
[Federal Register Volume 81, Number 155 (Thursday, August 11, 2016)]
[Notices]
[Pages 53176-53180]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19053]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78483; File No. SR-NYSEMKT-2016-68]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of 
Proposed Rule Change, Rule Change, as Modified by Amendment No. 1, 
Amending NYSE Rule 49--Equities Regarding: (1) The Exchange's Emergency 
Powers; (2) the Exchange's Disaster Recovery Plans; and (3) Exchange 
Backup Systems and Mandatory Testing

August 5, 2016.
    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 July 29, 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 49--Equities (Emergency Powers) 
by (1) replacing the text of current Rule 49--Equities with the 
Exchange's proposed disaster recovery plans; and (2) moving the text of 
current Rule 431 (Exchange Backup Systems and Mandatory Testing) 
relating to Exchange member organizations to Rule 49--Equities. This 
Amendment No. 1 supersedes the original filing in its entirety. 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 49--Equities (``Rule 49''), 
which addresses the Exchange's emergency powers, by (1) replacing the 
text of current Rule 49 with the Exchange's proposed disaster recovery 
plans; and (2) moving the text of current Rule 431 (Exchange Backup 
Systems and Mandatory Testing) relating to Exchange equity member 
organizations to Rule 49 with no substantive changes. The Exchange 
further proposes to amend Rules 0--Equities and 431 to specify that 
Rule 431 would govern Exchange Backup Systems and Mandatory Testing for 
Exchange ATP Holders only.
    The Exchange proposes to amend Rule 49 in two ways. First, the 
Exchange proposes to replace the current disaster recovery plan, 
pursuant to which NYSE Arca, Inc. (``NYSE Arca''), the Exchange's 
affiliate, will act on behalf of and at the direction of the Exchange 
for auctions and specified regulatory messages in Exchange-listed 
securities, with a new disaster recovery plan that the Exchange would 
implement if the Exchange's primary data center is impaired. Under the 
proposed disaster recovery plan, the Exchange would no longer rely on 
NYSE Arca to act on its behalf. Rather, the Exchange would operate as a 
fully electronic exchange under its own trading rules and would 
maintain its own order book in its disaster recovery facility. In 
addition, quotes and trades would be published to the securities 
information processor (``SIP'') as quotes and trades of the Exchange. 
To reflect this change, the Exchange proposes to delete Rule 49 
(Emergency Powers) in its entirety and replace it with new proposed 
Rule 49(a).\4\
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    \4\ Because the Exchange would not implement proposed Rule 49(a) 
until after an opportunity to test it with Exchange member 
organizations, the Exchange proposes to retain current Rule 49 on 
its books and not delete it until after proposed Rule 49(a) is 
approved. The Exchange also proposes to file a separate proposed 
rule change to establish the operative date of paragraph (a) of 
proposed Rule 49 and delete the current version of the rule. To 
reduce the potential for any confusion regarding which version of 
the rule governs, the Exchange proposes to add the following 
preamble to current Rule 49: ``This version of Rule 49--equities 
will remain operative until the proposed rule changes described in 
SR-NYSEMKT-2016-68 are approved and the Exchange files a separate 
proposed rule change to delete this version of Rule 49--Equities and 
preamble and to establish the operative date of paragraph (a) of 
`Rule 49--Equities. Exchange Business Continuity and Disaster 
Recovery Plans and Mandatory Testing.' Subject to such separate 
proposed rule change, the Exchange will announce via Trader Update 
the operative date of the deletion of this Rule and implementation 
of paragraph (a) of Rule 49--Equities. Exchange Business Continuity 
and Disaster Recovery Plans and Mandatory Testing.'' The Exchange 
also proposes to add a preamble to proposed Rule 49, which would 
provide: ``The Exchange will file a separate proposed rule change to 
establish the operative date of paragraph (a) of this version of 
Rule 49--Equities and to delete `Rule 49--Equities. Emergency 
Powers' and this preamble. Until such time, `Rule 49--Equities. 
Emergency Powers' will remain operative. Subject to such separate 
proposed rule change, the Exchange will announce via Trader Update 
the operative date of paragraph (a) of this Rule and deletion of 
`Rule 49--Equities. Emergency Powers.' ''
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    Second, the Exchange proposes to move text from Rule 431 governing 
Exchange Backup Systems and Mandatory Testing relating to equity member 
organizations, to proposed Rule 49(b)(N) with only non-substantive 
changes to update sub-paragraph numbering and cross references. Because 
Rule 431 relates to mandatory testing of the Exchange's disaster 
recovery facility, as required by Rule 1004 of Regulation SCI,\5\ the 
Exchange believes that moving the rule text from Rule 431 to Rule 49 
for its equity member organizations would make the Exchange's rules 
easier to navigate by consolidating equity rules with a common theme 
into a single rule. To incorporate that proposed Rule 49 would also 
cover mandatory testing requirements for its equity member 
organizations, the Exchange also proposes to change the title of Rule 
49 to ``Exchange Business Continuity and

[[Page 53177]]

Disaster Recovery Plans and Mandatory Testing.''
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    \5\ 17 CFR 242.1004.
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    Because Rule 431 would pertain only to options trading, the 
Exchange proposes to amend that rule to delete references to the terms 
``member,'' ``member organization,'' and ``designated market maker'' 
and use the term ``ATP Holder'' instead. The Exchange also proposes to 
amend Rule 0--Equities to remove the reference to Rule 431 as being 
applicable to equities trading.
Background
    In 2012, the Exchange adopted Rule 49 to provide the Exchange with 
the authority to declare an Emergency Condition with respect to trading 
on or through the systems and facilities of the Exchange and to act as 
necessary in the public interest and for the protection of 
investors.\6\ The authority in Rule 49 may be exercised when, due to an 
Emergency Condition,\7\ the Exchange's systems and facilities located 
at 11 Wall Street, New York, New York, including the Trading Floor, 
cannot be utilized, or if the Exchange's primary data center is 
impaired. If such an Emergency Condition is declared, a qualified 
Exchange officer may designate NYSE Arca to serve as a backup facility 
so that the Exchange, as a self-regulatory organization (``SRO''), can 
remain operational.\8\ NYSE Arca also would continue to operate 
simultaneously.\9\ In September 2014, the Exchange further amended Rule 
49 to revise how certain messages are disseminated.\10\
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    \6\ See Securities Exchange Act Release No. 70822 (November 6, 
2013), 78 FR 68128 (November 13, 2013) (SR-NYSEMKT-2013-66) (``2013 
Approval Order''). At the same time, NYSE Arca amended NYSE Arca 
Equities Rule 2.100 to provide that NYSE Arca Equities would receive 
and process bids and offers in Exchange-listed securities on behalf 
of the Exchange. See id. (SR-NYSEArca-2013-77).
    \7\ Under current Rule 49, an ``Emergency Condition'' means an 
emergency as defined in Section 12(k)(7) of the Act, which is ``(A) 
a major market disturbance characterized by or constituting--(i) 
sudden and excessive fluctuations of securities prices generally, or 
a substantial threat thereof, that threaten fair and orderly 
markets; or (ii) a substantial disruption of the safe or efficient 
operation of the national system for clearance and settlement of 
transactions in securities, or a substantial threat thereof; or (B) 
a major disturbance that substantially disrupts, or threatens to 
substantially disrupt--(i) the functioning of securities markets, 
investment companies, or any other significant portion or segment of 
the securities markets; or (ii) the transmission or processing of 
securities transactions.'' 15 U.S.C. 78l(k)(7).
    \8\ NYSE Arca trades equity securities on the systems and 
facilities of its wholly owned subsidiary, NYSE Arca Equities, Inc., 
referred to as the ``NYSE Arca Marketplace.'' For the purposes of 
this filing and in the text of Rule 49, these shall be referred to 
collectively as the systems and facilities of NYSE Arca, or simply 
NYSE Arca.
    \9\ The Exchange's affiliate, New York Stock Exchange LLC 
(``NYSE''), originally adopted a version of NYSE Rule 49 under which 
quotes and trades of NYSE-listed securities would continue to be 
reported to the SIP as quotes and trades of the NYSE. That plan was 
referred to as the ``Print as N'' plan. NYSE MKT did not have a 
corollary ``Print as A'' plan. When the NYSE amended its NYSE Rule 
49 in 2013 and 2014, the Exchange adopted an identical version of 
that rule as Rule 49. See 2013 Approval Order, supra note 5 (SR-
NYSE-2013-54).
    \10\ See Securities Exchange Act Release No. 73029 (Sept. 9, 
2014), 79 FR 55061 (Sept. 15, 2014) (SR-NYSEMKT-2014-75) (``2014 
Approval Order'').
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    Under Rule 49, if the Exchange declares an Emergency Condition, the 
Exchange will halt all trading on the Exchange's systems and facilities 
and purge any unexecuted orders from the Exchange's own systems and 
facilities as soon as practicable following declaration of the 
Emergency Condition.\11\ Beginning the next trading day, NYSE Arca, on 
behalf of and at the direction of the Exchange, will disseminate the 
official opening, re-opening, and closing trades of Exchange-listed 
securities to the Consolidated Tape as message of the Exchange, and any 
notification for Exchange listed securities to the Consolidated 
Quotation System of a regulatory halt and resumption of trading 
thereafter, trading pause and resumption of trading thereafter, and 
Short Sale Price Test trigger and lifting thereafter, as messages of 
the Exchange.\12\
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    \11\ See Rule 49(b)(1).
    \12\ See Rule 49(b)(2)(A)(i) and (ii).
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    In addition, bids and offers for Exchange-listed securities entered 
on or through the systems and facilities of NYSE Arca during the 
Emergency Condition will be reported to the Consolidated Quotation 
system as bids and offers of NYSE Arca, except that the opening quote 
will be reported to the Consolidated Quotation System as a bid and/or 
offer of both the Exchange and NYSE Arca and any re-opening quote will 
be reported to the Consolidated Quotation System as a bid and/or offer 
of the Exchange only. Bids and offers for Exchange-listed securities 
executed on or through the systems and facilities of NYSE Arca during 
the Emergency Condition will be reported to the Consolidated Tape as 
executions of NYSE Arca, except for executions in the opening, re-
opening, or closing transactions, which will be reported as Exchange 
executions and Exchange volume only.\13\ Because intra-day quotes and 
trades in Exchange-listed securities would be reported to the SIP as 
quotes and trades of NYSE Arca (except for the opening, reopening and 
closing trades), this disaster recovery plan is referred to the ``Print 
as P'' plan.
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    \13\ See Rule 49(2)(B).
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    Since adopting Rule 49, the Exchange has amended its rules to 
provide for Exchange-facilitated procedures for opening and closing 
securities if either a Designated Market Maker (``DMM'') or the 
Exchange's 11 Wall Street facilities are unavailable.\14\ Because the 
Exchange can now operate even in the absence of 11 Wall Street 
facilities, and because the Exchange's Print as P disaster recovery 
plan is available in the exchange's secondary data center, Rule 49 
would be invoked only if an Emergency Condition impacted the Exchange's 
primary data center. To date, the Exchange has not invoked Rule 49.
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    \14\ See Rules 123D(a)(2)-(6)--Equities (describing process for 
the Exchange to facilitate the open and reopen of trading) and 
Supplementary Material .10 to Rule 123C--Equities (describing 
process for the Exchange to facilitate the close of trading).
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Proposed Rule Change
    Proposed Rule 49(a) would govern the Exchange's Disaster Recovery 
Facility. As proposed, Rule 49(a)(1) would provide that, as part of its 
business continuity and disaster recovery plans, the Exchange maintains 
a ``Disaster Recovery Facility,'' which is a secondary data center 
located in a geographically diverse location, as required by Regulation 
SCI.\15\ This proposed rule text is intended to be definitional, and 
describes that the Exchange maintains a secondary data center.
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    \15\ See 17 CFR 242.1001(a)(2)(v) (requiring policies and 
procedures for business continuity and disaster recovery plans that 
including maintaining backup and recovery capabilities sufficiently 
resilient and geographically diverse and that are reasonably 
designed to achieve next business day resumption of trading and two-
hour resumption of critical SCI systems following a wide-scale 
disruption).
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    Proposed Rule 49(a)(2) would specify the procedures that the 
Exchange would follow if the Exchange determines under Rule 51--
Equities (``Rule 51'') to trade Exchange-traded securities on its 
Disaster Recovery Facility. Currently, Rule 49(a)(1) provides that a 
qualified Exchange officer shall have the authority to declare an 
Emergency Condition and current Rule 49(a)(3)(B) defines the term 
``qualified Exchange officer'' to mean the ICE Chief Executive Officer 
or his or her designee, or the Chief Regulatory Officer of the Exchange 
or his or her designee. The rule further provides that in the event 
that none of these individuals is able to act due to incapacitation, 
the most senior surviving officer of ICE or the Exchange shall be a 
``qualified Exchange officer'' for purposes of Rule 49.
    Rather than specifying separately in Rule 49 who can act under that 
rule, the Exchange proposes to include in Rule

[[Page 53178]]

51 the authority to determine whether to use the Exchange's Disaster 
Recovery Facility. Rule 51(b) currently provides that, except as may be 
otherwise determined by the Exchange Board of Directors, the Chief 
Executive Officer (``CEO'') of the Exchange shall have the power to: 
(i) Halt or suspend trading in some or all securities trading on the 
Exchange; (ii) extend the hours for the transaction of business on the 
Exchange; (iii) close some or all Exchange facilities; or (iv) 
determine the duration of any halt, suspension or closing undertaken 
under this Rule. Rule 51(c) specifies the circumstances under which the 
CEO may take these actions, which includes a loss or interruption of 
facilities utilized by the Exchange.\16\
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    \16\ See Rule 51(c)(1).
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    The Exchange believes that the authority to determine to trade 
Exchange-traded securities in its Disaster Recovery Facility should 
similarly be vested with the CEO of the Exchange. Specifically, the CEO 
may already take the above-specified actions under Rule 51(b) if there 
is a loss or interruption of facilities utilized by the Exchange. The 
Exchange believes that a loss or interruption of the Exchange's primary 
data center is an event contemplated in Rule 51(c), and therefore the 
authority to take an action based on that event, whether suspending 
trading or determining to use the Disaster Recovery Facility, should be 
determined by the same person. Accordingly, the Exchange proposes to 
add proposed Rule 51(b)(v) to specify that the CEO of the Exchange may 
determine to trade securities on the Exchange's Disaster Recovery 
Facility pursuant to Rule 49.\17\
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    \17\ Under Rule 1--Equities, the CEO may formally designate one 
or more qualified employees of Intercontinental Exchange Group, Inc. 
to act in place of any person named in a rule as having authority to 
act under such rule in the event that the named person in the rule 
is not available to administer that rule. Because Rule 1--Equities 
already provides the authority to designated alternate qualified 
employees, the Exchange would not include rule text from current 
Rule 49(a)(3)(B) regarding who may be designated to act in proposed 
Rule 51 in the absence of the CEO.
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    The Exchange also proposes non-substantive amendments to Rule 51(b) 
to provide that the CEO ``may take any of the following actions'' 
rather than to provide that the CEO ``shall have the power to.'' The 
Exchange believes the proposed amendment makes clear that the CEO may 
invoke one or more of the actions specified in Rule 51(b)(i)-(v). For 
the same reason, the Exchange proposes to make a conforming amendment 
to Rule 51(c) to specify that the CEO shall take any of the actions 
described in paragraph (b) above.
    The Exchange proposes that the following would apply if the 
Exchange determines under Rule 51 to trade Exchange-traded securities 
on its Disaster Recovery Facility:
     Proposed Rule 49(a)(2)(A) would provide that the 11 Wall 
Street facilities would not be available for trading if the Exchange is 
operating from its Disaster Recovery Facility. Because the trading 
systems in the Exchange's Disaster Recovery Facility would not have 
connectivity to DMM and Floor broker trading systems, the Exchange 
would operate as a fully electronic exchange when operating out of its 
Disaster Recovery Facility, even if 11 Wall Street facilities were not 
impacted.
     Proposed Rule 49(a)(2)(B) would provide that opening and 
reopening auctions would be subject to Rule 123D(a)(2)-(6)--Equities 
and closing auctions would be subject to Supplementary Material .10 to 
Rule 123C--Equities. Because there would be no Trading Floor or DMM 
connectivity, the Exchange proposes that, when operating out of its 
Disaster Recovery Facility, the Exchange would facilitate all openings, 
reopenings, and closings, as provided for in the enumerated rules. As 
noted above, this is the Exchange's current business continuity plan if 
the 11 Wall Street facilities were unavailable, but the Exchange could 
continue to operate out of its primary data center.
     Proposed Rule 49(a)(2)(C) would provide that any 
unexecuted orders entered into Exchange systems before trading on the 
Disaster Recovery Facility begins would be deemed cancelled and would 
be purged from Exchange systems. This proposed rule text is based on 
current Rule 49(b)(1)(B), which provides that when an Emergency 
Condition is declared, the Exchange will purge any unexecuted orders 
from the Exchange's own systems and facilities as soon as practicable 
following declaration of the Emergency Condition. The Exchange proposes 
to modify this text in proposed Rule 49(a)(2)(C) to make clear that any 
unexecuted orders entered into Exchange systems before trading on the 
Disaster Recovery Facility begins would be deemed cancelled because 
depending on the scope of the disruption, the Exchange may not be able 
to transmit cancellation messages for unexecuted orders.
     Proposed Rule 49(a)(2)(D) would provide that member 
organizations registered as DMMs would not be subject to any DMM 
obligations or benefits under Exchange rules while securities trade on 
the Disaster Recovery Facility.\18\ DMMs would not be subject to any 
such obligations or benefits because the Exchange will not maintain 
systems that support DMM quoting at its Disaster Recovery Facility. 
DMMs that route orders to the Disaster Recovery Facility would trade no 
differently than other market participants that electronically enter 
orders at the Exchange, and would be subject to the fees and credits 
applicable to non-DMM transactions.
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    \18\ See, e.g., Rules 103B(I)--Equities (quoting requirements 
for allocation process of listed securities) and 104--Equities 
(Dealings and Responsibilities of DMMs).
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    Proposed Rule 49(a)(3) would provide that member organizations 
wishing to trade on the Exchange's Disaster Recovery Facility would be 
responsible for having contingency plans for establishing connectivity 
to such facility and changing routing instructions for their order 
entry systems to send bids and offers in Exchange-traded securities to 
such facility. This proposed rule text is based on current Rule 
49(b)(3), but references connectivity to the Exchange's Disaster 
Recovery Facility rather than connectivity to NYSE Arca.
    As noted above, because the Exchange would no longer be designating 
NYSE Arca to act on behalf of and at the direction of the Exchange, the 
Exchange would not include the provisions of current Rule 49(a)(1) and 
(b) relating to such designation. The Exchange further proposes that 
the term ``Emergency Condition'' and related definition, described in 
current Rule 49(a)(1), (2), and (3)(A), would not be included in 
proposed Rule 49 because this language has been superseded by 
Regulation SCI Rule 1001(a)(2)(v).\19\ Likewise, the Exchange would not 
retain the current Rule 49(c)(2) requirement that the ability to invoke 
Rule 49(a) would be operative for only a ten-day period. The Exchange 
believes that, in the event of a wide-scale disruption, ten days may 
not be enough time.
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    \19\ See 17 CFR 242.1001(a)(2)(v).
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    In addition, the Exchange is not proposing to include the subject 
of current Rule 49(b)(2)(A) and (B) in proposed Rule 49. In the 
Exchange's proposed Disaster Recovery Facility, the Exchange would be 
reporting all quotes and trades to the SIP as quotes and trades of the 
Exchange. In addition, the Exchange would be disseminating regulatory 
messages for its listed securities, including notifications of a 
regulatory halt and resumption of trading thereafter, trading pause and 
resumption of trading thereafter, and Short Sale Price Test trigger and 
lifting thereafter. Accordingly, NYSE Arca

[[Page 53179]]

would not be disseminating this information on behalf of the Exchange 
in the event it determines to trade Exchange-traded securities on its 
Disaster Recovery Facility.
    Finally, the Exchange does not propose to retain the language in 
current Rule 49(c)(1), regarding notification requirements to the 
Commission as these have also been superseded by the notification 
requirements in Regulation SCI.\20\ Accordingly, current Rule 49(c)(1) 
is obsolete and does not need to be included in proposed Rule 49(a).
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    \20\ 17 CFR 242.1002(b)(1).
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    As discussed above, proposed Rule 49(b)(N) would include all the 
text of current Rule 431, with non-substantive differences to update 
sub-paragraph numbering and rule paragraph cross references and to 
reference member organizations. The Exchange proposes to designate this 
paragraph of proposed Rule 49(b)(N) with an ``N'' to distinguish it 
from current Rule 49(b), as both would be operative at the same time.
* * * * *
    As discussed above in footnote 3, paragraph (a) of proposed Rule 49 
would not be operative until the Exchange has an opportunity to test it 
with Exchange member organizations. The Exchange does not anticipate 
that the DR Facility will be available for testing in production until 
late in the fourth quarter of 2016. The Exchange will file a separate 
proposed rule change to establish the operative date of paragraph (a) 
of proposed Rule 49, delete current ``Rule 49--Equities. Emergency 
Powers,'' delete the preamble to proposed Rule 49, and delete the ``N'' 
designation to proposed Rule 49(b). The operative date established in 
such separate proposed rule change will also be announced via Trader 
Update. The proposed changes to Rule 49(b)(N), 51, and Rule 431 will be 
operative on approval of this proposed rule change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\21\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\22\ 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, and in general, to protect 
investors and the public interest. Specifically, the Exchange believes 
that the proposed rule change will assist in facilitating trading in 
Exchange-traded securities in the event the Exchange experiences a 
disruption in its primary data center. Accordingly, the proposed rule 
change is designed to protect investors and the public interest by 
providing for minimal interruption of Exchange trading if the Exchange 
experiences a wide-scale disruption. The proposed rule change would 
therefore remove impediments to and perfect the mechanism of a free and 
open market and a national market system by providing for a business 
continuity and disaster recovery plan that includes maintaining backup 
and recovery capabilities sufficiently resilient and geographically 
diverse and that is reasonably designed to achieve next business day 
resumption of trading and two-hour resumption of critical Exchange 
systems following a wide-scale disruption, as required by Regulation 
SCI.\23\ Moreover, the Exchange believes that the proposed rule change 
would strengthen business continuity planning for itself and its member 
organizations, thereby benefiting market participants and investors 
generally.
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    \21\ 15 U.S.C. 78f(b).
    \22\ 15 U.S.C. 78f(b)(5).
    \23\ See supra note 4.
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    More specifically, the Exchange believes that the proposed rule 
change would remove impediments to and perfect the mechanism of a free 
and open market and a national market system because under the proposed 
disaster recovery plan, the Exchange would maintain its own facility 
within the Disaster Recovery Facility that would disseminate to the SIP 
all quote and trade information, including opening, reopening, and 
closing auction information and intra-day quotes and trades, as well as 
regulatory messages, as Exchange messages.
    The Exchange further believes that the proposed rule change to vest 
the authority to determine to trade securities on the Exchange's 
Disaster Recovery Facility pursuant to Rule 49 with the CEO, as 
provided for in proposed Rule 51(b)(v), would remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system because it would consolidate in a single rule the individual 
with authority to take specified actions. This proposed rule change 
would also streamline the Exchange's rules and procedures by providing 
for consistent authority of who may act when there is a loss or 
interruption of facilities utilized by the Exchange.
    The Exchange also believes that, because the Exchange is now 
subject to the requirements of Regulation SCI, certain elements of 
current Rule 49 have been superseded, and therefore it would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system for proposed Rule 49(a) not to include 
specified provisions of the current rule. Specifically, the Exchange 
does not believe that proposed Rule 49(a) needs to be limited to what 
is currently defined as an ``Emergency Condition'' or be invoked for 
only ten days because the proposed rule would be invoked as part of a 
robust business continuity and disaster recovery plan in the event of a 
wide-scale disruption, as required by Rule 1001(a)(2)(v) of Regulation 
SCI.\24\ For similar reasons, the Exchange does not believe that 
proposed Rule 49 needs separate provisions specifying notice 
requirements to the Commission because these are now required by Rule 
1002(b) of Regulation SCI.\25\
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    \24\ 17 CFR 242.1001(a)(2)(v).
    \25\ 17 CFR 242.1002(b).
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    Finally, the Exchange believes that moving the text of current Rule 
431 relating to equity member organizations to proposed Rule 49(b)(N), 
amending Rule 431 to pertain only to ATP Holders, and renaming Rule 49 
as ``Exchange Business Continuity and Disaster Recovery Plans and 
Mandatory Testing,'' would remove impediments to and perfect the 
mechanism of a free and open market and a national market system 
because it would consolidate into a single rule related content, i.e., 
the Exchange's proposed equity disaster recovery plan and mandatory 
testing requirements related to such plan. Thus, the proposed rule 
change would make the Exchange's rules easier to navigate for Exchange 
equity members, the Commission, and the public.

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 facilitate trading in Exchange-listed securities on its 
Disaster Recovery Facility. As such, the Exchange believes that the 
proposed rule change would promote competition for the benefit of 
market participants and investors generally because it provides 
transparency in terms of which rules would govern trading in Exchange-
traded securities if they trade on the Exchange's Disaster Recovery 
Facility.

[[Page 53180]]

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or up to 90 days (i) as the Commission may designate 
if it finds such longer period to be appropriate and publishes its 
reasons for so finding or (ii) as to which the self-regulatory 
organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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-2016-68 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-2016-68. 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-2016-68, and should 
be submitted on or before September 1, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2016-19053 Filed 8-10-16; 8:45 am]
 BILLING CODE 8011-01-P


