Document ID: SEC-2016-0846-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT LLC
Posted Date: 2016-05-17T04:00Z

[Federal Register Volume 81, Number 95 (Tuesday, May 17, 2016)]
[Notices]
[Pages 30589-30594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11538]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77808; File No. SR-NYSEMKT-2016-51]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change To Amend Rule 98--
Equities

May 11, 2016.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the

[[Page 30590]]

``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that 
on May 2, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') 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 amend Rule 98--Equities to provide that 
when Designated Market Makers (``DMM'') enter interest for the purpose 
of facilitating the execution of customer orders, such orders would not 
be required to be designated as DMM interest. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 98--Equities (``Rule 98'') to 
provide that when DMMs enter interest on a proprietary basis for the 
purpose of facilitating the execution of customer orders, such orders 
would not be required to be designated as DMM interest.\4\ This 
proposed rule change is based on a recently approved amendment to New 
York Stock Exchange LLC (``NYSE'') Rule 98.\5\
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    \4\ As defined in Rule 2(i)--Equities, the term ``DMM'' means an 
individual member, officer, partner, employee or associated person 
of a Designated Market Maker Unit who is approved by the Exchange to 
act in the capacity of a DMM.
    \5\ See Securities Exchange Act Release No. 77708 (April 26, 
2016) (SR-NYSE-2016-16) (NYSE Rule 98 Approval Order).
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Background
    In 2014, the Exchange amended Rule 98 to adopt a principles-based 
approach to prohibit the misuse of material nonpublic information by a 
member organization that operates a DMM unit and make conforming 
changes to other Exchange rules.\6\ Those rule changes provide member 
organizations operating DMM units with the ability to integrate DMM 
unit trading with other trading units, while maintaining tailored 
restrictions to address that DMMs while on the Trading Floor may have 
access to certain Floor-based non-public information. By removing 
prescriptive restrictions, the 2014 Filing was designed to enable a 
member organization that engages in market-making operations on 
multiple exchanges to house its DMM operations together with the other 
market-making operations, even if such operations are customer-facing, 
or, to enable a member organization to consolidate all equity trading, 
including customer-facing operations and the DMM unit, within a single 
independent trading unit.
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    \6\ See Securities Exchange Act Release Nos. 72535 (July 3, 
2014), 79 FR 39024 (July 9, 2014) (Approval Order) and 71838 (April 
1, 2014), 79 FR 19131 (April 7, 2014) (``2014 Notice'') (SR-NYSEMKT-
2014-22) (``2014 Filing'').
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    Rule 98(c) sets forth specified restrictions to operating a DMM 
unit.\7\ Among other requirements, Rule 98(c)(4) provides that any 
interest entered into Exchange systems by the DMM unit in DMM 
securities \8\ must be identifiable as DMM unit interest. Current Rule 
98(c)(4) was designed to ensure that all trading activity by a DMM unit 
in DMM securities at the Exchange is available for review. As discussed 
below, under Rule 98(c)(5), DMMs would continue to be required to 
submit information to the Exchange to make available to the Exchange 
for review all trading activity by a DMM unit in DMM securities. The 
Exchange did not specify which system(s) a DMM unit must use because, 
as the Exchange's trading systems continue to evolve, the manner by 
which interest would be identified as DMM interest could change. 
Accordingly, the current rule requires any trading for the account of 
the DMM unit in DMM securities at the Exchange to be identifiable as 
DMM interest.
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    \7\ As defined in Rule 98(b)(1), the term ``DMM unit'' means a 
trading unit within a member organization that is approved pursuant 
to Rule 103--Equities to act as a DMM unit.
    \8\ As defined in Rule 98(b)(2), the term ``DMM securities'' 
means any securities allocated to the DMM unit pursuant to Rule 
103B--Equities or other applicable rules.
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    Rule 98(c)(5) provides that a member organization must provide the 
Exchange with real-time net position information for trading in DMM 
securities by the DMM unit and any independent trading unit of which it 
is a part, at such times and in the manner prescribed by the Exchange. 
Rule 98(d) further specifies that the DMM rules \9\ will apply only to 
a DMM unit's quoting or trading in its DMM securities for its own 
accounts at the Exchange. Accordingly, the DMM rules do not apply to 
any customer orders that a member organization that operates a DMM unit 
sends to the Exchange as agent.\10\
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    \9\ As defined in Rule 98(b)(3), the term ``DMM rules'' means 
any rules that govern DMM or DMM unit conduct or trading.
    \10\ See 2014 Notice, supra note 5 [sic] at 19137 (specifying 
that Rule 98(d) was added because DMM rules are not applicable to 
any customer orders routed to the Exchange by a member organization 
as agent).
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    Because Rule 98(c)(4) currently requires that any interest entered 
into Exchange systems by the DMM unit in DMM securities be identifiable 
as DMM interest, a DMM unit integrated with a customer-facing unit that 
would send customer orders in DMM securities to the Exchange as 
proprietary interest must identify it as DMM interest. As a result, 
although agency orders are not subject to DMM rules, customer-driven 
interest entered on a proprietary basis is subject to all DMM rules.
    To date, none of the member organizations operating a DMM have 
integrated a DMM unit with a customer-facing trading unit and the 
Exchange believes that the current rule requiring customer-driven 
orders that are represented on a proprietary basis be designated as DMM 
interest has served as a barrier to achieving such integration.\11\ 
Specifically, there are certain scenarios when the rules governing DMMs 
may conflict with a member organization's obligations to its customers. 
For example, DMMs are not permitted to enter Market Orders, MOO Orders, 
CO Orders, MOC Order, LOC Orders, or orders with Sell ``Plus''--Buy 
``Minus'' Instructions.\12\ But to meet

[[Page 30591]]

customer instructions, a customer-driven order entered by a member 
organization on a proprietary basis may need to be one of these order 
types. As another example, DMMs are restricted from engaging in 
specified trading in the last ten minutes of trading before the close 
of trading.\13\ But a member organization may have a best execution 
obligation to route a customer-driven order to the Exchange in the last 
ten minutes of trading.
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    \11\ The Exchange understands it is a common practice among 
market makers that operate as wholesalers, and thus have their own 
customer orders as well as retail order flow from another broker 
dealer, to facilitate the execution of customer order flow by 
representing it on a proprietary basis when such orders are routed 
to an exchange. Once a customer-driven order that has been 
represented on a proprietary basis on an exchange has been executed, 
the market maker uses the position acquired on the Exchange to fill 
the customer order either on a riskless-principal basis or with 
price improvement to the customer.
    \12\ See Rule 104(b)(vi)--Equities.
    \13\ See Rule 104(g)(i)(A)(III)--Equities (defining Prohibited 
Transactions). Specifically, a DMM with a long position in a 
security is prohibited from making a purchase in a security that 
results in a new high price on the Exchange for the day, and a DMM 
with a short position in a security is prohibited from making a sale 
in such security that results in a new low price for the day.
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Proposed Amendments
    The Exchange proposes to amend Rule 98 to better reflect how member 
organizations that integrate DMM unit operations with customer-facing 
operations may facilitate customer-driven order flow to the Exchange in 
DMM securities. As noted above, one of the intended goals of the 2014 
Filing was to permit member organizations to integrate DMM unit 
operations with other market-making operations, including customer-
facing units. However, as discussed above, subjecting customer order 
flow that is entered on a proprietary basis to DMM rules may be 
inconsistent with a member organization's obligations to its customers, 
and thus continue to serve as a barrier to integrating DMM units within 
a member organization. Accordingly, the Exchange proposes to amend Rule 
98 to facilitate better integration of DMM units with a member 
organization's existing customer-facing market-making trading units by 
specifying that, as with agency orders, customer-driven orders that are 
entered on a proprietary basis by the DMM unit would not be required to 
be designated as DMM interest.
    The Exchange proposes to amend Rule 98 to provide that proprietary 
interest that is entered by a DMM unit for the purposes of facilitating 
customer orders would not be required to be designated as DMM interest. 
The Exchange proposes to replace the phrase ``any interest'' with the 
phrase ``proprietary interest'' in Rule 98(c)(4) to clarify that the 
existing rule only governs proprietary interest of a DMM unit, i.e., 
interest for the account of the member organization. As further 
proposed, the Exchange would amend Rule 98(c)(4) to provide that 
proprietary interest entered into Exchange systems by the DMM unit in 
DMM securities would not be required to be identifiable as DMM unit 
interest if such interest is (1) on a riskless principal basis, or on a 
principal basis to provide price improvement to the customer, and (2) 
for the purposes of facilitating the execution of an order received 
from a customer (whether its own customer or the customer of another 
broker-dealer). The Exchange proposes to define such interest as a 
``customer-driven order.''
    The proposed definition of ``customer-driven order'' is not a novel 
concept in that other SROs rules define the concept of a proprietary 
order being entered to facilitate a customer order. For example, 
Supplementary Material .03 to FINRA Rule 5320 defines the term 
``facilitated order'' to mean a proprietary trade that is for the 
purposes of facilitating the execution, on a riskless principal basis, 
of an order from a customer (whether its own customer or another 
broker-dealer).\14\ The Exchange proposes a distinction for the 
definition of ``customer-driven order'' in Rule 98 as compared to the 
Rule 5320 definition of ``facilitated order'' because, as proposed, a 
customer-driven order could be entered, not only on a riskless 
principal basis, but also on a principal basis so the member 
organization could provide price improvement to the customer. In either 
case, the member organization entering the customer-driven order would 
need to have received a customer order before entering a customer-
driven order at the Exchange.\15\
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    \14\ See also Supplementary Material .03 to Rule 5320--Equities.
    \15\ If a customer-driven order, as defined in Rule 98(c)(4), is 
not handled on a riskless principal basis, it would not be eligible 
for the riskless principal exception to the prohibition against 
trading ahead of customer orders as specified in Rule 5320--
Equities.
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    The proposed rule change is designed to reflect how member 
organizations handle customer orders, which in many circumstances, are 
routed to an exchange on a proprietary basis to facilitate execution of 
a customer's order. Therefore, the Exchange believes that the proposed 
amendment is consistent with the current rule, which does not require 
agency orders entered by the member organization that operates a DMM 
unit to be subject to DMM rules.\16\
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    \16\ See supra note 10.
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    The Exchange further proposes to amend Rule 98(c)(4) to specify 
that a DMM unit must use unique mnemonics that identify to the Exchange 
its customer-driven orders in DMM securities. Such mnemonics may not be 
used for trading activity at the Exchange in DMM securities that are 
not customer-driven orders, but may be used for trading activities in 
securities not assigned to the DMM. The Exchange believes that 
requiring a separate mnemonic for customer-driven orders would assist 
the Exchange in monitoring DMM unit compliance with the proposed 
rule.\17\
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    \17\ The Exchange requires a member to use a different mnemonic 
for its SLP-Prop trading activity in assigned SLP securities than it 
uses for such member's trading in assigned SLP securities that is 
not SLP-Prop trading. Using different mnemonics allows the Exchange 
to identify SLP-Prop trading activity in a member organization's 
assigned SLP securities. A member organization may use the same 
mnemonic for its trading activity in securities not assigned to an 
SLP as it uses for its SLP-Prop trading in assigned SLP securities. 
See Rule 107B(c)(2)--Equities.
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    The Exchange further proposes to amend Rule 98(d) to specify which 
rules would be applicable to trading by the DMM unit. As proposed, the 
rules, fees, or credits applicable to DMM quoting or trading activity 
would apply only to a DMM unit's quoting or trading in its DMM 
securities for its own account at the Exchange that has been identified 
as DMM interest. In addition, consistent with the proposal that 
customer-driven orders would not be required to be designated as DMM 
interest, the Exchange proposes to add text to Rule 98(d) to state that 
customer-driven orders for the account of a DMM unit that have not been 
identified as DMM interest would not be subject to DMM rules or be 
eligible for any fees or credits applicable to DMM quoting or trading 
activity.\18\ In addition, such customer-driven orders could not be 
aggregated with interest that has been identified as DMM interest for 
purposes of any DMM-related fees or credits or DMM quoting obligations 
specified in Rule 104(a). This proposed rule text would provide that 
customer-driven orders not designated as DMM interest would not be 
subject to DMM rules, which, as described above, include restrictions 
on availability of certain order types and entry of specified orders 
during the last ten minutes of trading. Because a customer-driven order 
that has not been designated as DMM interest would not be subject to 
DMM rules, it would also not be eligible for a parity allocation 
applicable for DMMs pursuant to Rule 72(c) or be used to assist a DMM 
in meeting its quoting or market maintenance obligations, or be 
eligible for DMM fees or credits.
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    \18\ Customer-driven orders would be eligible for any fees or 
credits applicable to equity transactions at the Exchange that are 
not DMM or Floor broker trades. See NYSE MKT Equities Price List, 
available here: https://www.nyse.com/publicdocs/nyse/markets/nyse-mkt/NYSE_MKT_Equities_Price_List.pdf.

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[[Page 30592]]

    The Rule 98(c)(5) obligation to provide the Exchange with real-time 
net position information in DMM securities would continue to be 
applicable to the DMM unit's position in DMM securities together with 
any position of a Regulation SHO independent trading unit of which the 
DMM unit may be included, regardless of whether they are positions 
resulting from trades in away markets, trades as a result of DMM 
interest entered at the Exchange, or customer-driven orders routed to 
the Exchange that were not identified as DMM interest.\19\ For example, 
if a DMM unit is combined with market-making desks that are trading on 
away markets and that route customer-driven orders to the Exchange in 
DMM securities that are not identified as DMM interest, the member 
organization would be required to report the position of the entire DMM 
unit in DMM securities, not only the DMM's Exchange-traded positions 
resulting from DMM interest. The Exchange also proposes a non-
substantive amendment to Rule 98(c)(5) to delete the term ``for 
trading,'' which the Exchange believes is extraneous rule text.
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    \19\ Under Regulation SHO, determination of a seller's net 
position is based on the seller's position in the security in all of 
its accounts, absent aggregation unit treatment under Rule 200(f) of 
Regulation SHO. See Securities Exchange Act Release No. 50103 (July 
28, 2004), 69 FR 48008, 48010, n.22 (Aug. 6, 2004); see also 
Securities Exchange Act Release No. 48709 (Oct. 29, 2003), 68 FR 
62972, 62991 and 62994 (Nov. 6, 2003); Letter from Richard R. 
Lindsey, Director, Division of Market Regulation, to Roger D. Blanc, 
Wilkie Farr & Gallagher, SEC No-Action Letter, 1998 SEC No-Act. 
LEXIS 1038, p. 5 (Nov. 23, 1998); Securities Exchange Act Release 
No. 30772 (June 3, 1992), 57 FR 24415, 24419 n.47 (June 9, 1992); 
Securities Exchange Act Release No. 27938 (Apr. 23, 1990), 55 FR 
17949, 17950 (Apr. 30, 1990). The Commission adopted a narrow 
exception to Regulation SHO's ``locate'' requirement only for market 
makers engaged in bona-fide market making in the security at the 
time they effect the short sale. See 17 CFR 242.203(b)(2)(iii); see 
also Securities Exchange Act Release No. 50103 (July 28, 2004), 69 
FR 48008, 48015 (Aug. 6, 2004); Securities Exchange Act Release No. 
58775 (Oct. 14, 2008), 73 FR 61690, 61698-9 (Oct. 17, 2008). Broker-
dealers would not be able to rely on the Exchange's or any self-
regulatory organization's designation of market marking for 
eligibility for the bona-fide market making exception to the 
``locate'' requirement, as such designations are distinct and 
independent from Regulation SHO. Further, the Exchange's designation 
of proprietary interest or any exclusion from proprietary interest 
for purposes of NYSE rules is not relevant for purposes of 
Regulation SHO. Eligibility for the bona-fide market making 
exception depends on the facts and circumstances and a determination 
of bona-fide market making is based on the Commission's factors 
outlined in the aforementioned Regulation SHO releases. It should 
also be noted that a determination of bona-fide market making is 
relevant for the purposes of the close-out obligations under Rule 
204 of Regulation SHO. See 17 CFR 242.204(a)(3).
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \20\ that an Exchange have rules that 
are designed to promote the just and equitable principles of trade, 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. The Exchange believes that the 
proposed rule change would remove impediments to and perfect the 
mechanism of a free and open market by providing greater specificity in 
Rule 98 regarding which proprietary interest would be required to be 
entered as DMM interest.
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    \20\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed amendment to define the 
term ``customer-driven order'' to be proprietary interest of a DMM that 
is for the purposes of facilitating the execution of an order received 
from a customer (whether its own customer or the customer of another 
broker-dealer) on a riskless principal basis or on a principal basis to 
provide price improvement to the customer reflects the current reality 
of how broker-dealers facilitate customer orders that are routed to an 
exchange. Specifically, after receiving a customer order, such customer 
order is routed to an exchange on a proprietary basis, and once an 
execution is received from an exchange, the execution is provided to 
the customer either on a riskless principal basis or with price 
improvement. Facilitating customer orders on a proprietary basis is not 
a novel concept and serves as the basis of the definition of the term 
``facilitated order'' in Supplementary Material .03 to FINRA Rule 5320. 
While the Exchange proposes that customer-driven orders for the 
purposes of Rule 98 would not be required to be executed only on a 
riskless principal basis, but could also be executed on a principal 
basis to provide price improvement to the customer, this difference 
does not alter the premise of how member organizations facilitate 
customer orders, as already established in Rule 5320.03. Because the 
proposed definition is narrowly defined to reflect how customer orders 
are facilitated on a proprietary basis when routed to an exchange, the 
Exchange believes that the proposed amendment to Rule 98(c)(4) to 
define the term ``customer-driven order'' would remove impediments to 
and perfect the mechanism of a free and open market.
    The Exchange believes that requiring a DMM unit to use unique 
mnemonics to identify customer-driven orders in DMM securities would 
promote just and equitable principles of trade because requiring such 
orders to be entered using unique mnemonics would assist the Exchange 
in monitoring DMM unit compliance with the proposed rule.
    The Exchange further believes that providing DMM units with a 
choice of whether to designate a customer-driven order as DMM interest 
would remove impediments to and perfect the mechanism of a free and 
open market because certain DMM rules may conflict with a broker-
dealer's obligation to its customers. As discussed in the 2014 Filing, 
agency orders entered by a member organization that operates a DMM unit 
are not subject to DMM rules.\21\ Yet, if that same customer order were 
routed to the Exchange on a proprietary basis, which is the manner by 
which broker-dealers may handle customer order flow, it would be 
subject to DMM rules. Accordingly, because Rule 98 does not currently 
require agency flow to be subject to DMM rules, the Exchange believes 
it is consistent with the protection of investors and the public 
interest that agency flow that is facilitated by a member organization 
on a proprietary basis at the Exchange would similarly not be required 
to be subject to DMM rules.
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    \21\ See supra note 10.
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    The proposed rule change would further be consistent with the 
protection of investors and the public interest because it would enable 
customer-driven orders to not be subject to DMM rules and eliminate any 
conflict with customer instructions or best execution obligations. The 
Exchange notes that this proposed rule change would not alter in any 
way a member organization's existing obligations under Section 15(g) of 
the Act,\22\ Regulation SHO,\23\ Rule 5320, or to maintain policies and 
procedures to assure that a member organization does not engage in any 
frontrunning of customer order information in violation of Exchange, 
FINRA, or federal securities laws.
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    \22\ 15 U.S.C. 78o(g).
    \23\ 17 CFR 242.201.
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    The Exchange further believes that the proposed amendments to Rule 
98(d) would remove impediments to and perfect the mechanism of a free 
and open market by promoting transparency in Exchange rules regarding 
which rules, fees or credits applicable to DMM quoting or trading 
activity would be applicable to which interest. More specifically, the 
Exchange believes that it would remove impediments to and

[[Page 30593]]

perfect the mechanism of a free and open market to provide specificity 
in Exchange rules that customer-driven orders that have not been 
designated as DMM interest would not be subject to the DMM rules and 
also would not be eligible for DMM fees or credits or to be aggregated 
with DMM interest for purposes of any DMM-related fees or credits or 
DMM quoting obligations.
    Finally, the Exchange believes that the proposed amendment to Rule 
98(c)(5) would remove impediments to and perfect the mechanism of a 
free and open market by removing extraneous rule text, thus promoting 
simplicity in Exchange rules.

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 proposed rule change is 
designed to be pro-competitive because it would remove a restriction 
unique to DMMs as specified in Rule 98, thus enabling existing 
customer-facing market making units to operate as a DMM unit at the 
Exchange without needing to change the manner by which they may 
facilitate customer orders on a proprietary basis at an exchange. The 
proposed rule change would also harmonize the Exchange's rules with 
recently approved amendments to NYSE Rule 98.\24\
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    \24\ See NYSE Rule 98 Approval Order, supra note 5.
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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) of the Act \25\ and Rule 19b-4(f)(6) thereunder.\26\ 
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.
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    \25\ 15 U.S.C. 78s(b)(3)(A).
    \26\ 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) \27\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\28\ 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 Exchange notes that 
the merits of the proposed rule change have already been considered by 
the Commission in the context of a substantively identical filing by 
the NYSE, which the Commission approved.\29\ The Exchange also believes 
that waiver is appropriate so that DMM units that are registered in 
both Exchange-listed and NYSE-listed securities will again, without 
delay, be subject to consistent rules across the two exchanges. The 
Commission believes that the proposed rule change is consistent with 
the protection of investors and the public interest, because the 
proposal is substantively identical to the NYSE proposal that was 
recently approved by the Commission, and because waiver of the 
operative delay will provide for consistent rules between NYSE and the 
Exchange. Accordingly, the Commission hereby waives the 30-day 
operative delay and designates the proposal operative upon filing.\30\
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    \27\ 17 CFR 240.19b-4(f)(6).
    \28\ 17 CFR 240.19b-4(f)(6)(iii).
    \29\ See NYSE Rule 98 Approval Order, supra note 5.
    \30\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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    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) \31\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \31\ 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-NYSEMKT-2016-51 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-2016-51. 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-2016-51 and should 
be submitted on or before June 7, 2016.

[[Page 30594]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\32\
Robert W. Errett,
Deputy Secretary.
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    \32\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2016-11538 Filed 5-16-16; 8:45 am]
 BILLING CODE 8011-01-P