81_FR_24227 81 FR 24148 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delete Obsolete Rules

81 FR 24148 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delete Obsolete Rules

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 79 (April 25, 2016)

Page Range24148-24149
FR Document2016-09453

Federal Register, Volume 81 Issue 79 (Monday, April 25, 2016) 
[Federal Register Volume 81, Number 79 (Monday, April 25, 2016)]
[Notices]
[Pages 24148-24149]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-09453]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77650; File No. SR-Phlx-2016-49]


Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Delete Obsolete 
Rules

April 19, 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 April 8, 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.
---------------------------------------------------------------------------

    \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 delete Rule 971, entitled ``Termination of 
Memberships and Equity Trading Permits and Leases and A-B-C Agreements 
Relating to Memberships and ETP Use Agreements,'' to delete Rule 972, 
entitled ``Continuation of Status After the NASDAQ OMX Merger,'' and to 
make conforming changes to other rules. 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 rules in order to 
remove outdated material from the Exchange's Rulebook. Specifically, 
the Exchange proposes to delete Rule 971, entitled ``Termination of 
Memberships and Equity Trading Permits and Leases and A-B-C Agreements 
Relating to Memberships and ETP Use Agreements''; and Rule 972, 
entitled ``Continuation of Status After the NASDAQ OMX Merger.'' The 
Exchange also proposes to make conforming changes to rules that 
reference the rules that are being deleted.
    Rule 971 pertained to the demutualization of the Exchange in 2004. 
As provided in the rule, demutualization resulted in the termination of 
memberships and equity trading permits (``ETP''),\3\ as well as leases 
and ``A-B-C Agreements'' relating to memberships and ``ETP Use 
Agreements.'' \4\ As a result of demutualization, the Exchange moved 
from a seat-based model of membership, under which memberships were 
limited in number, to a model under which status as a member 
organization and associated trading privileges were available to any 
broker-dealer qualified under the Exchange's rules. To assist in the 
effectuation of this change, Rule 971 made it clear that all rights 
existing under the former model were being terminated. Since the rule 
fully achieved its purpose at the time of demutualization 2004, the 
Exchange believes that maintaining the rule in the Exchange's rulebook 
is no longer necessary.
---------------------------------------------------------------------------

    \3\ ETPs were rights created by the rules of the Exchange that 
provided the ability to transact cash equities through the exchange 
but without having the ownership rights associated with membership.
    \4\ Leases reflected the ownership interest of a member in the 
exchange prior to demutualization. A-B-C Agreements allowed a member 
of the exchange, a natural person associated with the broker-dealer, 
to contribute the use of the membership to the broker-dealer with 
which he or she was associated. Similarly, ETP Use Agreements 
allowed an individual ETP holder to contribute its use to the 
broker-dealer with which he or she was associated.
---------------------------------------------------------------------------

    Rule 972 pertains to the merger in 2008 through which The NASDAQ 
OMX Group, Inc. (since, renamed Nasdaq, Inc.) acquired ownership of the 
Exchange. The rule provides that the status of members, inactive 
nominees, and member organizations under Exchange rules would not be 
affected by the acquisition, and that likewise any existing suspension 
would not be affected. Since the rule fully achieved its purpose at the 
time of the acquisition of the Exchange in 2008, the Exchange believes 
that maintaining the rule in the Exchange's rulebook is no longer 
necessary.
    The Exchange is also amending Rules 908 (``Rights and Privileges of 
A-1 Permits'') and 3202 (``Application of Other Rules of the 
Exchange'') to remove references to Rule 972, and amending Rule 900 
(``Administration of Rules by Membership Department'') to remove 
references to Rules 971 and 972.
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 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

[[Page 24149]]

mechanism of a free and open market and a national market system and, 
in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that Rules 971 and 972 are no longer 
necessary, since they were fully effective [sic] at the time of the 
Exchange's demutualization and its acquisition by The NASDAQ OMX Group, 
Inc., respectively. Accordingly, removing the rules from the Exchange's 
rulebook will perfect the mechanism of a free and open market by 
eliminating rules that are unnecessary and potentially confusing to 
member organizations.

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 
obsolete rules. Because the change will not alter the rights or 
obligations of member organizations in any respect, the Exchange 
believes that the change will not affect competition in any respect.

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 
subparagraph (f)(6) of Rule 19b-4 thereunder.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(a)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    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-2016-49 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-2016-49. 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-2016-49 and should be 
submitted on or before May 16, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Robert W. Errett,
Deputy Secretary.
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. 2016-09453 Filed 4-22-16; 8:45 am]
 BILLING CODE 8011-01-P

24148 Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Notices staff members who have an interest in I. Self-Regulatory Organization’s leases and ‘‘A-B-C Agreements’’ relating the matters also may be present. Statement of the Terms of Substance of to memberships and ‘‘ETP Use The General Counsel of the the Proposed Rule Change Agreements.’’ 4 As a result of Commission, or her designee, has The Exchange proposes to delete Rule demutualization, the Exchange moved certified that, in her opinion, one or 971, entitled ‘‘Termination of from a seat-based model of membership, more of the exemptions set forth in 5 Memberships and Equity Trading under which memberships were limited U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) Permits and Leases and A-B-C in number, to a model under which and 17 CFR 200.402(a)(3), (5), (7), 9(ii) Agreements Relating to Memberships status as a member organization and and (10), permit consideration of the and ETP Use Agreements,’’ to delete associated trading privileges were scheduled matter at the Closed Meeting. Rule 972, entitled ‘‘Continuation of available to any broker-dealer qualified Commissioner Piwowar, as duty Status After the NASDAQ OMX under the Exchange’s rules. To assist in officer, voted to consider the items Merger,’’ and to make conforming the effectuation of this change, Rule 971 listed for the Closed Meeting in closed changes to other rules. The text of the made it clear that all rights existing session. proposed rule change is available on the under the former model were being The subject matter of the Closed Exchange’s Web site at http:// terminated. Since the rule fully Meeting will be: www.nasdaqtrader.com/ achieved its purpose at the time of micro.aspx?id=PHLXRulefilings, at the demutualization 2004, the Exchange Institution and settlement of injunctive believes that maintaining the rule in the actions; principal office of the Exchange, and at the Commission’s Public Reference Exchange’s rulebook is no longer Institution and settlement of necessary. administrative proceedings; and Room. Rule 972 pertains to the merger in Other matters relating to enforcement II. Self-Regulatory Organization’s 2008 through which The NASDAQ proceedings. Statement of the Purpose of, and OMX Group, Inc. (since, renamed At times, changes in Commission Statutory Basis for, the Proposed Rule Nasdaq, Inc.) acquired ownership of the priorities require alterations in the Change Exchange. The rule provides that the scheduling of meeting items. In its filing with the Commission, the status of members, inactive nominees, For further information and to Exchange included statements and member organizations under ascertain what, if any, matters have been concerning the purpose of and basis for Exchange rules would not be affected by added, deleted or postponed, please the proposed rule change and discussed the acquisition, and that likewise any contact the Office of the Secretary at any comments it received on the existing suspension would not be (202) 551–5400. proposed rule change. The text of these affected. Since the rule fully achieved statements may be examined at the its purpose at the time of the acquisition Dated: April 21, 2016. of the Exchange in 2008, the Exchange places specified in Item IV below. The Brent J. Fields, believes that maintaining the rule in the Exchange has prepared summaries, set Secretary. forth in sections A, B, and C below, of Exchange’s rulebook is no longer [FR Doc. 2016–09714 Filed 4–21–16; 4:15 pm] the most significant aspects of such necessary. BILLING CODE 8011–01–P statements. The Exchange is also amending Rules 908 (‘‘Rights and Privileges of A–1 A. Self-Regulatory Organization’s Permits’’) and 3202 (‘‘Application of SECURITIES AND EXCHANGE Statement of the Purpose of, and Other Rules of the Exchange’’) to COMMISSION Statutory Basis for, the Proposed Rule remove references to Rule 972, and Change amending Rule 900 (‘‘Administration of [Release No. 34–77650; File No. SR–Phlx– 1. Purpose Rules by Membership Department’’) to 2016–49] remove references to Rules 971 and 972. The Exchange proposes to delete certain Phlx rules in order to remove 2. Statutory Basis Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing outdated material from the Exchange’s The Exchange believes that its and Immediate Effectiveness of Rulebook. Specifically, the Exchange proposal is consistent with Section 6(b) Proposed Rule Change To Delete proposes to delete Rule 971, entitled of the Act,5 in general, and furthers the Obsolete Rules ‘‘Termination of Memberships and objectives of Section 6(b)(5) of the Act,6 Equity Trading Permits and Leases and in particular, in that it is designed to April 19, 2016. A-B-C Agreements Relating to prevent fraudulent and manipulative Pursuant to Section 19(b)(1) of the Memberships and ETP Use acts and practices, to promote just and Securities Exchange Act of 1934 Agreements’’; and Rule 972, entitled equitable principles of trade, to foster (‘‘Act’’),1 and Rule 19b–4 thereunder,2 ‘‘Continuation of Status After the cooperation and coordination with notice is hereby given that on April 8, NASDAQ OMX Merger.’’ The Exchange persons engaged in facilitating 2016, NASDAQ PHLX LLC (‘‘Phlx’’ or also proposes to make conforming transactions in securities, to remove ‘‘Exchange’’) filed with the Securities changes to rules that reference the rules impediments to and perfect the and Exchange Commission (‘‘SEC’’ or that are being deleted. ‘‘Commission’’) the proposed rule Rule 971 pertained to the 4 Leases reflected the ownership interest of a change as described in Items I, II, and demutualization of the Exchange in member in the exchange prior to demutualization. asabaliauskas on DSK3SPTVN1PROD with NOTICES III, below, which Items have been 2004. As provided in the rule, A-B-C Agreements allowed a member of the demutualization resulted in the exchange, a natural person associated with the prepared by the Exchange. The broker-dealer, to contribute the use of the Commission is publishing this notice to termination of memberships and equity membership to the broker-dealer with which he or solicit comments on the proposed rule trading permits (‘‘ETP’’),3 as well as she was associated. Similarly, ETP Use Agreements allowed an individual ETP holder to contribute its change from interested persons. 3 ETPs were rights created by the rules of the use to the broker-dealer with which he or she was Exchange that provided the ability to transact cash associated. 1 15 U.S.C. 78s(b)(1). 5 15 U.S.C. 78f(b). equities through the exchange but without having 2 17 CFR 240.19b–4. the ownership rights associated with membership. 6 15 U.S.C. 78f(b)(5). VerDate Sep<11>2014 19:02 Apr 22, 2016 Jkt 238001 PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 E:\FR\FM\25APN1.SGM 25APN1

Federal Register / Vol. 81, No. 79 / Monday, April 25, 2016 / Notices 24149 mechanism of a free and open market Exchange has provided the Commission For the Commission, by the Division of and a national market system and, in written notice of its intent to file the Trading and Markets, pursuant to delegated general, to protect investors and the proposed rule change, along with a brief authority.9 public interest. description and text of the proposed Robert W. Errett, The Exchange believes that Rules 971 rule change, at least five business days Deputy Secretary. and 972 are no longer necessary, since prior to the date of filing of the [FR Doc. 2016–09453 Filed 4–22–16; 8:45 am] they were fully effective [sic] at the time proposed rule change. BILLING CODE 8011–01–P of the Exchange’s demutualization and IV. Solicitation of Comments its acquisition by The NASDAQ OMX Group, Inc., respectively. Accordingly, Interested persons are invited to SECURITIES AND EXCHANGE removing the rules from the Exchange’s submit written data, views, and COMMISSION rulebook will perfect the mechanism of arguments concerning the foregoing, a free and open market by eliminating including whether the proposed rule Sunshine Act Meeting rules that are unnecessary and change is consistent with the Act. potentially confusing to member Comments may be submitted by any of Notice is hereby given, pursuant to organizations. the following methods: the provisions of the Government in the Sunshine Act, Public Law 94–409, that B. Self-Regulatory Organization’s Electronic Comments the Securities and Exchange Statement on Burden on Competition • Use the Commission’s Internet Commission Equity Market Structure The proposed rule change does not comment form (http://www.sec.gov/ Advisory Committee will hold a public impose any burden on competition that rules/sro.shtml); or meeting on Tuesday, April 26, 2016, in is not necessary or appropriate in • Send an email to rule-comments@ the Multipurpose Room, LL–006 at the furtherance of the purposes of the Act. sec.gov. Please include File Number SR– Commission’s headquarters, 100 F The Exchange’s proposed amendments Phlx–2016–49 on the subject line. Street NE., Washington, DC. seek to delete certain obsolete rules. Paper Comments The meeting will begin at 9:30 a.m. Because the change will not alter the (EDT) and will be open to the public. • Send paper comments in triplicate Seating will be on a first-come, first- rights or obligations of member to Brent J. Fields, Secretary, Securities organizations in any respect, the served basis. Doors will be open at 9:00 and Exchange Commission, 100 F Street a.m. Visitors will be subject to security Exchange believes that the change will NE., Washington, DC 20549–1090. not affect competition in any respect. checks. The meeting will be webcast on All submissions should refer to File the Commission’s Web site at C. Self-Regulatory Organization’s Number SR–Phlx–2016–49. This file www.sec.gov. Statement on Comments on the number should be included on the On April 6, 2016, the Commission Proposed Rule Change Received From subject line if email is used. To help the published notice of the Committee Members, Participants, or Others Commission process and review your meeting (Release No. 34–77543), No written comments were either comments more efficiently, please use indicating that the meeting is open to solicited or received. only one method. The Commission will the public and inviting the public to post all comments on the Commission’s submit written comments to the III. Date of Effectiveness of the Internet Web site (http://www.sec.gov/ Committee. This Sunshine Act notice is Proposed Rule Change and Timing for rules/sro.shtml). being issued because a majority of the Commission Action Copies of the submission, all Commission may attend the meeting. Because the foregoing proposed rule subsequent amendments, all written The agenda for the meeting will focus change does not: (i) Significantly affect statements with respect to the proposed on status reports and potential the protection of investors or the public rule change that are filed with the recommendations from the four interest; (ii) impose any significant Commission, and all written subcommittees. burden on competition; and (iii) become communications relating to the For further information, please operative for 30 days from the date on proposed rule change between the contact the Office of the Secretary at which it was filed, or such shorter time Commission and any person, other than (202) 551–5400. as the Commission may designate, it has those that may be withheld from the Dated: April 19, 2016. become effective pursuant to Section public in accordance with the Brent J. Fields, 19(b)(3)(A)(iii) of the Act 7 and provisions of 5 U.S.C. 552, will be available for Web site viewing and Secretary. subparagraph (f)(6) of Rule 19b–4 printing in the Commission’s Public [FR Doc. 2016–09593 Filed 4–21–16; 11:15 am] thereunder.8 At any time within 60 days of the Reference Room, 100 F Street NE., BILLING CODE 8011–01–P filing of the proposed rule change, the Washington, DC 20549, on official Commission summarily may business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the SECURITIES AND EXCHANGE temporarily suspend such rule change if filing also will be available for COMMISSION it appears to the Commission that such action is: (i) Necessary or appropriate in inspection and copying at the principal Sunshine Act Meeting the public interest; (ii) for the protection office of the Exchange. All comments received will be posted without change; Notice is hereby given that, pursuant asabaliauskas on DSK3SPTVN1PROD with NOTICES of investors; or (iii) otherwise in furtherance of the purposes of the Act. the Commission does not edit personal to the provisions of the Government in If the Commission takes such action, the identifying information from the Sunshine Act, Public Law 94–409, Commission shall institute proceedings submissions. You should submit only the Securities and Exchange to determine whether the proposed rule information that you wish to make Commission will hold an Open Meeting should be approved or disapproved. The available publicly. All submissions on Wednesday, April 27, 2016 at 10:00 should refer to File Number SR–Phlx– a.m. in the Auditorium, Room L–002. 7 15 U.S.C. 78s(b)(3)(a)(iii). 2016–49 and should be submitted on or 8 17 CFR 240.19b–4(f)(6). before May 16, 2016. 9 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 19:02 Apr 22, 2016 Jkt 238001 PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 E:\FR\FM\25APN1.SGM 25APN1


Document Created: 2016-04-23 01:38:40
Document Modified: 2016-04-23 01:38:40
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 24148 
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR