81 FR 17525 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Chapter XI (Doing Business With the Public), Section 8 (Supervision of Accounts) of the Exchange's Rulebook
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 60 (March 29, 2016)
Federal Register Volume 81, Issue 60 (March 29, 2016)
| Page Range | 17525-17527 | |
| FR Document | 2016-06993 |
[Federal Register Volume 81, Number 60 (Tuesday, March 29, 2016)] [Notices] [Pages 17525-17527] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-06993] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77428; File No. SR-NASDAQ-2016-038] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Chapter XI (Doing Business With the Public), Section 8 (Supervision of Accounts) of the Exchange's Rulebook March 23, 2016. 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 March 14, 2016, The NASDAQ Stock Market LLC (``Exchange'') filed with the Securities and Exchange Commission (``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\ 15 U.S.C. 78s(b)(1). \2\ 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 Chapter XI (Doing Business with the Public), Section 8 (Supervision of Accounts) of the Exchange's rulebook to remove outdated references to three National Association of Securities Dealers, Inc. (``NASD'') rules and to replace those references with references to four successor Financial Industry Regulatory Authority, Inc. (``FINRA'') rules which have replaced them. The text of the proposed rule change is available on the Exchange's Web site at http://nasdaq.cchwallstreet.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. [[Page 17526]] 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 is proposing to amend Chapter XI (Doing Business with the Public), Section 8 (Supervision of Accounts) of the Exchange's rulebook (the ``Options Supervision Rules'') to remove outdated references to three NASD rules and to replace those references with references to four successor FINRA rules which have replaced them.\3\ --------------------------------------------------------------------------- \3\ The current FINRA rulebook consists of: (1) FINRA rules; (2) NASD rules; and (3) rules incorporated from NYSE (Incorporated NYSE Rules) (together, the NASD rules and Incorporated NYSE Rules are referred to as the ``Transitional Rulebook''). As part of the process of developing a new consolidated rulebook (the ``Consolidated FINRA Rulebook''), FINRA adopted FINRA Rules 3110, 3120, 3130 and 3170, which the Exchange seeks to incorporate in the Options Supervision Rules. --------------------------------------------------------------------------- Currently, the Options Supervision Rules provide in Section 8(a) that each member that conducts a public customer options business shall ensure that its written supervisory system policies and procedures pursuant to NASD Rules 3010, 3012, and 3013 (the ``Old NASD Rules'') adequately address the member's public customer options business. Since the adoption by the Exchange of the Options Supervision Rules, FINRA has updated its own rulebook and deleted the Old NASD Rules, adopting in their place FINRA Rules 3110, 3120, 3130 and 3170.\4\ The Exchange therefore proposes to make a conforming change to the Options Supervision Rules by deleting references to the Old NASD Rules and replacing them with references to FINRA Rules 3110, 3120, 3130 and 3170. --------------------------------------------------------------------------- \4\ FINRA Rules 3110 (Supervision) and 3120 (Supervisory Control System) were adopted by FINRA to replace NASD Rules 3010 (Supervision) and 3012 (Supervisory Control System). In addition, new FINRA Rule 3170 (Tape Recording of Registered Persons by Certain Firms) replaced NASD Rule 3010(b)(2). The new rules became effective on December 1, 2014. See Securities Exchange Act Release No. 71179 (Dec. 23, 2013), 78 FR 79542 (Dec. 30, 2013) (Order Approving Proposed Rule Change as Modified by Amendment No. 1) (File No. SR- FINRA-2013-025); see also FINRA Regulatory Notice 08-24 (May 2008) (Proposed Consolidated FINRA Rules Governing Supervision and Supervisory Controls). FINRA Rule 3130 (Annual Certification of Compliance and Supervisory Processes) replaced NASD Rule 3013 (Annual Certification of Compliance and Supervisory Processes) in 2008. See Securities Exchange Act Release No. 58661 (Sept. 26, 2008), 73 FR 57395 (Oct. 2, 2008) (SR-FINRA-2008-030). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act \5\ in general, and furthers the objectives of Section 6(b)(5) of the Act \6\ 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, by removing references to outdated NASD rules, thus minimizing any potential confusion on the part of members and other market participants regarding the standards and rules to which Exchange members are subject. --------------------------------------------------------------------------- \5\ 15 U.S.C. 78f(b). \6\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. As the amendments merely correct the Exchange rules to refer to the current FINRA rules discussed above, it has no impact on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\ --------------------------------------------------------------------------- \7\ 15 U.S.C. 78s(b)(3)(a)(iii). \8\ 17 CFR 240.19b-4(f)(6). 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. --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NASDAQ-2016-038 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-NASDAQ-2016-038. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and [[Page 17527]] printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549-1090, 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-NASDAQ-2016-038 and should be submitted on or before April 19, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\9\ --------------------------------------------------------------------------- \9\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2016-06993 Filed 3-28-16; 8:45 am] BILLING CODE 8011-01-P
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Significantly affect the protection of IV. Solicitation of Comments For the Commission, by the Division of
investors or the public interest; (ii) Trading and Markets, pursuant to delegated
impose any significant burden on Interested persons are invited to authority.18
competition; and (iii) become operative submit written data, views, and Brent J. Fields,
prior to 30 days from the date on which arguments concerning the foregoing, Secretary.
it was filed, or such shorter time as the including whether the proposed rule
[FR Doc. 2016–06990 Filed 3–28–16; 8:45 am]
Commission may designate, if change is consistent with the Act.
BILLING CODE 8011–01–P
consistent with the protection of Comments may be submitted by any of
investors and the public interest, the the following methods:
proposed rule change has become SECURITIES AND EXCHANGE
Electronic Comments
effective pursuant to Section 19(b)(3)(A)
COMMISSION
of the Act 13 and Rule 19b–4(f)(6) • Use the Commission’s Internet
thereunder.14 comment form (http://www.sec.gov/
A proposed rule change filed under [Release No. 34–77428; File No. SR–
rules/sro.shtml); or NASDAQ–2016–038]
Rule 19b–4(f)(6) 15 normally does not
become operative prior to 30 days after • Send an email to rule-comments@
the date of the filing. However, pursuant sec.gov. Please include File Number SR– Self-Regulatory Organizations; The
to Rule 19b4(f)(6)(iii),16 the Commission NYSEArca–2016–47 on the subject line. NASDAQ Stock Market LLC; Notice of
may designate a shorter time if such Filing and Immediate Effectiveness of
Paper Comments Proposed Rule Change To Amend
action is consistent with the protection
of investors and the public interest. The • Send paper comments in triplicate Chapter XI (Doing Business With the
Exchange has asked the Commission to to Secretary, Securities and Exchange Public), Section 8 (Supervision of
waive the 30-day operative delay so that Commission, 100 F Street NE., Accounts) of the Exchange’s Rulebook
the proposed rule change may become Washington, DC 20549–1090. March 23, 2016.
operative before the current expiration
of the pilot period. The Commission All submissions should refer to File Pursuant to Section 19(b)(1) of the
believes that waiving the 30-day Number SR–NYSEArca–2016–47. This Securities Exchange Act of 1934
operative delay is consistent with the file number should be included on the (‘‘Act’’),1 and Rule 19b–4 thereunder,2
protection of investors and the public subject line if email is used. To help the notice is hereby given that on March 14,
interest, because waiver would allow Commission process and review your 2016, The NASDAQ Stock Market LLC
the pilot period to continue comments more efficiently, please use (‘‘Exchange’’) filed with the Securities
uninterrupted after its current only one method. The Commission will and Exchange Commission
expiration date of March 31, 2016, post all comments on the Commission’s (‘‘Commission’’) the proposed rule
thereby avoiding any potential investor Internet Web site (http://www.sec.gov/ change as described in Items I, II, and
confusion that could result from rules/sro.shtml). Copies of the III, below, which Items have been
temporary interruption in the pilot submission, all subsequent substantially prepared by the Exchange.
program. For this reason, the amendments, all written statements The Commission is publishing this
Commission hereby waives the 30-day with respect to the proposed rule notice to solicit comments on the
operative delay and designates the change that are filed with the proposed rule change from interested
proposal operative upon filing.17 Commission, and all written
At any time within 60 days of the persons.
communications relating to the
filing of the proposed rule change, the I. Self-Regulatory Organization’s
proposed rule change between the
Commission summarily may Statement of the Terms of Substance of
Commission and any person, other than
temporarily suspend such rule change if the Proposed Rule Change
it appears to the Commission that such those that may be withheld from the
action is necessary or appropriate in the public in accordance with the The Exchange proposes to amend
public interest, for the protection of provisions of 5 U.S.C. 552, will be Chapter XI (Doing Business with the
investors, or otherwise in furtherance of available for Web site viewing and Public), Section 8 (Supervision of
the purposes of the Act. If the printing in the Commission’s Public Accounts) of the Exchange’s rulebook to
Commission takes such action, the Reference Room, 100 F Street NE., remove outdated references to three
Commission shall institute proceedings Washington, DC 20549 on official National Association of Securities
to determine whether the proposed rule business days between the hours of Dealers, Inc. (‘‘NASD’’) rules and to
change should be approved or 10:00 a.m. and 3:00 p.m. Copies of the replace those references with references
disapproved. filing also will be available for to four successor Financial Industry
inspection and copying at the principal Regulatory Authority, Inc. (‘‘FINRA’’)
13 15 U.S.C. 78s(b)(3)(A). office of the Exchange. All comments rules which have replaced them.
14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– received will be posted without change;
4(f)(6)(iii) requires the Exchange to give the
the Commission does not edit personal The text of the proposed rule change
Commission written notice of the Exchange’s intent is available on the Exchange’s Web site
to file the proposed rule change, along with a brief identifying information from
description and text of the proposed rule change, submissions. You should submit only at http://nasdaq.cchwallstreet.com, at
at least five business days prior to the date of filing
information that you wish to make the principal office of the Exchange, and
mstockstill on DSK4VPTVN1PROD with NOTICES
of the proposed rule change, or such shorter time at the Commission’s Public Reference
as designated by the Commission. The Exchange available publicly. All submissions
has satisfied this requirement. should refer to File Number SR– Room.
15 17 CFR 240.19b–4(f)(6).
NYSEArca–2016–47 and should be
16 17 CFR 240.19b–4(f)(6)(iii).
17 For purposes only of waiving the 30-day
submitted on or before April 19, 2016.
18 17 CFR 200.30–3(a)(12).
operative delay, the Commission has considered the
1 15 U.S.C. 78s(b)(1).
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f). 2 17 CFR 240.19b–4.
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printing in the Commission’s Public at www.nyse.com, at the principal office and the relative share of electronic
Reference Room, 100 F Street NE., of the Exchange, and at the volume in a given class of options (the
Washington, DC 20549–1090, on official Commission’s Public Reference Room. Primary Specialist Criteria’’).7 Per
business days between the hours of current Rule 964.2NY(a), the Exchange
II. Self-Regulatory Organization’s
10:00 a.m. and 3:00 p.m. Copies of the will publish the Primary Specialist
Statement of the Purpose of, and
filing also will be available for Criteria, including the relative
Statutory Basis for, the Proposed Rule
inspection and copying at the principal weighting of each factor, by Regulatory
Change
office of the Exchange. All comments Bulletin at least 5 business days prior to
received will be posted without change; In its filing with the Commission, the an evaluation period. The Exchange
the Commission does not edit personal self-regulatory organization included adopted the quarterly contest for
identifying information from statements concerning the purpose of, Primary Specialist in 2012 to enhance
submissions. You should submit only and basis for, the proposed rule change quote competition among the Specialist
information that you wish to make and discussed any comments it received Pool participants.8
available publicly. on the proposed rule change. The text The Exchange proposes to modify the
All submissions should refer to File of those statements may be examined at Primary Specialist Criteria to include
Number SR–NASDAQ–2016–038 and the places specified in Item IV below. the electronic volumes from resting
should be submitted on or before April The Exchange has prepared summaries, quotes and orders in the Consolidated
19, 2016. set forth in sections A, B, and C below, Book 9 for each Specialist and e-
of the most significant parts of such Specialist. While the current Primary
For the Commission, by the Division of statements.
Trading and Markets, pursuant to delegated Specialist Criteria includes ‘‘electronic
authority.9 A. Self-Regulatory Organization’s volume,’’ this can be composed of
Brent J. Fields, Statement of the Purpose of, and the liquidity-taking volume. The Exchange
Secretary. Statutory Basis for, the Proposed Rule believes the new criterion would enable
Change the Exchange to better account for the
[FR Doc. 2016–06993 Filed 3–28–16; 8:45 am]
liquidity-making volume of each
BILLING CODE 8011–01–P 1. Purpose Specialist and e-Specialist. The
The Exchange is proposing changes to Exchange believes this proposal also
Rule 964.2NY regarding the provides the Exchange the ability to
SECURITIES AND EXCHANGE
participation entitlement formula for reward Specialists and e-Specialists that
COMMISSION
Specialists and e-Specialists as contribute significant volumes through
[Release No. 34–77435; File No. SR– described below.4 market making activity. The Exchange
NYSEMKT–2016–41] Rule 964NY sets forth the priority for believes that having the ability to
the allocation of incoming orders to reward such participants would
Self-Regulatory Organizations; NYSE incentivize Specialist Pool Participants
resting interest at a particular price in
MKT LLC; Notice of Filing and to increase their posted volume on the
the System,5 which includes the
Immediate Effectiveness of Proposed Exchange, which benefits other market
allocation to the Specialist Pool.6 Rule
Rule Change to Rule 964.2NY participants through the improvement
964.2NY sets forth the participant
Regarding the Participation of the price and size of the displayed
entitlement formula applicable to the
Entitlement Formula for Specialists market.
Specialist Pool and provides that, on a
and e-Specialists The Exchange also proposes at this
quarterly basis, the Exchange will
March 23, 2016. determine a Primary Specialist in each time to make a procedural change for
Pursuant to Section 19(b)(1) 1 of the option class. announcements regarding the Primary
Securities Exchange Act of 1934 (the To select the Primary Specialist, the Specialist Criteria and any additional
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 Exchange objectively evaluates the weighting to the Primary Specialist
notice is hereby given that on March 21, relative quote performance of each amongst the Specialist Pool. Presently
2016, NYSE MKT LLC (the ‘‘Exchange’’ Specialist and e-Specialist focusing on the Exchange issues Regulatory
or ‘‘NYSE MKT’’) filed with the one or more of the following optional Bulletins when making such
Securities and Exchange Commission factors: time and size at the NBBO, announcements. Going forward, the
(the ‘‘Commission’’) the proposed rule average quote width, average quote size, Exchange proposes to issue a Trader
change as described in Items I and II Update in lieu of a Regulatory Bulletin.
below, which Items have been prepared
4 A Specialist is ‘‘an individual or entity that has Regulatory Bulletins generally contain
by the self-regulatory organization. The
been deemed qualified by the Exchange for the information regarding legal and
purpose of making transactions on the Exchange in regulatory matters while Trader Updates
Commission is publishing this notice to accordance with the provisions of Rule 920NY
solicit comments on the proposed rule [Market Makers], and who meets the qualification deal with issues such as trading,
change from interested persons. requirements of Rule 927NY(b) [Specialists]. Each systems changes and real-time market
Specialist must be registered with the Exchange as
I. Self-Regulatory Organization’s a Market Maker. Any ATP Holder registered as a 7 See Rule 964.2NY(a). The Primary Specialist’s
Market Maker with the Exchange is eligible to be size pro-rata participation in the Specialist Pool
Statement of the Terms of Substance of qualified as a Specialist. See Rule 900.2NY(76). also receives additional weighting amongst
the Proposed Rule Change Rule 923NY(b) also provides that ‘‘[t]he Exchange Specialist Pool participants, which is determined
may designate e-Specialists in an option class in by the Exchange and announced via Regulatory
The Exchange proposes to Rule accordance with Rule 927.4NY[e-Specialists].’’ Id. Bulletin. See Rule 964.2NY(b)(3)(A).
964.2NY regarding the participation 5 The term ‘‘System’’ refers to the Exchange’s
mstockstill on DSK4VPTVN1PROD with NOTICES
8 See Securities Exchange Release No. 34–67421
entitlement formula for Specialists and electronic order delivery, execution and reporting (July 12, 2012), 77 FR 42349 (July 18, 2012) (SR–
e-Specialists. The proposed rule change system through which orders and quotes for listed NYSEAmex–2012–31) (approval order).
is available on the Exchange’s Web site options are consolidated for execution and/or 9 The Consolidated Book is ‘‘the Exchange’s
display. See Rule 900.2NY(48) (defining ‘‘Exchange electronic book of limit orders for the accounts of
System’’ or ‘‘System’’). Customers and broker-dealers, and Quotes with
9 17 CFR 200.30–3(a)(12). 6 The Specialist Pool refers to the aggregated size Size. All orders and Quotes with Size that are
1 15 U.S.C.78s(b)(1). of the best bid and best offer, in a given series, entered into the Book will be ranked and
2 15 U.S.C. 78a.
amongst the Specialist and e-Specialists that match maintained in accordance with the rules of priority
3 17 CFR 240.19b–4. in price. See Rule 900.2NY(75). as provided in Rule 964NY.’’ See Rule 900.2NY(14).
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Document Created: 2016-03-30 08:29:14
Document Modified: 2016-03-30 08:29:14
| 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 | 81 FR 17525 |
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