Document ID: SEC-2016-1113-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT LLC
Posted Date: 2016-06-30T04:00Z

[Federal Register Volume 81, Number 126 (Thursday, June 30, 2016)]
[Notices]
[Pages 42779-42781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15500]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78155; File No. SR-NYSEMKT-2016-64]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change for a Temporary 
Suspension of Those Aspects of Rules 36.20--Equities and 36.21--
Equities That Would Not Permit Floor Brokers To Use Personal Portable 
Phone Devices on the Trading Floor Due to the Unavailability of Floor 
Broker Telephone Services

June 24, 2016.
    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 June 24, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE 
MKT'') 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 self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes a temporary suspension of those aspects of 
Rules 36.20--Equities and 36.21--Equities that would not permit Floor 
brokers to use personal portable phone devices on the Trading Floor due 
to the unavailability of Floor broker telephone services on June 24, 
2016. The proposed rule change is available on the Exchange's Web site 
at www.nyse.com, at the principal office of the Exchange,

[[Page 42780]]

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 temporarily suspend those aspects of Rules 
36.20--Equities (``Rule 36.20'') and 36.21--Equities (``Rule 36.21'') 
that would not permit Floor brokers to use personal portable phone 
devices on the Trading Floor.\4\ As proposed, all other aspects of Rule 
36--Equities (``Rule 36'') remain applicable and the temporary 
suspensions of the applicable Rule 36 requirements are in effect on 
June 24, 2016 only.\5\
---------------------------------------------------------------------------

    \4\ Pursuant to Rule 6A--Equities, the Trading Floor is defined 
as the restricted-access physical areas designated by the Exchange 
for the trading of securities.
    \5\ The Exchange provided Floor brokers with notice of this rule 
filing, including the applicable recordkeeping and other 
requirements related to using personal cell phones during the 
temporary suspension of Rule 36.
---------------------------------------------------------------------------

    On June 24, 2016, the third-party carrier that provides service for 
the wired phone lines for Floor brokers experienced an issue that 
affected the availability of those phone lines. This suspension of 
service only impacted the service for telephone service for Floor 
brokers and did not impact phone service for Designated Market Makers. 
The Exchange is working closely with the third-party carrier to restore 
such phone service.
    Rules 36.20 and 36.21 govern the type of telephone communications 
that are approved for Floor brokers. Pursuant to Rule 36.20, Floor 
brokers may maintain a telephone line on the Trading Floor and use 
Exchange authorized and provided portable phones while on the Trading 
Floor. The use of such Exchange authorized and provided portable phones 
is governed by Rule 36.21. Because of the issues with the third-party 
carrier, Floor brokers are unable to reach their customers via their 
third-party carrier wired telephone lines. While Exchange-provided 
portable phones are operating, not all Floor brokers have Exchange-
provided and authorized portable phones. However, the personal cell 
phones of Floor brokers are operational on the Trading Floor. The 
Exchange believes that because communications with customers is a vital 
part of a Floor broker's role as agent and therefore contributes to 
maintaining a fair and orderly market, during the period when the phone 
lines are non-operational, Floor brokers who do not have Exchange 
authorized and provided portable phones should be permitted to use 
personal cell phone devices in lieu of the non-operational wired phone 
lines.\6\
---------------------------------------------------------------------------

    \6\ To the extent that the wired phone lines are operational, 
Floor brokers must use those phone lines rather than use a personal 
cell phone.
---------------------------------------------------------------------------

    The Exchange therefore proposes to temporarily suspend the 
limitations in Rules 36.20 and 36.21 that permit Floor brokers to use 
only Exchange authorized and provided portable phones so that Floor 
brokers who do not have an Exchange authorized and portable phone may 
use personal cell phones on the Trading Floor. The Exchange proposes 
that pursuant to this temporary suspension, Floor brokers must provide 
the Exchange with the names of all Floor-based personnel who used 
personal portable phones during this temporary suspension period, 
together with the phone number and applicable carrier for each number. 
Floor broker member organizations must maintain in their books and 
records all cell phone records that show both incoming and outgoing 
calls that were made during the period that a personal portable phone 
was used on the Trading Floor. To the extent the records are 
unavailable from the third-party carrier, the Floor brokers must 
maintain contemporaneous records of all calls made or received on a 
personal portable phone while on the Trading Floor. As with all member 
organization records, such cell phone records must be provided to 
Exchange regulatory staff on request.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\7\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\8\ in particular, in that 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 facilitating 
transactions in securities, and to remove impediments to and perfect 
the mechanism of a free and open market and a national market system.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, because of issues experienced by a third-party phone 
carrier, wired phone lines are not functional. The Exchange believes 
that the proposed temporary suspensions from those aspects of Rule 36 
that restrict Floor broker's use of personal portable phones on the 
Trading Floor removes impediments to and perfects the mechanism of a 
free and open market and national market system because the proposed 
relief will enable Floor brokers who do not have an Exchange authorized 
and provided portable phone to conduct their regular business, 
notwithstanding the ongoing issues with telephone service. The Exchange 
further believes that without the requested relief, Floor brokers would 
be compromised in their ability to conduct their regular course of 
business on the Trading Floor. In particular, for Floor brokers, 
because they operate as agents for customers, their inability to 
communicate with customers could compromise their ability to represent 
public orders on the Trading Floor.

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. The Exchange does not 
believe that the proposed rule change will impose any burden on 
competition because the proposed change only impacts Floor brokers and 
has no change in operations for other market participants or other 
market centers. To the contrary, the Exchange believes that without the 
proposed relief, Floor brokers would be compromised in their ability to 
conduct their regular course of business on the Trading Floor, thereby 
placing a burden on the Floor brokers' ability to compete.

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.

[[Page 42781]]

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 \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
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.\11\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6). 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 Commission has determined to waive the five-day prefiling period 
in this case.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) under the Act 
\12\ normally does not become operative prior to 30 days after the date 
of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ 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. In support 
of the request, the Exchange states that waiver the 30-day operative 
delay will allow the Exchange to invoke the relief immediately upon 
filing, which is necessary so that Floor brokers may be able to 
communicate with their customers on a day with significantly increased 
volumes of trading due both to the United Kingdom referendum vote to 
leave the European Union and the rebalancing of the Russell Investment 
Group indices after the close of trading on June 24, 2016. Based on the 
above, the Commission believes that waiver of the 30-day operative 
delay is consistent with the protection of investors and the public 
interest because it will permit Floor brokers to remain in 
communication with customers while wired phone lines are unavailable. 
Accordingly, the Commission designates the proposed rule change as 
operative upon filing with the Commission.\14\
---------------------------------------------------------------------------

    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ 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).
---------------------------------------------------------------------------

    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) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-NYSEMKT-2016-64 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-NYSEMKT-2016-64. 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-NYSEMKT-2016-64, and should 
be submitted on or before July 21, 2016.
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2016-15500 Filed 6-29-16; 8:45 am]
 BILLING CODE 8011-01-P