliance rules
A. Self-Regulatory Organization’s Exchange proposes to amend the and preserves the existing mechanisms
Statement of the Purpose of, and Members’ Schedule as set forth in for ensuring the Exchange’s and the
Statutory Basis for, the Proposed Rule Exhibit 5A attached hereto 4 (marked Company’s compliance with the Act,
Change against the Members’ Schedule in effect the rules and regulations promulgated
prior to such issuance) to reflect the thereunder and the rules of the
1. Purpose
issuance of Annual Incentive Shares, Exchange. The Proposed Rule Change
The Exchange proposes to amend the including the allocation of the also retains NYSE MKT’s regulatory
Members’ Schedule as set forth herein. Reallocation Shares included in the control over the Company and the
The amendment reflects changes to the Unearned Class B Shares Pool. provisions specifically designed to
capital structure of the Company due to ensure the independence of its self-
(i) the issuance of Annual Incentive Founding Firm Transfer regulatory function and to ensure that
Shares to the Founding Firms pursuant Pursuant to Article XI of the LLC any regulatory determinations by NYSE
to Section 2.1 of the Members Agreement and Section 3.1 of the MKT, as the Company’s SRO, are
Agreement and (ii) the transfer of Members Agreement, a Member may controlling with respect to the actions
Interests by the Founding Firms to transfer Interests to a third party or to and decisions of the Company.
NYSE Market (DE) pursuant to Article another Member in accordance with the Additionally, the Proposed Rule
XI of the LLC Agreement and Section conditions and limitations set forth Change continues to require the
3.1 of the Members Agreement. therein. The Exchange is filing this Company, its Members and its directors
Issuance of Annual Incentive Shares Proposed Rule Change, in part, to to comply with the federal securities
provide notice that the Founding Firms laws and the rules and regulations
Pursuant to Section 2.1 of the collectively intend to transfer an promulgated thereunder and to engage
Members Agreement, each year until aggregate equity interest [sic] 16.0000% in conduct that fosters and does not
this year (unless extended by the board in the Company to NYSE Market (DE), interfere with the Exchange’s or the
tkelley on DSK3SPTVN1PROD with NOTICES
of directors of the Company), the an affiliate of the Exchange (the Company’s ability to carry out its
Company must issue a number of Class ‘‘Founding Firm Transfer’’). Upon
B Common Interests (as defined in the consummation of the Founding Firm 5 The Commission notes that Exhibit 5B is
LLC Agreement) equal to thirty percent Transfer and the acquisition by NYSE attached to the filing, not to this Notice.
(30%) of the then-outstanding Class B 6 15 U.S.C. 78f(b).
Common Interests as Annual Incentive 4 The Commission notes that Exhibit 5A is 7 15 U.S.C. 78.
Shares. These Annual Incentive Shares attached to the filing, not to this Notice. 8 15 U.S.C. 78f(b)(1).
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![37698 Federal Register / Vol. 80, No. 126 / Wednesday, July 1, 2015 / Notices
For the Commission, by the Division of II. Description of the Amended therein is superseded by proposed Rules
Trading and Markets, pursuant to delegated Proposal 4702 and 4703.15 Lastly, BX proposes
authority.16 certain conforming and technical
The Exchange proposes to amend and
Robert W. Errett, restate certain rules governing the changes to Rules 4756, 4757, and
Deputy Secretary. NASDAQ OMX BX Equities Market in 4780.16
[FR Doc. 2015–16089 Filed 6–30–15; 8:45 am] order to provide additional detail and BX represents that, except where
clarity regarding its order type specifically stated otherwise, all
BILLING CODE 8011–01–P
functionality.6 This proposed rule proposed rules are restatements of
change is a response to Chair White’s existing rules and are not intended to
request that each equities exchange reflect substantive changes to rule text
SECURITIES AND EXCHANGE or the operation of the NASDAQ OMX
COMMISSION conduct a comprehensive review of the
operation of each of the order types that BX Equities Market.17 Proposed Rule
it offers to members.7 4702 related to Order Types contains
[Release No. 34–75291; File No. SR–BX– definitions and descriptions of Price to
While the Exchange believes that its
2015–015] Comply Orders, Price to Display Orders
current rules and other public
disclosures provide a comprehensive (referred to as ‘‘Price to Comply Post
Self-Regulatory Organizations; Orders’’ in current Rule 4751),18 Non-
description of the operation of the
NASDAQ OMX BX Inc.; Notice of Filing Displayed Orders, Post-Only Orders,
NASDAQ OMX BX Equities Market and
of Amendment No. 1 and Order Retail Price Improving Orders, and
are sufficient for members and the
Granting Accelerated Approval of Retail Orders. Proposed Rule 4703
investing public to have an accurate
Proposed Rule Change, as Modified by understanding of its market structure, it related to Order Attributes contains
Amendment No. 1, To Amend and also acknowledges that a restatement of definitions and descriptions of time-in-
Restate Certain Rules That Govern the certain rules will further clarify the force (‘‘TIF’’) modifiers, order size, order
NASDAQ OMX BX Equities Market operation of its system.8 For instance, price, pegging, minimum quantity,
BX believes that adding examples of routing, discretion, reserve size,
June 24, 2015. attribution, intermarket sweep order
order type operation to its rules will
I. Introduction designation, and display.19
promote greater understanding of the
In Amendment No. 1, the Exchange
Exchange’s market structure.9 In
On March 20, 2015, NASDAQ OMX proposes to add language further
addition, BX asserts that certain explaining the operation of the
BX, Inc. (‘‘BX’’ or the ‘‘Exchange’’) filed functionality previously described as an
with the Securities and Exchange following order types: Post-Only Orders,
‘‘order type’’ is more precisely orders with a TIF of IOC, including
Commission (‘‘Commission’’), pursuant characterized as an attribute that may be
to Section 19(b)(1) of the Securities Routable Orders and Post-Only Orders;
added to a particular order.10 orders with Midpoint Pegging, Primary
Exchange Act of 1934 (‘‘Act’’) 1 and Rule Accordingly, this proposed rule change Pegging or Market Pegging; and orders
19b–4 thereunder,2 a proposed rule distinguishes between ‘‘Order Types’’ designated with both Pegging and
change to amend and restate certain BX and ‘‘Order Attributes,’’ and provides Routing attributes.20 For example, the
rules that govern the NASDAQ OMX BX descriptions of the Order Attributes that Exchange states that for Order Types
Equities Market in order to provide a may be attached to particular Order that list both Pegging and Routing as
clearer and more detailed description of Types.11 possible Order Attributes, the two Order
certain aspects of its functionality. The Currently, BX Rule 4751 sets forth Attributes may be combined since
proposed rule change was published for most of the rules governing NASDAQ Pegging serves to establish the price of
comment in the Federal Register on OMX BX Equities Market Order Types the order, while Routing establishes the
April 6, 2015.3 The Commission and Order Attributes, as well as other market center(s) to which the system’s
received no comment letters regarding defined terms that pertain to trading routing functionality may direct a
the proposed rule change. On May 12, securities on the NASDAQ OMX BX routed order if liquidity is available at
2015, the Commission extended to July Equities Market.12 BX proposes to that price.21 The Exchange also
5, 2015, the time period in which to restate and amend Rule 4751 as new proposes to add further specification
approve the proposed rule change, Rule 4701.13 BX also proposes to amend regarding the availability of certain
disapprove the proposed rule change, or the definitions pertaining to Order order types only through certain
institute proceedings to determine Types and Order Attributes and to communication protocols by stating that
relocate them from Rule 4751 to new a Post-Only Order with a TIF of IOC
whether the proposed rule change
Rules 4702 (Order Types) and 4703 may not be entered through the RASH
should be disapproved.4 On June 22,
(Order Attributes), respectively.14 In or FIX protocols.22 In addition, the
2015, the Exchange filed Amendment
addition, BX proposes to delete Rule Exchange proposes to add language
No. 1 to the proposed rule change.5 This 4755 as the information contained
order approves the proposed rule stating that one or more Order
change, as amended, on an accelerated 6 See Notice 80 FR at 18473. 15 See Rule 4755.
basis. 7 See id.; see also Mary Jo White, Chair, 16 BX states that, in subsequent proposed rule
Commission, Speech at the Sandler O’Neill & changes, it plans to restate the remainder of its
1 15 U.S.C. 78s(b)(1). Partners, L.P. Global Exchange and Brokerage Rules numbered 4752 through 4780 so that they
2 17 Conference (June 5, 2014), available at http:// appear sequentially following Rule 4703. See.
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 74617
www.sec.gov/News/Speech/Detail/Speech/ Notice, 80 FR at 18474.
tkelley on DSK3SPTVN1PROD with NOTICES
1370542004312. 17 See. Notice, 80 FR at 18474.
(March 31, 2015), 80 FR 18473 (‘‘Notice’’). 8 See Notice, 80 FR at 18474.
18 See Notice, 80 FR at 18477 n.29.
4 See Securities Exchange Act Release No. 74934,
9 Id.
19 The Notice contains additional details related
80 FR 28325 (May 18, 2015). 10 Id.
5 In Amendment No. 1, the Exchange proposed to to proposed Rules 4702 and 4703. See Notice, 80
11 Id. FR at 18473–90.
correct typographical errors in the original filing,
12 See Rule 4751. 20 See Amendment No. 1.
further improve the clarity of certain rule language,
13 See proposed Rule 4701. 21 Id.
and include additional explanation with regard to
the purpose of the proposed rule change. 14 See proposed Rules 4702 and 4703. 22 Id.
VerDate Sep<11>2014 18:30 Jun 30, 2015 Jkt 235001 PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 E:\FR\FM\01JYN1.SGM 01JYN1](https://thefederalregister.org/doc/80_FR_37821/page/4.svg)
Document Created: 2015-12-15 13:18:59
Document Modified: 2015-12-15 13:18:59
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 37695 |
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