Federal Register / Vol. 80, No. 71 / Tuesday, April 14, 2015 / Notices 20049 

8 17 CFR 200.30–3(a)(12). 

1 15 U.S.C.78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

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 

filings also will be available for 

inspection and copying at the principal 

office of ICE Clear Credit and on ICE 

Clear Credit’s Web site at https://

www.theice.com/clear-credit/regulation. 

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–ICC–2015–008 and should 

be submitted on or before May 5, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–08448 Filed 4–13–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, April 16, 2015 at 2:00 p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or her designee, has 

certified that, in her opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (5), (7), 9(ii) 

and (10), permit consideration of the 

scheduled matter at the Closed Meeting. 

Commissioner Stein, as duty officer, 

voted to consider the items listed for the 

Closed Meeting in closed session, and 

determined that no earlier notice thereof 

was possible. 

The subject matter of the Closed 

Meeting will be: 

Institution of injunctive actions; 

Institution and settlement of 

administrative proceedings; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact the Office of the Secretary at 

(202) 551–5400. 

Dated: April 9, 2015. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–08630 Filed 4–10–15; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74677; File No. SR– 

NYSEMKT–2015–23] 

Self-Regulatory Organizations; NYSE 

MKT, LLC; Notice of Filing of Proposed 

Rule Change Adopting a PrinciplesBased Approach To Prohibit the 

Misuse of Material Nonpublic 

Information by Specialists and eSpecialists by Deleting Rule 927.3NY 

and Section (f) of Rule 927.5NY 

April 8, 2015. 

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 March 

26, 2015, NYSE MKT LLC (the 

‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to adopt a 

principles-based approach to prohibit 

the misuse of material nonpublic 

information by Specialists and eSpecialists by deleting Rule 927.3NY 

and section (f) of Rule 927.5NY. 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 adopt a 

principles-based approach to prohibit 

the misuse of material nonpublic 

information by Specialists and eSpecialists by deleting Rule 927.3NY 

and section (f) of Rule 927.5NY. In so 

doing, the Exchange would harmonize 

its rules governing Specialists, eSpecialists and Market Makers relating 

to protecting against the misuse of 

material, non-public information. The 

Exchange believes that Rules 927.3NY 

and 927.5NY(f) are no longer necessary 

because all ATP Holders, including 

Specialists and e-Specialists, are subject 

to the Exchange’s general principlesbased requirements governing the 

protection against the misuse of 

material, non-public information, 

pursuant to Exchange Rules, Part 1— 

General Rules, Rule 3 (General 

Prohibitions and Duty to Report), 

section (j) (‘‘Rule 3(j)’’), which obviates 

the need for separately-prescribed 

requirements for a subset of market 

participants on the Exchange. 

Background 

The Exchange has three classes of 

registered market makers. Pursuant to 

Rule 920NY(a), a Market Maker is an 

ATP holder that is registered with the 

Exchange for the purpose of submitting 

quotes electronically and making 

transactions as a dealer-specialist 

verbally on the Trading Floor, through 

the System from the Trading Floor, or 

remotely from off the Trading Floor. As 

the rule further provides, a Market 

Maker can be either a Remote Market 

Maker, a Floor Market Maker, a 

Specialist, or an e-Specialist. All Market 

Makers are subject to the requirements 

of Rule 925NY and 925.1NY, which set 

forth the obligations of Market Makers, 

particularly relating to quoting. 


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4Compare Rule 925.1NY(b) (‘‘Specialists must 

provide continuous two-sided quotations 

throughout the trading day in its appointed issues 

[sic] 90% of the time the Exchange is open for 

trading in each issue.’’) with Rule 925.1NY(c) (‘‘A 

Market Maker must provide continuous two-sided 

quotations throughout the trading day in its 

appointed issues for 60% of the time the Exchange 

is open for trading in each issue.’’) 

5See Rule 964NY(b)(2)(C). 

6See Rules 927NY(c) and 927.5NY. 

7The Exchange notes that by deleting Rule 

927.3NY, the Exchange would no longer require 

specific information barriers for Specialists or 

require pre-approval of any information barriers 

that a Specialist would erect for purposes of 

protecting against the misuse of material non-public 

information. However, as is the case today with 

Market Makers, information barriers of new 

entrants, including new Specialists, would be 

subject to review as part of a new firm application. 

Moreover, the policies and procedures of 

Specialists and e-Specialists, including those 

relating to information barriers, would be subject to 

Rule 927NY(c) specifies the 

obligations of Specialists, which, in 

addition to the Market Maker 

obligations of Rule 925NY, must also 

honor guaranteed markets. Rules 

927.4NY and 927.5NY specify the 

obligations of e-Specialists, which is a 

form of Specialist that operates remotely 

only. The quoting obligations of all 

Market Makers, including Specialists/eSpecialists, are set forth in Rule 

925.1NY. That rule sets forth the main 

difference between Market Makers and 

Specialists/e-Specialists, namely that 

Specialists/e-Specialists have a 

heightened quoting obligation as 

compared to Market Makers.4 In 

addition to a heightened quoting 

obligation, pursuant to Rule 964NY, 

Specialists/e-Specialists that are 

participants in the Specialist Pool are 

eligible to receive a guaranteed 

participation of incoming bids and 

offers.5

Importantly, whether operating on the 

Trading Floor or remotely, all Market 

Makers, including Specialists/eSpecialists, have access to the same 

information in the Consolidated Book 

that is available to all other market 

participants. Moreover, none of the 

Exchange’s Market Makers, including 

Specialists/e-Specialists, have agency 

obligations to the Exchange’s 

Consolidated Book. As such, the 

distinctions between Market Makers and 

Specialists/e-Specialists are the quoting 

requirements set forth in Rule 925.1NY 

and allocation guarantee for the 

Specialist Pool set forth in Rule 964NY. 

Notwithstanding that Market Makers, 

Specialists, and e-Specialists have 

access to the same Exchange trading 

information as all other market 

participants on the Exchange, the 

Exchange has distinct, prescriptive rules 

governing how Specialists and eSpecialists may operate. Rule 927.3NY 

prohibits ATP Holders affiliated with a 

Specialist from purchasing or selling 

any option to which the Specialist is 

appointed, except to reduce or liquidate 

positions after appropriate identification 

and floor official approval of the 

transaction. The rule further provides an 

exemption from the prohibition for 

affiliated firms that implement specified 

Exchange-approved procedures to 

restrict the flow of material, non-public 

information. Rules 927.3NY(e)–(j) 

outline the ‘‘Exemption Guidelines’’ 

with which an affiliated firm must 

comply to obtain an exemption from the 

restriction in Rule 927.3NY. These 

specified ‘‘Exemption Guidelines’’ are 

meant to ensure that a Specialist will 

not have access to material, non-public 

information possessed by its affiliated 

ATP Holder, and that a firm will not 

misuse its affiliated Specialist’s 

material, non-public information. The 

Exchange notes that the current rule is 

based on requirements from when 

specialists on the American Stock 

Exchange had agency obligations to the 

Exchange’s book. 

Rule 927.5NY(f) requires e-Specialists 

to maintain information barriers that are 

reasonably designed to prevent the 

misuse of material, non-public 

information with any affiliates that may 

conduct a brokerage business in option 

classes allocated to the e-Specialist or 

act as specialist or Market Maker in any 

security underlying options allocated to 

the e-Specialist (but does not require 

prior Exchange approval and does not 

set forth proscribed ‘‘Exemption 

Guidelines’’). 

Proposed Rule Change 

The Exchange believes that the 

particularized guidelines in Rule 

927.3NY and 927.5NY(f) for Specialists 

and e-Specialists, respectively, are no 

longer necessary and proposes to delete 

them. Rather, the Exchange believes that 

Rule 3(j) governing the misuse of 

material, non-public information 

provides for an appropriate, principlesbased approach to prevent the market 

abuses Rules 927.3NY and 927.5(f) are 

designed to address. Specifically, Rule 

3(j) requires every Exchange member to 

establish, maintain, and enforce written 

policies and procedures reasonably 

designed to prevent the misuse of 

material, non-public information by 

such member or associated persons. For 

purposes of this requirement, the 

misuse of material, non-public 

information includes, but is not limited 

to, the following: 

(a) Trading in any securities issued by 

a corporation, or in any related 

securities or related options or other 

derivative securities, while in 

possession of material, non-public 

information concerning that issuer; 

(b) trading in a security or related 

options or other derivative securities, 

while in possession of material, nonpublic information concerning 

imminent transactions in the security or 

related securities; or 

(c) disclosing to another person or 

entity any material, non-public 

information involving a corporation 

whose shares are publicly traded or an 

imminent transaction in an underlying 

security or related securities for the 

purpose of facilitating the possible 

misuse of such material, non-public 

information. 

Because Specialists and e-Specialists 

are already subject to the requirements 

of Rule 3(j), the Exchange does not 

believe that it is necessary to separately 

require specific limitations on dealings 

between Specialists/e-Specialists and 

their affiliates. Deleting Rule 927.3NY 

and 927.5NY(f) and requirements for 

specific procedures would provide 

Specialists/e-Specialists and ATP 

Holders with the flexibility to adapt 

their policies and procedures as 

appropriate to reflect changes to their 

business model, business activities, or 

the securities market in a manner 

similar to how Market Makers on the 

Exchange currently operate and 

consistent with Rule 3(j). 

As noted above, Exchange Specialists 

and e-Specialists are distinguished 

under Exchange rules from other types 

of Market Makers only to the extent that 

Specialists and e-Specialists have 

heightened obligations and allocation 

guarantees. However, none of these 

heightened obligations provides [sic] 

different or greater access to nonpublic 

information than any other market 

participant on the Exchange.6

Specifically, whether on the Trading 

Floor or remotely, neither Specialists 

nor e-Specialists on the Exchange have 

access to trading information provided 

by the Exchange, either at, or prior to, 

the point of execution, that is not made 

available to all other market participants 

on the Exchange in a similar manner. 

Further, as noted above, Specialists/eSpecialists on the Exchange do not have 

any agency responsibilities for orders in 

the Consolidated Book. Accordingly, 

because Specialists, e-Specialists and 

Market Makers do not have any trading 

advantages at the Exchange due to their 

market role, the Exchange believes that 

they should be subject to the same rules 

regarding the protection against the 

misuse of material non-public 

information, which in this case, is 

existing Rule 3(j).7


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Federal Register / Vol. 80, No. 71 / Tuesday, April 14, 2015 / Notices 20051 

review by FINRA, on behalf of the Exchange, 

pursuant to a Regulatory Services Agreement. 

8See Securities Exchange Act Release Nos. 60604 

(Sept. 2, 2009), 76 FR 46272 (Sept. 8, 2009) (SR– 

NYSEArca–2009–78) (Order approving elimination 

of NYSE Arca rule that required market makers to 

establish and maintain specifically prescribed 

information barriers, including discussion of NYSE 

Arca and Nasdaq rules) (‘‘Arca Approval Order’’); 

61574 (Feb. 23, 2010), 75 FR 9455 (Mar. 2, 2010) 

(SR–BATS–2010–003) (Order approving 

amendments to BATS Rule 5.5 to move to a 

principles-based approach to protecting against the 

misuse of material, non-public information, and 

noting that the proposed change is consistent with 

the approaches of NYSE Arca and Nasdaq) (‘‘BATS 

Approval Order’’); and 72534 (July 3, 2014), 79 FR 

39440 (July 10, 2014), SR–NYSE–2014–12) (Order 

approving amendments to NYSE Rule 98 governing 

designated market makers to move to a principlesbased approach to prohibit the misuse of material 

non-public information) (‘‘NYSE Approval Order’’). 

9See, e.g., BATS Approval Order, supra note 8 at 

9458. 

10 17 CFR part 242.200(f). 

11 15 U.S.C. 78o(g). 12 17 CFR part 240.15c3–5. 

The Exchange notes that its proposed 

approach to use a principles-based 

approach to protecting against the 

misuse of material non-public 

information for all of its registered 

market makers is consistent with recent 

approved rule changes for NYSE Arca 

Equities, Inc. (‘‘NYSE Arca’’), BATS 

Exchange, Inc.’s (‘‘BATS’’), and New 

York Stock Exchange LLC (‘‘NYSE’’) 

rules governing cash equity market 

makers on those respective exchanges.8

Except for prescribed rules relating to 

floor-based designated market makers 

on the NYSE, who have access to 

specified non-public trading 

information, each of these exchanges 

have moved to a principles-based 

approach to protecting against the 

misuse of material non-public 

information. In connection with 

approving those rule changes, the 

Commission found that eliminating 

prescriptive information barrier 

requirements should not reduce the 

effectiveness of exchange rules requiring 

its members to establish and maintain 

systems to supervise the activities of its 

members, including written procedures 

reasonably designed to ensure 

compliance with applicable federal 

securities law and regulations, and with 

the rules of the applicable exchange.9

Comparable to members of cash 

equity markets, the Exchange believes 

that a principles-based rule applicable 

to members of options markets would be 

equally effective in protecting against 

the misuse of material non-public 

information. Indeed, Exchange Rule 3(j) 

is currently applicable to Exchange 

Market Makers other than Specialists 

and e-Specialists and already requires 

all ATP Holders to have policies and 

procedures reasonably designed to 

protect against the misuse of material 

nonpublic information, which is similar 

to the respective NYSE Arca Equities, 

BATS and NYSE rules governing cash 

equity market makers. The Exchange 

believes Rule 3(j) provides appropriate 

protection against the misuse of material 

nonpublic information by Specialists 

and e-Specialists on the Exchange and 

there is no longer a need for prescriptive 

information barrier requirements in 

Rules 927.3NY and 927.5NY(f). 

The Exchange notes that even with 

this proposed rule change, pursuant to 

Rule 3(j), a Specialist or e-Specialist 

would still be obligated to ensure that 

its policies and procedures reflect the 

current state of its business and 

continue to be reasonably designed to 

achieve compliance with applicable 

federal securities law and regulations, 

and with applicable Exchange rules, 

including being reasonably designed to 

protect against the misuse of material, 

non-public information. While 

information barriers would not 

specifically be required under the 

proposal, Rule 3(j) already requires that 

an ATP Holder consider its business 

model or business activities in 

structuring its policies and procedures, 

which may dictate that an information 

barrier or a functional separation be part 

of the appropriate set of policies and 

procedures that would be reasonably 

designed to achieve compliance with 

applicable securities law and 

regulations, and with applicable 

Exchange rules. 

The Exchange further notes that under 

Rule 3(j), an ATP Holder would be able 

[sic] structure its firm to provide for its 

options Specialists, e-Specialists, or 

Market Makers, as applicable, to be 

structured with its equities and 

customer-facing businesses, provided 

that any such structuring would be done 

in a manner reasonably designed to 

protect against the misuse of material, 

non-public information. For example, 

pursuant to Rule 3(j), a Specialist on the 

Exchange could be in the same 

independent trading unit, as defined in 

Rule 200(f) of Regulation SHO,10 as an 

equities market maker and other trading 

desks within the firm, including options 

trading desks, so that the firm could 

share post-trade information to better 

manage its risk across related securities. 

The Exchange believes it is appropriate, 

and consistent with Rule 3(j) and 

Section 15(g) of the Act 11 for a firm to 

share options position and related 

hedging position information (e.g., 

equities, futures, and foreign currency) 

within a firm to better manage risk on 

a firm-wide basis. The Exchange notes, 

however, that if so structured, a firm 

would need to have appropriate policies 

and procedures, including information 

barriers as applicable, to protect against 

the misuse of material non-public 

information, and specifically customer 

information, consistent with Rule 3(j). 

The Exchange believes that the 

proposed reliance on the principlesbased Rule 3(j) would ensure that an 

ATP Holder that operates a Specialist or 

e-Specialist would be required to 

protect against the misuse of any 

material non-public information. As 

noted above, Rule 3(j) already requires 

that firms refrain from trading while in 

possession of material non-public 

information concerning imminent 

transactions in the security or related 

product. The Exchange believes that 

moving to a principles-based approach 

rather than prescribing how and when 

to wall off a Specialist or e-Specialist 

from the rest of the firm would provide 

ATP Holders operating Specialists or eSpecialists with appropriate tools to 

better manage risk across a firm, 

including integrating options positions 

with other positions of the firm or, as 

applicable, by the respective 

independent trading unit. Specifically, 

the Exchange believes that it is 

appropriate for risk management 

purposes for a member operating a 

Specialist or e-Specialist to be able to 

consider both options Specialist/eSpecialist traded positions for purposes 

of calculating net positions consistent 

with Rule 200 of Regulation SHO, 

calculating intra-day net capital 

positions, and managing risk both 

generally as well as in compliance with 

Rule 15c3–5 under the Act (the ‘‘Market 

Access Rule’’).12 The Exchange notes 

that any risk management operations 

would need to operate consistent with 

the requirement to protect against the 

misuse of material non-public 

information. 

The Exchange further notes that if 

Specialists or e-Specialists are 

integrated with other market making 

operations, they would be subject to 

existing rules that prohibit ATP Holders 

from disadvantaging their customers or 

other market participants by improperly 

capitalizing on a member organization’s 

access to the receipt of material, nonpublic information. As such, a member 

organization that integrates its 

Specialist/e-Specialist operations 

together with equity market making 

would need to protect customer 

information consistent with existing 

obligations to protect such information. 

The Exchange has rules prohibiting 

members from disadvantaging their 

customers or other market participants 

by improperly capitalizing on the 


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13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(5). 15See 15 U.S.C. 78o(g) and Rule 3(j). 

members’ [sic] access to or receipt of 

material, non-public information. For 

example, Rule 320 requires members to 

establish, maintain, enforce, and keep 

current a system of compliance and 

supervisory controls, reasonably 

designed to achieve compliance with 

applicable securities laws and Exchange 

rules. Additionally, Rule 995NY(c) 

prevents an ATP Holder or person 

associated with an ATP Holder, who has 

knowledge of an originating order, a 

solicited order, or a facilitation order, to 

enter, based on such knowledge, an 

order to buy or sell an option on the 

underlying securities of any option that 

is the subject of the order, an order to 

buy or sell the security underlying any 

option that is the subject of the order, 

or any order to buy or sell any related 

instrument unless certain circumstances 

are met. 

The Exchange proposes to make a 

conforming amendment to remove the 

section referencing Rule 927.3NY in 

Rule 927.6NY. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 13 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 14

in particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, 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. 

The Exchange believes that the 

proposed rule change would remove 

impediments to and perfect the 

mechanism of a free and open market by 

adopting a principles-based approach to 

permit an ATP Holder operating a 

Specialist or e-Specialist to maintain 

and enforce policies and procedures to, 

among other things, prohibit the misuse 

of material non-public information and 

eliminating restrictions on how an ATP 

Holder structures it Specialist or eSpecialist operations. The Exchange 

notes that the proposed rule change is 

based on an approved rule of the 

Exchange to which Specialists and eSpecialists are already subject—Rule 

3(j)—and harmonizes the rules 

governing Specialists, e-Specialists, and 

Market Makers. Moreover, ATP Holders 

operating Specialists and e-Specialists 

would continue to be subject to federal 

and Exchange requirements for 

protecting material non-public order 

information.15 The Exchange believes 

that the proposed rule change would 

remove impediments to and perfect the 

mechanism of a free and open market 

because it would harmonize the 

Exchange’s approach to protecting 

against the misuse of material nonpublic 

information and no longer subject 

Specialists/e-Specialists to prescriptive 

requirements. The Exchange does not 

believes that the existing prescriptive 

requirements applicable to Specialists/

e-Specialists are narrowly tailored to 

their respective roles because neither 

market participant has access to 

Exchange trading information in a 

manner different from any other market 

participant on the Exchange and they do 

not have agency responsibilities to the 

Consolidated Book. 

The Exchange further believes the 

proposal is designed to prevent 

fraudulent and manipulative acts and 

practices and to promote just and 

equitable principles of trade because 

existing rules make clear to Specialists, 

e-Specialists and ATP Holders the type 

of conduct that is prohibited by the 

Exchange. While the proposal 

eliminates prescriptive requirements 

relating to the misuse of material nonpublic information, Specialists, eSpecialists and ATP Holders would 

remain subject to existing Exchange 

rules requiring them to establish and 

maintain systems to supervise their 

activities, and to create, implement, and 

maintain written procedures that are 

reasonably designed to comply with 

applicable securities laws and Exchange 

rules, including the prohibition on the 

misuse of material, nonpublic 

information. 

The Exchange notes that the proposed 

rule change would still require that ATP 

Holders operating Specialists and eSpecialists maintain and enforce 

policies and procedures reasonably 

designed to ensure compliance with 

applicable federal securities laws and 

regulations and with Exchange rules. 

Even though there would no longer be 

pre-approval of Specialist information 

barriers, any Specialist/e-Specialist 

written policies and procedures would 

continue to be subject to oversight by 

the Exchange and therefore the 

elimination of prescribed restrictions 

should not reduce the effectiveness of 

the Exchange rules to protect against the 

misuse of material non-public 

information. Rather, ATP Holders will 

be able to utilize a flexible, principlesbased approach to modify their policies 

and procedures as appropriate to reflect 

changes to their business model, 

business activities, or to the securities 

market itself. Moreover, while specified 

information barriers may no longer be 

required, an ATP Holder’s business 

model or business activities may dictate 

that an information barrier or functional 

separation be part of the appropriate set 

of policies and procedures that would 

be reasonably designed to achieve 

compliance with applicable securities 

laws and regulations, and with 

applicable Exchange rules. The 

Exchange therefore believes that the 

proposed rule change will maintain the 

existing protection of investors and the 

public interest that is currently 

applicable to Specialists and 

e-Specialists, while at the same time 

removing impediments to and 

perfecting a free and open market by 

moving to a principles-based approach 

to protect against the misuse of material 

non-public information. 

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. To the 

contrary, the Exchange believes that the 

proposal will enhance competition by 

allowing Specialists, e-Specialists and 

Market Makers to comply with 

applicable Exchange rules in a manner 

best suited to their business models, 

business activities, and the securities 

markets, thus reducing regulatory 

burdens while still ensuring compliance 

with applicable securities laws and 

regulations and Exchange rules. The 

Exchange believes that the proposal will 

foster a fair and orderly marketplace 

without being overly burdensome upon 

Specialists and e-Specialists. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or up to 90 days (i) as the 

Commission may designate if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 

or (ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the proposed rule change, or 


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Federal Register / Vol. 80, No. 71 / Tuesday, April 14, 2015 / Notices 20053 

16 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Mary Jo White, Chair, Securities and 

Exchange Commission, Speech at the Sandler, 

O’Neill & Partners, L.P. Global Exchange and 

Brokerage Conference (June 5, 2014) (available at 

www.sec.gov/News/Speech/Detail/Speech/

1370542004312#.U5HI-fmwJiw). 5See Letter from James Burns, Deputy Director, 

Division of Trading and Markets, Securities and 

Exchange Commission, to Jeffrey C. Sprecher, Chief 

Executive Officer, Intercontinental Exchange, Inc., 

dated June 20, 2014. 6See Securities Exchange Act Release No. 71897 

(April 8, 2014), 79 FR 20953 (April 14, 2014) (SR– 

NYSE–2014–16) (‘‘2014 Pegging Filing’’) (amending 

rules governing pegging interest to conform to 

functionality that is available at the Exchange). 7See, e.g., Securities Exchange Act Release Nos. 

68302 (Nov. 27, 2012), 77 FR 71658 (Dec. 3, 2012) 

(SR–NYSE–2012–65) (amending rules governing 

pegging interest to, among other things, make nonsubstantive changes, including moving the rule text 

from Rule 70.26 to Rule 13, to make the rule text 

more focused and streamlined) (‘‘2012 Pegging 

Filing’’), and 71175 (Dec. 23, 2013), 78 FR 79534 

(Dec. 30, 2013) (SR–NYSE–2013–21) (approval 

order for rule proposal that, among other things, 

amended Rule 70 governing Floor broker reserve equotes that streamlined the rule text without 

making substantive changes) (‘‘2013 Reserve eQuote Filing’’). 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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 rule-comments@

sec.gov. Please include File Number SR– 

NYSEMKT–2015–23 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEMKT–2015–23. 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–2015–23 and should be 

submitted on or before May 5, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–08449 Filed 4–13–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74678; File No. SR–NYSE– 

2015–15] 

Self-Regulatory Organizations; New 

York Stock Exchange, LLC; Notice of 

Filing of Proposed Rule Change 

Amending Rule 13 and Related Rules 

Governing Order Types and Modifiers 

April 8, 2015. 

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 March 24, 

2015, New York Stock Exchange LLC 

(‘‘NYSE’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 13 and related rules governing 

order types and modifiers. 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 

On June 5, 2014, in a speech entitled 

‘‘Enhancing Our Market Equity 

Structure,’’ Mary Jo White, Chair of the 

Securities and Exchange Commission 

(‘‘SEC’’ or the ‘‘Commission’’) requested 

the equity exchanges to conduct a 

comprehensive review of their order 

types and how they operate in practice, 

and as part of this review, consider 

appropriate rule changes to help clarify 

the nature of their order types.4

Subsequent to the Chair’s speech, the 

SEC’s Division of Trading and Markets 

requested that the equity exchanges 

complete their reviews and submit any 

proposed rule changes.5

The Exchange notes that it 

continually assesses its rules governing 

order types and undertook on its own 

initiative a review of its rules related to 

order functionality to assure that its 

various order types, which have been 

adopted and amended over the years, 

accurately describe the functionality 

associated with those order types, and 

more specifically, how different order 

types may interact. As a result of that 

review, the Exchange submitted a 

proposed rule change to delete rules 

relating to functionality that was not 

available.6 In addition, over the years, 

when filing rule changes to adopt new 

functionality, the Exchange has used 

those filings as an opportunity to 

streamline related existing rule text for 

which functionality has not changed.7

The Exchange is filing this proposed 

rule change to continue with its efforts 


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