80_FR_43280 80 FR 43141 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Pilot Period Applicable to the Customer Best Execution Auction per Rule 971.1NY Until July 18, 2016

80 FR 43141 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Pilot Period Applicable to the Customer Best Execution Auction per Rule 971.1NY Until July 18, 2016

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 139 (July 21, 2015)

Page Range43141-43143
FR Document2015-17759

Federal Register, Volume 80 Issue 139 (Tuesday, July 21, 2015)
[Federal Register Volume 80, Number 139 (Tuesday, July 21, 2015)]
[Notices]
[Pages 43141-43143]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-17759]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75460; File No. SR-NYSEMKT-2015-48]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Extending the Pilot 
Period Applicable to the Customer Best Execution Auction per Rule 
971.1NY Until July 18, 2016

July 15, 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 July 2, 2015, NYSE MKT LLC (the ``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 self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the pilot period applicable to the 
Customer Best Execution Auction (``CUBE''), per Rule 971.1NY, until 
July 18, 2016. 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 extend the pilot period applicable to 
certain aspects of the Customer Best Execution--or CUBE--Auction, which 
is currently set to expire on July 17, 2015, until July 18, 2016.
Background
    Rule 971.1NY sets forth an electronic crossing mechanism for 
single-leg orders with a price improvement auction on the Exchange, 
referred to as the CUBE Auction.\4\ The CUBE Auction, which was 
approved in April 2014, is designed to provide price improvement for 
paired orders of any size.\5\ Two aspects of the CUBE were approved on 
a pilot basis--Rule 971.1NY(b)(1)(B), which establishes the permissible 
range of executions for CUBE Auctions for fewer than 50 contracts; and 
Rule 971.1NY(b)(8), which establishes that the minimum size for a CUBE 
Auction is one contract (together, the ``CUBE Pilot'').
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    \4\ See generally Rule 971.1NY (Electronic Cross Transactions).
    \5\ See Securities Exchange Act Release No. 72025 (April 25, 
2014), 79 FR 24779 (May 1, 2014) (NYSEMKT-2014-17) (the ``CUBE 
Approval Order'').
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    An ATP Holder may initiate a CUBE Auction by electronically 
submitting for execution a limit order it represents as agent on behalf 
of a public customer, broker dealer, or any other entity (``CUBE 
Order'') against principal interest or against any other order it 
represents as agent, provided the initiating ATP Holder complies with 
Rule 971.1NY.\6\ Rule 971.1NY(b)(1) sets forth the permissible range of 
executions for a CUBE Order.\7\ Pursuant to the CUBE Pilot, a CUBE 
Order for fewer than 50 contracts is subject to tighter ranges of 
execution than larger CUBE Orders to maximize price improvement.\8\ 
Specifically, if the CUBE Order is for fewer than 50 contracts, the 
range of permissible execution will be equal to or better than the 
National Best Bid/Offer (``NBBO''), provided that such price must be at 
least one cent better than any displayed interest in the Exchange's 
Consolidated Book.\9\
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    \6\ In addition, CUBE provides for the automatic execution, 
under certain conditions, of a crossing transaction where there is a 
public customer order in the same options series on each side.
    \7\ Subject to specified exceptions, a CUBE Order to buy (sell) 
may execute at prices equal to or between the initiating price as 
the upper (lower) bound and the National Best Bid (``NBB'') 
(National Best Offer (``NBO'')) as the lower (upper) bound. See Rule 
971.1NY(b).
    \8\ See Rule 971.1NY(b)(1)(B). Rule 971.1NY(b)(8), also subject 
to the pilot period, provides that the minimum size for a CUBE 
Auction is one contract.
    \9\ See Rule 971.1NY(b)(1)(B).
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    The CUBE Pilot was initially approved for a one-year pilot.\10\ 
Pursuant to Commentary .01 to Rule 971.1NY, the CUBE Pilot would, if 
not amended, end on July 17, 2015. In connection with the CUBE Pilot, 
the Exchange agreed to submit certain data to provide supporting 
evidence that, among other things, there is meaningful competition for 
all size orders and that there is an active and liquid market 
functioning on the Exchange outside of the CUBE Auction.\11\
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    \10\ See CUBE Approval Order, supra, n. 5. The CUBE Pilot was 
subsequently extended, until July 17, 2015, in order to align the 
expiration of the pilot period with that of other competing options 
exchange that offer electronic price improvement auctions similar to 
the CUBE. See Securities Exchange Act Release No. 74695 (April 9, 
2015), 80 FR 20274 (April 15, 2015) (SR-NYSEMKT-2015-28).
    \11\ See CUBE Approval Order, supra, n. 5 at 79 FR 24779, at 
24785-86, fn. 94-95. See also Commentary .01 to Rule 971.1NY.
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Proposal To Extend the Operation of the CUBE Pilot
    The Exchange implemented the CUBE Auction to provide an electronic 
crossing mechanism for single-leg orders with a price improvement 
auction. The CUBE Pilot was designed to create tighter markets and 
ensure that each order receives the best possible price. The Exchange 
believes that the CUBE Pilot attracts order flow and promotes 
competition and price improvement opportunities for CUBE Orders of 
fewer than 50 contracts. The Exchange believes that extending the pilot 
period is appropriate because it

[[Page 43142]]

will allow the Exchange and the Commission additional time to analyze 
data regarding the CUBE Pilot that the Exchange has committed to 
provide.\12\ As such, the Exchange believes that it is appropriate to 
extend the current operation of the Pilot. Through this filing, the 
Exchange seeks to amend Commentary .01 to Rule 971.1NY and extend the 
current pilot period until July 18, 2016.\13\ The Exchange notes that 
it would retain the text of Rules 971.1NY(b)(1)(B) and 971.1NY(b)(8). 
In further support of this proposed rule change, the Exchange would 
continue to submit to the Commission detailed data from, and analysis 
of, the CUBE Pilot. Further, the Exchange represents that it will 
provide certain additional data requested by the Commission regarding 
trading in the CUBE Auction for the six (6) month period from January 
1, 2015 through June 30, 2015. The Exchange agrees to provide this data 
by January 18, 2016 and to make the summary of the data provided to the 
Commission publicly available. The Exchange continues to believe that 
there remains meaningful competition for all size orders and that there 
is an active and liquid market functioning on the Exchange outside of 
the CUBE Auction. The Exchange believes the additional data will 
substantiate the Exchange's belief and provide further evidence in 
support of permanent approval of the CUBE Pilot.
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    \12\ Id.
    \13\ See proposed Commentary .01 to Rule 971.1NY.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \14\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \15\ in particular, in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, 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.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that extending the pilot period is consistent 
with these principles because the CUBE Pilot is reasonably designed to 
create tighter markets and ensure that each order receives the best 
possible price, which benefits investors by increasing competition 
thereby maximizing opportunities for price improvement. The proposed 
extension would allow the CUBE Pilot to continue uninterrupted, thereby 
avoiding any potential investor confusion that could result from a 
temporary interruption in the CUBE Pilot. Because the CUBE Pilot is 
applicable to all CUBE Orders for fewer than 50 contracts, and to the 
requirement that the minimum size of the CUBE Auction is one contract, 
the proposal to extend the pilot merely acts to maintain status quo on 
the Exchange, which promotes just and equitable principles of trade and 
removes impediments to, and perfects the mechanism of, a free and open 
market and a national market system. The extension of the pilot period 
will allow the Commission and the Exchange to continue to monitor the 
CUBE Pilot to ascertain whether there is meaningful competition for all 
size orders and whether there is an active and liquid market 
functioning on the Exchange outside of the CUBE Auction.

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 not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule change simply 
extends an established pilot program for an additional period and would 
allow for further analysis of the CUBE Pilot. In addition, the proposed 
extension would allow the CUBE Pilot to continue uninterrupted, thereby 
avoiding any potential investor confusion that could result from a 
temporary interruption in the CUBE Pilot. Thus, the proposal would also 
serve to promote regulatory clarity and consistency, thereby reducing 
burdens on the marketplace and facilitating investor protection.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    Because the proposed rule change does not: (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.\16\
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    \16\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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    A proposed rule change filed under Rule 19b-4(f)(6) \17\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\18\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing, stating that the proposed 
rule change simply extends an established pilot program and that the 
waiver would allow the pilot to continue uninterrupted, thereby 
avoiding potential confusion for investors. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. Therefore, the 
Commission hereby waives the operative delay and designates the 
proposed rule change operative upon filing.\19\
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    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ 17 CFR 240.19b-4(f)(6)(iii).
    \19\ 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 such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \20\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \20\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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

[[Page 43143]]

     Send an email to rule[email protected]. Please include 
File Number SR-NYSEMKT-2015-48 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEMKT-2015-48. 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 Section, 100 F Street, 
NE., Washington, DC 20549-1090. Copies of the filing will also be 
available for inspection and copying at the NYSE's principal office and 
on its Internet Web site at www.nyse.com. All comments received will be 
posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSEMKT-2015-48 and should be submitted 
on or before August 10, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-17759 Filed 7-20-15; 8:45 am]
 BILLING CODE 8011-01P



                                                                                     Federal Register / Vol. 80, No. 139 / Tuesday, July 21, 2015 / Notices                                                      43141

                                                    and (10), permit consideration of the                     Rule 971.1NY, until July 18, 2016. The                initiating ATP Holder complies with
                                                    scheduled matter at the Closed Meeting.                   text of the proposed rule change is                   Rule 971.1NY.6 Rule 971.1NY(b)(1) sets
                                                       Commissioner Aguilar, as duty                          available on the Exchange’s Web site at               forth the permissible range of
                                                    officer, voted to consider the items                      www.nyse.com, at the principal office of              executions for a CUBE Order.7 Pursuant
                                                    listed for the Closed Meeting in closed                   the Exchange, and at the Commission’s                 to the CUBE Pilot, a CUBE Order for
                                                    session.                                                  Public Reference Room.                                fewer than 50 contracts is subject to
                                                       The subject matter of the Closed                                                                             tighter ranges of execution than larger
                                                    Meeting will be:                                          II. Self-Regulatory Organization’s
                                                                                                                                                                    CUBE Orders to maximize price
                                                       Settlement of injunctive actions;                      Statement of the Purpose of, and
                                                                                                                                                                    improvement.8 Specifically, if the CUBE
                                                       Institution and settlement of                          Statutory Basis for, the Proposed Rule
                                                                                                                                                                    Order is for fewer than 50 contracts, the
                                                    administrative proceedings;                               Change
                                                                                                                                                                    range of permissible execution will be
                                                       Resolution of litigation claims;                         In its filing with the Commission, the              equal to or better than the National Best
                                                       Litigation matters; and                                self-regulatory organization included                 Bid/Offer (‘‘NBBO’’), provided that such
                                                       Other matters relating to enforcement                  statements concerning the purpose of,                 price must be at least one cent better
                                                    proceedings.                                              and basis for, the proposed rule change
                                                       At times, changes in Commission                                                                              than any displayed interest in the
                                                                                                              and discussed any comments it received                Exchange’s Consolidated Book.9
                                                    priorities require alterations in the
                                                                                                              on the proposed rule change. The text                    The CUBE Pilot was initially
                                                    scheduling of meeting items.
                                                       For further information and to                         of those statements may be examined at                approved for a one-year pilot.10
                                                    ascertain what, if any, matters have been                 the places specified in Item IV below.                Pursuant to Commentary .01 to Rule
                                                    added, deleted or postponed, please                       The Exchange has prepared summaries,                  971.1NY, the CUBE Pilot would, if not
                                                    contact the Office of the Secretary at                    set forth in sections A, B, and C below,              amended, end on July 17, 2015. In
                                                    (202) 551–5400.                                           of the most significant parts of such                 connection with the CUBE Pilot, the
                                                                                                              statements.                                           Exchange agreed to submit certain data
                                                      Dated: July 16, 2015.                                                                                         to provide supporting evidence that,
                                                    Brent J. Fields,                                          A. Self-Regulatory Organization’s
                                                                                                                                                                    among other things, there is meaningful
                                                    Secretary.
                                                                                                              Statement of the Purpose of, and the
                                                                                                                                                                    competition for all size orders and that
                                                                                                              Statutory Basis for, the Proposed Rule
                                                    [FR Doc. 2015–17970 Filed 7–17–15; 4:15 pm]                                                                     there is an active and liquid market
                                                                                                              Change
                                                    BILLING CODE 8011–01–P                                                                                          functioning on the Exchange outside of
                                                                                                              1. Purpose                                            the CUBE Auction.11
                                                                                                                 The Exchange proposes to extend the                Proposal To Extend the Operation of the
                                                    SECURITIES AND EXCHANGE                                   pilot period applicable to certain
                                                    COMMISSION                                                                                                      CUBE Pilot
                                                                                                              aspects of the Customer Best
                                                                                                                                                                      The Exchange implemented the CUBE
                                                    [Release No. 34–75460; File No. SR–                       Execution—or CUBE—Auction, which
                                                    NYSEMKT–2015–48]
                                                                                                                                                                    Auction to provide an electronic
                                                                                                              is currently set to expire on July 17,
                                                                                                                                                                    crossing mechanism for single-leg
                                                                                                              2015, until July 18, 2016.
                                                    Self-Regulatory Organizations; NYSE                                                                             orders with a price improvement
                                                    MKT LLC; Notice of Filing and                             Background                                            auction. The CUBE Pilot was designed
                                                    Immediate Effectiveness of Proposed                          Rule 971.1NY sets forth an electronic              to create tighter markets and ensure that
                                                    Rule Change Extending the Pilot                           crossing mechanism for single-leg                     each order receives the best possible
                                                    Period Applicable to the Customer                         orders with a price improvement                       price. The Exchange believes that the
                                                    Best Execution Auction per Rule                           auction on the Exchange, referred to as               CUBE Pilot attracts order flow and
                                                    971.1NY Until July 18, 2016                               the CUBE Auction.4 The CUBE Auction,                  promotes competition and price
                                                                                                                                                                    improvement opportunities for CUBE
                                                    July 15, 2015.                                            which was approved in April 2014, is
                                                                                                                                                                    Orders of fewer than 50 contracts. The
                                                       Pursuant to Section 19(b)(1) 1 of the                  designed to provide price improvement
                                                                                                                                                                    Exchange believes that extending the
                                                    Securities Exchange Act of 1934 (the                      for paired orders of any size.5 Two
                                                                                                                                                                    pilot period is appropriate because it
                                                    ‘‘Act’’) 2 and Rule 19b–4 thereunder,3                    aspects of the CUBE were approved on
                                                    notice is hereby given that on July 2,                    a pilot basis—Rule 971.1NY(b)(1)(B),                     6 In addition, CUBE provides for the automatic

                                                    2015, NYSE MKT LLC (the ‘‘Exchange’’                      which establishes the permissible range               execution, under certain conditions, of a crossing
                                                    or ‘‘NYSE MKT’’) filed with the                           of executions for CUBE Auctions for                   transaction where there is a public customer order
                                                    Securities and Exchange Commission                        fewer than 50 contracts; and Rule                     in the same options series on each side.
                                                                                                                                                                       7 Subject to specified exceptions, a CUBE Order
                                                    (the ‘‘Commission’’) the proposed rule                    971.1NY(b)(8), which establishes that
                                                                                                                                                                    to buy (sell) may execute at prices equal to or
                                                    change as described in Items I and II                     the minimum size for a CUBE Auction                   between the initiating price as the upper (lower)
                                                    below, which Items have been prepared                     is one contract (together, the ‘‘CUBE                 bound and the National Best Bid (‘‘NBB’’) (National
                                                    by the self-regulatory organization. The                  Pilot’’).                                             Best Offer (‘‘NBO’’)) as the lower (upper) bound.
                                                                                                                 An ATP Holder may initiate a CUBE                  See Rule 971.1NY(b).
                                                    Commission is publishing this notice to                                                                            8 See Rule 971.1NY(b)(1)(B). Rule 971.1NY(b)(8),

                                                    solicit comments on the proposed rule                     Auction by electronically submitting for
                                                                                                                                                                    also subject to the pilot period, provides that the
                                                    change from interested persons.                           execution a limit order it represents as              minimum size for a CUBE Auction is one contract.
                                                                                                              agent on behalf of a public customer,                    9 See Rule 971.1NY(b)(1)(B).

                                                    I. Self-Regulatory Organization’s                         broker dealer, or any other entity                       10 See CUBE Approval Order, supra, n. 5. The

                                                    Statement of the Terms of Substance of                    (‘‘CUBE Order’’) against principal                    CUBE Pilot was subsequently extended, until July
asabaliauskas on DSK5VPTVN1PROD with NOTICES




                                                    the Proposed Rule Change                                  interest or against any other order it                17, 2015, in order to align the expiration of the pilot
                                                                                                                                                                    period with that of other competing options
                                                       The Exchange proposes to extend the                    represents as agent, provided the                     exchange that offer electronic price improvement
                                                    pilot period applicable to the Customer                                                                         auctions similar to the CUBE. See Securities
                                                                                                                4 See generally Rule 971.1NY (Electronic Cross      Exchange Act Release No. 74695 (April 9, 2015), 80
                                                    Best Execution Auction (‘‘CUBE’’), per                    Transactions).                                        FR 20274 (April 15, 2015) (SR–NYSEMKT–2015–
                                                                                                                5 See Securities Exchange Act Release No. 72025     28).
                                                      1 15 U.S.C. 78s(b)(1).                                  (April 25, 2014), 79 FR 24779 (May 1, 2014)              11 See CUBE Approval Order, supra, n. 5 at 79 FR
                                                      2 15 U.S.C. 78a.                                        (NYSEMKT–2014–17) (the ‘‘CUBE Approval                24779, at 24785–86, fn. 94–95. See also
                                                      3 17 CFR 240.19b–4.                                     Order’’).                                             Commentary .01 to Rule 971.1NY.



                                               VerDate Sep<11>2014    17:58 Jul 20, 2015   Jkt 235001   PO 00000   Frm 00091   Fmt 4703   Sfmt 4703   E:\FR\FM\21JYN1.SGM   21JYN1


                                                    43142                           Federal Register / Vol. 80, No. 139 / Tuesday, July 21, 2015 / Notices

                                                    will allow the Exchange and the                          uninterrupted, thereby avoiding any                   of the Act and Rule 19b-4(f)(6)(iii)
                                                    Commission additional time to analyze                    potential investor confusion that could               thereunder.16
                                                    data regarding the CUBE Pilot that the                   result from a temporary interruption in                  A proposed rule change filed under
                                                    Exchange has committed to provide.12                     the CUBE Pilot. Because the CUBE Pilot                Rule 19b-4(f)(6) 17 normally does not
                                                    As such, the Exchange believes that it is                is applicable to all CUBE Orders for                  become operative prior to 30 days after
                                                    appropriate to extend the current                        fewer than 50 contracts, and to the                   the date of the filing. However, pursuant
                                                    operation of the Pilot. Through this                     requirement that the minimum size of                  to Rule 19b4(f)(6)(iii),18 the Commission
                                                    filing, the Exchange seeks to amend                      the CUBE Auction is one contract, the                 may designate a shorter time if such
                                                    Commentary .01 to Rule 971.1NY and                       proposal to extend the pilot merely acts              action is consistent with the protection
                                                    extend the current pilot period until                    to maintain status quo on the Exchange,               of investors and the public interest. The
                                                    July 18, 2016.13 The Exchange notes that                 which promotes just and equitable                     Exchange has asked the Commission to
                                                    it would retain the text of Rules                        principles of trade and removes                       waive the 30-day operative delay so that
                                                    971.1NY(b)(1)(B) and 971.1NY(b)(8). In                   impediments to, and perfects the                      the proposal may become operative
                                                    further support of this proposed rule                    mechanism of, a free and open market                  immediately upon filing, stating that the
                                                    change, the Exchange would continue to                   and a national market system. The                     proposed rule change simply extends an
                                                    submit to the Commission detailed data                   extension of the pilot period will allow              established pilot program and that the
                                                    from, and analysis of, the CUBE Pilot.                   the Commission and the Exchange to                    waiver would allow the pilot to
                                                    Further, the Exchange represents that it                 continue to monitor the CUBE Pilot to                 continue uninterrupted, thereby
                                                    will provide certain additional data                     ascertain whether there is meaningful                 avoiding potential confusion for
                                                    requested by the Commission regarding                    competition for all size orders and                   investors. The Commission believes that
                                                    trading in the CUBE Auction for the six                  whether there is an active and liquid                 waiving the 30-day operative delay is
                                                    (6) month period from January 1, 2015                    market functioning on the Exchange                    consistent with the protection of
                                                    through June 30, 2015. The Exchange                      outside of the CUBE Auction.                          investors and the public interest.
                                                    agrees to provide this data by January                                                                         Therefore, the Commission hereby
                                                                                                             B. Self-Regulatory Organization’s                     waives the operative delay and
                                                    18, 2016 and to make the summary of                      Statement on Burden on Competition
                                                    the data provided to the Commission                                                                            designates the proposed rule change
                                                    publicly available. The Exchange                            The Exchange does not believe that                 operative upon filing.19
                                                    continues to believe that there remains                  the proposed rule change will impose                     At any time within 60 days of the
                                                    meaningful competition for all size                      any burden on competition not                         filing of such proposed rule change, the
                                                    orders and that there is an active and                   necessary or appropriate in furtherance               Commission summarily may
                                                    liquid market functioning on the                         of the purposes of the Act. The                       temporarily suspend such rule change if
                                                    Exchange outside of the CUBE Auction.                    proposed rule change simply extends an                it appears to the Commission that such
                                                                                                             established pilot program for an                      action is necessary or appropriate in the
                                                    The Exchange believes the additional
                                                                                                             additional period and would allow for                 public interest, for the protection of
                                                    data will substantiate the Exchange’s
                                                                                                             further analysis of the CUBE Pilot. In                investors, or otherwise in furtherance of
                                                    belief and provide further evidence in
                                                                                                             addition, the proposed extension would                the purposes of the Act. If the
                                                    support of permanent approval of the
                                                                                                             allow the CUBE Pilot to continue                      Commission takes such action, the
                                                    CUBE Pilot.
                                                                                                             uninterrupted, thereby avoiding any                   Commission shall institute proceedings
                                                    2. Statutory Basis                                       potential investor confusion that could               under Section 19(b)(2)(B) 20 of the Act to
                                                       The Exchange believes that its                        result from a temporary interruption in               determine whether the proposed rule
                                                    proposal is consistent with Section 6(b)                 the CUBE Pilot. Thus, the proposal                    change should be approved or
                                                    of the Act 14 in general, and furthers the               would also serve to promote regulatory                disapproved.
                                                    objectives of Section 6(b)(5) of the Act 15              clarity and consistency, thereby                      IV. Solicitation of Comments
                                                    in particular, in that it is designed to                 reducing burdens on the marketplace
                                                                                                             and facilitating investor protection.                   Interested persons are invited to
                                                    prevent fraudulent and manipulative                                                                            submit written data, views, and
                                                    acts and practices, to promote just and                  C. Self-Regulatory Organization’s                     arguments concerning the foregoing,
                                                    equitable principles of trade, to remove                 Statement on Comments on the                          including whether the proposed rule
                                                    impediments to and perfect the                           Proposed Rule Change Received From                    change is consistent with the Act.
                                                    mechanism of a free and open market                      Members, Participants, or Others                      Comments may be submitted by any of
                                                    and a national market system, and, in                                                                          the following methods:
                                                    general, to protect investors and the                      No written comments were solicited
                                                    public interest.                                         or received with respect to the proposed              Electronic Comments
                                                       The Exchange believes that extending                  rule change.
                                                                                                                                                                     • Use the Commission’s Internet
                                                    the pilot period is consistent with these                III. Date of Effectiveness of the                     comment form (http://www.sec.gov/
                                                    principles because the CUBE Pilot is                     Proposed Rule Change and Timing for                   rules/sro.shtml); or
                                                    reasonably designed to create tighter                    Commission Action
                                                    markets and ensure that each order                          Because the proposed rule change
                                                                                                                                                                     16 17 CFR 240.19b–4(f)(6). As required under Rule

                                                    receives the best possible price, which                  does not: (i) Significantly affect the
                                                                                                                                                                   19b–4(f)(6)(iii), the Exchange provided the
                                                    benefits investors by increasing                                                                               Commission with written notice of its intent to file
                                                                                                             protection of investors or the public                 the proposed rule change, along with a brief
                                                    competition thereby maximizing                           interest; (ii) impose any significant                 description and the text of the proposed rule
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                                                    opportunities for price improvement.                     burden on competition; and (iii) become               change, at least five business days prior to the date
                                                    The proposed extension would allow                                                                             of filing of the proposed rule change, or such
                                                                                                             operative prior to 30 days from the date              shorter time as designated by the Commission.
                                                    the CUBE Pilot to continue                               on which it was filed, or such shorter                  17 17 CFR 240.19b–4(f)(6).


                                                      12 Id.
                                                                                                             time as the Commission may designate,                   18 17 CFR 240.19b–4(f)(6)(iii).
                                                                                                                                                                     19 For purposes only of waiving the 30-day
                                                      13 See proposed Commentary .01 to Rule                 if consistent with the protection of
                                                                                                                                                                   operative delay, the Commission has considered the
                                                    971.1NY.                                                 investors and the public interest, the                proposed rule’s impact on efficiency, competition,
                                                      14 15 U.S.C. 78f(b).                                   proposed rule change has become                       and capital formation. See 15 U.S.C. 78c(f).
                                                      15 15 U.S.C. 78f(b)(5).                                effective pursuant to Section 19(b)(3)(A)               20 15 U.S.C. 78s(b)(2)(B).




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                                                                                      Federal Register / Vol. 80, No. 139 / Tuesday, July 21, 2015 / Notices                                                        43143

                                                      • Send an email to rule-comments@                        SECURITIES AND EXCHANGE                                    A. Self-Regulatory Organization’s
                                                    sec.gov. Please include File Number SR–                    COMMISSION                                                 Statement of the Purpose of, and
                                                    NYSEMKT–2015–48 on the subject line.                                                                                  Statutory Basis for, the Proposed Rule
                                                                                                               [Release No. 34–75458; File No. SR–                        Change
                                                    Paper Comments
                                                                                                               NASDAQ–2015–081]                                           1. Purpose
                                                      • Send paper comments in triplicate
                                                    to Brent J. Fields, Secretary, Securities                  Self-Regulatory Organizations; The                            NASDAQ is proposing to amend the
                                                    and Exchange Commission, 100 F Street                      NASDAQ Stock Market LLC; Notice of                         fees and credits provided under
                                                                                                               Filing and Immediate Effectiveness of                      NASDAQ Rule 7018. Specifically,
                                                    NE., Washington, DC 20549–1090.
                                                                                                               Proposed Rule Change To Modify                             NASDAQ is proposing to delete the
                                                    All submissions should refer to File                       NASDAQ Rule 7018 Governing Fees                            charge it assesses a member firm for its
                                                    Number SR–NYSEMKT–2015–48. This                            and Credits Assessed for Execution                         orders that execute in the NASDAQ
                                                    file number should be included on the                                                                                 Market Center, which is assessed if the
                                                                                                               and Routing
                                                    subject line if email is used. To help the                                                                            member firm has Market-on Close
                                                    Commission process and review your                         July 15, 2015.                                             (‘‘MOC’’) or Limit-on-Close (‘‘LOC’’)
                                                    comments more efficiently, please use                                                                                 orders that execute in the NASDAQ
                                                                                                                  Pursuant to Section 19(b)(1) of the                     Closing Cross entered through a single
                                                    only one method. The Commission will                       Securities Exchange Act of 1934
                                                    post all comments on the Commission’s                                                                                 NASDAQ Market Center market
                                                                                                               (‘‘Act’’),1 and Rule 19b–4 thereunder,2                    participant identifier (‘‘MPID’’), that
                                                    Internet Web site (http://www.sec.gov/                     notice is hereby given that on July 13,
                                                    rules/sro.shtml). Copies of the                                                                                       represent more than 0.15% of
                                                                                                               2015, The NASDAQ Stock Market LLC                          Consolidated Volume during the month.
                                                    submission, all subsequent                                 (‘‘NASDAQ’’ or ‘‘Exchange’’) filed with                    Currently, the Exchange assesses a
                                                    amendments, all written statements                         the Securities and Exchange                                charge of $0.0030 per share executed in
                                                    with respect to the proposed rule                          Commission (‘‘SEC’’ or ‘‘Commission’’)                     securities listed on NASDAQ (‘‘Tape
                                                    change that are filed with the                             the proposed rule change as described                      C’’), and a charge of $0.00295 per share
                                                    Commission, and all written                                in Items I, II, and III, below, which Items                executed in securities listed on NYSE
                                                    communications relating to the                             have been prepared by the Exchange.                        (‘‘Tape A’’) and on exchanges other than
                                                    proposed rule change between the                           The Commission is publishing this                          NASDAQ and the NYSE (‘‘Tape B’’)
                                                    Commission and any person, other than                      notice to solicit comments on the                          (collectively, the ‘‘Tapes’’). The
                                                    those that may be withheld from the                        proposed rule change from interested                       Exchange is proposing to eliminate this
                                                    public in accordance with the                              persons.                                                   charge under Rules 7018(a)(1), (2) and
                                                    provisions of 5 U.S.C. 552, will be                                                                                   (3).
                                                    available for Web site viewing and                         I. Self-Regulatory Organization’s                             The Exchange is also proposing to add
                                                    printing in the Commission’s Public                        Statement of the Terms of the Substance                    a new credit applied to securities of all
                                                    Reference Section, 100 F Street, NE.,                      of the Proposed Rule Change                                three Tapes. Specifically, the Exchange
                                                    Washington, DC 20549–1090. Copies of                                                                                  proposes a $0.0029 per share executed
                                                                                                                  The Exchange proposes to modify
                                                    the filing will also be available for                                                                                 credit provided to member firms that
                                                                                                               changes to amend NASDAQ Rule 7018,
                                                    inspection and copying at the NYSE’s                                                                                  add Customer,3 Professional,4 Firm,5
                                                                                                               governing fees and credits assessed for
                                                    principal office and on its Internet Web                                                                              Non-NASDAQ Options Market
                                                                                                               execution and routing of securities.
                                                    site at www.nyse.com. All comments                                                                                    (‘‘NOM’’) market maker 6 and/or broker-
                                                    received will be posted without change;                       The text of the proposed rule change                    dealer 7 liquidity in Penny Pilot
                                                    the Commission does not edit personal                      is available on the Exchange’s Web site                    Options 8 and/or Non-Penny Pilot
                                                    identifying information from                               at http://nasdaq.cchwallstreet.com, at                     Options 9 of 1.25% or more of total
                                                    submissions. You should submit only                        the principal office of the Exchange, and                  industry average daily volume (‘‘ADV’’)
                                                    information that you wish to make                          at the Commission’s Public Reference                       in the customer clearing range for
                                                    available publicly. All submissions                        Room.                                                      Equity and ETF option contracts per
                                                    should refer to File Number SR–                                                                                       day, in a month on NOM. The Exchange
                                                                                                               II. Self-Regulatory Organization’s                         believes that the new credit tier will
                                                    NYSEMKT–2015–48 and should be                              Statement of the Purpose of, and
                                                    submitted on or before August 10, 2015.                                                                               provide incentive to NASDAQ market
                                                                                                               Statutory Basis for, the Proposed Rule                     participants to also provide liquidity in
                                                      For the Commission, by the Division of                   Change                                                     NOM and notes that it currently
                                                    Trading and Markets, pursuant to delegated                                                                            provides a similar credit tier available
                                                    authority.21                                                 In its filing with the Commission, the
                                                                                                                                                                          for executions in securities of all three
                                                    Robert W. Errett,                                          Exchange included statements
                                                                                                                                                                          Tapes. That credit tier provides a
                                                                                                               concerning the purpose of and basis for                    slightly higher credit in return for a
                                                    Deputy Secretary.
                                                                                                               the proposed rule change and discussed
                                                    [FR Doc. 2015–17759 Filed 7–20–15; 8:45 am]
                                                                                                               any comments it received on the                              3 As defined by NASDAQ Options Rules, Chapter
                                                    BILLING CODE 8011–01P
                                                                                                               proposed rule change. The text of these                    XV.
                                                                                                               statements may be examined at the                            4 Id.

                                                                                                               places specified in Item IV below. The                       5 Id.
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                                                                                                                                                                            6 Id.
                                                                                                               Exchange has prepared summaries, set
                                                                                                                                                                            7 Id.
                                                                                                               forth in sections A, B, and C below, of                      8 The Penny Pilot allows market participants to
                                                                                                               the most significant aspects of such                       quote in penny increments in certain series of
                                                                                                               statements.                                                option classes and is designed to narrow the
                                                                                                                                                                          average quoted spreads in all classes in the Pilot,
                                                                                                                                                                          which may result in customers and other market
                                                                                                                                                                          participants to trade options at better prices. See
                                                                                                                    1 15   U.S.C. 78s(b)(1).                              NASDAQ Options Rules, Chapter XV, Sec. 2(1).
                                                      21 17   CFR 200.30–3(a)(12).                                  2 17   CFR 240.19b–4.                                   9 Id.




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Document Created: 2018-02-23 09:23:25
Document Modified: 2018-02-23 09:23:25
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 43141 

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