[Federal Register Volume 80, Number 239 (Monday, December 14, 2015)]
[Notices]
[Pages 77392-77394]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31329]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-76591; File No. SR-NYSE-2015-63]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending the NYSE Listed Company Manual To Provide That Any Senior
Official of a Listed Company With the Rank of Corporate Secretary or
Higher Can Sign the Written Request of a Listed Company Seeking To
Change Its Designated Market Maker Unit Required by Section 806.01 of
the Manual
December 8, 2015.
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 November 25, 2015, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the NYSE Listed Company Manual (the
``Manual'') to provide that any senior official of a listed company
with the rank of Corporate Secretary or higher can sign the written
request of a listed company seeking to change its designated market
maker (``DMM'') unit required by Section 806.01 of the Manual. The
filing also proposes to replace outdated references throughout the
Manual to ``Specialists'' with references to ``DMMs'' and update the
text of Section 402.09(E) to reflect the current text of NYSE Rule 460.
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 amend the Manual to provide that any
senior official of a listed company with the rank of Corporate
Secretary or higher can sign the written request of a listed company
seeking to change its DMM unit required by Section 806.01 of the
Manual. The filing also proposes to replace outdated references
throughout the Manual to ``Specialists'' with
[[Page 77393]]
references to ``DMMs'' and update the text of Section 402.09(E) to
reflect the current text of NYSE Rule 460.
Section 806.01 of the Manual establishes a process to be followed
by any listed company wishing to change to a new DMM unit. Pursuant to
Section 806.01, a listed company wishing to change DMM units must file
with the Corporate Secretary of the Exchange a written notice (the
``Issuer Notice''), signed by the company's chief executive officer.
The Issuer Notice is required to indicate the specific issues prompting
this request. It has been the Exchange's experience that companies have
occasionally found it burdensome to obtain the signature of their CEO
for purposes of submitting an Issuer Notice and that this requirement
has caused an undesirable delay when companies are making their
submissions. We also note that this requirement is inconsistent with
the Exchange Rule 103B, which provides that any senior official with
the rank of Corporate Secretary or higher (or, in the case of a
structured product listing, a senior officer of the issuer) can sign
the notice in which a listed company informs the Exchange of its
initial selection of a DMM unit. It has been the Exchange's experience
that a senior officer other than the chief executive officer often
manages the DMM relationship on behalf of the listed company and has
authority to take action in relation to that relationship. In light of
that fact, the Exchange believes there is no reason to have different
requirements with respect to the commencement and severing of a listed
company's relationship with its DMM unit. Consequently, we propose to
amend Section 806.01 to provide that any official with the rank of
Corporate Secretary or higher at a listed company may sign an Issuer
Notice.
The Exchange amended its rules a number of years ago to
significantly change the role of specialists on the trading floor.\3\
In connection with that change, the Exchange adopted the new title of
``designated market maker'' or ``DMM'' for specialists. Several
sections of the Manual (Sections 106.02, 106.03 and 806.01) include
outdated references to specialists. The Exchange proposes to replace
these references with references to DMMs. In addition, Section
402.09(E) (``Rule 460--Specialists Participating in Contests or Serving
as Directors'') is intended as a repetition of Exchange Rule 460.
Exchange Rule 460 has been amended several times over the years and the
Exchange inadvertently failed to make conforming changes to Section
402.09(E).\4\ We now propose to replace the current text of Section
402.09(E) with the up-to-date text of Rule 460.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 58845 (October 24,
([sic] 2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46).
\4\ See Securities Exchange Act Release No. 58328 (August 7,
2008), 73 FR 48260 (August 18, 2008) (SR-NYSE-2008-45). See also
Securities Exchange Act Release No. 58845 (October 24, ([sic] 2008),
73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46). See also
Securities Exchange Act Release No. 66709 (April 2, 2012), 77 FR
20870 (April 6, 2012) (SR-NYSE-2012-06).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) \5\ of the Act, in general, and furthers the
objectives of Section 6(b)(5) of the Act,\6\ in particular in that it
is designed 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, in general, to protect investors and the public interest
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers. The Exchange believes that the proposed
amendment is consistent with the investor protection objectives of
Section 6(b)(5) because it is designed to ensure that listed companies
are able to expeditiously change their DMM unit when senior management
of the listed company believes it is desirable to do so. An effective
relationship between the listed company and the DMM is important to the
maintenance of a high quality market for the company's securities and
is therefore in the interests of investors.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The replacement of references to ``specialists'' with references to
``DMMs'' and the amendment of the text of Section 402.09(E) are non-
substantive changes to update the terminology and reflect the
Exchange's current Rule 460 and therefore have no implications for the
protection of investors.
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 purpose of the Act. The proposed rule change is
designed to permit listed companies to apply for a change in the DMM
unit allocated to their securities on the basis of a notice signed by
any officer with the title of Corporate Secretary or higher rather than
requiring that it be signed in all cases by the CEO, as is currently
the case. The proposed amendment simply provides more flexibility in
providing the required paperwork and conforms the signing requirements
with respect to the commencement and severing of a listed company's
relationship with its DMM unit, but does not change any of the
substantive rights of the listed company or the DMM unit in any way. As
such, the Exchange does not expect the rule change to have any
significant impact on competition. The other proposed changes are non-
substantive changes to update terminology and reflect the Exchange's
current Rule 460 and therefore have no significant impact on
competition.
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 \7\ and Rule 19b-4(f)(6) thereunder.\8\
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 for 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 \9\ and Rule 19b-
4(f)(6) thereunder.\10\
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 17 CFR 240.19b-4(f)(6).
\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's 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.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the
[[Page 77394]]
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 proposed rule change may become operative immediately. The Exchange
believes that providing greater flexibility in the preparation of the
paperwork needed to request a change of DMM unit is in the interests of
investors as it is important to the maintenance of a high quality
market for an issuer's stock that the issuer has a good relationship
with its DMM. As the Exchange notes in its filing, the proposal would
better conform the process for changing a DMM to that which is used for
initially selecting a DMM. In particular, the officer's signature that
would be required to change a company's DMM must be that of a senior
official at the company with a rank of Corporate Secretary or above.
Furthermore, the other rule changes proposed by the Exchange are also
conforming changes that would make the Manual more consistent with the
Exchange's current rules. Based on the foregoing, the Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. For this reason, the
Commission hereby waives the 30-day operative delay and designates the
proposal operative upon filing.\13\
---------------------------------------------------------------------------
\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ 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).
---------------------------------------------------------------------------
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 change 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 Number SR-NYSE-2015-63 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-NYSE-2015-63. 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 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-NYSE-2015-63,
and should be submitted on or before January 4, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------
Brent J. Fields,
Secretary.
[FR Doc. 2015-31329 Filed 12-11-15; 8:45 am]
BILLING CODE 8011-01-P