
[Federal Register Volume 81, Number 217 (Wednesday, November 9, 2016)]
[Notices]
[Pages 78873-78875]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27025]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79232; File No. SR-NYSEMKT-2016-96]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change To Add to the Rules of 
the Exchange the Eleventh Amended and Restated Operating Agreement of 
the New York Stock Exchange LLC

November 3, 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 October 24, 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to add to the rules of the Exchange the 
Eleventh Amended and Restated Operating Agreement of the New York Stock 
Exchange LLC (``NYSE LLC''). 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.

[[Page 78874]]

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 add to the rules of the Exchange the 
Eleventh Amended and Restated Operating Agreement of NYSE LLC (the 
``Eleventh NYSE Operating Agreement'').
    In September 2015, the Exchange filed the Eighth Amended and 
Restated Operating Agreement of NYSE LLC (the ``Eighth NYSE Operating 
Agreement'') as a ``rule of the exchange'' under Section 3(a)(27) of 
the Act because NYSE LLC has a wholly-owned subsidiary, NYSE Market 
(DE), Inc., which owns a majority interest in NYSE Amex Options LLC 
(``NYSE Amex Options''), a facility of the Exchange.\4\ The Exchange 
subsequently removed the obsolete Eighth NYSE Operating Agreement and 
replaced it with the Ninth Amended and Restated Operating Agreement of 
NYSE LLC as a ``rule of the exchange'' under Section 3(a)(27) of the 
Act.\5\ In turn, when the Ninth Amended and Restated Operating 
Agreement of NYSE LLC was amended, the Exchange removed it and replaced 
it with the Tenth Amended and Restated Operating Agreement of NYSE LLC 
(the ``Tenth NYSE Operating Agreement'') as a ``rule of the exchange'' 
under Section 3(a)(27) of the Act.\6\
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    \4\ See 15 U.S.C. 78c(a)(27); Securities Exchange Act Release 
No. 75984 (September 25, 2015), 80 FR 59213, 59214 (October 1, 2015) 
(SR-NYSEMKT-2015-71).
    \5\ See 15 U.S.C. 78c(a)(27); Securities Exchange Act Release 
No. 76637 (December 14, 2015), 80 FR 79124 (December 18, 2015) (SR-
NYSEMKT-2015-102).
    \6\ See Securities Exchange Act Release No. 78436 (July 28, 
2016), 81 FR 51249 (August 3, 2016) (SR-NYSE-2016-51).
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    On October 6, 2016, NYSE LLC filed on an immediately effective 
basis to amend Section 4.05 of the Tenth NYSE Operating Agreement 
regarding the use of regulatory assets, fees, fines and penalties, and 
to make additional, non-substantive edits.\7\ On October 18, 2016, NYSE 
LLC's rule filing amending the Tenth NYSE Operating Agreement was 
noticed.\8\ Such rule change will become operative 30 days from the 
date on which it was filed, or such shorter time as the Commission may 
designate.\9\
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    \7\ See Securities Exchange Act Release No. 79115 (October 18, 
2016), 81 FR 73187 (October 24, 2016) (SR-NYSE-2016-66).
    \8\ Id.
    \9\ Id. at 73189.
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    The Exchange is accordingly filing to remove the obsolete Tenth 
NYSE Operating Agreement as a ``rule of the exchange'' under Section 
3(a)(27) of the Act, and replace it with the Eleventh NYSE Operating 
Agreement as a ``rule of the exchange'' under Section 3(a)(27) of the 
Act.\10\ The Exchange proposes that the rule change become effective on 
the date that the rule change amending the Tenth NYSE Operating 
Agreement becomes operative.
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    \10\ See 15 U.S.C. 78c(a)(27).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act \11\ in general, and with Section 
6(b)(1) \12\ in particular, in that it enables the Exchange to be so 
organized as to have the capacity to be able to carry out the purposes 
of the Exchange Act and to comply, and to enforce compliance by its 
exchange members and persons associated with its exchange members, with 
the provisions of the Exchange Act, the rules and regulations 
thereunder, and the rules of the Exchange.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(1).
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    The Exchange believes that the proposed rule change would 
contribute to the orderly operation of the Exchange and would enable 
the Exchange to be so organized as to have the capacity to carry out 
the purposes of the Act and comply and enforce compliance by its 
members and persons associated with its members, with the provisions of 
the Act because, by removing the obsolete Tenth NYSE Operating 
Agreement and making the Eleventh NYSE Operating Agreement a rule of 
the Exchange, the Exchange would be ensuring that its rules remain 
consistent with the NYSE LLC operating agreement in effect.
    The Exchange notes that, as with the Tenth NYSE Operating 
Agreement, it would be required to file any changes to the Eleventh 
NYSE Operating Agreement with the Commission as a proposed rule 
change.\13\ In addition, the Exchange believes that the proposed 
changes are consistent with and will facilitate an ownership structure 
of the Exchange's facility NYSE Amex Options that will provide the 
Commission with appropriate oversight tools to ensure that the 
Commission will have the ability to enforce the Act with respect to 
NYSE Amex Options and its direct and indirect parent entities.
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    \13\ The Exchange notes that any amendment to the NYSE LLC 
Operating Agreement would also require that NYSE LLC file a proposed 
rule change with the Commission.
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    The Exchange also believes that this filing furthers the objectives 
of Section 6(b)(5) of the Act \14\ because the proposed rule change 
would be consistent with and facilitate a governance and regulatory 
structure that is designed to prevent fraudulent and manipulative acts 
and practices, to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, 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 removing the obsolete Tenth NYSE Operating 
Agreement and making the Eleventh NYSE Operating Agreement a rule of 
the Exchange will remove impediments to the operation of the Exchange 
by ensuring that its rules remain consistent with the NYSE LLC 
operating agreement in effect. The Exchange notes that, as with the 
Tenth NYSE Operating Agreement, no amendment to the Eleventh NYSE 
Operating Agreement could be made without the Exchange filing a 
proposed rule change with the Commission. For the same reasons, the 
proposed rule change is also designed to protect investors as well as 
the public interest.
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    \14\ 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 Exchange Act. The proposed rule 
change is not intended to address competitive issues but rather is 
concerned solely with ensuring that the Commission will have the 
ability to enforce the Act with respect to NYSE Amex Options and its 
direct and indirect parent entities.

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 \15\ and Rule 19b-4(f)(6) thereunder.\16\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on

[[Page 78875]]

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, 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.\17\
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    \15\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 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) \18\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, Rule 19b-4(f)(6)(iii) 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 on November 5, 2016, the same date that the 
proposed rule change to amend the Tenth NYSE Operating Agreement and to 
renumber it as the Eleventh NYSE Operating Agreement becomes 
operative.\19\ The Commission believes that waiver of the 30-day 
operative delay is appropriate because it would permit the Eleventh 
NYSE Operating Agreement to become ``rules of an exchange'' of NYSE MKT 
without delay.\20\ Based on the foregoing, the Commission believes that 
the waiver of the operative delay is consistent with the protection of 
investors and the public interest.\21\ The Commission hereby grants the 
waiver and designates the proposal operative upon November 5, 2016, the 
same date that the rule change amending the Tenth NYSE Operating 
Agreement and renumbering it as the Eleventh NYSE Operating Agreement 
becomes operative.\22\
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    \18\ 17 CFR 240.19b-4(f)(6).
    \19\ See supra note 7.
    \20\ See 15 U.S.C. 78c(a)(27).
    \21\ 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).
    \22\ See supra note 7.
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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) \23\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \23\ 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-2016-96 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-2016-96. 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 20549-1090, 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-2016-96 and should 
be submitted on or before November 30, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-27025 Filed 11-8-16; 8:45 am]
BILLING CODE 8011-01-P


