Document ID: SEC-2016-0228-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT, LLC
Posted Date: 2016-02-11T05:00Z

[Federal Register Volume 81, Number 28 (Thursday, February 11, 2016)]
[Notices]
[Pages 7392-7394]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-02729]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77074; File No. SR-NYSEMKT-2016-14]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending Supplementary 
Material .10 to Rule 103B--Equities 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

February 5, 2016.
    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 January 27, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') 
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 Supplementary Material .10 to Rule 
103B--Equities 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. 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,

[[Page 7393]]

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 Supplementary Material .10 to Rule 
103B--Equities 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 
that provision.
    Supplementary Material .10 to Rule 103B--Equities establishes a 
process to be followed by any listed company wishing to change to a new 
DMM unit. The rule provides that 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 provisions of Rule 103B--Equities in relation to an issuer's 
initial selection of a DMM, 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. We also note 
that the NYSE recently amended its parallel provision (Section 806.01 
of the NYSE's Listed Company Manual) to address this issue by providing 
that an Issuer Notice may be signed by an official of the listed 
company with the rank of Corporate Secretary or higher.\3\ 
Consequently, we propose to amend Supplementary Material .10 to Rule 
103B--Equities to make the same change.
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    \3\ See Securities Exchange Act Release No. 76591 (December 8, 
2015), 80 FR 77392 (December 14, 2015) (SR-NYSE-2015-63).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \4\ of the Act, in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\5\ 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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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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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.

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 \6\ and Rule 19b-4(f)(6) thereunder.\7\ 
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 \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \6\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \7\ 17 CFR 240.19b-4(f)(6).
    \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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    A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\11\ 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 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

[[Page 7394]]

must be that of a senior official at the company with a rank of 
Corporate Secretary or above. 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.\12\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ 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-NYSEMKT-2016-14 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-NYSEMKT-2016-14. 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-2016-14, and should 
be submitted on or before March 3, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12), (59).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-02729 Filed 2-10-16; 8:45 am]
 BILLING CODE 8011-01-P