[Federal Register Volume 87, Number 143 (Wednesday, July 27, 2022)]
[Notices]
[Pages 45138-45141]
[FR Doc No: 2022-16041]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95344; File No. SR-CBOE-2022-036]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing of a Proposed Rule Change To Amend Rule 5.6 and Rule 5.33 To
Allow Delta-Adjusted at Close Orders To Be Submitted in Equity Options

July 21, 2022
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on July 8, 2022, Cboe Exchange, Inc. (``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. 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\ 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

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend Rule 5.6 and Rule 5.33 to allow Delta-Adjusted at Close
(``DAC'') orders to be submitted in equity options. The text of the
proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, 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 Exchange 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 these 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 aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 5.6 and Rule 5.33 to allow DAC
orders to be submitted in equity options.\3\
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    \3\ The Exchange notes that reference to equity options and
equity securities herein this proposal means options on securities
that are not exchange-traded products (``ETPs'') and equity
securities that are not ETPs (i.e., single-name securities or single
stocks), respectively. As noted below, DAC orders will continue to
be available only for FLEX options.
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    A DAC order is an order for which the System delta-adjusts its
execution price after the market close. The DAC order instruction is
available for simple and complex orders and allows Users to incorporate
into their options pricing the closing price or value of the underlying
on the transaction date based on how much that price or value changed
during the trading day. Specifically, pursuant to the DAC order
definition under Rule 5.6(c) (for simple DAC orders) and Rule
5.33(b)(5) (for complex DAC orders), the delta-adjusted execution price
equals the original execution price plus the delta value times the
difference between the official closing price or value of the
underlying on the transaction date and the reference price or index
value of the underlying (``reference price''). Upon order entry for
electronic execution, a User must designate a delta value (per leg for
complex DAC orders) and may designate a reference price. If no
reference price is designated, the System will include the price or
value, as applicable, of the underlying at the time of order entry as
the reference price. Upon order entry for open outcry execution, a User
may designate a delta value (for one or more legs for complex DAC
orders) and/or a reference price. During the open outcry auction, in-
crowd market participants will determine the final delta value(s) and/
or reference price, which may differ from any delta value or reference
price designated by the submitting User. The final delta value(s) and
reference price would be reflected in the final terms of the execution.
A DAC order (simple and complex) may only be submitted in options on
ETPs and indexes for execution in a FLEX electronic auction or open
outcry auction on the Exchange's trading floor pursuant to Rule
5.72.\4\
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    \4\ Additionally, pursuant to the definition of a DAC order
under Rule 5.6(c) and Rule 5.33(b)(5), a DAC order submitted for
execution in open outcry may only have a Time-in-Force of Day. A
User may not designate a DAC order as All Sessions.
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    The Exchange proposes to make the DAC order instruction available
for orders submitted in any FLEX option, including equity options. In
particular, the proposed rule change amends the definition of a DAC
order (simple and complex) to allow for DAC orders to be submitted in
equity options by removing the restriction that a DAC order may only be
submitted in options on ETPs and indexes. In particular, the proposed
rule change to the definition of a simple DAC order under Rule 5.6(c)
provides that a DAC order may only be submitted for execution in a FLEX
electronic auction or open outcry auction on the Exchange's trading
floor pursuant to Rule 5.72, and the proposed rule change to the
definition of a complex DAC order under Rule 5.33(b)(5) provides that a
complex DAC order may only be submitted for execution in a FLEX
electronic auction or open outcry auction on the Exchange's trading
floor pursuant to Rule 5.72. In addition to this, the proposed rule
change adds to the definition of a simple DAC order under Rule 5.6(c)
that a DAC order submitted in a single stock equity option may not be
submitted until 45 minutes prior to the market close. A DAC order may
not be submitted in a single stock equity option on its expiration day.
    DAC orders are designed to allow investors to incorporate any
upside market moves that may occur following execution of the order up
to the market close while limiting downside risk. Significant numbers
of market participants interact in the equity markets near the market
close, which may substantially impact the price of an underlying equity
security at the market close. For example, the Exchange understands
that market makers and other liquidity providers seek to balance their
books before the market close and contribute to increased price
discovery surrounding the market close. The Exchange also understands
it is common for other market participants to seek to offset intraday
positions and mitigate exposure risks based on their predictions of the
closing underlying prices. This substantial activity near the market
close may create wider spreads and increased price volatility, which
may attract further trading activity from those participants seeking
arbitrage opportunities and further drive prices. The significant
liquidity and price/value movements in securities, including equity
securities, that can occur near the market close, may cause option
closing and settlement prices to deviate significantly from option
execution prices earlier that trading day. As such,

the Exchange wishes to provide its investors with the same
opportunities to incorporate any upside market moves that may occur
following execution of the order up to the market close while limiting
downside risk in their equity options trading as currently provided for
their ETP and index options trading by making DAC orders available in
equity options.
    Additionally, DAC orders are intended to benefit investors that
participate in defined-outcome investment strategies,\5\ which, at the
time the DAC order was adopted, existed only for indexes and ETPs.
Particularly, DAC orders allow such funds to incorporate market moves
that may occur following execution of the order up to the market close
while limiting risk and to allow such funds to employ certain FLEX
options strategies that enable their investors to mitigate risk at the
market close while also participating in beneficial market moves at the
close.\6\ The Exchange has recently been made aware that defined-
outcome investment strategies are being created to provide exposure to
individual equity securities and as a result has received growing
customer demand to make DAC orders available in equity options.\7\ The
Exchange understands that, like defined-outcome strategies for ETPs and
indexes, such funds for single-name equity securities would seek to use
multi-leg strategy orders when seeding their funds,\8\ and, like for
any defined-outcome strategy, the goal of the strategies used by
defined-outcome funds for single-name securities would be to price the
execution of multi-leg strategy orders at the close of the underlying.
Also, the Exchange understands that funds for multiple single-name
equity securities would seek to use single-leg (i.e., simple) orders to
create a strategy when seeding their funds.\9\ However, there is
operational execution risk in attempting to fill an order near the
close to capture the underlying closing price. A DAC complex order
currently allows the User to execute a strategy order in connection
with a fund for an ETP or an index prior to the close and have its
price adjusted at the close. The proposed rule change would allow a
User to execute strategy orders in connection with seeding a fund for
an equity security in the same manner.\10\ Like DAC complex orders for
strategy orders in ETP and index options currently, DAC orders in
equity options, either simple or complex depending on the structure of
the fund, would allow the strategy order or orders to be executed at a
time before the close, eliminating the execution risk, while realizing
the objective of pricing based on the exact underlying close for those
strategies that require pricing at the close or a defined amount of
market exposure through the close. The proposed rule change would allow
Users to participate in the same benefits--eliminating execution risk
while realizing objective pricing--for their strategies in equity
options as they are currently may for their strategies in ETP and index
options.
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    \5\ Including defined-outcome ETFs, other managed funds, unit
investment trusts (``UITs''), index funds, structured annuities, and
other such funds or instruments that are indexed managed funds.
    \6\ See Securities Exchange Act Release No. 88997 (June 3,
2020), 85 FR 35351 (June 9, 2020) (SR-CBOE-2020-014).
    \7\ Indeed, in the proposal that adopted the DAC order
instruction, the Exchange notes that if, at a later date, User
demand warrants the availability of DAC orders for equity options,
the Exchange could submit a proposal to make DAC orders available
for equity options. See id.
    \8\ The Exchange understands that, like defined-outcome ETFs for
ETPs and indexes, issuers of defined-outcome ETFs for equity
securities would not buy stocks directly, but instead, use options
contracts to deliver the price gain or loss of the underlying over
the course of a year, up to a preset cap.
    \9\ The Exchange notes that funds for multiple single-name
equity securities would seek to use simple orders across multiple
single-name equity options when seeding their funds as multi-leg,
multi-class strategies in single stock options are not available for
trading on the Exchange.
    \10\ Because multi-leg strategies themselves may have delta
offsets, the User is hedged, meaning that the User may realize a
negative movement versus the initial execution on some legs, which
is offset by a positive move in other legs. The Exchange notes that
the strategies may or may not define an exact delta offset (``delta
neutrality'' occurs where the strategy defines an exact delta
offset). Given the delta neutral nature of an order with exact
offset, a User is indifferent to any movement in the underlying from
the time of execution to the close. Whether or not a User defines an
exact delta offset, a User anticipates a given amount of market
exposure, either partial or none, depending on the strategy and
combinations of buy/sell, call/put and quantity. See supra note 6 at
35352.
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    As stated above, the proposed rule change also provides that a
simple DAC order submitted in a single stock equity option may not be
submitted until 45 minutes prior to the market close and may not be
submitted on its expiration day. As a general rule, attempted
manipulation of the price of a security encounters greater difficulty
the more volume that is traded, and, generally, single name equity
securities tend to be less liquid and experience greater price
sensitivity and larger market moves than indexes or ETPs. The Exchange
notes that on expiration day in particular, underlying equity
securities may experience more price sensitivity than on non-expiration
days and may be more susceptible to incentive to manipulate given that
the exercise value of overlying options are contingent on the
underlying closing price on expiration day. Options holders on
expiration day, whether their positions were taken via a DAC execution
or not, are subject to the risk of price swings in the underlying prior
to the final close; however, options holders of positions taken via a
DAC execution may potentially be more susceptible to such risk given
the price adjustment at the close. For example, if a market participant
executes a DAC order to buy calls on expiration day and a large price
swing follows, in that, the underlying price is pushed significantly
higher before the close, the DAC option holder would be forced to pay a
much higher premium upon adjustment, and ultimately expiration.
Therefore, in order to mitigate the potential risk associated with
expiration day price swings, which may potentially expose DAC order
users the gamma effect of options as they become more sensitive to
underlying price changes as they approach expiration, particularly in
options overlying less liquid securities, the proposed rule change
restricts trading (regardless of opening or closing) in simple DAC
orders in single stock options on expiration day. In addition to this,
the proposed rule to require simple DAC orders in single stock options
to be submitted no earlier than 45 minutes before the market close will
reduce the amount of time during which the underlying price could
potentially move; movements which, as stated above, may pose greater
risk upon price adjustment at close to holders of DAC options. The
Exchange notes that the same potential incentive to ``push'' the price
of the underlying on expiration day in connection with the exercise
price of an option is greatly diminished for multi-leg orders given
that parties to multi-leg transactions are focused on the spread or
ratio between the transaction prices for each of the legs (i.e., the
net price of the entire complex trade).
    The Exchange notes that the same rules regarding the entry,
execution and processing of DAC orders submitted in ETP and index
options will apply to DAC orders submitted in equity options.\11\
Unadjusted and adjusted

DAC trade information for DAC orders in equity options will be sent to
the transacting parties, Options Clearing Corporation (``OCC'') and
Options Price Reporting Agency (``OPRA'') in the same manner as such
trade information for DAC orders in ETP and index options is currently
sent today. The Exchange further notes that, similar to a DAC order
instruction, the Exchange Rules already permit exercise prices for FLEX
Equity Options series to be formatted as a percentage of the closing
value of the underlying security.
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    \11\ See Rule 5.6(c) (definition of simple DAC order), Rule
5.33(b)(5) (definition of complex DAC order), and Rule 5.34(c)(11)
(DAC order reasonability check). The Exchange notes too that all DAC
orders, currently and as proposed, are entered, priced, prioritized,
allocated and execute as any other FLEX Order would when submitted
into any FLEX electronic or open outcry auction and, like any FLEX
Order, a FLEX DAC order may only be submitted into FLEX Options
series eligible for trading pursuant to the FLEX Rules.
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    The Exchange has analyzed its capacity and represents that it
believes the Exchange and OPRA have the necessary systems capacity to
handle any additional order traffic, and the associated restatements,
that may result from the submission of DAC orders in equity options and
represents that it continues to have an adequate surveillance program
in place to monitor orders with DAC pricing, including such orders in
equity options. The Exchange additionally notes that it intends to
further enhance its surveillances to, among other things, monitor for
certain changes in delta and stock price between an original order and
the final terms of execution and to generally monitor activity in the
underlying potentially related to DAC trades. The Exchange notes that
it has not observed any impact on pricing or price discovery at or near
the market close as a result of DAC orders submitted in ETP and index
options and does not believe that making DAC orders available in equity
options will have any impact on pricing or price discovery at or near
the market close. The Exchange also notes that it has not identified an
impact on pricing or price discovery at or near the close as a result
of exercise prices for FLEX Equity Options series formatted as a
percentage of the closing value of the underlying security, which is
similar to a DAC order instruction and permitted on the Exchange today.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\12\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \13\ requirements that the rules of an exchange be
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. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \14\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ Id.
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    In particular, the Exchange believes that making DAC orders
available in all FLEX options, including equity options, will promote
just and equitable principles of trade and will remove impediments to
and perfect the mechanism of a free and open market and national market
system and, in general, protect investors, as it will allow investors
to realize the same benefits in connection with their equity options
trading that they may currently realize through the use of DAC orders
in their ETP and index options trading, as previously approved by the
Commission.\15\ As stated above, the Exchange has received growing
customer demand to make DAC orders available in equity options.\16\ The
proposed change to make DAC orders available in all options will
benefit investors by allowing them to incorporate into the pricing of
their equity options the closing price of the underlying on the
transaction date based on the amount that the price of the underlying
changes intraday. This allows investors to incorporate potential upside
market moves that may occur following the execution of an order up to
the market close while limiting downside risk in the same manner as may
today for their ETP and index options. Also, offering DAC orders in
equity options will allow investors to use the underlying reference
prices and delta to fully hedge their equity options positions taken
during the trading day through the market close and potentially benefit
from price movements at the close as they are already able to do for
their ETP and index option positions. In addition to this, as managed
funds for single-name securities are expected to begin utilizing
strategies at the close in order to mitigate risk at the close and
participate in beneficial market moves at the same time, the Exchange
believes that DAC orders in equity options will offer to managed funds
for equity securities the same method by which such funds for ETPs and
indexes are currently able to meet these objectives through the
execution of FLEX options, thereby benefiting investors that hold
shares of these funds. Additionally, the proposed restrictions in
connection with the submission of simple DAC orders in equity options
are designed to prevent fraudulent and manipulative acts and practices
and protect investors by mitigating the potential risk associated with
expiration day price swings, which may potentially expose DAC order
users to the gamma effect of options as they become more sensitive to
underlying price changes as such options approach expiration, and
reducing the amount of time during which the underlying price could
potentially move. As described, single-name securities may experience
greater price sensitivity and may experience larger price swings than
compared to indexes and ETPs, and DAC options holders particularly may
potentially be subject to a greater risk of paying much higher premiums
given the price adjustment at close. The Exchange believes proposed
will minimize any potential incentive to attempt to manipulate the
equities that may underlie a DAC order, particularly those securities
that may experience relatively lower volume, and will mitigate
potential risk to holders of DAC options in single-name securities.
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    \15\ See Securities and Exchange Act Release No. 90319 (November
3, 2020), 85 FR 71361 (November 9, 2020) (SR-CBOE-2020-014).
    \16\ See supra note 7.
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    Further, the Exchange believes that the proposed rule change will
remove impediments to and perfect the mechanism of a free and open
market and a national market system and, in general, protect investors
because the same rules regarding the entry, execution and processing of
DAC orders submitted in ETP and index options will apply to DAC orders
submitted in equity options,\17\ and all DAC trade information for DAC
orders in equity options will be sent to the transacting parties, OCC
and OPRA in the same manner as such trade information for DAC orders in
ETP and index options is currently sent today. The Exchange represents
that the Exchange itself and OPRA have the necessary systems capacity
to handle any additional order traffic and the related restatements
that may result from making DAC orders available in equity options and
represents that it continues to have an adequate surveillance program
in place to monitor orders with DAC pricing,

including such orders in equity options, thereby ensuring the
protection of investors. In addition to this, the Exchange intends to
further enhance its surveillances to, among other things, monitor for
certain changes in delta and stock price between an original order and
the final terms of execution and to generally monitor activity in the
underlying potentially related to DAC trades. As noted above, the
Exchange has not observed any impact on pricing or price discovery at
or near the market close as a result of DAC orders submitted in ETP and
index options, nor as a result of orders submitted in FLEX Equity
Options series with exercise prices formatted as a percentage of the
closing value of the underlying security, which are similar to DAC
orders in equity options and currently permitted under the Exchange
Rules. The Exchange does not believe that making DAC orders available
in equity options will have any impact on pricing or price discovery at
or near the market close.
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    \17\ See supra note 11.
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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
will not impose any burden on intramarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act,
because use of the DAC order instruction is optional and already
available to all Users. The proposed rule change merely expands the
availability of an optional order instruction to orders submitted in
all FLEX options. The Exchange believes that making DAC orders
available in FLEX equity options is consistent with current demand by
market participants and will allow them to realize the same benefits in
their equity options trading as they may currently realize for their
ETP and index options trading through the use of DAC orders. Also, and
as described above, the additional proposed parameters in connection
with single-leg, single name DAC orders are designed to minimize any
potential incentive to attempt to manipulate the equities that may
underlie a DAC order, particularly those securities that may experience
relatively lower volume, and will mitigate potential risk to holders of
DAC options in single-name securities.
    The proposed rule change will not impose any burden on intermarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act, as the Exchange already offers DAC order
functionality--the proposed rule change merely expands the availability
of the DAC order instruction to orders in all FLEX options. The
proposed rule change it is intended to provide market participants in
equity options with an additional means to manage risks in connection
with potential volatility and downside price swings that may occur near
the market close, while allowing them to receive potential benefits
associated with any upside market moves near the market close. The
Exchange believes the proposed rule change may foster competition, as
other options exchanges in their discretion may pursue the adoption of
similar orders applicable to equity options, which will result in
additional choices for investors.

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

    The Exchange neither solicited nor received comments on the
proposed rule change.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
    A. by order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule
change should be 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-CBOE-2022-036 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-CBOE-2022-036. 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-CBOE-2022-036, and should be submitted
on or before August 17, 2022.

    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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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-16041 Filed 7-26-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 203 (Tuesday, October 21, 2014)]
[Rules and Regulations]
[Pages 62829-62832]
[FR Doc No: 2014-24908]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket Number USCG-2014-0492]
RIN 1625-AA00

Safety Zone; Portland Dragon Boat Races, Willamette River,
Portland, OR

AGENCY: Coast Guard, DHS.

ACTION: Interim rule and request for comments.

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SUMMARY: The Coast Guard is establishing a safety zone in Portland, OR.
This safety zone is necessary to help ensure the safety of the maritime
public during the annual marine event and will do so by prohibiting
unauthorized persons and vessels from entering the regulated area
unless authorized by the Sector Columbia River Captain of the Port or
his designated representatives.

DATES: This rule is effective without actual notice October 21, 2014.
For the purposes of enforcement, actual notice will be used from the
date the rule was signed, September 4, 2014 until October 21, 2014.
    Comments and related material must be received by the Coast Guard
on or before November 20, 2014.
    Requests for public meetings must be received by the Coast Guard on
or before October 28, 2014.

ADDRESSES: Documents mentioned in this preamble are part of Docket
Number USCG-2014-0492. To view documents mentioned in this preamble as
being available in the docket, go to http://www.regulations.gov, type
the docket number in the ``SEARCH'' box and click ``SEARCH.'' Click on
``Open Docket Folder'' on the line associated with this rulemaking. You
may also visit the Docket Management Facility in Room W12-140 on the
ground floor of the Department of Transportation West Building, 1200
New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    You may submit comments identified by docket number USCG-2014-0492
using any one of the following methods:
    (1) Federal e-Rulemaking Portal: http://www.regulations.gov.
    (2) Fax:<PHONE_NUMBER>.
    (3) Mail or Delivery: Docket Management Facility (M-30), U.S.
Department of Transportation, West Building Ground Floor, Room W12-140,
1200 New Jersey Avenue SE., Washington, DC 20590-0001. Deliveries
accepted between 9 a.m. and 5 p.m., Monday through Friday, except
Federal holidays. The telephone number is<PHONE_NUMBER>. See the
``Public Participation and Request for Comments'' portion of the
SUPPLEMENTARY INFORMATION section below for further instructions on
submitting comments. To avoid duplication, please use only one of these
three methods.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email Kenneth Lawrenson, Waterways Management Division, Marine
Safety Unit Portland, Coast Guard; telephone<PHONE_NUMBER>, email
<EMAIL_ADDRESS>If you have questions on viewing or submitting
material to the docket, call Cheryl Collins, Program Manager, Docket
Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Acronyms

DHS Department of Homeland Security
FR Federal Register
NPRM Notice of Proposed Rulemaking

A. Public Participation and Request for Comments

    We encourage you to participate in this rulemaking by submitting
comments and related materials. All comments received will be posted
without change to http://www.regulations.gov and will include any
personal information you have provided.

1. Submitting Comments

    If you submit a comment, please include the docket number for this
rulemaking, indicate the specific section of this document to which
each comment applies, and provide a reason for each suggestion or
recommendation. You may submit your comments and material online at
http://www.regulations.gov, or by fax, mail, or hand delivery, but
please use only one of these means. If you submit a comment online, it
will be considered received by the Coast Guard when you successfully
transmit the comment. If you fax, hand deliver, or mail your comment,
it will be considered as having been received by the Coast Guard when
it is received at the Docket Management Facility. We recommend that you
include your name and a

mailing address, an email address, or a telephone number in the body of
your document so that we can contact you if we have questions regarding
your submission.
    To submit your comment online, go to http://www.regulations.gov,
type the docket number [USCG-2014-0492] in the ``SEARCH'' box and click
``SEARCH.'' Click on ``Submit a Comment'' on the line associated with
this rulemaking.
    If you submit your comments by mail or hand delivery, submit them
in an unbound format, no larger than 8\1/2\ by 11 inches, suitable for
copying and electronic filing. If you submit comments by mail and would
like to know that they reached the Facility, please enclose a stamped,
self-addressed postcard or envelope. We will consider all comments and
material received during the comment period and may change the rule
based on your comments.

2. Viewing Comments and Documents

    To view comments, as well as documents mentioned in this preamble
as being available in the docket, go to http://www.regulations.gov,
type the docket number in the ``SEARCH'' box and click ``SEARCH.''
Click on Open Docket Folder on the line associated with this
rulemaking. You may also visit the Docket Management Facility in Room
W12-140 on the ground floor of the Department of Transportation West
Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

3. Privacy Act

    Anyone can search the electronic form of comments received into any
of our dockets by the name of the individual submitting the comment (or
signing the comment, if submitted on behalf of an association,
business, labor union, etc.). You may review a Privacy Act notice
regarding our public dockets in the January 17, 2008, issue of the
Federal Register (73 FR 3316).

4. Public Meeting

    We do not now plan to hold a public meeting. But you may submit a
request for one before October 28, 2014, using one of the methods
specified under ADDRESSES. Please explain why you believe a public
meeting would be beneficial. If we determine that one would aid this
rulemaking, we will hold one at a time and place announced by a later
notice in the Federal Register.

B. Regulatory History and Information

    The Coast Guard is issuing this final rule without prior notice and
opportunity to comment pursuant to authority under section 4(a) of the
Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision
authorizes an agency to issue a rule without prior notice and
opportunity to comment when the agency for good cause finds that those
procedures are ``impracticable, unnecessary, or contrary to the public
interest.'' Under 5 U.S.C. 553 (b) (B), the Coast Guard finds that good
cause exists for not publishing a notice of proposed rulemaking (NPRM)
with respect to this rule. The first event for which this safety zone
will be in effect is scheduled to be held on the 6th and 7th of
September, 2014. Approximately 1,850 people are anticipating this event
to commence as scheduled, and the event organizers are unable to
reschedule the event in order to allow enough time for public comment.
As such, it is impracticable for the Coast Guard to publish an NPRM
with a notice and comment period, as well as a Final Rule (FR) prior to
the date of the 2014 event. However, comments received under this
temporary interim rule will be considered before a final rule is
published.
    Under 5 U.S.S. 553(d)(3), the Coast Guard finds that good cause
exists for making this rule effective less than 30 days after
publication in the Federal Register. The first event for which this
safety zone will be in effect is scheduled to be held on the 6th and
7th of September, 2014. Approximately 1,850 people are anticipating
this event to commence as scheduled, and the event organizers are
unable to reschedule the event in order to allow enough time for public
comment. As such, it is impracticable to wait until 30 days after
publication in the Federal Register to make this rule effective.

C. Basis and Purpose

    Coast Guard Captains of the Port are granted authority to establish
safety zones in 33 CFR 1.05-1(f) for safety and environmental purposes
as described in 33 CFR Part 165.
    The Portland dragon boat races generally take place each year on
the first or second weekend of September. These events create the
potential for complex navigation situations because of the large number
of vessels that congregate near the event. In addition, the dragon
boats involved in this regatta are not power driven vessels and
consequently are limited in their ability to maneuver. A safety zone is
necessary in order to ensure the safety of the maritime public in the
proximity of marine event sites and reduce the risk of collision with
the non-power driven vessels involved in the race.

D. Discussion of the Interim Rule

    The rule establishes a safety zone in the Thirteenth Coast Guard
District. The safety zone will be located along the western side of the
Willamette River extending from Tom McCall Waterfront Park between the
Hawthorne and Marquam Bridges, Portland, OR. This safety zone will be
enclosed by four lines along the western side of the Willamette River
extending from Tom McCall Waterfront Park between the Hawthorne and
Marquam Bridges, Portland, OR: line one starting at 45-30'49'' N/122-
40'24'' W then heading east to 45-30'49'' N/122-40'22'' W then heading
south to 45-30'29'' N/122-40'08'' W then heading west to 45-30'26'' N/
122-40'14'' W then heading north ending at 45-30'49'' N/122-40'24'' W.
The center span of the Hawthorne and Marquam bridges will be left open
to allow commercial traffic through during the event. This safety zone
will be enforced from 8:00 a.m. to 6:00 p.m. on the first or second
Saturday and Sunday of September. The Coast Guard will make
notifications via maritime advisories when the safety zone will be
enforced. Enforcement of the zone will be short in duration and will
allow waterway users to enter or transit through the zone when deemed
safe by the Captain of the Port or his designated representative.

E. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on these statutes and executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of Executive Order 12866 or
under section 1 of Executive Order 13563. The Office of Management and
Budget has not reviewed it under those Orders. The Coast Guard has made
this determination based on the fact that the regulated area created by
this rule will not significantly affect the maritime public because
vessels may still

coordinate their transit with the Coast Guard in the vicinity of the
safety zone.

2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000.
    The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will
not have a significant economic impact on a substantial number of small
entities.
    This rule may affect the following entities, some of which may be
small entities: The owners and operators of vessels intending to
operate in the area covered by the safety zone.
    The rule will not have a significant economic impact on a
substantial number of small entities for the following reasons: (i) The
regulated area is limited in size; (ii) the official on-scene patrol
may authorize access to the regulated area; (iii) the regulated area
will affect a limited geographical location for a limited time; (iv)
the Coast Guard will make notifications via maritime advisories so
mariners can adjust their plans accordingly; and (v) vessel traffic
will be able to pass the safety zone with permission from the COTP
representative.
    If you think that your business, organization, or governmental
jurisdiction qualifies as a small entity and that this rule would have
a significant economic impact on it, please submit a comment (see
ADDRESSES) explaining why you think it qualifies and how and to what
degree this rule would economically affect it.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and determined
that this rule does not have implications for federalism.

6. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

7. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such expenditure, we do discuss the effects of this rule elsewhere in
this preamble.

8. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

9. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

10. Protection of Children From Environmental Health Risks

    We have analyzed this rule under Executive Order 13045, Protection
of Children From Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

11. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

12. Energy Effects

    This action is not a ``significant energy action'' under Executive
Order 13211, Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.

13. Technical Standards

    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

14. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a
preliminary determination that this action is one of a category of
actions that do not individually or cumulatively have a significant
effect on the human environment. This rule involves the creation of one
safety zone around a marine event to protect the maritime public. This
rule is categorically excluded from further review under paragraph
34(g) of Figure 2-1 of the Commandant Instruction. A preliminary
environmental analysis checklist supporting this determination and a
Categorical Exclusion Determination are available in the docket where
indicated under ADDRESSES. We seek any comments or information that may
lead to the discovery of a significant environmental impact from this
rule.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR Part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for Part 165 continues to read as follows:

    Authority: 33 U.S.C. 1226; 1231; 46 U.S.C. Chapter 701, 3306,
3703; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5;
Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security
Delegation No. 0170.1.

0
2. Add Sec.  165.1341 to read as follows:

Sec.  165.1341  Safety Zone; Portland Dragon Boat Races, Portland, OR.

    (a) Safety Zones. The following area is a designated safety zone:
    (1) Location. This safety zone is enclosed by four lines along the
western side of the Willamette River extending from Tom McCall
Waterfront Park between the Hawthorne and Marquam Bridges, Portland,
OR: line one starting at 45-30'49'' N/122-40'24'' W then heading east
to 45-30'49'' N/122-40'22'' W then heading south to 45-30'29'' N/122-
40'08'' W then heading west to 45-30'26'' N/122-40'14'' W then heading
north ending at 45-30'49'' N/122-40'24'' W.
    (2) Enforcement Period. This safety zone will be enforced from 8:00
a.m. to 6:00 p.m. on the first or second Saturday and Sunday of
September.
    (b) Regulations. In accordance with the general regulations in 33
CFR Part 165, subpart C, no person may enter or remain in the safety
zone created in this section or bring, cause to be brought, or allow to
remain in the safety zone created in this section any vehicle, vessel,
or object unless authorized by the Captain of the Port or his
designated representative. The Captain of the Port may be assisted by
other Federal, State, or local agencies with the enforcement of the
safety zone.

    Dated: September 4, 2014.
D.J. Travers,
Captain, U.S. Coast Guard, Captain of the Port, Sector Columbia River.
[FR Doc. 2014-24908 Filed 10-20-14; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 77, Number 216 (Wednesday, November 7, 2012)]
[Notices]
[Pages 66890-66893]
[FR Doc No: 2012-27221]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68138; File No. SR-NYSEMKT-2012-59]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change to Temporarily
Suspend Those Aspects of Rules 36.20--Equities, 36.21--Equities, and
36.30--Equities That Would Not Permit Designated Market Makers and
Floor Brokers To Use Personal Portable Phone Devices on the Trading
Floor Following the Aftermath of Hurricane Sandy From October 31, 2012
Until the Earlier of When Phone Service is Fully Restored or Friday,
November 2, 2012

 November 1, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 1, 2012, the NYSE MKT LLC (``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 Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to temporarily suspend those aspects of Rules
36.20--Equities, 36.21--Equities, and 36.30--Equities that would not
permit Designated Market Makers (``DMMs'') and Floor brokers to use
personal portable phone devices on the Trading Floor following the
aftermath of Hurricane Sandy from October 31, 2012 until the earlier of
when phone service is fully restored or Friday, November 2, 2012. 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
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes 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 \3\ following the
aftermath of Hurricane Sandy and during the period that phone service
is not fully functional. All other aspects of those rules will remain
applicable. The Exchange proposes that the temporary suspensions of
Rule 36 requirements be in effect beginning the first day trading
resumed following Hurricane Sandy and remain in place to the earlier of
when phone service is fully restored or Friday, November 2, 2012.\4\
---------------------------------------------------------------------------

    \3\ Pursuant to Rule 6A--Equities, 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.
    \4\ The Exchange notes that it formally submitted a draft of
this rule proposal through the SEC's prefiling system on October 31,
2012, but that due to technological issues associated with Hurricane
Sandy-related limitations on Exchange staff computer access, the
Exchange was unable to formally submit the filing on October 31,
2012.
---------------------------------------------------------------------------

    On October 29 and 30, 2012, due to the dangerous conditions that
developed as a result of Hurricane Sandy, and in consultation with
other equities, options, bonds, and derivative exchanges, market
participants, and Commission staff, all U.S. equities and options
markets were closed, including the Exchange, the New York Stock
Exchange LLC, and NYSE Arca, Inc.
    On October 31, 2012, notwithstanding the ongoing lack of power in
the downtown Manhattan vicinity, the Exchange, using back-up
generators, was able to open trading at its physical location in New
York City. However, due to intermittent telephone and cell phone
service, neither the wired or wireless telephone connections on the
Trading Floor are fully operational.
Proposed Temporary Suspensions to Permit Use of Personal Portable
Phones
    Rule 36.23--Equities generally permits Exchange members, including
Floor brokers and DMMs, to use personal portable telephone devices at
locations outside of the Trading Floor, other than on the NYSE Amex
Options Trading Floor. Rules 36.20--Equities and 36.21--Equities govern
the type of telephone communications that are approved for Floor
brokers and Rule 36.30--Equities governs the type of telephone
communications that are approved for DMMs.
    Pursuant to Rule 36.20--Equities, Floor brokers may maintain a
telephone line on the Trading Floor and use Exchange authorized and
provided portable phones while on the Trading Floor. The use of such
Exchange authorized and provided portable phones is governed by Rule
36.21--Equities. Because of intermittent cell phone service, many
Exchange authorized and provided portable phones are not functional and
therefore Floor brokers cannot use the Exchange authorized and provided
portable phones. 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.
    The Exchange therefore proposes to temporarily suspend the
limitations in Rules 36.20--Equities and 36.21--Equities that permit
Floor brokers to use only Exchange authorized and provided portable
phones so that Floor brokers may also use personal portable phones on
the Trading Floor. The Exchange proposes that pursuant to this
temporary suspension, Floor brokers 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 brokers 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.
    Pursuant to Rule 36.30--Equities, with the permission of the
Exchange, a DMM unit may maintain a telephone line at its stock trading
post location to the off-Floor offices of the DMM unit, the unit's
clearing firm, or to persons providing non-trading related services, as
permitted under Rule 98--Equities.\5\ Similar to the issues relating to
wireless phone service on the Trading Floor, the Exchange is
experiencing problems with the DMM unit wired telephone lines. In some
circumstances, the DMM unit location at the Trading Floor post may
receive incoming calls, but the phones are not capable of making
outgoing calls.
---------------------------------------------------------------------------

    \5\ Rule 36.30--Equities restricts a DMM unit from using the
post telephone lines to transmit to the Floor orders for the
purchase or sale of securities. In addition, Rule 98--Equities sets
forth restrictions on communications between the Floor-based
personnel of a DMM unit and off-Floor personnel. See, e.g., Rules
98(c)(2)(A)-Equities, (d)(2)(B)(iii)--Equities, (f)(1)(A)(ii)--
Equities, and (f)(2)(A)--Equities.
---------------------------------------------------------------------------

    The inability of a DMM unit to use its telephone lines could impact
the ability of a DMM unit to comply with its obligations in securities
registered to the

DMM unit. For example, if a DMM unit experiences connectivity issues or
problems with its algorithms and needs to speak with one of its back-
office support teams, with the current phone limitations, the DMM would
not be able to do so. Accordingly, the Exchange proposes to temporarily
suspend the requirements of Rule 36.30--Equities that restrict the use
of personal cell phones so that DMM unit Trading Floor personnel may
use personal portable phone devices while on the Trading Floor in lieu
of their non-operational wired telephone lines.
    The Exchange proposes that notwithstanding this temporary
suspension, DMM units and their Floor-based personnel would remain
subject to both the Rule 36.30 and 98 limitations of whom they may
contact directly from the Trading Floor. However, because of the
extensive, ongoing issues with power and phone lines in the New York
City area and vicinity, the persons with whom a DMM may be permitted to
communicate from the Trading Floor may not be at their regular physical
location. Accordingly, the Exchange proposes to temporarily permit DMMs
to use their personal portable phones to contact the off-Floor persons
that they are permitted to contact by rule, even if such off-Floor
personnel are not located in their regular office locations. The
Exchange believes that this relief is consistent with guidance issued
by FINRA, which recognizes that in the aftermath of Hurricane Sandy, a
FINRA member may relocate displaced office personnel to temporary
locations.\6\
---------------------------------------------------------------------------

    \6\ See FINRA Regulatory Notice 12-45. The Exchange notes that
all member organizations operating a DMM unit are also FINRA
members, and therefore subject to the guidance set forth in FINRA
Regulatory Notice 12-45.
---------------------------------------------------------------------------

    DMM units that use personal portable phones during this temporary
suspension 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. DMM units must also 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 DMM unit 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
FINRA, on request.
    At this time, 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 will be required. The Exchange therefore proposes that the
temporary suspensions of Rule 36 requirements remain in place to the
earlier of when phone service is fully restored or Friday, November 2,
2012.\7\
---------------------------------------------------------------------------

    \7\ The Exchange will provide notice of this rule filing to the
DMMs and Floor brokers, including the applicable recordkeeping and
other requirements.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\8\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\9\ 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    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 temporary suspensions from those aspects of
Rule 36 that restrict the 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 both Floor brokers and DMMs to conduct their regular
business, notwithstanding the ongoing issues with telephone service.
The Exchange further believes that without the requested relief, both
Floor brokers and DMMs 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. For DMM units, any
inability to communicate with personnel from their off-Floor offices,
clearing firms, or non-trading related support staff, regardless of
where such off-Floor personnel may be located in the aftermath of
Hurricane Sandy, could compromise the DMM unit's ability to meet their
obligations, particularly if the DMM unit experiences issues with
connectivity or its algorithms.

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 \10\ and Rule 19b-
4(f)(6) thereunder.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \12\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6) \13\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requested
that the Commission waive the 30-day operative delay so that the
proposed rule change 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.
The Commission notes that doing so will allow the Exchange to make the
emergency temporary relief described in this proposal, which was
necessitated by Hurricane Sandy's disruption of telephone service,
available on October 31, 2012, the first day that the Exchange reopened
for trading following Hurricane Sandy. Therefore, the Commission hereby
waives the 30-day operative delay and designates the proposal operative
upon filing.\14\
---------------------------------------------------------------------------

    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 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).
---------------------------------------------------------------------------

    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_ADDRESS>Please include
File Number SR-NYSEMKT-2012-59 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-2012-59. 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-2012-59 and should
be submitted on or before November 28, 2012.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-27221 Filed 11-6-12; 8:45 am]
BILLING CODE 8011-01-P