81 FR 536 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Adopting New Rules To Reflect the Implementation of Pillar, the Exchange's New Trading Technology Platform
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 3 (January 6, 2016)
Federal Register Volume 81, Issue 3 (January 6, 2016)
| Page Range | 536-540 | |
| FR Document | 2015-33217 |
[Federal Register Volume 81, Number 3 (Wednesday, January 6, 2016)] [Notices] [Pages 536-540] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-33217] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76803; File No. SR-NYSE-2015-67] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Adopting New Rules To Reflect the Implementation of Pillar, the Exchange's New Trading Technology Platform December 30, 2015. 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 December 18, 2015, New York Stock Exchange LLC (``NYSE'' or the ``Exchange'') 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 adopt new rules to reflect the implementation of Pillar, the Exchange's new trading technology platform. 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 [[Page 537]] 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 On January 29, 2015, the Exchange announced the implementation of Pillar, which is an integrated trading technology platform designed to use a single specification for connecting to the equities and options markets operated by the Exchange and its affiliates, NYSE Arca, Inc. (``NYSE Arca'') and NYSE MKT LLC (``NYSE MKT'').\4\ NYSE Arca Equities, Inc. (``NYSE Arca Equities), which operates the equities trading platform for NYSE Arca, will be the first trading system to migrate to Pillar.\5\ In connection with this implementation schedule, NYSE Arca filed four rule proposals relating to Pillar, three of which have been approved.\6\ --------------------------------------------------------------------------- \4\ See Trader Update dated January 29, 2015, available here: http://www1.nyse.com/pdfs/Pillar_Trader_Update_Jan_2015.pdf. \5\ NYSE Arca Equities is a wholly-owned corporation of NYSE Arca and operates as a facility of NYSE Arca. \6\ See Securities Exchange Act Release Nos. 74951 (May 13, 2015), 80 FR 28721 (May 19, 2015) (Notice) and 75494 (July 20, 2015), 80 FR 44170 (July 24, 2015) (SR-NYSEArca-2015-38) (Approval Order of NYSE Arca Pillar I Filing, adopting rules for Trading Sessions, Order Ranking and Display, and Order Execution); Securities Exchange Act Release Nos. 75497 (July 21, 2015), 80 FR 45022 (July 28, 2015) (Notice) and 76267 (October 26, 2015), 80 FR 66951 (October 30, 2015) (SR-NYSEArca-2015-56) (Approval Order of NYSE Arca Pillar II Filing, adopting rules for Orders and Modifiers and the Retail Liquidity Program); Securities Exchange Act Release Nos. 75467 (July 16, 2015), 80 FR 43515 (July 22, 2015) (Notice) and 76198 (October 20, 2015), 80 FR 65274 (October 26, 2015) (SR-NYSE- 2015-58) (Approval Order of NYSE Arca Pillar III Filing, adopting rules for Trading Halts, Short Sales, Limit Up-Limit Down, and Odd Lots and Mixed Lots); and Securities Exchange Act Release No. 76085 (October 6, 2015), 80 FR 61513 (October 13, 2015) (Notice of NYSE Arca Pillar IV Filing, proposing rules for Auctions). --------------------------------------------------------------------------- Following the implementation of Pillar on NYSE Arca Equities, the Exchange will be the next trading platform to migrate to Pillar. On Pillar, the Exchange will retain its current trading model, which uses a parity and priority model for allocating trades, as set forth in Rule 72. To streamline and simplify trading across the Exchange, NYSE Arca, and NYSE MKT, other facets of trading on the Pillar platform on the Exchange will be based on the NYSE Arca Equities Pillar rules, including for example, rules governing order types and modifiers, order display, execution, or routing, and order processing during a Limit Up- Limit Down scenario or when a Short Sale Period is triggered. In addition, in connection with its migration to Pillar, the Exchange proposes the rule numbering framework of the NYSE Arca Equities rules. The Exchange believes that if it and its affiliates are operating on the same trading platform, using the same rule numbering scheme across all markets will make it easier for members, the public and the Commission to navigate the rules of each market. The Exchange therefore proposes to adopt a framework of rule numbering that is based on the current NYSE Arca Equities rules. The Exchange proposes to place this framework of rules following current Rule 0. As proposed, this framework would use the current rule numbering scheme of NYSE Arca Equities, and would consist of proposed Rules 1P-13P. Accordingly, the Exchange proposes to add a new heading following Rule 0 that would provide ``Pillar Platform Rules (Rules 1P-Rule 13P).'' To explain that the proposed rules would only be applicable to trading in a security once that security is trading on the Pillar platform, the Exchange proposes to state that Rules 1P-13P would be operative for securities that are trading on the Pillar trading platform. Similar to the text following NYSE Arca Equities Rule 7, the Exchange would further provide that the Exchange would announce by Trader Update when securities are trading on the Pillar trading platform. Because there will be a period when specified securities that trade on the Exchange would continue to trade on the current trading platform, while other securities would be trading on the Pillar platform, the Exchange would not delete current Exchange rules when it adopts Pillar rules that cover the same topic as a current Exchange rule. Unless specified in this list of rules, current Exchange rules would continue to be applicable to trading in a security on the Pillar platform. As with the NYSE Arca Equities rules, the Exchange proposes to denote the Pillar rules with the letter ``P'' to distinguish such rules from current Exchange rules with the same numbering. And as with the NYSE Arca Equities rules, each top-level ``P''-designated rule would include a number of individual sections or rules, e.g., Rule 1.1, or Rule 7.1-Rule 7.44. However, because none of the current Exchange rules use this sub-numbering format and therefore these is no risk of confusing rules with these numbers with current Exchange rules, the Exchange would not include a ``P'' designation when adopting these individual rules. Except as described below, at this time, the Exchange would be adopting the framework for only these rule numbers and would designate the proposed rules as ``Reserved.'' Through a series of subsequent rule filings, the Exchange will propose to populate the individual rules with the rule text to operate the Exchange on the Pillar platform. In addition to adopting a framework of rule numbering, the Exchange also proposes to adopt specified rules that would be operative to trading on Pillar. The proposed rules would be based on NYSE Arca Equities rules, but with non-substantive differences to use the term ``Exchange'' instead of the terms ``NYSE Arca Marketplace'' or ``Corporation,'' and to use the terms ``mean'' or ``have the meaning'' instead of the terms ``shall mean'' or ``shall have the meaning.'' The Exchange has selected these rules because they are either definitional or the same substantively across all markets today and would not change when the Exchange migrates to Pillar. First, the Exchange proposes certain definitions in Rule 1.1. The terms defined in these proposed rules, unless the context requires otherwise, would have the meaning specified.Proposed Rule 1.1(h) would define the term ``BBO'' as the best bid or offer on the Exchange and the term ``BB'' to mean the best bid on the Exchange and the term ``BO'' to mean the best offer on the Exchange. This proposed rule text is based on NYSE Arca Equities Rule 1.1(h) and current Exchange Rule 7, which defines the term ``Exchange BBO'' as the best bid or offer disseminated to the Consolidated Quotation System (``CQS'') by the Exchange. Proposed Rule 1.1(l) would define the term ``Eligible Security'' as any equity security (i) either listed on the Exchange or traded on the Exchange pursuant to a grant of unlisted trading privileges under section 12(f) of the Exchange Act and (ii) specified by the Exchange to be traded on the Exchange [[Page 538]] or other facility, as the case may be. This proposed rule text is based on NYSE Arca Equities Rule 1.1(l). The term Eligible Security is not currently used in Exchange rules. Proposed Rule 1.1(o) would define the term ``FINRA'' as the Financial Industry Regulatory Authority, Inc. This proposed rule text is based on NYSE Arca Equities Rule 1.1(o). The term ``FINRA'' is used in current Exchange rules, but is not defined separately. Proposed Rule 1.1(dd) would define the term ``NBBO'' as the national best bid or offer, the term ``NBB'' as the national best bid, the term ``NBO'' as the national best offer, the terms ``Best Protected Bid'' or ``PBB'' as the highest Protected Bid, the terms ``Best Protected Offer'' or ``PBO'' as the lowest Protected Offer, and the term ``Protected Best Bid and Offer'' (``PBBO'') as the Best Protected Bid and Best Protected Offer. This proposed rule text is based on NYSE Arca Equities Rule 1.1(dd). These terms are used in current Exchange rules, but are not defined separately. Proposed Rule 1.1(ff) would define the term ``Away Market'' as any exchange, alternative trading system (``ATS'') or other broker-dealer (1) with which the Exchange maintains an electronic linkage and (2) that provides instantaneous responses to orders routed from the Exchange. As further proposed, the Exchange would designate from time to time those ATSs or other broker-dealers that qualify as Away Markets. This proposed rule text is based on NYSE Arca Equities Rule 1.1(ff). This term is not currently defined in Exchange rules because, on the current trading platform, the Exchange only maintains electronic linkage with those markets that display protected quotations. Proposed Rule 1.1(ii) would define the term ``UTP Security'' as a security that is listed on a national securities exchange other than the Exchange and that trades on the Exchange pursuant to unlisted trading privileges. This proposed rule text is based on NYSE Arca Equities Rule 1.1(ii). This term is not currently defined in Exchange rules because the Exchange does not currently trade any securities pursuant to unlisted trading privileges. Similar to NYSE Arca Equities, the Exchange plans to trade securities on Pillar that are listed on markets other than the Exchange. Proposed Rule 1.1(jj) would define the term ``UTP Listing Market'' as the primary listing market for a UTP Security. This proposed rule text is based on NYSE Arca Equities Rule 1.1(jj). This term is not currently defined in Exchange rules because the Exchange does not currently trade any securities pursuant to unlisted trading privileges, Proposed Rule 1.1(ddd) would define the term ``NMS Stock'' as any security, other than an option, for which transaction reports are collected, processed, and made available pursuant to an effective transaction reporting plan. This proposed rule text is based on NYSE Arca Equities Rule 1.1(ddd). This term is not currently defined in Exchange rules. Proposed Rule 1.1(eee) would define the terms ``Protected Bid'' or ``Protected Offer'' as a quotation in an NMS stock that is (i) displayed by an Automated Trading Center; (ii) disseminated pursuant to an effective national market system plan; and (iii) an Automated Quotation that is the best bid or best offer of a national securities exchange or the best bid or best offer of a national securities association. The proposed rule would further define the term ``Protected Quotation'' as a quotation that is a Protected Bid or Protected Offer and would provide that, for purposes of the foregoing definitions, the terms ``Automated Trading Center,'' ``Automated Quotation,'' ``Manual Quotation,'' ``Best Bid,'' and ``Best Offer,'' would have the meanings ascribed to them in Rule 600(b) of Regulation NMS under the Securities Exchange Act. This proposed rule text is based on NYSE Arca Equities Rule 1.1(eee). These terms are used in current Exchange rules, but not separately defined. Proposed Rule 1.1(fff) would define the term ``trade- through'' as the purchase or sale of an NMS stock during regular trading hours, either as principal or agent, at a price that is lower than a Protected Bid or higher than a Protected Offer. This proposed rule text is based on NYSE Arca Equities Rule 1.1(fff). This term is not currently defined in Exchange rules. Proposed Rule 1.1(hhh) would define the terms ``effective national market system plan'' and ``regular trading hours'' as having the meanings set forth in Rule 600(b) of Regulation NMS under the Securities Exchange Act of 1934. This proposed rule text is based on NYSE Arca Equities Rule 1.1(hhh). These terms are not currently defined in Exchange rules. The Exchange proposes the remaining rule numbers that correspond to the sub-numbering of NYSE Arca Equities Rule 1.1 on a ``reserved'' basis. Next, the Exchange proposes rules that would be grouped under proposed Rule 7P relating to equities trading. With the exception of Rules 7.5 and 7.6, the Exchange proposes Rules 7.1-Rule 7.44 on a ``Reserved'' basis. Proposed Rule 7.5 would be entitled ``Trading Units'' and would specify that the unit of trading in stocks is 1 share. The rule would further provide that a ``round lot'' is 100 shares, unless specified by the primary listing market to be fewer than 100 shares. The rule would also provide that any amount less than a round lot would constitute an ``odd lot'' and any amount greater than a round lot that is not a multiple of a round lot would constitute a ``mixed lot.'' This proposed rule text is based on NYSE Arca Equities Rule 7.5 without any differences. The substance of this proposed rule is currently set forth in Rules 55 and 56. The Exchange proposes a non-substantive difference to use the term ``mixed lot'' instead of ``partial round lot'' or ``PRL.'' Proposed Rule 7.6 would be entitled ``Trading Differentials'' and would provide that the minimum price variation (``MPV'') for quoting and entry of securities traded on the Exchange would be $0.01, with the exception of securities that are priced less than $1.00 for which the MPV for quoting and entry of orders would be $0.0001. This proposed rule text is based on NYSE Arca Equities Rule 7.6 without any differences. The substance of this proposed rule is currently set forth in Rule 62. Because trading on Pillar would be under the above-described rules, the Exchange proposes to specify that Rules 7, 55, 56, and 62 would not be applicable to trading on the Pillar trading platform. * * * * * As discussed above, because of the technology changes associated with the migration to the Pillar trading platform, the Exchange will announce by Trader Update when rules with a ``P'' modifier will become operative and for which symbols. Accordingly, the Exchange is not proposing to delete rules applicable to trading on the current platform until all securities are trading on Pillar. 2. Statutory Basis The proposed rule change is consistent with section 6(b) of the Securities Exchange Act of 1934 (the ``Act''),\7\ in general, and furthers the objectives of section 6(b)(5),\8\ in particular, because 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 539]] mechanism of, a free and open market and a national market system and, in general, to protect investors and the public interest. The Exchange believes that the proposed rules to support Pillar on the Exchange would remove impediments to and perfect the mechanism of a free and open market because the proposed rule set would promote transparency in Exchange rules by using consistent rule numbers with NYSE Arca Equities, which is the first market to migrate to the Pillar trading platform. The Exchange believes that using a common framework of rule numbers for the markets that operate on the Pillar trading platform will better allow members, regulators, and the public to navigate the Exchange's rulebook and better understand how equity trading is conducted on the Exchange. Adding new rules with the modifier ``P'' to denote those rules that would be operative for the Pillar trading platform would remove impediments to and perfect the mechanism of a free and open market by providing transparency of which rules govern trading once a symbol has been migrated to the Pillar platform. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78f(b). \8\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange further believes that adopting specified definitions in proposed Rule 1P and proposed Rules 7.5 and 7.6 under proposed Rule 7P would remove impediments to and perfect the mechanism of a free and open market and national market system because the proposed rules are definitional and are based on approved rules of NYSE Arca Equities without any substantive differences and would be operative once the Exchange migrates to Pillar. 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 change is not designed to address any competitive issue but rather to adopt new rules to support the Exchange's new Pillar trading platform. As discussed in detail above, with this rule filing, the Exchange is not proposing to change its core functionality but rather to adopt a rule numbering framework based on the rules of NYSE Arca Equities. The Exchange believes that the proposed rule change would promote consistent use of terminology to support the Pillar trading platform on both the Exchange and its affiliate NYSE Arca Equities, thus making the Exchange's rules easier to navigate 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 \9\ and Rule 19b-4(f)(6) thereunder.\10\ 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 \11\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\12\ --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(3)(A)(iii). \10\ 17 CFR 240.19b-4(f)(6). \11\ 15 U.S.C. 78s(b)(3)(A)(iii). \12\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b- 4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the 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. --------------------------------------------------------------------------- A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act \13\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \14\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange states that it believes the proposed rule change will not significantly affect the protection of investors or the public interest or impose any significant burden on competition because the proposed rule change is not designed to make any substantive changes to how the Exchange operates. Rather, the Exchange believes that the proposed rule change would promote transparency in Exchange rules by adopting a rule- numbering framework based on the rules of NYSE Arca Equities, which will be the first market to migrate to the Pillar trading platform, so that when the Exchange migrates to the Pillar trading platform, its rules will follow the same numbering scheme of NYSE Arca Equities. Because the proposed rule change makes no substantive changes to how the Exchange operates, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the operative delay and designates the proposed rule change operative upon filing.\15\ --------------------------------------------------------------------------- \13\ 17 CFR 240.19b-4(f)(6). \14\ 17 CFR 240.19b-4(f)(6)(iii). \15\ For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend the 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 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-NYSE-2015-67 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-NYSE-2015-67. 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 [[Page 540]] 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 will also be available for inspection and copying at the NYSE's principal office and on its Internet Web site at www.nyse.com. 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-NYSE-2015-67 and should be submitted on or before January 27, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\ --------------------------------------------------------------------------- \16\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Jill M. Peterson, Assistant Secretary. [FR Doc. 2015-33217 Filed 1-5-16; 8:45 am] BILLING CODE 8011-01-P
![536 Federal Register / Vol. 81, No. 3 / Wednesday, January 6, 2016 / Notices
The New Fee takes into account the III. Date of Effectiveness of the filing also will be available for
allocation of resources required and Proposed Rule Change and Timing for inspection and copying at the principal
more manually intensive processing Commission Action office of DTC and on DTCC’s Web site
performed by Reorganization and The foregoing rule change has become (http://dtcc.com/legal/sec-rule-
Underwriting in order for DTC to effective pursuant to section 19(b)(3)(A) filings.aspx). All comments received
provide the services necessary to make of the Act 14 and paragraph (f) of Rule will be posted without change; the
new CUSIPs DTC-eligible when they are 19b–4 thereunder.15 At any time within Commission does not edit personal
issued as a result of Corporate Actions. 60 days of the filing of the proposed rule identifying information from
change, the Commission summarily may submissions. You should submit only
Implementation Date information that you wish to make
temporarily suspend such rule change if
it appears to the Commission that such available publicly. All submissions
The implementation date of the
action is necessary or appropriate in the should refer to File Number SR–DTC–
proposed rule change would be January
public interest, for the protection of 2015–012 and should be submitted on
1, 2016. or before January 27, 2016.
investors, or otherwise in furtherance of
2. Statutory Basis the purposes of the Act. For the Commission, by the Division of
Trading and Markets, pursuant to delegated
Section 17A(b)(3)(F) 13of the Act IV. Solicitation of Comments authority.16
requires that the rules of the clearing Interested persons are invited to Jill M. Peterson,
agency be designed, inter alia, to submit written data, views, and Assistant Secretary.
promote the prompt and accurate arguments concerning the foregoing, [FR Doc. 2015–33218 Filed 1–5–16; 8:45 am]
clearance and settlement of securities including whether the proposed rule
BILLING CODE 8011–01–P
transactions. DTC believes that the change is consistent with the Act.
proposed rule change is consistent with Comments may be submitted by any of
this provision because the New Fee the following methods: SECURITIES AND EXCHANGE
would offset costs incurred by DTC in Electronic Comments COMMISSION
its allocation of resources necessary for
making CUSIPs eligible in connection • Use the Commission’s Internet [Release No. 34–76803; File No. SR–NYSE–
comment form (http://www.sec.gov/ 2015–67]
with Corporate Actions. The New Fee is
rules/sro.shtml); or
designed to facilitate allocation of • Send an email to rule- Self-Regulatory Organizations; New
resources necessary for the continued comments@sec.gov. Please include File York Stock Exchange LLC; Notice of
offering of this service, thus the Number SR–DTC–2015–012 on the Filing and Immediate Effectiveness of
proposed rule change would promote subject line. Proposed Rule Change Adopting New
the prompt and accurate clearance and
Paper Comments Rules To Reflect the Implementation of
settlement of securities transactions. Pillar, the Exchange’s New Trading
• Send paper comments in triplicate Technology Platform
(B) Clearing Agency’s Statement on to Secretary, Securities and Exchange
Burden on Competition Commission, 100 F Street NE., December 30, 2015.
DTC does not believe that the Washington, DC 20549–1090. Pursuant to section 19(b)(1) 1 of the
proposed rule change would have any All submissions should refer to File Securities Exchange Act of 1934 (the
impact or impose any burden on Number SR–DTC–2015–012. This file ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
competition because the proposed rule number should be included on the notice is hereby given that on December
change equally applies (on a per CUSIP subject line if email is used. To help the 18, 2015, New York Stock Exchange
basis) to all issues made eligible for DTC Commission process and review your LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
services as the result of a Corporate comments more efficiently, please use with the Securities and Exchange
Action. only one method. The Commission will Commission (the ‘‘Commission’’) the
post all comments on the Commission’s proposed rule change as described in
(C) Clearing Agency’s Statement on Internet Web site (http://www.sec.gov/ Items I and II below, which Items have
Comments on the Proposed Rule rules/sro.shtml). Copies of the been prepared by the self-regulatory
Change Received From Members, submission, all subsequent organization. The Commission is
Participants, or Others amendments, all written statements publishing this notice to solicit
with respect to the proposed rule comments on the proposed rule change
Written comments relating to the change that are filed with the from interested persons.
proposed rule change have not been Commission, and all written
solicited or received. DTC will notify communications relating to the I. Self-Regulatory Organization’s
the Commission of any written proposed rule change between the Statement of the Terms of Substance of
comments received by DTC. DTC Commission and any person, other than the Proposed Rule Change
management has discussed its intent to those that may be withheld from the The Exchange proposes to adopt new
implement the New Fee with members public in accordance with the rules to reflect the implementation of
of the Securities Transfer Association at provisions of 5 U.S.C. 552, will be Pillar, the Exchange’s new trading
industry meetings. available for Web site viewing and technology platform. The proposed rule
mstockstill on DSK4VPTVN1PROD with NOTICES
printing in the Commission’s Public change is available on the Exchange’s
reorganization involving the exchange of the Reference Room, 100 F Street NE., Web site at www.nyse.com, at the
common stock under CUSIP X for common and Washington, DC 20549 on official principal office of the Exchange, and at
preferred stock under CUSIPs Y and Z, respectively, business days between the hours of
the transfer agent would be charged $2,000 in
connection with the exchange reflecting the sum of 10:00 a.m. and 3:00 p.m. Copies of the 16 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
a $1,000 fee relating to the issuance of CUSIP Y and
a $1,000 fee relating to the issuance of CUSIP Z). 14 15 U.S.C. 78s(b)(3)(A). 2 15 U.S.C. 78a.
13 15 U.S.C. 78q–1(b)(3)(F). 15 17 CFR 240.19b–4(f). 3 17 CFR 240.19b–4.
VerDate Sep<11>2014 17:32 Jan 05, 2016 Jkt 238001 PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 E:\FR\FM\06JAN1.SGM 06JAN1](https://thefederalregister.org/doc/81_FR_539/page/1.svg)
![540 Federal Register / Vol. 81, No. 3 / Wednesday, January 6, 2016 / Notices
communications relating to the by Commission-registered investment related person holds the adviser’s client
proposed rule change between the advisers. Rule 206(4)–2 requires each assets and the related person is
Commission and any person, other than registered investment adviser that has operationally independent of the
those that may be withheld from the custody of client funds or securities to adviser.7
public in accordance with the maintain those client funds or securities Advisory clients use this information
provisions of 5 U.S.C. 552, will be with a broker-dealer, bank or other to confirm proper handling of their
available for Web site viewing and ‘‘qualified custodian.’’ 1 The rule accounts. The Commission’s staff uses
printing in the Commission’s Public requires the adviser to promptly notify the information obtained through these
Reference Room, 100 F Street NE., clients as to the place and manner of collections in its enforcement,
Washington, DC 20549, on official custody, after opening an account for regulatory and examination programs.
business days between the hours of the client and following any changes.2 Without the information collected under
10:00 a.m. and 3:00 p.m. Copies of the If an adviser sends account statements the rule, the Commission would be less
filing will also be available for to its clients, it must insert a legend in efficient and effective in its programs
inspection and copying at the NYSE’s the notice and in subsequent account and clients would not have information
principal office and on its Internet Web statements sent to those clients urging valuable for monitoring an adviser’s
site at www.nyse.com. All comments them to compare the account statements handling of their accounts.
received will be posted without change; from the custodian with those from the The respondents to this information
the Commission does not edit personal adviser.3 The adviser also must have a collection are investment advisers
identifying information from reasonable basis, after due inquiry, for registered with the Commission and
submissions. You should submit only believing that the qualified custodian have custody of clients’ funds or
information that you wish to make maintaining client funds and securities securities. We estimate that 5,228
available publicly. All submissions sends account statements directly to the advisers would be subject to the
should refer to File Number SR–NYSE– advisory clients, and undergo an annual information collection burden under the
2015–67 and should be submitted on or surprise examination by an independent rule 206(4)–2. The number of responses
before January 27, 2016. public accountant to verify client assets under rule 206(4)–2 will vary
For the Commission, by the Division of pursuant to a written agreement with considerably depending on the number
Trading and Markets, pursuant to delegated the accountant that specifies certain of clients for which an adviser has
authority.16 duties.4 Unless client assets are custody of funds or securities, and the
Jill M. Peterson, maintained by an independent number of investors in pooled
Assistant Secretary. custodian (i.e., a custodian that is not investment vehicles that the adviser
the adviser itself or a related person), manages. It is estimated that the average
[FR Doc. 2015–33217 Filed 1–5–16; 8:45 am]
the adviser also is required to obtain or number of responses annually for each
BILLING CODE 8011–01–P
receive a report of the internal controls respondent would be 6,830, and an
relating to the custody of those assets average time of 0.02286 hour per
SECURITIES AND EXCHANGE from an independent public accountant response. The annual aggregate burden
COMMISSION that is registered with and subject to for all respondents to the requirements
regular inspection by the Public of rule 206(4)–2 is estimated to be
Submission for OMB Review; Company Accounting Oversight Board 816,285 hours.
Comment Request (‘‘PCAOB’’).5 This collection of information is
The rule exempts advisers from the found at 17 CFR 275.206(4)–2 and is
Upon Written Request, Copies Available mandatory. Responses to the collection
rule with respect to clients that are
From: Securities and Exchange of information are not kept confidential.
registered investment companies.
Commission, Office of FOIA Services, Commission-registered investment
Advisers to limited partnerships,
100 F Street NE., Washington, DC advisers are required to maintain and
20549–2736. limited liability companies and other
pooled investment vehicles are excepted preserve certain information required
Extension: Rule 206(4)–2. from the account statement delivery and under rule 206(4)–2 for five years. The
OMB Control No. 3235–0241, SEC File No. deemed to comply with the annual long-term retention of these records is
270–217. necessary for the Commission’s
surprise examination requirement if the
Notice is hereby given that pursuant limited partnerships, limited liability examination program to ascertain
to the Paperwork Reduction Act of 1995 companies or pooled investment compliance with the Investment
(44 U.S.C. 3501 et seq.), the Securities vehicles are subject to annual audit by Advisers Act.
and Exchange Commission an independent public accountant The estimated average burden hours
(‘‘Commission’’) has submitted to the registered with, and subject to regular are made solely for the purposes of
Office of Management and Budget inspection by the PCAOB, and the Paperwork Reduction Act and are not
(‘‘OMB’’) a request for extension and audited financial statements are derived from a comprehensive or even
revision of the previously approved distributed to investors in the pools.6 representative survey or study of the
collection of information discussed The rule also provides an exception to cost of Commission rules and forms. An
below. the surprise examination requirement agency may not conduct or sponsor, and
The title for the collection of for advisers that have custody because a person is not required to respond to,
information is ‘‘Rule 206(4)–2 under the they have authority to deduct advisory a collection of information unless it
Investment Advisers Act of 1940— fees from client accounts and advisers displays a currently valid control
mstockstill on DSK4VPTVN1PROD with NOTICES
Custody of Funds or Securities of that have custody solely because a number.
Clients by Investment Advisers.’’ Rule The public may view the background
206(4)–2 (17 CFR 275.206(4)–2) under 1 Rule 206(4)–2(a)(1).
documentation for this information
the Investment Advisers Act of 1940 (15 2 Rule 206(4)–2(a)(2). collection at the following Web site,
U.S.C. 80b–1 et seq.) governs the 3 Rule 206(4)–2(a)(2). www.reginfo.gov. Comments should be
custody of funds or securities of clients 4 Rule 206(4)–2(a)(3), (4). directed to: (i) Desk Officer for the
5 Rule 206(4)–2(a)(6).
16 17 CFR 200.30–3(a)(12). 6 Rule 206(4)–2(b)(4). 7 Rule 206(4)–2(b)(3), (b)(6).
VerDate Sep<11>2014 17:32 Jan 05, 2016 Jkt 238001 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 E:\FR\FM\06JAN1.SGM 06JAN1](https://thefederalregister.org/doc/81_FR_539/page/5.svg)
Document Created: 2016-01-06 04:01:35
Document Modified: 2016-01-06 04:01:35
| 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 536 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR