Document ID: SEC-2013-0012-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2013-01-03T05:00Z

[Federal Register Volume 78, Number 2 (Thursday, January 3, 2013)]
[Notices]
[Pages 335-337]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-31572]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68538; File No. SR-NYSE-2012-71]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending the Price List To Waive Certain Fees for Floor Brokers for 
November and December 2012

December 27, 2012.
    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 December 17, 2012, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') 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 to amend its Price List to provide relief for 
Floor brokers from the Annual Telephone Line Charge and the Annual Fee 
for November and December 2012, which the Exchange proposes to become 
operative as of November 1, 2012. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Price List to provide relief for 
Floor brokers from the Annual Telephone Line Charge and the Annual Fee 
for November and December 2012, which the Exchange proposes to become 
operative as of November 1, 2012.
    Currently, member organizations are charged an Annual Telephone 
Line Charge of $400 per phone number. The Exchange proposes to waive 
the fee for Floor brokers for November and December 2012 on a prorated 
basis because Hurricane Sandy affected the ability of Floor brokers to 
communicate with customers from the Floor.
    The Exchange has been advised by its third-party carrier that the 
damage to the telephone connections is very extensive, and as a result, 
the telephone line connections for Floor brokers still are not fully 
operational and may not be so for at least another month, and possibly 
longer, given the type of work that needs to be completed to restore 
the telephone services. In particular, the Exchange notes that the 
telephone lines that support both the wired and wireless connections 
for Floor brokers are based in an area of lower Manhattan that suffered 
extensive damage as a result of Hurricane Sandy. The type of damage 
that was sustained will require the third-party carrier to rebuild the 
infrastructure that supports the telephone services, rather than engage 
in repairs of the existing lines.\4\ In addition to the damage to 
telephone lines, internet bandwidth has been reduced considerably. The 
Exchange notes that it is waiving the fee for Floor brokers only 
because off-Floor member firms were not impacted by these services. In 
addition, DMMs are on the Floor but do not engage in an agency business 
with customers from the Floor and, therefore, were not impacted by the 
telecommunications issues. The proposed waiver would be $33.33 for each 
month.
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    \4\ The Exchange filed a rule change to temporarily suspend 
those aspects of Rules 36.20, 36.21, and 36.30 that would not permit 
Floor brokers and Designated Market Makers (``DMMs'') to use 
personal portable phone devices on the Floor following the aftermath 
of Hurricane Sandy and during the period that phone service was not 
fully functional. See Securities Exchange Act Release No. 68137 
(November 1, 2012), 77 FR 66893 (November 7, 2012) (SR-NYSE-2012-
58). The temporary suspension was subsequently extended for Floor 
brokers and DMMs, and again extended for Floor brokers after the 
Exchange was able to restore service for DMMs. See Securities 
Exchange Act Release No. 68161 (November 5, 2012), 77 FR 67704 
(November 13, 2012) (SR-NYSE-2012-61) and File No. SR-NYSE-2012-64.
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    Currently, member organizations are charged an Annual Fee of 
$40,000 per license (the equivalent of $3,333.33 per month) for the 
first two licenses held by a member organization and $25,000 per 
license (the equivalent of $2,083.33 per month) for additional licenses 
held by a member organization. The Exchange proposes to provide a 
monthly credit of $2,000 for the first and second Floor broker licenses 
held by a member organization and a monthly credit of $500 for each 
additional Floor broker license held by a member organization for 
November and December 2012 because of the impact of Hurricane Sandy on 
Floor brokers. For example, a member organization with only one Floor 
broker license would receive a $2,000 credit in November and December 
2012, and a member organization with three Floor broker licenses would 
receive a total of $4,500 in credits for November and December 2012.
    As stated above, Hurricane Sandy had a disproportionate impact on 
Floor brokers compared with off-Floor member firms and DMMs, including 
limited telephone service, no direct customer telephone lines, limited 
Internet service, intermittent cellular telephone service at the 
Exchange, and

[[Page 336]]

persistent busy signals.\5\ As a result, Floor brokers face greater 
operating challenges and have experienced reduced activity from certain 
accounts and customers compared with pre-Hurricane Sandy levels. 
Therefore, Floor brokers are not getting the full benefit of their 
licenses.
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    \5\ As part of the proposed rule change, the Exchange proposes 
to renumber the footnotes in the Price List accordingly.
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    The proposed waivers would apply retroactively and would be 
reflected in the December 2012 and January 2013 billing statements.
    The proposed changes are not otherwise intended to address any 
other problem, and the Exchange is not aware of any significant problem 
that the affected member organizations would have in complying with the 
proposed changes.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act,\7\ in particular, because it 
provides for the equitable allocation of reasonable dues, fees, and 
other charges among its members and issuers and other persons using its 
facilities and does not unfairly discriminate between customers, 
issuers, brokers, or dealers. The Exchange also believes that the 
proposed rule change is consistent with Section 6(b)(5) of the Act,\8\ 
in particular, because it is designed to prevent fraudulent and 
manipulative acts and practices, 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 facilitating transactions in 
securities, to 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 and because it is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that waiving the Annual Telephone Line Charge 
and providing a monthly credit for the Annual Fee for Floor brokers for 
November and December 2012 is reasonable because Hurricane Sandy 
affected the ability of Floor brokers to communicate with customers and 
the ease with which they could represent public orders on the Floor. 
Therefore, the Exchange believes it is reasonable to provide relief for 
Floor brokers in this regard.
    The Exchange believes the proposed change to the Annual Telephone 
Line Charge and Annual Fee for Floor brokers is equitable and not 
unfairly discriminatory because Floor brokers are the only class of 
member organization that was affected by the telecommunications issues, 
which has impacted their ability to conduct their regular business and 
has resulted in reduced activity from certain accounts and customers. 
Therefore, it is equitable and not unfairly discriminatory to offer the 
fee waiver and credit only to Floor brokers, which is the only class of 
Floor members not getting the full benefit of their licenses. In 
addition, the Exchange believes that because communications with 
customers is a vital part of a Floor broker's role as agent, during the 
period when phone service continues to be intermittent, Floor brokers 
should receive relief from the Annual Telephone Line Charge.
    The Exchange believes that the proposed monthly credit of $2,000 
for the first and second licenses held by a Floor broker for November 
and December 2012 is reasonable because all Floor brokers hold at least 
one license, and as such, all member organizations that have a Floor 
broker license will receive at least a $2,000 per month credit for 
November and December 2012. The Exchange believes that the proposed 
monthly credit of $500 for each additional Floor broker license held by 
a member organization for November and December 2012 is reasonable 
because it will provide additional compensation to a member 
organization that holds and pays for more than two Floor broker 
licenses. In addition, the Exchange believes that the proposed credits 
are equitable and not unfairly discriminatory because member 
organizations that hold only one or two Floor broker licenses are 
generally smaller and are less able to absorb the operating impact 
resulting from the infrastructure damage caused by Hurricane Sandy. In 
addition, member organizations that hold more than two Floor broker 
licenses pay a reduced Annual Fee for additional licenses, and 
therefore, it is equitable and not unfairly discriminatory to provide a 
lower monthly credit for each additional Floor broker license.
    The Exchange believes that the proposed relief for Floor brokers 
removes impediments to and perfects the mechanism of a free and open 
market and national market system because it would provide relief for 
Floor brokers that are experiencing ongoing issues with telephone 
service while they are conducting their regular business on the Floor. 
The Exchange further believes that the proposed waiver and credit do 
not permit unfair discrimination because they would provide relief for 
Floor brokers that have been disproportionally impacted in their 
ability to operate as agents for customers during this time of 
unprecedented weather disruptions.

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act.

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

    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 \9\ and Rule 19b-
4(f)(6)(iii) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6)(iii). 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, 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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    A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Commission believes 
that waiving the 30-day operative delay is

[[Page 337]]

consistent with the protection of investors and the public interest. 
The Commission notes that doing so will allow the Exchange to provide 
the proposed relief during the billing period in which the Floor 
brokers were affected. Therefore, the Commission hereby waives the 30-
day operative delay and designates the proposal operative upon 
filing.\13\
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ For purposes only 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).
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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.

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-2012-71 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2012-71. 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-NYSE-2012-71 and should be 
submitted on or before January 24, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Lynn M. Powalski,
Deputy Secretary.
[FR Doc. 2012-31572 Filed 1-2-13; 8:45 am]
BILLING CODE 8011-01-P