80 FR 37343 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 1.1 Governing Definitions and Various Equity Trading Rules in Order To Eliminate Obsolete References
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 125 (June 30, 2015)
Federal Register Volume 80, Issue 125 (June 30, 2015)
| Page Range | 37343-37346 | |
| FR Document | 2015-15973 |
[Federal Register Volume 80, Number 125 (Tuesday, June 30, 2015)] [Notices] [Pages 37343-37346] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-15973] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75289; File No. SR-NYSEArca-2015-54] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 1.1 Governing Definitions and Various Equity Trading Rules in Order To Eliminate Obsolete References June 24, 2015. 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 June 22, 2015, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE Arca'') 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 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 amend Rule 1.1 governing Definitions and various equity trading rules in order to eliminate obsolete references. The text of the proposed rule change is available on the Exchange's Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rule 1.1 governing Definitions and various equity trading rules in order to eliminate obsolete references. These proposed rule changes represent current functionality and would not propose any substantive changes to functionality. The Exchange has separately filed proposed rule changes to support the implementation of Pillar, which is an integrated trading technology platform designed to use a single specification for connecting to the equities and options markets operated by NYSE Arca and its affiliates, New York Stock Exchange LLC (``NYSE'') and NYSE MKT LLC (``NYSE MKT'').\4\ The Pillar I Filing proposed to adopt new rules relating to Trading Sessions, Order Ranking and Display, and Order Execution. --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 74951 (May 13, 2015), 80 FR 28721 (May 19, 2015) (SR-NYSEArca-2015-38) (Notice) (``Pillar I Filing''). In the Pillar I Filing, the Exchange described its proposed implementation of Pillar, including that it would be submitting more than one rule filing to correspond to the anticipated phased migration to Pillar. --------------------------------------------------------------------------- In anticipation of the implementation of Pillar, the Exchange has reviewed its rules governing equity trading and has identified a number of rules that could be streamlined both for the current trading platform and for Pillar.\5\ [[Page 37344]] Specifically, the Exchange proposes to amend NYSE Arca Equities Rules 1.1 (Definitions) (``Rule 1.1''), 7.5 (Trading Units) (``Rule 7.5''), 7.6 (Trading Differentials) (``Rule 7.6''), 7.8 (Bid or Offer Deemed Regular Way) (``Rule 7.8''), 7.12 (Trading Halts Due to Extraordinary Market Volatility) (``Rule 7.12''), and 7.32 (Order Entry) (``Rule 7.32''). The proposed changes to these rules are non-substantive and would streamline the existing rule text and eliminate obsolete terms. --------------------------------------------------------------------------- \5\ The Exchange has filed several rule filings to streamline its rules, but these filings generally addressed rules that describe the functionality associated with the Exchange's order types, and more specifically, how different order types may interact. See Securities Exchange Act Release Nos. 71331 (Jan. 16, 2014), 79 FR 3907 (Jan. 23, 2014) (SR-NYSEArca-2013-92) (Approval order for filing that updated rules relating to order types and modifiers); 72942 (Aug. 28, 2014), 79 FR 52784 (Sept. 4, 2014) (SR-NYSEArca- 2014-75) (Approval order for filing that eliminated specified order types, modifiers, and related references); and 74796 (April 23, 2015), 80 FR 12537 (March 9, 2015) (SR-NYSEArca-2015-08) (Approval order for filing to clarify Exchange rules governing order types) (``2015 Order Type Filing''). The Exchange filed the 2015 Order Type Filing in part to respond to a request by the SEC's Division of Trading and Markets that equity exchanges conduct a comprehensive review of their order types and how they operate in practice, and as part of that review, consider appropriate rule changes. This rule filing addresses equity rules other than those addressing orders and modifiers. --------------------------------------------------------------------------- Because these proposed changes are applicable to the current trading platform, the Exchange would implement these changes as soon as this rule filing is effective. Proposed Amendments to Rule 1.1 Rule 1.1 sets forth definitions in Exchange rules. The Exchange proposes to amend Rule 1.1 to revise definitions to eliminate obsolete references, make clarifying changes to existing definitions, add new short-hand terms for existing definitions, and propose non-substantive changes to replace the terms ``shall refer to'' or ``shall mean'' with the term ``means.'' The Exchange is not proposing any substantive changes to these rules. The proposed amendments to Rule 1.1 would be:Amend the definition of ``BBO'' set forth in Rule 1.1(h) to add that the term ``BB'' would mean the best bid on the NYSE Arca Marketplace and the term ``BO'' would mean the best offer on the NYSE Arca Marketplace. The Exchange proposes to add these short-hand terms to the definition of BBO because the Exchange would be using these terms in its proposed Pillar rules. These are not novel terms and therefore the Exchange proposes to adopt these terms before the implementation of Pillar. Delete the definition of ``Limited Price Order'' in Rule 1.1(t) as obsolete and replace it with ``reserved.'' In the 2015 Order Type Filing, the Exchange eliminated use of the term ``Limited Price Order'' in Rules 7.36 and 7.37.\6\ Because the term is not used in any other rules and the Exchange would not be proposing to use this term in rules governing trading in Pillar, the Exchange proposes to delete the definition. --------------------------------------------------------------------------- \6\ See 2015 Order Type Filing, infra, note 5. --------------------------------------------------------------------------- Amend the definition of ``Marketable'' in Rule 1.1(u) to mean for a Limit Order, an order that can be immediately executed or routed. The Exchange believes that this proposed definition better describes the term ``marketable,'' which is currently defined for Limited Price Orders as when the price matches or crosses the NBBO on the other side of the market. The proposed definition reflects more accurately circumstances of when an order would be marketable, which for a Limit Order, includes if the limit price is equal to or better than the contra-side PBBO or for Inside Limit Orders, includes if the limit price is equal to or better than the contra-side NBBO. The proposed new definition would also include in the definition of marketable if an order would be required to route, because it is priced through the PBBO or NBBO, or if it would be eligible to trade with non- displayed interest that is priced better than the PBBO or NBBO that may be on the NYSE Arca Book. The Exchange also proposes a non-substantive difference to capitalize the term ``Market Order.'' Delete the definition of ``NASD'' in Rule 1.1(y) as obsolete and replace it with ``reserved.'' Amend the definition of ``Nasdaq'' in Rule 1.1(z) to update the name of Nasdaq to its current official name, which is ``The Nasdaq Stock Market LLC,'' instead of ``The Nasdaq Stock Market, Inc.'' Delete the definitions of ``Nasdaq Security,'' ``Nasdaq System,'' and ``Nasdaq System BBO'' in Rules 1.1(aa), 1.1(bb) and 1.1(cc) and replace them with ``reserved.'' The Exchange no longer uses these terms in its rules and therefore proposes to delete the definitions as obsolete for purposes of Exchange rules. Amend the definition of ``NBBO, Best Protected Bid, Best Protected Offer, Protected Best Bid and Offer (PBBO)'' in Rule 1.1(dd) to add new short-hand defined terms. As proposed, the term ``NBB'' would mean the national best bid and the term ``NBO'' would mean the national best offer. The Exchange also proposes to add the short-hand terms of ``PBB'' to correlate to ``Best Protected Bid'' and ``PBO'' to correlate to ``Best Protected Offer.'' The Exchange proposes to add these terms, which are not novel, because the Exchange would be proposing to use them in its proposed Pillar rules. Proposed Amendments to Equity Trading Rules The Exchange proposes to amend Rules 7.5 (Trading Units), 7.6 (Trading Differentials), 7.8 (Bid or Offered Deemed Regular Way), 7.12 (Trading Halts due to Extraordinary Market Volatility), and 7.32 (Order Entry) to eliminate obsolete references and streamline the rule text. The Exchange is not proposing any substantive changes to these rules. Rule 7.5: Rule 7.5 sets forth Trading Units and currently provides: The unit of trading in stocks shall be 1 share and the unit of trading in bonds shall be $1,000 in par value thereof unless otherwise designated by the Corporation. For stocks, 100 shares shall constitute a ``round lot,'' any amount less than 100 shares shall constitute an ``odd lot,'' and any amount greater than 100 shares that is not a multiple of a round lot shall constitute a ``mixed lot.'' For bonds, a designated unit of trading shall constitute a ``round lot'' and any lesser amount shall constitute an ``odd lot.'' The Exchange proposes non-substantive amendments to Rule 7.5 to streamline the rule text and eliminate obsolete references to bonds, which do not trade on the Exchange. As proposed, the amended rule would provide: The unit of trading in stocks is 1 share. A ``round lot'' is 100 shares, unless specified by the primary listing market to be fewer than 100 shares. Any amount less than a round lot will constitute an ``odd lot,'' and any amount greater than a round lot that is not a multiple of a round lot will constitute a ``mixed lot.'' The Exchange believes that the proposed rule text streamlines the rule and provides greater transparency of what is considered a round lot or an odd lot. In addition, to reflect that a primary listing market may have securities with a trading unit fewer than 100 shares,\7\ the Exchange proposes to amend the rule to provide that a ``round lot'' would be 100 shares, unless specified by the primary listing market to be fewer than 100 shares. Because a round lot would no longer be set at 100 shares, and instead would reflect the unit of trading designated by the primary listing Exchange, the Exchange proposes to delete the additional references to ``100 shares'' and instead provide that any amount less than a round lot would constitute an ``odd lot,'' and any amount greater than a round lot that is not a [[Page 37345]] multiple of a round lot would constitute a mixed lot. The Exchange also proposes non-substantive amendments to change the term ``shall'' to ``will.'' --------------------------------------------------------------------------- \7\ For example, Biglari Holdings Inc. (symbol: BH), an NYSE- listed security, has a 10-share round lot parameter. --------------------------------------------------------------------------- The Exchange believes the proposed changes would provide transparency regarding trading units on the Exchange and reduce confusion regarding the types of securities available to trade on the Exchange. Specifically, because the Exchange does not trade bonds, the proposed amendment to delete the reference to bonds represents current functionality. Rule 7.6: Rule 7.6 sets forth the Exchange's Trading Differentials, also referred to as the minimum price variation (``MPV'') for quoting and entry of orders, and currently provides: (a) The Corporation shall determine the trading differentials for equity securities traded on the Corporation. Commentary: .01 The Corporation may only change the trading differentials for equity securities traded on the Corporation by filing a rule change proposal with the SEC, pursuant to section 19(b)(3)(A) of the Securities Exchange Act of 1934 (effective upon filing); provided that no change in the trading differentials may be made while the industry wide Decimalization Implementation Plan is in effect. .02 Notwithstanding Commentary .01, the Corporation may allow trading at smaller increments in order to match bids and offers displayed by other markets for the purpose of preventing Intermarket Trading System trade-throughs. .03 The minimum price variation (``MPV'') for quoting and entry of orders in equity securities traded on the NYSE Arca Marketplace is $0.01, with the exception of securities that are priced less than $1.00 for which the MPV for order entry is $0.0001, provided, however, that the Corporation shall round the bid down to the next whole penny or the offer up to the next whole penny and display the rounded bid or offer in the consolidated quotation system. (b) Bonds. Bids or offers in bonds shall not be made at a lesser variation than 1/8 of 1% of the principal amount, except that the Corporation may fix a lesser variation in specific issues. The Exchange proposes non-substantive amendments to Rule 7.6 to eliminate obsolete references to the Decimalization Implementation Plan, Intermarket Trading System (``ITS''), and bonds, and instead have the rule simply provide what are the Exchange's trading differentials for equity securities. Because Commentaries .01 and .02 refer to how trading differentials could be set before the industry-wide Decimalization Implementation Plan was in effect and to comply with the now-obsolete ITS requirements, respectively, the Exchange proposes to delete those two commentaries as obsolete text. The Exchange also proposes to delete the text that currently follows paragraph (a) of the Rule because the Exchange does not determine the trading differentials; these are now industry-wide standards. The Exchange also proposes to delete paragraph (b) of the rule, which relates to the MPV for bonds, because the Exchange does not trade bonds. The Exchange proposes that current Commentary .03 would become the sole rule text, without any subparagraph number. The Exchange would amend the text currently set forth in Commentary .03 to delete the term ``equity'' as unnecessary, conform the rule text to use the clause ``quoting and entry of orders'' for securities priced less than $1.00, and delete the last clause in the commentary regarding rounding as an obsolete requirement.\8\ --------------------------------------------------------------------------- \8\ The Exchange publishes bids and offers priced under $1.00 in sub-penny increments to the public data feeds and no longer rounds such quotes to the whole penny. --------------------------------------------------------------------------- Accordingly, as proposed, amended Rule 7.6 would provide that the MPV for quoting and entry of orders in securities traded on the NYSE Arca Marketplace would be $0.01, with the exception of securities that are priced less than $1.00, for which the MPV for quoting and entry of orders would be $0.0001. The Exchange believes that the proposed streamlined rule would promote transparency in Exchange rules to identify the MPVs applicable to securities trading on the Exchange. Rule 7.8: Rule 7.8 sets forth how bids or offers are deemed regular way, which relates to the settlement instructions for an order, and provides that ``[b]ids and offers made without stated conditions shall be considered to be `regular way.' `Regular way' bids or offers have priority over conditional bids or offers.'' The Exchange proposes non-substantive amendments to Rule 7.8 to eliminate obsolete rule text. Because the Exchange currently only accepts bids and offers made regular way, and does not accept any bids or offers with stated conditions, the Exchange proposes non-substantive amendments to delete text relating to stated conditions or that ``regular way'' bids or offers have priority over conditional bids or offers. Accordingly, as proposed, amended Rule 7.8 would provide that Bids and offers would be considered ``regular way.'' The Exchange believes the proposed rule change would reduce confusion by eliminating references to functionality that is not available on the Exchange. Rule 7.12: Rule 7.12 sets forth the market-wide rule relating to trading halts due to extraordinary market volatility.\9\ In the Pillar I Filing, the Exchange has proposed to replace references from Pacific Time to Eastern Time, and the Exchange believes that this proposed change should be made to rules that would not otherwise be amended for Pillar. Accordingly, the Exchange proposes non-substantive amendments to Rule 7.12 to replace Pacific Time references with Eastern Time references. The Exchange believes that references to Eastern Time rather than Pacific Time would reduce confusion because all other equity exchanges that have a rule similar to Rule 7.12, which was adopted on a market-wide basis, use Eastern Time references. --------------------------------------------------------------------------- \9\ See Securities Exchange Act Release No. 67090 (May 31, 2012), 77 FR 33531 (June 6, 2012) (Approval order of amendments to all equity exchange rules relating to trading halts due to extraordinary market volatility, including Rule 7.12). --------------------------------------------------------------------------- Rule 7.32: Rule 7.32 sets forth the Exchange's rules relating to order entry and currently provides: Users may enter into the NYSE Arca Marketplace the types of orders listed in Rule 7.31; provided, however, no User may enter an order other than a PNP Order unless the User or the User's Sponsoring ETP Holder has entered into a Routing Agreement. Orders entered that are greater than five million shares in size shall be rejected. Upon at least 24 hours advance notice to market participants, the Exchange may decrease the maximum order size on a security-by-security basis. The Exchange proposes to delete the first sentence of the current rule because in order to enter orders at the Exchange, an ETP Holder must have entered into a routing agreement, which is part of the ETP Holder's agreement to become a member of the Exchange. Because there is no possibility of being able to enter any orders at the Exchange without being approved as an ETP Holder and once approved as an ETP Holder, there is no limitation on the types of orders or modifiers that may be entered by that ETP Holder, the Exchange believes that the first sentence of the current rule text is no longer necessary and represents obsolete requirements. The Exchange also believes the proposed rule change would reduce confusion because it would streamline the rule to focus on [[Page 37346]] the size of orders that may be entered at the Exchange. With respect to the second sentence of the current rule, the Exchange proposes a non-substantive amendment to change the term ``shall'' to ``will.'' As amended, Rule 7.32 would therefore provide that Orders entered that are greater than five million shares in size would be rejected and upon at least 24 hours advance notice to market participants, the Exchange may decrease the maximum order size on a security-by-security basis. 2. Statutory Basis The proposed rule change is consistent with section 6(b) of the Securities Exchange Act of 1934 (the ``Act''),\10\ in general, and furthers the objectives of section 6(b)(5),\11\ in particular, because 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, 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. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78f(b). \11\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that the proposed rule changes would remove impediments to and perfect the mechanism of a free and open market because they would not make any substantive changes to Exchange rules, but rather are designed to reduce confusion by eliminating obsolete references and terms and therefore streamline the Exchange's rules. The Exchange further believes that the proposed changes would remove impediments to and perfect a free and open market because the proposed changes would simplify the structure of the Exchange's rules and permit the use of consistent terminology throughout numerous rules, without changing the underlying functionality. The Exchange therefore believes that the proposed rule amendments would promote transparency in Exchange rules by using consistent terminology governing equities trading, thereby ensuring that members, regulators, and the public can more easily navigate the Exchange's rulebook and better understand how equity trading is conducted on the Exchange. 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 change is not designed to address any competitive issue but rather to make non- substantive changes to streamline the Exchange's rules in order to promote transparency and reduce potential confusion, thereby making the Exchange's rules easier to navigate. 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 foregoing 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, 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 \12\ and Rule 19b-4(f)(6)(iii) thereunder.\13\ --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A). \13\ 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 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. --------------------------------------------------------------------------- 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-NYSEArca-2015-54 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-NYSEArca-2015-54. 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 such filing will also be available for inspection and copying at the principal office of the Exchange and on its Internet Web site at www.nyse.com. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2015-54 and should be submitted on or before July 21, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\ --------------------------------------------------------------------------- \14\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-15973 Filed 6-29-15; 8:45 am] BILLING CODE 8011-01-P
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Therefore, the Commission hereby printing in the Commission’s Public www.nyse.com, at the principal office of
waives the 30-day operative delay and Reference Room, 100 F Street NE., the Exchange, and at the Commission’s
designates the proposed rule change to Washington, DC 20549 on official Public Reference Room.
be operative upon filing with the business days between the hours of
II. Self-Regulatory Organization’s
Commission.18 10:00 a.m. and 3:00 p.m. Copies of such
At any time within 60 days of the Statement of the Purpose of, and
filing also will be available for
filing of the proposed rule change, the Statutory Basis for, the Proposed Rule
inspection and copying at the principal
Commission summarily may Change
offices of the Exchange. All comments
temporarily suspend such rule change if received will be posted without change; In its filing with the Commission, the
it appears to the Commission that such the Commission does not edit personal self-regulatory organization included
action is: (i) Necessary or appropriate in identifying information from statements concerning the purpose of,
the public interest; (ii) for the protection submissions. You should submit only and basis for, the proposed rule change
of investors; or (iii) otherwise in information that you wish to make and discussed any comments it received
furtherance of the purposes of the Act. available publicly. All submissions on the proposed rule change. The text
If the Commission takes such action, the should refer to File Number SR– of those statements may be examined at
Commission shall institute proceedings NYSEArca–2015–52, and should be the places specified in Item IV below.
to determine whether the proposed rule submitted on or before July 21, 2015. The Exchange has prepared summaries,
should be approved or disapproved. set forth in sections A, B, and C below,
For the Commission, by the Division of
Trading and Markets, pursuant to delegated of the most significant parts of such
IV. Solicitation of Comments statements.
authority.19
Interested persons are invited to Robert W. Errett,
submit written data, views, and A. Self-Regulatory Organization’s
arguments concerning the foregoing,
Deputy Secretary. Statement of the Purpose of, and the
including whether the proposed rule [FR Doc. 2015–15979 Filed 6–29–15; 8:45 am] Statutory Basis for, the Proposed Rule
change is consistent with the Act. BILLING CODE 8011–01–P Change
Comments may be submitted by any of 1. Purpose
the following methods: The Exchange proposes to amend
SECURITIES AND EXCHANGE
Electronic comments COMMISSION Rule 1.1 governing Definitions and
• Use the Commission’s Internet various equity trading rules in order to
[Release No. 34–75289; File No. SR– eliminate obsolete references. These
comment form (http://www.sec.gov/ NYSEArca–2015–54]
rules/sro.shtml); or proposed rule changes represent current
• Send an email to rule-comments@ Self-Regulatory Organizations; NYSE functionality and would not propose
sec.gov. Please include File Number SR– Arca, Inc.; Notice of Filing and any substantive changes to
NYSE–Arca–2015–52 on the subject Immediate Effectiveness of Proposed functionality. The Exchange has
line. Rule Change Amending Rule 1.1 separately filed proposed rule changes
Governing Definitions and Various to support the implementation of Pillar,
Paper comments which is an integrated trading
Equity Trading Rules in Order To
• Send paper comments in triplicate Eliminate Obsolete References technology platform designed to use a
to Secretary, Securities and Exchange single specification for connecting to the
Commission, 100 F Street NE., June 24, 2015. equities and options markets operated
Washington, DC 20549–1090. Pursuant to section 19(b)(1) 1 of the by NYSE Arca and its affiliates, New
All submissions should refer to File Securities Exchange Act of 1934 (the York Stock Exchange LLC (‘‘NYSE’’) and
Number SR–NYSEArca–2015–52. This ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 NYSE MKT LLC (‘‘NYSE MKT’’).4 The
file number should be included on the notice is hereby given that, on June 22, Pillar I Filing proposed to adopt new
subject line if email is used. To help the 2015, NYSE Arca, Inc. (the ‘‘Exchange’’ rules relating to Trading Sessions, Order
Commission process and review your or ‘‘NYSE Arca’’) filed with the Ranking and Display, and Order
comments more efficiently, please use Securities and Exchange Commission Execution.
only one method. The Commission will (the ‘‘Commission’’) the proposed rule In anticipation of the implementation
post all comments on the Commission’s change as described in Items I and II of Pillar, the Exchange has reviewed its
Internet Web site (http://www.sec.gov/ below, which Items have been prepared rules governing equity trading and has
rules/sro.shtml). Copies of the by the self-regulatory organization. The identified a number of rules that could
submission, all subsequent Commission is publishing this notice to be streamlined both for the current
amendments, all written statements solicit comments on the proposed rule trading platform and for Pillar.5
with respect to the proposed rule change from interested persons.
4 See Securities Exchange Act Release No. 74951
change that are filed with the I. Self-Regulatory Organization’s (May 13, 2015), 80 FR 28721 (May 19, 2015) (SR–
Commission, and all written Statement of the Terms of Substance of NYSEArca–2015–38) (Notice) (‘‘Pillar I Filing’’). In
communications relating to the the Proposed Rule Change the Pillar I Filing, the Exchange described its
proposed implementation of Pillar, including that it
proposed rule change between the
The Exchange proposes to amend would be submitting more than one rule filing to
Commission and any person, other than correspond to the anticipated phased migration to
Rule 1.1 governing Definitions and
those that may be withheld from the Pillar.
asabaliauskas on DSK5VPTVN1PROD with NOTICES
various equity trading rules in order to
public in accordance with the 5 The Exchange has filed several rule filings to
eliminate obsolete references. The text streamline its rules, but these filings generally
provisions of 5 U.S.C. 552, will be
of the proposed rule change is available addressed rules that describe the functionality
available for Web site viewing and associated with the Exchange’s order types, and
on the Exchange’s Web site at
more specifically, how different order types may
18 For purposes only of waiving the operative interact. See Securities Exchange Act Release Nos.
19 17 CFR 200.30–3(a)(12).
delay for this proposal, the Commission has 71331 (Jan. 16, 2014), 79 FR 3907 (Jan. 23, 2014)
1 15 U.S.C. 78s(b)(1).
considered the proposed rule’s impact on (SR–NYSEArca–2013–92) (Approval order for filing
2 15 U.S.C. 78a.
efficiency, competition, and capital formation. See that updated rules relating to order types and
15 U.S. C. 78c(f). 3 17 CFR 240.19b–4. Continued
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multiple of a round lot would constitute Because Commentaries .01 and .02 offers would be considered ‘‘regular
a mixed lot. The Exchange also proposes refer to how trading differentials could way.’’ The Exchange believes the
non-substantive amendments to change be set before the industry-wide proposed rule change would reduce
the term ‘‘shall’’ to ‘‘will.’’ Decimalization Implementation Plan confusion by eliminating references to
The Exchange believes the proposed was in effect and to comply with the functionality that is not available on the
changes would provide transparency now-obsolete ITS requirements, Exchange.
regarding trading units on the Exchange respectively, the Exchange proposes to Rule 7.12: Rule 7.12 sets forth the
and reduce confusion regarding the delete those two commentaries as market-wide rule relating to trading
types of securities available to trade on obsolete text. The Exchange also halts due to extraordinary market
the Exchange. Specifically, because the proposes to delete the text that currently volatility.9 In the Pillar I Filing, the
Exchange does not trade bonds, the follows paragraph (a) of the Rule Exchange has proposed to replace
proposed amendment to delete the because the Exchange does not references from Pacific Time to Eastern
reference to bonds represents current determine the trading differentials; Time, and the Exchange believes that
functionality. these are now industry-wide standards. this proposed change should be made to
Rule 7.6: Rule 7.6 sets forth the The Exchange also proposes to delete rules that would not otherwise be
Exchange’s Trading Differentials, also paragraph (b) of the rule, which relates amended for Pillar. Accordingly, the
referred to as the minimum price to the MPV for bonds, because the Exchange proposes non-substantive
variation (‘‘MPV’’) for quoting and entry Exchange does not trade bonds. amendments to Rule 7.12 to replace
of orders, and currently provides: The Exchange proposes that current Pacific Time references with Eastern
(a) The Corporation shall determine Commentary .03 would become the sole Time references. The Exchange believes
the trading differentials for equity rule text, without any subparagraph that references to Eastern Time rather
securities traded on the Corporation. number. The Exchange would amend than Pacific Time would reduce
Commentary: the text currently set forth in confusion because all other equity
.01 The Corporation may only change Commentary .03 to delete the term exchanges that have a rule similar to
the trading differentials for equity ‘‘equity’’ as unnecessary, conform the Rule 7.12, which was adopted on a
securities traded on the Corporation by rule text to use the clause ‘‘quoting and market-wide basis, use Eastern Time
filing a rule change proposal with the entry of orders’’ for securities priced references.
less than $1.00, and delete the last Rule 7.32: Rule 7.32 sets forth the
SEC, pursuant to section 19(b)(3)(A) of
clause in the commentary regarding Exchange’s rules relating to order entry
the Securities Exchange Act of 1934
rounding as an obsolete requirement.8 and currently provides:
(effective upon filing); provided that no Users may enter into the NYSE Arca
change in the trading differentials may Accordingly, as proposed, amended
Rule 7.6 would provide that the MPV Marketplace the types of orders listed in
be made while the industry wide Rule 7.31; provided, however, no User
Decimalization Implementation Plan is for quoting and entry of orders in
may enter an order other than a PNP
in effect. securities traded on the NYSE Arca
Order unless the User or the User’s
.02 Notwithstanding Commentary .01, Marketplace would be $0.01, with the
Sponsoring ETP Holder has entered into
the Corporation may allow trading at exception of securities that are priced
a Routing Agreement. Orders entered
smaller increments in order to match less than $1.00, for which the MPV for
that are greater than five million shares
bids and offers displayed by other quoting and entry of orders would be
in size shall be rejected. Upon at least
markets for the purpose of preventing $0.0001. The Exchange believes that the
24 hours advance notice to market
Intermarket Trading System trade- proposed streamlined rule would
participants, the Exchange may decrease
throughs. promote transparency in Exchange rules
the maximum order size on a security-
.03 The minimum price variation to identify the MPVs applicable to
by-security basis.
(‘‘MPV’’) for quoting and entry of orders securities trading on the Exchange.
Rule 7.8: Rule 7.8 sets forth how bids The Exchange proposes to delete the
in equity securities traded on the NYSE first sentence of the current rule because
Arca Marketplace is $0.01, with the or offers are deemed regular way, which
relates to the settlement instructions for in order to enter orders at the Exchange,
exception of securities that are priced an ETP Holder must have entered into
less than $1.00 for which the MPV for an order, and provides that ‘‘[b]ids and
offers made without stated conditions a routing agreement, which is part of the
order entry is $0.0001, provided, ETP Holder’s agreement to become a
however, that the Corporation shall shall be considered to be ‘regular way.’
‘Regular way’ bids or offers have member of the Exchange. Because there
round the bid down to the next whole is no possibility of being able to enter
penny or the offer up to the next whole priority over conditional bids or offers.’’
The Exchange proposes non- any orders at the Exchange without
penny and display the rounded bid or being approved as an ETP Holder and
offer in the consolidated quotation substantive amendments to Rule 7.8 to
once approved as an ETP Holder, there
system. eliminate obsolete rule text. Because the
is no limitation on the types of orders
(b) Bonds. Bids or offers in bonds Exchange currently only accepts bids
or modifiers that may be entered by that
shall not be made at a lesser variation and offers made regular way, and does
ETP Holder, the Exchange believes that
than 1/8 of 1% of the principal amount, not accept any bids or offers with stated
the first sentence of the current rule text
except that the Corporation may fix a conditions, the Exchange proposes non-
is no longer necessary and represents
lesser variation in specific issues. substantive amendments to delete text
obsolete requirements. The Exchange
The Exchange proposes non- relating to stated conditions or that
asabaliauskas on DSK5VPTVN1PROD with NOTICES
also believes the proposed rule change
substantive amendments to Rule 7.6 to ‘‘regular way’’ bids or offers have
would reduce confusion because it
eliminate obsolete references to the priority over conditional bids or offers.
would streamline the rule to focus on
Decimalization Implementation Plan, Accordingly, as proposed, amended
Intermarket Trading System (‘‘ITS’’), Rule 7.8 would provide that Bids and 9 See Securities Exchange Act Release No. 67090
and bonds, and instead have the rule (May 31, 2012), 77 FR 33531 (June 6, 2012)
8 The Exchange publishes bids and offers priced (Approval order of amendments to all equity
simply provide what are the Exchange’s under $1.00 in sub-penny increments to the public exchange rules relating to trading halts due to
trading differentials for equity data feeds and no longer rounds such quotes to the extraordinary market volatility, including Rule
securities. whole penny. 7.12).
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![37346 Federal Register / Vol. 80, No. 125 / Tuesday, June 30, 2015 / Notices
the size of orders that may be entered B. Self-Regulatory Organization’s change is consistent with the Act.
at the Exchange. Statement on Burden on Competition Comments may be submitted by any of
With respect to the second sentence of The Exchange does not believe that the following methods:
the current rule, the Exchange proposes the proposed rule change will impose Electronic comments
a non-substantive amendment to change any burden on competition that is not
the term ‘‘shall’’ to ‘‘will.’’ As amended, necessary or appropriate in furtherance • Use the Commission’s Internet
of the purposes of the Act. The comment form (http://www.sec.gov/
Rule 7.32 would therefore provide that
proposed change is not designed to rules/sro.shtml); or
Orders entered that are greater than five
million shares in size would be rejected address any competitive issue but rather • Send an email to rule-comments@
and upon at least 24 hours advance to make non-substantive changes to sec.gov. Please include File Number SR–
streamline the Exchange’s rules in order NYSEArca–2015–54 on the subject line.
notice to market participants, the
Exchange may decrease the maximum to promote transparency and reduce Paper comments
order size on a security-by-security potential confusion, thereby making the
Exchange’s rules easier to navigate. • Send paper comments in triplicate
basis.
to Secretary, Securities and Exchange
C. Self-Regulatory Organization’s Commission, 100 F Street NE.,
2. Statutory Basis
Statement on Comments on the Washington, DC 20549–1090.
The proposed rule change is Proposed Rule Change Received from
Members, Participants, or Others All submissions should refer to File
consistent with section 6(b) of the
Number SR–NYSEArca–2015–54. This
Securities Exchange Act of 1934 (the No written comments were solicited file number should be included on the
‘‘Act’’),10 in general, and furthers the or received with respect to the proposed subject line if email is used. To help the
objectives of section 6(b)(5),11 in rule change. Commission process and review your
particular, because it is designed to III. Date of Effectiveness of the comments more efficiently, please use
prevent fraudulent and manipulative Proposed Rule Change and Timing for only one method. The Commission will
acts and practices, to promote just and Commission Action post all comments on the Commission’s
equitable principles of trade, to foster Internet Web site (http://www.sec.gov/
Because the foregoing proposed rule
cooperation and coordination with rules/sro.shtml). Copies of the
change does not: (i) Significantly affect
persons engaged in facilitating submission, all subsequent
the protection of investors or the public
transactions in securities, to remove amendments, all written statements
interest; (ii) impose any significant
impediments to, and perfect the burden on competition; and (iii) become with respect to the proposed rule
mechanism of, a free and open market operative for 30 days from the date on change that are filed with the
and a national market system and, in which it was filed, or such shorter time Commission, and all written
general, to protect investors and the as the Commission may designate, if communications relating to the
public interest. consistent with the protection of proposed rule change between the
investors and the public interest, the Commission and any person, other than
The Exchange believes that the
proposed rule change has become those that may be withheld from the
proposed rule changes would remove
effective pursuant to section 19(b)(3)(A) public in accordance with the
impediments to and perfect the
of the Act 12 and Rule 19b–4(f)(6)(iii) provisions of 5 U.S.C. 552, will be
mechanism of a free and open market available for Web site viewing and
because they would not make any thereunder.13
At any time within 60 days of the printing in the Commission’s Public
substantive changes to Exchange rules, Reference Room, 100 F Street NE.,
but rather are designed to reduce filing of the proposed rule change, the
Commission summarily may Washington, DC 20549, on official
confusion by eliminating obsolete business days between the hours of
temporarily suspend such rule change if
references and terms and therefore 10:00 a.m. and 3:00 p.m. Copies of such
it appears to the Commission that such
streamline the Exchange’s rules. The filing will also be available for
action is necessary or appropriate in the
Exchange further believes that the inspection and copying at the principal
public interest, for the protection of
proposed changes would remove investors, or otherwise in furtherance of office of the Exchange and on its
impediments to and perfect a free and the purposes of the Act. If the Internet Web site at www.nyse.com. All
open market because the proposed Commission takes such action, the comments received will be posted
changes would simplify the structure of Commission shall institute proceedings without change; the Commission does
the Exchange’s rules and permit the use to determine whether the proposed rule not edit personal identifying
of consistent terminology throughout change should be approved or information from submissions. You
numerous rules, without changing the disapproved. should submit only information that
underlying functionality. The Exchange you wish to make available publicly. All
therefore believes that the proposed rule IV. Solicitation of Comments submissions should refer to File
amendments would promote Interested persons are invited to Number SR–NYSEArca–2015–54 and
transparency in Exchange rules by using submit written data, views, and should be submitted on or before July
consistent terminology governing arguments concerning the foregoing, 21, 2015.
equities trading, thereby ensuring that including whether the proposed rule For the Commission, by the Division of
asabaliauskas on DSK5VPTVN1PROD with NOTICES
members, regulators, and the public can Trading and Markets, pursuant to delegated
more easily navigate the Exchange’s
12 15 U.S.C. 78s(b)(3)(A). authority.14
13 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
rulebook and better understand how Robert W. Errett,
4(f)(6) requires a self-regulatory organization to give
equity trading is conducted on the the Commission written notice of its intent to file Deputy Secretary.
Exchange. the proposed rule change at least five business days [FR Doc. 2015–15973 Filed 6–29–15; 8:45 am]
prior to the date of filing of the proposed rule BILLING CODE 8011–01–P
change, or such shorter time as designated by the
10 15 U.S.C. 78f(b). Commission. The Exchange has satisfied this
11 15 U.S.C. 78f(b)(5). requirement. 14 17 CFR 200.30–3(a)(12).
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Document Created: 2018-02-22 11:16:53
Document Modified: 2018-02-22 11:16:53
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 37343 |
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