Document ID: SEC-2018-1610-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American, LLC
Posted Date: 2018-10-17T04:00Z

[Federal Register Volume 83, Number 201 (Wednesday, October 17, 2018)]
[Notices]
[Pages 52586-52588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22532]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84412; File No. SR-NYSEAMER-2018-45]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Rule 7.14E, Clearance and Settlement

October 11, 2018.
    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 September 27, 2018, NYSE American LLC (``Exchange'' or ``NYSE 
American'') 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.
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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 amend Rule 7.14E, Clearance and 
Settlement, to remove language that is inconsistent with the Exchange's 
Price List. The proposed rule change is available on the Exchange's 
website 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 Rule 7.14E, Clearance and 
Settlement, to remove language that was inadvertently included when the 
rule was first adopted and that is inconsistent with the Exchange's 
Price List. The Exchange adopted Rule 7.14E as part of a proposed rule 
change to adopt rules for trading on the Exchange's new trading 
technology platform.\4\ Rule 7.14E was based on similar rules of its 
affiliate, NYSE Arca, Inc. (``NYSE Arca'') Rule 7.14-E and adopted by 
the Exchange without any substantive differences.\5\
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    \4\ See Securities Exchange Act Release Nos. 79242 (November 4, 
2016), 81 FR 79081 (November 10, 2016) (SR-NYSEMKT-2016-97); 80590 
(May 4, 2017), 82 FR 21843 (May 10, 2017) (SR-NYSEMKT-2017-01); and 
79982 (February 7, 2017), 82 FR 105008 (February 13, 2017) (Notice) 
and 80577 (May 2, 2017), 82 FR 21446 (May 8, 2017) (SR-NYSEMKT-2017-
04).
    \5\ Id.
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    Paragraph (c) of Rule 7.14E states that ``[e]ach clearing firm must 
be admitted to the Exchange as an ETP Holder by meeting the 
qualification requirements set forth in Rule 2--Equities.'' Paragraph 
(c) of Rule 7.14E also includes language that exempts clearing firms 
from paying the regular ETP Holder fee where that clearing firm became 
an ETP Holder for the sole purpose of acting as a clearing firm on the 
Exchange. This language

[[Page 52587]]

was inadvertently included when Rule 7.14E was adopted and is 
inconsistent with the Exchange's Price List, which does not include 
language exempting clearing only ETP Holders from the fee's 
application.\6\ The Exchange notes that no such exemption exists in the 
Exchange's rule governing the trading of Exchange-listed securities. 
Therefore, the Exchange proposes to remove the following phrase from 
the first sentence of Exchange Rule 7.14E(c): ``provided, however, if 
the clearing firm has become an ETP Holder for the sole purpose of 
acting as a clearing firm on the Exchange, such clearing firm need not 
pay the regular ETP Holder fee''.
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    \6\ The Exchange does not currently charge ETP Holders a 
separate ETP Holder fee. See the Exchange's Price List on page 4 
available at https://www.nyse.com/publicdocs/nyse/markets/nyse-american/NYSE_America_Equities_Price_List.pdf (dated July 26, 2018).
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Sections 
6(b)(5) of the Act,\8\ in particular, because it is designed to promote 
just and equitable principles of trade, remove impediments to, and 
perfect the mechanisms 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 mechanisms of, a free and open market 
and a national market system and, in general, protect investors and the 
public interest because it would remove language from Exchange Rule 
7.14E(c) that was inadvertently included when the rule was adopted and 
that is inconsistent with the Exchange's Price List. The proposed rule 
change would delete language from Rule 7.14E(c) that incorrectly 
exempts clearing only ETP Holders from the ETP Holder fee and would, 
therefore, remove an inconsistency between Rule 7.14E and the 
Exchange's Price List. The Exchange does not currently charge an ETP 
Holder fee.\9\ Further, no ETP Holders currently acts solely as a 
clearing firm and, therefore, no ETP Holder would be affected by the 
proposed rule change. The proposed rule change should avoid potential 
confusion about the applicability of the ETP Holder fee should an ETP 
Holder seek to act solely as a clearing firm on the Exchange. Lastly, 
the Exchange notes that no such exemption exists in the Exchange's rule 
governing the trading of Exchange-listed securities. Therefore, the 
proposed rule change would allow for the consistent application of the 
ETP Holder fee among ETP Holders that act solely as clearing firms.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ See supra note 6.
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    The Exchange also believes that the proposed rule change is 
consistent with Sections 6(b)(4) of the Act \10\ because it provides 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members, issuers and other persons using its 
facilities and does not unfairly discriminate between customers, 
issuers, brokers or dealers. The proposed rule change is equitable, 
reasonable, and not unfairly discriminatory because it would clarify 
the application of the ETP Holder fee and apply it equally to ETP 
Holders that act solely as a clearing firm.
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    \10\ 15 U.S.C. 78f(b)(4).
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    For these reasons, the Exchange believes that the proposal is 
consistent with the Act.

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

    In accordance with Section 6(b)(8) of the Act,\11\ the Exchange 
believes that the proposed rule change would not 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 designed to have a 
competitive impact. It is simply intended to amend the Exchange's rules 
to remove language from Exchange Rule 7.14E(c) that was inadvertently 
included when the rule was adopted and that is inconsistent with the 
Exchange's Price List. It is not intended to address any competitive 
issues or to attract additional order flow the Exchange.
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    \11\ 15 U.S.C. 78f(b)(8).
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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 \12\ and Rule 19b-4(f)(6) thereunder.\13\ 
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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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii) [sic],\15\ the 
Commission may designate a shorter time if such action is consistent 
with the protection of investors and the public interest.
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
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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) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \16\ 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-NYSEAMER-2018-45 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-NYSEAMER-2018-45. 
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 website (http://www.sec.gov/

[[Page 52588]]

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 website 
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; Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEAMER-2018-45, and should 
be submitted on or before November 7, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-22532 Filed 10-16-18; 8:45 am]
 BILLING CODE 8011-01-P