81 FR 93976 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Section 902.02 of the NYSE Listed Company Manual To Adopt a Fee Cap Specific to Investment Management Entities and Their Eligible Portfolio Companies
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 246 (December 22, 2016)
Federal Register Volume 81, Issue 246 (December 22, 2016)
| Page Range | 93976-93979 | |
| FR Document | 2016-30793 |
[Federal Register Volume 81, Number 246 (Thursday, December 22, 2016)] [Notices] [Pages 93976-93979] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-30793] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79582; File No. SR-NYSE-2016-70] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Section 902.02 of the NYSE Listed Company Manual To Adopt a Fee Cap Specific to Investment Management Entities and Their Eligible Portfolio Companies December 16, 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 December 5, 2016, New York Stock Exchange LLC (``NYSE'' or the ``Exchange'') 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 the Substance of the Proposed Rule Change The Exchange proposes to amend Section 902.02 of the NYSE Listed Company Manual (the ``Manual'') to adopt a fee cap specific to Investment Management Entities and their eligible portfolio companies. 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 Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Section 902.02 of the Manual to adopt a fee cap specific to Investment Management Entities and their eligible portfolio companies. An Investment Management Entity for purposes of this provision would be defined as a listed company which manages private investment vehicles that are not registered under the Investment Company Act. There are a small number of such companies listed on the NYSE that engage in the business of managing such private equity funds. Through these private equity funds, Investment Management Entities invest in private companies. Investment Management Entities typically provide significant managerial and advisory assistance to their portfolio companies. An Investment Management Entity will frequently seek to exit its funds' investment in a privately-held portfolio company by conducting an initial public offering on behalf of that portfolio company. The Investment Management Entity does not typically sell shares in the IPO but, rather, shares not sold in the IPO are gradually sold off over a period of years in the public market. While these Investment Management Entities have control or influence over the decision making of their portfolio companies in both their pre- and post-public phases, the decision as to where to list is typically made jointly by the portfolio company's senior management team and the Investment Management Entity. The Exchange benefits from its ongoing [[Page 93977]] relationships with these Investment Management Entities (and members of the management teams that had previously dealt with the Exchange) when competing for the listing of their portfolio companies. In addition, the Exchange benefits from the efficiencies in dealing with portfolio companies that are benefiting from the guidance and experience of the Investment Management Entities to which they are related. The Exchange incurs substantial costs in connection with its marketing to companies choosing a listing venue for their IPO. In those cases where the Exchange has a longstanding relationship with the Investment Management Entity controlling a listing applicant, the Exchange's costs of marketing to the prospect company are often much lower than usual because of the Investment Management Entity's prior experience with the NYSE. Typically, when pitching for the listing of a company that is choosing a listing venue for its IPO, the Exchange incurs significant expense, including the time spent by its CEO and other senior management in preparing for and traveling to meetings with the prospect company, travel costs, the cost of developing pitching strategies, and the cost of producing marketing materials. In addition, it has been the Exchange's experience that an Investment Management Entity puts high-quality and experienced management teams in place at its portfolio companies prior to listing and that the Investment Management Entity continues to provide significant support to those companies after listing. Consequently, those companies require lower levels of support from the NYSE's business and Regulation groups to assist them in navigating the initial and continued listing process and the Exchange devotes significantly smaller staff resources to those companies on average than to the typical newly-listed company that is not controlled prior to listing by an Investment Management Entity. The Exchange believes that these cost savings attributable to its relationship with an Investment Management Entity make it desirable and reasonable to provide a reduction in continued listing fees to the Investment Management Companies that are significant shareholders in other listed companies, as well as to those portfolio companies that have listed as a consequence of those relationships. The Exchange also believes that the proposed fee reduction would provide an incentive to Investment Management Entities to both remain listed themselves and to list additional portfolio companies on the Exchange. Under Section 902.02, all listed companies are eligible to benefit from limitations on most fees (including Listing Fees and Annual Fees) (``Eligible Fees'') payable to the Exchange in a calendar year of $500,000 (the ``Total Maximum Fee'').\4\ The Exchange proposes to amend Section 902.02 to add a separate limitation on Eligible Fees applicable only to Investment Management Entities and their eligible portfolio companies (``Eligible Portfolio Companies''), with effect from the calendar year commencing January 1, 2017 (the ``Investment Management Entity Group Fee Discount''). An ``Eligible Portfolio Company'' of an Investment Management Entity is a company in which the Investment Management Entity has owned at least 20% of the common stock on a continuous basis since prior to that company's initial listing. The Investment Management Entity Group Fee Discount would be as follows: --------------------------------------------------------------------------- \4\ The Total Maximum Fee cap, however, does not include the following fees: (i) Listing Fees and Annual Fees for Investment Company Units, streetTRACKS[supreg] Gold Shares, Currency Trust Shares, and Commodity Trust Shares; (ii) Listing Fees and Annual Fees for closed-end funds; (iii) Listing Fees for structured products; and (iv) Annual Fees for structured products other than retail debt securities. ---------------------------------------------------------------------------A 30% discount on all Eligible Fees of an Investment Management Entity and each of its Eligible Portfolio Companies in any year in which the Investment Management Entity has two Eligible Portfolio Companies. a 50% discount on all Eligible Fees of an Investment Management Entity and each of its Eligible Portfolio Companies in any year in which the Investment Management Entity has three or more Eligible Portfolio Companies. The Investment Management Entity Group Fee Discount would be subject to a maximum aggregate discount of $500,000 for the Investment Management Entity and each of its Eligible Portfolio Companies in any given year (the ``Maximum Discount''). The Maximum Discount would be shared among the Investment Management Entity and the Eligible Portfolio Companies in direct proportion to their respective Eligible Fees. In addition to benefiting from the Investment Management Entity Group Fee Discount, the Investment Management Entity and each of the Eligible Portfolio Companies would each continue to have its fees capped by the applicable company's individual Total Maximum Fee of $500,000. Below are two examples: An Investment Management Entity owes the Total Maximum Fee of $500,000. The Investment Management Entity and its three Eligible Portfolio Companies as a group owe an aggregate of $1.0 million in Eligible Fees before application of the 50% discount. The aggregate 50% discount for the group upon application of the Management Entity Group Fee Discount would be $500,000. As the Investment Management Entity's proportionate share of the aggregate fees owed by the group would be 50% ($500,000/$1.0 million), the Investment Management Entity would receive a $250,000 discount (50% of the $500,000 maximum Investment Management Entity Group Fee Discount), resulting in total Eligible Fees for the Investment Management Entity in that year of $250,000 ($500,000 minus $250,000). The Eligible Portfolio Companies would share the remaining $250,000 discount available under the Maximum Discount in proportion to their respective Eligible Fee obligations for that calendar year. An Investment Management Entity owes $400,000 in Eligible Fees. The Investment Management Entity and its two Eligible Portfolio Companies as a group owe an aggregate of $1.0 million in Eligible Fees before application of the 30% discount. The aggregate 30% discount for the group upon application of the Investment Management Entity Group Fee Discount would be $300,000. As the Investment Management Entity's proportionate share of the aggregate fees owed by the group would be 40% ($400,000/$1.0 million), the Investment Management Entity would receive a $120,000 discount (40% of the $300,000 aggregate Investment Management Entity Group Fee Discount), resulting in total Eligible Fees for the Investment Management Entity in that year of $280,000 ($400,000 minus $120,000). The Eligible Portfolio Companies would share the remaining $180,000 discount available under the Investment Management Entity Group Fee Discount in proportion to the amounts of their respective Eligible Fee obligations for that calendar year. In order to qualify for the Investment Management Entity Group Fee Discount in any calendar year for itself and its Eligible Portfolio Companies, an Investment Management Entity must submit satisfactory proof to the Exchange no later than December 31 that it has met the ownership requirements specified for the entire period between January 1 and September 30 of that year. In the event that a listed company qualifies as an Eligible Portfolio [[Page 93978]] Company of two or more Investment Management Entities, for purposes of the Investment Management Entity Group Fee Discount, such company will be treated as an Eligible Portfolio Company only of the Investment Management Entity which has the largest equity interest in such Eligible Portfolio Company. If two or more of such Investment Management Entities own identical equity interests in such listed company, such company will be treated as an Eligible Portfolio Company of each of such Investment Management Entities. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act,\5\ in general, and furthers the objectives of Sections 6(b)(4) \6\ of the Exchange Act, in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges and is not designed to permit unfair discrimination among its members and issuers and other persons using its facilities. The Exchange also believes that the proposed rule change is consistent with Section 6(b)(5) of the Exchange Act, in particular in that it is designed 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. --------------------------------------------------------------------------- \5\ 15 U.S.C. 78f(b). \6\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- The Exchange is proposing to adopt fee discounts for listed Investment Management Entities and their Eligible Portfolio Companies. The Exchange believes that the proposed rule change is consistent with Sections 6(b)(4) and 6(b)(5) of the Exchange Act in that it represents an equitable allocation of fees and does not unfairly discriminate among listed companies. In particular, the Exchange believes the proposal represents an equitable allocation of fees and is not unfairly discriminatory because the Exchange benefits from significant cost and resource-utilization savings when listing portfolio companies of Investment Management Entities as it does not have to engage in significant marketing efforts as the decision makers at the Investment Management Entity are very familiar with the Exchange. Typically when pitching for the listing of a company that is choosing a listing venue for its IPO, the Exchange incurs significant expense, including: The time spent by its CEO and other senior management in preparing for and traveling to meetings with the prospect company, travel costs, the cost of developing pitching strategies, and the cost of producing marketing materials. As the Exchange saves much of this expense when pitching to a portfolio company of an Investment Management Entity with which the Exchange has a deep relationship, the Exchange believes that it is appropriate to share some of those savings with the Investment Management Entity and its Eligible Portfolio Companies. In addition, the Exchange typically has lower costs and resource utilization in connection with the initial and continued listing of Eligible Portfolio Companies than with other new listings, as the Exchange benefit from dealing with the high-quality and experienced management teams Investment Management Entities put in place at portfolio companies prior to listing and the ongoing relationship those companies maintain with staff at the Investment Management Entity who are experienced in dealing with the NYSE. The Exchange also believes that the proposed discount is reasonable in that it will create a reasonable commercial incentive for Investment Management Entities and the management of their portfolio companies to consider listing on the Exchange and to remain listed. The Exchange believes that it is not unfairly discriminatory to discount continued listing fees as a means of recognizing its cost savings related to the listing of an Investment Management Company and its Eligible Portfolio Companies. This is because a significant portion of the Exchange's savings arise from the efficiencies it experiences on an ongoing basis in dealing with Eligible Portfolio Companies for such time as the Investment Management Entity retains a significant investment and is thereby motivated to provide ongoing advice and assistance. In addition, the Investment Management Entity will in all cases already be listed on the Exchange and can therefore only share in the benefits of any fee discount if it is provided on a continued listing basis. The Exchange believes that the tiered discounts of 30% and 50% are not unfairly discriminatory, as they are reasonably related to the cost savings the Exchange benefits from when dealing with an Investment Management Entity and its Eligible Portfolio Companies rather than an individual listed company. In addition, it is not unfairly discriminatory to provide a higher percentage discount when there are a greater number of Eligible Portfolio Companies as there are economies of scale in dealing with a larger group of related entities because the incremental resources devoted by the Exchange in dealing with each additional Eligible Portfolio Company tend to be less. The Exchange believes that, where a company is an Eligible Portfolio Company of two or more Investment Management Entities, it is not unfairly discriminatory to provide the Investment Management Entity Group Fee Discount to the Investment Management Entity which has the largest ownership interest in the company as it would typically play the sole or lading leading role in advising the company. In the case where two or more Investment Management Entities own identical equity interests in a listed company, the Exchange believes it is not unfairly discriminatory to treat such company as an Eligible Portfolio Company of each of such Investment Management Entities, as all of them would typically provide significant levels of assistance to the company. 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 designed to reflect the cost savings the Exchange derives from its relationship with listed Investment Management Entities whose portfolio companies also list on the Exchange. The market for listing services is extremely competitive. Each listing exchange has a different fee schedule that applies to issuers seeking to list securities on its exchange. Issuers have the option to list their securities on these alternative venues based on the fees charged and the value provided by each listing. Because issuers have a choice to list their securities on a different national securities exchange, the Exchange does not believe that the proposed fee change imposes a burden on competition. 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. [[Page 93979]] III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) \7\ of the Act and subparagraph (f)(2) of Rule 19b- 4 \8\ thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78s(b)(3)(A). \8\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- 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) \9\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \9\ 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 Comments Use 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-NYSE-2016-70 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSE-2016-70. 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 such filing also will be available for inspection and copying at the principal offices 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-NYSE-2016-70, and should be submitted on or before January 12, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\10\ Eduardo A. Aleman, Assistant Secretary. --------------------------------------------------------------------------- \10\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2016-30793 Filed 12-21-16; 8:45 am] BILLING CODE 8011-01-P
![93976 Federal Register / Vol. 81, No. 246 / Thursday, December 22, 2016 / Notices
The Exchanges now seek to extend with the operation of its Retail Liquidity change is available on the Exchange’s
the exemptions until June 30, 2017.6 Program, until June 30, 2017. Web site at www.nyse.com, at the
The Exchanges’ request was made in The limited and temporary principal office of the Exchange, and at
conjunction with immediately effective exemptions extended by this Order are the Commission’s Public Reference
filings that extend the operation of the subject to modification or revocation if Room.
Programs through the same date.7 In at any time the Commission determines
that such action is necessary or II. Self-Regulatory Organization’s
their request to extend the exemptions,
appropriate in furtherance of the Statement of the Purpose of, and
the Exchanges note that the
purposes of the Securities Exchange Act Statutory Basis for, the Proposed Rule
participation in the Programs has
of 1934. Responsibility for compliance Change
increased more recently. Accordingly,
the Exchanges have asked for additional with any applicable provisions of the In its filing with the Commission, the
time to allow themselves and the Federal securities laws must rest with self-regulatory organization included
Commission to analyze more robust data the persons relying on the exemptions statements concerning the purpose of,
concerning the Programs, which the that are the subject of this Order. and basis for, the proposed rule change
Exchanges committed to provide to the For the Commission, by the Division of and discussed any comments it received
Commission.8 For this reason and the Trading and Markets, pursuant to delegated on the proposed rule change. The text
reasons stated in the Order originally authority.9 of those statements may be examined at
granting the limited exemptions, the Brent J. Fields, the places specified in Item IV below.
Commission finds that extending the Secretary. The Exchange has prepared summaries,
exemptions, pursuant to its authority [FR Doc. 2016–30815 Filed 12–21–16; 8:45 am] set forth in sections A, B, and C below,
under Rule 612(c) of Regulation NMS, is BILLING CODE 8011–01–P
of the most significant parts of such
appropriate in the public interest and statements.
consistent with the protection of A. Self-Regulatory Organization’s
investors. SECURITIES AND EXCHANGE Statement of the Purpose of, and
Therefore, it is hereby ordered that, COMMISSION Statutory Basis for, the Proposed Rule
pursuant to Rule 612(c) of Regulation [Release No. 34–79582; File No. SR–NYSE– Change
NMS, each Exchange is granted a 2016–70]
limited exemption from Rule 612 of 1. Purpose
Regulation NMS that allows it to accept Self-Regulatory Organizations; New The Exchange proposes to amend
and rank orders priced equal to or York Stock Exchange LLC; Notice of Section 902.02 of the Manual to adopt
greater than $1.00 per share in Filing and Immediate Effectiveness of a fee cap specific to Investment
increments of $0.001, in connection Proposed Rule Change Amending Management Entities and their eligible
Section 902.02 of the NYSE Listed portfolio companies.
additional year, through July 31, 2014, see Company Manual To Adopt a Fee Cap An Investment Management Entity for
Securities Exchange Act Release Nos. 70096 Specific to Investment Management purposes of this provision would be
(August 2, 2013), 78 FR 48520 (Aug. 8, 2013) (SR– Entities and Their Eligible Portfolio defined as a listed company which
NYSE–2013–48), and 70100 (Aug. 2, 2013), 78 FR
48535 (Aug. 8, 2013) (SR–NYSEMKT–2013–60), Companies manages private investment vehicles
and then, through various extensions, through that are not registered under the
December 16, 2016.
December 31, 2016. See Securities Exchange Act Investment Company Act. There are a
Release Nos. 72629 (July 16, 2014), 79 FR 42564 Pursuant to Section 19(b)(1) 1 of the small number of such companies listed
(July 22, 2014) (SR–NYSE–2014–35); 72625 (July Securities Exchange Act of 1934 (the on the NYSE that engage in the business
16, 2014), 79 FR 42566 (July 22, 2014) (SR– ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
NYSEMKT–2014–60); 74454 (Mar. 6, 2015), 80 FR of managing such private equity funds.
13054 (Mar. 12, 2015) (SR–NYSE–2015–10); 74455 notice is hereby given that, on December Through these private equity funds,
(Mar. 6, 2015), 80 FR 13047 (Mar. 12, 2015) (SR– 5, 2016, New York Stock Exchange LLC Investment Management Entities invest
NYSEMKT–2015–14); 75993 (Sept. 28, 2015), 80 FR (‘‘NYSE’’ or the ‘‘Exchange’’) filed with in private companies. Investment
59844 (Oct. 2, 2015) (SR–NYSE–2015–41); 75995 the Securities and Exchange
(Sept. 28, 2015), 80 FR 59836 (Oct. 2, 2015) (SR– Management Entities typically provide
NYSEMKT–2015–69); 77426 (Mar. 23, 2016), 81 FR Commission (the ‘‘Commission’’) the significant managerial and advisory
17533 (Mar. 29, 2016) (SR–NYSE–2016–25); 77424 proposed rule change as described in assistance to their portfolio companies.
(Mar. 23, 2016), 81 FR 17522 (Mar. 29, 2016) (SR– Items I, II, and III below, which Items An Investment Management Entity will
NYSEMKT–2016–39); 78600 (Aug. 17, 2016), 81 FR have been prepared by the self-
57642 (Aug. 23, 2016) (SR–NYSE–2016–54); and frequently seek to exit its funds’
78602 (Aug. 17, 2016), 81 FR 57639 (Aug. 23, 2016) regulatory organization. The investment in a privately-held portfolio
(SR–NYSEMKT–2016–76). Each time the pilot Commission is publishing this notice to company by conducting an initial
terms of the Programs were extended, the solicit comments on the proposed rule public offering on behalf of that
Commission also granted the Exchanges’ requests to change from interested persons.
extend the Sub-Penny exemptions. See Securities portfolio company. The Investment
Exchange Act Release Nos. 70085 (July 31, 2013), I. Self-Regulatory Organization’s Management Entity does not typically
78 FR 47807 (Aug. 6, 2013); 72732 (July 31, 2014), Statement of the Terms of the Substance sell shares in the IPO but, rather, shares
79 FR 45851 (Aug. 6, 2014); 74507 (Mar. 13, 2015),
80 FR 14421 (Mar. 19, 2015); 76020 (Sept. 29, 2015), of the Proposed Rule Change not sold in the IPO are gradually sold off
80 FR 60201 (Oct. 5, 2015); 77438 (Mar. 24, 2016), The Exchange proposes to amend over a period of years in the public
81 FR 17752 (Mar. 30, 2016); and 78678 (Aug. 25,
Section 902.02 of the NYSE Listed market. While these Investment
2016), 81 FR 60031 (Aug. 31, 2016). The current Management Entities have control or
exemptions expire December 31, 2016. Company Manual (the ‘‘Manual’’) to
influence over the decision making of
sradovich on DSK3GMQ082PROD with NOTICES
6 See Letter from Martha Redding, Assistant adopt a fee cap specific to Investment
Secretary, NYSE, to Brent J. Fields, Secretary, Management Entities and their eligible their portfolio companies in both their
Securities and Exchange Commission, dated
portfolio companies. The proposed rule pre- and post-public phases, the
November 28, 2016. decision as to where to list is typically
7 See Securities Exchange Act Release Nos. 79493
9 17 CFR 200.30–3(a)(83). made jointly by the portfolio company’s
(Dec. 7, 2016), 81 FR 90019 (Dec. 13, 2016) (SR–
NYSE–2016–82), and 79509 (Dec. 8, 2016), 81 FR 1 15 U.S.C. 78s(b)(1). senior management team and the
90389 (Dec. 14, 2016) (SR–NYSEMKT–2016–112). 2 15 U.S.C. 78a. Investment Management Entity. The
8 See Order, supra note 3, 77 FR at 40681. 3 17 CFR 240.19b–4. Exchange benefits from its ongoing
VerDate Sep<11>2014 17:40 Dec 21, 2016 Jkt 241001 PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 E:\FR\FM\22DEN1.SGM 22DEN1](https://thefederalregister.org/doc/81_FR_94222/page/1.svg)
![Federal Register / Vol. 81, No. 246 / Thursday, December 22, 2016 / Notices 93979
III. Date of Effectiveness of the Commission and any person, other than I. Self-Regulatory Organization’s
Proposed Rule Change and Timing for those that may be withheld from the Statement of the Terms of Substance of
Commission Action public in accordance with the the Proposed Rule Change
The foregoing rule change is effective provisions of 5 U.S.C. 552, will be The Exchange proposes to amend
upon filing pursuant to Section available for Web site viewing and Phlx Rule 1080(n), concerning a price-
19(b)(3)(A) 7 of the Act and printing in the Commission’s Public improvement mechanism entitled
subparagraph (f)(2) of Rule 19b–4 8 Reference Room, 100 F Street NE., ‘‘Price Improvement XL’’, also known as
thereunder, because it establishes a due, Washington, DC 20549 on official ‘‘PIXL.’’ Certain aspects of PIXL are
fee, or other charge imposed by the business days between the hours of currently operating on a pilot basis
Exchange. 10:00 a.m. and 3:00 p.m. Copies of such (‘‘Pilot’’), which was initially approved
At any time within 60 days of the filing also will be available for by the Commission in 2010,3 and which
filing of such proposed rule change, the inspection and copying at the principal is set to expire on January 18, 2017.4 In
Commission summarily may offices of the Exchange. All comments this proposal, the Exchange proposes to
temporarily suspend such rule change if received will be posted without change; make the Pilot permanent, and to
it appears to the Commission that such the Commission does not edit personal change the requirements for providing
action is necessary or appropriate in the identifying information from price improvement for PIXL Auction
public interest, for the protection of submissions. You should submit only Orders, other than Auctions involving
investors, or otherwise in furtherance of information that you wish to make Complex Orders, of less than 50 option
the purposes of the Act. If the available publicly. All submissions contracts.
Commission takes such action, the should refer to File Number SR–NYSE– The text of the proposed rule change
Commission shall institute proceedings 2016–70, and should be submitted on or is available on the Exchange’s Web site
under Section 19(b)(2)(B) 9 of the Act to before January 12, 2017. at http://nasdaqphlx.cchwallstreet.
determine whether the proposed rule For the Commission, by the Division of com/, at the principal office of the
change should be approved or Trading and Markets, pursuant to delegated Exchange, and at the Commission’s
disapproved. authority.10 Public Reference Room.
IV. Solicitation of Comments Eduardo A. Aleman,
II. Self-Regulatory Organization’s
Assistant Secretary.
Interested persons are invited to Statement of the Purpose of, and
[FR Doc. 2016–30793 Filed 12–21–16; 8:45 am] Statutory Basis for, the Proposed Rule
submit written data, views, and
arguments concerning the foregoing, BILLING CODE 8011–01–P Change
including whether the proposed rule In its filing with the Commission, the
change is consistent with the Act. Exchange included statements
SECURITIES AND EXCHANGE
Comments may be submitted by any of concerning the purpose of and basis for
COMMISSION
the following methods: the proposed rule change and discussed
Electronic Comments [Release No. 34–79584; File No. SR–Phlx– any comments it received on the
2016–119] proposed rule change. The text of these
• Use the Commission’s Internet statements may be examined at the
comment form (http://www.sec.gov/ Self-Regulatory Organizations; places specified in Item IV below. The
rules/sro.shtml); or NASDAQ PHLX LLC; Notice of Filing of Exchange has prepared summaries, set
• Send an email to rule-comments@ Proposed Rule Change, as Modified by forth in sections A, B, and C below, of
sec.gov. Please include File Number SR– Amendment No. 1 Thereto, To Amend the most significant aspects of such
NYSE–2016–70 on the subject line. the PIXL Price Improvement Auction in statements.
Paper Comments Phlx Rule 1080(n) and To Make Pilot
Program Permanent A. Self-Regulatory Organization’s
• Send paper comments in triplicate Statement of the Purpose of, and
to Secretary, Securities and Exchange December 16, 2016 Statutory Basis for, the Proposed Rule
Commission, 100 F Street NE., Pursuant to Section 19(b)(1) of the Change
Washington, DC 20549–1090. Securities Exchange Act of 1934
All submissions should refer to File (‘‘Act’’),1 and Rule 19b–4 thereunder,2 1. Purpose
Number SR–NYSE–2016–70. This file notice is hereby given that on December The purpose of this proposed rule
number should be included on the 6, 2016, NASDAQ PHLX LLC (‘‘Phlx’’ or change is to make permanent certain
subject line if email is used. To help the ‘‘Exchange’’) filed with the Securities pilots within Rule 1080(n), relating to
Commission process and review your and Exchange Commission (‘‘SEC’’ or PIXL. In addition, Phlx proposes to
comments more efficiently, please use ‘‘Commission’’) the proposed rule modify the requirements for PIXL
only one method. The Commission will change as described in Items I, II, and auctions involving less than 50
post all comments on the Commission’s III, below, which Items have been contracts (other than auctions involving
Internet Web site (http://www.sec.gov/ prepared by the Exchange. On December Complex Orders) where the National
rules/sro.shtml). Copies of the 15, 2016, the Exchange filed Best Bid and Offer (‘‘NBBO’’) is only
submission, all subsequent Amendment No. 1 to the proposed rule $0.01 wide.
amendments, all written statements change, which amended and replaced
Background
with respect to the proposed rule the proposed rule change in its entirety.
The Exchange adopted PIXL in
sradovich on DSK3GMQ082PROD with NOTICES
change that are filed with the The Commission is publishing this
Commission, and all written notice to solicit comments on the October 2010 as a price-improvement
communications relating to the proposed rule change, as amended, from
3 See Securities Exchange Act Release No. 63027
proposed rule change between the interested persons.
(October 1, 2010), 75 FR 62160 (October 7, 2010)
(SR–Phlx–2010–108) (‘‘PIXL Approval Order’’).
7 15 U.S.C. 78s(b)(3)(A). 10 17 CFR 200.30–3(a)(12). 4 See Securities Exchange Act Release No. 78301
8 17 CFR 240.19b–4(f)(2). 1 15 U.S.C. 78s(b)(1). (July 12, 2016), 81 FR 46731 (July 18, 2016) (SR–
9 15 U.S.C. 78s(b)(2)(B). 2 17 CFR 240.19b–4. PHLX–2016–75).
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Document Created: 2016-12-21 23:52:30
Document Modified: 2016-12-21 23:52:30
| 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 93976 |
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