
[Federal Register Volume 79, Number 96 (Monday, May 19, 2014)]
[Notices]
[Pages 28779-28781]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-11440]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72160; File No. SR-NYSEARCA-2014-55]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Deleting NYSE Arca 
Rule 9.1(b) To Harmonize NYSE Arca's Rules With the Rules of Other 
Self-Regulatory Organizations Concerning Office Space Sharing

May 13, 2014.
    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 1, 2014, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE 
Arca'') 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 delete NYSE Arca Rule 9.1(b) to harmonize 
NYSE Arca's rules with the rules of other self-regulatory organizations 
(``SROs'') concerning office space sharing. The text of 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 delete NYSE Arca Rule 9.1(b) to harmonize 
NYSE Arca's rules with the rules of other SROs concerning office space 
sharing.
Background
    On July 30, 2007, the Financial Industry Regulatory Authority 
Inc.'s (``FINRA) predecessors, the National Association of Securities 
Dealers, Inc. (``NASD''), and NYSE Regulation, Inc. (``NYSER''), 
consolidated their member firm regulation operations into a combined 
organization, FINRA. Pursuant to Rule 17d-2 under the Act, New York 
Stock Exchange, LLC (``NYSE''), NYSER and FINRA entered into an 
agreement (the ``Agreement'') to reduce regulatory duplication for 
their members by allocating to FINRA certain regulatory 
responsibilities for NYSE rules and rule interpretations (``FINRA 
Incorporated NYSE Rules''). NYSE MKT LLC (``NYSE MKT'') became a party 
to the Agreement effective December 15, 2008.
    As part of its effort to reduce regulatory duplication and relieve 
firms that are members of FINRA, NYSE and NYSE MKT of conflicting or 
unnecessary regulatory burdens, FINRA is now engaged in the process of 
reviewing and amending the NASD and FINRA Incorporated NYSE Rules in 
order to create a consolidated FINRA rulebook.\4\ FINRA recently 
harmonized

[[Page 28780]]

NASD and FINRA Incorporated NYSE Rules and interpretations concerning 
supervision.\5\ FINRA's supervisory rule changes will become effective 
on December 1, 2014.\6\
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    \4\ FINRA's rulebook currently has three sets of rules: (1) NASD 
Rules, (2) FINRA Incorporated NYSE Rules, and (3) consolidated FINRA 
Rules. The FINRA Incorporated NYSE Rules apply only to those members 
of FINRA that are also members of the NYSE (``Dual Members''), while 
the consolidated FINRA Rules apply to all FINRA members. For more 
information about the FINRA rulebook consolidation process, see 
FINRA Information Notice, March 12, 2008.
    \5\ See Securities Exchange Act Release No. 71179 (December 23, 
2013), 78 FR 79542 (December 30, 2013) (SR-FINRA-2013-025).
    \6\ See FINRA Regulatory Notice 14-10.
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    As part of this filing, FINRA deleted Incorporated NYSE Rule 343 
and its interpretation. These provisions set forth certain pre-approval 
requirements for space sharing.\7\ As part of the harmonization 
process, FINRA determined that a pre-approval process was no longer 
necessary and instead NASD's notice filing model would be utilized.
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    \7\ NYSE Rule 343(a) provides that, unless otherwise permitted 
by the NYSE, an office or foreign incorporated branch of a member or 
member organization may not be occupied jointly with any other 
broker or dealer, investment advisor, or other person who conducts a 
securities or commodities business with the public. Certain types of 
office space arrangements that were deemed permissible are described 
in the rule. NYSE Rule 343(b) provides that members and member 
organizations may share office space with any person who is not a 
broker or dealer, an investment advisor, or who does not conduct a 
securities or commodities business with the public. NYSE Rule 343(c) 
also provides that, unless otherwise permitted by the NYSE, the main 
office of every member organization must remain open for business on 
every full business day during the trading hours on the NYSE. 
Supplementary Material 343.10 provides additional guidance relating 
to office space arrangements. The related NYSE Rule 343 
Interpretation provides additional guidance relating to space 
sharing.
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    FINRA also recently amended the Uniform Branch Office Registration 
Form (``Form BR''), which is used by firms to register their branch 
offices with participating SROs and states via the Central Registration 
Depository.\8\ Among other things, the amendments to Form BR eliminated 
Section 6, which incorporated space sharing arrangement questions 
relating to NYSE Rule 343. As such, FINRA accelerated the effective 
date for the deletion of Incorporated NYSE Rule 343 and the related 
interpretations to April 7, 2014, to correspond to the effective date 
of the revised Form BR.\9\ Thus, there are no longer any pre-approval 
requirements for FINRA members that are also members of NYSE.
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    \8\ See Securities Exchange Act Release No. 71626 (February 27, 
2014), 79 FR 12547 (March 5, 2014) (SR-FINRA-2013-051).
    \9\ See FINRA Regulatory Notice 14-11.
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Proposed Rule Change
    As a result of the changes to Form BR, there is no longer a 
mechanism to collect the information used for the space sharing pre-
approval process under NYSE Rule 343. As such, NYSE has eliminated NYSE 
Rule 343 and its interpretations, and NYSE MKT also has eliminated NYSE 
MKT Rule 343--Equities, which is substantially the same as NYSE Rule 
343.\10\ To harmonize its office space sharing requirements with other 
SROs, NYSE Arca similarly proposes to delete NYSE Arca Rule 9.1(b), 
which requires prior and continuing approval of the Exchange for 
certain space sharing arrangements.\11\ The Exchange notes that any 
office-sharing arrangements of OTP Holders and OTP Firms that engage in 
a public business would be required to be disclosed on Form BR.
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    \10\ See Securities Exchange Act Release Nos. 71989 (April 22, 
2014) (SR-NYSE-2014-21) and 71988 (April 22, 2014) (SR-NYSEMKT-2014-
34).
    \11\ NYSE Arca Rule 9.1(b) provides that OTP Holders and OTP 
Firms may not occupy joint quarters with anyone other than another 
OTP Holder or OTP Firm without the prior and continuing approval of 
the Exchange.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\12\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\13\ in particular, because it 
is designed to promote just and equitable principles of trade and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. Specifically, the Exchange 
believes that the proposed rule change supports the objectives of the 
Act by providing greater harmonization between NYSE Arca rules and 
NYSE, NYSE MKT, and FINRA rules of similar purpose, resulting in less 
burdensome and more efficient regulatory compliance. In particular, 
deleting NYSE Arca Rule 9.1(b) would promote just and equitable 
principles of trade by harmonizing the Exchange's rules with the rules 
of the NYSE, NYSE MKT, and FINRA and with Form BR, which is used by the 
Securities and Exchange Commission (``Commission''), SROs, and states.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 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 purposes of the Act. The proposed rule change is 
not intended to address competitive issues but rather to achieve 
greater consistency between NYSE Arca's rules concerning office space 
sharing with other SROs.

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 \14\ and Rule 19b-4(f)(6) thereunder.\15\ 
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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    \14\ 15 U.S.C. 78s(b)(3)(A)(iii). 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.
    \15\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\17\ 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 upon filing. The Commission believes that waiving 
the 30-day operative delay is consistent with the protection of 
investors and the public interest, as it will harmonize the Exchange's 
rules with the rules of the NYSE, NYSE MKT, and FINRA and with Form BR, 
thus helping to eliminate confusion regarding broker reporting 
obligations.\18\ Therefore, the Commission designates the proposed rule 
change to be operative upon filing.
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ 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 such proposed rule 
change, the

[[Page 28781]]

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) \19\ of the Act to determine whether the proposed rule 
change should be approved or disapproved.
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    \19\ 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-NYSEARCA-2014-55 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-NYSEARCA-2014-55. 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 will also be available 
for inspection and copying at the NYSE's principal office and on its 
Internet Web site at www.nyse.com. 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-NYSEARCA-2014-55 and should be submitted on or before 
June 9, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-11440 Filed 5-16-14; 8:45 am]
BILLING CODE 8011-01-P


