[Federal Register Volume 82, Number 147 (Wednesday, August 2, 2017)]
[Notices]
[Pages 36008-36009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-16211]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81231; File No. SR-NYSE-2017-38]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change in 
Connection With the September 5, 2017 Compliance Date for the 
Shortening of the Standard Settlement Cycle From Three Business Days 
After the Trade Date to Two Business Days After the Trade Date

July 27, 2017.
    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 26, 2017, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') 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 in connection with the September 5, 2017 
compliance date for the shortening of the standard settlement cycle 
from three business days after the trade date (``T+3'') to two business 
days after the trade date (``T+2''), to (1) delete NYSE Rule 282.65 
(Failure to Deliver and Liability Notice Procedures) (``Rule 282.65'') 
and Section 703.02 (part 2) (Stock Split/Stock Rights/Stock Dividend 
Listing Process) (``Section 703.02 (part 2)'') of the NYSE Listed 
Company Manual (``Listed Company Manual''); (2) delete the preamble and 
``T'' modifier from NYSE Rule 282.65T (Failure to Deliver and Liability 
Notice Procedures) (``Rule 282.65T'') and Section 703.02T (part 2) 
(Stock Split/Stock Rights/Stock Dividend Listing Process) (``Section 
703.02T'') of Listed Company Manual; and (3) establish the operative 
date of Rule 282.65T and Section 703.02T of the Listed Company Manual. 
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
    In connection with the September 5, 2017 compliance date for 
shortening of the standard settlement cycle from T+3 to T+2, the 
Exchange proposes to (1) delete Rule 282.65 and Section 703.02 (part 2) 
of the Listed Company Manual; (2) delete the preamble and ``T'' 
modifier from Rule 282.65T and Section 703.02T of the Listed Company 
Manual; and (3) establish the operative date of Rule 282.65T and 
Section 703.02T of the Listed Company Manual as September 5, 2017.
Background
    On September 28, 2016, the Securities and Exchange Commission 
(``SEC'') proposed amendments to Rule 15c6-1(a) to shorten the standard 
settlement cycle from T+3 to T+2.\4\ Following this action by the SEC, 
the Exchange adopted new rules with the modifier ``T'' to reflect a T+2 
settlement cycle.\5\ Because the Exchange would not implement the new 
rules until after the final implementation of T+2, the Exchange 
retained the versions of the rules reflecting T+3 settlement on its 
books. Certain of these rules have since been deleted in connection 
with the Exchange's elimination of non-regular way trading.\6\ In order 
to reduce the potential for confusion regarding which version of the 
rule governs, the Exchange added explanatory preambles, provided below.
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    \4\ See Securities Exchange Act Release No. 78962 (September 28, 
2016), 81 FR 69240 (October 5, 2016) (File No. S7-22-16).
    \5\ See Securities Exchange Act Release No. 80021 (February 104, 
2017), 82 FR 10931 (February 16, 2017) (SR-NYSE-2016-87).
    \6\ See Securities Exchange Act Release No. 811762 (July 20, 
2017) (SR-NYSE-2017-33).
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    In particular, the following preamble was added to the Rule 282.65 
and Section 703.02 (part 2):
    ``This version of . . . will remain operative until the Exchange 
files separate proposed rule changes as necessary to establish the 
operative date of . . . , to delete this version of . . . and preamble, 
and to remove the preamble text from the version of . . . . In addition 
to filing the necessary proposed rule changes, the Exchange will 
announce via Information Memo the operative date of the deletion of 
this Rule and implementation of . . .''
    The following preamble was added to the Rule 282.65T and Section 
703.02T:
    ``The Exchange will file separate proposed rule changes to 
establish the operative date of . . . , to delete . . . and the 
preamble text from . . . , and to remove the preamble text from the 
version of . . . . Until such time, . . . will remain operative. In 
addition to filing the necessary proposed rule changes, the Exchange 
will announce via Information Memo the implementation of this Rule and 
the operative date of the deletion of . . .''
    On March 22, 2017, the SEC adopted the proposed amendment to Rule 
15c6-1(a) under the Act \7\ with a compliance date of September 5, 
2017.\8\
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    \7\ See 17 CFR 240.15c6-1(a).
    \8\ See Securities Exchange Act Release No. 80295 (March 22, 
2017), 82 FR 15564 (March 29, 2017) (File No. S7-22-16).
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Proposed Rule Change
    In order to comply with the September 5, 2017, transition to T+2 
settlement, the Exchange proposes to:
     Delete Rule 282.65 and Section 703.02 (part 2), including 
the preambles, in their entirety;

[[Page 36009]]

     delete the preambles to Rule 282.65T Section 703.02T; and
     delete the ``T'' modifier in Rule 282.65T and Section 
703.02T, which distinguished such rules from the T+3 rules.
    The Exchange proposes that the changes described herein would take 
effect on September 5, 2017, to coincide with the transition to T+2. 
The Exchange will announce via Information Memo the implementation of 
Rule 282.65T and Section 703.02T of the Listed Company Manual and the 
operative date of the deletion of Rule 282.65 and Section 703.02 (part 
2).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\9\ in general, and further the objectives 
of Section 6(b)(5) of the Act,\10\ in particular, because it is 
designed to prevent fraudulent and manipulative acts and practices, 
promote just and equitable principles of trade, 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.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    In particular, the Exchange believes that the proposed changes 
remove impediments to and perfect the mechanism of a free and open 
market by adding clarity as to which rules are operative and when, 
thereby reducing potential confusion, and making the Exchange's rules 
easier to navigate. The Exchange also believes that eliminating 
obsolete material from its rulebook and Listed Company Manual also 
removes impediments to and perfects the mechanism of a free and open 
market by removing confusion that may result from having obsolete 
material in the Exchange's rulebook and Listed Company Manual. The 
Exchange believes that eliminating such obsolete material would not be 
inconsistent with the public interest and the protection of investors 
because investors will not be harmed and in fact would benefit from 
increased transparency, thereby reducing potential confusion.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change is not 
designed to address any competitive issue but rather facilitate the 
industry's transition to a T+2 regular-way settlement cycle. The 
Exchange also believes that the proposed rule change will serve to 
promote clarity and consistency, thereby reducing burdens on the 
marketplace and facilitating investor protection.

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 \11\ and Rule 19b-4(f)(6) thereunder.\12\ 
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.\13\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6). 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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    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) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 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-2017-38 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-NYSE-2017-38. 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-NYSE-2017-38 and should be 
submitted on or before August 23, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-16211 Filed 8-1-17; 8:45 am]
 BILLING CODE 8011-01-P