81 FR 94473 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca Rule 3.2 and NYSE Arca Equities Rules 1.1, 3.2, 10.3, 10.8, 10.13, and 14

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 247 (December 23, 2016)

[Federal Register Volume 81, Number 247 (Friday, December 23, 2016)]
[Notices]
[Pages 94473-94475]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-30940]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79594; File No. SR-NYSEArca-2016-164]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca 
Rule 3.2 and NYSE Arca Equities Rules 1.1, 3.2, 10.3, 10.8, 10.13, and 
14

December 19, 2016.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on December 8, 2016, NYSE Arca, Inc. (``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend NYSE Arca Rule 3.2 and NYSE Arca 
Equities Rules 1.1, 3.2, 10.3, 10.8, 10.13, and 14 to delete outdated 
references. The proposed rule change is available on the Exchange's Web 
site at www.nyse.com, at the principal office of the Exchange, and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the following rules to delete 
outdated references to the ``NYSE Arca Board of Governors'' in NYSE 
Arca Rule 3.2 and NYSE Arca Equities Rules 1.1, 3.2, 10.3, 10.8, 10.13, 
and 14.
    In 2016, the Exchange amended, among other rules, Rule 10.8 in 
order to establish a Committee for Review (``CFR'') as a sub-committee 
of the Regulatory Oversight Committee (``ROC'').\4\ When the Exchange's 
CFR was created, NYSE Arca Equities Rules 10.3 (Ex Parte 
Communications), 10.12 (Minor Rule Plan) and 10.13 (Hearing and Review 
of Decisions) were amended to replace outdated references to the ``NYSE 
Arca Board of Governors'' with the ``NYSE Arca Board of Directors.'' 
\5\ However, outdated references to the ``NYSE Arca Board of 
Governors'' in NYSE Arca Rule 3.2 and NYSE Arca Equities Rules 1.1, 
3.2, 10.3, 10.8, 10.13, and 14 were inadvertently omitted. The Exchange 
accordingly proposes to replace references to ``Governors'' with 
``Directors'' in these rules as follows:
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    \4\ See Securities Exchange Act Release No. 77898 (May 24, 
2016), 81 FR 34404 (May 31, 2016) (SR-NYSEArca-2016-11). 
Specifically, the Exchange amended NYSE Arca Equities Rule 10.8(a) 
and (b) to replace references to the NYSE Arca Equities Board 
Appeals Committee with references to the ``Committee for Review'' or 
``CFR'' and to replace references to the ``Appeals Panel'' with the 
``CFR Appeals Panel.'' See id., 81 FR at 34406. NYSE Arca Equities 
Rule 10.8(a) and (b) did not contain references to the ``NYSE Arca 
Board of Governors.''
    \5\ See id., 81 FR at 34406.
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     NYSE Arca Rule 3.2 (Options Committees) governs the 
organization, structure and membership of NYSE Arca Options committees. 
NYSE Arca Rule 3.2(b) sets forth the eligibility requirements for three 
[sic] specific Options Committees, including the Nominating Committee 
which is governed by Rule 3.2(b)(2). The Exchange proposes one 
replacement of ``Governors'' with ``Directors'' in subsection (C)(i) of 
Rule 3.2(b)(2).
     NYSE Arca Equities Rule 1.1(n) defines ETP Holder and 
describes ETP Holder's limited voting rights to, among other things, 
nominate directors to the Board of Directors of NYSE Arca. The Exchange 
proposes to replace ``Governor'' and ``Governors'' with ``Director'' 
and ``Directors,'' respectively, in NYSE Arca Equities Rule 1.1(n).
     NYSE Arca Equities Rule 3.2 (Equity Committees) governs 
the organization, structure and membership of NYSE Arca Equities 
committees. NYSE Arca Equities Rule 3.2(b) sets forth the eligibility 
requirements for three [sic] specific Options Committees [sic], 
including the Nominating Committee which is governed by Rule 3.2(b)(2). 
The Exchange proposes one replacement of ``Governors'' with 
``Directors'' in subsection (C)(ii) of Rule 3.2(b)(2). The Exchange 
also proposes a non-substantive change to delete ``the'' before ``NYSE 
Arca, Inc.'' in the last section of subsection (C)(ii).
     Subsection (a) of NYSE Arca Equities Rule 10.3 (Ex Parte 
Communications) governs certain prohibited communications. The Exchange 
proposes to replace ``Governors'' with ``Directors'' in NYSE Arca 
Equities Rule 10.3(a)(2)(e) and in NYSE Arca Equities Rule 
10.3(a)(3)(d).
     NYSE Arca Equities Rule 10.8 (Review) governs review of 
review [sic] of disciplinary decisions. The Exchange proposes three 
replacements of ``Governors'' with ``Directors'' in subsection (c) of 
NYSE Arca Equities

[[Page 94474]]

Rule 10.8, and two replacements of ``Governors'' with ``Directors'' in 
subsection (d).
     NYSE Arca Equities Rule 10.13 (Hearings and Review of 
Decisions) sets forth procedures for persons aggrieved by certain 
Exchange actions to seek review of those actions. The Exchange proposes 
three replacements of ``Governors'' with ``Directors'' in subsection 
(k) of NYSE Arca Equities Rule 10.13.
     Finally, the Exchange proposes one replacement of 
``Governors'' with ``Directors'' in NYSE Arca Equities Rule 14.1 (NYSE 
Arca, Inc.), which sets forth the plan of delegation of functions by 
NYSE Arca to NYSE Arca Equities.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act \6\ in general, and with Section 
6(b)(5) \7\ in particular, in that it is designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system and, in general, help to protect 
investors and the public interest. Specifically, the Exchange believes 
that replacing outdated references to ``Governors'' with ``Directors'' 
in the phrase ``NYSE Arca Board of Governors'' and one reference to a 
``Governor'' with ``Director'' in the NYSE Arca and NYSE Arca Equities 
Rules removes impediments to and perfects the mechanism of a free and 
open market by removing confusion that may result from having obsolete 
references in the Exchange's rulebook. The Exchange further believes 
that the proposal removes impediments to and perfects the mechanism of 
a free and open market by ensuring that persons subject to the 
Exchange's jurisdiction, regulators, and the investing public can more 
easily navigate and understand the Exchange's rulebook. The Exchange 
believes that eliminating obsolete references would not be inconsistent 
with the public interest and the protection of investors because 
investors will not be harmed and in fact would benefit from increased 
transparency, thereby reducing potential confusion. Removing such 
obsolete references will also further the goal of transparency and add 
clarity to the Exchange's rules.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Exchange Act. The proposed rule 
change is not intended to address competitive issues but rather to 
delete obsolete references, thereby increasing transparency, reducing 
confusion, and making the Exchange's rules easier to understand and 
navigate.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the proposed rule change does not: (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and the text of the proposed rule change, 
at least five business days prior to the date of filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Exchange has satisfied this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \10\ normally does not become operative for 30 days after the date 
of the filing. However, Rule 19b-4(f)(6)(iii) \11\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The Exchange 
notes that the proposed rule change would delete obsolete references, 
which would reduce confusion and add clarity to its rulebook. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Therefore, the Commission hereby waives the operative delay and 
designates the proposed rule change operative upon filing.\12\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the 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 to 
determine whether the proposed rule change should be approved or 
disapproved.

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-NYSEArca-2016-164 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-NYSEArca-2016-164. 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

[[Page 94475]]

printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2016-164 and should 
be submitted on or before January 13, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-30940 Filed 12-22-16; 8:45 am]
 BILLING CODE 8011-01-P