Document ID: SEC-2016-0936-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT, LLC
Posted Date: 2016-06-01T04:00Z

[Federal Register Volume 81, Number 105 (Wednesday, June 1, 2016)]
[Notices]
[Pages 35090-35092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-12788]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77902; File No. SR-NYSEMKT-2016-55]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending Rule 930NY 
Regarding Definition of Floor Broker

May 25, 2016.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the

[[Page 35091]]

``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that 
on May 17, 2016, 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 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend Rule 930NY (Floor Broker Defined). 
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 amend Rule 930NY to update the definition 
of Floor Broker.\4\ The proposed rule change would harmonize the Floor 
Broker definition with the recently updated rule of another competing 
options exchange--specifically NASDAQ OMX PHLX LLC (``PHLX'').\5\
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    \4\ The Exchange notes that, other than adding reference to 
Professional Customers, the definition of Floor Broker has remained 
unchanged since its adoption in 2009, as part of the Exchange's 
adoption of the Rule 900NY series. See Securities Exchange Act 
Release No. 59472 (February 27, 2009) 74 FR 9843 (March 6, 2009) 
(NYSEALTR-2008-14), which established rules for the trading of 
listed options. The Rule 900NY suite of rules was substantially 
based on the existing Rules of NYSE Arca LLC. See also Securities 
Exchange Act Release No. 61818 (March 31, 2010) 75 FR 17457 (April 
6, 2010) (SR-NYSE Amex-2010-18) (relating to accepting orders from 
Professional Customers).
    \5\ See Securities Exchange Act Release No. 76800 (December 30, 
2015), 81 FR 549, (January 6, 2016) (SR-Phlx-2015-114) (adopting 
updated definition of Floor Broker in PHLX Rule 1060 on immediately 
effective basis).
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    Rule 930NY(a) defines a Floor Broker as ``a sole proprietor ATP 
Holder or a representative of an ATP Holder who is registered with the 
Exchange for the purpose, while on the Exchange Floor, of accepting and 
executing option orders received from ATP Holders.'' The Rule further 
provides that ``[a] Floor Broker shall not accept an order from any 
other source unless he is a sole proprietor ATP Holder or a 
representative of an ATP Holder approved to transact business with the 
public in accordance with Rule 441, in which event he may accept orders 
for customers of the ATP Holder.''
    The Exchange notes that Floor Brokers, as registered Broker/
Dealers,\6\ have long handled orders from Broker/Dealers who may not be 
ATP Holders. In addition, Floor Brokers may accept orders from non-
Broker/Dealers (i.e., public customers).\7\ Thus, the Exchange proposes 
to clarify Rule 930NY(a) by removing the language regarding the types 
of market participants from whom a Floor Broker may accept an order.\8\ 
The updated rule would provide that a Floor Broker is an individual who 
is registered with the Exchange for the purpose, while on the Options 
Floor, of accepting and handling options orders.\9\ Further, as 
proposed, a Floor Broker may accept orders from ATP Holders, Broker 
Dealers that are non-ATP Holders, Professional Customers, pursuant to 
Rule 930NY(b), as well as from public customers provided the Floor 
Broker is properly qualified to do business with the public.\10\
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    \6\ See Rule 930NY(a).
    \7\ To handle the orders of public customers, Floor Brokers must 
be properly qualified to do business with the public, per Section 3 
(Conduct of Accounts for Options Trading), generally, and Rule 920 
(Registration and Examination of Options Personnel), specifically.
    \8\ See proposed Rule 930NY(a). This practice is consistent with 
the rules of other exchanges. See, e.g., supra n. 5 (PHLX Rule 1060) 
and CBOE Rule 6.70 (permitting CBOE Floor Brokers to accept orders 
from non-member broker-dealers).
    \9\ Consistent with the proposed changes to Rule 930NY(a), the 
Exchange proposes to delete the cross reference to this section from 
Rule 930NY(b)(1). See proposed Rule 930NY(b)(1).
    \10\ See supra n. 7.
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    This proposed rule change would reflect current practice on the 
Exchange, specifically that a Floor Broker may accept orders from 
Broker Dealers that are not ATP Holders. The proposed modification 
would not alter a Floor Broker's responsibilities. Further, the 
proposal would have no impact on a Floor Broker's ability to accept 
orders from the public.\11\
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    \11\ See id.
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2. Statutory Basis
    The Exchange believes that the proposed change is consistent with 
Section 6(b) of the Act,\12\ in general, and furthers the objectives of 
Section 6(b)(5),\13\ 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 facilitation transactions 
in securities, to remove impediments to, and perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that the proposal is designed 
to remove language that could be interpreted as a limitation on orders 
that may be accepted by Floor Brokers to reflect current practice on 
the Exchange, which would promote just and equitable principles of 
trade, and remove impediments to, and perfect the mechanism of a free 
and open market. The proposed change would make clear to market 
participants that a Floor Broker may accept an order from a non-ATP 
Holder that is a Broker Dealer, which adds clarity and transparency to 
Exchange rules to the benefit of all market participants. Thus, the 
Exchange believes that the proposal would help prevent confusion and 
help ensure that floor brokerage services are widely available to 
various types of market participants, which should, in turn, promote 
just and equitable principles of trade.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that this proposed rule change would 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. With respect to inter-market 
competition, the proposed rule change is a competitive change that is 
substantially similar to rules in place at another competing options 
exchange.\14\ With respect to intra-market competition, the proposal 
applies to all NYSE MKT Floor Brokers.
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    \14\ See supra n. 5.

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[[Page 35092]]

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 \15\ and Rule 19b-4(f)(6) thereunder.\16\ 
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) thereunder.\17\
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    \15\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 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 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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    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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    \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 rule-comments@sec.gov. Please include 
File Number SR-NYSEMKT-2016-55 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-NYSEMKT-2016-55. 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 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-NYSEMKT-2016-55, and should 
be submitted on or before June 22, 2016.

    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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Brent J. Fields,
Secretary.
[FR Doc. 2016-12788 Filed 5-31-16; 8:45 am]
 BILLING CODE 8011-01-P