[Federal Register Volume 79, Number 81 (Monday, April 28, 2014)]
[Notices]
[Pages 23391-23393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-09527]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71989; File No. SR-NYSE-2014-21]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Deleting NYSE Rule 343 and Its Interpretation to Harmonize the NYSE's 
Rules with Changes by Financial Industry Regulatory Authority, Inc. to 
Amend the Uniform Branch Office Registration Form

April 22, 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 April 11, 2014, New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') 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 Rule 343 and its 
interpretation to harmonize the NYSE's rules with changes by Financial 
Industry Regulatory Authority, Inc. (``FINRA'') to amend the Uniform 
Branch Office Registration Form (``Form BR''). 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 Rule 343 and its 
interpretation to harmonize the NYSE's rules with changes by FINRA to 
Form BR.
Background
    On July 30, 2007, FINRA's predecessor, 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, the 
Exchange, 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, the Exchange, 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

[[Page 23392]]

rulebook.\4\ FINRA recently harmonized 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 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 Exchange, 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 are 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) provides that, unless otherwise permitted 
by the Exchange, the main office of every member organization must 
remain open for business on every full business day during the 
trading hours on the Exchange. 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 Form BR, which is used by firms to 
register their branch offices with FINRA, the NYSE, and participating 
states via the Central Registration Depository.\8\ Among other things, 
the amendments to Form BR eliminated Section 6, which incorporates 
space sharing arrangement questions relating to NYSE Rule 343. The 
changes to Form BR will become effective on April 7, 2014.\9\
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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 proposed changes to Form BR, there will no 
longer be a mechanism to collect the information used for the space 
sharing pre-approval process under NYSE Rule 343, and as such, the 
Exchange proposes to delete NYSE Rule 343 and its interpretation 
effective on the same date that FINRA makes its changes to Form BR 
effective, April 7, 2014, rather than the date that the supervisory 
rule changes become effective, December 1, 2014. The Exchange notes 
that it will be submitting a proposed rule change to harmonize the 
remaining NASD and FINRA Incorporated NYSE Rules and interpretations 
concerning supervision to coincide with FINRA's December 1, 2014 
effective date. The Exchange will announce both effective dates via an 
Information Memo.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\10\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\11\ 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 Exchange rules and FINRA 
rules and forms of similar purpose, resulting in less burdensome and 
more efficient regulatory compliance. In particular, deleting NYSE Rule 
343 and related NYSE Rule 343 Interpretations would promote just and 
equitable principles of trade by harmonizing the Exchange's rules with 
the Form BR, which is used by the Commission, SROs, and states.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 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 the Exchange's rules and Form BR.

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 \12\ and Rule 19b-4(f)(6) thereunder.\13\ 
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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    \12\ 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.
    \13\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\15\ 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 FINRA's rules at the same time that the revised Form BR 
becomes operative, thus helping to eliminate confusion regarding broker 
reporting obligations.\16\ Therefore, the Commission designates the 
proposed rule change to be operative upon filing.
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ 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 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) \17\ of the Act to determine whether the proposed 
rule

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change should be approved or disapproved.
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    \17\ 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 [email protected]. Please include 
File Number SR-NYSE-2014-21 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-NYSE-2014-21. 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-NYSE-2014-21 and should be submitted on or before May 
19, 2014.

    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. 2014-09527 Filed 4-25-14; 8:45 am]
BILLING CODE 8011-01-P