81 FR 67029 - Self-Regulatory Organizations; New York Stock Exchange LLC; Order Granting Approval of Proposed Rule Change, as Modified by Amendment No. 1 and Partial Amendment No. 2, Amending Exchange Rule 49 Regarding the Exchange's: (1) Emergency Powers; (2) Disaster Recovery Plans; and (3) Backup Systems and Mandatory Testing
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 189 (September 29, 2016)
Federal Register Volume 81, Issue 189 (September 29, 2016)
| Page Range | 67029-67031 | |
| FR Document | 2016-23494 |
[Federal Register Volume 81, Number 189 (Thursday, September 29, 2016)] [Notices] [Pages 67029-67031] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-23494] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78916; File No. SR-NYSE-2016-48] Self-Regulatory Organizations; New York Stock Exchange LLC; Order Granting Approval of Proposed Rule Change, as Modified by Amendment No. 1 and Partial Amendment No. 2, Amending Exchange Rule 49 Regarding the Exchange's: (1) Emergency Powers; (2) Disaster Recovery Plans; and (3) Backup Systems and Mandatory Testing September 23, 2016. I. Introduction On July 29, 2016, New York Stock Exchange LLC (``NYSE'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to amend Exchange Rule 49 to establish a Disaster Recovery Facility and to move the text of Exchange Rule 438 to proposed Exchange Rule 49. On August 1, 2016, the Exchange filed Amendment No. 1 to its proposal.\3\ On August 11, 2016, the proposed rule change, as modified by Amendment No. 1, was published for comment in the Federal Register.\4\ On September 19, 2016, the Exchange filed Partial Amendment No. 2, to its proposal.\5\ --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ Amendment No. 1 replaced the proposal in its entirety. \4\ See Securities Exchange Act Release No. 78484 (Aug. 5, 2016), 81 FR 53180 (SR-NYSE-2016-48) (``Notice''). \5\ Amendment No. 2 partially amended the proposal to add additional text to proposed Exchange Rule 49, specifying that member organizations of the Exchange that are currently required to participate in testing of the Exchange's business continuity and disaster recovery plans under current Exchange Rule 438 and proposed Exchange Rule 49(b)(N) would also be required to test the Exchange's proposed disaster recovery plans. Partial Amendment No. 2 is available at: https://www.sec.gov/comments/sr-nyse-2016-48/nyse201648-2.pdf. Because Amendment No. 2 does not materially alter the substance of the proposed rule change or raise unique or novel regulatory issues, Amendment No. 2 is not subject to notice and comment. --------------------------------------------------------------------------- The Commission did not receive any comments on the proposal. This order approves the proposal, as modified by Amendment No. 1 and Partial Amendment No. 2. II. Description of the Proposed Rule Changes, as Modified by Amendment No. 1 and Partial Amendment No. 2 The Exchange proposes to amend Exchange Rule 49 by removing the current text relating to the Exchange's Emergency Powers and replacing it with new text regarding the Exchange's Business Continuity and Disaster Recovery Plan, and by moving the text in Exchange Rule 438 regarding Mandatory Testing to Rule 49.\6\ The Exchange also proposes to amend Exchange Rule 51 to govern the circumstances under which the Exchange's CEO may determine to have the Exchange trade securities on its Disaster Recovery Facility. --------------------------------------------------------------------------- \6\ Because the Exchange would not implement amended Exchange Rule 49(a) until after an opportunity to test its procedures with Exchange member organizations, the Exchange proposes to retain current NYSE Rule 49 on its rulebook. The Exchange would delete current Exchange Rule 49 through a separate proposed rule change to establish the operative date of amended Exchange Rule 49(a). In addition to filing the separate proposed rule change, the Exchange will announce via Trader Update the operative date of proposed Rule 49(a). --------------------------------------------------------------------------- [[Page 67030]] A. Current NYSE Rule 49 Exchange Rule 49(a) sets forth the Exchange's emergency powers, which grant a qualified Exchange officer the authority to declare an emergency condition with respect to trading on or through the Exchange's systems and facilities of the Exchange, and designates NYSE Arca, Inc. (``NYSE Arca'') to perform certain functions on behalf of, and at the direction of, the Exchange in the event of an emergency condition. Exchange Rule 49(a) also describes when an Emergency Condition may be declared and defines the terms ``emergency'' and ``qualified Exchange officer.'' Under Exchange Rule 49, once an emergency condition is declared, the Exchange shall halt all trading on its systems and facilities, purge any unexecuted orders as soon as practicable, and prevent those orders from routing to NYSE Arca.\7\ Beginning the next trading day following the declaration of an emergency condition, NYSE Arca, on behalf of and at the direction of the Exchange, shall disseminate the official opening, re-opening, and closing trades of Exchange-listed securities to the Consolidated Tape as messages of the Exchange, and also disseminate certain other notifications for Exchange-listed securities to the Consolidated Quotation System as messages of the Exchange.\8\ In addition, bids and offers for Exchange-listed securities entered on or through the systems and facilities of NYSE Arca during the emergency condition shall be reported to the Consolidated Quotation System as bids and offers of NYSE Arca, except that the opening quote shall be reported to the Consolidated Quotation System as a bid or offer of both the Exchange and NYSE Arca, and any re-opening quote shall be reported to the Consolidated Quotation System as a bid or offer of the Exchange only.\9\ --------------------------------------------------------------------------- \7\ See Current Exchange Rule 49(b)(1)(A) and (B). \8\ See Current Exchange Rule 49(b)(2)(A). \9\ See Current Exchange Rule 49(b)(2)(B). --------------------------------------------------------------------------- Members and member organizations of the Exchange who wish to trade Exchange-listed securities during an emergency condition are responsible for having a contingency plan for connecting to NYSE Arca.\10\ All trading of Exchange-listed securities during an emergency condition on or through NYSE Arca shall be subject to NYSE Arca Equities Rules.\11\ Before declaring an emergency condition, the qualified Exchange officer shall make a reasonable effort to consult with the Commission.\12\ An emergency condition may remain in effect for up to 10 calendar days from the date it is invoked.\13\ The Exchange has represented that, to date, it has not invoked Exchange Rule 49.\14\ --------------------------------------------------------------------------- \10\ See Current Exchange Rule 49(b)(3). \11\ See Current Exchange Rule 49(b)(4). However, the Exchange's listing requirements shall remain applicable. See Current Exchange Rule 49(b)(4). \12\ See Current Exchange Rule 49(c)(1). \13\ See Current Exchange Rule 49(c)(2). \14\ See Notice, supra note 3, at 53182. --------------------------------------------------------------------------- B. Proposed Amendments to Exchange Rules The Exchange proposes to adopt new business continuity and disaster recovery plans for use on the Disaster Recovery Facility to be maintained by the Exchange. Under the proposed business continuity and disaster recovery plans, if the Exchange trades securities on its Disaster Recovery Facility, then: 1. The 11 Wall Street facilities will not be available for trading.\15\ --------------------------------------------------------------------------- \15\ See Proposed Exchange Rule 49(a)(2)(A). The Exchange states that, because the trading systems in the Exchange's Disaster Recovery Facility would not have connectivity to designated market maker (``DMM'') and Floor broker trading systems, the Exchange would operate as a fully electronic exchange when operating out of its Disaster Recovery Facility, even if 11 Wall Street facilities were not impacted. --------------------------------------------------------------------------- 2. Consistent with the Exchange's business continuity plan, opening and reopening auctions of Exchange-traded securities traded on the Disaster Recovery Facility would be subject to Rule 123D(a)(2)-(6) and closing auctions would be subject to Supplementary Material .10 to Rule 123C.\16\ --------------------------------------------------------------------------- \16\ See Proposed Exchange Rule 49(a)(2)(B). The Exchange states that, because there would be no Trading Floor or DMM connectivity, the Exchange would facilitate all openings, reopenings, and closings. --------------------------------------------------------------------------- 3. Any unexecuted Exchange-traded securities orders entered into the Exchange's systems prior to commencing trading on the Disaster Recovery Facility would be deemed canceled and would be purged from the Exchange's systems.\17\ --------------------------------------------------------------------------- \17\ See Proposed Exchange Rule 49(a)(2)(C). The Exchange states that the orders would have to be canceled because, depending on the scope of the disruption, the Exchange may be unable to transmit cancellation messages for unexecuted orders. --------------------------------------------------------------------------- 4. Member organizations registered as DMMs would not be subject to any DMM obligations or benefits under Exchange rules while securities trade on the Disaster Recovery Facility.\18\ --------------------------------------------------------------------------- \18\ See Proposed Exchange Rule 49(a)(2)(D). See also Exchange Rule 103B(I) (quoting requirements for allocation process of listed securities) and Rule 104 (Dealings and Responsibilities of DMMs). According to the Exchange, DMMs would not be subject to any such obligations or benefits because the Exchange would not maintain systems that support DMM quoting at its Disaster Recovery Facility. Therefore, DMMs that route orders to the Disaster Recovery Facility would trade in a manner similar to other market participants that electronically enter orders at the Exchange, and DMMs would be subject to the same fees and credits applicable to non-DMM transactions. --------------------------------------------------------------------------- The Disaster Recovery Facility and the revised business continuity and disaster recovery plans would allow the Exchange to no longer designate NYSE Arca as its backup facility but instead operate as a fully electronic exchange on its own facilities under its own trading rules, with its own order book and with quotes and trades publicly reported as quotes and trades of the Exchange, rather than as quotes and trades of NYSE Arca. Member organizations wishing to trade on the Exchange's Disaster Recovery Facility would be responsible for having contingency plans for establishing connectivity to that facility and changing routing instructions for their order entry systems to send bids and offers in Exchange-traded securities to that facility.\19\ The proposed rule change would also require member organizations to participate in scheduled functional and performance testing of the Exchange's business continuity and disaster recovery plans in the manner and frequency specified by the Exchange, which shall not be less than once every 12 months.\20\ --------------------------------------------------------------------------- \19\ See Proposed Exchange Rule 49(a)(3). \20\ See Proposed Exchange Rule 49(b)(N). --------------------------------------------------------------------------- The Exchange also proposes to delete certain current Rule 49 text that will be rendered obsolete or unnecessary by the proposal. This text includes certain terms, references to NYSE Arca, limits on the operative period for emergency powers, and notifications to the Commission.\21\ In addition the Exchange has proposed non-substantive conforming changes to Exchange Rules 49(b)(N), 431, and 438, to update numbering and cross-references.\22\ Finally, the Exchange proposes to amend Exchange Rule 51 to govern the circumstances under which the Exchange's Chief Executive Officer (``CEO'') may determine to have the Exchange trade securities on its Disaster Recovery Facility.\23\ --------------------------------------------------------------------------- \21\ The Commission notes that, under Regulation SCI, the Exchange would be required to notify the Commission of any ``SCI event,'' such as a systems disruption that caused the Exchange to use its Disaster Recovery Facility. See 17 CFR 242.1002(b)(1). \22\ The Exchange proposes to designate this paragraph of proposed Exchange Rule 49(b)(N) with an ``N'' to distinguish it from current Exchange Rule 49(b), as both would be operative at the same time. \23\ The Exchange proposes to amend Exchange Rule 51(b) to provide the Exchange's CEO with the authority to determine whether to use the Exchange's Disaster Recovery Facility. The Exchange also proposes to make a conforming amendment to Exchange Rule 51(c) to specify that the CEO shall take any of the actions described in Exchange Rule 51(b) only when such action is deemed necessary or appropriate for the maintenance of a fair and orderly market, or the protection of investors of otherwise in the public interest, due to extraordinary circumstances. --------------------------------------------------------------------------- [[Page 67031]] III. Discussion and Commission Findings After careful review of the proposal, as modified by Amendment Nos. 1 and No. 2, 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.\24\ In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,\25\ which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \24\ In approving these proposed rule changes, the Commission has considered the proposed rules' impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). \25\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Under amended Exchange Rule 49, the Exchange would maintain its own Disaster Recovery Facility to continue Exchange operations when necessary without substantial disruption to member organizations. This Disaster Recovery Facility would allow the Exchange to no longer designate NYSE Arca as its backup facility but instead operate as a fully electronic exchange on its own facilities, under its own trading rules, with its own order book and with quotes and trades publicly reported under the Exchange's own reporting symbol. The proposed rule change would also require member organizations to participate in scheduled functional and performance testing of the Exchange's business continuity and disaster recovery plans in the manner and frequency specified by the Exchange, which shall not be less than once every 12 months.\26\ --------------------------------------------------------------------------- \26\ See Proposed Exchange Rule 49(b)(N). --------------------------------------------------------------------------- Under the proposal, the Exchange CEO would be authorized to make a determination for the Exchange to trade securities on the Disaster Recovery Facility only when the CEO deems such action to be necessary or appropriate for the maintenance of a fair and orderly market, or for the protection of investors or otherwise in the public interest, due to extraordinary circumstances. The Exchange CEO must notify the Exchange board of directors as soon as feasible if the CEO makes a determination to use the Disaster Recovery Facility. The Commission believes that the proposal is reasonably designed to permit the Exchange to continue to operate in the event of an emergency by using a secondary data center located in a geographically diverse location to open, trade, and close Exchange-listed securities. Accordingly, the Commission believes that the proposal is designed to remove impediments to and perfect the mechanism of a free and open market and a national market system, and to protect investors and the public interest, and the Commission therefore finds that the proposed rule change is consistent with the requirements of the Act. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\27\ that the proposed rule change (SR-NYSE-2016-48), as modified by Amendments No. 1 and Partial Amendment No. 2, be, and hereby is, approved. --------------------------------------------------------------------------- \27\ 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\28\ --------------------------------------------------------------------------- \28\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2016-23494 Filed 9-28-16; 8:45 am] BILLING CODE 8011-01-P
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investors and the public interest. The post all comments on the Commission’s Exchange Act of 1934 (‘‘Act’’) 1 and Rule
Exchange has asked the Commission to Internet Web site (http://www.sec.gov/ 19b–4 thereunder,2 a proposed rule
waive the 30-day operative delay so that rules/sro.shtml). Copies of the change to amend Exchange Rule 49 to
the proposal may become operative submission, all subsequent establish a Disaster Recovery Facility
immediately upon filing. The amendments, all written statements and to move the text of Exchange Rule
Commission believes that waiver of the with respect to the proposed rule 438 to proposed Exchange Rule 49. On
30-day operative delay is appropriate change that are filed with the August 1, 2016, the Exchange filed
because the Tenth NYSE Operating Commission, and all written Amendment No. 1 to its proposal.3 On
Agreement will become ‘‘rules of an communications relating to the August 11, 2016, the proposed rule
exchange’’ of NYSE MKT without proposed rule change between the change, as modified by Amendment No.
delay.16 Based on the foregoing, the Commission and any person, other than 1, was published for comment in the
Commission believes that the waiver of those that may be withheld from the Federal Register.4 On September 19,
the operative delay is consistent with public in accordance with the 2016, the Exchange filed Partial
the protection of investors and the provisions of 5 U.S.C. 552, will be Amendment No. 2, to its proposal.5
public interest.17 The Commission available for Web site viewing and The Commission did not receive any
hereby grants the waiver and designates printing in the Commission’s Public comments on the proposal. This order
the proposal operative upon filing. Reference Room, 100 F Street NE., approves the proposal, as modified by
At any time within 60 days of the Washington, DC 20549–1090, on official Amendment No. 1 and Partial
filing of such proposed rule change, the business days between the hours of Amendment No. 2.
Commission summarily may 10:00 a.m. and 3:00 p.m. Copies of the
temporarily suspend such rule change if filing also will be available for II. Description of the Proposed Rule
it appears to the Commission that such inspection and copying at the principal Changes, as Modified by Amendment
action is necessary or appropriate in the office of the Exchange. All comments No. 1 and Partial Amendment No. 2
public interest, for the protection of received will be posted without change;
investors, or otherwise in furtherance of The Exchange proposes to amend
the Commission does not edit personal Exchange Rule 49 by removing the
the purposes of the Act. If the identifying information from
Commission takes such action, the current text relating to the Exchange’s
submissions. You should submit only Emergency Powers and replacing it with
Commission shall institute proceedings information that you wish to make
under Section 19(b)(2)(B) 18 of the Act to new text regarding the Exchange’s
available publicly. All submissions Business Continuity and Disaster
determine whether the proposed rule should refer to File Number SR–
change should be approved or Recovery Plan, and by moving the text
NYSEMKT–2016–89 and should be in Exchange Rule 438 regarding
disapproved. submitted on or before October 20, Mandatory Testing to Rule 49.6 The
IV. Solicitation of Comments 2016. Exchange also proposes to amend
Interested persons are invited to For the Commission, by the Division of Exchange Rule 51 to govern the
Trading and Markets, pursuant to delegated circumstances under which the
submit written data, views, and
authority.19 Exchange’s CEO may determine to have
arguments concerning the foregoing,
Brent J. Fields, the Exchange trade securities on its
including whether the proposed rule
change is consistent with the Act. Secretary. Disaster Recovery Facility.
Comments may be submitted by any of [FR Doc. 2016–23491 Filed 9–28–16; 8:45 am]
the following methods: BILLING CODE 8011–01–P 1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
Electronic Comments 3 Amendment No. 1 replaced the proposal in its
• Use the Commission’s Internet SECURITIES AND EXCHANGE entirety.
4 See Securities Exchange Act Release No. 78484
comment form (http://www.sec.gov/ COMMISSION
(Aug. 5, 2016), 81 FR 53180 (SR–NYSE–2016–48)
rules/sro.shtml); or (‘‘Notice’’).
• Send an email to rule-comments@ [Release No. 34–78916; File No. SR–NYSE– 5 Amendment No. 2 partially amended the
2016–48]
sec.gov. Please include File Number SR– proposal to add additional text to proposed
NYSEMKT–2016–89 on the subject line. Exchange Rule 49, specifying that member
Self-Regulatory Organizations; New organizations of the Exchange that are currently
Paper Comments York Stock Exchange LLC; Order required to participate in testing of the Exchange’s
Granting Approval of Proposed Rule business continuity and disaster recovery plans
• Send paper comments in triplicate under current Exchange Rule 438 and proposed
Change, as Modified by Amendment
to Brent J. Fields, Secretary, Securities Exchange Rule 49(b)(N) would also be required to
No. 1 and Partial Amendment No. 2, test the Exchange’s proposed disaster recovery
and Exchange Commission, 100 F Street
Amending Exchange Rule 49 plans. Partial Amendment No. 2 is available at:
NE., Washington, DC 20549–1090. https://www.sec.gov/comments/sr-nyse-2016-48/
Regarding the Exchange’s: (1)
All submissions should refer to File Emergency Powers; (2) Disaster nyse201648-2.pdf. Because Amendment No. 2 does
Number SR–NYSEMKT–2016–89. This not materially alter the substance of the proposed
Recovery Plans; and (3) Backup rule change or raise unique or novel regulatory
file number should be included on the Systems and Mandatory Testing issues, Amendment No. 2 is not subject to notice
subject line if email is used. To help the and comment.
Commission process and review your September 23, 2016. 6 Because the Exchange would not implement
comments more efficiently, please use amended Exchange Rule 49(a) until after an
I. Introduction opportunity to test its procedures with Exchange
only one method. The Commission will
mstockstill on DSK3G9T082PROD with NOTICES
On July 29, 2016, New York Stock member organizations, the Exchange proposes to
retain current NYSE Rule 49 on its rulebook. The
16 See 15 U.S.C. 78c(a)(27). Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) Exchange would delete current Exchange Rule 49
17 For purposes only of waiving the 30-day filed with the Securities and Exchange through a separate proposed rule change to
operative delay, the Commission has also Commission (‘‘Commission’’), pursuant establish the operative date of amended Exchange
considered the proposed rule’s impact on Rule 49(a). In addition to filing the separate
efficiency, competition, and capital formation. See
to Section 19(b)(1) of the Securities
proposed rule change, the Exchange will announce
15 U.S.C. 78c(f). via Trader Update the operative date of proposed
18 15 U.S.C. 78s(b)(2)(B). 19 17 CFR 200.30–3(a)(12). Rule 49(a).
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III. Discussion and Commission the CEO makes a determination to use pursuant to Section 19(b)(3)(A)(iii) of
Findings the Disaster Recovery Facility. the Act 3 and Rule 19b–4(f)(6)
After careful review of the proposal, The Commission believes that the thereunder.4 The Commission is
as modified by Amendment Nos. 1 and proposal is reasonably designed to publishing this notice to solicit
No. 2, the Commission finds that the permit the Exchange to continue to comments on the proposed rule change
proposed rule change is consistent with operate in the event of an emergency by from interested persons.
the requirements of the Act and the using a secondary data center located in
a geographically diverse location to I. Self-Regulatory Organization’s
rules and regulations thereunder Statement of the Terms of Substance of
applicable to a national securities open, trade, and close Exchange-listed
securities. Accordingly, the Commission the Proposed Rule Change
exchange.24 In particular, the
Commission finds that the proposed believes that the proposal is designed to The Exchange seeks to correct a
rule change is consistent with Section remove impediments to and perfect the typographical error in Rule 3.6A.08
6(b)(5) of the Act,25 which requires, mechanism of a free and open market related to the Qualification and
among other things, that the rules of a and a national market system, and to Registration of Trading Permit Holders
national securities exchange be protect investors and the public interest, and Associated Persons. The text of the
designed to prevent fraudulent and and the Commission therefore finds that proposed rule change is provided
manipulative acts and practices, to the proposed rule change is consistent below.
promote just and equitable principles of with the requirements of the Act.
(additions are underlined; deletions
trade, to foster cooperation and IV. Conclusion are [bracketed])
coordination with persons engaged in
facilitating transactions in securities, to It is therefore ordered, pursuant to * * * * *
remove impediments to and perfect the Section 19(b)(2) of the Act,27 that the
proposed rule change (SR–NYSE–2016– Chicago Board Options Exchange,
mechanism of a free and open market Incorporated Rules
and a national market system, and, in 48), as modified by Amendments No. 1
and Partial Amendment No. 2, be, and * * * * *
general, to protect investors and the Rule 3.6A. Qualification and Registration
public interest. hereby is, approved.
of Trading Permit Holders and Associated
Under amended Exchange Rule 49, For the Commission, by the Division of Persons
the Exchange would maintain its own Trading and Markets, pursuant to delegated (a)–(e) No change.
Disaster Recovery Facility to continue authority.28 . . . Interpretations and Policies:
Exchange operations when necessary Brent J. Fields, .01–.07 No change.
without substantial disruption to Secretary. .08 (a) An individual Trading Permit
member organizations. This Disaster [FR Doc. 2016–23494 Filed 9–28–16; 8:45 am]
Holder or individual associated person who:
Recovery Facility would allow the (1) is engaged in proprietary trading,
BILLING CODE 8011–01–P
Exchange to no longer designate NYSE market-making and/or effecting transactions
on behalf of a broker-dealer is required to
Arca as its backup facility but instead
register and qualify as a Securities Trader
operate as a fully electronic exchange on SECURITIES AND EXCHANGE (TD) in WebCRD;
its own facilities, under its own trading COMMISSION (2) (i) supervises or monitors proprietary
rules, with its own order book and with trading, market-making and/or brokerage
quotes and trades publicly reported [Release No. 34–78915; File No. SR–CBOE–
2016–067] activities for broker-dealers; (ii) supervises or
under the Exchange’s own reporting trains those engaged in proprietary trading,
symbol. The proposed rule change Self-Regulatory Organizations; market-making and/or effecting transactions
would also require member on behalf of a broker-dealer, with respect to
Chicago Board Options Exchange,
organizations to participate in those activities; and/or (iii) is an officer,
Incorporated; Notice of Filing and partner or director of a Trading Permit
scheduled functional and performance Immediate Effectiveness of a Proposed
testing of the Exchange’s business Holder or TPH organization is required to
Rule Change To Correct Rule 3.6A register and qualify as a Securities Trader
continuity and disaster recovery plans Principal (TP) in WebCRD and satisfy the
in the manner and frequency specified September 23, 2016.
prerequisite registration and qualification
by the Exchange, which shall not be less Pursuant to Section 19(b)(1) of the requirements; and
than once every 12 months.26 Securities Exchange Act of 1934 (the (3) is a Chief Compliance Officer (or
Under the proposal, the Exchange ‘‘Act’’),1 and Rule 19b–4 thereunder,2 performs similar functions) for a Trading
CEO would be authorized to make a notice is hereby given that on Permit Holder or TPH organization that
determination for the Exchange to trade September 9, 2016, Chicago Board engages in proprietary trading, market-
securities on the Disaster Recovery Options Exchange, Incorporated (the making or effecting transactions on behalf of
Facility only when the CEO deems such ‘‘Exchange’’ or ‘‘CBOE’’) filed with the a broker-dealer is required to register and
action to be necessary or appropriate for Securities and Exchange Commission qualify as a Securities Trader Compliance
Officer (CT) in WebCRD and satisfy the
the maintenance of a fair and orderly (the ‘‘Commission’’) the proposed rule
prerequisite registration and qualification
market, or for the protection of investors change as described in Items I, II, and requirements.
or otherwise in the public interest, due III below, which Items have been (b) The following sets forth the
to extraordinary circumstances. The prepared by the Exchange. The qualification requirements for each of the
Exchange CEO must notify the Exchange Exchange filed the proposal as a ‘‘non- required registration categories described in
board of directors as soon as feasible if controversial’’ proposed rule change paragraph (a) to Interpretation and Policy .08:
mstockstill on DSK3G9T082PROD with NOTICES
deemed necessary or appropriate for the impact on efficiency, competition, and capital 1 15 U.S.C. 78s(b)(1).
maintenance of a fair and orderly market, or the formation. See 15 U.S.C. 78c(f). 2 17 CFR 240.19b–4.
protection of investors of otherwise in the public 25 15 U.S.C. 78f(b)(5).
3 15 U.S.C. 78s(b)(3)(A)(iii).
interest, due to extraordinary circumstances. 26 See Proposed Exchange Rule 49(b)(N).
4 17 CFR 240.19b–4(f)(6).
24 In approving these proposed rule changes, the 27 15 U.S.C. 78s(b)(2).
Commission has considered the proposed rules’ 28 17 CFR 200.30–3(a)(12).
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Document Created: 2016-09-29 04:14:54
Document Modified: 2016-09-29 04:14:54
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 81 FR 67029 |
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