80 FR 44166 - Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the BX Routing Order Rule
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 142 (July 24, 2015)
Federal Register Volume 80, Issue 142 (July 24, 2015)
| Page Range | 44166-44168 | |
| FR Document | 2015-18132 |
[Federal Register Volume 80, Number 142 (Friday, July 24, 2015)] [Notices] [Pages 44166-44168] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-18132] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75490; File No. SR-BX-2015-041] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the BX Routing Order Rule July 20, 2015. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on July 10, 2015, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend BX Rules at chapter VI (Trading Systems) at section 11 (Order Routing) to clarify the manner in which a SEEK Order will route again after an initial routing attempt to another market center. The text of the proposed rule change is available on the Exchange's Web site at http://nasdaqomxbx.cchwallstreet.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 Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange's rules at chapter VI, section 11 provide for the manner in which orders submitted to the System \3\ will route to other market centers.\4\ The System provides two routing options pursuant to which orders are sent to other available market centers for potential execution, per the entering firm's instructions. The routing options are SEEK and SRCH. Routing options may be combined with all available order types and times-in-force, with the exception of order types and times-in-force whose terms are inconsistent with the terms of a particular routing option. The Exchange is seeking to clarify the manner in which a SEEK order will route again, after it is initially routed (``re-route'').\5\ --------------------------------------------------------------------------- \3\ The term ``System'' is defined in BX Rules at chapter VI, section 1(a). \4\ Participants can designate orders as either available for routing or not available for routing. See chapter VI, sec. 11(a). \5\ If an order is only partially routed the portion that was not routed will be posted to the book. --------------------------------------------------------------------------- SEEK is a routing option pursuant to which an order will first check the System for available contracts for execution. After checking the System for available contracts, orders are sent to other available market centers for potential execution, per the entering firm's instructions. When checking the book, the System will seek to execute at the price at which it would send the order to a destination market center. SRCH is a routing option pursuant to which an order will first check the System for available contracts for execution. After checking the System for available contracts, orders are sent to other available market centers for potential execution, per the entering firm's instructions. When checking the book, the System will seek to execute at the price at which it would send the order to a destination market center. Both SEEK and SRCH eligible unexecuted orders will continue to be routed utilizing a route timer. The SEEK or SRCH order will post to the book and will be routed after a time period (``Route Timer'') not to exceed one second as specified by the Exchange on its Web site provided that the order's limit price would lock or cross other market center(s).\6\ If, during the Route Timer, any new interest arrives opposite the order that is equal to or better than the ABBO \7\ price, the order will trade against such new interest at the ABBO price. Eligible unexecuted orders will be routed at the end of the Route Timer provided the order was not filled and the order's limit price would continue to lock or cross the ABBO. If an order was routed with either the SEEK or SRCH routing option, and has size after such routing, it will execute against contra side interest in the book, post in the book, and route again pursuant to the process described above, if applicable, if the order's limit price would lock or cross another market center(s). --------------------------------------------------------------------------- \6\ Pursuant to section 11(c) of chapter VI, orders sent by the System pursuant to the SEEK and SRCH routing options to other markets would not retain time priority with respect to other orders in the System. If an order routed pursuant to SEEK or SRCH is subsequently returned, in whole or in part, that order, or its remainder, will receive a new time stamp reflecting the time of its return to the System. \7\ ABBO is the away market's best bid or offer. --------------------------------------------------------------------------- With respect to SRCH Orders, if contracts remain un-executed after routing, they are posted on the book. Once on the book, should the order subsequently be locked or crossed by another market center, it will re-route. With SEEK orders, the rule currently states, if contracts remain un-executed after routing, they are posted on the book. Once on the book at the limit price, should the order subsequently be locked or crossed by another market center, the System will not route the order to the locking or crossing market center. The Exchange seeks to amend the rule text in chapter VI, section 11(a)(1)(A) to state, while, on the book at the limit price, should the order subsequently be locked or crossed by another market center, the System will not route the order to the locking or crossing market center. The purpose of this change is to make clear that the SEEK order will not re-route as long as that order is at the limit price. The SEEK order may re- [[Page 44167]] route, after it has initially routed, when such order reprices. Example #1: By way of example, if an order is subject to Acceptable Trade Range \8\ (``ATR'') with a price band of 0.80 and the order book is as follows: --------------------------------------------------------------------------- \8\ The System will calculate an Acceptable Trade Range to limit the range of prices at which an order will be allowed to execute. The Acceptable Trade Range is calculated by taking the reference price, plus or minus a value to be determined by the Exchange. (i.e., the reference price--(x) for sell orders and the reference price + (x) for buy orders). Upon receipt of a new order, the reference price is the national best bid (NBB) for sell orders and the national best offer (NBO) for buy orders or the last price at which the order is posted whichever is higher for a buy order or lower for a sell order. See BX Rules at chapter VI, section 10(7). [cir] Order 1: Buy SEEK order 27 (10) [cir] Order 2: Sell SEEK order 31 (10) [cir] Order 3: Sell DNR order 29 (10) Further, if BX's BBO is 27(10) x 29(10) and the away market is 27(10) x 33 (10) with an NBBO of 27(20) x 29(10); then An incoming Order 4: Buy DNR 30 (100) triggers ATR and the following takes place within the order book:Order 4 first executes with Order 3 at 29 (10) ATR timer starts, with Order 4 re-priced and displayed at 29.80 (90) Exchange BBO becomes 29.80 (90) x 31 (10), offer 31 is non- firm Assume, during ATR timer, away market moves such that new away market is 31.10 (10) x 33 (10) After ATR processing concludes, Order 2 is repriced to be offered at 31.10 and displayed tick away at 31.20 to avoid locking/ crossing the market. Exchange BBO becomes 30(90) x 31.20(10) After route timer, Order 2 routes to away market at 31.10 The Exchange proposes to add the following new sentence, ``SEEK orders will not be eligible for routing until the next time the option series is subject to a new opening or reopening.'' The purpose of this new sentence is to make clear that an opening and reopening will cause an order to be eligible for routing. The SEEK order will be treated as a new order and therefore will become subject to the routing process anew with an opening or reopening process, provided the order locks or crosses another market. Example #2: By way of example, presume a halt occurred on BX with the following order book: [ssquf] Order 1: Buy SEEK Order is on the book at its limit price, 2.00 (15). [ssquf] The related underlying is halted. [ssquf] Immediately following the halt, before BX has re-opened the issue, the away market quotes at 1.95 (100) x 1.99 (100). [ssquf] Upon re-opening the issue on BX, the SEEK order routes at 1.99 (15). The System comes out of a halt with a new opening process and treats all orders as if they were new orders thus the SEEK order will re-route. The Exchange proposes to modify the existing sentence which states, ``[o]nce on the book at the limit price, should the order subsequently be locked or crossed by another market center, the System will not route the order to the locking or crossing market center'' to ``[w]hile on the book at the limit price, should the order subsequently be locked or crossed by another market center, the System will not route the order to the locking or crossing market center.'' The Exchange believes that this modification reflects more accurate rule text. The Exchange believes that market participants are aware of the manner in which the SEEK order operates as there has been no System change with respect to the function of the SEEK order. The proposed language serves to make clear that a SEEK order will not re-route while at its limit price, but once that order is re-priced, it may route again.\9\ --------------------------------------------------------------------------- \9\ See Example #1. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with section 6(b) of the Act \10\ in general, and furthers the objectives of section 6(b)(5) of the Act \11\ in particular, in that it is designed 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, by amending the rule text to clarify the existing rule text and provide the circumstances when a SEEK order would be eligible to route, such as (1) when the order is repriced, after it is posted to the order book, at a price not at its limit price; and (2) when an opening or reopening (after a halt) occurs such that the System views these orders as new orders and they become subject to routing anew. The Exchange believes that these amendments provide transparency and specificity to the Rules and the corrected rule text protects investors and the public interest by reducing the potential for investor confusion. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78f(b). \11\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes the additional language benefits other market participants who may not be currently familiar with the routing options on BX to understand the difference between the two routing options offered by the Exchange. While the Exchange is modifying the rule text, it notes that the System will continue to operate as it does today. Rather, the proposed rule text seeks to bring additional clarity to the current rule text to clarify when a SEEK order will re-route to another market center after it has initially routed. The Exchange believes this language corrects the current rule text and more clearly differentiates an order routed pursuant to the SEEK routing option as compared to the SRCH routing option. 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 does not create an undue burden on competition as the proposed rule change is not a substantive change in that the System will continue to operate as it does today. The Exchange desires to amend the current rule text to provide two circumstances when the SEEK order would re-route after it has initially routed to an away market center. The Exchange believes that this proposed rule text will clarify the current rule which states that SEEK order will not re-route once it is on the book at the limit price. The Exchange is seeking to provide greater transparency in its rules. The amendments would apply to all market participants in the same manner. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to section 19(b)(3)(A)(iii) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\ Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become [[Page 44168]] effective pursuant to section 19(b)(3)(A) of the Act \14\ and Rule 19b- 4(f)(6) thereunder.\15\ --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A)(iii). \13\ 17 CFR 240.19b-4(f)(6). \14\ 15 U.S.C. 78s(b)(3)(A). \15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange's intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ 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 proposed rule change may become operative immediately. The Exchange states that the proposal would apply to all market participants in the same manner and believes that market participants would benefit from the additional clarity the Exchange asserts the proposal would provide in regard to the circumstances when a SEEK order is eligible to re-route. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposal provides further clarity regarding the routing functionality of the Exchange's SEEK orders, which the Commission believes will benefit investors and market participants who use such orders to accomplish their trading objectives. For this reason, the Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing.\18\ --------------------------------------------------------------------------- \16\ 17 CFR 240.19b-4(f)(6). \17\ 17 CFR 240.19b-4(f)(6)(iii). \18\ For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 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-BX-2015-041 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-BX-2015-041. 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 also will be available for inspection and copying at the principal offices of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-BX-2015-041, and should be submitted on or before August 14, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\19\ --------------------------------------------------------------------------- \19\ 17 CFR 200.30-3(a)(12), (59). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-18132 Filed 7-23-15; 8:45 am] BILLING CODE 8011-01-P
![44166 Federal Register / Vol. 80, No. 142 / Friday, July 24, 2015 / Notices
Washington, DC 20549 on official the Commission’s Public Reference potential execution, per the entering
business days between the hours of Room. firm’s instructions. When checking the
10:00 a.m. and 3:00 p.m. Copies of such book, the System will seek to execute at
II. Self-Regulatory Organization’s
filing also will be available for the price at which it would send the
Statement of the Purpose of, and
inspection and copying at the principal order to a destination market center.
Statutory Basis for, the Proposed Rule
office of the Exchange. All comments Both SEEK and SRCH eligible
received will be posted without change; Change
unexecuted orders will continue to be
the Commission does not edit personal In its filing with the Commission, the routed utilizing a route timer. The SEEK
identifying information from Exchange included statements or SRCH order will post to the book and
submissions. You should submit only concerning the purpose of and basis for will be routed after a time period
information that you wish to make the proposed rule change and discussed (‘‘Route Timer’’) not to exceed one
available publicly. All submissions any comments it received on the second as specified by the Exchange on
should refer to File Number SR–Phlx– proposed rule change. The text of these its Web site provided that the order’s
2015–65, and should be submitted on or statements may be examined at the limit price would lock or cross other
before August 14, 2015. places specified in Item IV below. The market center(s).6 If, during the Route
For the Commission, by the Division of Exchange has prepared summaries, set Timer, any new interest arrives opposite
Trading and Markets, pursuant to delegated forth in sections A, B, and C below, of the order that is equal to or better than
authority.10 the most significant aspects of such the ABBO 7 price, the order will trade
Robert W. Errett, statements. against such new interest at the ABBO
Deputy Secretary. A. Self-Regulatory Organization’s price. Eligible unexecuted orders will be
[FR Doc. 2015–18134 Filed 7–23–15; 8:45 am] Statement of the Purpose of, and routed at the end of the Route Timer
BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule provided the order was not filled and
Change the order’s limit price would continue
to lock or cross the ABBO. If an order
SECURITIES AND EXCHANGE 1. Purpose was routed with either the SEEK or
COMMISSION The Exchange’s rules at chapter VI, SRCH routing option, and has size after
[Release No. 34–75490; File No. SR–BX– section 11 provide for the manner in such routing, it will execute against
2015–041] which orders submitted to the System 3 contra side interest in the book, post in
will route to other market centers.4 The the book, and route again pursuant to
Self-Regulatory Organizations; System provides two routing options the process described above, if
NASDAQ OMX BX, Inc.; Notice of Filing pursuant to which orders are sent to applicable, if the order’s limit price
and Immediate Effectiveness of other available market centers for would lock or cross another market
Proposed Rule Change To Amend the potential execution, per the entering center(s).
BX Routing Order Rule firm’s instructions. The routing options With respect to SRCH Orders, if
July 20, 2015.
are SEEK and SRCH. Routing options contracts remain un-executed after
Pursuant to section 19(b)(1) of the may be combined with all available routing, they are posted on the book.
Securities Exchange Act of 1934 order types and times-in-force, with the Once on the book, should the order
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 exception of order types and times-in- subsequently be locked or crossed by
notice is hereby given that on July 10, force whose terms are inconsistent with another market center, it will re-route.
2015, NASDAQ OMX BX, Inc. (‘‘BX’’ or the terms of a particular routing option. With SEEK orders, the rule currently
‘‘Exchange’’) filed with the Securities The Exchange is seeking to clarify the states, if contracts remain un-executed
and Exchange Commission (‘‘SEC’’ or manner in which a SEEK order will after routing, they are posted on the
‘‘Commission’’) the proposed rule route again, after it is initially routed book. Once on the book at the limit
change as described in Items I and II (‘‘re-route’’).5 price, should the order subsequently be
below, which Items have been prepared SEEK is a routing option pursuant to locked or crossed by another market
by the Exchange. The Commission is which an order will first check the center, the System will not route the
publishing this notice to solicit System for available contracts for order to the locking or crossing market
comments on the proposed rule change execution. After checking the System for center.
from interested persons. available contracts, orders are sent to The Exchange seeks to amend the rule
other available market centers for text in chapter VI, section 11(a)(1)(A) to
I. Self-Regulatory Organization’s potential execution, per the entering state, while, on the book at the limit
Statement of the Terms of Substance of firm’s instructions. When checking the price, should the order subsequently be
the Proposed Rule Change book, the System will seek to execute at locked or crossed by another market
The Exchange proposes to amend BX the price at which it would send the center, the System will not route the
Rules at chapter VI (Trading Systems) at order to a destination market center. order to the locking or crossing market
section 11 (Order Routing) to clarify the SRCH is a routing option pursuant to center. The purpose of this change is to
manner in which a SEEK Order will which an order will first check the make clear that the SEEK order will not
route again after an initial routing System for available contracts for re-route as long as that order is at the
attempt to another market center. execution. After checking the System for limit price. The SEEK order may re-
asabaliauskas on DSK5VPTVN1PROD with NOTICES
The text of the proposed rule change available contracts, orders are sent to
is available on the Exchange’s Web site other available market centers for 6 Pursuant to section 11(c) of chapter VI, orders
at http:// sent by the System pursuant to the SEEK and SRCH
3 The
term ‘‘System’’ is defined in BX Rules at
nasdaqomxbx.cchwallstreet.com/, at the routing options to other markets would not retain
chapter VI, section 1(a). time priority with respect to other orders in the
principal office of the Exchange, and at 4 Participants can designate orders as either System. If an order routed pursuant to SEEK or
available for routing or not available for routing. See SRCH is subsequently returned, in whole or in part,
10 17 CFR 200.30–3(a)(12). chapter VI, sec. 11(a). that order, or its remainder, will receive a new time
1 15 U.S.C. 78s(b)(1). 5 If an order is only partially routed the portion stamp reflecting the time of its return to the System.
2 17 CFR 240.19b–4. that was not routed will be posted to the book. 7 ABBO is the away market’s best bid or offer.
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![Federal Register / Vol. 80, No. 142 / Friday, July 24, 2015 / Notices 44167
route, after it has initially routed, when D Upon re-opening the issue on BX, Exchange. While the Exchange is
such order reprices. the SEEK order routes at 1.99 (15). The modifying the rule text, it notes that the
Example #1: By way of example, if an System comes out of a halt with a new System will continue to operate as it
order is subject to Acceptable Trade opening process and treats all orders as does today. Rather, the proposed rule
Range 8 (‘‘ATR’’) with a price band of if they were new orders thus the SEEK text seeks to bring additional clarity to
0.80 and the order book is as follows: order will re-route. the current rule text to clarify when a
Æ Order 1: Buy SEEK order 27 (10) The Exchange proposes to modify the SEEK order will re-route to another
Æ Order 2: Sell SEEK order 31 (10) existing sentence which states, ‘‘[o]nce market center after it has initially
Æ Order 3: Sell DNR order 29 (10) on the book at the limit price, should routed. The Exchange believes this
Further, if BX’s BBO is 27(10) × 29(10) the order subsequently be locked or language corrects the current rule text
and the away market is 27(10) × 33 (10) crossed by another market center, the and more clearly differentiates an order
with an NBBO of 27(20) × 29(10); then System will not route the order to the routed pursuant to the SEEK routing
An incoming Order 4: Buy DNR 30 locking or crossing market center’’ to option as compared to the SRCH routing
(100) triggers ATR and the following ‘‘[w]hile on the book at the limit price, option.
takes place within the order book: should the order subsequently be locked
or crossed by another market center, the B. Self-Regulatory Organization’s
• Order 4 first executes with Order 3 at Statement on Burden on Competition
29 (10) System will not route the order to the
• ATR timer starts, with Order 4 re- locking or crossing market center.’’ The The Exchange does not believe that
priced and displayed at 29.80 (90) Exchange believes that this modification the proposed rule change will impose
• Exchange BBO becomes 29.80 (90) × reflects more accurate rule text. The any burden on competition not
31 (10), offer 31 is non-firm Exchange believes that market necessary or appropriate in furtherance
• Assume, during ATR timer, away participants are aware of the manner in of the purposes of the Act. The
market moves such that new away which the SEEK order operates as there proposed rule change does not create an
market is 31.10 (10) × 33 (10) has been no System change with respect undue burden on competition as the
• After ATR processing concludes, to the function of the SEEK order. The proposed rule change is not a
Order 2 is repriced to be offered at proposed language serves to make clear substantive change in that the System
31.10 and displayed tick away at that a SEEK order will not re-route will continue to operate as it does today.
31.20 to avoid locking/crossing the while at its limit price, but once that The Exchange desires to amend the
market. order is re-priced, it may route again.9 current rule text to provide two
• Exchange BBO becomes 30(90) × 2. Statutory Basis
circumstances when the SEEK order
31.20(10) would re-route after it has initially
• After route timer, Order 2 routes to The Exchange believes that its routed to an away market center. The
away market at 31.10 proposal is consistent with section 6(b) Exchange believes that this proposed
The Exchange proposes to add the of the Act 10 in general, and furthers the rule text will clarify the current rule
following new sentence, ‘‘SEEK orders objectives of section 6(b)(5) of the Act 11 which states that SEEK order will not
will not be eligible for routing until the in particular, in that it is designed to re-route once it is on the book at the
next time the option series is subject to promote just and equitable principles of limit price. The Exchange is seeking to
a new opening or reopening.’’ The trade, to remove impediments to and provide greater transparency in its rules.
purpose of this new sentence is to make perfect the mechanism of a free and The amendments would apply to all
clear that an opening and reopening will open market and a national market market participants in the same manner.
cause an order to be eligible for routing. system, and, in general to protect
investors and the public interest, by C. Self-Regulatory Organization’s
The SEEK order will be treated as a new Statement on Comments on the
order and therefore will become subject amending the rule text to clarify the
existing rule text and provide the Proposed Rule Change Received From
to the routing process anew with an Members, Participants, or Others
opening or reopening process, provided circumstances when a SEEK order
the order locks or crosses another would be eligible to route, such as (1) No written comments were either
market. when the order is repriced, after it is solicited or received.
Example #2: By way of example, posted to the order book, at a price not
III. Date of Effectiveness of the
presume a halt occurred on BX with the at its limit price; and (2) when an
Proposed Rule Change and Timing for
following order book: opening or reopening (after a halt)
Commission Action
D Order 1: Buy SEEK Order is on the occurs such that the System views these
book at its limit price, 2.00 (15). orders as new orders and they become The Exchange has filed the proposed
D The related underlying is halted. subject to routing anew. The Exchange rule change pursuant to section
D Immediately following the halt, believes that these amendments provide 19(b)(3)(A)(iii) of the Act 12 and Rule
before BX has re-opened the issue, the transparency and specificity to the 19b–4(f)(6) thereunder.13 Because the
away market quotes at 1.95 (100) × 1.99 Rules and the corrected rule text proposed rule change does not: (i)
(100). protects investors and the public Significantly affect the protection of
interest by reducing the potential for investors or the public interest; (ii)
8 The System will calculate an Acceptable Trade investor confusion. impose any significant burden on
Range to limit the range of prices at which an order The Exchange believes the additional competition; and (iii) become operative
asabaliauskas on DSK5VPTVN1PROD with NOTICES
will be allowed to execute. The Acceptable Trade language benefits other market for 30 days from the date on which it
Range is calculated by taking the reference price,
plus or minus a value to be determined by the participants who may not be currently was filed, or such shorter time as the
Exchange. (i.e., the reference price—(x) for sell familiar with the routing options on BX Commission may designate, if
orders and the reference price + (x) for buy orders). to understand the difference between consistent with the protection of
Upon receipt of a new order, the reference price is the two routing options offered by the investors and the public interest, the
the national best bid (NBB) for sell orders and the
national best offer (NBO) for buy orders or the last
proposed rule change has become
9 See Example #1.
price at which the order is posted whichever is
10 15 U.S.C. 78f(b). 12 15 U.S.C. 78s(b)(3)(A)(iii).
higher for a buy order or lower for a sell order. See
BX Rules at chapter VI, section 10(7). 11 15 U.S.C. 78f(b)(5). 13 17 CFR 240.19b–4(f)(6).
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![44168 Federal Register / Vol. 80, No. 142 / Friday, July 24, 2015 / Notices
effective pursuant to section 19(b)(3)(A) IV. Solicitation of Comments For the Commission, by the Division of
of the Act 14 and Rule 19b–4(f)(6) Trading and Markets, pursuant to delegated
thereunder.15 Interested persons are invited to authority.19
submit written data, views, and Robert W. Errett,
A proposed rule change filed under arguments concerning the foregoing, Deputy Secretary.
Rule 19b–4(f)(6) 16 normally does not including whether the proposed rule [FR Doc. 2015–18132 Filed 7–23–15; 8:45 am]
become operative prior to 30 days after change is consistent with the Act. BILLING CODE 8011–01–P
the date of the filing. However, pursuant Comments may be submitted by any of
to Rule 19b–4(f)(6)(iii),17 the
the following methods:
Commission may designate a shorter SECURITIES AND EXCHANGE
time if such action is consistent with the Electronic Comments COMMISSION
protection of investors and the public
interest. The Exchange has asked the • Use the Commission’s Internet [Release No. 34–75493; File Nos. SR–
comment form (http://www.sec.gov/ NYSEArca–2015–43; SR–NYSEMKT–2015–
Commission to waive the 30-day 41]
operative delay so that the proposed rules/sro.shtml); or
rule change may become operative • Send an email to rule-comments@ Self-Regulatory Organizations;
immediately. The Exchange states that sec.gov. Please include File Number SR– NYSEArca, Inc.; NYSEMKT LLC; Order
the proposal would apply to all market BX–2015–041 on the subject line. Approving Proposed Rule Changes
participants in the same manner and Relating to the Complex Order Auction
believes that market participants would Paper Comments Process and Order Exposure
benefit from the additional clarity the • Send paper comments in triplicate Requirements
Exchange asserts the proposal would to Secretary, Securities and Exchange July 20, 2015.
provide in regard to the circumstances Commission, 100 F Street NE.,
when a SEEK order is eligible to re- Washington, DC 20549–1090. I. Introduction
route. The Commission believes that On May 21, 2015, NYSE Arca, Inc.
waiving the 30-day operative delay is All submissions should refer to File (‘‘NYSE Arca’’) and NYSE MKT LLC
consistent with the protection of Number SR–BX–2015–041. This file (‘‘NYSE MKT’’) (each, an ‘‘Exchange’’
investors and the public interest number should be included on the and, together, the ‘‘Exchanges’’) filed
because the proposal provides further subject line if email is used. To help the with the Securities and Exchange
clarity regarding the routing Commission process and review your Commission (the ‘‘Commission’’),
functionality of the Exchange’s SEEK comments more efficiently, please use pursuant to section 19(b)(1) 1 of the
orders, which the Commission believes only one method. The Commission will Securities Exchange Act of 1934 (the
will benefit investors and market post all comments on the Commission’s ‘‘Act’’),2 and Rule 19b–4 thereunder,3
participants who use such orders to Internet Web site (http://www.sec.gov/ proposed rule changes to amend NYSE
accomplish their trading objectives. For rules/sro.shtml). Copies of the Arca Rules 6.47A and 6.91(c) and NYSE
this reason, the Commission hereby submission, all subsequent MKT Rules 935NY and 980NY(e),
waives the 30-day operative delay and amendments, all written statements respectively, to (1) allow Users to utilize
designates the proposal operative upon with respect to the proposed rule the Complex Order Auction (‘‘COA’’) to
filing.18 change that are filed with the satisfy the order exposure requirements
At any time within 60 days of the Commission, and all written of Rules NYSE Arca Rule 6.47A and
filing of the proposed rule change, the communications relating to the NYSE MKT Rule 935NY; (2) allow any
Commission summarily may proposed rule change between the OTP Holder or ATP Holder, as
Commission and any person, other than applicable, to participate in a COA; and
temporarily suspend such rule change if
those that may be withheld from the (3) provide for a COA Response Time
it appears to the Commission that such
public in accordance with the Interval of no less than 500
action is necessary or appropriate in the
provisions of 5 U.S.C. 552, will be milliseconds.4 The proposed rule
public interest, for the protection of
changes were published for comment in
investors, or otherwise in furtherance of available for Web site viewing and
the in the Federal Register on June 8,
the purposes of the Act. If the printing in the Commission’s Public
2014.5 The Commission received no
Commission takes such action, the Reference Room, 100 F Street NE.,
Commission shall institute proceedings Washington, DC 20549 on official 1 15 U.S.C. 78s(b)(1).
to determine whether the proposed rule business days between the hours of 2 15 U.S.C. 78a.
change should be approved or 10:00 a.m. and 3:00 p.m. Copies of such 3 17 CFR 240.19b–4.
disapproved. filing also will be available for 4 An OTP Holder is the holder of an Options
inspection and copying at the principal Trading Permit issued by NYSE Arca. See NYSE
Arca Rules 1.1(p) and (q). Under NYSE Arca’s rules,
14 15 U.S.C. 78s(b)(3)(A). offices of the Exchange. All comments a User is any OTP Holder, OTP Firm, or Sponsored
15 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– received will be posted without change; Participant that is authorized to obtain access to
4(f)(6)(iii) requires the Exchange to give the OX, NYSE Arca’s electronic order delivery,
Commission written notice of the Exchange’s intent
the Commission does not edit personal
execution and reporting system for designated
to file the proposed rule change, along with a brief identifying information from option issues, pursuant to NYSE Arca Rule 6.2A.
description and text of the proposed rule change, submissions. You should submit only See NYSE Arca Rules 6.1A(13) and 6.1A(19). An
asabaliauskas on DSK5VPTVN1PROD with NOTICES
at least five business days prior to the date of filing ATP Holder is the holder of an Amex Trading
of the proposed rule change, or such shorter time
information that you wish to make
Permit issued by NYSE MKT. See NYSE MKT Rules
as designated by the Commission. The Exchange available publicly. All submissions 900.2NY(4) and (5). Under NYSE MKT’s rules, a
has satisfied this requirement. should refer to File Number SR–BX– User is any ATP Holder that is authorized to obtain
16 17 CFR 240.19b–4(f)(6).
2015–041, and should be submitted on access to the System pursuant to NYSE MKT Rule
17 17 CFR 240.19b–4(f)(6)(iii). 902.1NY. See NYSE MKT Rule 900.2NY(87).
18 For purposes only of waiving the 30-day
or before August 14, 2015. 5 See Securities Exchange Act Release Nos. 75096
operative delay, the Commission has considered the (June 2, 2015), 80 FR 32420 (‘‘NYSE Arca Notice’’);
proposed rule’s impact on efficiency, competition, and 75095 (June 2, 2015), 80 FR 32427 (‘‘NYSE
and capital formation. See 15 U.S.C. 78c(f). 19 17 CFR 200.30–3(a)(12), (59). MKT Notice’’).
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Document Created: 2018-02-23 09:25:22
Document Modified: 2018-02-23 09:25:22
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 80 FR 44166 |
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