Federal Register / Vol. 79, No. 247 / Wednesday, December 24, 2014 / Notices 77573 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

instance, as noted above, the Exchange 

believes that protection of Customers is 

important due to their direct 

participation in the options markets as 

well as the fact that they are not, by 

definition, market professionals. At the 

same time, the Exchange believes due to 

the quote-driven nature of the options 

markets, the importance of liquidity 

provision in such markets and the risk 

that liquidity providers bear when 

quoting a large breadth of products that 

are derivative of underlying securities, 

that the protection of liquidity providers 

and the practice of adjusting 

transactions rather than nullifying them 

is of critical importance. As described 

above, the Exchange will apply specific 

and objective criteria to determine 

whether an erroneous transaction has 

occurred and, if so, how to adjust or 

nullify a transaction. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received written comments on 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 within such longer period 

up to 90 days after publication (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 

(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– 

BATS–2014–067 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–BATS–2014–067. 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–BATS– 

2014–067 and should be submitted on 

or before January 14, 2015.19

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–30127 Filed 12–23–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73883; File No. SR–NYSE– 

2014–66] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Amending Rule 

342 To Remove the Three Years’ 

Experience Requirement for 

Supervisory Personnel and To Add 

Supplementary Material to Rule 3110 

Stating That Supervisors Must 

Reasonably Discharge Their 

Supervisory Duties and Obligations 

December 18, 2014. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on December 8, 2014, 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 substantially prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. The Exchange 

has designated the proposed rule change 

as constituting a ‘‘non-controversial’’ 

rule change under Exchange Act Rule 

19b–4(f)(6), which renders the proposal 

effective upon receipt of this filing by 

the Commission. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

NYSE Rule 342 to remove the three 

years’ experience requirement for 

supervisory personnel and to add 

supplementary material to NYSE Rule 

3110 stating that supervisors must 

reasonably discharge their supervisory 

duties and obligations. 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 

Exchange included statements 

concerning the purpose of, and basis for, 

the proposed rule change and discussed 

any comments it received on the 

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77574 Federal Register / Vol. 79, No. 247 / Wednesday, December 24, 2014 / Notices 

3See Exchange Act Release No. 73554 (Nov. 6, 

2014), 79 FR 67508 (Nov. 13, 2014) (SR–NYSE– 

2014–56) (‘‘Supervision Filing’’). 

4See Exchange Act Release No. 58549 (Sept. 15, 

2008), 73 FR 54444 (Sept. 19, 2008) (SR–NYSE– 

2008–80). 

5See Supervision Filing, supra, n. 4. 6FINRA Rule 0140 provides that FINRA’s rules 

apply to all members and persons associated with 

a member, and that persons associated with a 

member have the same duties and obligations as a 

member under FINRA’s rules. Under FINRA Rule 

0140, supervisors associated with a member are 

subject to the requirements of FINRA Rule 3110. 

The Exchange does not have a rule comparable to 

FINRA Rule 0140. The proposed amendment 

further clarifies that Rule 3110 applies to individual 

supervisors and thus promotes harmonization of the 

rule with Exchange rules and FINRA rules of 

similar purpose. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 9 15 U.S.C. 78f(b)(8). 

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 its 

Rule 342 to remove the three years’ 

experience requirement for supervisory 

personnel. The Exchange also proposes 

to add supplementary material to its 

Rule 3110 to further clarify that 

supervisors must reasonably discharge 

their supervisory duties and obligations. 

NYSE Rule 342 (Compliance 

Supervisors) 

As part of the Exchange’s efforts to 

harmonize its rules concerning 

supervision with those of the Financial 

Industry Regulatory Authority 

(‘‘FINRA’’), the Exchange recently 

amended Rule 342 by deleting elements 

of the rule relating to general 

supervision and focusing the rule on 

requirements regarding qualifications 

and exam requirements for individuals 

with supervisory responsibilities.3 As 

part of those amendments, the Exchange 

incorporated the following requirements 

for supervisory personnel into Rule 

342(a): 

• Every branch office or sales manager 

must have at least three years’ experience as 

a registered representative or substantial 

experience in a related sales or managerial 

position (the new rule provided examples of 

roles that would qualify as a related sales or 

managerial position); and 

• In order to qualify as a supervisory 

person, a principal executive should have at 

least three years’ experience as a registered 

representative unless granted an exception. 

The Exchange proposes to delete 

these requirements from Rule 342(a) as 

inconsistent with prior amendments to 

Rule 342. Specifically, effective 

September 12, 2008, the Exchange 

amended Rule 342 and its related 

Interpretation to eliminate the 

prescribed three-year record 

requirement for supervisory personnel 

and conform Rule 342.13(a) to the 

standard outlined in NASD Rule 

1014(a)(10)(D).4 In the Supervision 

Filing, the Exchange inadvertently reintroduced the standards from the 

formerly deleted Interpretation to Rule 

342. Because the re-introduction of the 

three-year experience requirement for 

supervisory personnel was inadvertent 

and inconsistent with the 

harmonization effectuated in 2008, the 

Exchange proposes to delete this text 

from Rule 342(a). 

NYSE Rule 3110 (Supervision) 

In the Supervision Filing, the 

Exchange also adopted new Rule 3110, 

which is based on FINRA Rule 3110.5

New Rule 3110(a) covers supervisory 

systems and requires member 

organizations to establish and maintain 

a system to supervise the activities of 

each associated person that is 

reasonably designed to achieve 

compliance with applicable securities 

laws and regulations, and with 

applicable Exchange rules. Under Rule 

3110, final responsibility for proper 

supervision rests with the member 

organization. While the Exchange 

believes that under Rule 3110 both 

member organizations and individual 

supervisors at member organizations 

may be liable for failing to reasonably 

discharge their duties and obligations 

with supervision and control of those 

employees under their supervision, for 

the avoidance of doubt, the Exchange 

proposes to add Supplementary 

Material .16 to Rule 3110 providing that 

individuals in charge of a group of 

employees must reasonably discharge 

their duties and obligations with respect 

to supervision and control of those 

employees related to the business of 

their employer and compliance with 

securities laws and regulations and 

Exchange rules.6

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

section 6(b) of the Act,7 in general, and 

furthers the objectives of section 6(b)(5) 

of the Act,8 in particular, because it is 

designed 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. 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 of similar purpose, resulting in 

less burdensome and more efficient 

regulatory compliance. In particular, the 

Exchange believes that removing the 

three-year experience requirement for 

supervisors, which was previously 

deleted from Rule 342 and inadvertently 

re-introduced, would remove 

impediments to and perfect the 

mechanism of a free and open market by 

eliminating a regulatory disparity 

between the supervisory rules of the 

Exchange and FINRA, thereby also 

further harmonizing those rules. 

Further, the Exchange believes that 

adding the proposed supplementary 

material to Rule 3110 emphasizing that 

individual supervisors shall reasonably 

discharge their supervisory duties and 

obligations would remove impediments 

to and perfect the mechanism of a free 

and open market because it would 

reduce potential confusion and provide 

transparency regarding the duties and 

obligations of individual supervisors 

under the Exchange’s harmonized 

supervision rules. The Exchange also 

believes that the proposed rule change 

would update and add specificity to the 

requirements governing supervision, 

which would promote just and equitable 

principles of trade and help to protect 

investors. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with section 6(b)(8) of 

the Act,9 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 

transparency and consistency between 

the Exchange’s rules and FINRA’s rules 

concerning supervision. 

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. 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 247 / Wednesday, December 24, 2014 / Notices 77575 

10 17 CFR 240.19b–4(f)(6). 

11 17 CFR 240.19b–4(f)(6)(iii). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(6). 

14See Exchange Act Release No. 58092 (Jul. 3, 

2008), 73 FR 40144 (Jul. 11, 2008) (concerning 17 

CFR 200 and 241). 

15For purposes 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). 

In addition, the Exchange has given 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 

(5) business days prior to the date of the filing of 

the proposed rule change, or such shorter time as 

designated by the Commission. See 17 CFR 

240.19b–4(f)(6)(iii). 

16 15 U.S.C. 78s(b)(2)(B). 17 17 CFR 200.30–3(a)(12). 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

A proposed rule change filed under 

Exchange Act Rule 19b–4(f)(6) normally 

does not become operative prior to 30 

days after the date of the filing.10

However, pursuant to Rule 19b– 

4(f)(6)(iii), the Commission may 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest.11 The 

Exchange believes that the proposal 

qualifies for immediate effectiveness 

upon filing because it is a ‘‘noncontroversial’’ rule change in 

accordance with section 19(b)(3)(A) of 

the Act 12 and Rule 19b–4(f)(6) 

thereunder.13 Accordingly, the 

Exchange has asked that the 

Commission waive the 30-day operative 

delay so that the proposal becomes 

operative immediately upon filing. 

The Exchange believes that the 

proposal is non-controversial because it 

raises no novel issues and is consistent 

with rules previously approved by the 

Commission. The Exchange states that 

the purpose of the proposed rule change 

is to eliminate requirements in the 

Exchange’s rules previously deleted by 

the Exchange and to further conform the 

Exchange’s supervision rules to those of 

FINRA. The Exchange believes that 

updating and adding transparency to the 

requirements governing individual 

supervisors would help to protect 

investors and would not significantly 

burden competition. More specifically, 

the Exchange believes that: (1) Members 

of both FINRA and the Exchange (‘‘Dual 

Members’’) are already subject to the 

requirement that individual supervisors 

reasonably discharge their supervisory 

duties and obligations; and (2) the 

proposed clarification does not 

represent a new standard for Exchangeonly members, who were subject to the 

same standard under former NYSE Rule 

342. Accordingly, the Exchange believes 

that these proposed rule changes are 

eligible for immediately effective 

treatment under the Commission’s 

current procedures for processing rule 

filings.14

The Commission believes that 

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. More specifically, the 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because enhanced 

transparency to the supervision 

obligations of individual supervisors 

will help members improve compliance 

with applicable securities laws, 

including rules governing sale practices. 

In addition, granting the waiver would 

allow the Exchange to immediately 

eliminate requirements in the 

Exchange’s rules that were mistakenly 

reinserted after being previously 

deleted. For these reasons, the 

Commission designates the proposed 

rule change as operative upon filing.15

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend the 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 16 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 rule-comments@

sec.gov. Please include File Number SR– 

NYSE–2014–66 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–NYSE–2014–66. 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 Section, 100 F Street NE., 

Washington, DC 20549–1090 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. 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– 

2014–66 and should be submitted on or 

before January 14, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–30126 Filed 12–23–14; 8:45 am] 

BILLING CODE 8011–01–P 

mstockstill on DSK4VPTVN1PROD with NOTICES