81 FR 73177 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Article IV, Section 4.05 of the Ninth Amended and Restated Operating Agreement of the Exchange
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 205 (October 24, 2016)
Federal Register Volume 81, Issue 205 (October 24, 2016)
| Page Range | 73177-73179 | |
| FR Document | 2016-25576 |
[Federal Register Volume 81, Number 205 (Monday, October 24, 2016)] [Notices] [Pages 73177-73179] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-25576] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79114; File No. SR-NYSEMKT-2016-93] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Article IV, Section 4.05 of the Ninth Amended and Restated Operating Agreement of the Exchange October 18, 2016. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that on October 6, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C.78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Article IV, Section 4.05 of the Ninth Amended and Restated Operating Agreement of the Exchange (``Operating Agreement'') regarding use of regulatory assets, fees, fines and penalties, and make additional, non-substantive edits. The proposed rule change is available on the Exchange's Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Article IV, Section 4.05 (Limitation on Distributions) of the Operating Agreement (``Section 4.05''), regarding use of regulatory assets, fees, fines and penalties (``Regulatory Funds''), and make additional, non-substantive edits. Proposed Amendment to Section 4.05 Section 4.05 provides that: [t]he Company shall not use any regulatory assets or any regulatory fees, fines or penalties collected by Exchange regulatory staff for commercial purposes or distribute such assets, fees, fines or penalties to the Member or any other entity.\4\ --------------------------------------------------------------------------- \4\ See Ninth Amended and Restated Operating Agreement of NYSE MKT LLC, Art. IV, Sec. 4.05; see also Securities Exchange Act Release No. 77901 (May 25, 2016), 81 FR 35092 (June 1, 2016) (SR- NYSEMKT-2016-26). Although it prohibits the use of Regulatory Funds for ``commercial purposes,'' that term is not defined in Section 4.05 or elsewhere in the Operating Agreement. Accordingly, to add greater clarity to the limits on the use of Regulatory Funds, the Exchange proposes to replace the prohibition against using Regulatory Funds for ``commercial purposes'' with a statement that Regulatory Funds ``will be applied to fund the legal, regulatory and surveillance operations'' of the Exchange. The prohibition on using Regulatory Funds for distributions to the Member or any other entity would remain. In addition, ``Exchange'' is not a defined term in the Operating Agreement, which defines the Exchange as the ``Company.'' Accordingly, the Exchange proposes to replace ``Exchange regulatory staff'' with ``Company regulatory staff.'' The amended Section 4.05 would read as follows: Any regulatory assets or any regulatory fees, fines or penalties collected by Company regulatory staff will be applied to fund the legal, regulatory and surveillance operations of the Company, and the Company shall not distribute such assets, fees, fines or penalties to the Member or any other entity. The Exchange believes that the increased clarity in the scope of the limits on use of Regulatory Funds will enhance the protections provided by Section 4.05 against the possibility that Regulatory Funds may be assessed to respond to the Exchange's budgetary needs rather than to serve a disciplinary purpose.\5\ --------------------------------------------------------------------------- \5\ See Securities Exchange Act Release No. 77899 (May 24, 2016), 81 FR 34393 (May 31, 2016) (SR-NYSE-2016-37). --------------------------------------------------------------------------- The proposed amendments would have the benefit of bringing Section 4.05 into greater conformity with the bylaws of the Exchange's affiliate NYSE Arca, Inc., which provide that regulatory fees and penalties ``will be applied to fund the legal, regulatory and surveillance operations of the Exchange.'' \6\ --------------------------------------------------------------------------- \6\ See Bylaws of NYSE Arca, Inc., Art. II, Sec. 2.06 (``Any revenues received by the Exchange from regulatory fees or regulatory penalties will be applied to fund the legal, regulatory and surveillance operations of the Exchange and will not be used to pay dividends. For purposes of this Section, regulatory penalties shall include restitution and disgorgement of funds intended for customers.''). The Exchange's affiliate New York Stock Exchange LLC has submitted substantially the same proposed amendment to its operating agreement. See SR-NYSE-2016-66. --------------------------------------------------------------------------- The proposed amendments would make Section 4.05 more consistent with the limitations on the use of regulatory income of other self- regulatory organizations (``SROs''). Most such limitations are substantially similar to the proposed revised Section 4.05. For example, similar to the proposed Section 4.05, the limited liability company agreements of the BOX Options Exchange (``BOX''), International Securities Exchange, LLC (``ISE''), and its affiliates ISE Gemini, LLC and ISE Mercury, LLC, provide that regulatory funds shall be used to fund the relevant SRO's legal, regulatory and surveillance operations.\7\ Consistent with the proposed revised Section 4.05, their definition of ``regulatory funds'' includes fees, fines or penalties derived from its regulatory operations.\8\ --------------------------------------------------------------------------- \7\ Such provisions also limit the relevant SRO from making any distribution to its member using regulatory funds. See Box Options Exchange Limited Liability Company Agreement, Art. 1, Sec. 1.1 and Art. 8, Sec. 8.1; Third Amended and Restated Limited Liability Company Agreement of International Securities Exchange, LLC, Art. III, Sec. 3.3(ii); Second Amended and Restated Limited Liability Company Agreement of ISE Gemini, LLC, Art. III, Sec. 3.3(ii); and Limited Liability Company Agreement of ISE Mercury, LLC, Art. III, Sec. 3.3(ii). \8\ The BOX definition of regulatory funds also states that such funds ``shall not include revenues derived from listing fees, market data revenues, transaction revenues or any other aspect of the commercial operations of the Exchange or a facility of the Exchange, even if a portion of such revenues are used to pay costs associated with the regulatory operations of the Exchange.'' Box Options Exchange Limited Liability Company Agreement, Art. 1, Sec. 1.1. The agreements of ISE and its affiliates have substantially similar language. See Third Amended and Restated Limited Liability Company Agreement of International Securities Exchange, LLC, Art. III, Sec. 3.3(ii); Second Amended and Restated Limited Liability Company Agreement of ISE Gemini, LLC, Art. III, Sec. 3.3(ii); and Limited Liability Company Agreement of ISE Mercury, LLC, Art. III, Sec. 3.3(ii). --------------------------------------------------------------------------- [[Page 73178]] Some SROs have provisions that are less restrictive than the proposed Section 4.05. More specifically, the governing documents of affiliates Bats BZX Exchange, Inc., Bats BYX Exchange, Inc., Bats EDGX Exchange, Inc., and Bats EDGA Exchange, Inc. permit such SROs to use regulatory funds to fund legal and regulatory operations, including surveillance and enforcement activities, but also provide that revenues received from fees derived from the regulatory function or regulatory penalties may be used to pay restitution and disgorgement of funds intended for customers.\9\ The limited liability company agreement of Miami International Securities Exchange, LLC, and bylaws of National Stock Exchange, Inc., have similar provisions.\10\ By contrast, the operating agreement of the NASDAQ Stock Market LLC (``Nasdaq'') simply limits Nasdaq from making a distribution to its member using regulatory funds, and does not impose other restrictions.\11\ --------------------------------------------------------------------------- \9\ The described revenues may not be used for non-regulatory purposes or distributed to the stockholder. See Fourth Amended and Restated Bylaws of Bats BZX Exchange, Inc., Art. X, Sec. 4; Fourth Amended and Restated Bylaws of Bats BYX Exchange, Inc., Art. X, Sec. 4; Fifth Amended and Restated Bylaws of Bats EDGX Exchange, Inc., Art. X, Sec. 4; and Fifth Amended and Restated Bylaws of Bats EDGA Exchange, Inc., Art. X, Sec. 4. \10\ See Second Amended and Restated Limited Liability Company Agreement of Miami International Securities Exchange, LLC, Art. IX, Sec. 9.4 (``Any Regulatory Funds will not be used for non-regulatory purposes or distributed to the LLC Member, but rather, shall be applied to fund the legal and regulatory operations of the Company (including surveillance and enforcement activities), or, as the case may be, shall be used to pay restitution and disgorgement of funds intended for customers.''); Third Amended and Restated By-laws of National Stock Exchange, Inc., Art. X, Sec. 10.4 (``Any revenues received by the Exchange from fees derived from its regulatory function or regulatory penalties will not be used to pay dividends and shall be applied to fund the legal and regulatory operations of the Exchange (including surveillance and enforcement activities), or, as the case may be, shall be used to pay restitution and disgorgement of funds intended for customers.''); see also Amended and Restated By-Laws of Miami International Securities Exchange, LLC, Art. IX, Sec. 9.4. \11\ See Second Amended Limited Liability Company Agreement of The NASDAQ Stock Market LLC, Sec. 15. See also by-laws of NASDAQ BX, Inc., Art. IX, Sec. 9.8, and Second Amended Limited Liability Company Agreement of NASDAQ PHLX LLC, Sec. 14. When the NASDAQ OMX Group, Inc. acquired the Boston Stock Exchange (``BSE''), the BSE by-laws were amended to include a similar provision that dividends could not be paid to the stockholders using regulatory funds. See Securities Exchange Act Release No. 58324 (August 7, 2008), 73 FR 46936 (August 12, 2008) (SR-BSE- 2008-02; SR-BSE-2008-23; SR-BSE- 2008- 25; SR-BSECC-2008-01), at 46942. --------------------------------------------------------------------------- Additional Proposed Amendments The Exchange proposes to make a non-substantive amendment to the second sentence of Article II, Section 2.03(h)(iii) (Board). Currently, the sentence provides that the Committee for Review (``CFR'') will be responsible for, among other things, ``reviewing determinations to limit or prohibit the continued listing of an issuer's securities on the Exchange.'' The Exchange proposes to replace ``Exchange'' with ``exchange operated by the Company.'' The Exchange proposes to make the change because, as noted above, ``Exchange'' is not a defined term in the Operating Agreement. Finally, the Exchange proposes to make technical and conforming changes to the recitals and signature page of the Operating Agreement. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act \12\ in general, and Section 6(b)(1) \13\ in particular, in that it enables the Exchange to be so organized as to have the capacity to be able to carry out the purposes of the Exchange Act and to comply, and to enforce compliance by its exchange members and persons associated with its exchange members, with the provisions of the Exchange Act, the rules and regulations thereunder, and the rules of the Exchange. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78f(b). \13\ 15 U.S.C. 78f(b)(1). --------------------------------------------------------------------------- The Exchange believes that replacing the current prohibition against using Regulatory Funds for undefined ``commercial purposes'' with a requirement that Regulatory Funds ``be applied to fund the legal, regulatory and surveillance operations'' of the Exchange would enable the Exchange to be so organized as to have the capacity to be able to carry out the purposes of the Exchange Act and to comply with the provisions of the Exchange Act, the rules and regulations thereunder, and the rules of the Exchange, because it would add greater clarity to the limits on the use of Regulatory Funds, enhancing the protections provided by Section 4.05 against the possibility that Regulatory Funds may be assessed to respond to the Exchange's budgetary needs rather than to serve a disciplinary purpose.\14\ The proposed changes to Section 4.05 would make it more transparent to market participants. --------------------------------------------------------------------------- \14\ See Securities Exchange Act Release No. 77899 (May 24, 2016), 81 FR 34393 (May 31, 2016) (SR-NYSE-2016-37). --------------------------------------------------------------------------- Similarly, the Exchange believes that replacing ``Exchange regulatory staff'' with ``Company regulatory staff'' in Section 4.05 and replacing ``Exchange'' with ``exchange operated by the Company'' in Article II, Section 2.03(h)(iii) would enable the Exchange to be so organized as to have the capacity to be able to carry out the purposes of the Exchange Act and to comply with the provisions of the Exchange Act, the rules and regulations thereunder, and the rules of the Exchange, because it would add greater clarity to the Operating Agreement by using the defined term ``Company'' instead of ``Exchange,'' which is not defined in the Operating Agreement For the same reasons, the Exchange believes that the proposed rule changes are consistent with Section 6(b)(4),\15\ which requires that the rules of the exchange provide for the equitable allocation of reasonable dues, fees, and other charges among the exchange's members and issuers and other persons using its facilities, and Section 6(b)(5),\16\ which requires that the rules of the 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 regulating, clearing, settling, processing information with respect to, and 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. The proposed changes would add greater clarity to the limits on the use of Regulatory Funds, enhancing the protections provided by Section 4.05, and ensure the use of defined terms, thereby making Section 4.05 and Article II, Section 2.03(h)(iii) more transparent to market participants. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78f(b)(4). \16\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange notes that the proposed change to Section 4.05 would have the additional benefit of bringing the Exchange's restrictions on the use of regulatory assets and income into greater conformity with those of its affiliate NYSE Arca, Inc. In addition, the proposed amendments would make Section 4.05 more consistent with the limitations on the use of regulatory income of other SROs. Most such limitations are substantially similar to the proposed revised Section 4.05. In fact, the proposed Section 4.05 is more restrictive than the provisions of some [[Page 73179]] other SROs, whose rules allow the use of regulatory funds for restitution and disgorgement of funds intended for customers, or simply limit the SRO from making a distribution to its member using regulatory funds. 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 Exchange Act. The proposed rule change is not intended to address competitive issues but rather is concerned solely with the administration and functioning of the Exchange. 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 \17\ and Rule 19b-4(f)(6) thereunder.\18\ Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b- 4(f)(6)(iii) thereunder. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78s(b)(3)(A)(iii). \18\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \19\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b4(f)(6)(iii),\20\ the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. --------------------------------------------------------------------------- \19\ 17 CFR 240.19b-4(f)(6). \20\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) \21\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NYSEMKT-2016-93 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEMKT-2016-93. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEMKT-2016-93 and should be submitted on or before November 14, 2016. --------------------------------------------------------------------------- \22\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\22\ Robert W. Errett, Deputy Secretary. [FR Doc. 2016-25576 Filed 10-21-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 205 / Monday, October 24, 2016 / Notices 73177
For the Commission, by the Division of on the proposed rule change. The text The Exchange believes that the
Trading and Markets, pursuant to delegated of those statements may be examined at increased clarity in the scope of the
authority.169 the places specified in Item IV below. limits on use of Regulatory Funds will
Brent J. Fields, The Exchange has prepared summaries, enhance the protections provided by
Secretary. set forth in sections A, B, and C below, Section 4.05 against the possibility that
[FR Doc. 2016–25604 Filed 10–21–16; 8:45 am] of the most significant parts of such Regulatory Funds may be assessed to
BILLING CODE 8011–01–P statements. respond to the Exchange’s budgetary
needs rather than to serve a disciplinary
A. Self-Regulatory Organization’s
purpose.5
SECURITIES AND EXCHANGE Statement of the Purpose of, and the
The proposed amendments would
COMMISSION Statutory Basis for, the Proposed Rule
have the benefit of bringing Section 4.05
Change
[Release No. 34–79114; File No. SR– into greater conformity with the bylaws
NYSEMKT–2016–93] 1. Purpose of the Exchange’s affiliate NYSE Arca,
Inc., which provide that regulatory fees
The Exchange proposes to amend
Self-Regulatory Organizations; NYSE and penalties ‘‘will be applied to fund
Article IV, Section 4.05 (Limitation on
MKT LLC; Notice of Filing and the legal, regulatory and surveillance
Distributions) of the Operating
Immediate Effectiveness of Proposed operations of the Exchange.’’ 6
Agreement (‘‘Section 4.05’’), regarding
Rule Change Amending Article IV, The proposed amendments would
use of regulatory assets, fees, fines and
Section 4.05 of the Ninth Amended and make Section 4.05 more consistent with
penalties (‘‘Regulatory Funds’’), and
Restated Operating Agreement of the the limitations on the use of regulatory
make additional, non-substantive edits.
Exchange income of other self-regulatory
Proposed Amendment to Section 4.05 organizations (‘‘SROs’’). Most such
October 18, 2016. limitations are substantially similar to
Pursuant to Section 19(b)(1) 1 of the Section 4.05 provides that: the proposed revised Section 4.05. For
Securities Exchange Act of 1934 (the [t]he Company shall not use any regulatory example, similar to the proposed
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 assets or any regulatory fees, fines or Section 4.05, the limited liability
notice is hereby given that on October penalties collected by Exchange regulatory company agreements of the BOX
6, 2016, NYSE MKT LLC (the staff for commercial purposes or distribute
Options Exchange (‘‘BOX’’),
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with such assets, fees, fines or penalties to the
Member or any other entity.4 International Securities Exchange, LLC
the Securities and Exchange (‘‘ISE’’), and its affiliates ISE Gemini,
Commission (the ‘‘Commission’’) the Although it prohibits the use of LLC and ISE Mercury, LLC, provide that
proposed rule change as described in Regulatory Funds for ‘‘commercial regulatory funds shall be used to fund
Items I, II, and III below, which Items purposes,’’ that term is not defined in the relevant SRO’s legal, regulatory and
have been prepared by the self- Section 4.05 or elsewhere in the surveillance operations.7 Consistent
regulatory organization. The Operating Agreement. Accordingly, to with the proposed revised Section 4.05,
Commission is publishing this notice to add greater clarity to the limits on the their definition of ‘‘regulatory funds’’
solicit comments on the proposed rule use of Regulatory Funds, the Exchange includes fees, fines or penalties derived
change from interested persons. proposes to replace the prohibition from its regulatory operations.8
I. Self-Regulatory Organization’s against using Regulatory Funds for
Statement of the Terms of Substance of ‘‘commercial purposes’’ with a 5 See Securities Exchange Act Release No. 77899
statement that Regulatory Funds ‘‘will (May 24, 2016), 81 FR 34393 (May 31, 2016) (SR–
the Proposed Rule Change NYSE–2016–37).
be applied to fund the legal, regulatory 6 See Bylaws of NYSE Arca, Inc., Art. II, Sec. 2.06
The Exchange proposes to amend and surveillance operations’’ of the (‘‘Any revenues received by the Exchange from
Article IV, Section 4.05 of the Ninth Exchange. The prohibition on using regulatory fees or regulatory penalties will be
Amended and Restated Operating Regulatory Funds for distributions to applied to fund the legal, regulatory and
Agreement of the Exchange (‘‘Operating the Member or any other entity would surveillance operations of the Exchange and will
Agreement’’) regarding use of regulatory not be used to pay dividends. For purposes of this
remain. Section, regulatory penalties shall include
assets, fees, fines and penalties, and In addition, ‘‘Exchange’’ is not a restitution and disgorgement of funds intended for
make additional, non-substantive edits. defined term in the Operating customers.’’). The Exchange’s affiliate New York
The proposed rule change is available Agreement, which defines the Exchange
Stock Exchange LLC has submitted substantially the
on the Exchange’s Web site at same proposed amendment to its operating
as the ‘‘Company.’’ Accordingly, the agreement. See SR–NYSE–2016–66.
www.nyse.com, at the principal office of Exchange proposes to replace 7 Such provisions also limit the relevant SRO
the Exchange, and at the Commission’s ‘‘Exchange regulatory staff’’ with from making any distribution to its member using
Public Reference Room. ‘‘Company regulatory staff.’’ regulatory funds. See Box Options Exchange
Limited Liability Company Agreement, Art. 1, Sec.
II. Self-Regulatory Organization’s The amended Section 4.05 would 1.1 and Art. 8, Sec. 8.1; Third Amended and
Statement of the Purpose of, and read as follows: Restated Limited Liability Company Agreement of
Statutory Basis for, the Proposed Rule International Securities Exchange, LLC, Art. III, Sec.
Any regulatory assets or any regulatory 3.3(ii); Second Amended and Restated Limited
Change fees, fines or penalties collected by Company Liability Company Agreement of ISE Gemini, LLC,
In its filing with the Commission, the regulatory staff will be applied to fund the Art. III, Sec. 3.3(ii); and Limited Liability Company
legal, regulatory and surveillance operations Agreement of ISE Mercury, LLC, Art. III, Sec. 3.3(ii).
self-regulatory organization included 8 The BOX definition of regulatory funds also
of the Company, and the Company shall not
sradovich on DSK3GMQ082PROD with NOTICES
statements concerning the purpose of, states that such funds ‘‘shall not include revenues
distribute such assets, fees, fines or penalties
and basis for, the proposed rule change to the Member or any other entity. derived from listing fees, market data revenues,
and discussed any comments it received transaction revenues or any other aspect of the
commercial operations of the Exchange or a facility
4 See Ninth Amended and Restated Operating of the Exchange, even if a portion of such revenues
169 17CFR 200.30–3(a)(12). Agreement of NYSE MKT LLC, Art. IV, Sec. 4.05; are used to pay costs associated with the regulatory
1 15 U.S.C.78s(b)(1). see also Securities Exchange Act Release No. 77901 operations of the Exchange.’’ Box Options Exchange
2 15 U.S.C. 78a.
(May 25, 2016), 81 FR 35092 (June 1, 2016) (SR– Limited Liability Company Agreement, Art. 1, Sec.
3 17 CFR 240.19b-4. NYSEMKT–2016–26). Continued
VerDate Sep<11>2014 17:42 Oct 21, 2016 Jkt 241001 PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 E:\FR\FM\24OCN1.SGM 24OCN1](https://thefederalregister.org/doc/81_FR_73382/page/1.svg)
![Federal Register / Vol. 81, No. 205 / Monday, October 24, 2016 / Notices 73179
other SROs, whose rules allow the use investors, or otherwise in furtherance of should refer to File Number SR–
of regulatory funds for restitution and the purposes of the Act. If the NYSEMKT–2016–93 and should be
disgorgement of funds intended for Commission takes such action, the submitted on or before November 14,
customers, or simply limit the SRO from Commission shall institute proceedings 2016.
making a distribution to its member under Section 19(b)(2)(B) 21 of the Act to For the Commission, by the Division of
using regulatory funds. determine whether the proposed rule Trading and Markets, pursuant to delegated
change should be approved or authority.22
B. Self-Regulatory Organization’s disapproved.
Statement on Burden on Competition Robert W. Errett,
IV. Solicitation of Comments Deputy Secretary.
The Exchange does not believe that
Interested persons are invited to [FR Doc. 2016–25576 Filed 10–21–16; 8:45 am]
the proposed rule change will impose
any burden on competition that is not submit written data, views, and BILLING CODE 8011–01–P
necessary or appropriate in furtherance arguments concerning the foregoing,
of the purposes of the Exchange Act. including whether the proposed rule
change is consistent with the Act. SECURITIES AND EXCHANGE
The proposed rule change is not
Comments may be submitted by any of COMMISSION
intended to address competitive issues
but rather is concerned solely with the the following methods: [Release No. 34–79111; File No. SR–
administration and functioning of the NYSEArca–2016–96]
Electronic Comments
Exchange.
• Use the Commission’s Internet Self-Regulatory Organizations; NYSE
C. Self-Regulatory Organization’s comment form (http://www.sec.gov/ Arca, Inc.; Order Instituting
Statement on Comments on the rules/sro.shtml); or Proceedings To Determine Whether To
Proposed Rule Change Received From • Send an email to rule-comments@ Approve or Disapprove a Proposed
Members, Participants, or Others sec.gov. Please include File Number SR– Rule Change To Amend NYSE Arca
No written comments were solicited NYSEMKT–2016–93 on the subject line. Equities Rule 8.700 and To List and
or received with respect to the proposed Paper Comments Trade Shares of the Managed
rule change. Emerging Markets Trust Under
• Send paper comments in triplicate Proposed Amended NYSE Arca
III. Date of Effectiveness of the to Brent J. Fields, Secretary, Securities Equities Rule 8.700
Proposed Rule Change and Timing for and Exchange Commission, 100 F Street
Commission Action NE., Washington, DC 20549–1090. October 18, 2016.
The Exchange has filed the proposed All submissions should refer to File I. Introduction
rule change pursuant to Section Number SR–NYSEMKT–2016–93. This
file number should be included on the On July 1, 2016, NYSE Arca, Inc.
19(b)(3)(A)(iii) of the Act 17 and Rule (‘‘Exchange’’) filed with the Securities
19b–4(f)(6) thereunder.18 Because the subject line if email is used. To help the
Commission process and review your and Exchange Commission
proposed rule change does not: (i) (‘‘Commission’’), pursuant to Section
Significantly affect the protection of comments more efficiently, please use
only one method. The Commission will 19(b)(1) of the Securities Exchange Act
investors or the public interest; (ii) of 1934 (‘‘Act’’) 1 and Rule 19b–4
impose any significant burden on post all comments on the Commission’s
Internet Web site (http://www.sec.gov/ thereunder,2 a proposed rule change to
competition; and (iii) become operative amend NYSE Arca Equities Rule 8.700
prior to 30 days from the date on which rules/sro.shtml). Copies of the
submission, all subsequent and to list and trade shares (‘‘Shares’’)
it was filed, or such shorter time as the of the Managed Emerging Markets Trust
Commission may designate, if amendments, all written statements
with respect to the proposed rule (‘‘Trust’’) under proposed amended
consistent with the protection of NYSE Arca Equities Rule 8.700. The
investors and the public interest, the change that are filed with the
Commission, and all written proposed rule change was published for
proposed rule change has become comment in the Federal Register on July
effective pursuant to Section 19(b)(3)(A) communications relating to the
proposed rule change between the 21, 2016.3 On August 30, 2016, pursuant
of the Act and Rule 19b–4(f)(6)(iii) to Section 19(b)(2) of the Act,4 the
thereunder. Commission and any person, other than
those that may be withheld from the Commission designated a longer period
A proposed rule change filed under within which to approve the proposed
Rule 19b–4(f)(6) 19 normally does not public in accordance with the
provisions of 5 U.S.C. 552, will be rule change, disapprove the proposed
become operative prior to 30 days after rule change, or institute proceedings to
the date of the filing. However, pursuant available for Web site viewing and
printing in the Commission’s Public determine whether to disapprove the
to Rule 19b4(f)(6)(iii),20 the Commission proposed rule change.5 The Commission
may designate a shorter time if such Reference Room, 100 F Street NE.,
Washington, DC 20549 on official received no comments on the proposed
action is consistent with the protection rule change. This order institutes
of investors and the public interest. business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the proceedings under Section 19(b)(2)(B) of
At any time within 60 days of the
filing of such proposed rule change, the filing also will be available for
22 17 CFR 200.30–3(a)(12).
Commission summarily may inspection and copying at the principal 1 15 U.S.C. 78s(b)(1).
temporarily suspend such rule change if office of the Exchange. All comments 2 17 CFR 240.19b–4.
sradovich on DSK3GMQ082PROD with NOTICES
it appears to the Commission that such received will be posted without change; 3 See Securities Exchange Act Release No. 78345
action is necessary or appropriate in the the Commission does not edit personal (July 15, 2016), 81 FR 47447 (‘‘Notice’’).
public interest, for the protection of identifying information from 4 15 U.S.C. 78s(b)(2).
submissions. You should submit only 5 See Securities Exchange Act Release No. 78727,
17 15 information that you wish to make 81 FR 61268 (September 6, 2016). The Commission
U.S.C. 78s(b)(3)(A)(iii). designated October 19, 2016 as the date by which
18 17 CFR 240.19b–4(f)(6). available publicly. All submissions the Commission shall either approve or disapprove,
19 17 CFR 240.19b–4(f)(6).
or institute proceedings to determine whether to
20 17 CFR 240.19b–4(f)(6)(iii). 21 15 U.S.C. 78s(b)(2)(B). disapprove, the proposed rule change.
VerDate Sep<11>2014 17:42 Oct 21, 2016 Jkt 241001 PO 00000 Frm 00124 Fmt 4703 Sfmt 4703 E:\FR\FM\24OCN1.SGM 24OCN1](https://thefederalregister.org/doc/81_FR_73382/page/3.svg)
Document Created: 2016-10-21 23:45:58
Document Modified: 2016-10-21 23:45:58
| 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 73177 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR