Document ID: SEC-2018-0805-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American LLC
Posted Date: 2018-05-23T04:00Z

[Federal Register Volume 83, Number 100 (Wednesday, May 23, 2018)]
[Notices]
[Pages 23948-23950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10974]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83273; File No. SR-NYSEAMER-2018-21]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Rule 7.4E To Reflect the Standard Settlement Cycle of Two Business Days 
After the Trade Date

May 17, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on May 11, 2018, NYSE American LLC (``Exchange'' or ``NYSE 
American'') 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.
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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 Rule 7.4E to reflect the standard 
settlement cycle of two business days after the trade date (``T+2'') in 
Securities Exchange Act Rule 15c6-1(a). The proposed rule change is 
available on the Exchange's website at www.nyse.com, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

[[Page 23949]]

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 Rule 7.4E to reflect the standard 
T+2 settlement cycle in Securities Exchange Act (the ``Act'') Rule 
15c6-1(a) (``Rule 15c6-1(a)'').

Background

    On September 28, 2016, the Securities and Exchange Commission 
(``SEC'') proposed amendments to Rule 15c6-1(a) under the Act \4\ to 
shorten the standard settlement cycle from three business days after 
the trade date (``T+3'') to T+2.\5\ The amendment was adopted on March 
22, 2017, with a compliance date of September 5, 2017.\6\
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    \4\ See 17 CFR 240.15c6-1(a).
    \5\ See Securities Exchange Act Release No. 78962 (September 28, 
2016), 81 FR 69240 (October 5, 2016) (File No. S7-22-16).
    \6\ See Securities Exchange Act Release No. 80295 (March 22, 
2017), 82 FR 15564 (March 29, 2017) (File No. S7-22-16).
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    In response, the Exchange adopted new rules with the modifier ``T'' 
to reflect a T+2 settlement cycle but retained versions of rules 
reflecting T+3 settlement because the Exchange would not implement the 
new rules until after the final implementation of T+2.\7\
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    \7\ See Securities Exchange Act Release No. 80020 (February 10, 
2017), 82 FR 10940 (February 16, 2017) (SR-NYSEMKT-2016-119).
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    Rule 7.4E (Ex-Dividend or Ex-Right Dates), which establishes the 
ex-dividend and ex-rights dates for stocks traded regular way in 
connection with the implementation of Pillar on the Exchange, was 
approved in May 2017.\8\ The Exchange began trading on the Pillar 
platform on July 24, 2017.
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    \8\ See Securities Exchange Act Release Nos. 80590 (May 4, 
2017), 82 FR 21843 (May 10, 2017) (Approval Order) and 79993 
(February 9, 2017), 82 FR 10814,10815-16 (February 15, 2017) (SR-
NYSEMKT-2017-01) (Notice). Pillar is an integrated trading 
technology platform designed to use a single specification for 
connecting to the equities and options markets operated by the 
Exchange and its affiliates, NYSE Arca, Inc. and New York Stock 
Exchange LLC.
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    In connection with the September 5, 2017 compliance date for 
shortening of the standard settlement cycle from T+3 to T+2, the 
Exchange deleted the rules reflecting the T+3 settlement cycle and 
implemented the new rules reflecting the T+2 settlement cycle. The 
Exchange, however, inadvertently did not update Rule 7.4E to reflect 
T+2 settlement, which it currently proposes to do.
    To effectuate the proposed change, the Exchange proposes to delete 
the word ``second'' so the reference would be to the ``business day'' 
preceding the record date. The current Rule further provides that if 
the record date or closing of transfer books occurs upon a day other 
than a business day, the Rule shall apply for the third preceding 
business day. The Exchange also proposes to change ``third preceding 
business day'' to ``second preceding business day.''
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\9\ in general, and further the objectives 
of Section 6(b)(5) of the Act,\10\ in particular, because it is 
designed to prevent fraudulent and manipulative acts and practices, 
promote just and equitable principles of trade, 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.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The proposed change is consistent with the SEC's amendment to Rule 
15c6-1(a) requiring standard settlement no later than T+2. The Exchange 
believes that removing obsolete references to T+3 settlement from the 
Exchange's rulebook removes impediments to and perfects the mechanism 
of a free and open market, thereby reducing potential confusion, making 
the Exchange's rules easier to navigate. The Exchange believes that 
eliminating obsolete material would not be inconsistent with the public 
interest and the protection of investors because investors will not be 
harmed and in fact would benefit from increased transparency, thereby 
reducing potential confusion.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change is not 
designed to address any competitive issue but rather to promote clarity 
and consistency, thereby reducing burdens on the marketplace and 
facilitating investor protection.

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 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 \11\ and Rule 19b-4(f)(6) 
thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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) \13\ normally 
does not become operative for 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\14\ 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 consistent with the 
protection of investors and the public interest. Waiving the operative 
delay will allow the Exchange to immediately conform its rule to Rule 
15c6-1(a) under the Act, that has a standard settlement cycle of T+2, 
and eliminate outdated references to the T+3 settlement cycle. 
Accordingly, the Commission hereby waives the 30-day operative delay 
requirement and

[[Page 23950]]

designates the proposed rule change as operative upon filing.\15\
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission has also 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 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 [email protected]. Please include 
File Number SR-NYSEAMER-2018-21 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-NYSEAMER-2018-21. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSEAMER-2018-21, and should be 
submitted on or before June 13, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-10974 Filed 5-22-18; 8:45 am]
 BILLING CODE 8011-01-P