[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62825-62827]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-24685]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70697; File No. SR-NYSE-2013-69]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
for a Temporary Suspension of Those Aspects of Rules 36.20 and 36.21
That Would Not Permit Floor Brokers To Use Personal Portable Phone
Devices on The Trading Floor Due to the Unavailability of Exchange-
Provided Cell Phones Beginning on October 10, 2013 Until the Earlier of
When Cell Phone Service Is Restored or October 11, 2013
October 16, 2013.
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 October 10, 2013, 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
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 a temporary suspension of those aspects of
Rules 36.20 and 36.21 that would not permit Floor brokers to use
personal portable phone devices on the Trading Floor due to the
unavailability of Exchange-provided cell phones beginning on October
10, 2013 until the earlier of when cell phone service is restored or
October 11, 2013. The text of 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 temporarily suspend those aspects of Rules
36.20 and 36.21 that would not permit Floor brokers to use personal
portable phone devices on the Trading Floor.\4\ As proposed, all other
aspects of Rule 36 remain applicable and the temporary suspensions of
the applicable Rule 36 requirements are in effect beginning October 10,
2013 when the outage began, and remain in place until the earlier of
when phone service is restored or close of business Friday, October 11,
2013.\5\
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\4\ Pursuant to Rule 6A, the Trading Floor is defined as the
restricted-access physical areas designated by the Exchange for the
trading of securities.
\5\ The Exchange provided Floor brokers with notice of this rule
filing, including the applicable recordkeeping and other
requirements related to using personal cell phones during the
temporary suspension of Rule 36.
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On October 10, 2013, the third-party carrier that provides service
for the Exchange-provided cell phones experienced an issue that
affected Exchange authorized and provided
[[Page 62826]]
portable phones for Floor brokers. This outage only impacted the
service for Exchange authorized and provided portable phones. As a
result, all Exchange authorized and provided cell phones were non-
operational before the opening of trading on October 10, 2013. The
Exchange is working closely with the third-party carrier to restore
such cell phone service.
Rules 36.20 and 36.21 govern the type of telephone communications
that are approved for Floor brokers. Pursuant to Rule 36.20, Floor
brokers may maintain a telephone line on the Trading Floor and use
Exchange authorized and provided portable phones while on the Trading
Floor. The use of such Exchange authorized and provided portable phones
is governed by Rule 36.21. Because of the issues with the third-party
carrier, all Exchange authorized and provided portable phones are not
functional and therefore Floor brokers cannot use the Exchange
authorized and provided portable phones. However, the personal cell
phones of Floor brokers are operational on the Trading Floor. The
Exchange believes that because communications with customers is a vital
part of a Floor broker's role as agent and therefore contributes to
maintaining a fair and orderly market, during the period when Exchange-
provided cell phones are non-operational, Floor brokers should be
permitted to use personal portable phone devices in lieu of the non-
operational Exchange authorized and provided portable phones.
The Exchange therefore proposes to temporarily suspend the
limitations in Rules 36.20 and 36.21 that permit Floor brokers to use
only Exchange authorized and provided portable phones so that Floor
brokers may also use personal portable phones on the Trading Floor. The
Exchange proposes that pursuant to this temporary suspension, Floor
brokers must provide the Exchange with the names of all Floor-based
personnel who used personal portable phones during this temporary
suspension period, together with the phone number and applicable
carrier for each number. Floor broker member organizations must
maintain in their books and records all cell phone records that show
both incoming and outgoing calls that were made during the period that
a personal portable phone was used on the Trading Floor. To the extent
the records are unavailable from the third-party carrier, the Floor
brokers must maintain contemporaneous records of all calls made or
received on a personal portable phone while on the Trading Floor. As
with all member organization records, such cell phone records must be
provided to Exchange regulatory staff, including without limitation
staff of the Financial Industry Regulatory Authority (``FINRA''), on
request.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\6\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\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.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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In particular, because of issues experienced by a third-party cell
phone carrier, Exchange authorized and provided cell phones are not
functional. The Exchange believes that the proposed temporary
suspensions from those aspects of Rule 36 that restrict Floor broker's
use of personal portable phones on the Trading Floor removes
impediments to and perfects the mechanism of a free and open market and
national market system because the proposed relief will enable Floor
brokers to conduct their regular business, notwithstanding the ongoing
issues with telephone service. The Exchange further believes that
without the requested relief, Floor brokers would be compromised in
their ability to conduct their regular course of business on the
Trading Floor. In particular, for Floor brokers, because they operate
as agents for customers, their inability to communicate with customers
could compromise their ability to represent public orders on the
Trading Floor.
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 Act. The Exchange does not
believe that the proposed rule change will impose any burden on
competition because the proposed change only impacts Floor brokers and
has no change in operations for other market participants or other
market centers. To the contrary, the Exchange believes that without the
proposed relief, Floor brokers would be compromised in their ability to
conduct their regular course of business on the Trading Floor, thereby
placing a burden on the Floor brokers' ability to compete.
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
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 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 under Rule 19b-4(f)(6) \12\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission
may 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 Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. Waiver of the
operative delay allows the terms of the relief described herein to be
available during the service outage for Exchange-provided cell phones.
Therefore, the Commission hereby waives the 30-day operative delay and
[[Page 62827]]
designates the proposal operative upon filing.\14\
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\12\ 17 CFR 240.19b-4(f)(6).
\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ For purposes only of waiving the 30-day operative delay,
the Commission has 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 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) of the Act \15\ to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(2)(B).
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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-2013-69 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-NYSE-2013-69. 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-NYSE-2013-69 and should be
submitted on or before November 12, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24685 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P