[Federal Register Volume 84, Number 35 (Thursday, February 21, 2019)]
[Notices]
[Pages 5536-5538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02899]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85145; File No. SR-NYSE-2019-03]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to
(1) Delete Dealings and Settlements (Rule 45-299C), Rule 235 (Ex-
Dividend, Ex-Rights), Rule 236 (Ex-Warrants), and Rule 257 (Deliveries
After ``Ex'' Date) and (2) Amend Dealings and SettlementsT (Rule 45-
299C), Rule 235T (Ex-Dividend, Ex-Rights), Rule 236T (Ex-Warrants), and
Rule 257T (Deliveries After ``Ex'' Date)
February 14, 2019.
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 February 4, 2019, 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
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 (1) delete Dealings and Settlements (Rule
45-
[[Page 5537]]
299C), Rule 235 (Ex-Dividend, Ex-Rights), Rule 236 (Ex-Warrants), and
Rule 257 (Deliveries After ``Ex'' Date) and (2) amend Dealings and
SettlementsT (Rule 45-299C), Rule 235T (Ex-Dividend, Ex-Rights), Rule
236T (Ex-Warrants), and Rule 257T (Deliveries After ``Ex'' Date) to
reflect the standard settlement cycle in Securities Exchange Act Rule
15c6-1(a). The proposed rule change is available on the Exchange's
website 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 (1) delete Dealings and Settlements (Rule
45-299C), Rule 235 (Ex-Dividend, Ex-Rights), Rule 236 (Ex-Warrants),
and Rule 257 (Deliveries After ``Ex'' Date) and (2) amend Dealings and
SettlementsT (Rule 45-299C), Rule 235T (Ex-Dividend, Ex-Rights), Rule
236T (Ex-Warrants), and Rule 257T (Deliveries After ``Ex'' Date) to
reflect the standard settlement cycle in Securities Exchange Act (the
``Act'') Rule 15c6-1(a) (``Rule 15c6-1(a)'').
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\ The amendment was adopted on March
22, 2017, with a compliance date of September 5, 2017.\5\
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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. 80295 (March 22,
2017), 82 FR 15564 (March 29, 2017) (File No. S7-22-16).
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In response, the Exchange adopted new rules with the modifier ``T''
to reflect a T+2 settlement cycle.\6\ 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 were deleted in
connection with the Exchange's elimination of non-regular way
trading.\7\
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\6\ See Securities Exchange Act Release No. 80021 (February 10,
2017), 82 FR 10931(February 16, 2017) (SR-NYSE-2016-87).
\7\ See Securities Exchange Act Release No. 81176 (July 20,
2017), 82 FR 34728 (July 26, 2017) (SR-NYSE-2017-33).
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In order to reduce the potential for confusion regarding which
version of the rule governs, the Exchange added explanatory preambles.
In particular, the following preamble was added to Dealings and
Settlements, Rule 235, Rule 236 and Rule 257:
``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 Dealings and SettlementsT, Rule
235T, Rule 236T and Rule 257T:
``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 . . .''
In July 2017, the Exchange (1) deleted Rule 282.65 and Section
703.02(part2) of the Listed Company Manual; (2) deleted the preamble
and ``T'' modifier from Rule 282.65T and Section 703.02T of the Listed
Company Manual; and (3) established the operative date of Rule 282.65T
and Section 703.02T of the Listed Company Manual.\8\ As part of that
filing, the Exchange inadvertently omitted Dealings and Settlements and
Dealings and SettlementsT, Rule 235 and Rule 235T, Rule 236 and Rule
236T, and Rule 257 and Rule 257T.
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\8\ See Securities Exchange Act Release No. 81231 (July 27,
2017), 82 FR 36008 (August 2, 2017) (SR-NYSE-2017-38).
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Proposed Rule Change
In order to reflect the September 5, 2017 transition to T+2
settlement in its rulebook, the Exchange proposes to:
Delete Dealings and Settlements, Rule 235, Rule 236, and
Rule 257, including the preambles, in their entirety as obsolete;
delete the obsolete ``T'' modifier in Dealings and
SettlementsT, Rule 235T, Rule 236T, and Rule 257T; and
delete the preambles to Dealings and SettlementsT, Rule
235T, Rule 236T, and Rule 257T, which distinguished such rules from the
T+3 rules, as obsolete.
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 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. 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 serve to promote
clarity and consistency, thereby reducing burdens
[[Page 5538]]
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
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 for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). 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.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \13\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ 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 immediately upon filing. According to
the Exchange, waiver would allow the Exchange to conform the rule to
the current settlement cycle and eliminate outdated references to the
T+3 settlement cycle without undue delay. The Commission believes that
the proposed rule change raises no new or novel issues and that waiver
of the operative delay is consistent with the protection of investors
and the public interest. Therefore, the Commission hereby waives the
operative delay and designates the proposal operative upon filing.\15\
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ 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 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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
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 [email protected]. Please include
File Number SR-NYSE-2019-03 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-2019-03. 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 website (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 website 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSE-2019-03 and should be submitted on
or before March 14, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-02899 Filed 2-20-19; 8:45 am]
BILLING CODE 8011-01-P