Document ID: SEC-2017-1291-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American, LLC
Posted Date: 2017-08-02T04:00Z

[Federal Register Volume 82, Number 147 (Wednesday, August 2, 2017)]
[Notices]
[Pages 36010-36012]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-16212]

[[Page 36010]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81232; File No. SR-NYSEAMER-2017-01]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change in 
Connection With the September 5, 2017 Compliance Date for the 
Shortening of the Standard Settlement Cycle From Three Business Days 
After the Trade Date to Two Business Days After the Trade Date

July 27, 2017.
    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 July 26, 2017, NYSE American LLC (the ``Exchange'' or 
``NYSE AMER'') 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 Substance 
of the Proposed Rule Change

    The Exchange proposes in connection with the September 5, 2017 
compliance date for the shortening of the standard settlement cycle 
from three business days after the trade date (``T+3'') to two business 
days after the trade date (``T+2''), to (1) delete NYSE American Rules 
14--Equities, 64--Equities, 235--Equities, 236--Equities, 257--
Equities, 282--Equities. Supplementary Material .65, and Sections 510 
and 512 of the NYSE American Company Guide (``Company Guide''); (2) 
delete the preamble and ``T'' modifier from NYSE American Rules 14T--
Equities, 64T--Equities, 235T--Equities, 236T--Equities, 257T--
Equities, and 282.65--Equities, and Sections 510T and 512T of the 
Company Guide; and (3) establish the operative date of Rules 14T--
Equities, 64T--Equities, 235T--Equities, 236T--Equities, 257T--
Equities, and 282 65T--Equities, and Sections 510T and 512T of the 
Company Guide. 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
    In connection with the September 5, 2017 compliance date for 
shortening of the standard settlement cycle from T+3 to T+2, the 
Exchange proposes to delete:
     Rule 14--Equities (Non-Regular Way Settlement Instructions 
for Orders); \4\
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    \4\ The Exchange proposes to retain the title of current Rule 14 
(``Non-Regular Way Settlement Instructions for Orders'') and the 
legend that states ``This Rule is not applicable to trading the 
Pillar trading platform,'' which was added in connection with the 
Exchange's transition to Pillar, an integrated trading technology 
platform designed to use a single specification for connecting to 
the equities and options markets operated by the Exchange and its 
affiliates, NYSE Arca, Inc. (``NYSE Arca'') and New York Stock 
Exchange LLC (``NYSE''). See Securities Exchange Act Release Nos. 
80590 (May 4, 2017), 82 FR 21843 (May 10, 2017) (Approval Order) and 
79993 (February 9, 2017), 82 FR 10814, 10815-16 (February 15, 2017) 
(SR-NYSEMKT-2017-01) (Notice) (the ``Pillar Trading Rule Filing''). 
The Exchange began trading on the Pillar platform on July 24, 2017.
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     Rule 64--Equities (Bonds, Rights and 100-Share-Unit 
Stocks),
     Rule 235--Equities (Ex-Dividend, Ex-Rights); \5\
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    \5\ The Exchange proposes to retain the title of current Rule 
235 (``Ex-Dividend, Ex-Rights'') and the legend that states ``This 
Rule is not applicable to trading the Pillar trading platform,'' 
which was added in connection with the Exchange's transition to 
Pillar. See note 5, supra.
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     Rule 236--Equities (Ex-Warrants);
     Rule 257--Equities (Deliveries After Ex-Date);
     Rule 282.65 (Failure to Deliver and Liability Notice 
Procedures); and
     Sec. 510 (Three Day Delivery Plan) and Sec. 512 (Ex-
Dividend Procedure) of the Company Guide.
    The Exchange further proposes to delete the preamble and ``T'' 
modifier from the following rules:
     Rule 64T--Equities (Bonds, Rights and 100-Share-Unit 
Stocks);
     Rule 236T--Equities (Ex-Warrants);
     Rule 257T--Equities (Deliveries After Ex-Date);
     282.65T (Failure to Deliver and Liability Notice 
Procedures); and
     Sec. 510T (Two Day Delivery Plan) and Sec. 512T (Ex-
Dividend Procedure).
    The Exchange proposes that the operative date for these changes 
would be September 5, 2017 to conform to the compliance date for T+2.
Background
    On September 28, 2016, the Securities and Exchange Commission 
(``SEC'') proposed amendments to Rule 15c6-1(a) to shorten the standard 
settlement cycle from T+3 to T+2.\6\ Following this action by the SEC, 
the Exchange adopted new rules with the modifier ``T'' to reflect a T+2 
settlement cycle.\7\ Because the Exchange would not implement the new 
rules until after the final implementation of T+2, the Exchange 
retained the versions of rules reflecting T+3 settlement on its books. 
In order to reduce the potential for confusion regarding which version 
of the rule governs, the Exchange added explanatory preambles as noted 
below.
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    \6\ See Securities Exchange Act Release No. 78962 (September 28, 
2016), 81 FR 69240 (October 5, 2016) (File No. S7-22-16).
    \7\ See Securities Exchange Act Release No. 80020 (February 13, 
2017), 82 FR 10940 (February 16, 2017) (SR-NYSEMKT-2016-119).
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    In particular, the following preamble was added to Rules 14, 64, 
235, 236, 257, and 282.65, and Sec. 510 and Sec. 512 of the Company 
Guide:
    ``This version of . . . will remain operative until the Exchange 
files separate proposed rule changes as necessary to establish the 
operative date of . . . to delete this version of . . . and preamble, 
and to remove the preamble text from the version of . . . In addition 
to filing the necessary proposed rule changes, the Exchange will 
announce via Information Memo the operative date of the deletion of 
this Rule and implementation of revised . . .''
    The following preamble was added to Rules 14T, 64T, 235T, 236T, 
257T, and 282.65T, as well as Sections 510T and 512T of the Company 
Guide:
    ``The Exchange will file separate proposed rule changes to 
establish the operative date of . . ., to delete . . . and the preamble 
text from . . ., and to remove the preamble text from the version of . 
. . Until such time, . . . will remain operative. In addition to filing 
the necessary proposed rule changes, the Exchange will announce via 
Information Memo the implementation of this Rule and the operative date 
of the deletion of . . .''
    On March 22, 2017, the SEC adopted the proposed amendment to Rule 
15c6-

[[Page 36011]]

1(a) under the Act \8\ with a compliance date of September 5, 2017.\9\
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    \8\ See 17 CFR 240.15c6-1(a).
    \9\ See Securities Exchange Act Release No. 80295 (March 22, 
2017), 82 FR 15564 (March 29, 2017) (File No. S7-22-16).
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Proposed Rule Change
    In order to comply with the September 5, 2017 transition to T+2 
settlement, the Exchange proposes to:
     Delete Rules 64, 236, 257, 282.65, and Sec. 510 and Sec. 
512 of the Company Guide, including the preambles, in their entirety;
     delete the text of Rules 14 and 235, including the 
preambles, and retain the title of each rule and the legend providing 
that the rule will not be applicable to trading in the Pillar platform; 
\10\
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    \10\ See notes 5 & 6, supra. As noted in the Pillar Trading 
Rules Filing, once trading on the Pillar trading platform begins, 
specified current Exchange equities trading rules would no longer be 
applicable, and current Exchange rules governing equities trading 
that are not identified as inapplicable would continue to govern 
Exchange operations on its cash equities trading platform. See 
Pillar Trading Rule Filing, supra note 5, 82 FR at 10815-16.
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     delete the preambles to Rules 14T, 64T, 235T, 236T, 257T, 
282.65T and Sec. 510T and 512T of the Company Guide; and
     delete the ``T'' modifier in Rules 64T, 236T, 257T, 
282.65T and Sec. 510T and 512T of the Company Guide which distinguished 
such rules from the T+3 rules.
    The Exchange proposes that the changes described herein would take 
effect on September 5, 2017, to coincide with the transition to T+2. 
The Exchange will announce via Information Memo the implementation of 
Rules 14T, 64T, 235T, 236T, 257T, 282.65T and Sec. 510T and 512T of the 
Company Guide and the operative date of the deletion of Rules 64, 236, 
257, 282.65, and Sec. 510 and Sec. 512 of the Company Guide.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\11\ in general, and further the 
objectives of Section 6(b)(5) of the Act,\12\ in particular, because it 
is designed to prevent fraudulent and manipulative acts and practices, 
promote just and equitable principles of trade, 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.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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    In particular, the Exchange believes that the proposed changes 
remove impediments to and perfect the mechanism of a free and open 
market by adding clarity as to which rules are operative and when, 
thereby reducing potential confusion, and making the Exchange's rules 
easier to navigate. The Exchange also believes that eliminating 
obsolete material from its rulebook also removes impediments to and 
perfects the mechanism of a free and open market by removing confusion 
that may result from having obsolete material in the Exchange's 
rulebook. The Exchange believes that eliminating such obsolete material 
would not be inconsistent with the public interest and the protection 
of investors because investors will not be harmed and in fact would 
benefit from increased transparency, thereby reducing potential 
confusion.

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

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change is not 
designed to address any competitive issue but rather facilitate the 
industry's transition to a T+2 regular-way settlement cycle. The 
Exchange also believes that the proposed rule change will serve to 
promote clarity and consistency, thereby reducing burdens on the 
marketplace and facilitating investor protection.

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 \13\ and Rule 19b-4(f)(6) thereunder.\14\ 
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.\15\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 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.
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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 rule-comments@sec.gov. Please include 
File Number SR-NYSEAMER-2017-01 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-NYSEAMER-2017-01. 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

[[Page 36012]]

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-NYSEAMER-2017-01 and should be submitted on or before 
August 23, 2017.

    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. 2017-16212 Filed 8-1-17; 8:45 am]
 BILLING CODE 8011-01-P