80 FR 46074 - Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4702 To Introduce a Market Maker Peg Order for Use on BX
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 148 (August 3, 2015)
Federal Register Volume 80, Issue 148 (August 3, 2015)
| Page Range | 46074-46078 | |
| FR Document | 2015-18882 |
[Federal Register Volume 80, Number 148 (Monday, August 3, 2015)] [Notices] [Pages 46074-46078] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-18882] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75536; File No. SR-BX-2015-042] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4702 To Introduce a Market Maker Peg Order for Use on BX July 28, 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 17, 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, II, and III below, which Items have been prepared by the Exchange. The [[Page 46075]] 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 Rule 4702 to introduce a Market Maker Peg Order for use on BX. 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 is proposing to introduce a Market Maker Peg Order (``MMPO'') for use on BX by registered BX Market Makers. The MMPO, which is currently available for use on The NASDAQ Stock Market (``NASDAQ'') \3\ and NASDAQ OMX Phlx (``PHLX'') PSX System,\4\ is an order type that provides a means by which a market maker may comply with its market making obligations under applicable Exchange rules.\5\ Although the Exchange has rules allowing market making on BX, it does not currently have any market makers registered with the Exchange. In an effort to attract market makers, BX is proposing to introduce the MMPO, which will facilitate BX market maker compliance with BX quoting obligations.\6\ The MMPO is available for use only by BX Market Makers because these obligations are not applicable to other market participants. The MMPO is available only through the Exchange's RASH and FIX connectivity protocols, because these are the only protocols that support continuous pegging functionality. --------------------------------------------------------------------------- \3\ See NASDAQ Rule 4702(b)(7). \4\ See PHLX Rule 3301A(b)(5). \5\ See Rule 4613. The MMPO is a ``one-sided'' order. Therefore a member firm exclusively employing the order type to comply with its market making obligations must enter both a buy and sell MMPO. \6\ Id. --------------------------------------------------------------------------- BX Rule 4613 requires a member firm registered as a Market Maker in a particular security to be willing to buy and sell such security for its own account on a continuous basis during regular market hours and to enter and maintain a two-sided trading interest (``Two-Sided Obligation'') that is identified to the Exchange as the interest meeting the obligation and is displayed in BX's quotation montage at all times. Interest eligible to be considered part of a Market Maker's Two-Sided Obligation must have a displayed quotation size of at least one normal unit of trading.\7\ After an execution against its Two-Sided Obligation, a Market Maker must ensure that it has additional trading interest to satisfy its Two-Sided Obligation either by immediately entering new interest to comply with this obligation to maintain continuous two-sided quotations or by identifying existing interest on the BX book that will satisfy this obligation. --------------------------------------------------------------------------- \7\ Unless otherwise designated, 100 shares. --------------------------------------------------------------------------- BX Market Makers must also adhere to certain pricing obligations established by Rule 4613, which are premised on entering quotation prices that are not more than a ``Designated Percentage'' \8\ away from the National Best Bid or National Best Offer \9\ (as applicable), and that must be refreshed if a change in the National Best Bid or National Best Offer causes the quotation price to be more than a ``Defined Limit'' \10\ away from the National Best Bid or National Best Offer.\11\ The pricing obligations established by the Rule apply during regular trading hours (i.e., 9:30 a.m. to 4:00 p.m.), but do not commence during any trading day until after the first regular way transaction on the primary listing market in the security. Moreover, the obligations are suspended during a trading halt, suspension, or pause, and do not re-commence until after the first regular way transaction on the primary listing market in the security following such halt, suspension, or pause, as reported by the responsible single plan processor. When the halt is lifted, the order will remain on the book unless cancelled by the market maker or if the displayed price is outside the permitted pricing range the order will be cancelled. --------------------------------------------------------------------------- \8\ The ``Designated Percentage'' is: (i) 8% for securities subject to Rule 4120(a)(11) and are securities included in the S&P 500[supreg] Index, Russell 1000[supreg] Index, and a pilot list of Exchange Traded Products (``Tier 1 Securities''); 28% for securities subject to Rule 4120(a)(11) and that are all NMS stocks not Tier 1 Securities with a price equal to or greater than $1 (``Tier 2 Securities''); and 30% for securities subject to Rule 4120(a)(11) and that are all NMS stocks not Tier 1 Securities with a price less than $1 (``Tier 3 Securities''), except that between 9:30 a.m. and 9:45 a.m. and between 3:35 p.m. and the close of trading, when Rule 4120(a)(11) is not in effect, the Designated Percentage shall be 20% for Tier 1 Securities, 28% for all Tier 2 Securities, and 30% for Tier 3 Securities. See Rule 4613(a)(2)(D). \9\ As determined by the Exchange in accordance with its procedures for determining Protected Quotations under SEC Rule 600 under Regulation NMS. \10\ The ``Defined Limit'' is 9.5% for Tier 1 Securities, 29.5% for Tier 2 Securities, and 31.5% for Tier 3 Securities, except that between 9:30 a.m. and 9:45 a.m. and between 3:35 p.m. and the close of trading, when Rule 4120(a)(11) is not in effect, the Defined Limit shall be 21.5% Tier 1 Securities, 29.5% for Tier 2 Securities, and 31.5% for Tier 3 Securities. See Rule 4613(a)(2)(E). \11\ Nothing in Rule 4613 precludes a BX Market Maker from quoting at price levels that are closer to the National Best Bid and Offer than the levels required by the rule. --------------------------------------------------------------------------- For bid quotations, at the time of entry of bid interest satisfying the Two-Sided Obligation, the displayed price of the bid interest may not be more than the applicable Designated Percentage away from the then current National Best Bid, or if no National Best Bid, not more than the Designated Percentage away from the last reported sale from the responsible single plan securities information processor. In the event that the National Best Bid (or if no National Best Bid, the last reported sale) increases to a level that would cause the bid interest of the Two-Sided Obligation to be more than the Defined Limit away from the National Best Bid (or if no National Best Bid, the last reported sale), or if the bid is executed or cancelled, the Market Maker must enter new bid interest at a displayed price not more than the Designated Percentage away from the then current National Best Bid (or if no National Best Bid, the last reported sale), or identify to the Exchange current resting interest that satisfies the Two-Sided Obligation. Similarly, for offer quotations, at the time of entry of offer interest satisfying the Two-Sided Obligation, the displayed price of the offer interest may not be more than the Designated Percentage away from the then current National Best Offer, or if no National Best Offer, not more than the Designated Percentage away from the last reported sale received from the responsible single plan securities information processor. In the event that the National Best Offer (or if no National Best Offer, the last reported sale) decreases to a level that would cause the offer interest of the Two-Sided Obligation to be more than [[Page 46076]] the Defined Limit away from the National Best Offer (or if no National Best Offer, the last reported sale), or if the offer is executed or cancelled, the Market Maker must enter new offer interest at a displayed price not more than the Designated Percentage away from the then current National Best Offer (or if no National Best Offer, the last reported sale), or identify to the Exchange current resting interest that satisfies the Two-Sided Obligation. The MMPO is designed to assist Market Makers in complying with these requirements by being repriced in accordance with the parameters required by Rule 4613. Thus, use of the order will allow market makers to make liquidity available at prices reasonably related to the National Best Bid and National Best Offer, even in circumstances where they are not themselves quoting at the best price or have more limited liquidity available at the best price. Specifically, the MMPO is a limit order that, upon entry, is automatically priced by the BX System at the Designated Percentage away from the Reference Price to keep the displayed price of the order bounded within a price range, thereby allowing the market maker to comply with the quotation requirements under Rule 4613(a)(2). The Reference Price is the then current National Best Bid (National Best Offer), or if no National Best Bid (National Best Offer), the most recent reported last-sale eligible trade from the responsible single plan processor for that day, or if none, the previous closing price of the security as adjusted to reflect any corporate actions (e.g., dividends or stock splits) in the security. For example, if the National Best Bid was $10 in a Tier 1 Security, the Designated Percentage would be 8%, an MMPO to buy entered between 9:45 a.m. and 3:45 p.m. would be priced at $9.20.\12\ Because the order is designed to post to the book at the Designated Percentage, it would not be marketable upon entry and therefore may not be entered with a time- in-force of Immediate-or-Cancel. As a result, an MMPO would provide, rather than access, liquidity. The order may not be assigned any special conditions governing its terms of execution, other than time- in-force, limit price, and the pegging functionality described herein. --------------------------------------------------------------------------- \12\ As noted above, the MMPO is a limit order and therefore must be assigned a limit priced beyond which it will not execute. If the repricing mechanism of the order would result in the order being priced at a level inconsistent with its limit price, the order will be rejected or cancelled. --------------------------------------------------------------------------- Upon reaching the Defined Limit, the displayed price of an MMPO will be repriced by the System to the Designated Percentage away from the then current Reference Price. Thus, if the National Best Bid in the above example increased to $10.17, the MMPO priced at $9.20 would now be more than 9.5%, the Defined Limit, away from the National Best Bid, and would be repriced to $9.35, the Designated Percentage away from $10.17. An MMPO order could execute in the circumstances shown below. The best bid in a particular security is currently $10.00 and all MMPO's in the security are currently priced at $9.50 with no other bids resting between those two prices. If the $10.00 bid were cancelled or executed, the MMPO's resting at $9.50 would become the inside market and would then be available for execution against any order willing to sell at $9.50 or lower. Alternatively, assume there is a bid for 100 shares at $10.00 and the next order on the book is the MMPO resting at $9.50 for 100 shares. If a 200 share order to sell at $9.50 is received, it would execute 100 shares against the $10.00 bid and 100 shares against the MMPO that is posted at $9.50. If as a result of a change to the Reference Price, the displayed price of a Market Maker Peg Order to buy (sell) is at least one minimum price variation more than (less than) a price that is 4% less than (more than) the Reference Price, rounded up (down), then the price of the Market Maker Peg Order to buy (sell) will be re-priced to the Designated Percentage away from the Reference Price. Thus, if the National Best Bid was initially $10 in a Tier 1 Security, and an MMPO to buy was initially entered at $9.20, if the National Best Bid decreased to $9.57 (such that the displayed price of the MMPO would be at least $0.01 more than a price that is 4% less than the National Best Bid, rounded up (i.e., $9.57 - ($9.57 x 0.04) = $9.1872, rounding up to $9.19), the MMPO would be repriced to $8.81 (8% away from the National Best Bid).\13\ --------------------------------------------------------------------------- \13\ If the resulting calculated price is $9.185, the price would round up or down to the compliant price for the entering party, up for a buyer and down for a seller. --------------------------------------------------------------------------- For a given MMPO, a Market Maker may designate a more aggressive offset from the National Best Bid or National Best Offer than the given Designated Percentage, but such an offset will be expressed as a price difference from the Reference Price. Thus, for example, the Market Maker could designate an offset of $0.25, in which case the order would be continually repriced to maintain the $0.25 offset as the Reference Price moved. Thus, if the National Best Bid was $10, an MMPO to buy with a $0.25 offset would initially be priced at $9.75, with the price rising or falling continually as the Reference Price moved.\14\ If there is no Reference Price, an MMPO with a designated offset amount will be sent back to the Market Maker. --------------------------------------------------------------------------- \14\ An MMPO with an offset operates in a manner similar to a Primary Pegged Order with an offset amount (see Rule 4702(b(4)), but an MMPO is always displayed. Note also that if the repricing of an order with an offset amount would result in the order being priced at a level inconsistent with its limit price, the order will be rejected or cancelled. --------------------------------------------------------------------------- In the absence of a Reference Price, a Market Maker Peg Order will be cancelled (if on the BX Book) or rejected (if it is an incoming Order). If, after entry, a Market Maker Peg Order has a displayed price based on a Reference Price other than the National Best Bid or National Best Offer and such Market Maker Peg Order is established as the National Best Bid or National Best Offer, the Market Maker Peg Order will not be subsequently repriced in accordance with this rule until a new Reference Price is established. Thus, if the last sale price on the consolidated tape was $10 and an MMPO to buy is priced at $9.20 and establishes the National Best Bid, the order will not then be repriced to maintain an offset from itself. Rather, the order will be repriced only once there is an independent basis pricing the order. In the event of an execution against an MMPO that reduces the size of the order below one round lot, the Market Maker would need to enter a new order (after performing required regulatory checks, as discussed below) to satisfy its obligations under Rule 4613.\15\ If a Market Maker Peg Order is repriced 1,000 times, it will be cancelled.\16\ --------------------------------------------------------------------------- \15\ Rule 4613 generally sets forth BX Market Maker requirements, which include quotation and pricing obligations, and the firm quote obligation. \16\ BX limits the total number of repricings to 1,000 to control message traffic in the System. For example, a MMPO may be affected by a flickering quotation, which is a condition whereby the displayed quotation (off of which the MPPO is pegged) can change multiple times in a single second. The Exchange determined that, if the MMPO repricing was unlimited, the flickering quotation may cause unnecessary System traffic as the MMPO continually reprices in reaction to each rapid change of the quotation. --------------------------------------------------------------------------- MMPOs are not eligible for routing pursuant to Rule 4758 and are always displayed on BX. Notwithstanding the availability of MMPO functionality, a Market Maker remains responsible for entering, monitoring, and resubmitting, as applicable, quotations that meet the requirements of Rule 4613. A new timestamp is created for an MMPO each time that its displayed price is automatically repriced. At a particular price, the order would be processed in regular price/time priority, with better [[Page 46077]] priced interest being executed prior to the MMPO and with the MMPO being executed behind similarly priced orders entered before the MMPO is repriced. Although Rule 4613 does not govern the pre-market trading session before 9:30 a.m. and the post-market trading session after 4:00 p.m., a Market Maker may enter an MMPO during such periods. In that case, the Designated Percentage and Defined Limit applicable to the MMPO will be the same as for the periods from 9:30 a.m. through 9:45 a.m., as described in Rule 4613.\17\ As BX does not have a special market opening or closing process, an MMPO does not behave differently at 9:30 a.m. or 4:00 p.m. than it does immediately before or after such times. --------------------------------------------------------------------------- \17\ Supra notes 8 and 10. --------------------------------------------------------------------------- Use of the MMPO does not frustrate compliance with any broker- dealer risk management obligations required by SEC Rule 15c3-5 (the ``Market Access Rule''), or any Regulation SHO marking and locate requirement prior to order entry. As such, use of the order is not inconsistent with Market Makers fulfilling their obligations under these rules, while also meeting their Exchange market making obligations. It should be noted, however, that use of the order does not ensure that the Market Maker is in compliance with its regulatory obligations under the Market Access Rule or Regulation SHO. 2. Statutory Basis BX believes that the proposed rule change is consistent with the provisions of section 6 of the Act,\18\ in general, and with section 6(b)(5) of the Act,\19\ in particular, in that the proposal is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest; and also in that it is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange believes that the MMPO will aid Market Makers in complying with the requirements of Rule 4613. The Exchange further believes that compliance with this rule will remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest, because it will provide a means by which Market Makers may offer liquidity at prices that are reasonably related to the National Best Bid and National Best Offer, even in circumstances where they are not willing to quote at the inside market. As a result, in circumstances where liquidity available at displayed prices closer to the inside than the price of an MMPO is exhausted, the MMPO will nevertheless be available to support executions at prices that are not widely at variance with the prior inside market. Moreover, a Market Maker may elect to set a more aggressive offset from the National Best Bid or National Best Offer than the given Designated Percentage, which would support executions as prices closer to the prior inside market. Because the MMPO is repriced to avoid triggering a limit-up, limit-down restriction or a trading pause, it will not contribute to aberrant volatility in a particular stock. --------------------------------------------------------------------------- \18\ 15 U.S.C. 78f. \19\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The methodology for repricing an MMPO is consistent with the requirements of the Act because it will ensure that the displayed price of the order bears a reasonable relationship to the inside market and is less likely to execute at a price that would trigger a limit-up, limit-down restriction or a trading pause. Moreover, because the repricing of an MMPO results in a new timestamp being attached to the order, the MMPO does not provide a means by which an MMPO may achieve an execution priority superior to an order entered at that price earlier in time. In addition, the use of the MMPO would not be inconsistent with Market Makers fulfilling their obligations under the Market Access Rule and Regulation SHO. The Exchange also believes that although the order may be used only by Market Makers, this restriction is not unfairly discriminatory because only Market Makers are subject to the requirements of Rule 4613; accordingly, the order is not needed to assist other market participants in fulfilling regulatory obligations. To the extent that a market participant wishes to maintain an order at a displayed price that deviates from the inside market by a particular amount, however, it may use the Primary Peg Order to achieve this purpose. Accordingly, an alternative to the MMPO is already available to market participants. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange believes that the proposal will enhance BX's competitiveness by providing Market Makers on BX with a means to offer liquidity at prices reasonably related to the inside market. The Exchange believes that this functionality will be appealing to potential Market Makers, and therefore will make it more likely that market participants will choose to become active on BX. This may, in turn, increase the extent of liquidity available on BX and increase its ability to compete with other execution venues to attract orders that are seeking liquidity. The Exchange further believes that the introduction of the MMPO will not impair in any manner the ability of market participants or other execution venues to compete. 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 Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A)(iii) of the Act \20\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\21\ --------------------------------------------------------------------------- \20\ 15 U.S.C. 78s(b)(3)(a)(iii). \21\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) 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 should be approved or disapproved. [[Page 46078]] 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 CommentsUse 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-2015-042 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-2015-042. 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-2015-042, and should be submitted on or before August 24, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\22\ --------------------------------------------------------------------------- \22\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-18882 Filed 7-31-15; 8:45 am] BILLING CODE 8011-01-P
![46074 Federal Register / Vol. 80, No. 148 / Monday, August 3, 2015 / Notices
further believes that a reduction in its and support of the stability of the only one method. The Commission will
liquidity risk would reduce systemic broader financial system.9 post all comments on the Commission’s
risk and would have a positive impact Internet Web site (http://www.sec.gov/
III. Date of Effectiveness of the Advance
on the safety and soundness of the rules/sro.shtml). Copies of the
Notice, and Timing for Commission
clearing system. submission, all subsequent
Action
While the Prefunded Liquidity amendments, all written statements
The proposed change may be with respect to the Advance Notice that
Program, like any liquidity resource,
implemented if the Commission does are filed with the Commission, and all
would involve certain risks, most of
not object to the proposed change written communications relating to the
these risks are standard in any within 60 days of the later of (i) the date
commercial paper or extendible note Advance Notice between the
that the proposed change was filed with Commission and any person, other than
program. One risk associated with the the Commission or (ii) the date that any
Prefunded Liquidity Program would be those that may be withheld from the
additional information requested by the public in accordance with the
the risk that NSCC does not have Commission is received. NSCC shall not
sufficient funds to repay issued Notes provisions of 5 U.S.C. 552, will be
implement the proposed change if the available for Web site viewing and
when they mature. NSCC believes that Commission has any objection to the printing in the Commission’s Public
this risk is extremely remote, as the proposed change. Reference Room, 100 F Street NE.,
proceeds of the Prefunded Liquidity The Commission may extend the Washington, DC 20549 on official
Program would be used only in the period for review by an additional 60 business days between the hours of
event of a Member default, and NSCC days if the proposed change raises novel 10:00 a.m. and 3:00 p.m. Copies of the
would replenish that cash, as it would or complex issues, subject to the filing also will be available for
replenish any of its liquidity resources Commission providing NSCC with inspection and copying at the principal
that are used to facilitate settlement in prompt written notice of the extension. office of NSCC and on NSCC’s Web site
the event of a Member default, with the The proposed change may be (http://dtcc.com/legal/sec-rule-
proceeds of the close out of that implemented in less than 60 days from filings.aspx). All comments received
defaulted Member’s portfolio. This the date the Advance Notice is filed, or will be posted without change; the
notwithstanding, in the event that the date further information requested Commission does not edit personal
proceeds from the close out are by the Commission is received, if the identifying information from
insufficient to fully repay a liquidity Commission notifies NSCC in writing submissions. You should submit only
borrowing, then NSCC would look to its that it does not object to the proposed information that you wish to make
loss waterfall to repay any outstanding change and authorizes NSCC to available publicly. All submissions
liquidity borrowings. NSCC would implement the proposed change on an should refer to File Number SR–NSCC–
further mitigate this risk by structuring earlier date, subject to any conditions 2015–802 and should be submitted on
the Prefunded Liquidity Program so that imposed by the Commission. or before August 18, 2015.
the maturity dates of the issued Notes NSCC shall post notice on its Web site
are sufficiently staggered, which would of proposed changes that are By the Commission.
provide NSCC with time to complete the implemented. Brent J. Fields,
close out of a defaulted Member’s Secretary.
IV. Solicitation of Comments
portfolio. A second risk is that NSCC [FR Doc. 2015–18905 Filed 7–31–15; 8:45 am]
may be unable to issue new Notes as Interested persons are invited to BILLING CODE 8011–01–P
issued Notes mature. This risk is submit written data, views and
mitigated by the fact that NSCC arguments concerning the foregoing,
maintains a number of different including whether the Advance Notice SECURITIES AND EXCHANGE
liquidity resources, described above, is consistent with the Clearing COMMISSION
and would not depend on the Prefunded Supervision Act. Comments may be
[Release No. 34–75536; File No. SR–BX–
Liquidity Program as its sole source of submitted by any of the following 2015–042]
liquidity. As such, NSCC believes that methods:
the significant systemic risk mitigation Electronic Comments Self-Regulatory Organizations;
benefits of providing NSCC with NASDAQ OMX BX, Inc.; Notice of Filing
additional, prefunded liquidity • Use the Commission’s Internet and Immediate Effectiveness of
resources outweigh these risks. comment form (http://www.sec.gov/ Proposed Rule Change To Amend Rule
rules/sro.shtml); or 4702 To Introduce a Market Maker Peg
Consistency with Clearing • Send an email to rule-comments@
Supervision Act. By supplementing Order for Use on BX
sec.gov. Please include File Number SR–
NSCC’s existing liquidity resources with NSCC–2015–802 on the subject line. July 28, 2015.
prefunded liquidity, the proposed Pursuant to section 19(b)(1) of the
Prefunded Liquidity Program would Paper Comments
Securities Exchange Act of 1934
contribute to NSCC’s goal of assuring • Send paper comments in triplicate (‘‘Act’’),1 and Rule 19b–4 thereunder,2
that NSCC has adequate liquidity to Brent J. Fields, Secretary, Securities notice is hereby given that on July 17,
resources to meet its settlement and Exchange Commission, 100 F Street 2015, NASDAQ OMX BX, Inc. (‘‘BX’’ or
obligations notwithstanding the default NE., Washington, DC 20549–1090. ‘‘Exchange’’) filed with the Securities
of any of its Members. As such, the
mstockstill on DSK4VPTVN1PROD with NOTICES
All submissions should refer to File and Exchange Commission (‘‘SEC’’ or
proposed Prefunded Liquidity Program Number SR–NSCC–2015–802. This file ‘‘Commission’’) the proposed rule
is consistent with Section 805(b)(1) of number should be included on the change as described in Items I, II, and
the Clearing Supervision Act, the subject line if email is used. To help the III below, which Items have been
objectives and principles of which Commission process and review your prepared by the Exchange. The
specify the promotion of robust risk comments more efficiently, please use
management, promotion of safety and 1 15 U.S.C. 78s(b)(1).
soundness, reduction of systemic risks 9 12 U.S.C. 5464(b)(1). 2 17 CFR 240.19b–4.
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IV. Solicitation of Comments For the Commission, by the Division of II. Self-Regulatory Organization’s
Trading and Markets, pursuant to delegated Statement of the Purpose of, and
Interested persons are invited to authority.22 Statutory Basis for, the Proposed Rule
submit written data, views, and Robert W. Errett, Change
arguments concerning the foregoing, Deputy Secretary.
including whether the proposed rule In its filing with the Commission, the
[FR Doc. 2015–18882 Filed 7–31–15; 8:45 am] self-regulatory organization included
change is consistent with the Act. BILLING CODE 8011–01–P statements concerning the purpose of,
Comments may be submitted by any of
and basis for, the proposed rule change
the following methods: and discussed any comments it received
Electronic Comments SECURITIES AND EXCHANGE on the proposed rule change. The text
COMMISSION of those statements may be examined at
• Use the Commission’s Internet the places specified in Item IV below.
comment form (http://www.sec.gov/ [Release No. 34–75535; File No. SR– The Exchange has prepared summaries,
rules/sro.shtml); or NYSEMKT–2015–54] set forth in sections A, B, and C below,
• Send an email to rule-comments@ of the most significant parts of such
Self-Regulatory Organizations; NYSE statements.
sec.gov. Please include File Number SR– MKT LLC; Notice of Filing and
BX–2015–042 on the subject line. Immediate Effectiveness of Proposed A. Self-Regulatory Organization’s
Paper Comments Rule Change Amending NYSE MKT Statement of the Purpose of, and the
Rule 500—Equities To Extend the Statutory Basis for, the Proposed Rule
• Send paper comments in triplicate Operation of the Pilot Program that Change
to Secretary, Securities and Exchange Allows ‘‘UTP Securities’’ To Be Traded 1. Purpose
Commission, 100 F Street NE., on the Exchange Pursuant to a Grant
Washington, DC 20549–1090. of Unlisted Trading Privileges Until The Exchange proposes to amend
October 31, 2015 NYSE MKT Rule 500—Equities to
All submissions should refer to File extend the operation of the pilot
Number SR–BX–2015–042. This file July 28, 2015. program that allows ‘‘UTP Securities’’ to
number should be included on the Pursuant to Section 19(b)(1) 1 of the be traded on the Exchange pursuant to
subject line if email is used. To help the Securities Exchange Act of 1934 (the a grant of unlisted trading privileges.4
Commission process and review your ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 The pilot program is currently
comments more efficiently, please use notice is hereby given that on July 17, scheduled to expire on July 31, 2015;
only one method. The Commission will 2015, NYSE MKT LLC (the ‘‘Exchange’’ the Exchange proposes to extend it until
post all comments on the Commission’s or ‘‘NYSE MKT’’) filed with the the earlier of Commission approval to
Internet Web site (http://www.sec.gov/ Securities and Exchange Commission make such pilot permanent or October
rules/sro.shtml). Copies of the (the ‘‘Commission’’) the proposed rule 31, 2015.
submission, all subsequent change as described in Items I and II NYSE MKT Rules 500–525—Equities,
amendments, all written statements below, which Items have been prepared as a pilot program, govern the trading of
with respect to the proposed rule by the self-regulatory organization. The any ‘‘UTP Securities’’ on the Exchange
change that are filed with the Commission is publishing this notice to pursuant to unlisted trading privileges
solicit comments on the proposed rule (‘‘UTP Pilot Program’’).5 The Exchange
Commission, and all written
communications relating to the change from interested persons. 4 ‘‘UTP Securities’’ is included within the
proposed rule change between the I. Self-Regulatory Organization’s definition of ‘‘security’’ as that term is used in the
Commission and any person, other than Statement of the Terms of Substance of NYSE MKT Equities Rules. See NYSE MKT Rule
those that may be withheld from the 3—Equities. In accordance with this definition,
the Proposed Rule Change UTP Securities are admitted to dealings on the
public in accordance with the Exchange on an ‘‘issued,’’ ‘‘when issued,’’ or ‘‘when
provisions of 5 U.S.C. 552, will be The Exchange proposes to amend distributed’’ basis. See NYSE MKT Rule 501—
available for Web site viewing and NYSE MKT Rule 500—Equities to Equities.
5 See Securities Exchange Act Release No. 62479
printing in the Commission’s Public extend the operation of the pilot
(July 9, 2010), 75 FR 41264 (July 15, 2010) (SR–
Reference Room, 100 F Street NE., program that allows ‘‘UTP Securities’’ to NYSEAmex–2010–31). See also Securities
Washington, DC 20549 on official be traded on the Exchange pursuant to Exchange Act Release Nos. 62857 (September 7,
business days between the hours of a grant of unlisted trading privileges. 2010), 75 FR 55837 (September 14, 2010) (SR–
The pilot program is currently NYSEAmex–2010–89); 63601 (December 22, 2010),
10:00 a.m. and 3:00 p.m. Copies of such 75 FR 82117 (December 29, 2010) (SR–NYSEAmex–
filing also will be available for scheduled to expire on July 31, 2015; 2010–124); 64746 (June 24, 2011), 76 FR 38446
inspection and copying at the principal the Exchange proposes to extend it until (June 30, 2011) (SR–NYSEAmex–2011–45); 66040
the earlier of Securities and Exchange (December 23, 2011), 76 FR 82324 (December 30,
offices of the Exchange. All comments 2011) (SR–NYSEAmex–2011–104); 67497 (July 25,
Commission (‘‘Commission’’) approval
received will be posted without change; 2012), 77 FR 45404 (July 31, 2012) (SR–NYSEMKT–
to make such pilot permanent or
the Commission does not edit personal 2012–25); 68561 (January 2, 2013), 78 FR 1290
October 31, 2015. The text of the (January 8, 2013) (SR–NYSEMKT–2012–86); 69814
identifying information from proposed rule change is available on the (June 20, 2013), 78 FR 38762 (June 27, 2013) (SR–
submissions. You should submit only Exchange’s Web site at www.nyse.com, NYSEMKT–2013–53); 71363 (January 21, 2014), 79
information that you wish to make FR 4373 (January 27, 2014) (SR–NYSEMKT–2014–
mstockstill on DSK4VPTVN1PROD with NOTICES
at the principal office of the Exchange, 01); 72624 (July 16, 2014), 79 FR 42595 (July 22,
available publicly. All submissions and at the Commission’s Public 2014) (SR–NYSEMKT–2014–59); and 73969
should refer to File Number SR–BX– Reference Room. (December 31, 2014), 80 FR 914 (January 7, 2015)
2015–042, and should be submitted on (SR–NYSEMKT–2014–112). The UTP Pilot Program
or before August 24, 2015. 22 17
was originally limited to securities listed on the
CFR 200.30–3(a)(12). Nasdaq Stock Market LLC (‘‘Nasdaq Securities’’),
1 15 U.S.C. 78s(b)(1). but the Exchange recently expanded the UTP Pilot
2 15 U.S.C. 78a.
Program beyond Nasdaq Securities. See Securities
3 17 CFR 240.19b 4. Exchange Act Release No. 71952 (April 16, 2014),
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Document Created: 2018-02-23 10:51:22
Document Modified: 2018-02-23 10:51:22
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 46074 |
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