80_FR_74383 80 FR 74155 - Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt Rule 2.13, Mandatory Participation in Testing of Backup Systems

80 FR 74155 - Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt Rule 2.13, Mandatory Participation in Testing of Backup Systems

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 228 (November 27, 2015)

Page Range74155-74158
FR Document2015-30086

Federal Register, Volume 80 Issue 228 (Friday, November 27, 2015) 
[Federal Register Volume 80, Number 228 (Friday, November 27, 2015)]
[Notices]
[Pages 74155-74158]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-30086]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76497; File No. SR-NSX-2015-06]


Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Adopt Rule 2.13, Mandatory Participation in Testing of Backup Systems

November 20, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Exchange Act'' or ``Act'') \1\ and Rule 19b-4 thereunder,\2\ 
notice is hereby given that on November 10, 2015, National Stock 
Exchange, Inc. (``NSX'' 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 
substantially prepared by the Exchange. The Exchange has designated 
this proposal as a ``non-controversial'' proposed rule change pursuant 
to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)(iii) \4\ 
thereunder, which renders it effective upon filing with the Commission. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).

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[[Page 74156]]

I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange is proposing to adopt Rule 2.13, Mandatory 
Participation in Testing of Backup Systems, establishing business 
continuity and disaster recovery plans (``BC/DR plans'') testing 
requirements for certain ETP Holders in connection with Regulation 
Systems Compliance and Integrity (''Regulation SCI''), as further 
described below.\5\
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    \5\ See Securities Exchange Act Release No. 73639 (November 19, 
2014), 79 FR 72252 (December 5, 2014) (``SCI Adopting Release'').
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    The text of the proposed rule change is available at the Exchange's 
Web site at www.nsx.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 the 
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 parts of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    As adopted by the Commission, Regulation SCI applies to certain 
self-regulatory organizations (including the Exchange), alternative 
trading systems (``ATSs''), plan processors, and exempt clearing 
agencies (collectively, ``SCI entities''), and will require these SCI 
entities to comply with requirements with respect to the automated 
systems central to the performance of their regulated activities.\6\ 
Among the requirements of Regulation SCI is Rule 1001(a)(2)(v), which 
requires the Exchange and other SCI entities to maintain ``[b]usiness 
continuity and disaster recovery plans that include maintaining backup 
and recovery capabilities sufficiently resilient and geographically 
diverse and that are reasonably designed to achieve next business day 
resumption of trading and two-hour resumption of critical SCI systems 
following a wide-scale disruption.'' \7\
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    \6\ The Exchange ceased trading operations as of the close of 
business on May 30, 2014. See Securities Exchange Act Release No. 
72107 (May 6, 2014), 79 FR 27017 (May 12, 2014) (SR-NSX-2014-14). 
However, the Exchange has retained its status as a registered 
national securities exchange under Section 6 of the Act, 15 U.S.C. 
78f and a self-regulatory organization as defined in Section 
3(a)(26) of the Act, 15 U.S.C. 78c(a)(26). NSX is planning to resume 
trading operations, subject to receiving Commission approval to do 
so.
    \7\ 17 CFR 242.1001(a)(2)(v).
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    Pursuant to Regulation SCI, the Exchange is proposing to require 
certain ETP Holders to participate in testing of the operation of the 
Exchange's BC/DR plans. Paragraph (a) of Rule 1004 of Regulation SCI 
requires each SCI entity to: ``[e]stablish standards for the 
designation of those members or participants that the SCI entity 
reasonably determines are, taken as a whole, the minimum necessary for 
the maintenance of fair and orderly markets in the event of the 
activation of such plans.'' \8\ Paragraph (b) of Rule 1004 further 
requires each SCI entity to ``[d]esignate members or participants 
pursuant to the standards established in paragraph (a) of [Rule 1004] 
and require participation by such designated members or participants in 
scheduled functional and performance testing of the operation of such 
plans, in the manner and frequency specified by the SCI entity, 
provided that such frequency shall not be less than once every 12 
months.'' \9\
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    \8\ 17 CFR 242.1004(a).
    \9\ 17 CFR 242.1004(b).
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    To comply with the provisions of Rule 1004 of Regulation SCI, the 
Exchange is proposing to adopt new Rule 2.13 governing mandatory 
testing of the Exchange's backup systems. First, in paragraph (a) of 
Rule 2.13, the Exchange proposes to include language from paragraph (a) 
of Rule 1004 of Regulation SCI to summarize the Exchange's obligation 
pursuant to such rule. Specifically, the Exchange proposes to state 
that ``[p]ursuant to Regulation SCI and with respect to the Exchange's 
business continuity and disaster recovery plans, including its backup 
systems, the Exchange is required to establish standards for the 
designation of ETP Holders that the Exchange reasonably determines are, 
taken as a whole, the minimum necessary for the maintenance of fair and 
orderly markets in the event of the activation of such plans.'' The 
Exchange further proposes that paragraph (a) state that the ``Exchange 
has established standards and will designate ETP Holders according to 
those standards'' as set forth in the proposed Rule. In addition, the 
Exchange proposes to make clear that all ETP Holders are permitted to 
connect to the Exchange's backup systems as well as to participate in 
testing of such systems. Proposed paragraph (a) is consistent with the 
Commission's adoption of Regulation SCI, which encouraged ``SCI 
entities to permit non-designated members or participants to 
participate in the testing of the SCI entity's BC/DR plans if they 
request to do so.'' \10\
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    \10\ See SCI Adopting Release, supra note 5 at 72350.
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    Second, in paragraph (b) of Rule 2.13, the Exchange proposes to 
specify the criteria that the Exchange will employ to determine whether 
an ETP Holder will be required to connect to the Exchange's backup 
systems and to participate in scheduled functional and performance 
testing as announced by the Exchange, which shall occur at least once 
every 12 months. Specifically, proposed paragraph (b) would require all 
ETP Holders that account for a meaningful percentage of the Exchange's 
volume to connect to the Exchange's backup systems and to participate 
in functional and performance testing.
    In adopting the requirements of Rule 2.13(b) to participate in 
mandatory testing of such systems, the Exchange intends to subject to 
the Rule only those ETP Holders that the Exchange believes are 
necessary to maintain fair and orderly markets at the Exchange. 
Designating ETP Holders to participate in mandatory testing because 
they account for a meaningful percentage of the Exchange's overall 
volume is a reasonable means to ensure the maintenance of a fair and 
orderly market on the Exchange.
    In addition to paragraphs (a) and (b) described above, the Exchange 
also proposes to adopt Interpretation and Policy .01, which would 
provide additional detail regarding the notice that will be provided to 
ETP Holders that have been designated pursuant to subparagraph (b) of 
the Rule as well as the Exchange's method for measuring the volume 
threshold. As proposed, Interpretation and Policy .01 would state that 
for purposes of identifying ETP Holders that account for a meaningful 
percentage of the Exchange's overall volume, the Exchange will measure 
volume executed on the Exchange on a quarterly basis. The percentage of 
volume that the Exchange considers to be meaningful for purposes of 
this Interpretation and Policy .01 will be determined by the Exchange 
and will be published in a circular distributed to ETP Holders. The 
Exchange will publish its first Information Circular consistent with

[[Page 74157]]

Rule 2.13 upon a resumption of trading on the System.
    The proposed Interpretation and Policy would also require the 
Exchange to notify, on a quarterly basis, individual ETP Holders that 
are subject to proposed paragraph (b) based on the prior calendar 
quarter's volume. Finally, as proposed, if an ETP Holder has not 
previously been subject to the requirements of proposed paragraph (b), 
then such ETP Holder would have until the next calendar quarter before 
such requirements are applicable. The Exchange believes the proposed 
notice requirements are necessary to provide ETP Holders with proper 
advance notice in the event they become subject to proposed Rule 
2.13(b). The proposed timeframes would also provide ETP Holders with 
adequate time to become compliant with such Rule due to the necessary 
infrastructure changes that may be needed to connect to the Exchange's 
backup systems for an ETP Holder that is not already connected.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \11\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \12\ in particular, in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general to protect investors and the public 
interest. The proposal will ensure that the minimum number of ETP 
Holders necessary for the maintenance of a fair an orderly market are 
properly designated consistent with Rule 1004 of Regulation SCI.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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    Specifically, the proposal will adopt criteria with respect to the 
designation of ETP Holders that are required to participate in the 
testing of the Exchange's BC/DR plans, as well as appropriate 
notification regarding such designation. As set forth in the SCI 
Adopting Release, ``SROs have the authority, and legal responsibility, 
under Section 6 of the Exchange Act, to adopt and enforce rules 
(including rules to comply with Regulation SCI's requirements relating 
to BC/DR testing) applicable to their members or participants that are 
designed to, among other things, 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 mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest.'' \13\ The proposal is 
consistent with such authority and legal responsibility.
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    \13\ See SCI Adopting Release, supra note 5 at 72350.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. To the contrary, the proposal 
is not a competitive proposal but rather is necessary for the 
Exchange's compliance with Regulation SCI.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change from market participants or others.

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) of the Act \14\ and Rule 19b-4(f)(6)(iii) thereunder.\15\ 
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.\16\ A proposed rule change filed under Rule 
19b-4(f)(6)(iii) \17\ normally does not become operative prior to 30 
days after the date of the filing. However, pursuant to Rule 
19b4(f)(6)(iii),\18\ the Commission may designate a shorter time if 
such action is consistent with the protection of investors and the 
public interest.
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    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ In addition, Rule 19b-4(f)(6) requires a self-regulatory 
organization to give the Commission written notice of its intent to 
file 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.
    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Commission believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest 
as it will allow the Exchange to immediately incorporate changes 
required under Regulation SCI, such as establishing standards for 
designating BC/DR participants, and help ensure that the Exchange will 
be able to satisfy the requirements of Regulation SCI once the Exchange 
commences operations. Accordingly, the Commission designates the 
proposed rule change to be operative upon filing.\19\
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    \19\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \20\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \20\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NSX-2015-06 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 No. SR-NSX-2015-06. This file 
number should be included in the subject line if email is used. To help 
the

[[Page 74158]]

Commission process and review 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 20549-1090. Copies of the filing will also 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. Interested 
persons should submit only information that they wish to make available 
publicly. All submissions should refer to file number SR-NSX-2015-06 
and should be submitted on or before December 18, 2015.

    For the Commission by the Division of Trading and Markets, 
pursuant to the delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-30086 Filed 11-25-15; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 228 / Friday, November 27, 2015 / Notices 74155 continuity, workplace safety and the At any time within 60 days of the business days between 10 a.m. and 3 security of the Exchange’s operations filing of such proposed rule change, the p.m. Copies of the filing will also be and helping to protect investors and the Commission summarily may available for inspection and copying at public interest. The proposed rule is temporarily suspend such rule change if the NYSE’s principal office and on its substantially similar to the rules of the it appears to the Commission that such Internet Web site at www.nyse.com. All Exchange’s affiliates NYSE and NYSE action is necessary or appropriate in the comments received will be posted MKT and the fingerprinting rules of public interest, for the protection of without change; the Commission does other SROs.13 The proposed amendment investors, or otherwise in furtherance of not edit personal identifying would also conform the Exchange’s the purposes of the Act. If the information from submissions. You fingerprinting practices with Section Commission takes such action, the should submit only information that 17(f)(2) of the Act. Commission shall institute proceedings you wish to make available publicly. All under Section 19(b)(2)(B) 17 of the Act to B. Self-Regulatory Organization’s determine whether the proposed rule submissions should refer to File Statement on Burden on Competition change should be approved or Number SR–NYSEArca–2015–92 and The Exchange does not believe that disapproved. should be submitted on or before the proposed rule change will impose December 18, 2015. IV. Solicitation of Comments any burden on competition that is not For the Commission, by the Division of necessary or appropriate in furtherance Interested persons are invited to Trading and Markets, pursuant to delegated of the purposes of the Act. The submit written data, views, and authority.18 proposed rule change is not intended to arguments concerning the foregoing, Robert W. Errett address competitive issues but rather to including whether the proposed rule change is consistent with the Act. Deputy Secretary. enhance the security and continuity of Comments may be submitted by any of [FR Doc. 2015–30082 Filed 11–25–15; 8:45 am] the Exchange’s facilities and records by adopting a fingerprinting rule that the following methods: BILLING CODE 8011–01–P codifies the Exchange’s current practice Electronic Comments in compliance with Section 17(f)(2) of the Act as amended by the Dodd-Frank • Use the Commission’s Internet SECURITIES AND EXCHANGE Act.14 As discussed below, the comment form (http://www.sec.gov/ COMMISSION Exchange notes that the proposed rule rules/sro.shtml); or • Send an email to rule-comments@ change is based on the fingerprinting [Release No. 34–76497; File No. SR–NSX– sec.gov. Please include File Number SR– rules of other SROs. 2015–06] NYSEArca–2015–92 on the subject line. C. Self-Regulatory Organization’s Self-Regulatory Organizations; Paper Comments Statement on Comments on the National Stock Exchange, Inc.; Notice Proposed Rule Change Received From • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities of Filing and Immediate Effectiveness Members, Participants, or Others of Proposed Rule Change To Adopt and Exchange Commission, 100 F Street No written comments were solicited Rule 2.13, Mandatory Participation in NE., Washington, DC 20549–1090. or received with respect to the proposed Testing of Backup Systems rule change. All submissions should refer to File Number SR–NYSEArca–2015–92. This November 20, 2015. III. Date of Effectiveness of the file number should be included on the Proposed Rule Change and Timing for subject line if email is used. To help the Pursuant to Section 19(b)(1) of the Commission Action Commission process and review your Securities Exchange Act of 1934 (the comments more efficiently, please use ‘‘Exchange Act’’ or ‘‘Act’’) 1 and Rule Because the proposed rule change does not (i) significantly affect the only one method. The Commission will 19b–4 thereunder,2 notice is hereby protection of investors or the public post all comments on the Commission’s given that on November 10, 2015, interest; (ii) impose any significant Internet Web site (http://www.sec.gov/ National Stock Exchange, Inc. (‘‘NSX’’ burden on competition; and (iii) become rules/sro.shtml). Copies of the or the ‘‘Exchange’’) filed with the operative for 30 days from the date on submission, all subsequent Securities and Exchange Commission which it was filed, or such shorter time amendments, all written statements (the ‘‘Commission’’) the proposed rule as the Commission may designate, if with respect to the proposed rule change, as described in Items I and II consistent with the protection of change that are filed with the below, which Items have been investors and the public interest, the Commission, and all written substantially prepared by the Exchange. proposed rule change has become communications relating to the The Exchange has designated this effective pursuant to Section 19(b)(3)(A) proposed rule change between the proposal as a ‘‘non-controversial’’ of the Act 15 and Rule 19b–4(f)(6) Commission and any person, other than proposed rule change pursuant to thereunder.16 those that may be withheld from the Section 19(b)(3)(A) of the Act 3 and Rule public in accordance with the 19b–4(f)(6)(iii) 4 thereunder, which 13 See, e.g., International Securities Exchange provisions of 5 U.S.C. 552, will be renders it effective upon filing with the Rule 1408. See generally Release No. 71066, 78 FR available for Web site viewing and Commission. The Commission is at 76668, n. 12 (noting that ‘‘[a]n FBI-approved printing in the Commission’s Public Channel Partner simply helps expedite the delivery publishing this notice to solicit mstockstill on DSK4VPTVN1PROD with NOTICES of Criminal History Summary information on behalf Reference Room, 100 F Street NE., comments on the proposed rule change of the FBI’’, and that the ‘‘process for making a Washington, DC 20549 on official from interested persons. request through an FBI-approved Channel Partner is consistent with FBI submission procedures’’). the proposed rule change, along with a brief 14 See Section 929S of the Dodd-Frank Act. 18 17 CFR 200.30–3(a)(12). description and the text of the proposed rule 15 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1). change, at least five business days prior to the date 2 17 CFR 240.19b–4. 16 17 CFR 240.19b–4(f)(6). As required under Rule of filing of the proposed rule change, or such 19b–4(f)(6)(iii), the Exchange provided the shorter time as designated by the Commission. 3 15 U.S.C. 78s(b)(3)(A). Commission with written notice of its intent to file 17 15 U.S.C. 78s(b)(2)(B). 4 17 CFR 240.19b–4(f)(6)(iii). VerDate Sep<11>2014 19:01 Nov 25, 2015 Jkt 238001 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 E:\FR\FM\27NON1.SGM 27NON1

74156 Federal Register / Vol. 80, No. 228 / Friday, November 27, 2015 / Notices I. Self-Regulatory Organization’s maintaining backup and recovery backup systems as well as to participate Statement of the Terms of the Substance capabilities sufficiently resilient and in testing of such systems. Proposed of the Proposed Rule Change geographically diverse and that are paragraph (a) is consistent with the The Exchange is proposing to adopt reasonably designed to achieve next Commission’s adoption of Regulation Rule 2.13, Mandatory Participation in business day resumption of trading and SCI, which encouraged ‘‘SCI entities to Testing of Backup Systems, establishing two-hour resumption of critical SCI permit non-designated members or business continuity and disaster systems following a wide-scale participants to participate in the testing recovery plans (‘‘BC/DR plans’’) testing disruption.’’ 7 of the SCI entity’s BC/DR plans if they requirements for certain ETP Holders in Pursuant to Regulation SCI, the request to do so.’’ 10 connection with Regulation Systems Exchange is proposing to require certain Second, in paragraph (b) of Rule 2.13, Compliance and Integrity (’’Regulation ETP Holders to participate in testing of the Exchange proposes to specify the SCI’’), as further described below.5 the operation of the Exchange’s BC/DR criteria that the Exchange will employ The text of the proposed rule change plans. Paragraph (a) of Rule 1004 of to determine whether an ETP Holder is available at the Exchange’s Web site Regulation SCI requires each SCI entity will be required to connect to the at www.nsx.com, at the principal office to: ‘‘[e]stablish standards for the Exchange’s backup systems and to of the Exchange, and at the designation of those members or participate in scheduled functional and Commission’s Public Reference Room. participants that the SCI entity performance testing as announced by reasonably determines are, taken as a the Exchange, which shall occur at least II. Self-Regulatory Organization’s whole, the minimum necessary for the once every 12 months. Specifically, Statement of the Purpose of, and the maintenance of fair and orderly markets proposed paragraph (b) would require Statutory Basis for, the Proposed Rule in the event of the activation of such all ETP Holders that account for a Change plans.’’ 8 Paragraph (b) of Rule 1004 meaningful percentage of the In its filing with the Commission, the further requires each SCI entity to Exchange’s volume to connect to the Exchange included statements ‘‘[d]esignate members or participants Exchange’s backup systems and to concerning the purpose of and basis for pursuant to the standards established in participate in functional and the proposed rule change and discussed paragraph (a) of [Rule 1004] and require performance testing. any comments it received on the participation by such designated In adopting the requirements of Rule proposed rule change. The text of these members or participants in scheduled 2.13(b) to participate in mandatory statements may be examined at the functional and performance testing of the operation of such plans, in the testing of such systems, the Exchange places specified in Item IV below. The intends to subject to the Rule only those Exchange has prepared summaries, set manner and frequency specified by the SCI entity, provided that such frequency ETP Holders that the Exchange believes forth in Sections A, B, and C below, of are necessary to maintain fair and the most significant parts of such shall not be less than once every 12 months.’’ 9 orderly markets at the Exchange. statements. Designating ETP Holders to participate To comply with the provisions of A. Self-Regulatory Organization’s Rule 1004 of Regulation SCI, the in mandatory testing because they Statement of the Purpose of, and Exchange is proposing to adopt new account for a meaningful percentage of Statutory Basis for, the Proposed Rule Rule 2.13 governing mandatory testing the Exchange’s overall volume is a Change of the Exchange’s backup systems. First, reasonable means to ensure the in paragraph (a) of Rule 2.13, the maintenance of a fair and orderly 1. Purpose Exchange proposes to include language market on the Exchange. As adopted by the Commission, from paragraph (a) of Rule 1004 of In addition to paragraphs (a) and (b) Regulation SCI applies to certain self- described above, the Exchange also Regulation SCI to summarize the regulatory organizations (including the proposes to adopt Interpretation and Exchange’s obligation pursuant to such Exchange), alternative trading systems Policy .01, which would provide rule. Specifically, the Exchange (‘‘ATSs’’), plan processors, and exempt additional detail regarding the notice proposes to state that ‘‘[p]ursuant to clearing agencies (collectively, ‘‘SCI that will be provided to ETP Holders Regulation SCI and with respect to the entities’’), and will require these SCI that have been designated pursuant to Exchange’s business continuity and entities to comply with requirements subparagraph (b) of the Rule as well as disaster recovery plans, including its with respect to the automated systems the Exchange’s method for measuring backup systems, the Exchange is central to the performance of their the volume threshold. As proposed, required to establish standards for the regulated activities.6 Among the Interpretation and Policy .01 would designation of ETP Holders that the requirements of Regulation SCI is Rule state that for purposes of identifying 1001(a)(2)(v), which requires the Exchange reasonably determines are, taken as a whole, the minimum ETP Holders that account for a Exchange and other SCI entities to meaningful percentage of the maintain ‘‘[b]usiness continuity and necessary for the maintenance of fair and orderly markets in the event of the Exchange’s overall volume, the disaster recovery plans that include Exchange will measure volume activation of such plans.’’ The Exchange 5 See Securities Exchange Act Release No. 73639 further proposes that paragraph (a) state executed on the Exchange on a quarterly (November 19, 2014), 79 FR 72252 (December 5, that the ‘‘Exchange has established basis. The percentage of volume that the 2014) (‘‘SCI Adopting Release’’). standards and will designate ETP Exchange considers to be meaningful for 6 The Exchange ceased trading operations as of Holders according to those standards’’ purposes of this Interpretation and mstockstill on DSK4VPTVN1PROD with NOTICES the close of business on May 30, 2014. See Policy .01 will be determined by the Securities Exchange Act Release No. 72107 (May 6, as set forth in the proposed Rule. In 2014), 79 FR 27017 (May 12, 2014) (SR–NSX–2014– addition, the Exchange proposes to Exchange and will be published in a 14). However, the Exchange has retained its status make clear that all ETP Holders are circular distributed to ETP Holders. The as a registered national securities exchange under permitted to connect to the Exchange’s Exchange will publish its first Section 6 of the Act, 15 U.S.C. 78f and a self- Information Circular consistent with regulatory organization as defined in Section 7 17 CFR 242.1001(a)(2)(v). 3(a)(26) of the Act, 15 U.S.C. 78c(a)(26). NSX is 8 17 CFR 242.1004(a). 10 See SCI Adopting Release, supra note 5 at planning to resume trading operations, subject to receiving Commission approval to do so. 9 17 CFR 242.1004(b). 72350. VerDate Sep<11>2014 19:01 Nov 25, 2015 Jkt 238001 PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 E:\FR\FM\27NON1.SGM 27NON1

Federal Register / Vol. 80, No. 228 / Friday, November 27, 2015 / Notices 74157 Rule 2.13 upon a resumption of trading mechanism of a free and open market is consistent with the protection of on the System. and a national market system, and, in investors and the public interest. The proposed Interpretation and general, to protect investors and the The Exchange has asked the Policy would also require the Exchange public interest.’’ 13 The proposal is Commission to waive the 30-day to notify, on a quarterly basis, consistent with such authority and legal operative delay so that the proposal may individual ETP Holders that are subject responsibility. become operative immediately upon to proposed paragraph (b) based on the filing. The Commission believes that prior calendar quarter’s volume. Finally, B. Self-Regulatory Organization’s waiving the 30-day operative delay is as proposed, if an ETP Holder has not Statement on Burden on Competition consistent with the protection of previously been subject to the investors and the public interest as it The Exchange does not believe that requirements of proposed paragraph (b), will allow the Exchange to immediately the proposed rule change will impose then such ETP Holder would have until incorporate changes required under the next calendar quarter before such any burden on competition not Regulation SCI, such as establishing requirements are applicable. The necessary or appropriate in furtherance standards for designating BC/DR Exchange believes the proposed notice of the purposes of the Act. To the participants, and help ensure that the requirements are necessary to provide contrary, the proposal is not a Exchange will be able to satisfy the ETP Holders with proper advance notice competitive proposal but rather is requirements of Regulation SCI once the in the event they become subject to necessary for the Exchange’s Exchange commences operations. proposed Rule 2.13(b). The proposed compliance with Regulation SCI. Accordingly, the Commission timeframes would also provide ETP C. Self-Regulatory Organization’s designates the proposed rule change to Holders with adequate time to become Statement on Comments on the be operative upon filing.19 compliant with such Rule due to the Proposed Rule Change Received From At any time within 60 days of the necessary infrastructure changes that Members, Participants or Others filing of such proposed rule change, the may be needed to connect to the Commission summarily may Exchange’s backup systems for an ETP The Exchange has neither solicited temporarily suspend such rule change if Holder that is not already connected. nor received written comments on the it appears to the Commission that such proposed rule change from market action is necessary or appropriate in the 2. Statutory Basis participants or others. public interest, for the protection of The Exchange believes that its investors, or otherwise in furtherance of proposal is consistent with Section 6(b) III. Date of Effectiveness of the the purposes of the Act. If the of the Act 11 in general, and furthers the Proposed Rule Change and Timing for Commission takes such action, the objectives of Section 6(b)(5) of the Act 12 Commission Action Commission shall institute proceedings in particular, in that it is designed to under Section 19(b)(2)(B) 20 of the Act to promote just and equitable principles of The Exchange has filed the proposed rule change pursuant to Section determine whether the proposed rule trade, to remove impediments to and change should be approved or perfect the mechanism of a free and 19(b)(3)(A) of the Act 14 and Rule 19b– 4(f)(6)(iii) thereunder.15 Because the disapproved. open market and a national market system, and, in general to protect proposed rule change does not: (i) IV. Solicitation of Comments investors and the public interest. The significantly affect the protection of Interested persons are invited to proposal will ensure that the minimum investors or the public interest; (ii) submit written data, views, and number of ETP Holders necessary for impose any significant burden on arguments concerning the foregoing, the maintenance of a fair an orderly competition; and (iii) become operative including whether the proposed rule market are properly designated prior to 30 days from the date on which change is consistent with the Act. consistent with Rule 1004 of Regulation it was filed, or such shorter time as the Comments may be submitted by any of SCI. Commission may designate, if the following methods: Specifically, the proposal will adopt consistent with the protection of criteria with respect to the designation investors and the public interest, the Electronic Comments of ETP Holders that are required to proposed rule change has become • Use the Commission’s Internet participate in the testing of the effective pursuant to Section 19(b)(3)(A) comment form (http://www.sec.gov/ Exchange’s BC/DR plans, as well as of the Act and Rule 19b–4(f)(6)(iii) rules/sro.shtml); or appropriate notification regarding such thereunder.16 A proposed rule change • Send an email to rule-comments@ designation. As set forth in the SCI filed under Rule 19b–4(f)(6)(iii) 17 sec.gov. Please include File Number SR– Adopting Release, ‘‘SROs have the normally does not become operative NSX–2015–06 on the subject line. authority, and legal responsibility, prior to 30 days after the date of the filing. However, pursuant to Rule Paper Comments under Section 6 of the Exchange Act, to adopt and enforce rules (including rules 19b4(f)(6)(iii),18 the Commission may • Send paper comments in triplicate to comply with Regulation SCI’s designate a shorter time if such action to Brent J. Fields, Secretary, Securities requirements relating to BC/DR testing) and Exchange Commission, 100 F Street applicable to their members or 13 See SCI Adopting Release, supra note 5 at NE., Washington, DC 20549–1090. 72350. All submissions should refer to File No. participants that are designed to, among 14 15 U.S.C. 78s(b)(3)(A)(iii). other things, foster cooperation and 15 17 CFR 240.19b–4(f)(6). SR–NSX–2015–06. This file number mstockstill on DSK4VPTVN1PROD with NOTICES coordination with persons engaged in 16 In addition, Rule 19b–4(f)(6) requires a self- should be included in the subject line regulating, clearing, settling, processing regulatory organization to give the Commission if email is used. To help the information with respect to, and written notice of its intent to file the proposed rule change at least five business days prior to the date 19 For purposes only of waiving the 30-day facilitating transactions in securities, to of filing of the proposed rule change, or such operative delay, the Commission has also remove impediments to and perfect the shorter time as designated by the Commission. The considered the proposed rule’s impact on Exchange has satisfied this requirement. efficiency, competition, and capital formation. See 11 15 U.S.C. 78f(b). 17 17 CFR 240.19b–4(f)(6). 15 U.S.C. 78c(f). 12 15 U.S.C. 78f(b)(5). 18 17 CFR 240.19b–4(f)(6)(iii). 20 15 U.S.C. 78s(b)(2)(B). VerDate Sep<11>2014 19:01 Nov 25, 2015 Jkt 238001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 E:\FR\FM\27NON1.SGM 27NON1

74158 Federal Register / Vol. 80, No. 228 / Friday, November 27, 2015 / Notices Commission process and review have been prepared by the Exchange. Feed using the same non-display use fee comments more efficiently, please use The Commission is publishing this structure established for the Exchange’s only one method. The Commission will notice to solicit comments on the other market data products.4 Non- post all comments on the Commission’s proposed rule change from interested display use would mean accessing, Internet Web site (http://www.sec.gov/ persons. processing, or consuming the NYSE rules/sro.shtml). Copies of the Integrated Feed delivered via direct submission, all subsequent I. Self-Regulatory Organization’s and/or Redistributor 5 data feeds for a amendments, all written statements Statement of the Terms of Substance of purpose other than in support of a data with respect to the proposed rule the Proposed Rule Change recipient’s display or further internal or change that are filed with the The Exchange proposes to establish external redistribution (‘‘Non-Display Commission, and all written fees for the NYSE Integrated Feed. The Use’’). Non-Display Use would include communications relating to the proposed rule change is available on the any trading use, such as high frequency proposed rule change between the Exchange’s Web site at www.nyse.com, or algorithmic trading, and would also Commission and any person, other than at the principal office of the Exchange, include any trading in any asset class, those that may be withheld from the and at the Commission’s Public automated order or quote generation public in accordance with the Reference Room. and/or order pegging, price referencing provisions of 5 U.S.C. 552, will be for algorithmic trading or smart order II. Self-Regulatory Organization’s available for Web site viewing and routing, operations control programs, Statement of the Purpose of, and printing in the Commission’s Public investment analysis, order verification, Reference Room, 100 F Street NE., Statutory Basis for, the Proposed Rule Change surveillance programs, risk Washington, DC 20549–1090. Copies of management, compliance, and portfolio the filing will also be available for In its filing with the Commission, the management. inspection and copying at the principal self-regulatory organization included Under the proposal, for Non-Display office of the Exchange. All comments statements concerning the purpose of, Use of NYSE Integrated Feed, there received will be posted without change; and basis for, the proposed rule change would be three categories of, and fees the Commission does not edit personal and discussed any comments it received applicable to, data recipients. One, two identifying information from on the proposed rule change. The text or three categories of Non-Display Use submissions. Interested persons should of those statements may be examined at may apply to a data recipient. submit only information that they wish the places specified in Item IV below. to make available publicly. All The Exchange has prepared summaries, • Under the proposal, the Category 1 submissions should refer to file number set forth in sections A, B, and C below, Fee would be $20,000 per month and SR–NSX–2015–06 and should be of the most significant parts of such would apply when a data recipient’s submitted on or before December 18, statements. Non-Display Use of the NYSE Integrated 2015. Feed is on its own behalf, not on behalf A. Self-Regulatory Organization’s of its clients. For the Commission by the Division of Trading and Markets, pursuant to the Statement of the Purpose of, and the • Under the proposal, Category 2 Fees Statutory Basis for, the Proposed Rule would be $20,000 per month and would delegated authority.21 Change apply to a data recipient’s Non-Display Robert W. Errett, Deputy Secretary. 1. Purpose Use of the NYSE Integrated Feed on behalf of its clients. [FR Doc. 2015–30086 Filed 11–25–15; 8:45 am] The Exchange proposes to establish • Under the proposal, Category 3 Fees BILLING CODE 8011–01–P the fees for the NYSE Integrated Feed in would be $20,000 and would apply to the NYSE Proprietary Market Data Fee a data recipient’s Non-Display Use of Schedule (‘‘Fee Schedule’’).3 The SECURITIES AND EXCHANGE the NYSE Integrated Feed for the Exchange proposes to make the NYSE COMMISSION purpose of internally matching buy and Integrated Feed available without charge sell orders within an organization, [Release No. 34–76485; File No. SR–NYSE– starting on November 16, 2015. The including matching customer orders for 2015–57] Exchange proposes to establish the data recipient’s own behalf and/or on following fees for the NYSE Integrated Self-Regulatory Organizations; New behalf of its clients. This category would Feed operative on January 1, 2016: York Stock Exchange LLC; Notice of apply to Non-Display Use in trading 1. Access Fee. For the receipt of Filing and Immediate Effectiveness of platforms, such as, but not restricted to, access to the NYSE Integrated Feed, the a Proposed Rule Change Establishing alternative trading systems (‘‘ATSs’’), Exchange proposes to charge $7,500 per Fees for the NYSE Integrated Feed broker crossing networks, broker month. crossing systems not filed as ATSs, dark November 20, 2015. 2. User Fees. The Exchange proposes pools, multilateral trading facilities, Pursuant to Section 19(b)(1) of the to charge a Professional User Fee (Per exchanges and systematic Securities Exchange Act of 1934 User) of $70 per month and a Non- internalization systems. Category 3 Fees (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Professional User Fee (Per User) of $16 would be capped at $60,000 per month notice is hereby given that on November per month. These user fees would apply for each data recipient for the NYSE 5, 2015, New York Stock Exchange LLC to each display device that has access to Integrated Feed. (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the NYSE Integrated Feed. 3. Non-Display Use Fees. The mstockstill on DSK4VPTVN1PROD with NOTICES the Securities and Exchange 4 See Securities Exchange Act Release Nos. 69278 Commission (‘‘Commission’’) the Exchange proposes to establish non- (April 2, 2013), 78 FR 20973 (April 8, 2013) (SR– proposed rule change as described in display fees for the NYSE Integrated NYSE–2013–25) and 72923 (Aug. 26, 2014), 79 FR 52079 (Sept. 2, 2014) (SR–NYSE–2014–43). Items I, II, and III below, which Items 3 The proposed rule change establishing the 5 ‘‘Redistributor’’ means a vendor or any person NYSE Integrated Feed was immediately effective on that provides a real-time NYSE data product to a 21 17 CFR 200.30–3(a)(12). January 23, 2015. See Securities Exchange Act data recipient or to any system that a data recipient 1 15 U.S.C. 78s(b)(1). Release No. 74128 (Jan. 23, 2015), 80 FR 4951 (Jan. uses, irrespective of the means of transmission or 2 17 CFR 240.19b–4. 29, 2015) (SR–NYSE–2015–03). access. VerDate Sep<11>2014 19:01 Nov 25, 2015 Jkt 238001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 E:\FR\FM\27NON1.SGM 27NON1


Document Created: 2015-12-14 14:05:49
Document Modified: 2015-12-14 14:05:49
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 74155 
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