[Federal Register Volume 77, Number 199 (Monday, October 15, 2012)]
[Notices]
[Pages 62556-62558]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-25279]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68012; File No. SR-Phlx-2012-115]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Clarify
Further That the Provisions of the Rule 800 Series Are Not Effective To
Permit the Listing of Securities and Include a Reference on the Need To
Comply With Rule 10C-1 Under the Securities Exchange Act of 1934 Should
the Exchange List Equity Securities in the Future
October 9, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on September 25, 2012, NASDAQ OMX 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 the
Substance of the Proposed Rule Change
Phlx is proposing to modify certain Exchange Rules to clarify
further that the provisions of the Rule 800 Series are not effective to
permit the listing of securities. The text of the proposed rule change
is available at http://nasdaqomxphlx.cchwallstreet.com/nasdaqomxphlx/phlx/, at Phlx's principal office, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and the
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Commission recently adopted rules that require any national
securities exchange that lists equity securities to have listing
standards relating to the independence of compensation committees and
their advisers.\3\
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\3\ See 17 CFR 240.10C-1 and Securities Exchange Act Release No.
67220 (June 20, 2012), 77 FR 38422 (June 27, 2012).
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The Exchange operates NASDAQ OMX PSX (``PSX''), a fully integrated
order display and execution system for all NMS stocks,\4\ as defined in
SEC Rule 600(b)(47) under Regulation NMS.\5\ PSX trades stocks listed
on other exchanges pursuant to unlisted trading privileges (``UTP'').
As provided by SEC Rule 12f-5, the Exchange may extend UTP to any
security for which the Exchange has in effect rules providing for
transactions in such class or type of security.\6\ Accordingly, Phlx's
rules include the Rule 800 Series to support UTP trading of all NMS
stocks on PSX. However, the Exchange does not list any securities
pursuant to the Rule 800 Series, and does not have any present intent
to list securities under this series in the future.\7\
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\4\ See Securities Exchange Act Release No. 62877 (September 9,
2010), 75 FR 56633 (September 16, 2010) (SR-Phlx-2010-079).
\5\ See 17 CFR 242.600(b)(47).
\6\ See 17 CFR 240.12f-5.
\7\ Pursuant to its Rule 1000, 1000A and 1000C Series, the
Exchange lists only standardized options, as defined in Rule 9b-1
under the Act, issued by a clearing agency that is registered
pursuant to Section 17A of the Act. As a result, the Exchange is not
proposing any clarifying changes to its Rule 1000, 1000A and 1000C
Series relating to Rule 10C-1 under the Act because Rule 10C-1
includes an exemption for listing of such standardized options. See
17 CFR 240.10C-1(b)(5)(iv). The Exchange's Rule 1000B Series is a
dormant set of rules applicable to trading of cash index
participations, and the Exchange has no present intent to trade or
list such securities. Should the Exchange ever propose to trade or
list any securities pursuant to its Rule 1000, 1000A, 1000B or 1000C
Series that are not entitled to an exemption under Rule 10C-1 under
the Act, the Exchange recognizes that it must file a proposed rule
change under Section 19(b)(2) under the Act to amend its rules to
make any changes needed to comply with Rule 10C-1 under the Act and
that such proposed rule change must be approved by the Commission.
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[[Page 62557]]
The Exchange proposes to modify Rules 800-803 and 867.5 to clarify
further that the provisions of the Rule 800 Series are not effective to
permit the listing of securities. Specifically, the Exchange proposes
to change the title of the Rule 800 Series from ``Listing of
Securities'' to ``Standards for Trading Securities Pursuant to Unlisted
Trading Privileges.'' Regarding Rule 801, the Exchange proposes to
delete references to listing and add clarifying language to state that
the Exchange lists only standardized options, as defined in Rule 9b-1
under the Act, issued by a clearing agency that is registered pursuant
to Section 17A of the Act, pursuant to the Rule 1000, 1000A and 1000C
Series. In addition, the Exchange will not list securities pursuant to
any other rule until the Exchange files a proposed rule change under
Section 19(b)(2) under the Act to amend its rules to make any changes
needed to comply with Rules 10A-3 and 10C-1 under the Act and to
incorporate additional qualitative and other listing criteria, and such
proposed rule change is approved by the Commission. The Exchange also
proposes to state explicitly in Rule 801, as well as Rule 803, which is
discussed further below, that the provisions of the Rule 800 Series are
not effective to permit the listing of securities.
Regarding Rule 802, the Exchange proposes to move the statement
that ``[t]he Exchange does not rate or guarantee the quality of any
security dealt on the Exchange'' to Rule 801. The Exchange also
proposes to move the definition of the terms ``public shareholder'' and
``public holder'' to Rule 800, which includes definitions that apply to
the entire Rule 800 Series. The Exchange proposes to delete the
remainder of Rule 802, which relates to determinations concerning
listing or delisting, and is therefore irrelevant since the Exchange
does not list securities pursuant to the Rule 800 Series.
The Exchange proposes to change the title of Rule 803 from
``Criteria for Listing--Tier I'' to ``Listing Standards for Unlisted
Trading Privileges.'' As discussed above, Rule 803(o) includes a
statement that the provisions of the Rule 800 Series that permit the
listing of securities will not be effective until the Exchange files a
proposed rule change under Section 19(b)(2) under the Act to amend its
rules to make any changes needed to comply with Rule 10A-3 under the
Act and to incorporate additional qualitative listing criteria, and
such proposed rule change is approved by the Commission. The Exchange
proposes to move this language to Rule 801, so that it is more
prominent at the beginning of this section of rules, and to revise the
existing language to state that the Exchange will not list securities
pursuant to any other rule until it complies with the aforementioned
conditions. The Exchange also proposes to add a reference to Rule 10C-1
under the Act, which requires securities exchanges that list equity
securities to adopt rules relating to the independence of compensation
committees and their advisers,\8\ and to expand the reference to
additional qualitative listing criteria to include other listing
criteria as well. As a result of this new language, the Exchange cannot
list securities pursuant to the Rule 800 Series until it files proposed
rules under Rule 10C-1, and such rules are approved by the Commission.
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\8\ See 17 CFR 240.10C-1.
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Finally, the Exchange proposes to add similar clarifying language
to Rule 867.5, which relates to compensation committees.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\9\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\10\ in particular, in that it is designed to
promote just and equitable principles of trade, 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, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The rule change will promote
these goals by clarifying further the intent of the Exchange's Rule 800
Series, which exists to permit the Exchange to extend UTP to NMS stocks
that are listed on another national securities exchange. The proposed
amendments to the Rule 800 Series emphasize that the Exchange does not
list securities pursuant to that series and that it will not list
securities pursuant to that series until it proposes certain rule
changes and those changes are approved by the Commission. These
clarifications will serve to protect investors and the public interest
by preventing confusion about the intent of the Rule 800 Series.
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\9\ 15 U.S.C. 78f(b).
\10\ 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 not necessary or appropriate in
furtherance of the purposes of the Act.
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) of the Act \11\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 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 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 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
[[Page 62558]]
Number SR-Phlx-2012-115 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2012-115. 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 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-Phlx-2012-115, and should be submitted on or before
November 5, 2012.
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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-25279 Filed 10-12-12; 8:45 am]
BILLING CODE 8011-01-P