Document ID: SEC-2019-0183-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2019-02-21T05:00Z

[Federal Register Volume 84, Number 35 (Thursday, February 21, 2019)]
[Notices]
[Pages 5536-5538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02899]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85145; File No. SR-NYSE-2019-03]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
(1) Delete Dealings and Settlements (Rule 45-299C), Rule 235 (Ex-
Dividend, Ex-Rights), Rule 236 (Ex-Warrants), and Rule 257 (Deliveries 
After ``Ex'' Date) and (2) Amend Dealings and SettlementsT (Rule 45-
299C), Rule 235T (Ex-Dividend, Ex-Rights), Rule 236T (Ex-Warrants), and 
Rule 257T (Deliveries After ``Ex'' Date)

February 14, 2019.
    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 February 4, 2019, New York Stock Exchange LLC (``NYSE'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``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 (1) delete Dealings and Settlements (Rule 
45-

[[Page 5537]]

299C), Rule 235 (Ex-Dividend, Ex-Rights), Rule 236 (Ex-Warrants), and 
Rule 257 (Deliveries After ``Ex'' Date) and (2) amend Dealings and 
SettlementsT (Rule 45-299C), Rule 235T (Ex-Dividend, Ex-Rights), Rule 
236T (Ex-Warrants), and Rule 257T (Deliveries After ``Ex'' Date) to 
reflect the standard settlement cycle 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.

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 (1) delete Dealings and Settlements (Rule 
45-299C), Rule 235 (Ex-Dividend, Ex-Rights), Rule 236 (Ex-Warrants), 
and Rule 257 (Deliveries After ``Ex'' Date) and (2) amend Dealings and 
SettlementsT (Rule 45-299C), Rule 235T (Ex-Dividend, Ex-Rights), Rule 
236T (Ex-Warrants), and Rule 257T (Deliveries After ``Ex'' Date) to 
reflect the standard 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) to shorten the standard 
settlement cycle from T+3 to T+2.\4\ The amendment was adopted on March 
22, 2017, with a compliance date of September 5, 2017.\5\
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    \4\ See Securities Exchange Act Release No. 78962 (September 28, 
2016), 81 FR 69240 (October 5, 2016) (File No. S7-22-16).
    \5\ 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.\6\ Because the Exchange would not 
implement the new rules until after the final implementation of T+2, 
the Exchange retained the versions of the rules reflecting T+3 
settlement on its books. Certain of these rules were deleted in 
connection with the Exchange's elimination of non-regular way 
trading.\7\
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    \6\ See Securities Exchange Act Release No. 80021 (February 10, 
2017), 82 FR 10931(February 16, 2017) (SR-NYSE-2016-87).
    \7\ See Securities Exchange Act Release No. 81176 (July 20, 
2017), 82 FR 34728 (July 26, 2017) (SR-NYSE-2017-33).
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    In order to reduce the potential for confusion regarding which 
version of the rule governs, the Exchange added explanatory preambles. 
In particular, the following preamble was added to Dealings and 
Settlements, Rule 235, Rule 236 and Rule 257:
    ``This version of . . . will remain operative until the Exchange 
files separate proposed rule changes as necessary to establish the 
operative date of . . ., to delete this version of . . . and preamble, 
and to remove the preamble text from the version of . . . . In addition 
to filing the necessary proposed rule changes, the Exchange will 
announce via Information Memo the operative date of the deletion of 
this Rule and implementation of . . .''
    The following preamble was added to Dealings and SettlementsT, Rule 
235T, Rule 236T and Rule 257T:
    ``The Exchange will file separate proposed rule changes to 
establish the operative date of . . ., to delete . . . and the preamble 
text from . . ., and to remove the preamble text from the version of . 
. . . Until such time, . . . will remain operative. In addition to 
filing the necessary proposed rule changes, the Exchange will announce 
via Information Memo the implementation of this Rule and the operative 
date of the deletion of . . .''
    In July 2017, the Exchange (1) deleted Rule 282.65 and Section 
703.02(part2) of the Listed Company Manual; (2) deleted the preamble 
and ``T'' modifier from Rule 282.65T and Section 703.02T of the Listed 
Company Manual; and (3) established the operative date of Rule 282.65T 
and Section 703.02T of the Listed Company Manual.\8\ As part of that 
filing, the Exchange inadvertently omitted Dealings and Settlements and 
Dealings and SettlementsT, Rule 235 and Rule 235T, Rule 236 and Rule 
236T, and Rule 257 and Rule 257T.
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    \8\ See Securities Exchange Act Release No. 81231 (July 27, 
2017), 82 FR 36008 (August 2, 2017) (SR-NYSE-2017-38).
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Proposed Rule Change
    In order to reflect the September 5, 2017 transition to T+2 
settlement in its rulebook, the Exchange proposes to:
     Delete Dealings and Settlements, Rule 235, Rule 236, and 
Rule 257, including the preambles, in their entirety as obsolete;
     delete the obsolete ``T'' modifier in Dealings and 
SettlementsT, Rule 235T, Rule 236T, and Rule 257T; and
     delete the preambles to Dealings and SettlementsT, Rule 
235T, Rule 236T, and Rule 257T, which distinguished such rules from the 
T+3 rules, as obsolete.
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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    In particular, the Exchange believes that the proposed changes 
remove impediments to and perfect the mechanism of a free and open 
market by adding clarity as to which rules are operative and when, 
thereby reducing potential confusion, and making the Exchange's rules 
easier to navigate. The Exchange also believes that eliminating 
obsolete material from its rulebook also removes impediments to and 
perfects the mechanism of a free and open market by removing confusion 
that may result from having obsolete material in the Exchange's 
rulebook. The Exchange believes that eliminating such 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 serve to promote 
clarity and consistency, thereby reducing burdens

[[Page 5538]]

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, it 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). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the 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.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \13\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ permits the 
Commission to 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. According to 
the Exchange, waiver would allow the Exchange to conform the rule to 
the current settlement cycle and eliminate outdated references to the 
T+3 settlement cycle without undue delay. The Commission believes that 
the proposed rule change raises no new or novel issues and that waiver 
of the operative delay is consistent with the protection of investors 
and the public interest. Therefore, the Commission hereby waives the 
operative delay and designates the proposal 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 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-2019-03 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-NYSE-2019-03. 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-NYSE-2019-03 and should be submitted on 
or before March 14, 2019.

    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,
Deputy Secretary.
[FR Doc. 2019-02899 Filed 2-20-19; 8:45 am]
 BILLING CODE 8011-01-P