81 FR 67036 - Self-Regulatory Organizations; NYSE MKT 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 | 67036-67038 | |
| FR Document | 2016-23495 |
[Federal Register Volume 81, Number 189 (Thursday, September 29, 2016)] [Notices] [Pages 67036-67038] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-23495] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78917; File No. SR-NYSEMKT-2016-68] Self-Regulatory Organizations; NYSE MKT 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, NYSE MKT LLC (``NYSE MKT'' 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--Equities (``Rule 49'') to establish a Disaster Recovery Facility and to move the text of Exchange Rule 438--Equities (``Rule 438'') to proposed Exchange Rule 49. The Exchange further proposes to amend Exchange Rule 0--Equities (``Rule 0'') and Rule 431-- Equities (Exchange Backup Systems and Mandatory Testing) (``Rule 431'') to specify that Exchange Rule 431 would govern Exchange Backup Systems and Mandatory Testing for Exchange ATP Holders only. 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. 78483 (August 5, 2016), 81 FR 53176 (SR-NYSEMKT-2016-68). \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-nysemkt-2016-68/nysemkt201668-2.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 [[Page 67037]] Exchange also proposes to amend Exchange Rule 51--Equities (``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 MKT 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). --------------------------------------------------------------------------- A. Current NYSE MKT 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 53177. --------------------------------------------------------------------------- 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)-- Equities and closing auctions would be subject to Supplementary Material .10 to Rule 123C--Equities.\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)--Equities (quoting requirements for allocation process of listed securities) and Rule 104--Equities (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\ The Exchange also proposes to amend Exchange Rule 51 to govern the [[Page 67038]] circumstances under which the Exchange's Chief Executive Officer (``CEO'') may determine to have the Exchange trade securities on its Disaster Recovery Facility.\23\ Finally, the Exchange proposes to amend Rule 431 to delete references to the terms ``member,'' ``member organization,'' and ``designated market maker'' and use the term ``ATP Holder'' because Rule 431 would pertain only to options trading. Additionally the Exchange proposes to amend Rule 0 to remove the reference to Rule 431 as being applicable to equities trading. --------------------------------------------------------------------------- \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. --------------------------------------------------------------------------- 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-NYSEMKT-2016-68), 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. 2016-23495 Filed 9-28-16; 8:45 am] BILLING CODE 8011-01-P
![67036 Federal Register / Vol. 81, No. 189 / Thursday, September 29, 2016 / Notices
after 4:00 p.m. Eastern Time each 6(b)(5) of the Act,27 which requires, Commission (‘‘Commission’’), pursuant
trading day.22 among other things, that the Exchange’s to Section 19(b)(1) of the Securities
(4) The issuer of a series of Managed rules be designed to prevent fraudulent Exchange Act of 1934 (‘‘Act’’) 1 and Rule
Fund Shares will be required to comply and manipulative acts and practices, to 19b–4 thereunder,2 a proposed rule
with Rule 10A–3 under the Act for the promote just and equitable principles of change to amend Exchange Rule 49—
initial and continued listing of Managed trade, to remove impediments to and Equities (‘‘Rule 49’’) to establish a
Fund Shares, as provided under the perfect the mechanism of a free and Disaster Recovery Facility and to move
Nasdaq Rule 5600 Series.23 open market and a national market the text of Exchange Rule 438—Equities
(5) On a periodic basis, and no less system, and, in general, to protect (‘‘Rule 438’’) to proposed Exchange Rule
than annually, the Exchange will review investors and the public interest. 49. The Exchange further proposes to
the Managed Fund Shares generically The Commission notes that Nasdaq’s amend Exchange Rule 0—Equities
listed and traded on the Exchange under proposal is substantively identical to (‘‘Rule 0’’) and Rule 431—Equities
Nasdaq Rule 5735 for compliance with proposals that the Commission recently (Exchange Backup Systems and
that rule and will provide a report to its approved.28 Accordingly, for the Mandatory Testing) (‘‘Rule 431’’) to
Regulatory Oversight Committee reasons discussed in the Prior MFS specify that Exchange Rule 431 would
presenting the findings of its review. Generics Orders, the Commission finds govern Exchange Backup Systems and
(6) On a quarterly basis, the Exchange that the proposed rule change is Mandatory Testing for Exchange ATP
will provide a report to the Commission consistent with Section 6(b)(5) of the Holders only. On August 1, 2016, the
staff that contains, for each ETF whose Act 29 and the rules and regulations Exchange filed Amendment No. 1 to its
shares are generically listed and traded thereunder applicable to a national proposal.3 On August 11, 2016, the
under Nasdaq Rule 5735(b)(1): (a) securities exchange. proposed rule change, as modified by
Symbol and date of listing; (b) the Amendment No. 1, was published for
IV. Conclusion comment in the Federal Register.4 On
number of active authorized
participants (‘‘APs’’) and a description It is therefore ordered, pursuant to September 19, 2016, the Exchange filed
of any failure by either a fund or an AP Section 19(b)(2) of the Act,30 that the Partial Amendment No. 2, to its
to deliver promised baskets of shares, proposed rule change (SR–NASDAQ– proposal.5
cash, or cash and instruments in 2016–104) be, and it hereby is, The Commission did not receive any
approved. comments on the proposal. This order
connection with creation or redemption
approves the proposal, as modified by
orders; and (c) a description of any For the Commission, by the Division of
Trading and Markets, pursuant to delegated Amendment No. 1 and Partial
failure by a fund to comply with Nasdaq
authority.31 Amendment No. 2.
Rule 5735.24
(7) Prior to listing pursuant to Brent J. Fields, II. Description of the Proposed Rule
amended Rule 5735(b)(1), an issuer Secretary. Changes, as Modified by Amendment
would be required to represent to the [FR Doc. 2016–23496 Filed 9–28–16; 8:45 am] No. 1 and Partial Amendment No. 2
Exchange that it will advise the BILLING CODE 8011–01–P The Exchange proposes to amend
Exchange of any failure by a series of Exchange Rule 49 by removing the
Managed Fund Shares to comply with current text relating to the Exchange’s
the continued listing requirements, and, SECURITIES AND EXCHANGE Emergency Powers and replacing it with
pursuant to its obligations under COMMISSION new text regarding the Exchange’s
Section 19(g)(1) of the Exchange Act, the [Release No. 34–78917; File No. SR– Business Continuity and Disaster
Exchange will surveil for compliance NYSEMKT–2016–68] Recovery Plan, and by moving the text
with the continued listing requirements. in Exchange Rule 438 regarding
If a series of Managed Fund Shares is Self-Regulatory Organizations; NYSE Mandatory Testing to Rule 49.6 The
not in compliance with the applicable MKT LLC; Order Granting Approval of
listing requirements, the Exchange will Proposed Rule Change, as Modified by 1 15 U.S.C. 78s(b)(1).
commence delisting procedures under Amendment No. 1 and Partial 2 17 CFR 240.19b–4.
the Nasdaq Rule 5800 Series.25 Amendment No. 2, Amending 3 Amendment No. 1 replaced the proposal in its
Exchange Rule 49 Regarding the entirety.
III. Discussion and Commission 4 See Securities Exchange Act Release No. 78483
Findings Exchange’s: (1) Emergency Powers; (August 5, 2016), 81 FR 53176 (SR–NYSEMKT–
(2) Disaster Recovery Plans; and (3) 2016–68).
After careful review, the Commission Backup Systems and Mandatory 5 Amendment No. 2 partially amended the
finds that the Exchange’s proposal to Testing proposal to add additional text to proposed
amend Nasdaq Rule 5735 to, among Exchange Rule 49, specifying that member
September 23, 2016. organizations of the Exchange that are currently
other things, adopt generic listing required to participate in testing of the Exchange’s
criteria, is consistent with the Act and I. Introduction business continuity and disaster recovery plans
the rules and regulations thereunder under current Exchange Rule 438 and proposed
applicable to a national securities On July 29, 2016, NYSE MKT LLC Exchange Rule 49(b)(N) would also be required to
exchange.26 In particular, the (‘‘NYSE MKT’’ or ‘‘Exchange’’) filed test the Exchange’s proposed disaster recovery
with the Securities and Exchange plans. Partial Amendment No. 2 is available at:
Commission finds that the proposed https://www.sec.gov/comments/sr-nysemkt-2016-
rule change is consistent with Section 27 15
68/nysemkt201668-2.pdf. Because Amendment No.
U.S.C. 78f(b)(5). 2 does not materially alter the substance of the
mstockstill on DSK3G9T082PROD with NOTICES
28 See Securities Exchange Act Release Nos.
22 See
proposed rule change or raise unique or novel
id. 78396 (Jul. 22, 2016), 81 FR 49698 (Jul. 28, 2016) regulatory issues, Amendment No. 2 is not subject
23 See id. (SR–BATS–2015–100); and 78397 (Jul. 22, 2016), 81 to notice and comment.
24 See id. FR 49320 (Jul. 27, 2016) (SR–NYSEArca–2015–110). 6 Because the Exchange would not implement
25 See id. These releases are referred to collectively as the amended Exchange Rule 49(a) until after an
26 In approving this proposed rule change, the ‘‘Prior MFS Generics Orders.’’ opportunity to test its procedures with Exchange
29 15 U.S.C. 78f(b)(5).
Commission has considered the proposed rule’s member organizations, the Exchange proposes to
30 15 U.S.C. 78s(b)(2).
impact on efficiency, competition, and capital retain current NYSE MKT Rule 49 on its rulebook.
formation. See 15 U.S.C. 78c(f). 31 17 CFR 200.30–3(a)(12). The Exchange would delete current Exchange Rule
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![67038 Federal Register / Vol. 81, No. 189 / Thursday, September 29, 2016 / Notices
circumstances under which the quotes and trades publicly reported SECURITIES AND EXCHANGE
Exchange’s Chief Executive Officer under the Exchange’s own reporting COMMISSION
(‘‘CEO’’) may determine to have the symbol. The proposed rule change
Exchange trade securities on its Disaster would also require member [Release No. 34–78920; File No. SR–ISE–
Recovery Facility.23 Finally, the organizations to participate in 2016–21]
Exchange proposes to amend Rule 431 scheduled functional and performance
to delete references to the terms Self-Regulatory Organizations;
testing of the Exchange’s business
‘‘member,’’ ‘‘member organization,’’ and International Securities Exchange,
continuity and disaster recovery plans LLC; Notice of Filing and Immediate
‘‘designated market maker’’ and use the in the manner and frequency specified
term ‘‘ATP Holder’’ because Rule 431 Effectiveness of Proposed Rule
by the Exchange, which shall not be less Change To Adopt a Rule To Prohibit
would pertain only to options trading.
than once every 12 months.26 Disruptive Quoting and Trading
Additionally the Exchange proposes to
amend Rule 0 to remove the reference Under the proposal, the Exchange Activity and Allow the Exchange To
to Rule 431 as being applicable to CEO would be authorized to make a Take Prompt Action
equities trading. determination for the Exchange to trade
September 23, 2016.
securities on the Disaster Recovery
III. Discussion and Commission Pursuant to Section 19(b)(1) of the
Facility only when the CEO deems such
Findings Securities Exchange Act of 1934
action to be necessary or appropriate for
After careful review of the proposal, (‘‘Act’’),1 and Rule 19b–4 thereunder,2
the maintenance of a fair and orderly notice is hereby given that on
as modified by Amendment Nos. 1 and market, or for the protection of investors
No. 2, the Commission finds that the September 15, 2016, the International
or otherwise in the public interest, due Securities Exchange, LLC (‘‘ISE’’ or
proposed rule change is consistent with
to extraordinary circumstances. The ‘‘Exchange’’) filed with the Securities
the requirements of the Act and the
Exchange CEO must notify the Exchange and Exchange Commission (‘‘SEC’’ or
rules and regulations thereunder
applicable to a national securities board of directors as soon as feasible if ‘‘Commission’’) the proposed rule
exchange.24 In particular, the the CEO makes a determination to use change as described in Items I and II
Commission finds that the proposed the Disaster Recovery Facility. below, which Items have been prepared
rule change is consistent with Section The Commission believes that the by the Exchange. The Commission is
6(b)(5) of the Act,25 which requires, proposal is reasonably designed to publishing this notice to solicit
among other things, that the rules of a permit the Exchange to continue to comments on the proposed rule change
national securities exchange be operate in the event of an emergency by from interested persons.
designed to prevent fraudulent and using a secondary data center located in I. Self-Regulatory Organization’s
manipulative acts and practices, to a geographically diverse location to Statement of the Terms of the Substance
promote just and equitable principles of open, trade, and close Exchange-listed of the Proposed Rule Change
trade, to foster cooperation and securities. Accordingly, the Commission
coordination with persons engaged in The Exchange proposes to adopt a
believes that the proposal is designed to new rule to clearly prohibit disruptive
facilitating transactions in securities, to remove impediments to and perfect the
remove impediments to and perfect the quoting and trading activity on the
mechanism of a free and open market Exchange, as further described below.
mechanism of a free and open market
and a national market system, and, in and a national market system, and to Further the Exchange proposes to
general, to protect investors and the protect investors and the public interest, amend Exchange Rules to permit the
public interest. and the Commission therefore finds that Exchange to take prompt action to
Under amended Exchange Rule 49, the proposed rule change is consistent suspend Members or their clients that
the Exchange would maintain its own with the requirements of the Act. violate such rule.
Disaster Recovery Facility to continue IV. Conclusion The text of the proposed rule change
Exchange operations when necessary is available on the Exchange’s Web site
without substantial disruption to It is therefore ordered, pursuant to at www.ise.com, at the principal office
member organizations. This Disaster Section 19(b)(2) of the Act,27 that the of the Exchange, and at the
Recovery Facility would allow the proposed rule change (SR–NYSEMKT– Commission’s Public Reference Room.
Exchange to no longer designate NYSE 2016–68), as modified by Amendments II. Self-Regulatory Organization’s
Arca as its backup facility but instead No. 1 and Partial Amendment No. 2, be, Statement of the Purpose of, and
operate as a fully electronic exchange on and hereby is, approved. Statutory Basis for, the Proposed Rule
its own facilities, under its own trading
For the Commission, by the Division of Change
rules, with its own order book and with
Trading and Markets, pursuant to delegated In its filing with the Commission, the
23 The Exchange proposes to amend Exchange authority.28 Exchange included statements
Rule 51(b) to provide the Exchange’s CEO with the Brent J. Fields, concerning the purpose of and basis for
authority to determine whether to use the
Exchange’s Disaster Recovery Facility. The Secretary. the proposed rule change and discussed
Exchange also proposes to make a conforming [FR Doc. 2016–23495 Filed 9–28–16; 8:45 am] any comments it received on the
amendment to Exchange Rule 51(c) to specify that
BILLING CODE 8011–01–P
proposed rule change. The text of these
the CEO shall take any of the actions described in statements may be examined at the
Exchange Rule 51(b) only when such action is
places specified in Item IV below. The
mstockstill on DSK3G9T082PROD with NOTICES
deemed necessary or appropriate for the
maintenance of a fair and orderly market, or the Exchange has prepared summaries, set
protection of investors of otherwise in the public forth in sections A, B, and C below, of
interest, due to extraordinary circumstances. the most significant aspects of such
24 In approving these proposed rule changes, the
statements.
Commission has considered the proposed rules’
26 See Proposed Exchange Rule 49(b)(N).
impact on efficiency, competition, and capital
27 15 U.S.C. 78s(b)(2).
formation. See 15 U.S.C. 78c(f). 1 15 U.S.C. 78s(b)(1).
25 15 U.S.C. 78f(b)(5). 28 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4.
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Document Created: 2016-09-29 04:14:16
Document Modified: 2016-09-29 04:14:16
| 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 67036 |
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