Document ID: SEC-2013-0759-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2013-04-19T04:00Z

[Federal Register Volume 78, Number 76 (Friday, April 19, 2013)]
[Notices]
[Pages 23620-23622]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-09189]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69372; File No. SR-NYSE-2013-26]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Its Price List To Provide Relief for Floor Brokers From the 
Annual Telephone Line Charge for January, February and March 2013

April 15, 2013.
    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 April 2, 2013, New York Stock Exchange LLC (the ``Exchange'' 
or ``NYSE'') filed with the Securities and Exchange Commission 
(``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 its Price List to provide relief for 
Floor brokers from the Annual Telephone Line Charge for January, 
February and March 2013, which the Exchange proposes to become 
operative as of January 1, 2013. 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 for January, 
February and March 2013, which the Exchange proposes to become 
operative as of January 1, 2013. The Exchange previously amended its 
Price List to provide such relief for November and December 2012.\3\
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    \3\ See Securities Exchange Act Release No. 68538 (December 27, 
2012), 78 FR 335 (January 3, 2013) (SR-NYSE-2012-71) (``Prior Waiver 
Filing'').
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    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 January, February and March 2013 on a 
prorated basis because Hurricane Sandy affected the ability of Floor 
brokers to communicate with customers from the Floor.
    As noted in the Prior Waiver Filing, the damage to the telephone 
connections was very extensive. While telephone connections became 
fully operational by March 31, 2013, a majority of telephone line 
connections for Floor brokers were not fully operational during the 
January through mid-March 2013 period. In particular, the Exchange 
notes that the telephone lines that support both the wired and wireless 
connections for Floor brokers were based in an area of lower Manhattan 
that suffered extensive damage as a result of Hurricane Sandy.\4\ In 
addition to the damage to telephone lines, internet bandwidth was 
reduced considerably; however, internet service has been significantly 
restored as of March 31, 2013. 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 Exchange subsequently filed to extend the temporary 
suspension. See Securities Exchange Act Release Nos. 68161 (Nov. 5, 
2012), 77 FR 67704 (Nov. 13, 2012) (SR-NYSE-2012-61); 68211 (Nov. 9, 
2012), 77 FR 69534 (Nov. 19, 2012) (SR-NYSE-2012-64); 68271 (Nov. 
20, 2012), 77 FR 70862 (Nov. 27, 2012) (SR-NYSE-2012-67); 68452 
(Dec. 17, 2012), 77 FR 75683 (Dec. 21, 2012) (SR-NYSE-2012-73); 
68704 (Jan. 22, 2013), 78 FR 5851 (Jan. 28, 2013) (SR-NYSE-2013-06); 
and 68958 (Feb. 20, 2013), 78 FR 13127 (Feb. 26, 2013) (SR-NYSE-
2013-14).
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    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 persistent busy signals. As a result, Floor brokers faced 
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.
    The proposed waiver would apply retroactively to January 1, 2013 
and would be reflected in the March 2013 billing statement.
    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,\5\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act,\6\ 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,\7\ 
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,

[[Page 23621]]

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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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that waiving the Annual Telephone Line Charge 
for Floor brokers for January, February and March 2013 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 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 only to Floor brokers, which is the only class of Floor 
members not getting the full benefit of their licenses. 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 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 does not permit 
unfair discrimination because they would provide relief for Floor 
brokers that have been disproportionately 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 because the proposed change 
to the Annual Telephone Line Charge is limited in duration (January 
through March, 2013) and Floor brokers are the only class of member 
organization affected by the telecommunications issues described above, 
which have impacted their ability to conduct their regular business and 
have resulted in reduced activity from certain accounts and customers.

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 foregoing proposed rule change does not significantly 
affect the protection of investors or the public interest, does not 
impose any significant burden on competition, and, by its terms, does 
not become operative for 30 days from the date on which it was filed, 
or such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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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    The Exchange has requested that the Commission waive the 30-day 
operative delay. The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. Doing so will allow the Exchange to provide the 
proposed relief during the billing period in which the Floor brokers 
were affected. Accordingly, the Commission designates the proposal 
operative upon filing.\10\
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    \10\ 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 under 
Section 19(b)(2)(B) \11\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \11\ 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-NYSE-2013-26 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-2013-26. 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-

[[Page 23622]]

2013-26 and should be submitted on or before May 10, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-09189 Filed 4-18-13; 8:45 am]
BILLING CODE 8011-01-P