81_FR_19729 81 FR 19664 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Partnerships

81 FR 19664 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Partnerships

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 65 (April 5, 2016)

Page Range19664-19665
FR Document2016-07682

Federal Register, Volume 81 Issue 65 (Tuesday, April 5, 2016) 
[Federal Register Volume 81, Number 65 (Tuesday, April 5, 2016)]
[Notices]
[Pages 19664-19665]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-07682]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77475; File No. SR-Phlx-2016-36]


Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to 
Partnerships

March 30, 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 17, 2016, NASDAQ PHLX LLC (``Phlx'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') the proposed rule change as described in Items I, II, 
and III, below, which Items have been prepared by the Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to delete these Rules: 902 entitled, 
``Admission to Partnership-Partnership Arrangements''; and 907 
entitled, ``Partners and Officers.'' The text of the proposed rule 
change is available on the Exchange's Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    The Exchange proposes to delete certain Phlx membership rules in 
order to harmonize and modernize the Exchange's Rulebook. Specifically, 
Exchange proposes to delete Rules: 902 entitled, ``Admission to 
Partnership-Partnership Arrangements''; and 907, entitled ``Partners 
and Officers.'' Rule 902 was retained through the demutualization 
process in 2004 and is no longer applicable to the business today. 
Although Rule 907 was established following the demutualization the 
requirements are no longer necessary. The proposed changes related to 
the former need for the Exchange to more acutely understand the 
ownership structure of partnerships as discussed in greater detail 
below.
    Rule 902 was applicable when Phlx offered seats to its members, 
prior to demutualization. Before demutualization, Phlx seats conveyed 
ownership of the Exchange, which created a greater obligation on Phlx 
to gather information on the members' corporate structure. 
Specifically, Phlx was obligated to maintain a heighted vigilance on 
the structure, ownership, and change of control in a partnership in 
order to ensure the financial integrity of its ownership structure.
    Today, permits are issued to Exchange members and member 
organizations. The Exchange no longer needs to differentiate ownership 
structure as required under Rule 902 and 907 because the permit 
structure conveys no ownership of the Exchange to the membership. These 
membership rules related to partnerships are no longer applicable 
today. The distinctions regarding the admission of member as a 
partnership, as compared to a corporation, are no longer relevant. The 
Exchange proposes to remove these outdated Rules.
Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act,\3\ in general, and furthers the objectives of section 
6(b)(5) of the Act,\4\ in particular, in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in 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.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that Rules 902 and 907(a) are burdensome and 
unnecessary. These rules regarding admission of partnerships and 
changes to the partnership serve no modern purpose to the Exchange. The 
former ownership structure required the Exchange to be vigilant of the 
ownership structure of its members in case of financial distress or 
bankruptcy as the seat structure was vital to the financial condition 
of the Exchange. Before demutualization, members had an ownership 
interest in the Exchange. Today, permits convey no ownership and 
therefore such vigilance as to the ownership structure of members is 
not warranted.
    The only changes to the rules since demutualization were in 2009 in 
order to replace the term ``Membership Committee'' with ``Membership 
Department,'' which was done in conjunction with other changes to the 
Exchange's standing committees and corporate governance processes in 
order to make the Exchange more similar to the other Nasdaq SROs.
    Rule 907(b) is burdensome and unnecessary as well. The obligations 
on the firm, its employees, and officers are not predicated on the 
requirement that one of the officers be a member of the exchange, 
therefore this rule has become obsolete. These rules have remained on 
the books of the exchange for several years, despite their obsolescence 
because they were not inconsistent with the membership process and the 
overall regulatory goals of the Exchange.
    The removal of Rules 902 and 907 will promote just and equitable 
principles of trade, and foster cooperation and coordination with 
persons engaged in facilitating transactions in securities by removing 
burdensome requirements so that members and member organizations may 
properly focus on other relevant requirements which benefit the 
marketplace.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act. The Exchange's proposed amendments seek to delete certain 
unnecessary rules

[[Page 19665]]

which today burden partnerships over corporations.
    The deletions of Rules 902 and 907(a) will remove a current burden 
on competition which requires members and member organizations that are 
partnerships to disclose unnecessary information as compared to other 
corporate entities not structured as a partnership.
    The deletion of 907(b) will remove a current burden on competition 
by eliminating the need to identify an officer that is a member of the 
exchange which will have no practical effect on the exchange's 
interaction with the company. The Exchange does not believe that there 
is any impact on inter-market 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 \5\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\6\
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    \5\ 15 U.S.C. 78s(b)(3)(a)(iii).
    \6\ 17 CFR 240.19b-4(f)(6).
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    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. The Exchange has 
provided the Commission written notice of its intent to file the 
proposed rule change, along with a brief description and text of the 
proposed rule change, at least five business days prior to the date of 
filing of the proposed rule change.

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-Phlx-2016-36 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-Phlx-2016-36. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml).
    Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of 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-Phlx-2016-36 and 
should be submitted on or before April 26, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-07682 Filed 4-4-16; 8:45 a.m.]
BILLING CODE 8011-01-P

19664 Federal Register / Vol. 81, No. 65 / Tuesday, April 5, 2016 / Notices For the Commission, by the Division of the most significant aspects of such cooperation and coordination with Trading and Markets, pursuant to delegated statements. persons engaged in facilitating authority.79 transactions in securities, to remove Robert W. Errett, A. Self-Regulatory Organization’s impediments to and perfect the Deputy Secretary. Statement of the Purpose of, and Statutory Basis for, the Proposed Rule mechanism of a free and open market [FR Doc. 2016–07683 Filed 4–4–16; 8:45 am] Change and a national market system and, in BILLING CODE 8011–01–P general, to protect investors and the 1. Purpose public interest. The Exchange proposes to delete The Exchange believes that Rules 902 SECURITIES AND EXCHANGE certain Phlx membership rules in order and 907(a) are burdensome and COMMISSION to harmonize and modernize the unnecessary. These rules regarding [Release No. 34–77475; File No. SR–Phlx– Exchange’s Rulebook. Specifically, admission of partnerships and changes 2016–36] Exchange proposes to delete Rules: 902 to the partnership serve no modern entitled, ‘‘Admission to Partnership- purpose to the Exchange. The former Self-Regulatory Organizations; Partnership Arrangements’’; and 907, ownership structure required the NASDAQ PHLX LLC; Notice of Filing entitled ‘‘Partners and Officers.’’ Rule Exchange to be vigilant of the and Immediate Effectiveness of 902 was retained through the ownership structure of its members in Proposed Rule Change Relating to demutualization process in 2004 and is case of financial distress or bankruptcy Partnerships no longer applicable to the business as the seat structure was vital to the today. Although Rule 907 was financial condition of the Exchange. March 30, 2016. Before demutualization, members had established following the Pursuant to section 19(b)(1) of the demutualization the requirements are an ownership interest in the Exchange. Securities Exchange Act of 1934 no longer necessary. The proposed Today, permits convey no ownership (‘‘Act’’),1 and Rule 19b–4 thereunder, 2 changes related to the former need for and therefore such vigilance as to the notice is hereby given that on March 17, the Exchange to more acutely ownership structure of members is not 2016, NASDAQ PHLX LLC (‘‘Phlx’’ or understand the ownership structure of warranted. ‘‘Exchange’’) filed with the Securities partnerships as discussed in greater The only changes to the rules since and Exchange Commission (‘‘SEC’’ or detail below. demutualization were in 2009 in order ‘‘Commission’’) the proposed rule Rule 902 was applicable when Phlx to replace the term ‘‘Membership change as described in Items I, II, and offered seats to its members, prior to Committee’’ with ‘‘Membership III, below, which Items have been demutualization. Before Department,’’ which was done in prepared by the Exchange. The demutualization, Phlx seats conveyed conjunction with other changes to the Commission is publishing this notice to ownership of the Exchange, which Exchange’s standing committees and solicit comments on the proposed rule created a greater obligation on Phlx to corporate governance processes in order change from interested persons. gather information on the members’ to make the Exchange more similar to I. Self-Regulatory Organization’s corporate structure. Specifically, Phlx the other Nasdaq SROs. Statement of the Terms of Substance of was obligated to maintain a heighted Rule 907(b) is burdensome and the Proposed Rule Change vigilance on the structure, ownership, unnecessary as well. The obligations on and change of control in a partnership the firm, its employees, and officers are The Exchange proposes to delete in order to ensure the financial integrity these Rules: 902 entitled, ‘‘Admission to not predicated on the requirement that of its ownership structure. one of the officers be a member of the Partnership-Partnership Arrangements’’; Today, permits are issued to Exchange and 907 entitled, ‘‘Partners and exchange, therefore this rule has become members and member organizations. obsolete. These rules have remained on Officers.’’ The text of the proposed rule The Exchange no longer needs to change is available on the Exchange’s the books of the exchange for several differentiate ownership structure as years, despite their obsolescence Web site at http:// required under Rule 902 and 907 www.nasdaqtrader.com/ because they were not inconsistent with because the permit structure conveys no micro.aspx?id=PHLXRulefilings, at the the membership process and the overall ownership of the Exchange to the principal office of the Exchange, and at regulatory goals of the Exchange. membership. These membership rules the Commission’s Public Reference The removal of Rules 902 and 907 related to partnerships are no longer Room. applicable today. The distinctions will promote just and equitable regarding the admission of member as a principles of trade, and foster II. Self-Regulatory Organization’s cooperation and coordination with Statement of the Purpose of, and partnership, as compared to a corporation, are no longer relevant. The persons engaged in facilitating Statutory Basis for, the Proposed Rule transactions in securities by removing Change Exchange proposes to remove these outdated Rules. burdensome requirements so that In its filing with the Commission, the members and member organizations Exchange included statements Statutory Basis may properly focus on other relevant concerning the purpose of and basis for The Exchange believes that its requirements which benefit the the proposed rule change and discussed proposal is consistent with section 6(b) marketplace. asabaliauskas on DSK3SPTVN1PROD with NOTICES any comments it received on the of the Act,3 in general, and furthers the B. Self-Regulatory Organization’s proposed rule change. The text of these objectives of section 6(b)(5) of the Act,4 Statement on Burden on Competition statements may be examined at the in particular, in that it is designed to places specified in Item IV below. The prevent fraudulent and manipulative The proposed rule change does not Exchange has prepared summaries, set acts and practices, to promote just and impose any burden on competition that forth in sections A, B, and C below, of equitable principles of trade, to foster is not necessary or appropriate in furtherance of the purposes of the Act. 1 15 U.S.C. 78s(b)(1). 3 15 U.S.C. 78f(b). The Exchange’s proposed amendments 2 17 CFR 240.19b–4. 4 15 U.S.C. 78f(b)(5). seek to delete certain unnecessary rules VerDate Sep<11>2014 17:18 Apr 04, 2016 Jkt 238001 PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 E:\FR\FM\05APN1.SGM 05APN1

Federal Register / Vol. 81, No. 65 / Tuesday, April 5, 2016 / Notices 19665 which today burden partnerships over arguments concerning the foregoing, SECURITIES AND EXCHANGE corporations. including whether the proposed rule COMMISSION The deletions of Rules 902 and 907(a) change is consistent with the Act. will remove a current burden on Comments may be submitted by any of [Release No. 34–77478; File No. SR– competition which requires members the following methods: NYSEMKT–2016–40] and member organizations that are partnerships to disclose unnecessary Electronic Comments Self-Regulatory Organizations; NYSE information as compared to other • Use the Commission’s Internet MKT LLC; Notice of Filing and corporate entities not structured as a comment form (http://www.sec.gov/ Immediate Effectiveness of Proposed partnership. rules/sro.shtml); or Rule Change Adopting Requirements The deletion of 907(b) will remove a • Send an email to rule-comments@ for the Collection and Transmission of current burden on competition by sec.gov. Please include File Number SR– Phlx–2016–36 on the subject line. Data Pursuant to Appendices B and C eliminating the need to identify an of the Regulation NMS Plan To officer that is a member of the exchange Paper Comments which will have no practical effect on Implement a Tick Size Pilot Program the exchange’s interaction with the • Send paper comments in triplicate March 30, 2016. company. The Exchange does not to Brent J. Fields, Secretary, Securities believe that there is any impact on inter- and Exchange Commission, 100 F Street Pursuant to Section 19(b)(1) 1 of the market competition. NE., Washington, DC 20549–1090. Securities Exchange Act of 1934 (the All submissions should refer to File ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 C. Self-Regulatory Organization’s Number SR–Phlx–2016–36. This file notice is hereby given that on March 29, Statement on Comments on the number should be included on the 2016, NYSE MKT LLC (the ‘‘Exchange’’ Proposed Rule Change Received From subject line if email is used. To help the or ‘‘NYSE MKT’’) filed with the Members, Participants, or Others Commission process and review your Securities and Exchange Commission No written comments were either comments more efficiently, please use (the ‘‘Commission’’) the proposed rule solicited or received. only one method. The Commission will change as described in Items I and II III. Date of Effectiveness of the post all comments on the Commission’s below, which Items have been prepared Proposed Rule Change and Timing for Internet Web site (http://www.sec.gov/ by the Exchange. The Commission is Commission Action rules/sro.shtml). publishing this notice to solicit Copies of the submission, all comments on the proposed rule change Because the foregoing proposed rule subsequent amendments, all written from interested persons. change does not: (i) Significantly affect statements with respect to the proposed the protection of investors or the public rule change that are filed with the I. Self-Regulatory Organization’s interest; (ii) impose any significant Commission, and all written Statement of the Terms of Substance of burden on competition; and (iii) become communications relating to the the Proposed Rule Change operative for 30 days from the date on proposed rule change between the which it was filed, or such shorter time The Exchange proposes to adopt Commission and any person, other than as the Commission may designate, it has requirements for the collection and those that may be withheld from the become effective pursuant to section public in accordance with the transmission of data pursuant to 19(b)(3)(A)(iii) of the Act 5 and provisions of 5 U.S.C. 552, will be Appendices B and C of the Regulation subparagraph (f)(6) of Rule 19b–4 available for Web site viewing and NMS Plan to Implement a Tick Size thereunder.6 printing in the Commission’s Public Pilot Program (‘‘Plan’’). The proposed At any time within 60 days of the Reference Room, 100 F Street NE., rule change is available on the filing of the proposed rule change, the Washington, DC 20549, on official Exchange’s Web site at www.nyse.com, Commission summarily may business days between the hours of at the principal office of the Exchange, temporarily suspend such rule change if 10:00 a.m. and 3:00 p.m. Copies of the and at the Commission’s Public it appears to the Commission that such filing also will be available for Reference Room. action is: (i) Necessary or appropriate in inspection and copying at the principal the public interest; (ii) for the protection II. Self-Regulatory Organization’s office of the Exchange. All comments Statement of the Purpose of, and of investors; or (iii) otherwise in received will be posted without change; furtherance of the purposes of the Act. Statutory Basis for, the Proposed Rule the Commission does not edit personal If the Commission takes such action, the Change identifying information from Commission shall institute proceedings submissions. You should submit only In its filing with the Commission, the to determine whether the proposed rule information that you wish to make self-regulatory organization included should be approved or disapproved. The available publicly. statements concerning the purpose of, Exchange has provided the Commission All submissions should refer to File written notice of its intent to file the and basis for, the proposed rule change Number SR–Phlx–2016–36 and should and discussed any comments it received proposed rule change, along with a brief be submitted on or before April 26, description and text of the proposed on the proposed rule change. The text 2016. of those statements may be examined at rule change, at least five business days For the Commission, by the Division of the places specified in Item IV below. asabaliauskas on DSK3SPTVN1PROD with NOTICES prior to the date of filing of the Trading and Markets, pursuant to delegated The Exchange has prepared summaries, proposed rule change. authority.7 set forth in sections A, B, and C below, IV. Solicitation of Comments Robert W. Errett, of the most significant parts of such Interested persons are invited to Deputy Secretary. statements. submit written data, views, and [FR Doc. 2016–07682 Filed 4–4–16; 8:45 a.m.] BILLING CODE 8011–01–P 1 15 U.S.C. 78s(b)(1). 5 15 U.S.C. 78s(b)(3)(a)(iii). 2 15 U.S.C. 78a. 6 17 CFR 240.19b–4(f)(6). 7 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4. VerDate Sep<11>2014 17:18 Apr 04, 2016 Jkt 238001 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 E:\FR\FM\05APN1.SGM 05APN1


Document Created: 2018-02-07 13:53:53
Document Modified: 2018-02-07 13:53:53
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 Citation81 FR 19664 
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