80 FR 58318 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Supplementary Material .20 to Rule 103 To Permit Member Organizations That Operate as Designated Market Maker Units on the Exchange and Also Operate DMM Units on the NYSE MKT LLC To Make an Adjustment to Excess Net Capital
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 187 (September 28, 2015)
Federal Register Volume 80, Issue 187 (September 28, 2015)
| Page Range | 58318-58321 | |
| FR Document | 2015-24517 |
[Federal Register Volume 80, Number 187 (Monday, September 28, 2015)] [Notices] [Pages 58318-58321] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-24517] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75966; File No. SR-NYSE-2015-39] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Supplementary Material .20 to Rule 103 To Permit Member Organizations That Operate as Designated Market Maker Units on the Exchange and Also Operate DMM Units on the NYSE MKT LLC To Make an Adjustment to Excess Net Capital September 22, 2015. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on September 8, 2015, New York Stock Exchange LLC (``NYSE'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I, II, and III, below, which Items have been substantially prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ See 15 U.S.C. 78s(b)(1). \2\ See 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 Supplementary Material .20 to Rule 103 (``NYSE Rule 103.20''), to permit member organizations that operate as Designated Market Maker (``DMM'') units on the Exchange and also operate DMM units on the NYSE MKT LLC (``NYSE MKT'') to make an adjustment to Excess Net Capital. 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. [[Page 58319]] 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 Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A., B., and C. below, of the most significant aspects 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 NYSE Rule 103.20, which sets forth the net liquid assets requirements for a member organization that operates as DMM a [sic] unit on the Exchange,\3\ to permit such DMM unit to make an adjustment to Excess Net Capital when calculating Net Liquid Assets if it also operates as a DMM unit on NYSE MKT. The proposed adjustment would permit a DMM unit to add back to its Excess Net Capital the lesser of (1) the actual haircuts under Securities and Exchange Commission (``SEC'' or ``Commission'') [sic] Rule 15c3-1 (the ``SEC Net Capital Rule'') \4\ on its NYSE MKT DMM dealer positions, or (2) the NYSE MKT DMM tentative net capital requirement calculated according to NYSE MKT Rule 103.20--Equities (``NYSE MKT Rule 103.20''). --------------------------------------------------------------------------- \3\ Pursuant to Rule 2(j), a DMM unit is defined as a member organization or unit within a member organization that has been approved to act as a DMM unit under Rule 98. Pursuant to Rule 2(i), a DMM is defined as an individual member, officer, partner, employee or associated person of a DMM unit who is approved by the Exchange to act in the capacity of a DMM. All references to rules herein are to NYSE rules, unless otherwise noted. \4\ 17 CFR 240.15c3-1. --------------------------------------------------------------------------- Background and Proposed Rule Change NYSE Rule 103.20 sets forth a Net Liquid Assets requirement for DMM units that exceed [sic] the SEC Net Capital Rule minimum net capital requirement applicable to market-making activities. The purpose of the Exchange's requirement is to reasonably assure that each DMM unit maintains sufficient liquidity to carry out its obligation to maintain a fair and orderly market in its assigned securities in times of market stress. Rule 103.20(a) defines ``Net Liquid Assets'' as the sum of (A) ``Excess Net Capital'' and (B) ``Liquidity'' dedicated to the DMM unit. Excess Net Capital has the same meaning as the term excess net capital as computed in accordance with the SEC Net Capital Rule, which means the amount identified as item number 3770 of SEC Form X-17A-5 (``FOCUS Report''), except for DMM units that compute net capital under the alternative standard, for which it would mean item number 3910 of the FOCUS Report. Liquidity is defined as undrawn or actual borrowings that are dedicated to the DMM unit's business, as specified in Rule 103.20(a)(3)(A)-(C). Rule 103.20 requires that aggregate Net Liquid Assets of all DMM units equal at least $125 million and that each DMM unit maintain or have allocated to it Net Liquid Assets that are the greater of (1) $1 million, or (2) $125,000 for each one-tenth of one percent (0.1%) of Exchange transaction dollar volume \5\ in its registered securities. --------------------------------------------------------------------------- \5\ The term ``Exchange transaction dollar volume'' means the most recent Statistical Data, calculated and provided by the NYSE on a monthly basis. --------------------------------------------------------------------------- Pursuant to NYSE MKT Rule 103.20, DMM units on NYSE MKT are required to calculate their NYSE MKT tentative net capital (``TNC'') requirement based on the greater of (i) $1,000,000 or (ii) the haircut charges on a theoretical position of 60 trading units of each assigned NYSE MKT DMM security and 20 trading units of each assigned Unlisted Trading Privileges DMM security. For NYSE MKT DMM units that also operate as DMMs on the NYSE, the haircuts on NYSE MKT DMM positions as computed pursuant to the SEC Net Capital Rule are deducted in computing Net Liquid Assets under NYSE Rule 103.20. DMM units operating on NYSE and NYSE MKT therefore incorporate the market risk charges (i.e., haircuts) on the NYSE MKT positions twice: First, because the NYSE and NYSE MKT DMM capital requirements are cumulative,\6\ Excess Net Capital available to meet the requirement of NYSE Rule 103.20 must be reduced by the amount of capital needed to satisfy the NYSE MKT Rule 103.20 requirement and, second, in computing Net Liquid Assets under NYSE Rule 103.20, the determination of Excess Net Capital incorporates several adjustments, such as a reduction for haircuts on proprietary positions, including NYSE MKT DMM positions. --------------------------------------------------------------------------- \6\ NYSE Rule 103.20(b)(2) requires that Excess Net Capital be ``dedicated exclusively to the DMM unit's activities and shall not be used by other business units.'' Accordingly, the portion of Excess Net Capital used to meet the DMM's NYSE Rule 103.20 requirement cannot include the capital which is being used to meet the firm's NYSE MKT DMM requirement. --------------------------------------------------------------------------- The Exchange accordingly proposes to add a new section (6) to NYSE Rule 103.20(b), which sets forth the minimum Net Liquid Assets requirement,\7\ to permit a DMM unit operating on both the NYSE and NYSE MKT to avoid duplicative reductions to Excess Net Capital by adding back the lesser of actual SEC Net Capital Rule haircuts on the firm's NYSE MKT DMM positions or the NYSE MKT DMM TNC requirement calculated pursuant to NYSE MKT Rule 103.20. The proposed adjustment would permit a DMM unit operating on both marketplaces to have Excess Net Capital reduced once for NYSE MKT DMM haircuts under NYSE Rule 103.20, thereby adjusting the DMM unit's capital available to meet its Net Liquid Assets requirement. The Exchange believes that this change would result in a more efficient utilization of capital by DMM units who operate on both exchanges. --------------------------------------------------------------------------- \7\ The Exchange also proposes to add a reference to the proposed adjustment in NYSE Rule 103.20(a)(1)(A), which defines the term ``Net Liquid Assets.'' --------------------------------------------------------------------------- The Exchange believes that the proposed change would not diminish the current levels of capital maintained by DMM units operating on both markets. The Exchange notes that it would continue to assess DMM unit financial requirements and that the Financial Industry Regulatory Authority, Inc. (``FINRA''), [sic] on behalf of the Exchange, would continue to monitor DMM unit compliance with NYSE Rule 103.20. The Exchange proposes to notify DMM units of the implementation date of this rule change via a Member Education Bulletin. The proposed change is not otherwise intended to address any other issues and the Exchange is not aware of any problems that DMM units would have in complying with the proposed change. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act,\8\ in general, and furthers the objectives of section 6(b)(5) of the Act,\9\ 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 regulating, clearing, settling, processing information with respect to, and 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 [[Page 58320]] general, to protect investors and the public interest and because it is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78f(b). \9\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that the proposed change would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system by reducing the financial burden on DMM units operating on both the Exchange and NYSE MKT by eliminating the requirement to apply duplicative NYSE MKT DMM dealer haircuts. The Exchange believes that permitting DMM units operating on both marketplaces to take an adjustment would prevent those units from taking NYSE MKT DMM positions into consideration twice as part of the Excess Net Capital calculation under NYSE Rule 103.20, thereby potentially lowering the DMM units' Excess Net Capital available to meet their Net Liquid Assets requirements. The Exchange believes that the proposed rule would continue to assure that DMM units have sufficient liquidity to carry out their obligations to maintain an orderly market in their assigned securities in times of market stress. The Exchange further believes that the proposed change would protect investors and the public interest by reducing existing barriers to entry for new DMM units and mitigating the potential loss of existing DMM units. Stabilizing and increasing the pool of DMM units with a more efficient financial structure would be beneficial to the Exchange and would also enhance market quality and thereby support investor protection and public interest goals. Finally, the Exchange believes that it is subject to significant competitive forces, as described below in the Exchange's statement regarding the burden on competition. For the foregoing 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. The proposed change is designed to permit DMM units operating on the Exchange and NYSE MKT to make an adjustment to Excess Net Capital to add back haircuts on NYSE MKT DMM positions and avoid taking these haircuts into consideration twice, but would not affect the overall level thereof. This proposed change would eliminate a potential barrier to entry for new DMM units interested in operating on both markets, thereby promoting competition. The Exchange notes that market makers and traders on other U.S. equity exchanges are not subject to net capital requirements beyond those required by the SEC Net Capital Rule. Nonetheless, DMM units have unique affirmative obligations and the Exchange continues to believe that it is appropriate that their financial requirements be higher than other market participants. The proposal would support competition by making DMM unit financial requirements more manageable for member organizations, including both existing and potential future DMM units, and would thereby promote greater interest in seeking DMM unit appointments on the Exchange. Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues. In such an environment, the Exchange must continually review, and consider adjusting the services it offers and the requirements it imposes to remain competitive with other U.S. equity exchanges. For the reasons described above, the Exchange believes that the proposed rule change reflects this competitive environment. 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). --------------------------------------------------------------------------- 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 19b4(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. --------------------------------------------------------------------------- \12\ 17 CFR 240.19b-4(f)(6). \13\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- 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)\14\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \14\ 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 rule-comments@sec.gov. Please include File Number SR-NYSE-2015-39 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-NYSE-2015-39. 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 [[Page 58321]] 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-NYSE-2015-39 and should be submitted on or before October 19, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\15\ --------------------------------------------------------------------------- \15\ See 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-24517 Filed 9-25-15; 8:45 am] BILLING CODE 8011-01-P
![58318 Federal Register / Vol. 80, No. 187 / Monday, September 28, 2015 / Notices
disabilities where appropriate. If you ADDRESSES: Mail all comments and contact the project sponsors and offer
need a reasonable accommodation to requests for copies of the subject form assistance in the preparation and
participate in these public meetings, or to OPIC’s Agency Submitting Officer: submission of OPIC loan applications.
need this meeting notice or the James Bobbitt, Overseas Private Dated: September 22, 2015.
transcript or other information from the Investment Corporation, 1100 New York
Nichole Skoyles,
public meetings in another format (e.g. Avenue NW., Washington, DC 20527.
braille, large print), please notify See SUPPLEMENTARY INFORMATION for Administrative Counsel, Department of Legal
Kimberly Meyer, NRC Disability Affairs.
other information about filing.
Program Manager, at 301–287–0727, by [FR Doc. 2015–24512 Filed 9–25–15; 8:45 am]
FOR FURTHER INFORMATION CONTACT:
videophone at 240–428–3217, or by OPIC Agency Submitting Officer: James BILLING CODE 3210–01P
email at Kimberly.Meyer- Bobbitt, (202)336–8558.
Chambers@nrc.gov. Determinations on
SUPPLEMENTARY INFORMATION: OPIC
requests for reasonable accommodation
received no comments in response to SECURITIES AND EXCHANGE
will be made on a case-by-case basis.
Members of the public may request to the sixty (60) day notice published in COMMISSION
receive this information electronically. Federal Register volume 80 FR 43479
If you would like to be added to the on July 22, 2015. All mailed comments
and requests for copies of the subject [Release No. 34–75966; File No. SR–NYSE–
distribution, please contact the Nuclear 2015–39]
Regulatory Commission, Office of the form should include form number
Secretary, Washington, DC 20555 (301– OPIC–257 on both the envelope and in
Self-Regulatory Organizations; New
415–1969), or email the subject line of the letter. Electronic
York Stock Exchange LLC; Notice of
Brenda.Akstulewicz@nrc.gov or comments and requests for copies of the
Filing and Immediate Effectiveness of
Patricia.Jimenez@nrc.gov. subject form may be sent to
Proposed Rule Change Amending
James.Bobbitt@opic.gov, subject line
Dated: September 23, 2015. Supplementary Material .20 to Rule 103
OPIC–257.
Glenn Ellmers, To Permit Member Organizations That
Policy Coordinator, Office of the Secretary. Summary Form Under Review Operate as Designated Market Maker
[FR Doc. 2015–24612 Filed 9–24–15; 11:15 am] Type of Request: Approval for existing Units on the Exchange and Also
collection in use without an OMB Operate DMM Units on the NYSE MKT
BILLING CODE 7590–01–P
control number. LLC To Make an Adjustment to Excess
Title: Enterprise Development Net Capital
OVERSEAS PRIVATE INVESTMENT Network Project Information September 22, 2015.
CORPORATION Questionnaire.
Form Number: OPIC–257. Pursuant to section 19(b)(1) of the
[OPIC–257, OMB No. XXX] Securities Exchange Act of 1934
Frequency of Use: Once per applicant
per project. The form is used to generate (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Submission for OMB Review; notice is hereby given that on
comments request online sales leads. It is completed by the
applicant and the information collected September 8, 2015, New York Stock
AGENCY: Overseas Private Investment is routed to OPIC-affiliated Loan Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’)
Corporation (OPIC). Originators. Applicants may make filed with the Securities and Exchange
ACTION: Notice and request for multiple submissions of the same Commission (‘‘SEC’’ or ‘‘Commission’’)
comments. project information, but the the proposed rule change as described
overwhelming majority submit once per in Items I, II, and III, below, which Items
SUMMARY: Under the provisions of the applicant per project. have been substantially prepared by the
Paperwork Reduction Act (44 U.S.C. Type of Respondents: Business or Exchange. The Commission is
chapter 35), agencies are required to other institutions; individuals. publishing this notice to solicit
publish a Notice in the Federal Register Standard Industrial Classification comments on the proposed rule change
notifying the public that the agency is Codes: All. from interested persons.
submitting an existing collection in use Description of Affected Public:
without an OMB control number for I. Self-Regulatory Organization’s
Companies or citizens investing Statement of the Terms of Substance of
OMB review and approval, and requests overseas.
public review and comment on the the Proposed Rule Change
Reporting Hours: 16 hours (5 minutes
submission. OPIC received no per form). The Exchange proposes to amend
comments in response to the sixty (60) Number of Responses: 192 per year. Supplementary Material .20 to Rule 103
day notice. The purpose of this notice Federal Cost: $0. Automated leads are (‘‘NYSE Rule 103.20’’), to permit
is to allow an additional thirty (30) days generated and sent to OPIC Affiliates for member organizations that operate as
for public comments to be submitted. review, prequalification and action. Designated Market Maker (‘‘DMM’’)
Comments are being solicited on the Authority for Information Collection: units on the Exchange and also operate
need for the information; the accuracy Sections 231; 234(b); and 234(c) of the DMM units on the NYSE MKT LLC
of OPIC’s burden estimate; the quality, Foreign Assistance Act of 1961, as (‘‘NYSE MKT’’) to make an adjustment
practical utility, and clarity of the amended. to Excess Net Capital. The text of the
information to be collected; and ways to Abstract (Needs and Uses): The proposed rule change is available on the
minimize reporting the burden,
tkelley on DSK3SPTVN1PROD with NOTICES
Project Information Questionnaire is the Exchange’s Web site at www.nyse.com,
including automated collected principal document used by OPIC’s at the principal office of the Exchange,
techniques and uses of other forms of Enterprise Development Network (EDN) and at the Commission’s Public
technology. to collect project and contact Reference Room.
DATES: Comments must be received information. These leads are routed to a
within thirty (30) calendar days of network of approved Loan Originators. 1 See 15 U.S.C. 78s(b)(1).
publication of this Notice. After review, Loan Originators can 2 See 17 CFR 240.19b–4.
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II. Self-Regulatory Organization’s Capital’’ and (B) ‘‘Liquidity’’ dedicated The Exchange accordingly proposes to
Statement of the Purpose of, and to the DMM unit. Excess Net Capital has add a new section (6) to NYSE Rule
Statutory Basis for, the Proposed Rule the same meaning as the term excess net 103.20(b), which sets forth the
Change capital as computed in accordance with minimum Net Liquid Assets
In its filing with the Commission, the the SEC Net Capital Rule, which means requirement,7 to permit a DMM unit
Exchange included statements the amount identified as item number operating on both the NYSE and NYSE
concerning the purpose of and basis for 3770 of SEC Form X–17A–5 (‘‘FOCUS MKT to avoid duplicative reductions to
the proposed rule change and discussed Report’’), except for DMM units that Excess Net Capital by adding back the
any comments it received on the compute net capital under the lesser of actual SEC Net Capital Rule
proposed rule change. The text of these alternative standard, for which it would haircuts on the firm’s NYSE MKT DMM
statements may be examined at the mean item number 3910 of the FOCUS positions or the NYSE MKT DMM TNC
places specified in Item IV below. The Report. Liquidity is defined as undrawn requirement calculated pursuant to
Exchange has prepared summaries, set or actual borrowings that are dedicated NYSE MKT Rule 103.20. The proposed
forth in sections A., B., and C. below, of to the DMM unit’s business, as specified adjustment would permit a DMM unit
the most significant aspects of such in Rule 103.20(a)(3)(A)–(C). Rule 103.20 operating on both marketplaces to have
statements. requires that aggregate Net Liquid Excess Net Capital reduced once for
Assets of all DMM units equal at least NYSE MKT DMM haircuts under NYSE
A. Self-Regulatory Organization’s $125 million and that each DMM unit Rule 103.20, thereby adjusting the DMM
Statement of the Purpose of, and maintain or have allocated to it Net unit’s capital available to meet its Net
Statutory Basis for, the Proposed Rule Liquid Assets that are the greater of (1) Liquid Assets requirement. The
Change $1 million, or (2) $125,000 for each one- Exchange believes that this change
1. Purpose tenth of one percent (0.1%) of Exchange would result in a more efficient
transaction dollar volume 5 in its utilization of capital by DMM units who
The Exchange proposes to amend operate on both exchanges.
NYSE Rule 103.20, which sets forth the registered securities.
Pursuant to NYSE MKT Rule 103.20, The Exchange believes that the
net liquid assets requirements for a proposed change would not diminish
member organization that operates as DMM units on NYSE MKT are required
to calculate their NYSE MKT tentative the current levels of capital maintained
DMM a [sic] unit on the Exchange,3 to by DMM units operating on both
permit such DMM unit to make an net capital (‘‘TNC’’) requirement based
on the greater of (i) $1,000,000 or (ii) the markets. The Exchange notes that it
adjustment to Excess Net Capital when would continue to assess DMM unit
calculating Net Liquid Assets if it also haircut charges on a theoretical position
of 60 trading units of each assigned financial requirements and that the
operates as a DMM unit on NYSE MKT. Financial Industry Regulatory
The proposed adjustment would permit NYSE MKT DMM security and 20
trading units of each assigned Unlisted Authority, Inc. (‘‘FINRA’’), [sic] on
a DMM unit to add back to its Excess behalf of the Exchange, would continue
Net Capital the lesser of (1) the actual Trading Privileges DMM security. For
NYSE MKT DMM units that also operate to monitor DMM unit compliance with
haircuts under Securities and Exchange NYSE Rule 103.20.
Commission (‘‘SEC’’ or ‘‘Commission’’) as DMMs on the NYSE, the haircuts on
The Exchange proposes to notify
[sic] Rule 15c3–1 (the ‘‘SEC Net Capital NYSE MKT DMM positions as
DMM units of the implementation date
Rule’’) 4 on its NYSE MKT DMM dealer computed pursuant to the SEC Net
of this rule change via a Member
positions, or (2) the NYSE MKT DMM Capital Rule are deducted in computing
Education Bulletin.
tentative net capital requirement Net Liquid Assets under NYSE Rule The proposed change is not otherwise
calculated according to NYSE MKT Rule 103.20. DMM units operating on NYSE intended to address any other issues
103.20—Equities (‘‘NYSE MKT Rule and NYSE MKT therefore incorporate and the Exchange is not aware of any
103.20’’). the market risk charges (i.e., haircuts) on problems that DMM units would have
the NYSE MKT positions twice: First, in complying with the proposed change.
Background and Proposed Rule Change because the NYSE and NYSE MKT
NYSE Rule 103.20 sets forth a Net DMM capital requirements are 2. Statutory Basis
Liquid Assets requirement for DMM cumulative,6 Excess Net Capital The Exchange believes that the
units that exceed [sic] the SEC Net available to meet the requirement of proposed rule change is consistent with
Capital Rule minimum net capital NYSE Rule 103.20 must be reduced by section 6(b) of the Act,8 in general, and
requirement applicable to market- the amount of capital needed to satisfy furthers the objectives of section 6(b)(5)
making activities. The purpose of the the NYSE MKT Rule 103.20 requirement of the Act,9 in particular, because it is
Exchange’s requirement is to reasonably and, second, in computing Net Liquid designed to prevent fraudulent and
assure that each DMM unit maintains Assets under NYSE Rule 103.20, the manipulative acts and practices, to
sufficient liquidity to carry out its determination of Excess Net Capital promote just and equitable principles of
obligation to maintain a fair and orderly incorporates several adjustments, such trade, to foster cooperation and
market in its assigned securities in times as a reduction for haircuts on coordination with persons engaged in
of market stress. proprietary positions, including NYSE regulating, clearing, settling, processing
Rule 103.20(a) defines ‘‘Net Liquid MKT DMM positions. information with respect to, and
Assets’’ as the sum of (A) ‘‘Excess Net facilitating transactions in securities, to
5 The term ‘‘Exchange transaction dollar volume’’ remove impediments to, and perfect the
3 Pursuant to Rule 2(j), a DMM unit is defined as means the most recent Statistical Data, calculated mechanisms of, a free and open market
a member organization or unit within a member and provided by the NYSE on a monthly basis.
tkelley on DSK3SPTVN1PROD with NOTICES
organization that has been approved to act as a 6 NYSE Rule 103.20(b)(2) requires that Excess Net
and a national market system and, in
DMM unit under Rule 98. Pursuant to Rule 2(i), a Capital be ‘‘dedicated exclusively to the DMM
7 The Exchange also proposes to add a reference
DMM is defined as an individual member, officer, unit’s activities and shall not be used by other
partner, employee or associated person of a DMM business units.’’ Accordingly, the portion of Excess to the proposed adjustment in NYSE Rule
unit who is approved by the Exchange to act in the Net Capital used to meet the DMM’s NYSE Rule 103.20(a)(1)(A), which defines the term ‘‘Net Liquid
capacity of a DMM. All references to rules herein 103.20 requirement cannot include the capital Assets.’’
are to NYSE rules, unless otherwise noted. which is being used to meet the firm’s NYSE MKT 8 15 U.S.C. 78f(b).
4 17 CFR 240.15c3–1. DMM requirement. 9 15 U.S.C. 78f(b)(5).
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Commission and any person, other than rule change is available on the now proposes to increase its Taker Fees
those that may be withheld from the Exchange’s Internet Web site at http:// and Fees for Responses to Crossing
public in accordance with the www.ise.com, at the principal office of Orders to $0.89 per contract for all non-
provisions of 5 U.S.C. 552, will be the Exchange, and at the Commission’s Priority Customer orders executed in
available for Web site viewing and Public Reference Room. Non-Penny Symbols.
printing in the Commission’s Public
II. Self-Regulatory Organization’s 2. Statutory Basis
Reference Room, 100 F Street NE.,
Statement of the Purpose of, and The Exchange believes that the
Washington, DC 20549, on official
Statutory Basis for, the Proposed Rule proposed rule change is consistent with
business days between the hours of
Change the provisions of Section 6 of the Act,10
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for In its filing with the Commission, the in general, and Section 6(b)(4) of the
inspection and copying at the principal Exchange included statements Act,11 in particular, in that it is designed
office of the Exchange. All comments concerning the purpose of, and basis for, to provide for the equitable allocation of
received will be posted without change; the proposed rule change and discussed reasonable dues, fees, and other charges
the Commission does not edit personal any comments it received on the among its members and other persons
identifying information from proposed rule change. The text of these using its facilities.
submissions. You should submit only statements may be examined at the The Exchange believes that it is
information that you wish to make places specified in Item IV below. The reasonable and equitable to increase fees
available publicly. self-regulatory organization has for non-Priority Customer orders in
All submissions should refer to File prepared summaries, set forth in Non-Penny Symbols as the proposed
Number SR–NYSE–2015–39 and should Sections A, B and C below, of the most Taker Fee is marginally higher than
be submitted on or before October 19, significant aspects of such statements. ISE’s current fees and is set at a level
2015. A. Self-Regulatory Organization’s ISE believes will remain attractive to its
For the Commission, by the Division of Statement of the Purpose of, and members. Further, the proposed Taker
Trading and Markets, pursuant to delegated Statutory Basis for, the Proposed Rule Fee is within the range of fees charged
authority.15 Change by other options exchanges, including,
Robert W. Errett, for example, the Nasdaq Options Market
Deputy Secretary.
1. Purpose (‘‘NOM’’), which charges a fee of $0.94
[FR Doc. 2015–24517 Filed 9–25–15; 8:45 am] The Exchange proposes to amend its per contract for Non-Priority Customer
BILLING CODE 8011–01–P Schedule of Fees to increase Taker Fees orders in Non-Penny Pilot Symbols.12
and Fees for Responses to Crossing Similarly, the proposed Fee for
Orders 3 (excluding PIM orders) for Responses to Crossing Orders in Non-
SECURITIES AND EXCHANGE Market Maker,4 Non-ISE Gemini Market Penny Symbols is being increased
COMMISSION Maker,5 Firm Proprietary 6/Broker- slightly and is appropriate to attract
Dealer,7 and Professional Customer 8 price improvement for Crossing Orders
[Release No. 34–75959; File No. SR–ISE submitted to ISE. Further, the proposed
(collectively, ‘‘non-Priority Customer’’)
Gemini–2015–16]
orders in Non-Penny Symbols.9 In Non- Fee for Responses to Crossing Orders in
Self-Regulatory Organizations; ISE Penny Symbols, the current Taker Fee Non-Penny Symbols is within the range
Gemini, LLC; Notice of Filing and for Market Maker orders is $0.86 per of fees charged by other options
Immediate Effectiveness of Proposed contract, and the current Taker Fee for exchanges, including, for example, BOX
Rule Change To Amend the Schedule Non-ISE Gemini Market Maker, Firm Options Exchange (‘‘BOX’’), which
of Fees Proprietary/Broker Dealer, and charges up to $1.22 per contract for non-
Professional Customer orders is $0.87 customer responses in Non-Penny Pilot
September 22, 2015. per contract. Additionally, ISE Gemini Symbols.13 In addition, while the
Pursuant to Section 19(b)(1) of the charges Fees for Responses to Crossing Exchange is increasing the fee spread
Securities Exchange Act of 1934 (the Orders that are equivalent to the Taker between non-Priority Customer and
‘‘Act’’),1 and Rule 19b–4 thereunder,2 Fees described above. The Exchange Priority Customer 14 orders, the
notice is hereby given that on
September 11, 2015, ISE Gemini, LLC 3 ‘‘Responses to Crossing Orders’’ are any contra- 10 15 U.S.C. 78f.
(the ‘‘Exchange’’ or ‘‘ISE Gemini’’) filed side interest (i.e., orders & quotes) submitted after 11 15 U.S.C. 78f(b)(4).
the commencement of an auction in the Exchange’s 12 See NOM Fee Schedule, Chapter XV Options
with the Securities and Exchange Facilitation Mechanism, Solicited Order Pricing, Sec. 2. NASDAQ Options Market—Fees
Commission the proposed rule change, Mechanism, Block Order Mechanism or Price and Rebates.
as described in Items I, II, and III below, Improvement Mechanism (‘‘PIM’’). 13 The fees charged by BOX to non-customers for
4 The term Market Maker refers to ‘‘Competitive
which Items have been prepared by the Responses in the Solicitation of Facilitation
Market Makers’’ and ‘‘Primary Market Makers’’ Auction Mechanisms range from $0.20 to $0.27. See
self-regulatory organization. The collectively. See Rule 100(a)(25). BOX Fee Schedule, Section I. Exchange Fees, C.
Commission is publishing this notice to 5 A ‘‘Non-ISE Gemini Market Maker’’ is a market
Facilitation and Solicitation Transactions.
solicit comments on the proposed rule maker as defined in Section 3(a)(38) of the According to the Fee Schedule, ‘‘Responses to
change from interested persons. Securities Exchange Act of 1934, as amended, Facilitation and Solicitation Orders executed in
registered in the same options class on another these mechanisms shall be charged the ‘add’ fee.’’
I. Self-Regulatory Organization’s options exchange. Id. at Section II. Liquidity Fees and Credits, B.
Statement of the Terms of Substance of 6 A ‘‘Firm Proprietary’’ order is an order
Facilitation and Solicitation Transactions, second
the Proposed Rule Change submitted by a member for its own proprietary bullet. The Fee for Adding Liquidity in Non-Penny
account. Pilot Classes for all account types is $0.95. Id. at
tkelley on DSK3SPTVN1PROD with NOTICES
ISE Gemini proposes to amend the 7 A ‘‘Broker-Dealer’’ order is an order submitted Section II. Liquidity Fees and Credits, B.
Schedule of Fees as described in more by a member for a broker-dealer account that is not Facilitation and Solicitation Transactions. Thus,
its own proprietary account. BOX’s fees range from $1.15 to $1.22 per contract.
detail below. The text of the proposed 8 A ‘‘Professional Customer’’ is a person or entity 14 In contrast to the proposed Taker Fee and Fee
that is not a broker/dealer and is not a Priority for Responses to Crossing Orders of $0.89, Priority
15 See 17 CFR 200.30–3(a)(12). Customer. Customer orders that remove liquidity on ISE
1 15 U.S.C. 78s(b)(1). 9 ‘‘Non-Penny Symbols’’ are options overlying all Gemini are charged a lower Taker Fee of $0.82 for
2 17 CFR 240.19b–4. symbols excluding Penny Symbols. Continued
VerDate Sep<11>2014 17:19 Sep 25, 2015 Jkt 235001 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 E:\FR\FM\28SEN1.SGM 28SEN1](https://thefederalregister.org/doc/80_FR_58505/page/4.svg)
Document Created: 2018-02-26 10:22:04
Document Modified: 2018-02-26 10:22:04
| 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 58318 |
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