[Federal Register Volume 77, Number 223 (Monday, November 19, 2012)]
[Notices]
[Pages 69536-69538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-28002]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68212; File No. SR-NYSEMKT-2012-66]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Extending the Temporary 
Suspension of Those Aspects of Rules 36.20--Equities and 36.21--
Equities That Would Not Permit Floor Brokers To Use Personal Portable 
Phone Devices on the Trading Floor following the Aftermath of Hurricane 
Sandy Until the Earlier of When Phone Service Is Fully Restored or 
Friday, November 16, 2012

November 9, 2012.
    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 November 9, 2012, 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, II, 
and III 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 extend the temporary suspension of those 
aspects of Rules 36.20--Equities and 36.21--Equities that would not 
permit Floor brokers to use personal portable phone devices on the 
Trading Floor following the aftermath of Hurricane Sandy until the 
earlier of when phone service is fully restored or Friday, November 16, 
2012. 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

[[Page 69537]]

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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On Thursday, November 1, 2012, the Exchange filed a rule proposal 
to temporarily suspend those aspects of Rules 36.20--Equities, 36.21--
Equities, and 36.30--Equities that would not permit Floor brokers and 
Designated Market Makers (``DMMs'') to use personal portable phone 
devices on the Trading Floor \4\ following the aftermath of Hurricane 
Sandy and during the period that phone service was not fully 
functional.\5\ Pursuant to that filing, all other aspects of those 
rules remained applicable and the temporary suspensions of Rule 36--
Equities requirements were in effect beginning the first day trading 
resumed following Hurricane Sandy until Friday, November 2, 2012.
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    \4\ Pursuant to Rule 6A, the Trading Floor is defined as the 
restricted-access physical areas designated by the Exchange for the 
trading of securities, but does not include the physical locations 
where NYSE Amex Options are traded.
    \5\ See Securities Exchange Act Release No. 68138 (Nov. 1, 2012) 
(SR-NYSEMKT-2012-59).
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    On November 5, 2012, although power had been restored to the 
downtown Manhattan vicinity, other services were not yet fully 
operational. Among other things, the telephone services provided by 
third-party carriers to the Exchange were still not fully operational 
on the Trading Floor, which continued to impact the ability of Floor 
members to communicate from the Trading Floor as permitted by Rule 36--
Equities. Accordingly, the Exchange filed to extend the temporary 
suspension of those aspects of Rules 36.20--Equities, 36.21--Equities, 
and 36.30--Equities that would not permit Floor brokers and DMMs to use 
personal portable phone devices on the Trading Floor to the earlier of 
phone service being restored or November 9, 2012,\6\ which was subject 
to the same terms and conditions of the temporary suspension filed for 
October 31, 2012 through November 2, 2012, including the record 
retention requirements related to any use of personal portable 
phones.\7\
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    \6\ See Securities Exchange Act Release No. 68162 (Nov. 5, 2012) 
(SR-NYSEMKT-2012-62).
    \7\ See supra note 5 (notice that describes the terms and 
conditions of the temporary suspension).
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    Since filing the extension, the Exchange has been advised by its 
third-party carrier that the damage to the telephone connections is 
more extensive than previously anticipated. As a result, the telephone 
line connections for Floor brokers still are not fully operational. The 
Exchange notes, however, that the telephone lines available for DMMs 
are now operational, so that the DMMs no longer need relief.
    Because of the ongoing intermittent phone service, many Exchange 
authorized and provided portable phones continue to not be functional 
and therefore Floor brokers still cannot use the Exchange authorized 
and provided portable phones, pursuant to Rules 36.20--Equities and 
36.21--Equities. In addition, the land lines for Floor brokers continue 
to not be functional. In certain instances, however, the personal cell 
phones of Floor brokers are operational on the Trading Floor. The 
Exchange believes that because communications with customers is a vital 
part of a Floor broker's role as agent and therefore contributes to 
maintaining a fair and orderly market, during the period when phone 
service continues to be intermittent, Floor brokers should be permitted 
to use personal portable phone devices in lieu of the non-operational 
Exchange authorized and provided portable phones or wired phone lines.
    Accordingly, the Exchange proposes to extend the temporary 
suspension of those aspects of Rules 36.20--Equities and 36.21--
Equities that would not permit Floor brokers to use personal portable 
phone devices on the Trading Floor to the earlier of when phone service 
is fully restored or Friday, November 16, 2012. Because phone service 
to DMMs has been restored, the Exchange is not proposing to extend 
further the temporary suspension of Rule 36.30--Equities, which 
prohibits DMMs from using personal portable phones on the Trading 
Floor.\8\ The Exchange proposes that the extension of the temporary 
suspension of those aspects of Rules 36.20--Equities and 36.21--
Equities to permit use of the personal portable phones by Floor brokers 
on the Trading Floor be pursuant to the same terms and conditions of 
the temporary suspension filed for October 31, 2012 through November 2, 
2012, including the record retention requirements related to any use of 
personal portable phones.\9\
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    \8\ Similarly, because the off-Floor locations for DMMs have 
been restored, the Exchange does not need to extend further the 
temporary suspension for DMMs to be permitted to communicate with 
off-Floor personnel who may not be located at their regular physical 
location. See supra notes 5 and 6 (notices describing the relief 
requested for DMMs).
    \9\ See supra note 5 (notice that describes the terms and 
conditions of the temporary suspension).
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    In particular, as set forth in the prior filing, Floor brokers that 
use a portable personal phone must provide the Exchange with the names 
of all Floor-based personnel who used personal portable phones during 
this temporary suspension period, together with the phone number and 
applicable carrier for each number. Floor broker member organizations 
must maintain in their books and records all cell phone records that 
show both incoming and outgoing calls that were made during the period 
that a personal portable phone was used on the Trading Floor. To the 
extent the records are unavailable from the third-party carrier, the 
Floor broker member organizations must maintain contemporaneous records 
of all calls made or received on a personal portable phone while on the 
Trading Floor. As with all member organization records, such cell phone 
records must be provided to Exchange regulatory staff, including 
without limitation staff of the Financial Industry Regulatory Authority 
(``FINRA''), on request.
    As noted above, because the Exchange is dependent on third-party 
carriers for both wired and wireless phone service on the Trading 
Floor, the Exchange does not know how long the proposed temporary 
suspension of Rules 36.20--Equities and 36.21--Equities will be 
required. However, based on current estimates, the Exchange understands 
that phone service may not be fully restored until late in the week of 
November 12, 2012, and because of the extensive damage, may be later 
than that date. Accordingly, the Exchange proposes that the extension 
of the temporary suspensions of those aspects of Rule 36--Equities that 
do not permit Floor brokers to use personal portable phones on the 
Trading Floor continue until the earlier of when phone service is fully 
restored or Friday, November 16, 2012.\10\
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    \10\ The Exchange will provide notice of this rule filing to 
Floor brokers, including the applicable recordkeeping and other 
requirements. If telephone service is fully restored prior to 
November 16, 2012, the Exchange will notify Floor brokers that the 
temporary suspension of those aspects of Rule 36--Equities that do 
not permit the use of personal portable phones on the Trading Floor 
has expired as of the time that phone service is fully restored.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\11\ in general, and furthers the 
objectives of Section 6(b)(5)

[[Page 69538]]

of the Act,\12\ in particular, in that it 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 facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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    In particular, in the aftermath of Hurricane Sandy, while the 
Exchange was able to open for trading, many of the services that the 
Exchange depends on from third-party carriers, such as wired and 
wireless telephone connections, are not fully restored. The Exchange 
believes that the proposed extension of the temporary suspensions from 
those aspects of Rule 36--Equities that restrict Floor broker's use of 
personal portable phones on the Trading Floor removes impediments to 
and perfects the mechanism of a free and open market and national 
market system because the proposed relief will enable Floor brokers to 
conduct their regular business, notwithstanding the ongoing issues with 
telephone service. The Exchange further believes that without the 
requested relief, Floor brokers would be compromised in their ability 
to conduct their regular course of business on the Trading Floor, which 
could adversely impact the market generally and investor confidence 
during this time of unprecedented weather disruptions. In particular, 
for Floor brokers, because they operate as agents for customers, their 
inability to communicate with customers could compromise their ability 
to represent public orders on the Trading Floor.

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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the proposed rule change does not: (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
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 \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its 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 pursuant to Rule 19b-4(f)(6) under the 
Act \15\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6) \16\ 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. The Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. The Commission notes 
that doing so will allow the Exchange to continue uninterrupted, for 
Floor brokers, the emergency temporary relief necessitated by Hurricane 
Sandy's disruption of telephone service, as described herein and in the 
Exchange's prior filings seeking such relief, until the earlier of when 
phone service is fully restored for Floor brokers, or Friday, November 
16, 2012. Therefore, the Commission hereby waives the 30-day operative 
delay and designates the proposal operative upon filing.\17\
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    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

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 [email protected]. Please include 
File Number SR-NYSEMKT-2012-66 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEMKT-2012-66. 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-2012-66 and should 
be submitted on or before December 10, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-28002 Filed 11-16-12; 8:45 am]
BILLING CODE 8011-01-P