[Federal Register Volume 79, Number 81 (Monday, April 28, 2014)]
[Notices]
[Pages 23393-23395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-09526]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71988; File No. SR-NYSEMKT-2014-34]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Deleting NYSE MKT Rule
343--Equities to Harmonize the NYSE MKT's Rules With Changes by
Financial Industry Regulatory Authority, Inc. to Amend the Uniform
Branch Office Registration Form
April 22, 2014.
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 April 11, 2014, NYSE MKT LLC (``Exchange'' or ``NYSE MKT'')
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 delete NYSE MKT Rule 343--Equities to
harmonize the NYSE MKT's rules with changes by Financial Industry
Regulatory Authority, Inc. (``FINRA'') to amend the Uniform Branch
Office Registration Form (``Form BR''). 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to delete NYSE MKT Rule 343--Equities to
harmonize the NYSE MKT's rules with changes by FINRA to Form BR.
Background
On July 30, 2007, FINRA's predecessor, the National Association of
Securities Dealers, Inc. (``NASD''), and NYSE Regulation, Inc.
(``NYSER'') consolidated their member firm regulation operations into a
combined organization, FINRA. Pursuant to Rule 17d-2 under the Act, the
New York Stock Exchange (``NYSE''), NYSER and FINRA entered into an
agreement (the ``Agreement'') to reduce regulatory duplication for
their members by allocating to FINRA certain regulatory
responsibilities for NYSE rules and rule interpretations (``FINRA
Incorporated NYSE Rules''). NYSE MKT LLC (``NYSE MKT'') became a party
to the Agreement effective December 15, 2008.
As part of its effort to reduce regulatory duplication and relieve
firms that are members of FINRA, the Exchange, and NYSE of conflicting
or unnecessary regulatory burdens, FINRA is now engaged in the process
of reviewing and amending the NASD and FINRA Incorporated NYSE Rules in
order to create a consolidated FINRA rulebook.\4\ FINRA recently
harmonized NASD and FINRA Incorporated NYSE Rules and interpretations
concerning supervision.\5\ FINRA's supervisory rule changes will become
effective on December 1, 2014.\6\
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\4\ FINRA's rulebook currently has three sets of rules: (1) NASD
Rules, (2) FINRA Incorporated NYSE Rules, and (3) consolidated FINRA
Rules. The FINRA Incorporated NYSE Rules apply only to those members
of FINRA that are also members of the NYSE (``Dual Members''), while
the consolidated FINRA Rules apply to all FINRA members. For more
information about the FINRA rulebook consolidation process, see
FINRA Information Notice, March 12, 2008.
\5\ See Securities Exchange Act Release No. 71179 (December 23,
2013), 78 FR 79542 (December 30, 2013) (SR-FINRA-2013-025).
\6\ See FINRA Regulatory Notice 14-10.
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As part of this filing, FINRA deleted NYSE Rule 343 and its
interpretation.\7\
[[Page 23394]]
These provisions set forth certain pre-approval requirements for space
sharing.\8\ As part of the harmonization process, FINRA determined that
a pre-approval process was no longer necessary and instead NASD's
notice filing model would be utilized.
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\7\ NYSE Rule 343 is virtually identical to NYSE MKT Rule 343--
Equities except for certain technical differences. The Exchange does
not have a separate set of rule interpretations.
\8\ NYSE MKT Rule 343(a)--Equities provides that, unless
otherwise permitted by the Exchange, an office or foreign
incorporated branch of a member or member organization may not be
occupied jointly with any other broker or dealer, investment
advisor, or other person who conducts a securities or commodities
business with the public. Certain types of office space arrangements
that are deemed permissible are described in the rule. NYSE MKT Rule
343(b)--Equities provides that members and member organizations may
share office space with any person who is not a broker or dealer, an
investment advisor, or who does not conduct a securities or
commodities business with the public. NYSE MKT Rule 343(c)--Equities
provides that, unless otherwise permitted by the Exchange, the main
office of every member organization must remain open for business on
every full business day during the trading hours on the Exchange.
Supplementary Material 343.10--Equities provides additional guidance
relating to office space arrangements.
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FINRA also recently amended Form BR, which is used by firms to
register their branch offices with FINRA, the Exchange, and
participating states via the Central Registration Depository.\9\ Among
other things, the amendments to Form BR eliminated Section 6, which
incorporates space sharing arrangement questions relating to NYSE MKT
Rule 343--Equities. The changes to Form BR will become effective on
April 7, 2014.\10\
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\9\ See Securities Exchange Act Release No. 71626 (February 27,
2014), 79 FR 12547 (March 5, 2014) (SR-FINRA-2013-051).
\10\ See FINRA Regulatory Notice 14-11.
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Proposed Rule Change
As a result of the proposed changes to Form BR, there will no
longer be a mechanism to collect the information used for the space
sharing pre-approval process under NYSE MKT Rule 343--Equities, and as
such, the Exchange proposes to delete NYSE MKT Rule 343--Equities
effective on the same date that FINRA makes its changes to Form BR
effective, April 7, 2014, rather than the date that the supervisory
rule changes become effective, December 1, 2014. The Exchange notes
that it will be submitting a proposed rule change to harmonize the
remaining NASD and FINRA Incorporated NYSE Rules and interpretations
concerning supervision to coincide with FINRA's December 1, 2014
effective date. The Exchange will announce both effective dates via an
Information Memo.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\11\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\12\ in particular, because it
is designed to promote just and equitable principles of trade and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system. Specifically, the Exchange
believes that the proposed rule change supports the objectives of the
Act by providing greater harmonization between Exchange rules and FINRA
rules and forms of similar purpose, resulting in less burdensome and
more efficient regulatory compliance. In particular, deleting NYSE MKT
Rule 343--Equities would promote just and equitable principles of trade
by harmonizing the Exchange's rules with the Form BR, which is used by
the Commission, SROs, and states.
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\11\ 15 U.S.C. 78f(b).
\12\ 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 Act. The proposed rule change is
not intended to address competitive issues but rather to achieve
greater consistency between the Exchange's rules and Form BR.
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 \13\ and Rule 19b-4(f)(6) thereunder.\14\
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 and Rule 19b-
4(f)(6)(iii) thereunder.
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with 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.
\14\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\16\ 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 upon filing. The Commission believes that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest, as it will harmonize NYSE MKT's
rules with FINRA Rules at the same time that the revised Form BR
becomes operative, thus helping to eliminate confusion regarding broker
obligations.\17\ Therefore, the Commission designates the proposed rule
change to be operative upon filing. 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) \18\
of the Act to determine whether the proposed rule change should be
approved or disapproved.
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
\17\ 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).
\18\ 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-NYSEMKT-2014-34 on the subject line.
[[Page 23395]]
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-NYSEMKT-2014-34. 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 will also be available
for inspection and copying at the NYSE's principal office and on its
Internet Web site at www.nyse.com. 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-NYSEMKT-2014-34 and should be submitted on or before May
19, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-09526 Filed 4-25-14; 8:45 am]
BILLING CODE 8011-01-P