82 FR 3042 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of a Proposed Rule Change To Conform to Proposed Amendment to Rule 15c6-1(a) Under the Securities Exchange Act of 1934 To Shorten the Standard Settlement Cycle From Three Business Days After the Trade Date (“T+3”) to Two Business Days After the Trade Date (“T+2”)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 6 (January 10, 2017)

Page Range		3042-3042
FR Document		2017-00216

Federal Register, Volume 82 Issue 6 (Tuesday, January 10, 2017)

[Federal Register Volume 82, Number 6 (Tuesday, January 10, 2017)]
[Notices]
[Page 3042]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-00216]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79732; File No. SR-NYSEArca-2016-145]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Approval of a Proposed Rule Change To Conform to Proposed Amendment to 
Rule 15c6-1(a) Under the Securities Exchange Act of 1934 To Shorten the 
Standard Settlement Cycle From Three Business Days After the Trade Date 
(``T+3'') to Two Business Days After the Trade Date (``T+2'')

January 4, 2017.

I. Introduction

    On November 4, 2016, NYSE Arca, Inc. (``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to conform its rules to an amendment proposed by 
the Commission to Rule 15c6-1(a) under the Securities Exchange Act of 
1934 (``Act'') to shorten the standard settlement cycle for most 
broker-dealer transactions from three business days after the trade 
date (``T+3'') to two business days after the trade date (``T+2'').\3\ 
The proposed rule change was published for comment in the Federal 
Register on November 23, 2016.\4\ The Commission received no comments 
on the proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 78962 (Sept. 28, 
2016), 81 FR 69240 (Oct. 5, 2016) (File No. S7-22-16).
    \4\ See Securities Exchange Act Release No. 79337 (Nov. 17, 
2016), 81 FR 84635 (Nov. 23, 2016).
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II. Description of the Proposal

    The Exchange proposes to adopt new NYSE Arca Equities Rule 7.4T 
(Ex-Dividend or Ex-Right Dates), to conform to a proposed amendment to 
Rule 15c6-1(a) under the Act that would shorten the standard settlement 
cycle to T+2.

A. Current T+3 Settlement Cycle

    Currently, Exchange Rule 7.4 provides that transactions in stocks 
traded ``regular'' shall be ``ex-dividend'' or ``ex-rights,'' as the 
case may be, on the second business day preceding the record date fixed 
by the company or the date of the closing of transfer books, except 
when the Board of Directors rules otherwise.\5\ Further, current 
Exchange Rule 7.4 provides that, should the record date or closing of 
transfer books occur on a day other than a business day, the rule shall 
apply for the third preceding business day.
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    \5\ See Exchange Rule 7.4.
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B. Proposed T+2 Settlement Cycle

    Proposed new Exchange Rule 7.4T would provide that transactions in 
stocks traded ``regular'' shall be ``ex-divided'' or ``ex-rights,'' as 
the case may be, on the business day preceding the record date fixed by 
the company or the date of the closing of transfer books, except when 
the Board of Directors rules otherwise.\6\ Further, proposed Rule 7.4T 
would provide that, should the record date or closing of transfer books 
occur on a day other than a business day, the rule would apply for the 
second preceding business day.
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    \6\ See Proposed Exchange Rule 7.4T.
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C. Operative Date

    The Exchange proposes for the new rule to be adopted but not yet 
operative. The current T+3 rule would remain in effect until the 
Exchange files a separate proposed rule change, to delete the current 
T+3 rule and make operative the proposed T+2 rule. The Exchange would 
announce the operative date of the T+2 rule by issuing an Information 
Memo.

III. Discussion and Commission's Findings

    After careful review of the proposed rule change, the Commission 
finds that the proposal is consistent with the requirements of the Act 
and the rules and regulations thereunder that are applicable to a 
national securities exchange.\7\ Specifically, the Commission finds 
that the rule change is consistent with Section 6(b)(5) of the Act,\8\ 
which requires that the rules of a national securities exchange be 
designed, among other things, to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
to foster cooperation and coordination with persons engaged in 
regulating, clearing, settling, processing information with respect to, 
and facilitating transactions in securities, to remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system, and to protect investors and the public interest.
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    \7\ In approving this rule change, the Commission has considered 
the rule's impact on efficiency, competition, and capital formation. 
See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Commission notes that the proposal would conform Exchange Rule 
7.4 to the amendment that the Commission has proposed to Rule 15c6-1(a) 
under the Act. The Commission also notes that the proposed amendment to 
Rule 15c6-1(a) under the Act has not yet been adopted by the 
Commission, and that the Exchange has, accordingly, not proposed to 
make its amended rule effective at present. Instead, the Exchange has 
proposed to establish the operative date of the Exchange's proposal by 
filing a separate proposed rule change. The Commission expects that any 
proposed rule change to establish the operative date of the Exchange's 
proposal would correspond with the compliance date of any amendment to 
Rule 15c6-1(a) that is adopted by the Commission.
    For the reasons noted above, the Commission finds that the proposal 
is consistent with the requirements of the Act and would 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 to protect investors and the public interest.

IV. Conclusion

    It is therefore ordered that, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-NYSEArca-2016-145), be and 
hereby is, approved.
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    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-00216 Filed 1-9-17; 8:45 am]
 BILLING CODE 8011-01-P

3042 Federal Register / Vol. 82, No. 6 / Tuesday, January 10, 2017 / Notices

available publicly. All submissions 1(a) under the Act that would shorten acts and practices, to promote just and
should refer to File No. SR–NYSEMKT– the standard settlement cycle to T+2. equitable principles of trade, to foster
2016–126, and should be submitted on cooperation and coordination with
A. Current T+3 Settlement Cycle
or before January 31, 2017. persons engaged in regulating, clearing,
Currently, Exchange Rule 7.4 provides settling, processing information with
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
that transactions in stocks traded respect to, and facilitating transactions
authority.38 ‘‘regular’’ shall be ‘‘ex-dividend’’ or ‘‘ex-
in securities, to remove impediments to
Eduardo A. Aleman,
rights,’’ as the case may be, on the
and perfect the mechanism of a free and
second business day preceding the
Assistant Secretary.
record date fixed by the company or the open market and a national market
[FR Doc. 2017–00212 Filed 1–9–17; 8:45 am] date of the closing of transfer books, system, and to protect investors and the
BILLING CODE 8011–01–P except when the Board of Directors public interest.
rules otherwise.5 Further, current The Commission notes that the
Exchange Rule 7.4 provides that, should proposal would conform Exchange Rule
SECURITIES AND EXCHANGE the record date or closing of transfer 7.4 to the amendment that the
COMMISSION books occur on a day other than a Commission has proposed to Rule 15c6–
[Release No. 34–79732; File No. SR– business day, the rule shall apply for the 1(a) under the Act. The Commission
NYSEArca–2016–145] third preceding business day. also notes that the proposed amendment
B. Proposed T+2 Settlement Cycle to Rule 15c6–1(a) under the Act has not
Self-Regulatory Organizations; NYSE yet been adopted by the Commission,
Arca, Inc.; Order Granting Approval of Proposed new Exchange Rule 7.4T
and that the Exchange has, accordingly,
a Proposed Rule Change To Conform would provide that transactions in
not proposed to make its amended rule
to Proposed Amendment to Rule 15c6– stocks traded ‘‘regular’’ shall be ‘‘ex-
divided’’ or ‘‘ex-rights,’’ as the case may effective at present. Instead, the
1(a) Under the Securities Exchange Act
be, on the business day preceding the Exchange has proposed to establish the
of 1934 To Shorten the Standard
record date fixed by the company or the operative date of the Exchange’s
Settlement Cycle From Three Business
date of the closing of transfer books, proposal by filing a separate proposed
Days After the Trade Date (‘‘T+3’’) to
Two Business Days After the Trade except when the Board of Directors rule change. The Commission expects
Date (‘‘T+2’’) rules otherwise.6 Further, proposed that any proposed rule change to
Rule 7.4T would provide that, should establish the operative date of the
January 4, 2017. the record date or closing of transfer Exchange’s proposal would correspond
I. Introduction books occur on a day other than a with the compliance date of any
business day, the rule would apply for amendment to Rule 15c6–1(a) that is
On November 4, 2016, NYSE Arca, the second preceding business day. adopted by the Commission.
Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
with the Securities and Exchange C. Operative Date For the reasons noted above, the
Commission (‘‘Commission’’), pursuant Commission finds that the proposal is
The Exchange proposes for the new
to Section 19(b)(1) of the Securities rule to be adopted but not yet operative. consistent with the requirements of the
Exchange Act of 1934 (‘‘Act’’) 1 and Rule The current T+3 rule would remain in Act and would foster cooperation and
19b–4 thereunder,2 a proposed rule effect until the Exchange files a separate coordination with persons engaged in
change to conform its rules to an proposed rule change, to delete the regulating, clearing, settling, processing
amendment proposed by the current T+3 rule and make operative the information with respect to, and
Commission to Rule 15c6–1(a) under proposed T+2 rule. The Exchange facilitating transactions in securities, to
the Securities Exchange Act of 1934 would announce the operative date of remove impediments to and perfect the
(‘‘Act’’) to shorten the standard the T+2 rule by issuing an Information mechanism of a free and open market
settlement cycle for most broker-dealer Memo. and a national market system, and to
transactions from three business days protect investors and the public interest.
after the trade date (‘‘T+3’’) to two III. Discussion and Commission’s
business days after the trade date Findings IV. Conclusion
(‘‘T+2’’).3 The proposed rule change was After careful review of the proposed It is therefore ordered that, pursuant
published for comment in the Federal rule change, the Commission finds that
to Section 19(b)(2) of the Act,9 that the
Register on November 23, 2016.4 The the proposal is consistent with the
proposed rule change (SR–NYSEArca–
Commission received no comments on requirements of the Act and the rules
and regulations thereunder that are 2016–145), be and hereby is, approved.
the proposal. This order approves the
proposed rule change. applicable to a national securities For the Commission, by the Division of
exchange.7 Specifically, the Trading and Markets, pursuant to delegated
II. Description of the Proposal Commission finds that the rule change authority.10
The Exchange proposes to adopt new is consistent with Section 6(b)(5) of the Eduardo A. Aleman,
NYSE Arca Equities Rule 7.4T (Ex- Act,8 which requires that the rules of a Assistant Secretary.
Dividend or Ex-Right Dates), to conform national securities exchange be [FR Doc. 2017–00216 Filed 1–9–17; 8:45 am]
to a proposed amendment to Rule 15c6– designed, among other things, to
BILLING CODE 8011–01–P
pmangrum on DSK3GDR082PROD with NOTICES

prevent fraudulent and manipulative
38 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1). 5 See Exchange Rule 7.4.
2 17 CFR 240.19b–4. 6 See Proposed Exchange Rule 7.4T.
3 See Securities Exchange Act Release No. 78962 7 In approving this rule change, the Commission

(Sept. 28, 2016), 81 FR 69240 (Oct. 5, 2016) (File has considered the rule’s impact on efficiency,
No. S7–22–16). competition, and capital formation. See 15 U.S.C.
9 15 U.S.C. 78s(b)(2).
4 See Securities Exchange Act Release No. 79337 78c(f).
(Nov. 17, 2016), 81 FR 84635 (Nov. 23, 2016). 8 15 U.S.C. 78f(b)(5). 10 17 CFR 200.30–3(a)(12).

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Document Created: 2018-02-01 14:53:58
Document Modified: 2018-02-01 14:53:58

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		82 FR 3042