81 FR 3530 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 132.30(9)-Equities To Conform the Exchange's Rules to Industry-Wide Standards for Recording the Capacity in Which a Member Organization Executes a Transaction
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 13 (January 21, 2016)
Federal Register Volume 81, Issue 13 (January 21, 2016)
| Page Range | 3530-3532 | |
| FR Document | 2016-01057 |
[Federal Register Volume 81, Number 13 (Thursday, January 21, 2016)] [Notices] [Pages 3530-3532] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-01057] [[Page 3530]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76907; File No. SR-NYSEMKT-2016-07] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 132.30(9)--Equities To Conform the Exchange's Rules to Industry-Wide Standards for Recording the Capacity in Which a Member Organization Executes a Transaction January 14, 2016. Pursuant to Section 19(b)(1)\1\ of the Securities Exchange Act of 1934 (the ``Act'')\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that on January 11, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. 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\ 15 U.S.C. 78a. \3\ 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 Rule 132.30(9)--Equities to conform the Exchange's rules to industry-wide standards for recording the capacity in which a member organization executes a transaction. The proposed rule change is available on the Exchange's Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization 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 those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Supplementary Material .30 of Rule 132--Equities (``Rule 132'') to conform the Exchange's rules to industry-wide standards for recording the capacity in which a member organization executes a transaction. To effect this change, the Exchange proposes to eliminate the current requirement to identify the account for which an order was executed and require instead that clearing members and member organizations submit account type indicators (``ATI'') reflecting the capacity in which the member organization executed a transaction (e.g., agency, principal or riskless principal). The Exchange believes that the proposed rule change would align the Exchange's rules with industry-wide conventions focusing on the capacity in which a broker-dealer acts in effecting a transaction and, by eliminating the complex set of ATIs developed over the years, significantly simplify order entry on the Exchange. Background Rule 132 requires clearing member organizations submitting transactions to comparison to include the audit trail data elements set forth in Supplementary Material .30. Rule 132.30(9) requires that all orders submitted to the Exchange include specified trade data elements, including ``[w]hether the account for which the order was executed was that of a member or member organization or of a non-member or non- member organization.'' The Exchange's affiliate, New York Stock Exchange LLC (``NYSE''), which has the same rule,\4\ has periodically published guidance regarding the ATIs that can be used to satisfy this requirement.\5\ ATIs are included as part of the audit trail data reported for each transaction on the Exchange. The Exchange also uses ATIs to capture program trade information \6\ for those portions of the program trades that are submitted to and executed on the Exchange. In connection with this proposed rule change, the Exchange proposes to retire the unique ATIs used to capture program trading information.\7\ --------------------------------------------------------------------------- \4\ See NYSE Rule 132.30(9). The NYSE has filed to amend its rule relating to ATIs to conform to industry-wide standards for recording the capacity in which a member organization executes a transaction. See SR-NYSE-2016-07 (``NYSE ATI Filing''). \5\ See, e.g., Information Memos 85-37 (Nov. 12, 1985); 88-29 (Oct. 19, 1988); 92-34 (Nov. 13, 1992); 96-36 (Dec. 5, 1996); 02-59 (Dec. 17, 2002); 09-31 (June 24, 2009); 12-25 (October 9, 2012); 14- 04 (January 30, 2014). The current list contains 24 distinct ATIs. \6\ ``Program Trading'' means either (1) index arbitrage, or (2) any trading strategy involving the related purchase or sale of a basket or group of 15 or more stocks. See Rule 7410(m)--Equities. \7\ See NYSE ATI Filing, supra note 3. Prior to 2009, NYSE member organizations reported program trading activity to the NYSE via the Daily Program Trading Report (``DPTR''). Following decommissioning of the DPTR requirement in July 2009, the NYSE has used ATI data to report program trading statistics to the Securities and Exchange Commission (``Commission'') and the public. See Securities Exchange Act Release No. 60179 (June 26, 2009), 74 FR 31786, 31786-87 (July 2, 2009) (SR-NYSE-2009-61). Unlike the NYSE, the Exchange does not have a requirement to provide weekly statistics regarding program trading activity to either the Commission or the public. In addition, the Exchange did not adopt the DPTR requirement and uses ATIs to capture program trade information. --------------------------------------------------------------------------- Proposed Rule Change The Exchange proposes to amend the current requirement in subsection (9) of Rule 132.30 that clearing member organizations identify whether the account for which an order was executed was that of a member or member organization or of a non-member or non-member organization. The current requirement can be satisfied by entering the appropriate ATI from a list of ATIs that have evolved over the past 30 years.\8\ --------------------------------------------------------------------------- \8\ See note 5, supra. --------------------------------------------------------------------------- In place of this cumbersome process, the Exchange proposes to require member organizations to identify the capacity in which the member organization executed the transaction as follows: agency, principal or riskless principal.\9\ The ``principal'' category would include proprietary trades by a member on the trading Floor relating to the member's error account pursuant to Rule 134--Equities.\10\ --------------------------------------------------------------------------- \9\ In general, the term ``capacity'' refers to whether a broker-dealer acts as agent, i.e., directly on behalf of a customer, or whether the broker-dealer acts as principal, i.e., for its own account, in a transaction. A riskless principal transaction is one where a broker-dealer receives a customer order and then immediately executes an identical order in the marketplace, while taking on the role of principal, in order to fill the customer order pursuant to Rule 5320--Equities. \10\ Rule 134--Equities requires a member or member organization who acquires or assumes a security position resulting from an error transaction to clear such error transaction in the member's or member organization's error account, or in the error account established for a group of members. Rule 123.22--Equities further requires members to enter orders executed to offset transactions made in error into an electronic system and sends a copy of such order to an electronic system on the Floor within 60 seconds of execution. See also Rule 123(e)--Equities (defining system entry). This type of proprietary trade is currently identified by the ``Q'' account type indicator, which would be retained to identify these trading Floor-based executions. --------------------------------------------------------------------------- [[Page 3531]] By requiring member organizations to identify the capacity in which a broker-dealer enters an order, the Exchange would be harmonizing its order entry requirements with those of other national securities exchanges and the NYSE.\11\ The proposed change would also simplify the order entry process at the Exchange and eliminate the requirement for member organizations to use order entry requirements unique to the Exchange, thereby reducing complexity in the marketplace. This proposed amendment would not alter a member organization's obligation to meet order audit trail system requirements, as set forth in the Rule 7400 Series--Equities. --------------------------------------------------------------------------- \11\ See, e.g., BATS Exchange, Inc. (``BATS'') Rule 11.21; BATS Y-Exchange, Inc. (``BATS-Y'') Rule 11.21; EDGA Exchange, Inc. (``EDGA'') Rule 11.5; EDGX Exchange, Inc. Rule 11.5; and NASDAQ Stock Market LLC (``NASDAQ'') Rule 4611(a)(6). --------------------------------------------------------------------------- The Exchange will publish an Information Memo advising member organizations of the proposed change that will provide guidance of which ATIs should be submitted in connection with agency, principal, or riskless principal capacity. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,\12\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\13\ in particular, because it is designed to promote just and equitable principles of trade and to remove impediments to and perfect the mechanism of a free and open market and a national market system. The Exchange believes that the proposed rule change would remove impediments to and perfect the mechanism of a free and open market and national market system because it would provide greater harmonization between order entry on the Exchange and other marketplaces, resulting in greater uniformity and more efficient order entry to enable member organizations to use the same order-market conventions across all equities markets. As such, the proposed rule change would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would remove impediments to and perfect the mechanism of a free and open market and a national market system. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78f(b). \13\ 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 that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is not intended to address competitive issues, but rather it is designed to provide greater harmonization between Exchange and other markets in the marking of orders, resulting in less burdensome and more efficient order entry. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act\14\ and Rule 19b-4(f)(6) thereunder.\15\ Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b- 4(f)(6)(iii) thereunder.\16\ --------------------------------------------------------------------------- \14\ 15 U.S.C. 78s(b)(3)(A)(iii). \15\ 17 CFR 240.19b-4(f)(6). \16\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange's 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, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6)\17\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\18\ the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. --------------------------------------------------------------------------- \17\ 17 CFR 240.19b-4(f)(6). \18\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)\19\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \19\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- 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-NYSEMKT-2016-07 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-NYSEMKT-2016-07. 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-NYSEMKT-2016-07 and should be [[Page 3532]] submitted on or before February 11, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\20\ --------------------------------------------------------------------------- \20\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-01057 Filed 1-20-16; 8:45 am] BILLING CODE 8011-01-P
![3530 Federal Register / Vol. 81, No. 13 / Thursday, January 21, 2016 / Notices
SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s for those portions of the program trades
COMMISSION Statement of the Purpose of, and the that are submitted to and executed on
Statutory Basis for, the Proposed Rule the Exchange. In connection with this
[Release No. 34–76907; File No. SR– Change proposed rule change, the Exchange
NYSEMKT–2016–07] proposes to retire the unique ATIs used
1. Purpose
to capture program trading
Self-Regulatory Organizations; NYSE The Exchange proposes to amend information.7
MKT LLC; Notice of Filing and Supplementary Material .30 of Rule
132—Equities (‘‘Rule 132’’) to conform Proposed Rule Change
Immediate Effectiveness of Proposed
the Exchange’s rules to industry-wide The Exchange proposes to amend the
Rule Change Amending Rule
standards for recording the capacity in current requirement in subsection (9) of
132.30(9)—Equities To Conform the
which a member organization executes Rule 132.30 that clearing member
Exchange’s Rules to Industry-Wide
a transaction. To effect this change, the organizations identify whether the
Standards for Recording the Capacity account for which an order was
in Which a Member Organization Exchange proposes to eliminate the
current requirement to identify the executed was that of a member or
Executes a Transaction member organization or of a non-
account for which an order was
January 14, 2016. executed and require instead that member or non-member organization.
clearing members and member The current requirement can be satisfied
Pursuant to Section 19(b)(1)1 of the by entering the appropriate ATI from a
organizations submit account type
Securities Exchange Act of 1934 (the indicators (‘‘ATI’’) reflecting the list of ATIs that have evolved over the
‘‘Act’’)2 and Rule 19b–4 thereunder,3 capacity in which the member past 30 years.8
notice is hereby given that on January organization executed a transaction In place of this cumbersome process,
11, 2016, NYSE MKT LLC (the (e.g., agency, principal or riskless the Exchange proposes to require
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with principal). The Exchange believes that member organizations to identify the
the Securities and Exchange the proposed rule change would align capacity in which the member
Commission (the ‘‘Commission’’) the the Exchange’s rules with industry-wide organization executed the transaction as
proposed rule change as described in conventions focusing on the capacity in follows: agency, principal or riskless
Items I and II below, which Items have which a broker-dealer acts in effecting a principal.9 The ‘‘principal’’ category
been prepared by the self-regulatory transaction and, by eliminating the would include proprietary trades by a
organization. The Commission is complex set of ATIs developed over the member on the trading Floor relating to
publishing this notice to solicit years, significantly simplify order entry the member’s error account pursuant to
comments on the proposed rule change on the Exchange. Rule 134—Equities.10
from interested persons.
Background related purchase or sale of a basket or group of 15
I. Self-Regulatory Organization’s or more stocks. See Rule 7410(m)—Equities.
Statement of the Terms of Substance of Rule 132 requires clearing member 7 See NYSE ATI Filing, supra note 3. Prior to
the Proposed Rule Change organizations submitting transactions to 2009, NYSE member organizations reported
comparison to include the audit trail program trading activity to the NYSE via the Daily
data elements set forth in Program Trading Report (‘‘DPTR’’). Following
The Exchange proposes to amend decommissioning of the DPTR requirement in July
Rule 132.30(9)—Equities to conform the Supplementary Material .30. Rule 2009, the NYSE has used ATI data to report
Exchange’s rules to industry-wide 132.30(9) requires that all orders program trading statistics to the Securities and
submitted to the Exchange include Exchange Commission (‘‘Commission’’) and the
standards for recording the capacity in public. See Securities Exchange Act Release No.
which a member organization executes specified trade data elements, including 60179 (June 26, 2009), 74 FR 31786, 31786–87 (July
a transaction. The proposed rule change ‘‘[w]hether the account for which the 2, 2009) (SR–NYSE–2009–61). Unlike the NYSE, the
is available on the Exchange’s Web site order was executed was that of a Exchange does not have a requirement to provide
member or member organization or of a weekly statistics regarding program trading activity
at www.nyse.com, at the principal office to either the Commission or the public. In addition,
of the Exchange, and at the non-member or non-member the Exchange did not adopt the DPTR requirement
Commission’s Public Reference Room. organization.’’ The Exchange’s affiliate, and uses ATIs to capture program trade
New York Stock Exchange LLC information.
II. Self-Regulatory Organization’s (‘‘NYSE’’), which has the same rule,4
8 See note 5, supra.
9 In general, the term ‘‘capacity’’ refers to whether
Statement of the Purpose of, and has periodically published guidance a broker-dealer acts as agent, i.e., directly on behalf
Statutory Basis for, the Proposed Rule regarding the ATIs that can be used to of a customer, or whether the broker-dealer acts as
Change satisfy this requirement.5 ATIs are principal, i.e., for its own account, in a transaction.
included as part of the audit trail data A riskless principal transaction is one where a
In its filing with the Commission, the reported for each transaction on the
broker-dealer receives a customer order and then
self-regulatory organization included immediately executes an identical order in the
Exchange. The Exchange also uses ATIs marketplace, while taking on the role of principal,
statements concerning the purpose of, to capture program trade information 6 in order to fill the customer order pursuant to Rule
and basis for, the proposed rule change 5320—Equities.
and discussed any comments it received 4 See NYSE Rule 132.30(9). The NYSE has filed
10 Rule 134—Equities requires a member or
on the proposed rule change. The text member organization who acquires or assumes a
to amend its rule relating to ATIs to conform to
security position resulting from an error transaction
of those statements may be examined at industry-wide standards for recording the capacity to clear such error transaction in the member’s or
the places specified in Item IV below. in which a member organization executes a
asabaliauskas on DSK9F6TC42PROD with NOTICES
member organization’s error account, or in the error
transaction. See SR–NYSE–2016–07 (‘‘NYSE ATI account established for a group of members. Rule
The Exchange has prepared summaries, Filing’’). 123.22—Equities further requires members to enter
set forth in sections A, B, and C below, 5 See, e.g., Information Memos 85–37 (Nov. 12,
orders executed to offset transactions made in error
of the most significant parts of such 1985); 88–29 (Oct. 19, 1988); 92–34 (Nov. 13, 1992); into an electronic system and sends a copy of such
statements. 96–36 (Dec. 5, 1996); 02–59 (Dec. 17, 2002); 09–31 order to an electronic system on the Floor within
(June 24, 2009); 12–25 (October 9, 2012); 14–04 60 seconds of execution. See also Rule 123(e)—
(January 30, 2014). The current list contains 24 Equities (defining system entry). This type of
1 15 U.S.C. 78s(b)(1). distinct ATIs. proprietary trade is currently identified by the ‘‘Q’’
2 15 U.S.C. 78a. 6 ‘‘Program Trading’’ means either (1) index account type indicator, which would be retained to
3 17 CFR 240.19b–4. arbitrage, or (2) any trading strategy involving the identify these trading Floor-based executions.
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![3532 Federal Register / Vol. 81, No. 13 / Thursday, January 21, 2016 / Notices
submitted on or before February 11, include 50 Type A comment letters and
2016. Apartment Association, dated November 10, 2015 four Type B comment letters in response
(‘‘NMHC/NAA Letter’’); David W. Blass, Investment
For the Commission, by the Division of Company Institute, dated November 9, 2015 (‘‘ICI
to the proposed rule change. On January
Trading and Markets, pursuant to delegated Letter’’); Robert Cahn, Prudential Mortgage Capital 13, 2016, FINRA responded to the
authority.20 Company, LLC, dated November 10, 2015 comments and filed Partial Amendment
Robert W. Errett, (‘‘Prudential Letter’’); James M. Cain, Sutherland No. 1 to the proposal.5 The Commission
Asbill & Brennan LLP (on behalf of the Federal is publishing this order to solicit
Deputy Secretary. Home Loan Banks), dated November 10, 2015
(‘‘Sutherland Letter’’); Timothy W. Cameron, Esq. comments on Partial Amendment No. 1
[FR Doc. 2016–01057 Filed 1–20–16; 8:45 am]
and Laura Martin, Securities Industry and Financial from interested persons and to institute
BILLING CODE 8011–01–P
Markets Association, Asset Management Group, proceedings pursuant to Exchange Act
dated November 10, 2015 (‘‘SIFMA AMG Letter’’); Section 19(b)(2)(B) 6 to determine
Jonathan S. Camps, Love Funding, dated November
SECURITIES AND EXCHANGE 9, 2015 (‘‘Love Funding Letter’’); Richard A.
whether to approve or disapprove the
COMMISSION Carlson, Davis-Penn Mortgage Co., dated November proposed rule change, as modified by
9, 2015 (‘‘Davis-Penn 1 Letter’’); Michael S. Cordes, Partial Amendment No. 1.
[Release No. 34–76908; File No. SR–FINRA– Columbia National Real Estate Finance, LLC, dated Institution of proceedings does not
2015–036] November 9, 2015 (‘‘Columbia Letter’’); Carl E. indicate that the Commission has
Corrado, Great Lakes Financial Group, LP, dated
January 4, 2016 (‘‘Great Lakes Letter’’); Daniel R.
reached any conclusions with respect to
Self-Regulatory Organizations; Crain, Crain Mortgage Group, LLC, dated November the proposed rule change, not does it
Financial Industry Regulatory 6, 2015 (‘‘Crain Letter’’); James F. Croft, Red mean that the Commission will
Authority, Inc.; Order Instituting Mortgage Capital, LLC, dated November 10, 2015 ultimately disapprove the proposed rule
Proceedings To Determine Whether To (‘‘Red Mortgage Letter’’); Dan Darilek, Davis-Penn change. Rather, as discussed below, the
Mortgage Co., dated November 9, 2015 (‘‘Davis-
Approve or Disapprove Proposed Rule Penn 2 Letter’’); Jayson F. Donaldson, NorthMarq Commission seeks additional input on
Change To Amend FINRA Rule 4210 Capital Finance, L.L.C, dated November 10, 2015 the proposed rule change, as modified
(Margin Requirements) To Establish (‘‘NorthMarq Letter’’); Robert B. Engel, CoBank, by Partial Amendment No. 1, and on the
Margin Requirements for the TBA ACB (on behalf of the Farm Credit Banks), dated issues presented by the proposal.
Market, as Modified by Partial November 10, 2015 (‘‘CoBank Letter’’); Robert M.
Amendment No. 1
Fine, Brean Capital, LLC, dated November 10, 2015 II. Description of the Proposed Rule
(‘‘Brean Capital 1 Letter’’); Tari Flannery, M&T Change 7
Realty Capital Corporation, dated November 9, 2015
January 14, 2016. (‘‘M&T Realty Letter’’); Bernard P. Gawley, The In its filing, FINRA proposed
Ziegler Financing Corporation, dated November 10, amendments to FINRA Rule 4210
I. Introduction 2015 (‘‘Ziegler Letter’’); John R. Gidman,
Association of Institutional INVESTORS, dated
(Margin Requirements) to establish
On October 6, 2015, Financial requirements for: (1) TBA transactions,8
Industry Regulatory Authority, Inc. November 10, 2015 (‘‘AII Letter’’); Keith J. Gloeckl,
Churchill Mortgage Investment, LLC, dated
(‘‘FINRA’’) filed with the Securities and November 6, 2015 (‘‘Churchill Letter’’); Eileen Grey, 2015 (‘‘Century Letter’’); Deborah Rogan, Bellwether
Exchange Commission (‘‘SEC’’ or Mortgage Bankers Association & Others, dated Enterprise Real Estate Capital, LLC, dated
‘‘Commission’’), pursuant to Section October 29, 2015 (‘‘MBA & Others 1 Letter’’); November 10, 2015 (‘‘Bellwether Letter’’); Bruce
19(b)(1) of the Securities Exchange Act Mortgage Bankers Association & Others (including Sandweiss, Gershman Mortgage, dated November
American Seniors Housing Association), dated 18, 2015 (‘‘Gershman 1 Letter’’); Craig Singer and
of 1934 (‘‘Exchange Act’’) 1 and Rule November 10, 2015 (‘‘MBA & Others 2 Letter’’); James Hussey, RICHMAC Funding LLC, dated
19b–4 thereunder,2 a proposed rule Tyler Griffin, Dwight Capital, dated November 10, November 9, 2015 (‘‘Richmac Letter’’); David H.
change to amend FINRA Rule 4210 2015 (‘‘Dwight Letter’’); Pete Hodo, III, Highland Stevens, Mortgage Bankers Association, dated
(Margin Requirements) to establish Commercial Mortgage, dated November 5, 2015 November 10, 2015 (‘‘MBA Letter’’); Stephen P.
(‘‘Highland 1 Letter’’); Robert H. Huntington, Credit Theobald, Walker & Dunlop, LLC, dated November
margin requirements for covered agency Suisse Securities (USA) LLC, dated November 10, 10, 2015 (‘‘W&D Letter’’); Robert Tirschwell, Brean
transactions, also referred to, for 2015 (‘‘Credit Suisse Letter’’); Matthew Kane, Capital, LLC, dated November 10, 2015 (‘‘Brean
purposes of this proposed rule change, Centennial Mortgage, Inc., dated November 9, 2015 Capital 2 Letter’’); Mark C. Unangst, Gershman
as the To Be Announced (‘‘TBA’’) (‘‘Centennial Letter’’); Christopher B. Killian, Mortgage, dated November 23, 2015 (‘‘Gershman 2
Securities Industry and Financial Markets Letter’’); Charles M. Weber, Robert W. Baird & Co.
market. Association, dated November 10, 2015 (‘‘SIFMA Incorporated, dated November 10, 2015 (‘‘Robert
The proposed rule change was Letter’’); Robert T. Kirkwood, Lancaster Pollard Baird Letter’’); Steve Wendel, CBRE, Inc., dated
published for comment in the Federal Holdings, LLC, dated November 10, 2015 November 10, 2015 (‘‘CBRE Letter’’); Carl B.
Register on October 20, 2015.3 On (‘‘Lancaster Letter’’); Tony Love, Forest City Capital Wilkerson, American Council of Life Insurers, dated
Corporation, dated November 5, 2015 (‘‘Forest City November 10, 2015 (‘‘ACLI Letter’’); David H.
November 10, 2015, FINRA extended Stevens, Mortgage Bankers Association, dated
1 Letter’’); Tony Love, Forest City Capital
the time period in which the Corporation, dated November 10, 2015 (‘‘Forest City January 11, 2016 (‘‘MBA Supplemental Letter’’).
Commission must approve the proposed 2 Letter’’); Anthony Luzzi, Sims Mortgage Funding, The Type A and B form letters generally contain
rule change, disapprove the proposed Inc., dated November 9, 2015 (‘‘Sims Mortgage language opposing the inclusion of multifamily
Letter’’); Diane N. Marshall, Prairie Mortgage housing and project loan securities within the scope
rule change, or institute proceedings to of the proposed rule change. The Commission staff
Company, dated November 10, 2015 (‘‘Prairie
determine whether to approve or Mortgage Letter’’); Matrix Applications, LLC, dated also participated in numerous meetings and
disapprove the proposed rule change to November 10, 2015 (‘‘Matrix Letter’’); Douglas I. conference calls with some commenters and other
January 15, 2016. The Commission McCree, CMB, First Housing, dated November 10, market participants.
5 See Partial Amendment No. 1, dated January 13,
received 109 comment letters, 4 which 2015 (‘‘First Housing Letter’’); Michael McRoberts,
DUS Peer Group, dated November 2, 2015 (‘‘DUS 2016 (‘‘Partial Amendment No. 1’’). FINRA’s
Letter’’); Chris Melton, Coastal Securities, dated responses to comments received and proposed
20 17 CFR 200.30–3(a)(12). November 9, 2015 (‘‘Coastal Letter’’); John O. Moore amendments are included in Partial Amendment
1 15 U.S.C. 78s(b)(1). No. 1. The text of Partial Amendment No. 1 is
Jr., Highland Commercial Mortgage, dated
asabaliauskas on DSK9F6TC42PROD with NOTICES
2 17 CFR 240.19b–4.
November 6, 2015 (‘‘Highland 2 Letter’’); Dennis G. available on FINRA’s Web site at http://
3 See Exchange Act Release No. 76148 (Oct. 14, Morton, AJM First Capital, LLC, dated November www.finra.org, at the principal office of FINRA, and
2015), 80 FR 63603 (Oct. 20, 2015) (File No. SR– 10, 2015 (‘‘AJM Letter’’); Michael Nicholas, Bond at the Commission’s Public Reference Room.
6 15 U.S.C. 78s(b)(2)(B).
FINRA–2015–036) (‘‘Notice’’). Dealers of America, dated November 10, 2015
7 The proposed rule change, as described in this
4 See Letters from Margaret Allen, AGM (‘‘BDA Letter’’); Lee Oller, Draper and Kramer,
Financial, dated November 10, 2015 (‘‘AGM Incorporated, dated November 10, 2015 (‘‘Draper Item II, is excerpted, in part, from the Notice, which
Letter’’); Paul J. Barrese, Sandler O’Neill & Partners, Letter’’); Roderick D. Owens, Committee on was substantially prepared by FINRA. See supra
L.P., dated November 10, 2015 (‘‘Sandler O’Neill Healthcare Financing, dated November 6, 2015 note 3.
Letter’’); Doug Bibby and Doug Culkin, National (‘‘CHF Letter’’); Jose A. Perez, Perez, dated 8 See FINRA Rule 6710(u) defines TBA to mean
Multifamily Housing Council and National November 9, 2015 (‘‘Perez Letter’’); David F. Perry, a transaction in an Agency Pass-Through Mortgage-
Century Health Capital, Inc., dated November 9,
VerDate Sep<11>2014 18:26 Jan 20, 2016 Jkt 238001 PO 00000 Frm 00156 Fmt 4703 Sfmt 4703 E:\FR\FM\21JAN1.SGM 21JAN1](https://thefederalregister.org/doc/81_FR_3543/page/3.svg)
Document Created: 2018-02-02 12:34:09
Document Modified: 2018-02-02 12:34:09
| 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 3530 |
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