80 FR 79122 - Self-Regulatory Organizations; National Stock Exchange, Inc.; Order Approving a Proposed Rule Change To Modify and Eliminate Certain Rules and To Enable Trading Activity To Resume on the Exchange
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 243 (December 18, 2015)
Federal Register Volume 80, Issue 243 (December 18, 2015)
| Page Range | 79122-79124 | |
| FR Document | 2015-31790 |
[Federal Register Volume 80, Number 243 (Friday, December 18, 2015)] [Notices] [Pages 79122-79124] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-31790] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76640; File No. SR-NSX-2015-05] Self-Regulatory Organizations; National Stock Exchange, Inc.; Order Approving a Proposed Rule Change To Modify and Eliminate Certain Rules and To Enable Trading Activity To Resume on the Exchange December 14, 2015. I. Introduction On November 3, 2015, the National Stock Exchange (``NSX'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission''), pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change proposing changes that would, among other things, allow trading activity to resume on the Exchange.\3\ The proposed rule change was published for comment in the Federal Register on November 13, 2015.\4\ The Commission received no comments on the proposal. This order approves the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 782(b)(1). \2\ 17 CFR 249.19b-4. \3\ On May 1, 2014, NSX filed a proposed rule change to halt all trading activity on the Exchange. See Securities Exchange Act Release No. 72107 (May 6, 2014), 79 FR 27017 (May 12, 2014) (SR-NSX- 2014-14). There has been no trading activity on the Exchange since the close of business on May 30, 2014 (``Closing Date''). \4\ See Securities Exchange Act Release No. 76390 (November 9, 2015), 80 FR 70261 (``Notice''). --------------------------------------------------------------------------- II. Description of the Proposed Rule Change The Exchange proposes to amend Rule 11.1 (Hours of Trading) to rescind Interpretations and Policies .01 (Cessation of Trading Operations NSX) to permit the Exchange to resume trading activity. The Exchange also proposes to (i) amend Rule 11.11 (Orders and Modifiers) to remove descriptions of certain order types that the Exchange will not offer when it resumes trading and to correct the numbering of certain subparagraphs of the rule; (ii) delete Rule 11.12 (Cross Message) and make conforming changes to Rules 11.11(c) and 16.2; (iii) amend Rule 11.13 and Interpretations and Policies .01 to eliminate the order delivery mode of order interaction with the Exchange's trading system (``Order Delivery''); and (iv) adopt Rule 11.25 (Use of Market Data Feeds) to describe the Exchange's use of certain data feeds for order handling and execution.\5\ --------------------------------------------------------------------------- \5\ For a more detailed description of the proposed changes, see Notice, supra note 4. --------------------------------------------------------------------------- [[Page 79123]] In its filing, the Exchange represented to the Commission that it is ready to resume trading activity upon approval of this filing. To that end, the Exchange represents that, since the Closing Date, it has continued to discharge its responsibilities as a self-regulatory organization (``SRO'') in anticipation of resuming trading operations,\6\ specifically, by, among other things, (i) remaining a party to certain multi-party 17d-2 Plans for the Allocation of Regulatory Responsibilities pursuant to Section 17(d)(1) of the Act \7\ and Rules 17d-1 and 17d-2 thereunder \8\ relating to insider trading surveillance and certain Regulation NMS requirements; \9\ (ii) continuing to maintain the operability of its trading system and not modifying the system's functionality, except as necessary to comply with regulatory requirements; \10\ (iii) implementing and executing a rigorous testing program, including tests with industry participants, to assure that its trading system will function as designed and consistent with all applicable rules and regulations; \11\ (iv) testing connectivity to the securities information processors (``SIPs'') and re-certifying its connection to the Depository Trust Clearing Corporation; \12\ and (v) amending certain Exchange Rules to keep current with industry regulatory initiatives.\13\ The Exchange further represents that it has the capacity to be able to carry out the purposes of the Act and to comply with and to enforce compliance by ETP Holders and persons associated with ETP Holders, with the provisions of the Act, the rules and regulations thereunder, and the rules of the Exchange. The Exchange further states that it has the financial, technological, and personnel resources to effectively conduct surveillance of its marketplace and to regulate ETP Holders' trading on NSX upon the resumption of trading operations.\14\ --------------------------------------------------------------------------- \6\ See Notice, supra note 4, at 70262. \7\ 15 U.S.C. 78q(d)(1). \8\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2. \9\ See Notice, supra note 4, at 70264. \10\ See id. at 70263. \11\ See id. \12\ See id. \13\ See id. at 70263-64. \14\ See id. at 70264-65. --------------------------------------------------------------------------- Furthermore, the Exchange represents that it will provide timely written notice of the date it will commence trading, and other related information directly to the following parties: (i) ETP Holders; (ii) other national securities exchanges that trade NMS securities; (iii) the SIPs; and, (iv) the operating committees for the various NMS plans (e.g., the Consolidated Tape Association Plan/Consolidated Quote Plan, the Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Securities Traded on Exchanges on an Unlisted Trading Privileges Basis, the Plan to Address Extraordinary Market Volatility).\15\ NSX further states that it will provide timely notice to the general public by way of widely-disseminated press releases, notification through the Exchange's Web site, and communications with financial and industry press.\16\ --------------------------------------------------------------------------- \15\ See id. at 70263-64. \16\ See id. at 70264. --------------------------------------------------------------------------- Finally, the Exchange represents that upon receiving Commission approval to resume trading, it will execute a staged roll-out plan to reach full operational capacity and provide notice to ETP Holders with the precise details of the roll-out plan before initiating the plan.\17\ --------------------------------------------------------------------------- \17\ See id. at 70263. --------------------------------------------------------------------------- III. Discussion and Commission Findings The Commission has carefully reviewed the proposed rule change and finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.\18\ In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,\19\ which requires that the rules of the Exchange, among other things, be 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. --------------------------------------------------------------------------- \18\ In approving the proposed rule change, the Commission has considered its impact on efficiency, competition and capital formation. See 15 U.S.C. 78c(f). \19\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Based on the Exchange's representations, the Commission believes that the Exchange is positioned to resume its status as a fully operational national securities exchange and to commence trading operations consistent with the notice provisions set forth in the proposed rule change.\20\ The Commission notes that the Exchange will resume operations using the same trading system and rules (subject to the changes proposed herein) that were in effect on the Closing Date. The Commission further notes that the Exchange has committed to ``regularly assess its regulatory resources to assure that they continue to be sufficient to discharge its SRO responsibilities.'' \21\ The Exchange's proposed staged roll-out plan should ensure that trading is resumed in an orderly manner. The Exchange's decision to streamline its trading operations by amending Rules 11.11, 11.12, 11.13, and 16.2, and adopting Rule 11.25, is consistent with the protection of investors and the public interest. These changes, which eliminate order-types that were not being used before the Closing Date, eliminate the order delivery mode of order interaction with the Exchange's trading system, and adopt a rule to describe the Exchange's use of certain data feeds for order handling and execution, will allow the exchange to resume trading, providing another venue to which customer orders can be routed. The Commission notes that it received no comments on the proposed rule change. --------------------------------------------------------------------------- \20\ See Notice, supra note 4, at 70263-64. \21\ See id. at 70264. --------------------------------------------------------------------------- As noted above, NSX intends to resume operations as an automated trading center and have its best bid and best offer be a Protected Quotation.\22\ To meet their regulatory responsibilities under Rule 611(a) of Regulation NMS, market participants must have sufficient notice of new Protected Quotations, as well as all necessary information (such as final technical specifications).\23\ Therefore, the Commission believes that it would be a reasonable policy and procedure under Rule 611(a) to require that industry participants begin treating NSX's best bid and best offer as a Protected Quotation as soon as possible but no later than 60 days after the date of this order, or such later date as NSX resumes operations as a national securities exchange. --------------------------------------------------------------------------- \22\ 17 CFR 242.600(b)(58). \23\ See Securities Exchange Act Release No. 53829 (May 18, 2006), 71 FR 30038, 30041 (May 24, 2006). --------------------------------------------------------------------------- For the foregoing reasons, the Commission finds that the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act \24\ that the proposed rule change (SR-NSX-2015-05), be, and hereby is, approved. --------------------------------------------------------------------------- \24\ 15 U.S.C. 78s(b)(2). [[Page 79124]] --------------------------------------------------------------------------- For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\25\ --------------------------------------------------------------------------- \25\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-31790 Filed 12-17-15; 8:45 am] BILLING CODE 8011-01-P
![79122 Federal Register / Vol. 80, No. 243 / Friday, December 18, 2015 / Notices
market by ensuring that persons subject • Send an email to rule-comments@ SECURITIES AND EXCHANGE
to the Exchange’s jurisdiction, sec.gov. Please include File Number SR– COMMISSION
regulators, and the investing public can NYSEMKT–2015–106 on the subject
[Release No. 34–76640; File No. SR–NSX–
more easily navigate and understand the line. 2015–05]
Exchange’s rulebook. The Exchange
believes that eliminating obsolete Paper Comments
Self-Regulatory Organizations;
references would not be inconsistent • Send paper comments in triplicate National Stock Exchange, Inc.; Order
with the public interest and the Approving a Proposed Rule Change To
to Brent J. Fields, Secretary, Securities
protection of investors because investors Modify and Eliminate Certain Rules
and Exchange Commission, 100 F Street
will not be harmed and in fact would and To Enable Trading Activity To
NE., Washington, DC 20549–1090.
benefit from increased transparency, Resume on the Exchange
thereby reducing potential confusion. All submissions should refer to File
Removing such obsolete references will Number SR–NYSEMKT–2015–106. This December 14, 2015.
also further the goal of transparency and file number should be included on the I. Introduction
add clarity to the Exchange’s rules. subject line if email is used. To help the On November 3, 2015, the National
B. Self-Regulatory Organization’s Commission process and review your Stock Exchange (‘‘NSX’’ or ‘‘Exchange’’)
Statement on Burden on Competition comments more efficiently, please use filed with the Securities and Exchange
only one method. The Commission will Commission (‘‘Commission’’), pursuant
The Exchange does not believe that post all comments on the Commission’s to the provisions of Section 19(b)(1) of
the proposed rule change will impose Internet Web site (http://www.sec.gov/ the Securities Exchange Act of 1934
any burden on competition that is not rules/sro.shtml). Copies of the (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
necessary or appropriate in furtherance
submission, all subsequent proposed rule change proposing
of the purposes of the Exchange Act.
amendments, all written statements changes that would, among other things,
The proposed rule change is not
with respect to the proposed rule allow trading activity to resume on the
intended to address competitive issues
change that are filed with the Exchange.3 The proposed rule change
but rather is concerned solely with the
Commission, and all written was published for comment in the
administration and functioning of the
communications relating to the Federal Register on November 13,
Exchange and its board of directors.
proposed rule change between the 2015.4 The Commission received no
C. Self-Regulatory Organization’s Commission and any person, other than comments on the proposal. This order
Statement on Comments on the those that may be withheld from the approves the proposed rule change.
Proposed Rule Change Received From public in accordance with the II. Description of the Proposed Rule
Members, Participants, or Others provisions of 5 U.S.C. 552, will be Change
No written comments were solicited available for Web site viewing and The Exchange proposes to amend
or received with respect to the proposed printing in the Commission’s Public Rule 11.1 (Hours of Trading) to rescind
rule change. Reference Room, 100 F Street NE., Interpretations and Policies .01
Washington, DC 20549, on official (Cessation of Trading Operations NSX)
III. Date of Effectiveness of the
Proposed Rule Change and Timing for business days between the hours of to permit the Exchange to resume
Commission Action 10:00 a.m. and 3:00 p.m. Copies of the trading activity. The Exchange also
filing will also be available for proposes to (i) amend Rule 11.11
Within 45 days of the date of inspection and copying at the NYSE’s (Orders and Modifiers) to remove
publication of this notice in the Federal principal office and on its Internet Web descriptions of certain order types that
Register or up to 90 days (i) as the site at www.nyse.com. All comments the Exchange will not offer when it
Commission may designate if it finds received will be posted without change; resumes trading and to correct the
such longer period to be appropriate the Commission does not edit personal numbering of certain subparagraphs of
and publishes its reasons for so finding identifying information from the rule; (ii) delete Rule 11.12 (Cross
or (ii) as to which the self-regulatory submissions. You should submit only Message) and make conforming changes
organization consents, the Commission to Rules 11.11(c) and 16.2; (iii) amend
information that you wish to make
will: Rule 11.13 and Interpretations and
available publicly. All submissions
(A) By order approve or disapprove Policies .01 to eliminate the order
should refer to File Number SR–
the proposed rule change, or delivery mode of order interaction with
NYSEMKT–2015–106 and should be
(B) institute proceedings to determine submitted on or before January 8, 2016. the Exchange’s trading system (‘‘Order
whether the proposed rule change Delivery’’); and (iv) adopt Rule 11.25
should be disapproved. For the Commission, by the Division of (Use of Market Data Feeds) to describe
Trading and Markets, pursuant to delegated the Exchange’s use of certain data feeds
IV. Solicitation of Comments authority.30 for order handling and execution.5
Interested persons are invited to Robert W. Errett,
submit written data, views, and Deputy Secretary. 1 15 U.S.C. 782(b)(1).
arguments concerning the foregoing, [FR Doc. 2015–31788 Filed 12–17–15; 8:45 am]
2 17 CFR 249.19b–4.
3 On May 1, 2014, NSX filed a proposed rule
including whether the proposed rule BILLING CODE 8011–01–P change to halt all trading activity on the Exchange.
mstockstill on DSK4VPTVN1PROD with NOTICES
change is consistent with the Act. See Securities Exchange Act Release No. 72107
Comments may be submitted by any of (May 6, 2014), 79 FR 27017 (May 12, 2014) (SR–
the following methods: NSX–2014–14). There has been no trading activity
on the Exchange since the close of business on May
Electronic Comments 30, 2014 (‘‘Closing Date’’).
4 See Securities Exchange Act Release No. 76390
• Use the Commission’s Internet (November 9, 2015), 80 FR 70261 (‘‘Notice’’).
comment form (http://www.sec.gov/ 5 For a more detailed description of the proposed
rules/sro.shtml); or 30 17 CFR 200.30–3(a)(12). changes, see Notice, supra note 4.
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![79124 Federal Register / Vol. 80, No. 243 / Friday, December 18, 2015 / Notices
For the Commission, by the Division of II. Self-Regulatory Organization’s The Exchange is accordingly filing to
Trading and Markets, pursuant to delegated Statement of the Purpose of, and remove the obsolete Eighth NYSE
authority.25 Statutory Basis for, the Proposed Rule Operating Agreement as a ‘‘rule of the
Robert W. Errett, Change exchange’’ under Section 3(a)(27) of the
Deputy Secretary. In its filing with the Commission, the Act, and replace it with the Ninth NYSE
Operating Agreement as a ‘‘rule of the
[FR Doc. 2015–31790 Filed 12–17–15; 8:45 am] self-regulatory organization included
exchange’’ under Section 3(a)(27) of the
BILLING CODE 8011–01–P statements concerning the purpose of,
Act, once the Ninth NYSE Operating
and basis for, the proposed rule change
Agreement is operative.10 Under the
and discussed any comments it received
NYSE Approval Order, the Ninth NYSE
SECURITIES AND EXCHANGE on the proposed rule change. The text
Operating Agreement will be operative
COMMISSION of those statements may be examined at
simultaneously with the termination of
the places specified in Item IV below.
the Delegation Agreement, no later than
[Release No. 34–76637: File No. SR– The Exchange has prepared summaries,
June 30, 2016, on a date determined by
NYSEMKT–2015–102] set forth in sections A, B, and C below,
the board of directors of NYSE LLC. The
of the most significant parts of such Exchange proposes that the rule change
Self-Regulatory Organizations; NYSE statements. be operative on that same date. The
MKT LLC; Notice of Filing and A. Self-Regulatory Organization’s Eighth NYSE Operating Agreement
Immediate Effectiveness of Proposed Statement of the Purpose of, and the would remain the operative document
Rule Change To Add to the Rules of Statutory Basis for, the Proposed Rule until that time.
the Exchange the Ninth Amended and Change 2. Statutory Basis
Restated Operating Agreement of New
York Stock Exchange LLC 1. Purpose The Exchange believes that the
The Exchange proposes to add to the proposed rule change is consistent with
December 14, 2015. rules of the Exchange the Ninth Section 6(b) of the Act 11 in general, and
Pursuant to Section 19(b)(1) 1 of the Amended and Restated Operating with Section 6(b)(1) 12 in particular, in
Securities Exchange Act of 1934 (the Agreement of NYSE LLC (the ‘‘Ninth that it enables the Exchange to be so
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 NYSE Operating Agreement’’). organized as to have the capacity to be
notice is hereby given that on December In September 2015, the Exchange filed able to carry out the purposes of the Act
4, 2015, NYSE MKT LLC (the the Eighth Amended and Restated and to comply, and to enforce
Operating Agreement of NYSE LLC (the compliance by its exchange members
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with
‘‘Eighth NYSE Operating Agreement’’) and persons associated with its
the Securities and Exchange
as a ‘‘rule of the exchange’’ under exchange members, with the provisions
Commission (the ‘‘Commission’’) the of the Act, the rules and regulations
proposed rule change as described in Section 3(a)(27) of the Act because
NYSE LLC has a wholly-owned thereunder, and the rules of the
Items I and II below, which Items have Exchange.
subsidiary, NYSE Market (DE), Inc.,
been prepared by the self-regulatory The Exchange believes that the
which owns a majority interest in NYSE
organization. The Exchange has proposed rule change would contribute
Amex Options LLC (‘‘NYSE Amex
designated this proposal as a ‘‘non- Options’’), a facility of the Exchange.6 to the orderly operation of the Exchange
controversial’’ proposed rule change On June 12, 2015, NYSE LLC filed to, and would enable the Exchange to be so
pursuant to Section 19(b)(3)(A) of the among other things, amend the Eighth organized as to have the capacity to
Act 4 and Rule 19b–4(f)(6)(iii) NYSE Operating Agreement to establish carry out the purposes of the Act and
thereunder,5 which renders it effective a Regulatory Oversight Committee as a comply and enforce compliance by its
upon filing with the Commission. The committee of its board of directors and members and persons associated with
Commission is publishing this notice to to terminate a delegation agreement its members, with the provisions of the
solicit comments on the proposed rule between NYSE LLC, NYSE Market (DE), Act because, by removing the obsolete
change from interested persons. Inc., and NYSE Regulation, Inc. (the Eighth NYSE LLC Operating Agreement
‘‘Delegation Agreement’’).7 In its filing, and making the Ninth NYSE LLC
I. Self-Regulatory Organization’s Operating Agreement a rule of the
NYSE LLC represented that the
Statement of the Terms of Substance of Exchange when it becomes operative for
proposed rule changes would be
the Proposed Rule Change operative simultaneously with the NYSE LLC, the Exchange would be
termination of the Delegation ensuring that its rules remain consistent
The Exchange proposes to add to the
Agreement, no later than June 30, 2016, with the NYSE LLC operating agreement
rules of the Exchange the Ninth in effect.
Amended and Restated Operating on a date determined by the board of
directors of NYSE LLC.8 On September The Exchange notes that, as with the
Agreement of New York Stock Exchange Eighth NYSE LLC Operating Agreement,
LLC (‘‘NYSE LLC’’). The text of the 28, 2015, NYSE LLC’s rule filing
amending the Eighth NYSE Operating it would be required to file as a
proposed rule change is available on the proposed rule change any changes to the
Agreement to effectuate certain changes
Exchange’s Web site at www.nyse.com, Ninth NYSE LLC Operating Agreement
was approved.9
at the principal office of the Exchange, with the Commission.13 In addition, the
and at the Commission’s Public 6 See 15 U.S.C. 78c(a)(27); Securities Exchange
mstockstill on DSK4VPTVN1PROD with NOTICES
Reference Room. Act Release Nos. 75984 (September 25, 2015), 80 FR 2015) (SR–NYSE–2015–27) (‘‘NYSE Approval
59213, 59214 (October 1, 2015) (SR–NYSEMKT– Order’’).
25 17
2015–71). 10 15 U.S.C. 78c(a)(27).
CFR 200.30–3(a)(12). 7 See Securities Exchange Act Release No. 75288 11 15 U.S.C. 78f(b).
1 15 U.S.C. 78s(b)(1). (June 24, 2015), 80 FR 37316 (June 30, 2015) (SR– 12 15 U.S.C. 78f(b)(1).
2 15 U.S.C. 78a.
NYSE–2015–27) (‘‘Notice’’). 13 The Exchange notes that any amendment to the
3 17 CFR 240.19b–4. 8 Id.
NYSE LLC Operating Agreement would also require
4 15 U.S.C. 78s(b)(3)(A). 9 See Securities Exchange Act Release No. 75991 that NYSE LLC file a proposed rule change with the
5 17 CFR 240.19b–4(f)(6)(iii). (September 28, 2015), 80 FR 59837 (October 2, Commission.
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Document Created: 2015-12-18 01:38:49
Document Modified: 2015-12-18 01:38:49
| 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 79122 |
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