Document ID: SEC-2015-2058-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC,
Posted Date: 2015-12-14T05:00Z

[Federal Register Volume 80, Number 239 (Monday, December 14, 2015)]
[Notices]
[Pages 77392-77394]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31329]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76591; File No. SR-NYSE-2015-63]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending the NYSE Listed Company Manual To Provide That Any Senior 
Official of a Listed Company With the Rank of Corporate Secretary or 
Higher Can Sign the Written Request of a Listed Company Seeking To 
Change Its Designated Market Maker Unit Required by Section 806.01 of 
the Manual

December 8, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on November 25, 2015, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
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\ 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 the NYSE Listed Company Manual (the 
``Manual'') to provide that any senior official of a listed company 
with the rank of Corporate Secretary or higher can sign the written 
request of a listed company seeking to change its designated market 
maker (``DMM'') unit required by Section 806.01 of the Manual. The 
filing also proposes to replace outdated references throughout the 
Manual to ``Specialists'' with references to ``DMMs'' and update the 
text of Section 402.09(E) to reflect the current text of NYSE Rule 460. 
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
    The Exchange proposes to amend the Manual to provide that any 
senior official of a listed company with the rank of Corporate 
Secretary or higher can sign the written request of a listed company 
seeking to change its DMM unit required by Section 806.01 of the 
Manual. The filing also proposes to replace outdated references 
throughout the Manual to ``Specialists'' with

[[Page 77393]]

references to ``DMMs'' and update the text of Section 402.09(E) to 
reflect the current text of NYSE Rule 460.
    Section 806.01 of the Manual establishes a process to be followed 
by any listed company wishing to change to a new DMM unit. Pursuant to 
Section 806.01, a listed company wishing to change DMM units must file 
with the Corporate Secretary of the Exchange a written notice (the 
``Issuer Notice''), signed by the company's chief executive officer. 
The Issuer Notice is required to indicate the specific issues prompting 
this request. It has been the Exchange's experience that companies have 
occasionally found it burdensome to obtain the signature of their CEO 
for purposes of submitting an Issuer Notice and that this requirement 
has caused an undesirable delay when companies are making their 
submissions. We also note that this requirement is inconsistent with 
the Exchange Rule 103B, which provides that any senior official with 
the rank of Corporate Secretary or higher (or, in the case of a 
structured product listing, a senior officer of the issuer) can sign 
the notice in which a listed company informs the Exchange of its 
initial selection of a DMM unit. It has been the Exchange's experience 
that a senior officer other than the chief executive officer often 
manages the DMM relationship on behalf of the listed company and has 
authority to take action in relation to that relationship. In light of 
that fact, the Exchange believes there is no reason to have different 
requirements with respect to the commencement and severing of a listed 
company's relationship with its DMM unit. Consequently, we propose to 
amend Section 806.01 to provide that any official with the rank of 
Corporate Secretary or higher at a listed company may sign an Issuer 
Notice.
    The Exchange amended its rules a number of years ago to 
significantly change the role of specialists on the trading floor.\3\ 
In connection with that change, the Exchange adopted the new title of 
``designated market maker'' or ``DMM'' for specialists. Several 
sections of the Manual (Sections 106.02, 106.03 and 806.01) include 
outdated references to specialists. The Exchange proposes to replace 
these references with references to DMMs. In addition, Section 
402.09(E) (``Rule 460--Specialists Participating in Contests or Serving 
as Directors'') is intended as a repetition of Exchange Rule 460. 
Exchange Rule 460 has been amended several times over the years and the 
Exchange inadvertently failed to make conforming changes to Section 
402.09(E).\4\ We now propose to replace the current text of Section 
402.09(E) with the up-to-date text of Rule 460.
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    \3\ See Securities Exchange Act Release No. 58845 (October 24, 
([sic] 2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46).
    \4\ See Securities Exchange Act Release No. 58328 (August 7, 
2008), 73 FR 48260 (August 18, 2008) (SR-NYSE-2008-45). See also 
Securities Exchange Act Release No. 58845 (October 24, ([sic] 2008), 
73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46). See also 
Securities Exchange Act Release No. 66709 (April 2, 2012), 77 FR 
20870 (April 6, 2012) (SR-NYSE-2012-06).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \5\ of the Act, in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\6\ 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 
facilitating transactions in securities, to 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 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers. The Exchange believes that the proposed 
amendment is consistent with the investor protection objectives of 
Section 6(b)(5) because it is designed to ensure that listed companies 
are able to expeditiously change their DMM unit when senior management 
of the listed company believes it is desirable to do so. An effective 
relationship between the listed company and the DMM is important to the 
maintenance of a high quality market for the company's securities and 
is therefore in the interests of investors.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    The replacement of references to ``specialists'' with references to 
``DMMs'' and the amendment of the text of Section 402.09(E) are non-
substantive changes to update the terminology and reflect the 
Exchange's current Rule 460 and therefore have no implications for the 
protection of investors.

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 purpose of the Act. The proposed rule change is 
designed to permit listed companies to apply for a change in the DMM 
unit allocated to their securities on the basis of a notice signed by 
any officer with the title of Corporate Secretary or higher rather than 
requiring that it be signed in all cases by the CEO, as is currently 
the case. The proposed amendment simply provides more flexibility in 
providing the required paperwork and conforms the signing requirements 
with respect to the commencement and severing of a listed company's 
relationship with its DMM unit, but does not change any of the 
substantive rights of the listed company or the DMM unit in any way. As 
such, the Exchange does not expect the rule change to have any 
significant impact on competition. The other proposed changes are non-
substantive changes to update terminology and reflect the Exchange's 
current Rule 460 and therefore have no significant impact on 
competition.

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 \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
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 for 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) thereunder.\10\
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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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    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

[[Page 77394]]

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 proposed rule change may become operative immediately. The Exchange 
believes that providing greater flexibility in the preparation of the 
paperwork needed to request a change of DMM unit is in the interests of 
investors as it is important to the maintenance of a high quality 
market for an issuer's stock that the issuer has a good relationship 
with its DMM. As the Exchange notes in its filing, the proposal would 
better conform the process for changing a DMM to that which is used for 
initially selecting a DMM. In particular, the officer's signature that 
would be required to change a company's DMM must be that of a senior 
official at the company with a rank of Corporate Secretary or above. 
Furthermore, the other rule changes proposed by the Exchange are also 
conforming changes that would make the Manual more consistent with the 
Exchange's current rules. Based on the foregoing, the Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. For this reason, 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 the 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 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-2015-63 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-NYSE-2015-63. 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 offices 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-2015-63, 
and should be submitted on or before January 4, 2016.

    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), (59).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-31329 Filed 12-11-15; 8:45 am]
 BILLING CODE 8011-01-P