81 FR 63543 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving Proposed Rule Change Amending NYSE Arca Equities Rules 2.16(c) and 2.21(i) Regarding the Timing for Submission of a Uniform Termination Notice for Securities Industry Registration (“Form U5”) by an ETP Holder
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 179 (September 15, 2016)
Federal Register Volume 81, Issue 179 (September 15, 2016)
| Page Range | 63543-63543 | |
| FR Document | 2016-22158 |
[Federal Register Volume 81, Number 179 (Thursday, September 15, 2016)] [Notices] [Page 63543] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-22158] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78809; File No. SR-NYSEArca-2016-104] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving Proposed Rule Change Amending NYSE Arca Equities Rules 2.16(c) and 2.21(i) Regarding the Timing for Submission of a Uniform Termination Notice for Securities Industry Registration (``Form U5'') by an ETP Holder September 9, 2016. I. Introduction On July 14, 2016, NYSE Arca, Inc. (``Exchange'') filed with the Securities and Exchange Commission (``Commission''), pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ a proposed rule change to amend NYSE Arca Equities Rules 2.16, Amendments to ETP Documents, and 2.21, Employees of ETP Holders Registration. The proposed rule change was published for comment in the Federal Register on July 27, 2016.\4\ The Commission received no comment letters on the proposed rule change. This order approves the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. \4\ See Securities Exchange Act Release No. 78383 (July 21, 2016), 81 FR 49309 (``Notice''). --------------------------------------------------------------------------- II. Description of the Proposed Rule Change The Exchange currently has two different requirements in its rules governing when a Form U5 must be filed: NYSE Arca Equities Rule 2.16(c) requires an ETP Holder to file a Form U5 and any amendment thereto within 30 days of ``when a person associated with that ETP Holder terminates their [sic] affiliation with an ETP Holder''; Rule 2.21(i) requires an ETP Holder to file a Form U5 and any amendment thereto within 30 business days of the termination date, ``when a person's employment by such ETP Holder terminates.'' The Exchange proposed to amend these two rules to make the time frame within which a Form U5 must be submitted the same. As revised, an ETP Holder must promptly file a Form U5 with the Central Registration Depository (``CRD''), but not later than 30 calendar days after the date of termination of a person associated with the ETP Holder or of an employee, as applicable. The proposed rule change also requires that any amendment to a Form U5 be filed promptly with CRD, but not later than 30 calendar days after learning of the facts or circumstances giving rise to the amendment. Finally, the proposed rule change requires that all Forms U5 be provided to the terminated person concurrently with filing with CRD. This last requirement is new but is consistent with the rules of other SROs. III. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.\5\ In particular, the Commission finds that the proposed rule change is consistent with Section 6(b) of the Act,\6\ in general, and with the objectives of Section 6(b)(5),\7\ in particular, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to remove impediments to, and perfect the mechanism of, a free and open market and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \5\ In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). \6\ 15 U.S.C. 78f(b). \7\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Commission notes that the change to Rule 2.21 shortens the time within which the Form U5 must be submitted from 30 business days to 30 calendar days. (The change to Rule 2.16 merely adds ``calendar'' to modify the number of days. The Exchange made this change so that the two rules would be consistent.) Shortening the time within which a Form U5 must be submitted is important, as the Form U5 must be filed by member firms when they terminate the association of a registered person, or employee. The Form U5 includes the reason for termination of the registered person, which is important when a firm has terminated a registered person for cause. State regulators use the information on Form U5 to determine whether to approve requests by a firm to have an associated person registered in a particular state. Broker-dealer firms review the information on Form U5 when they are deciding whether to hire a registered person. Therefore, the sooner the Form U5 is filed the sooner regulators and broker-dealers will have access to the information. Thus, shortening the time within which a Form U5 must be submitted, so that regulators and broker-dealers can have access to the information sooner, would remove impediments to, and perfect the mechanism of, a free and open market and protect investors and the public interest. For these reasons, the Commission believes that the proposed rule change is consistent with the Act. IV. Conclusion It Is Therefore Ordered, pursuant to Section 19(b)(2) of the Act,\8\ that the proposed rule change (SR-NYSEArca-2016-104) be, and hereby is, approved. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\9\ --------------------------------------------------------------------------- \9\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2016-22158 Filed 9-14-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 179 / Thursday, September 15, 2016 / Notices 63543
permitting a transaction otherwise 30 days of ‘‘when a person associated must be filed by member firms when
prohibited by section 17(a) if it finds with that ETP Holder terminates their they terminate the association of a
that (a) the terms of the proposed [sic] affiliation with an ETP Holder’’; registered person, or employee. The
transaction are fair and reasonable and Rule 2.21(i) requires an ETP Holder to Form U5 includes the reason for
do not involve overreaching on the part file a Form U5 and any amendment termination of the registered person,
of any person concerned; (b) the thereto within 30 business days of the which is important when a firm has
proposed transaction is consistent with termination date, ‘‘when a person’s terminated a registered person for cause.
the policies of each registered employment by such ETP Holder State regulators use the information on
investment company involved; and (c) terminates.’’ Form U5 to determine whether to
the proposed transaction is consistent The Exchange proposed to amend approve requests by a firm to have an
with the general purposes of the Act. these two rules to make the time frame associated person registered in a
within which a Form U5 must be particular state. Broker-dealer firms
For the Commission, by the Division of
Investment Management, under delegated submitted the same. As revised, an ETP review the information on Form U5
authority. Holder must promptly file a Form U5 when they are deciding whether to hire
Brent J. Fields,
with the Central Registration Depository a registered person. Therefore, the
(‘‘CRD’’), but not later than 30 calendar sooner the Form U5 is filed the sooner
Secretary.
days after the date of termination of a regulators and broker-dealers will have
[FR Doc. 2016–22126 Filed 9–14–16; 8:45 am]
person associated with the ETP Holder access to the information. Thus,
BILLING CODE 8011–01–P or of an employee, as applicable. The shortening the time within which a
proposed rule change also requires that Form U5 must be submitted, so that
any amendment to a Form U5 be filed regulators and broker-dealers can have
SECURITIES AND EXCHANGE promptly with CRD, but not later than access to the information sooner, would
COMMISSION 30 calendar days after learning of the remove impediments to, and perfect the
[Release No. 34–78809; File No. SR– facts or circumstances giving rise to the mechanism of, a free and open market
NYSEArca–2016–104] amendment. Finally, the proposed rule and protect investors and the public
change requires that all Forms U5 be interest. For these reasons, the
Self-Regulatory Organizations; NYSE provided to the terminated person Commission believes that the proposed
Arca, Inc.; Order Approving Proposed concurrently with filing with CRD. This rule change is consistent with the Act.
Rule Change Amending NYSE Arca last requirement is new but is consistent
Equities Rules 2.16(c) and 2.21(i) with the rules of other SROs. IV. Conclusion
Regarding the Timing for Submission It Is Therefore Ordered, pursuant to
of a Uniform Termination Notice for III. Discussion and Commission Section 19(b)(2) of the Act,8 that the
Securities Industry Registration Findings proposed rule change (SR–NYSEArca–
(‘‘Form U5’’) by an ETP Holder After careful review, the Commission 2016–104) be, and hereby is, approved.
finds that the proposed rule change is For the Commission, by the Division of
September 9, 2016. consistent with the requirements of the Trading and Markets, pursuant to delegated
I. Introduction Act and the rules and regulations authority.9
thereunder applicable to a national Brent J. Fields,
On July 14, 2016, NYSE Arca, Inc.
securities exchange.5 In particular, the Secretary.
(‘‘Exchange’’) filed with the Securities
Commission finds that the proposed
and Exchange Commission [FR Doc. 2016–22158 Filed 9–14–16; 8:45 am]
rule change is consistent with Section
(‘‘Commission’’), pursuant to Section 6(b) of the Act,6 in general, and with the
BILLING CODE 8011–01–P
19(b)(1) 1 of the Securities Exchange Act objectives of Section 6(b)(5),7 in
of 1934 (‘‘Act’’) 2 and Rule 19b–4 particular, which requires, among other
thereunder,3 a proposed rule change to SECURITIES AND EXCHANGE
things, that the rules of a national COMMISSION
amend NYSE Arca Equities Rules 2.16, securities exchange be designed to
Amendments to ETP Documents, and prevent fraudulent and manipulative [Release No. 34–78804; File No. SR–
2.21, Employees of ETP Holders acts and practices, to remove NYSEMKT–2016–58]
Registration. The proposed rule change impediments to, and perfect the
was published for comment in the Self-Regulatory Organizations; NYSE
mechanism of, a free and open market
Federal Register on July 27, 2016.4 The Arca, Inc.; Order Instituting
and, in general, to protect investors and
Commission received no comment Proceedings to Determine Whether To
the public interest.
letters on the proposed rule change. The Commission notes that the Approve or Disapprove Proposed Rule
This order approves the proposed rule change to Rule 2.21 shortens the time Change, as Modified by Amendment
change. within which the Form U5 must be No. 1, Relating to Amendments to
submitted from 30 business days to 30 NYSE MKT Rules 1600 et seq. and the
II. Description of the Proposed Rule Listing Rules Applicable to the Shares
Change calendar days. (The change to Rule 2.16
merely adds ‘‘calendar’’ to modify the of the Nuveen Diversified Commodity
The Exchange currently has two number of days. The Exchange made Fund and the Nuveen Long/Short
different requirements in its rules this change so that the two rules would Commodity Total Return Fund
governing when a Form U5 must be be consistent.) Shortening the time September 9, 2016.
filed: NYSE Arca Equities Rule 2.16(c) within which a Form U5 must be
sradovich on DSK3GMQ082PROD with NOTICES
requires an ETP Holder to file a Form On May 24, 2016, NYSE MKT LLC
submitted is important, as the Form U5 (‘‘Exchange’’) filed with the Securities
U5 and any amendment thereto within
and Exchange Commission
5 In approving this proposed rule change, the
1 15 U.S.C. 78s(b)(1). (‘‘Commission’’), pursuant to Section
Commission has considered the proposed rule’s
2 15 U.S.C. 78a. impact on efficiency, competition, and capital 19(b)(1) of the Securities Exchange Act
3 17 CFR 240.19b–4. formation. See 15 U.S.C. 78c(f).
4 See Securities Exchange Act Release No. 78383 6 15 U.S.C. 78f(b). 8 15 U.S.C. 78s(b)(2).
(July 21, 2016), 81 FR 49309 (‘‘Notice’’). 7 15 U.S.C. 78f(b)(5). 9 17 CFR 200.30–3(a)(12).
VerDate Sep<11>2014 17:34 Sep 14, 2016 Jkt 238001 PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 E:\FR\FM\15SEN1.SGM 15SEN1](https://thefederalregister.org/doc/81_FR_63722/page/1.svg)
Document Created: 2018-02-09 13:18:05
Document Modified: 2018-02-09 13:18:05
| 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 63543 |
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