80 FR 59834 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Pilot Period for the Exchange's Retail Liquidity Program Until March 31, 2016

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 191 (October 2, 2015)

Page Range		59834-59835
FR Document		2015-24969
Federal Register, Volume 80 Issue 191 (Friday, October 2, 2015)
[Federal Register Volume 80, Number 191 (Friday, October 2, 2015)]
[Notices]
[Pages 59834-59835]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-24969]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75994; File No. SR-NYSEARCA-2015-84]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Extending the Pilot 
Period for the Exchange's Retail Liquidity Program Until March 31, 2016

September 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 September 17, 2015, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE 
Arca'') 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the pilot period for the Exchange's 
Retail Liquidity Program (the ``Retail Liquidity Program'' or the 
``Program''), which is currently scheduled to expire on September 30, 
2015, until March 31, 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 purpose of this filing is to extend the pilot period of the 
Retail Liquidity Program, currently scheduled to expire on September 
30, 2015, until March 31, 2016.
Background
    In December 2013, the Commission approved the Retail Liquidity 
Program on a pilot basis.\3\ The Program is designed to attract retail 
order flow to the Exchange, and allows such order flow to receive 
potential price improvement. The Program is currently limited to trades 
occurring at prices equal to or greater than $1.00 per share. Under the 
Program, Retail Liquidity Providers (``RLPs'') are able to provide 
potential price improvement in the form of a non-displayed order that 
is priced better than the Exchange's best protected bid or offer 
(``PBBO''), called a Retail Price Improvement Order (``RPI''). When 
there is an RPI in a particular security, the Exchange disseminates an 
indicator, known as the Retail Liquidity Identifier, indicating that 
such interest exists. Retail Member Organizations (``RMOs'') can submit 
a Retail Order to the Exchange, which would interact, to the extent 
possible, with available contra-side RPIs.
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    \3\ See Securities Exchange Act Release No. 71176 (December 23, 
2013), 78 FR 79524 (December 30, 2013) (SR-NYSEArca-2013-107) (``RLP 
Approval Order'').
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    The Retail Liquidity Program was approved by the Commission on a 
pilot basis. Pursuant to NYSE Arca Equities Rule 7.44(m), the pilot 
period for the Program was originally scheduled to end twelve months 
after the date of implementation. Because the Program was implemented 
on April 14, 2014, the first pilot period for the Program ended on 
April 14, 2015 and the Exchange extended the pilot period to September 
30, 2015.\4\
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    \4\ The Exchange announced the implementation date by Trader 
Update, which is available here: https://www.nyse.com/publicdocs/nyse/notifications/trader-update/2014_04_07_Arca_RLP%20GO%20LIVE.pdf. See Securities Exchange Act 
Release No. [sic]
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Proposal To Extend the Operation of the Program
    The Exchange established the Retail Liquidity Program in an attempt 
to attract retail order flow to the Exchange by potentially providing 
price improvement to such order flow. The Exchange believes that the 
Program promotes competition for retail order flow by allowing Exchange 
members to submit RPIs to interact with Retail Orders. Such competition 
has the ability to promote efficiency by facilitating the price 
discovery process and generating additional investor interest in 
trading securities, thereby promoting capital formation. The Exchange 
believes that extending the pilot is appropriate because it will allow 
the Exchange and the Commission additional time to analyze data 
regarding the Program that the Exchange has committed to provide.\5\ As 
such, the Exchange believes that it is appropriate to extend the 
current operation of the Program.\6\ Through this filing, the Exchange 
seeks to amend NYSE Arca Equities Rule 7.44(m) and extend the current 
pilot period of the Program until March 31, 2016.
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    \5\ See RLP Approval Order, supra, n. 4 at 79529.
    \6\ Concurrently with this filing, the Exchange has submitted a 
request for an extension of the exemption under Regulation NMS Rule 
612 previously granted by the Commission that permits it to accept 
and rank the undisplayed RPIs. See Letter from Martha Redding, Asst. 
Corporate Secretary, NYSE Group, Inc. to Brent J. Fields, Secretary, 
Securities and Exchange Commission, dated September 17, 2015.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\7\ in general, and furthers the objectives of Section 6(b)(5),\8\ 
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. The Exchange 
believes that extending the pilot period for the Retail Liquidity 
Program is consistent with these principles because the Program is 
reasonably designed to attract retail order flow to the exchange 
environment, while helping to ensure that retail investors benefit from 
the

[[Page 59835]]

better price that liquidity providers are willing to give their orders. 
Additionally, as previously stated, the competition promoted by the 
Program may facilitate the price discovery process and potentially 
generate additional investor interest in trading securities. The 
extension of the pilot period will allow the Commission and the 
Exchange to continue to monitor the Program for its potential effects 
on public price discovery, and on the broader market structure.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change 
simply extends an established pilot program for an additional six 
months, thus allowing the Retail Liquidity Program to enhance 
competition for retail order flow and contribute to the public price 
discovery process.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
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 
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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.
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    A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ 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 before the current expiration of the 
pilot period. The Exchange stated that an immediate operative date 
would be consistent with the protection of investors and the public 
interest because the pilot period is set to expire on September 30, 
2015, and a waiver would permit the beneficial aspects of the Program 
to continue uninterrupted. The Commission believes that waiving the 30-
day operative delay is consistent with the protection of investors and 
the public interest because such waiver would allow the pilot period to 
continue uninterrupted after its current expiration date of September 
30, 2015, thereby avoiding any potential investor confusion that could 
result from temporary interruption in the pilot program. For this 
reason, the Commission hereby waives the 30-day operative delay and 
designates the proposal operative upon filing.\15\
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ 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).
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    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 rule-comments@sec.gov. Please include 
File Number SR-NYSEARCA-2015-84 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEARCA-2015-84. 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-NYSEARCA-2015-
84, and should be submitted on or before October 23, 2015.
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    \16\ 17 CFR 200.30-3(a)(12), (59).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-24969 Filed 10-1-15; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 80, No. 191 / Friday, October 2, 2015 / Notices 59835

better price that liquidity providers are A proposed rule change filed under • Send an email to rule-comments@
willing to give their orders. Rule 19b–4(f)(6) 13 normally does not sec.gov. Please include File Number SR–
Additionally, as previously stated, the become operative prior to 30 days after NYSEARCA–2015–84 on the subject
competition promoted by the Program the date of the filing. However, pursuant line.
may facilitate the price discovery to Rule 19b–4(f)(6)(iii),14 the
process and potentially generate Commission may designate a shorter Paper Comments
additional investor interest in trading time if such action is consistent with the
• Send paper comments in triplicate
securities. The extension of the pilot protection of investors and the public
to Secretary, Securities and Exchange
period will allow the Commission and interest. The Exchange has asked the
the Exchange to continue to monitor the Commission to waive the 30-day Commission, 100 F Street NE.,
Program for its potential effects on operative delay so that the proposed Washington, DC 20549–1090.
public price discovery, and on the rule change may become operative All submissions should refer to File
broader market structure. before the current expiration of the pilot Number SR–NYSEARCA–2015–84. This
period. The Exchange stated that an file number should be included on the
B. Self-Regulatory Organization’s
immediate operative date would be subject line if email is used. To help the
Statement on Burden on Competition
consistent with the protection of Commission process and review your
The Exchange does not believe that investors and the public interest
the proposed rule change will impose comments more efficiently, please use
because the pilot period is set to expire
any burden on competition that is not only one method. The Commission will
on September 30, 2015, and a waiver
necessary or appropriate in furtherance post all comments on the Commission’s
would permit the beneficial aspects of
of the purposes of the Act. The the Program to continue uninterrupted. Internet Web site (http://www.sec.gov/
proposed rule change simply extends an The Commission believes that waiving rules/sro.shtml). Copies of the
established pilot program for an the 30-day operative delay is consistent submission, all subsequent
additional six months, thus allowing the with the protection of investors and the amendments, all written statements
Retail Liquidity Program to enhance public interest because such waiver with respect to the proposed rule
competition for retail order flow and would allow the pilot period to change that are filed with the
contribute to the public price discovery continue uninterrupted after its current Commission, and all written
process. expiration date of September 30, 2015, communications relating to the
C. Self-Regulatory Organization’s thereby avoiding any potential investor proposed rule change between the
Statement on Comments on the confusion that could result from Commission and any person, other than
Proposed Rule Change Received From temporary interruption in the pilot those that may be withheld from the
Members, Participants, or Others program. For this reason, the public in accordance with the
Commission hereby waives the 30-day provisions of 5 U.S.C. 552, will be
No written comments were solicited operative delay and designates the
or received with respect to the proposed available for Web site viewing and
proposal operative upon filing.15 printing in the Commission’s Public
rule change. At any time within 60 days of the Reference Room, 100 F Street NE.,
III. Date of Effectiveness of the filing of the proposed rule change, the
Washington, DC 20549 on official
Proposed Rule Change and Timing for Commission summarily may
business days between the hours of
Commission Action temporarily suspend such rule change if
it appears to the Commission that such 10:00 a.m. and 3:00 p.m. Copies of such
The Exchange has filed the proposed action is necessary or appropriate in the filing also will be available for
rule change pursuant to Section public interest, for the protection of inspection and copying at the principal
19(b)(3)(A)(iii) of the Act 9 and Rule investors, or otherwise in furtherance of offices of the Exchange. All comments
19b–4(f)(6) thereunder.10 Because the the purposes of the Act. If the received will be posted without change;
proposed rule change does not: (i) Commission takes such action, the the Commission does not edit personal
Significantly affect the protection of Commission shall institute proceedings identifying information from
investors or the public interest; (ii) to determine whether the proposed rule submissions. You should submit only
impose any significant burden on change should be approved or information that you wish to make
competition; and (iii) become operative disapproved. available publicly. All submissions
for 30 days from the date on which it should refer to File Number SR–
was filed, or such shorter time as the IV. Solicitation of Comments
NYSEARCA–2015–84, and should be
Commission may designate, if Interested persons are invited to submitted on or before October 23,
consistent with the protection of submit written data, views, and 2015.
investors and the public interest, the arguments concerning the foregoing,
proposed rule change has become including whether the proposed rule For the Commission, by the Division of
effective pursuant to Section 19(b)(3)(A) change is consistent with the Act. Trading and Markets, pursuant to delegated
of the Act 11 and Rule 19b–4(f)(6) Comments may be submitted by any of authority.16
thereunder.12 the following methods: Robert W. Errett,
Deputy Secretary.
9 15 U.S.C. 78s(b)(3)(A)(iii).
Electronic Comments
[FR Doc. 2015–24969 Filed 10–1–15; 8:45 am]
10 17 CFR 240.19b–4(f)(6). • Use the Commission’s Internet
11 15 U.S.C. 78s(b)(3)(A). BILLING CODE 8011–01–P
comment form (http://www.sec.gov/
mstockstill on DSK4VPTVN1PROD with NOTICES

12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
rules/sro.shtml); or
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
13 17 CFR 240.19b–4(f)(6).
to file the proposed rule change, along with a brief
14 17 CFR 240.19b–4(f)(6)(iii).
description and text of the proposed rule change,
at least five business days prior to the date of filing 15 For purposes only of waiving the 30-day

of the proposed rule change, or such shorter time operative delay, the Commission has considered the
as designated by the Commission. The Exchange proposed rule’s impact on efficiency, competition,
has satisfied this requirement. and capital formation. See 15 U.S.C. 78c(f). 16 17 CFR 200.30–3(a)(12), (59).

VerDate Sep<11>2014 20:43 Oct 01, 2015 Jkt 238001 PO 00000 Frm 00116 Fmt 4703 Sfmt 9990 E:\FR\FM\02OCN1.SGM 02OCN1
Document Created: 2015-12-15 08:45:15
Document Modified: 2015-12-15 08:45:15
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 59834