81 FR 9531 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Partnerships

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 37 (February 25, 2016)

Page Range		9531-9532
FR Document		2016-03946
Federal Register, Volume 81 Issue 37 (Thursday, February 25, 2016)
[Federal Register Volume 81, Number 37 (Thursday, February 25, 2016)]
[Notices]
[Pages 9531-9532]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-03946]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77186; File No. SR-Phlx-2016-20]


Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to 
Partnerships

February 19, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on February 16, 2016, NASDAQ PHLX LLC (``Phlx'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change as described in Items I, II, and III, below, 
which Items have been prepared by the Exchange. 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\ 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 delete these Rules: 903 entitled, ``Fixed 
Interest of Partner'';'' 904 entitled, ``Use of a Partnership Name;'' 
905 entitled, ``Special or Limited Partners;'' and 906 entitled, 
``Notice of Change in Partnership.'' The text of the proposed rule 
change is available on the Exchange's Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings, 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 Exchange 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 these 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 aspects 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 delete certain Phlx membership rules in 
order to harmonize and modernize the Exchange's Rulebook. Specifically, 
Exchange proposes to delete Rule 903 entitled, ``Fixed Interest of 
Partner;'' Rule 904 entitled, ``Use of a Partnership Name;'' Rule 905 
entitled, ``Special or Limited Partners;'' and Rule 906 entitled, 
``Notice of Change in Partnership.'' Specifically, each proposed rule 
change is as a result of the demutualization of the Exchange in 2004 
and no longer applicable to the business today. The proposed changes 
related to the former need for the exchange to more acutely understand 
the ownership structure of the membership and are discussed in greater 
detail below.
    These rules were applicable when Phlx offered seats, prior to 
demutualization. Before demutualization, Phlx seats conveyed ownership 
which created a greater obligation on Phlx to gather information on the 
members corporate structure. Specifically, Phlx was obligated to 
maintain a heighted vigilance on the makeup, ownership, and changes of 
individuals in a partnership in order to ensure the financial integrity 
of its ownership structure. Today, permits are issued to Exchange 
members and member organizations. The Exchange no longer needs to 
differentiate ownership because the permit structure conveys no 
ownership to the membership. These membership rules related to 
partnerships are no longer applicable today. The distinctions regarding 
the admission of member as a partnership, as compared to a corporation, 
are no longer relevant. The Exchange proposes to remove these outdated 
Rules.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \3\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \4\ 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, to 
remove impediments to and perfect the mechanism of a free and open 
market

[[Page 9532]]

and a national market system and, in general, to protect investors and 
the public interest. The Exchange believes that Rules 903-906 are 
burdensome and unnecessary. These rules regarding partnership 
interests, use of names, privileges, and changes to the partnership 
serve no modern purpose to the Exchange. The former ownership structure 
required the Exchange to be vigilant of the ownership structure of its 
members in case of financial distress or bankruptcy as the seat 
structure was vital to the financial condition of the Exchange. Before 
demutualization, members had ownership interest in the Exchange. Today, 
permits convey no ownership and therefore such vigilance as to the 
ownership structure of members is not warranted. The rules have not 
been changed since demutualization, but for 904 and 906 which were 
edited in 2009 in order to replace the term ``Membership Committee'' 
with ``Membership Department'' which was done in conjunction with other 
changes to the standing committees and corporate governance processes 
in order to make the Exchange more similar to the other Nasdaq SRO's.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78(f)(b)(5).
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    The removal of Rules 903-906 will promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities by removing 
burdensome requirements so that members may properly focus on other 
relevant requirements which benefit the marketplace.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act. The Exchange's proposed amendments seek to delete certain 
unnecessary rules which today burden partnerships over corporation. The 
deletions of Rules 903-906 will remove a current burden on competition 
which requires members and member organizations that are partnerships 
to disclose unnecessary information as compared to other corporate 
entities not structured as a partnership.

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

    No written comments were either solicited or received.

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

    Because the foregoing 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)(iii) of the Act \5\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\6\
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    \5\ 15 U.S.C. 78s(b)(3)(a)(iii).
    \6\ 17 CFR 240.19b-4(f)(6).
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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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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 should be approved or disapproved. The Exchange has 
provided the Commission written notice of its intent to file the 
proposed rule change, along with a brief description and text of the 
proposed rule change, at least five business days prior to the date of 
filing of the proposed rule change.

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-Phlx-2016-20 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-Phlx-2016-20. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml).
    Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly.
    All submissions should refer to File Number SR-Phlx-2016-20 and 
should be submitted on or before March 17, 2016.
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    \7\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
Brent J. Fields,
Secretary.
[FR Doc. 2016-03946 Filed 2-24-16; 8:45 am]
BILLING CODE 8011-01-P
Federal Register / Vol. 81, No. 37 / Thursday, February 25, 2016 / Notices 9531

• Send an email to rule-comments@ SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
sec.gov. Please include File Number SR– COMMISSION Statement of the Purpose of, and
SR–NYSEArca–2016–17 on the subject Statutory Basis for, the Proposed Rule
line. [Release No. 34–77186; File No. SR–Phlx– Change
Paper Comments 2016–20] 1. Purpose
The Exchange proposes to delete
• Send paper comments in triplicate Self-Regulatory Organizations;
certain Phlx membership rules in order
to Brent J. Fields, Secretary, Securities NASDAQ PHLX LLC; Notice of Filing
to harmonize and modernize the
and Exchange Commission, 100 F Street and Immediate Effectiveness of Exchange’s Rulebook. Specifically,
NE., Washington, DC 20549–1090. Proposed Rule Change Relating to Exchange proposes to delete Rule 903
Partnerships entitled, ‘‘Fixed Interest of Partner;’’
All submissions should refer to File
Number SR–NYSEArca–2016–17. This February 19, 2016. Rule 904 entitled, ‘‘Use of a Partnership
file number should be included on the Name;’’ Rule 905 entitled, ‘‘Special or
Pursuant to Section 19(b)(1) of the Limited Partners;’’ and Rule 906
subject line if email is used. To help the Securities Exchange Act of 1934 entitled, ‘‘Notice of Change in
Commission process and review your (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Partnership.’’ Specifically, each
comments more efficiently, please use notice is hereby given that on February proposed rule change is as a result of
only one method. The Commission will 16, 2016, NASDAQ PHLX LLC (‘‘Phlx’’ the demutualization of the Exchange in
post all comments on the Commission’s or ‘‘Exchange’’) filed with the Securities 2004 and no longer applicable to the
Internet Web site (http://www.sec.gov/ and Exchange Commission (‘‘SEC’’ or business today. The proposed changes
rules/sro.shtml). Copies of the ‘‘Commission’’) the proposed rule related to the former need for the
submission, all subsequent change as described in Items I, II, and exchange to more acutely understand
amendments, all written statements III, below, which Items have been the ownership structure of the
with respect to the proposed rule prepared by the Exchange. The membership and are discussed in
change that are filed with the Commission is publishing this notice to greater detail below.
Commission, and all written solicit comments on the proposed rule These rules were applicable when
communications relating to the Phlx offered seats, prior to
change from interested persons.
proposed rule change between the demutualization. Before
Commission and any person, other than I. Self-Regulatory Organization’s demutualization, Phlx seats conveyed
those that may be withheld from the Statement of the Terms of Substance of ownership which created a greater
public in accordance with the the Proposed Rule Change obligation on Phlx to gather information
provisions of 5 U.S.C. 552, will be on the members corporate structure.
The Exchange proposes to delete Specifically, Phlx was obligated to
available for Web site viewing and
these Rules: 903 entitled, ‘‘Fixed maintain a heighted vigilance on the
printing in the Commission’s Public
Interest of Partner’’;’’ 904 entitled, ‘‘Use makeup, ownership, and changes of
Reference Room, 100 F Street NE.,
of a Partnership Name;’’ 905 entitled, individuals in a partnership in order to
Washington, DC 20549 on official
‘‘Special or Limited Partners;’’ and 906 ensure the financial integrity of its
business days between the hours of
entitled, ‘‘Notice of Change in ownership structure. Today, permits are
10:00 a.m. and 3:00 p.m. Copies of the
Partnership.’’ The text of the proposed issued to Exchange members and
filing also will be available for member organizations. The Exchange no
rule change is available on the
inspection and copying at the principal longer needs to differentiate ownership
Exchange’s Web site at http://
office of the Exchange. All comments because the permit structure conveys no
www.nasdaqtrader.com/
received will be posted without change; ownership to the membership. These
micro.aspx?id=PHLXRulefilings, at the
the Commission does not edit personal membership rules related to
principal office of the Exchange, and at
identifying information from partnerships are no longer applicable
the Commission’s Public Reference
submissions. You should submit only today. The distinctions regarding the
Room.
information that you wish to make admission of member as a partnership,
available publicly. All submissions II. Self-Regulatory Organization’s as compared to a corporation, are no
should refer to File Number SR– Statement of the Purpose of, and longer relevant. The Exchange proposes
NYSEArca–2016–17 and should be Statutory Basis for, the Proposed Rule to remove these outdated Rules.
submitted on or before March 17, 2016. Change 2. Statutory Basis
For the Commission, by the Division of In its filing with the Commission, the The Exchange believes that its
Trading and Markets, pursuant to delegated
Exchange included statements proposal is consistent with Section 6(b)
authority.42
concerning the purpose of and basis for of the Act 3 in general, and furthers the
Brent J. Fields, the proposed rule change and discussed objectives of Section 6(b)(5) of the Act 4
Secretary. any comments it received on the in particular, in that it is designed to
[FR Doc. 2016–03940 Filed 2–24–16; 8:45 am] proposed rule change. The text of these prevent fraudulent and manipulative
BILLING CODE 8011–01–P statements may be examined at the acts and practices, to promote just and
places specified in Item IV below. The equitable principles of trade, to foster
mstockstill on DSK4VPTVN1PROD with NOTICES

Exchange has prepared summaries, set cooperation and coordination with
forth in sections A, B, and C below, of persons engaged in facilitating
the most significant aspects of such transactions in securities, to remove
statements. impediments to and perfect the
mechanism of a free and open market
1 15 U.S.C. 78s(b)(1). 3 15 U.S.C. 78f(b).
42 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. 4 15 U.S.C. 78(f)(b)(5).

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9532 Federal Register / Vol. 81, No. 37 / Thursday, February 25, 2016 / Notices

and a national market system and, in III. Date of Effectiveness of the Internet Web site (http://www.sec.gov/
general, to protect investors and the Proposed Rule Change and Timing for rules/sro.shtml).
public interest. The Exchange believes Commission Action Copies of the submission, all
that Rules 903–906 are burdensome and Because the foregoing proposed rule subsequent amendments, all written
unnecessary. These rules regarding change does not: (i) Significantly affect statements with respect to the proposed
partnership interests, use of names, the protection of investors or the public rule change that are filed with the
privileges, and changes to the interest; (ii) impose any significant Commission, and all written
partnership serve no modern purpose to burden on competition; and (iii) become communications relating to the
operative for 30 days from the date on proposed rule change between the
the Exchange. The former ownership
which it was filed, or such shorter time Commission and any person, other than
structure required the Exchange to be
as the Commission may designate, it has those that may be withheld from the
vigilant of the ownership structure of its public in accordance with the
members in case of financial distress or become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 5 and provisions of 5 U.S.C. 552, will be
bankruptcy as the seat structure was available for Web site viewing and
vital to the financial condition of the subparagraph (f)(6) of Rule 19b–4
thereunder.6 printing in the Commission’s Public
Exchange. Before demutualization, Reference Room, 100 F Street NE.,
At any time within 60 days of the
members had ownership interest in the Washington, DC 20549, on official
filing of the proposed rule change, the
Exchange. Today, permits convey no Commission summarily may business days between the hours of
ownership and therefore such vigilance temporarily suspend such rule change if 10:00 a.m. and 3:00 p.m. Copies of the
as to the ownership structure of it appears to the Commission that such filing also will be available for
members is not warranted. The rules action is: (i) Necessary or appropriate in inspection and copying at the principal
have not been changed since the public interest; (ii) for the protection office of the Exchange. All comments
demutualization, but for 904 and 906 of investors; or (iii) otherwise in received will be posted without change;
which were edited in 2009 in order to furtherance of the purposes of the Act. the Commission does not edit personal
replace the term ‘‘Membership If the Commission takes such action, the identifying information from
Committee’’ with ‘‘Membership Commission shall institute proceedings submissions. You should submit only
Department’’ which was done in to determine whether the proposed rule information that you wish to make
conjunction with other changes to the should be approved or disapproved. The available publicly.
Exchange has provided the Commission All submissions should refer to File
standing committees and corporate
written notice of its intent to file the Number SR–Phlx–2016–20 and should
governance processes in order to make be submitted on or before March 17,
the Exchange more similar to the other proposed rule change, along with a brief
description and text of the proposed 2016.
Nasdaq SRO’s.
rule change, at least five business days For the Commission, by the Division of
The removal of Rules 903–906 will prior to the date of filing of the Trading and Markets, pursuant to delegated
promote just and equitable principles of proposed rule change. authority.7
trade, to foster cooperation and Brent J. Fields,
coordination with persons engaged in IV. Solicitation of Comments Secretary.
facilitating transactions in securities by Interested persons are invited to [FR Doc. 2016–03946 Filed 2–24–16; 8:45 am]
removing burdensome requirements so submit written data, views, and BILLING CODE 8011–01–P
that members may properly focus on arguments concerning the foregoing,
other relevant requirements which including whether the proposed rule
benefit the marketplace. change is consistent with the Act. SECURITIES AND EXCHANGE
Comments may be submitted by any of COMMISSION
B. Self-Regulatory Organization’s the following methods:
Statement on Burden on Competition [Release No. 34–77184; File No. SR–
Electronic Comments NYSEArca–2015–125]
The proposed rule change does not • Use the Commission’s Internet
impose any burden on competition that Self-Regulatory Organizations; NYSE
comment form (http://www.sec.gov/ Arca, Inc.; Notice of Designation of a
is not necessary or appropriate in rules/sro.shtml); or Longer Period for Commission Action
furtherance of the purposes of the Act. • Send an email to rule-comments@ on a Proposed Rule Change, as
The Exchange’s proposed amendments sec.gov. Please include File Number SR– Modified by Amendment Nos. 1 and 2,
seek to delete certain unnecessary rules Phlx–2016–20 on the subject line. To List and Trade of Shares of
which today burden partnerships over RiverFront Dynamic Unconstrained
Paper Comments
corporation. The deletions of Rules 903– Income ETF and RiverFront Dynamic
906 will remove a current burden on • Send paper comments in triplicate
to Secretary, Securities and Exchange Core Income ETF Under NYSE Arca
competition which requires members Equities Rule 8.600
and member organizations that are Commission, 100 F Street NE.,
partnerships to disclose unnecessary Washington, DC 20549–1090. February 19, 2016.
information as compared to other All submissions should refer to File On December 15, 2015, NYSE Arca,
corporate entities not structured as a Number SR–Phlx–2016–20. This file Inc. (‘‘Exchange’’) filed with the
partnership. number should be included on the Securities and Exchange Commission
mstockstill on DSK4VPTVN1PROD with NOTICES

subject line if email is used. To help the (‘‘Commission’’), pursuant to Section
C. Self-Regulatory Organization’s Commission process and review your 19(b)(1) of the Securities Exchange Act
Statement on Comments on the comments more efficiently, please use of 1934 (‘‘Act’’) 1 and Rule 19b–4
Proposed Rule Change Received From only one method. The Commission will thereunder,2 a proposed rule change to
Members, Participants, or Others post all comments on the Commission’s
7 17 CFR 200.30–3(a)(12).
No written comments were either 5 15 U.S.C. 78s(b)(3)(a)(iii). 1 15 U.S.C. 78s(b)(1).
solicited or received. 6 17 CFR 240.19b–4(f)(6). 2 17 CFR 240.19b-4.

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Document Created: 2018-02-02 14:35:39
Document Modified: 2018-02-02 14:35:39
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 9531