81_FR_85885 81 FR 85657 - Order Granting Limited Exemption From Exchange Act Rule 15c2-11 to Certain Interdealer Quotation Systems Pursuant to Exchange Act Rule 15c2-11(h)

81 FR 85657 - Order Granting Limited Exemption From Exchange Act Rule 15c2-11 to Certain Interdealer Quotation Systems Pursuant to Exchange Act Rule 15c2-11(h)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 228 (November 28, 2016)

Page Range85657-85659
FR Document2016-28457

Federal Register, Volume 81 Issue 228 (Monday, November 28, 2016)
[Federal Register Volume 81, Number 228 (Monday, November 28, 2016)]
[Notices]
[Pages 85657-85659]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-28457]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79360; File No. TP 16-16]


Order Granting Limited Exemption From Exchange Act Rule 15c2-11 
to Certain Interdealer Quotation Systems Pursuant to Exchange Act Rule 
15c2-11(h)

November 21, 2016.
    By letter dated November 21, 2016 (the ``Letter''), Global OTC 
requested that the Securities and Exchange Commission (the 
``Commission'') grant a limited exemption from rule 15c2-11 under the 
Securities Exchange Act of 1934, as amended (the ``Exchange Act''), in 
connection with the publication or submission for publication of 
quotations for a covered over-the-counter (``OTC'') equity security (an 
``OTC Security'' or, plural, ``OTC Securities'') in the interdealer 
quotation system (``IDQS'') operated by Global OTC (``Global OTC 
IDQS''). Specifically, Global OTC seeks an exemption to permit broker-
dealers, consistent with the approach described below, to publish or 
submit for

[[Page 85658]]

publication quotations in Global OTC IDQS for an OTC Security that is 
already ``piggyback'' qualified, or ``piggyback'' eligible, under rule 
15c2-11(f)(3), in another IDQS, without the broker-dealer separately 
complying with the requirements of rule 15c2-11, subject to certain 
conditions.
    Rule 15c2-11, with certain exceptions, requires that a broker-
dealer that publishes or submits for publication quotations for OTC 
Securities in a quotation medium gather, review, and preserve certain 
specified information and have a reasonable basis under the 
circumstances for believing that the information is accurate in all 
material respects and was obtained from reliable sources.\1\ Rule 15c2-
11 includes an exception to the rule's requirements--the ``piggyback'' 
exception--for when a broker-dealer publishes, in an IDQS \2\ that 
specifically identifies as such unsolicited customer indications of 
interest, a quotation for an OTC Security that was already the subject 
of regular and frequent quotations in compliance with rule 15c2-
11(f)(3)(i).\3\ For this piggyback exception to apply, the security 
must have been the subject of quotations (exclusive of any identified 
customer interests) in the IDQS on each of at least 12 days within the 
previous 30 calendar days, with no more than 4 business days in 
succession without a quotation.\4\ Thus, if a publication or submission 
for publication of a quotation for an OTC Security meets all of the 
requirements of this exception, a broker-dealer can ``piggyback'' on 
either its own or other broker-dealers' previously published quotations 
in an IDQS.
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    \1\ See 17 CFR 240.15c2-11(a)-(c).
    \2\ Paragraph (e)(2) of rule 15c2-11 defines an IDQS to mean 
``any system of general circulation to brokers or dealers which 
regularly disseminates quotations of identified brokers or 
dealers.'' 17 CFR 240.15c2-11(e)(2). Global OTC represents that it 
qualifies as an IDQS because Global OTC IDQS does not accept or 
maintain dark orders and fully attributes to the broker-dealer 
representing the quotation all quotations submitted on Global OTC 
IDQS.
    \3\ See 17 CFR 240.15c2-11(f)(3)(i) (providing frequency of 
quotation requirements for a security to meet the piggyback 
exception).
    \4\ Id.
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    The Letter represents that the concerns the Commission raised in 
adopting rule 15c2-11 would not be implicated if exemptive relief, 
subject to the conditions below, were granted to broker-dealers 
publishing or submitting for publication quotations in Global OTC IDQS. 
Specifically, Global OTC describes in the Letter an approach based on 
transferability of piggyback eligibility from one IDQS to another IDQS 
to allow a broker-dealer to avail itself of the piggyback exception 
when quoting in Global OTC IDQS any OTC Security that (1) qualifies for 
the piggyback exception in another IDQS, or (2) is initially quoted in 
Global OTC IDQS based on the relief provided in this Order and then 
establishes and maintains piggyback eligibility under rule 15c2-
11(f)(3)(i) based on quotations (exclusive of any identified customer 
interests) in Global OTC IDQS. Global OTC represents that this approach 
would assist investors in OTC Securities by increasing competition, 
promoting fair and orderly markets, and providing redundancy in the 
event of systems failures by having an additional IDQS in which to 
continuously quote OTC Securities that already are eligible for the 
piggyback exception in another IDQS.
    Based on the facts and representations made in the Letter, we find 
that it is appropriate in the public interest, and is consistent with 
the protection of investors, to grant, and hereby grant, broker-dealers 
a limited exemption from rule 15c2-11 to permit a broker-dealer to 
publish or submit for publication quotations in Global OTC IDQS, or in 
any other IDQS,\5\ for an OTC Security that is piggyback eligible under 
rule 15c2-11(f)(3) in another IDQS, without the broker-dealer 
separately complying with the requirements of rule 15c2-11, subject to 
the conditions of this Order.
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    \5\ Based on the facts and representations, we believe it is 
appropriate to expand the scope of the exemptive relief to include 
publishing or submitting for publication quotations in any IDQS, not 
just Global OTC IDQS, provided that the conditions of this Order are 
satisfied.
---------------------------------------------------------------------------

    The conditions of this Order are designed to extend the rule 15c2-
11(f)(3)(i) exception to broker-dealers that are publishing or 
submitting for publication quotations for already-quoted OTC Securities 
that are currently piggyback eligible under rule 15c2-11(f)(3) in an 
IDQS other than an IDQS in which piggyback eligibility has been 
established, while at the same time limiting the scope of relief by 
excluding from eligibility certain OTC Securities. The first condition 
limits the applicability of relief to an IDQS that meets the 
requirements to be an IDQS as defined in the rule \6\ and that meets 
the requirements of rule 15c2-11(f)(3)(i). Conditions two, three, and 
four are designed to help ensure that the relief is limited to 
quotations in an IDQS that has established, maintains, and enforces 
monitoring and review requirements to verify that the OTC Security is 
piggyback eligible in another IDQS (or has established piggyback 
eligibility in the IDQS) and that there are current quotations for that 
OTC Security in that other IDQS, and that the issuer of the OTC 
Security is not delinquent in its required filing obligations under the 
federal securities laws, on the day that a broker-dealer commences 
publishing or submitting for publication quotations for that OTC 
Security in the IDQS. Finally, condition five is designed to ensure 
that the IDQS maintains adequate books and records to demonstrate 
compliance with this Order.
---------------------------------------------------------------------------

    \6\ See 17 CFR 240.15c2-11(e)(2); supra note 2.
---------------------------------------------------------------------------

    This Order does not expand the number of OTC Securities that are 
already quoted pursuant to the exception from the requirements of rule 
15c2-11 contained in rule 15c2-11(f)(3); rather, this Order extends the 
rule 15c2-11(f)(3)(i) exception to quotations for these already-quoted 
OTC Securities published by broker-dealers in an IDQS other than the 
IDQS in which piggyback eligibility is established if, and only if, the 
requirements of Rule 15c2-11(f)(3)(i) are otherwise satisfied and the 
conditions of this Order are met. As such, we do not believe that the 
transfer of piggyback eligibility for these already-quoted OTC 
Securities under rule 15c2-11(f)(3), from one IDQS to another IDQS, as 
conditioned in this Order, constitutes a fraudulent, manipulative, or 
deceptive practice comprehended within the purpose of rule 15c2-11.

Conclusion

    It is hereby ordered, pursuant to Exchange Act rule 15c2-11(h), 
that broker-dealers are exempt from the requirements of rule 15c2-11 
solely to permit broker-dealers to publish or submit for publication 
quotations in Global OTC IDQS or in any similarly situated IDQS for an 
OTC Security that is piggyback eligible under rule 15c2-11(f)(3) in 
another IDQS, subject to the following conditions:
    1. The IDQS meets the requirements to be an IDQS as defined in the 
rule \7\ and specifically identifies as such unsolicited indications of 
customer interest of the kind described in paragraph (f)(2) of rule 
15c2-11.
---------------------------------------------------------------------------

    \7\ See 17 CFR 240.15c2-11(e)(2); supra note 2.
---------------------------------------------------------------------------

    2. The IDQS permits a broker-dealer to commence publishing or 
submitting for publication quotations in such IDQS for the OTC 
Security, in reliance on this Order, only if (a) the OTC Security is 
piggyback eligible under rule 15c2-11(f)(3) in another IDQS; and (b) 
the OTC Security has current quotations in that other IDQS, and the 
symbol for the OTC Security does not contain the fifth letter 
identifier appended by FINRA to

[[Page 85659]]

the symbols of OTC Securities to identify issuers that are delinquent 
in their required filings, on the day the broker-dealer commences 
quoting in such IDQS.
    3. Once a broker-dealer commences publishing or submitting for 
publication quotations in the IDQS for the OTC Security in accordance 
with condition 2, such IDQS permits broker-dealers to continue 
publishing or submitting for publication quotations in such IDQS for 
the OTC Security only if the OTC Security continues to be piggyback 
eligible under rule 15c2-11(f)(3) in another IDQS or has established 
and maintains piggyback eligibility under rule 15c2-11(f)(3)(i) based 
on quotations (exclusive of any identified customer interests) in such 
IDQS.
    4. The IDQS establishes, maintains, and enforces policies and 
procedures reasonably designed to ensure compliance with this Order.
    5. The IDQS maintains books and records sufficient to demonstrate 
that such IDQS is complying with the terms of this Order, and such IDQS 
promptly provides such records to Commission staff upon request.
    This Order is subject to modification or revocation at any time the 
Commission determines that such action is necessary or appropriate in 
furtherance of the purposes of the Exchange Act. In addition, persons 
relying on this Order are directed to the anti-fraud and anti-
manipulation provisions of the federal securities laws, particularly 
section 10(b) of the Exchange Act and rule 10b-5 thereunder. 
Responsibility for compliance with these and any other applicable 
provisions of the federal securities laws must rest with the persons 
relying on this Order. This Order should not be considered a view with 
respect to any other question that the publication or submission for 
publication of quotations in reliance on this Order may raise, 
including, but not limited to, the applicability of other federal or 
state laws to such activity.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Robert W. Errett,
Deputy Secretary.
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    \8\ 17 CFR 200.30-3(a)(6).
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[FR Doc. 2016-28457 Filed 11-25-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                                             Federal Register / Vol. 81, No. 228 / Monday, November 28, 2016 / Notices                                                    85657

                                                  Improvement Order percentage                            opportunities and improves competition                   amendments, all written statements
                                                  thresholds are reasonable, equitable and                on the Exchange.                                         with respect to the proposed rule
                                                  not unfairly discriminatory. The                                                                                 change that are filed with the
                                                                                                          C. Self-Regulatory Organization’s
                                                  proposed changes to the thresholds are                                                                           Commission, and all written
                                                                                                          Statement on Comments on the
                                                  equitable and not unfairly                                                                                       communications relating to the
                                                  discriminatory as they are available to                 Proposed Rule Change Received From
                                                                                                                                                                   proposed rule change between the
                                                  all BOX Participants that initiate                      Members, Participants, or Others
                                                                                                                                                                   Commission and any person, other than
                                                  Auction Transactions, and Participants                    No written comments were either                        those that may be withheld from the
                                                  may choose whether or not to take                       solicited or received.                                   public in accordance with the
                                                  advantage of the percentage thresholds                  III. Date of Effectiveness of the                        provisions of 5 U.S.C. 552, will be
                                                  and their applicable discounted fees.                                                                            available for Web site viewing and
                                                                                                          Proposed Rule Change and Timing for
                                                  Further, the Exchange believes that the                                                                          printing in the Commission’s Public
                                                                                                          Commission Action
                                                  proposed changes are reasonable and                                                                              Reference Room, 100 F Street NE.,
                                                  competitive as they will further                           The foregoing rule change has become                  Washington, DC 20549 on official
                                                  incentivize Participants to direct order                effective pursuant to Section                            business days between the hours of
                                                  flow to the Exchange, benefiting all                    19(b)(3)(A)(ii) of the Exchange Act 8 and                10:00 a.m. and 3:00 p.m. Copies of such
                                                  market participants.                                    Rule 19b–4(f)(2) thereunder,9 because it                 filing also will be available for
                                                     The Exchange also believes the                       establishes or changes a due, or fee.                    inspection and copying at the principal
                                                  proposed amendments to the BVR in                          At any time within 60 days of the                     office of the Exchange. All comments
                                                  Section I.B.2 of the BOX Fee Schedule                   filing of the proposed rule change, the                  received will be posted without change;
                                                  are reasonable, equitable and not                       Commission summarily may                                 the Commission does not edit personal
                                                  unfairly discriminatory. The BVR was                    temporarily suspend the rule change if                   identifying information from
                                                  adopted to attract Public Customer order                it appears to the Commission that the                    submissions. You should submit only
                                                  flow to the Exchange by offering these                  action is necessary or appropriate in the                information that you wish to make
                                                  Participants incentives to submit their                 public interest, for the protection of                   available publicly. All submissions
                                                  Public Customer PIP and COPIP Orders                    investors, or would otherwise further                    should refer to File Number SR–BOX–
                                                  to the Exchange and the Exchange                        the purposes of the Act. If the                          2016–53, and should be submitted on or
                                                  believes it is appropriate to now amend                 Commission takes such action, the                        before December 19, 2016.
                                                  the BVR. The Exchange believes it is                    Commission shall institute proceedings
                                                  equitable and not unfairly                              to determine whether the proposed rule                     For the Commission, by the Division of
                                                                                                                                                                   Trading and Markets, pursuant to delegated
                                                  discriminatory to amend the BVR, as all                 should be approved or disapproved.
                                                                                                                                                                   authority.10
                                                  Participants have the ability to qualify
                                                                                                          IV. Solicitation of Comments                             Robert W. Errett,
                                                  for a rebate, and rebates are provided
                                                  equally to qualifying Participants. Other                 Interested persons are invited to                      Deputy Secretary.
                                                  exchanges employ similar incentive                      submit written data, views, and                          [FR Doc. 2016–28459 Filed 11–25–16; 8:45 am]
                                                  programs; 7 and the Exchange believes                   arguments concerning the foregoing,                      BILLING CODE 8011–01–P
                                                  that the proposed changes to the volume                 including whether the proposed rule
                                                  thresholds are reasonable and                           change is consistent with the Act.
                                                  competitive when compared to                            Comments may be submitted by any of                      SECURITIES AND EXCHANGE
                                                  incentive structures at other exchanges.                the following methods:                                   COMMISSION
                                                  Finally, the Exchange believes it is                                                                             [Release No. 34–79360; File No. TP 16–16]
                                                                                                          Electronic Comments
                                                  reasonable and appropriate to continue
                                                  to provide incentives for Public                          • Use the Commission’s Internet                        Order Granting Limited Exemption
                                                  Customers, which will result in greater                 comment form (http://www.sec.gov/                        From Exchange Act Rule 15c2–11 to
                                                  liquidity and ultimately benefit all                    rules/sro.shtml); or                                     Certain Interdealer Quotation Systems
                                                  Participants trading on the Exchange.                     • Send an email to rule-                               Pursuant to Exchange Act Rule 15c2–
                                                                                                          comments@sec.gov. Please include File                    11(h)
                                                  B. Self-Regulatory Organization’s                       Number SR–BOX–2016–53 on the
                                                  Statement on Burden on Competition                      subject line.                                            November 21, 2016.
                                                    The Exchange does not believe that                                                                                By letter dated November 21, 2016
                                                  the proposed rule change will impose                    Paper Comments                                           (the ‘‘Letter’’), Global OTC requested
                                                  any burden on competition not                             • Send paper comments in triplicate                    that the Securities and Exchange
                                                  necessary or appropriate in furtherance                 to Secretary, Securities and Exchange                    Commission (the ‘‘Commission’’) grant a
                                                  of the purposes of the Act. The                         Commission, 100 F Street NE.,                            limited exemption from rule 15c2–11
                                                  Exchange is simply proposing to amend                   Washington, DC 20549–1090.                               under the Securities Exchange Act of
                                                  certain percentage thresholds for                       All submissions should refer to File                     1934, as amended (the ‘‘Exchange Act’’),
                                                  Auction Transaction fees and rebates in                 Number SR–BOX–2016–53. This file                         in connection with the publication or
                                                  the BOX Fee Schedule. The Exchange                      number should be included on the                         submission for publication of quotations
                                                  believes that the volume based rebates                  subject line if email is used. To help the               for a covered over-the-counter (‘‘OTC’’)
                                                  and fees increase intermarket and                       Commission process and review your                       equity security (an ‘‘OTC Security’’ or,
                                                  intramarket competition by incenting                    comments more efficiently, please use                    plural, ‘‘OTC Securities’’) in the
                                                  Participants to direct their order flow to                                                                       interdealer quotation system (‘‘IDQS’’)
mstockstill on DSK3G9T082PROD with NOTICES




                                                                                                          only one method. The Commission will
                                                  the exchange, which benefits all                        post all comments on the Commission’s                    operated by Global OTC (‘‘Global OTC
                                                  participants by providing more trading                  Internet Web site (http://www.sec.gov/                   IDQS’’). Specifically, Global OTC seeks
                                                                                                          rules/sro.shtml). Copies of the                          an exemption to permit broker-dealers,
                                                    7 See Section B of the PHLX Pricing Schedule
                                                                                                          submission, all subsequent                               consistent with the approach described
                                                  entitled ‘‘Customer Rebate Program;’’ ISE Gemini’s
                                                  Qualifying Tier Thresholds (page 6 of the ISE
                                                                                                                                                                   below, to publish or submit for
                                                                                                            8 15   U.S.C. 78s(b)(3)(A)(ii).
                                                  Gemini Fee Schedule); and CBOE’s Volume
                                                  Incentive Program (VIP).                                  9 17   CFR 240.19b–4(f)(2).                              10 17   CFR 200.30–3(a)(12).



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                                                  85658                       Federal Register / Vol. 81, No. 228 / Monday, November 28, 2016 / Notices

                                                  publication quotations in Global OTC                     IDQS to allow a broker-dealer to avail                 the IDQS) and that there are current
                                                  IDQS for an OTC Security that is already                 itself of the piggyback exception when                 quotations for that OTC Security in that
                                                  ‘‘piggyback’’ qualified, or ‘‘piggyback’’                quoting in Global OTC IDQS any OTC                     other IDQS, and that the issuer of the
                                                  eligible, under rule 15c2–11(f)(3), in                   Security that (1) qualifies for the                    OTC Security is not delinquent in its
                                                  another IDQS, without the broker-dealer                  piggyback exception in another IDQS, or                required filing obligations under the
                                                  separately complying with the                            (2) is initially quoted in Global OTC                  federal securities laws, on the day that
                                                  requirements of rule 15c2–11, subject to                 IDQS based on the relief provided in                   a broker-dealer commences publishing
                                                  certain conditions.                                      this Order and then establishes and                    or submitting for publication quotations
                                                     Rule 15c2–11, with certain                            maintains piggyback eligibility under                  for that OTC Security in the IDQS.
                                                  exceptions, requires that a broker-dealer                rule 15c2–11(f)(3)(i) based on quotations              Finally, condition five is designed to
                                                  that publishes or submits for                            (exclusive of any identified customer                  ensure that the IDQS maintains
                                                  publication quotations for OTC                           interests) in Global OTC IDQS. Global                  adequate books and records to
                                                  Securities in a quotation medium                         OTC represents that this approach                      demonstrate compliance with this
                                                  gather, review, and preserve certain                     would assist investors in OTC Securities               Order.
                                                  specified information and have a                         by increasing competition, promoting                      This Order does not expand the
                                                  reasonable basis under the                               fair and orderly markets, and providing                number of OTC Securities that are
                                                  circumstances for believing that the                     redundancy in the event of systems                     already quoted pursuant to the
                                                  information is accurate in all material                  failures by having an additional IDQS in               exception from the requirements of rule
                                                  respects and was obtained from reliable                  which to continuously quote OTC                        15c2–11 contained in rule 15c2–11(f)(3);
                                                  sources.1 Rule 15c2–11 includes an                       Securities that already are eligible for               rather, this Order extends the rule 15c2–
                                                  exception to the rule’s requirements—                    the piggyback exception in another                     11(f)(3)(i) exception to quotations for
                                                  the ‘‘piggyback’’ exception—for when a                   IDQS.                                                  these already-quoted OTC Securities
                                                  broker-dealer publishes, in an IDQS 2                       Based on the facts and representations              published by broker-dealers in an IDQS
                                                  that specifically identifies as such                     made in the Letter, we find that it is                 other than the IDQS in which piggyback
                                                  unsolicited customer indications of                      appropriate in the public interest, and is             eligibility is established if, and only if,
                                                  interest, a quotation for an OTC Security                consistent with the protection of                      the requirements of Rule 15c2–11(f)(3)(i)
                                                  that was already the subject of regular                  investors, to grant, and hereby grant,                 are otherwise satisfied and the
                                                  and frequent quotations in compliance                    broker-dealers a limited exemption from                conditions of this Order are met. As
                                                  with rule 15c2–11(f)(3)(i).3 For this                    rule 15c2–11 to permit a broker-dealer                 such, we do not believe that the transfer
                                                  piggyback exception to apply, the                        to publish or submit for publication                   of piggyback eligibility for these
                                                  security must have been the subject of                   quotations in Global OTC IDQS, or in                   already-quoted OTC Securities under
                                                  quotations (exclusive of any identified                  any other IDQS,5 for an OTC Security                   rule 15c2–11(f)(3), from one IDQS to
                                                  customer interests) in the IDQS on each                  that is piggyback eligible under rule                  another IDQS, as conditioned in this
                                                  of at least 12 days within the previous                  15c2–11(f)(3) in another IDQS, without                 Order, constitutes a fraudulent,
                                                  30 calendar days, with no more than 4                    the broker-dealer separately complying                 manipulative, or deceptive practice
                                                  business days in succession without a                    with the requirements of rule 15c2–11,                 comprehended within the purpose of
                                                  quotation.4 Thus, if a publication or                    subject to the conditions of this Order.               rule 15c2–11.
                                                  submission for publication of a                             The conditions of this Order are
                                                                                                           designed to extend the rule 15c2–                      Conclusion
                                                  quotation for an OTC Security meets all
                                                  of the requirements of this exception, a                 11(f)(3)(i) exception to broker-dealers                   It is hereby ordered, pursuant to
                                                  broker-dealer can ‘‘piggyback’’ on either                that are publishing or submitting for                  Exchange Act rule 15c2–11(h), that
                                                  its own or other broker-dealers’                         publication quotations for already-                    broker-dealers are exempt from the
                                                  previously published quotations in an                    quoted OTC Securities that are currently               requirements of rule 15c2–11 solely to
                                                  IDQS.                                                    piggyback eligible under rule 15c2–                    permit broker-dealers to publish or
                                                     The Letter represents that the                        11(f)(3) in an IDQS other than an IDQS                 submit for publication quotations in
                                                  concerns the Commission raised in                        in which piggyback eligibility has been                Global OTC IDQS or in any similarly
                                                  adopting rule 15c2–11 would not be                       established, while at the same time                    situated IDQS for an OTC Security that
                                                  implicated if exemptive relief, subject to               limiting the scope of relief by excluding              is piggyback eligible under rule 15c2–
                                                  the conditions below, were granted to                    from eligibility certain OTC Securities.               11(f)(3) in another IDQS, subject to the
                                                  broker-dealers publishing or submitting                  The first condition limits the                         following conditions:
                                                  for publication quotations in Global                     applicability of relief to an IDQS that                   1. The IDQS meets the requirements
                                                  OTC IDQS. Specifically, Global OTC                       meets the requirements to be an IDQS as                to be an IDQS as defined in the
                                                  describes in the Letter an approach                      defined in the rule 6 and that meets the               rule 7 and specifically identifies as such
                                                  based on transferability of piggyback                    requirements of rule 15c2–11(f)(3)(i).                 unsolicited indications of customer
                                                  eligibility from one IDQS to another                     Conditions two, three, and four are                    interest of the kind described in
                                                                                                           designed to help ensure that the relief                paragraph (f)(2) of rule 15c2–11.
                                                    1 See  17 CFR 240.15c2–11(a)–(c).                      is limited to quotations in an IDQS that                  2. The IDQS permits a broker-dealer
                                                    2 Paragraph   (e)(2) of rule 15c2–11 defines an IDQS   has established, maintains, and enforces               to commence publishing or submitting
                                                  to mean ‘‘any system of general circulation to           monitoring and review requirements to                  for publication quotations in such IDQS
                                                  brokers or dealers which regularly disseminates          verify that the OTC Security is                        for the OTC Security, in reliance on this
                                                  quotations of identified brokers or dealers.’’ 17 CFR                                                           Order, only if (a) the OTC Security is
                                                  240.15c2–11(e)(2). Global OTC represents that it
                                                                                                           piggyback eligible in another IDQS (or
                                                                                                                                                                  piggyback eligible under rule 15c2–
mstockstill on DSK3G9T082PROD with NOTICES




                                                  qualifies as an IDQS because Global OTC IDQS does        has established piggyback eligibility in
                                                  not accept or maintain dark orders and fully                                                                    11(f)(3) in another IDQS; and (b) the
                                                  attributes to the broker-dealer representing the           5 Based on the facts and representations, we         OTC Security has current quotations in
                                                  quotation all quotations submitted on Global OTC         believe it is appropriate to expand the scope of the   that other IDQS, and the symbol for the
                                                  IDQS.                                                    exemptive relief to include publishing or
                                                     3 See 17 CFR 240.15c2–11(f)(3)(i) (providing          submitting for publication quotations in any IDQS,
                                                                                                                                                                  OTC Security does not contain the fifth
                                                  frequency of quotation requirements for a security       not just Global OTC IDQS, provided that the            letter identifier appended by FINRA to
                                                  to meet the piggyback exception).                        conditions of this Order are satisfied.
                                                     4 Id.                                                   6 See 17 CFR 240.15c2–11(e)(2); supra note 2.         7 See   17 CFR 240.15c2–11(e)(2); supra note 2.



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                                                                                 Federal Register / Vol. 81, No. 228 / Monday, November 28, 2016 / Notices                                         85659

                                                  the symbols of OTC Securities to                          SECURITIES AND EXCHANGE                               the places specified in Item IV below.
                                                  identify issuers that are delinquent in                   COMMISSION                                            The Exchange has prepared summaries,
                                                  their required filings, on the day the                                                                          set forth in sections A, B, and C below,
                                                                                                            [Release No. 34–79363; File No. SR–
                                                  broker-dealer commences quoting in                                                                              of the most significant parts of such
                                                                                                            NYSEArca-2016–148]
                                                  such IDQS.                                                                                                      statements.
                                                     3. Once a broker-dealer commences                      Self-Regulatory Organizations; NYSE                   A. Self-Regulatory Organization’s
                                                  publishing or submitting for publication                  Arca, Inc.; Notice of Filing and                      Statement of the Purpose of, and the
                                                  quotations in the IDQS for the OTC                        Immediate Effectiveness of Proposed                   Statutory Basis for, the Proposed Rule
                                                  Security in accordance with condition                     Rule Change Amending NYSE Arca                        Change
                                                  2, such IDQS permits broker-dealers to                    Rules 7.1 and 7.2, and NYSE Arca
                                                                                                            Equities Rules 7.1 and 7.2                            1. Purpose
                                                  continue publishing or submitting for
                                                                                                                                                                     The Exchange proposes to amend (a)
                                                  publication quotations in such IDQS for                   November 21, 2016.                                    NYSE Arca Rule 7.1 (Trading Sessions)
                                                  the OTC Security only if the OTC                             Pursuant to Section 19(b)(1) 1 of the              to permit the Chief Executive Officer
                                                  Security continues to be piggyback                        Securities Exchange Act of 1934 (the                  (‘‘CEO’’) of the Exchange or his or her
                                                  eligible under rule 15c2–11(f)(3) in                      ‘‘Act’’),2 and Rule 19b–4 thereunder,3                designee to take certain actions in
                                                  another IDQS or has established and                       notice is hereby given that on November               connection with the trading of securities
                                                  maintains piggyback eligibility under                     10, 2016, NYSE Arca, Inc. (the                        on the Exchange; (b) NYSE Arca
                                                  rule 15c2–11(f)(3)(i) based on quotations                 ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with             Equities Rule 7.1 (Hours of Business) to
                                                  (exclusive of any identified customer                     the Securities and Exchange                           permit the President of NYSE Arca
                                                  interests) in such IDQS.                                  Commission (the ‘‘Commission’’) the                   Equities or his or her designee to take
                                                                                                            proposed rule change as described in                  certain actions in connection with the
                                                     4. The IDQS establishes, maintains,
                                                                                                            Items I and II below, which Items have                trading of securities on the NYSE Arca
                                                  and enforces policies and procedures                      been prepared by the self-regulatory
                                                  reasonably designed to ensure                                                                                   Equities marketplace; and (c) NYSE
                                                                                                            organization. The Commission is                       Arca Rule 7.2 (Holidays) and NYSE
                                                  compliance with this Order.                               publishing this notice to solicit                     Arca Equities Rule 7.2 (Holidays) to
                                                     5. The IDQS maintains books and                        comments on the proposed rule change                  remove a reference to presidential
                                                  records sufficient to demonstrate that                    from interested persons.                              election days.
                                                  such IDQS is complying with the terms                     I. Self-Regulatory Organization’s                        The Exchange believes the proposed
                                                  of this Order, and such IDQS promptly                     Statement of the Terms of Substance of                changes to NYSE Arca Rule 7.1 and
                                                  provides such records to Commission                       the Proposed Rule Change                              NYSE Arca Equities Rule 7.1 would
                                                  staff upon request.                                                                                             make such rules more reflective of the
                                                                                                               The Exchange proposes to amend
                                                     This Order is subject to modification                                                                        organizational structure of the Exchange
                                                                                                            NYSE Arca Rule 7.1 (Trading Sessions)
                                                  or revocation at any time the                                                                                   and NYSE Arca Equities. At the same
                                                                                                            to permit the Chief Executive Officer of
                                                  Commission determines that such                                                                                 time, the proposed rule changes would
                                                                                                            the Exchange or his or her designee to
                                                  action is necessary or appropriate in                                                                           ensure that the Boards of Directors of
                                                                                                            take certain actions in connection with
                                                  furtherance of the purposes of the                                                                              NYSE Arca and of NYSE Arca Equities
                                                                                                            the trading of securities on the
                                                  Exchange Act. In addition, persons                                                                              (each, a ‘‘Board’’) continue to have the
                                                                                                            Exchange; (b) NYSE Arca Equities Rule
                                                                                                                                                                  authority to take action they deem
                                                  relying on this Order are directed to the                 7.1 (Hours of Business) to permit the
                                                                                                                                                                  necessary or appropriate in particular
                                                  anti-fraud and anti-manipulation                          President of NYSE Arca Equities or his
                                                                                                                                                                  situations.
                                                  provisions of the federal securities laws,                or her designee to take certain actions in
                                                  particularly section 10(b) of the                         connection with the trading of securities             NYSE Arca Rule 7.1 and NYSE Arca
                                                  Exchange Act and rule 10b-5                               on the NYSE Arca Equities marketplace;                Equities Rule 7.1
                                                  thereunder. Responsibility for                            and (c) NYSE Arca Rule 7.2 (Holidays)                 Proposed Changes to NYSE Arca Rule
                                                  compliance with these and any other                       and NYSE Arca Equities Rule 7.2                       7.1
                                                  applicable provisions of the federal                      (Holidays) to remove a reference to
                                                                                                            presidential election days. The                          The first paragraph of NYSE Arca
                                                  securities laws must rest with the                                                                              Rule 7.1 provides that, unless otherwise
                                                  persons relying on this Order. This                       proposed rule change is available on the
                                                                                                            Exchange’s Web site at www.nyse.com,                  ruled by the Board of the Exchange or
                                                  Order should not be considered a view                                                                           its designee, the Exchange shall be open
                                                  with respect to any other question that                   at the principal office of the Exchange,
                                                                                                            and at the Commission’s Public                        for the transaction of business daily
                                                  the publication or submission for                                                                               except on Saturdays and Sundays, and
                                                                                                            Reference Room.
                                                  publication of quotations in reliance on                                                                        that the hours at which trading sessions
                                                  this Order may raise, including, but not                  II. Self-Regulatory Organization’s                    shall open and close shall be established
                                                  limited to, the applicability of other                    Statement of the Purpose of, and                      by the Board or its designee.
                                                  federal or state laws to such activity.                   Statutory Basis for, the Proposed Rule                Commentary .01 to Rule 7.1 notes that,
                                                                                                            Change                                                except under unusual conditions as may
                                                    For the Commission, by the Division of
                                                  Trading and Markets, pursuant to delegated                   In its filing with the Commission, the             be determined by the Board or its
                                                  authority.8                                               self-regulatory organization included                 designee, hours during which
                                                  Robert W. Errett,                                         statements concerning the purpose of,                 transactions in options on individual
                                                                                                                                                                  securities may be made on the Exchange
mstockstill on DSK3G9T082PROD with NOTICES




                                                                                                            and basis for, the proposed rule change
                                                  Deputy Secretary.                                                                                               shall correspond to the normal hours for
                                                                                                            and discussed any comments it received
                                                  [FR Doc. 2016–28457 Filed 11–25–16; 8:45 am]                                                                    business set forth in the rules of the
                                                                                                            on the proposed rule change. The text
                                                  BILLING CODE 8011–01–P                                    of those statements may be examined at                primary exchange listing the securities
                                                                                                                                                                  underlying the options.
                                                                                                              1 15 U.S.C. 78s(b)(1).                                 The Exchange proposes to amend the
                                                                                                              2 15 U.S.C. 78a.                                    first paragraph of NYSE Arca Rule 7.1
                                                    8 17   CFR 200.30–3(a)(6).                                3 17 CFR 240.19b–4.                                 to provide that, except as may be


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Document Created: 2018-02-14 08:35:43
Document Modified: 2018-02-14 08:35:43
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 85657 

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