80 FR 9770 - Self-Regulatory Organizations; NYSE MKT LLC; Order Instituting Proceedings to Determine Whether to Approve or Disapprove a Proposed Rule Change, as Modified by Partial Amendment No. 1 and Partial Amendment No. 2, Amending Rule 13-Equities and Related Rules Governing Order Types and Modifiers
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 36 (February 24, 2015)
Federal Register Volume 80, Issue 36 (February 24, 2015)
| Page Range | 9770-9773 | |
| FR Document | 2015-03678 |
[Federal Register Volume 80, Number 36 (Tuesday, February 24, 2015)] [Notices] [Pages 9770-9773] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-03678] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74298; File No. SR-NYSEMKT-2014-95] Self-Regulatory Organizations; NYSE MKT LLC; Order Instituting Proceedings to Determine Whether to Approve or Disapprove a Proposed Rule Change, as Modified by Partial Amendment No. 1 and Partial Amendment No. 2, Amending Rule 13--Equities and Related Rules Governing Order Types and Modifiers February 18, 2015. I. Introduction On October 31, 2014, NYSE MKT LLC (``NYSE MKT'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission''), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to amend Exchange Rule 13--Equities and other related Exchange rules governing order types and order modifiers. The proposed rule change was published in the Federal Register on November 20, 2014.\3\ On November 14, 2014, the Exchange submitted Partial Amendment No. 1 to the Commission.\4\ On December 22, 2014, the Exchange submitted Partial Amendment No. 2 to the Commission. On December 22, 2014, pursuant to section 19(b)(2) of the Act,\5\ the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.\6\ The Commission has received no other comment on the proposal. This order institutes proceedings under section 19(b)(2)(B) of the Act \7\ to determine whether to approve or disapprove the proposal. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 73593 (Nov. 14, 2014), 79 FR 69153 (``Notice''). \4\ The Exchange also submitted a copy of the amendment to the public comment file. See Letter from Sudhir Bhattacharyya, Vice President, New York Stock Exchange, to Kevin M. O'Neill, Deputy Secretary, Commission (Nov. 14, 2014). \5\ 15 U.S.C. 78s(b)(2). \6\ See Securities Exchange Act Release No. 73913, 79 FR 78531 (Dec. 30, 2014). The Commission designated February 18, 2015, as the date by which it should approve, disapprove, or institute proceedings to determine whether to disapprove the proposed rule change. \7\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- II. Description of the Proposal The Exchange proposes to amend Exchange Rule 13--Equities by re- grouping and re-numbering existing order types and order modifiers. The Exchange also proposes to make changes to certain order types and order modifiers. In addition, the Exchange proposes to amend certain rules to remove references to functionality that is no longer operative. Under the proposal, Rule 13--Equities would be reorganized into six categories: (a) Primary order types; (b) time in force modifiers; (c) auction-only orders; (d) orders with instructions not to display all or a portion of the order; (e) orders with instructions not to route; and (f) additional orders and modifiers. A. Primary Order Types Proposed section (a) of Rule 13--Equities would set forth two primary order types--Market Orders and Limit Orders--and specify which orders are eligible for automatic executions. The Exchange proposes to delete the current definition of ``Auto Ex Order'' and [[Page 9771]] proposes that all orders entered electronically will be eligible for automatic executions. Interest represented manually by a floor broker, however, would not be eligible for automatic execution. The Exchange is not changing the definition of ``Market Order'' and would replace the current term ``Display Book'' with the proposed term ``Exchange systems.'' \8\ For Limit Orders, the Exchange's rules currently define marketable Limit Order. The Exchange proposes to add a definition for Limit Order as an order to buy or sell a stated amount of a security at a specified price or better. The marketable Limit Order definition would remain unchanged. --------------------------------------------------------------------------- \8\ The Exchange proposes to replace the term ``Display Book'' with ``Exchange systems'' when the term refers to Exchange systems that receive and execute orders and with ``Exchange book'' when the term refers to the interest that has been entered and ranked in Exchange systems, as applicable throughout the proposed rule text. See Partial Amendment No. 1. --------------------------------------------------------------------------- B. Time in Force Modifiers Proposed section (b) of Rule 13--Equities would set forth the Time in Force modifiers for orders: (1) Day; (2) Good til Cancelled (``GTC'') or Open; and (3) Immediate or Cancel (``IOC''). For Day modifiers, the Exchange proposes to allow only Limit Orders to be designated as Day orders. Currently, any order could be designated as a Day order. For the GTC or Open modifier, the Exchange is proposing to allow only Limit Orders to be designated with the GTC or Open modifier. Currently, any order could be a GTC or Open order. Further, the Exchange currently allows a GTC order that is designated ``Off Hours eligible'' to be executed through the Off-Hours Trading Facility. The Exchange is proposing that GTC orders be ineligible to be executed in any Off-Hours Trading Facility. With respect to IOC modifiers, the Exchange currently has three different modifiers: Regulation NMS-compliant IOC; Exchange IOC; and IOC-MTS (minimum trade size). The Exchange is making non-substantive changes to the Regulation NMS-compliant IOC order modifier.\9\ The Exchange is also proposing to rename the Exchange IOC order modifier as the NYSE IOC order and to make other non-substantive changes. For the IOC-MTS order modifier, the Exchange is proposing to make non- substantive changes. --------------------------------------------------------------------------- \9\ Throughout the proposed rule text, the Exchange proposes to capitalize terms, including, but not limited to, Limit Order and Market Order. --------------------------------------------------------------------------- C. Auction-Only Orders Proposed section (c) of Rule 13--Equities would set forth five Auction-Only Orders: (1) Closing Offset (``CO'') Orders; (2) Limit-on- Close (``LOC'') Orders; (3) Limit-on-Open (``LOO'') Orders; (4) Market- on Close (``MOC'') Orders; and (5) Market-on-Open (``MOO'') Orders.\10\ The Exchange is proposing to make non-substantive changes to these definitions. --------------------------------------------------------------------------- \10\ The Exchange also proposes to make non-substantive changes to Rule 501--Equities to use the term MOO/LOO Orders and MOC/LOC Orders. Further, the Exchange proposes to delete the reference to Good `til Cross (``GTX'') order in Rule 501--Equities, which the Exchange no longer uses. --------------------------------------------------------------------------- D. Non-Displayable Orders (All or a Portion) Proposed section (d) of Rule 13--Equities contains orders that are partially or fully undisplayed. There are two types of non-displayable orders: Mid-Point Passive Liquidity (``MPL'') Orders and Reserve Orders. The Exchange proposes to amend the MPL order modifier with a minimum triggering volume (``MTV'') and to make other, non-substantive changes. Specifically, Exchange systems would reject an MPL Order on entry if the MTV is larger than the size of the MPL Order, and Exchange systems would reject a request to partially cancel a resting MPL Order if it would result in the MTV being larger than the remaining size of the order. The Exchange believes that this proposed change would prevent an entering firm from causing an MPL Order to have an MTV that is larger than the order, thereby bypassing contra-side interest that is larger than the size of the MPL Order. With respect to Reserve Orders, the Exchange proposes to make non- substantive changes to the definition. The Exchange proposes to add new rule text to state that a Minimum Display Reserve Order, which is an order that has a portion of the interest displayed when the order is or becomes the Exchange best bid or offer (``BBO'') and a portion not displayed, would participate in both automatic and manual executions. The Exchange also proposes to add new rule text to state that a Non- Displayed Reserve Order, which is an order that is not displayed, would not participate in manual executions. The Exchange believes that these changes would reflect how the orders currently operate on the Exchange. Moreover, the Exchange proposes to change the circumstances in which the reserve interest of a Reserve Order would be available for execution. Currently, the Exchange's rule text specifies that reserve interest of a Non-Displayed Reserve Order is available for execution only after all displayed interest at the price has been executed. The Exchange proposes to amend the rule text to specify that reserve interest of all Reserve Orders is available for execution only after all displayed interest at the price has been executed. E. Do Not Route Orders Proposed section (e) of Rule 13--Equities would set forth order modifiers and order types that would not be routed: (1) The Add Liquidity Only (``ALO'') modifier; (2) Do Not Ship (``DNS'') orders; and (3) Intermarket Sweep orders (``ISO''). For the ALO modifier, the Exchange proposes to make non-substantive changes and to update a cross-reference. The Exchange also proposes to add new rule text to specify that limit orders with the ALO modifier may participate in re- openings. Current Exchange rule text states that a Limit Order with the ALO modifier may participate in the Exchange's open or close. The Exchange is also proposing to make non-substantive changes to the DNS order and ISO definitions.\11\ --------------------------------------------------------------------------- \11\ See Partial Amendment No. 2 (deleting inadvertent text referring to high-priced securities). --------------------------------------------------------------------------- F. Other Modifiers Proposed section (f) of Rule 13--Equities would include the Exchange's other order instructions and modifiers: (1) Do Not Reduce (``DNR'') modifier; (2) Do Not Increase (``DNI'') modifier; (3) pegging interest; (4) Retail modifier; (5) Self-Trade Prevention (``STP'') modifier; (6) Sell ``Plus''--Buy ``Minus'' instruction; and (7) Stop order. The Exchange proposes to make non-substantive changes to the DNR and DNI modifiers. With respect to pegging interest, the Exchange proposes to specify that pegging interest must be an e-Quote or d-Quote \12\ and proposes to add new rule text to define ``next available best-priced interest.'' \13\ Currently, if the protected best bid or offer (``PBBO'') is not within the specified price range of the pegging interest, the pegging interest will instead peg to the next available best-priced interest that is within the specified priced. For example, if the pegging interest to buy has a limit price of $10.25, but the Exchange PBB is at $10.30, the pegging interest would not peg to the Exchange PBB because that price is higher than what the limit price of the pegging interest. Instead, under the current Exchange rule, the pegging interest would peg to the ``next available best-priced interest,'' but the term ``next [[Page 9772]] available best-priced interest'' is not defined. The Exchange now proposes to define ``next available best-priced interest'' as (1) in the case of buy orders, the highest priced buy interest within the specified price range of pegging interest to buy, including displayable bids, Non-Display Reserve Orders, Non-Display Reserve e-Quotes, odd-lot sized interest, and protected bids on away markets, but not including non-displayed interest that is priced based on the PBBO, and (2) in the case of sell orders, the lowest priced sell interest within the specified price range of pegging interest to sell, including displayable offers, Non-Display Reserve Orders, Non-Display Reserve e- Quotes, odd-lot sized interest, and protected offers on away markets, but including non-displayed interest that is priced based on the PBBO.\14\ --------------------------------------------------------------------------- \12\ See Partial Amendment No. 1 (changing rule text to clarify that only d-Quotes or e-Quotes may use pegging interest). \13\ See Partial Amendment No. 2 (adding ALO modifier text in current rule text that the Exchange states that it inadvertently omitted). \14\ The Commission notes that this proposed new definition is based on current Supplemental Material .10 to Exchange Rule 13-- Equities, which defines ``best-priced sell interest'' and ``best- priced buy interest.'' These two definitions were adopted in connection with the ALO order and Day ISO order, both displayable orders, to allow for the Exchange to re-price such orders in the event of a locked or crossed market. See Securities Exchange Act Release No. 73333 (Oct. 9, 2014), 79 FR 62223 (Oct. 16, 2014). --------------------------------------------------------------------------- According to the Exchange, this proposed addition to the definition of pegging interest is necessary since pegging interest would not peg to either MPL Orders or Retail Price Improvement (``RPI'') Orders.\15\ The Exchange notes that this would be applicable regardless of whether an MPL Order or RPI Order is marketable and provided the following example in the filing. --------------------------------------------------------------------------- \15\ See Exchange Rule 107C(a)(4)--Equities. The Exchange has not stated whether this change to the rule reflects a new order-type functionality or whether it reflects an existing functionality that was not previously explicit in the Exchange's rules. For example, assume the best protected bid (``PBB'') is $10.00, the Exchange has pegging interest to buy at $9.99, an MPL Order priced at $9.98 and a Non-Displayed Reserve Order to buy priced at $9.97. Because the PBB is outside the specified price range of the pegging interest to buy, it would peg to the next available best- priced interest, which in this scenario would be the Non-Displayed Reserve Order to buy priced at $9.97. The pegging interest to buy would not peg to the MPL Order to buy priced at $9.98.\16\ --------------------------------------------------------------------------- \16\ See Notice, supra note 3, at n.18, 79 FR at 69156, n.18. The Exchange proposes to update cross-references to the Retail modifier and make non-substantive changes to the STP modifier and the Sell ``Plus''--Buy ``Minus'' instruction. With respect to Stop orders, the Exchange proposes to make non-substantive changes and to replace the term ``Exchange's automated order routing system'' with ``Exchange systems.'' G. Other Proposed Changes The Exchange proposes to move the definition of ``Routing Broker'' to Rule 17(c)--Equities. The Exchange also proposes to amend the definition of Not Held orders and relocate that definition to Supplementary Material .20 to Rule 13--Equities. The Exchange proposes that a Not Held order would refer to an unpriced, discretionary order that has been voluntarily categorized as such by the customer and as to which the customer has granted the member or member organization price and time discretion. The Exchange also proposes to amend Rule 70.25--Equities governing d-Quotes to clarify that certain functionality set forth in the Rule is no longer available. Specifically, Rule 70.25(c)(ii)--Equities currently provides that a Floor broker may designate a maximum size of contra-side volume with which it is willing to trade using discretionary pricing instructions. Because this functionality is not available, the Exchange proposes to delete references to the maximum discretionary size parameter from Rules 70.25(c)(ii)--Equities and (c)(v)--Equities. In addition, the Exchange proposes to amend Rule 70.25(c)(iv)-- Equities to clarify that the circumstances under which the Exchange would consider interest displayed by other market centers at the price at which a d-Quote may trade are not limited to determining when a d- Quote's minimum or maximum size range is met. Accordingly, the Exchange proposes to delete the clause ``when determining if the d-Quote's minimum and/or maximum size range is met.'' III. Proceedings To Determine Whether To Approve or Disapprove SR- NYSEMKT-2014-95 and Grounds for Disapproval Under Consideration The Commission is instituting proceedings pursuant to section 19(b)(2)(B) of the Act \17\ to determine whether the proposed rule change should be approved or disapproved. Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change, as discussed below. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described in greater detail below, the Commission encourages interested persons to provide additional comment on the proposed rule change. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- Pursuant to section 19(b)(2)(B) of the Act,\18\ the Commission is providing notice of the grounds for disapproval under consideration. The Commission is instituting proceedings to allow for additional analysis of, and input from commenters with respect to, the consistency of the proposed rule change with section 6(b)(5) of the Act, which require that the rules of a national securities exchange be designed, among other things, to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest, and that those rules not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers.\19\ --------------------------------------------------------------------------- \18\ Id. Section 19(b)(2)(B) of the Act also provides that proceedings to determine whether to disapprove a proposed rule change must be concluded within 180 days of the date of publication of notice of the filing of the proposed rule change. See id. The time for conclusion of the proceedings may be extended for up to 60 days if the Commission finds good cause for such extension and publishes its reasons for so finding. See id. \19\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- In particular, the Commission seeks comment on, and will consider, whether the Exchange's proposal is consistent with section 6(b)(5) of the Act to the extent that the proposed amendments to Rule 13--Equities would permit a sophisticated market participant to enter a pegging order with a limit price that is set outside the PBBO in an attempt to reveal hidden interest on the book and then adjust its trading strategies to the detriment of the hidden order. The Commission notes that market participants may submit hidden orders for a variety of reasons, including to avoid disclosing to the overall market that they have interest in trading a particular security. When pegging interest was approved by the Commission, the Exchange explained that this order type was intended to permit floor brokers to be represented at the Exchange's BBO in a rapidly changing market.\20\ The Exchange has [[Page 9773]] not offered any explanation as to why permitting its pegging orders to peg to hidden interest is, on balance, good for its members or the quality of its market or why it is otherwise consistent with section 6(b)(5) of the Act. Similarly, the Exchange's filing does not explain why this use of an order type would be available to floor brokers or to those who submit orders through a floor broker, but would not otherwise be available to other exchange members. --------------------------------------------------------------------------- \20\ See Securities Exchange Act Release No. 54577 (Oct. 6, 2006), 71 FR 60208 (Oct. 12, 2006) (approving the New York Stock Exchange Inc.'s proposal to allow pegging instructions for Floor Broker Agency Interest Files (e-quotes)). In the notice to that filing, the Exchange stated, ``In the Hybrid Market, a Floor broker needs to be represented in the BBO in order to participate in automatic executions. The e-Quotes provide Floor brokers with the mechanism to be part of the quote. However, in a more automated environment, the BBO may change rapidly and the e-Quoting process, as it currently exists, may not be sufficient to enable Floor brokers to stay with a quickly changing quote.'' See Securities Exchange Act Release No. 61081 (Dec. 1, 2009), 74 FR 64105 (Dec. 7, 2009) (approving the predecessor Exchange's proposal to update d- Quote functionality and provide for e-Quotes to peg to the National Best Bid or Offer). The Commission further notes that the Exchange's rules are based on the rules of the New York Stock Exchange, Inc. --------------------------------------------------------------------------- IV. Procedure: Request for Written Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the concerns identified above, as well as any other concerns they may have with the proposed rule change. Although there do not appear to be any issues relevant to approval or disapproval which would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.\21\ Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved by March 17, 2015. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by March 31, 2015. --------------------------------------------------------------------------- \21\ Section 19(b)(2) of the Act, as amended by the Securities Act Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the Commission flexibility to determine what type of proceeding--either oral or notice and opportunity for written comments--is appropriate for consideration of a particular proposal by a self-regulatory organization. See Securities Act Amendments of 1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). --------------------------------------------------------------------------- The Commission invites the written views of interested persons concerning whether the proposal is consistent with section 6(b)(5) of the Act,\22\ any other provision of the Act, or the rules and regulations thereunder. The Commission asks that commenters address the sufficiency and merit of the Exchange's statements in support of the proposed rule change, in addition to any other comments they may wish to submit about the proposed rule change. In particular, the Commission seeks comment on the following: --------------------------------------------------------------------------- \22\ Id. 1. As described above, the Exchange proposes to add a new definition for ``next available best-priced interest'' in connection with pegging interest. As shown in the Exchange's example, discussed above,\23\ the proposal would, when pegging interest is entered with a limit price outside the PBBO, allow pegging interest to peg to a Non-Display Reserve Order or Non-Display Reserve e-Quote that is not at the top of the Exchange's book. Therefore, the functionality would allow the member entering pegging interest with a limit price to potentially detect the presence of a hidden order outside the PBBO, if there are no other displayable orders at that price point. Given that, as noted above,\24\ pegging interest was instituted originally to facilitate the ability of manual Floor brokers to maintain orders at the best displayed prices, do commenters believe that allowing pegging interest to potentially operate in this manner is beneficial, or detrimental, to Exchange members or the quality of the Exchange's market? \25\ --------------------------------------------------------------------------- \23\ See text accompanying note 16, supra. \24\ See, supra, note 20 and accompanying text. \25\ The Commission notes that, while ALO orders or Day ISO orders on the Exchange can be re-priced in a manner that reveals the existence of hidden orders, ALO orders or Day ISO orders are displayed and would tighten the quoted spread. The Commission approved the ALO order and the Day ISO order re-pricing mechanism on the basis that their re-pricing mechanism would contribute to public price discovery, an objective consistent with the requirements of the Act. See Securities Exchange Act Release No. 73333 (Oct. 9, 2014), 79 FR 62223 (Oct. 16, 2014) (approving the Exchange's proposal to make the Add Liquidity Only modifier available for Limit Orders and to make the Day Time-In-Force condition and Add Liquidity Only modifier available for Intermarket Sweep Orders). --------------------------------------------------------------------------- 2. Do commenters believe that the Exchange's proposal sufficiently describes the characteristics, functionality, priority, and execution pricing of each of its order types and modifiers? If not, which aspects of the Exchange's order types and modifiers remain ambiguous or undescribed? Please be specific. 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-NYSEMKT-2014-95 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEMKT-2014-95. 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 office 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-NYSEMKT-2014-95 and should be submitted on or before March 17, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\26\ --------------------------------------------------------------------------- \26\ 17 CFR 200.30-3(a)(57). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-03678 Filed 2-23-15; 8:45 am] BILLING CODE 8011-01-P
![9770 Federal Register / Vol. 80, No. 36 / Tuesday, February 24, 2015 / Notices
BGM Affiliated Exchanges and an only one method. The Commission will 19b–4 thereunder,2 a proposed rule
enhanced ability of the BGM Affiliated post all comments on the Commission’s change to amend Exchange Rule 13—
Exchanges to fairly and efficiently Internet Web site (http://www.sec.gov/ Equities and other related Exchange
regulate members, which will further rules/sro.shtml). Copies of the rules governing order types and order
enhance competition. submission, all subsequent modifiers. The proposed rule change
amendments, all written statements was published in the Federal Register
C. Self-Regulatory Organization’s with respect to the proposed rule on November 20, 2014.3 On November
Statement on Comments on the change that are filed with the 14, 2014, the Exchange submitted
Proposed Rule Change Received From Commission, and all written Partial Amendment No. 1 to the
Members, Participants or Others communications relating to the Commission.4 On December 22, 2014,
The Exchange has neither solicited proposed rule change between the the Exchange submitted Partial
nor received written comments on the Commission and any person, other than Amendment No. 2 to the Commission.
proposed rule change. those that may be withheld from the On December 22, 2014, pursuant to
public in accordance with the section 19(b)(2) of the Act,5 the
III. Date of Effectiveness of the
provisions of 5 U.S.C. 552, will be Commission designated a longer period
Proposed Rule Change and Timing for
available for Web site viewing and within which to approve the proposed
Commission Action
printing in the Commission’s Public rule change, disapprove the proposed
Because the foregoing proposed rule Reference Room, 100 F Street NE., rule change, or institute proceedings to
change does not: (i) Significantly affect Washington, DC 20549, on official determine whether to disapprove the
the protection of investors or the public business days between the hours of proposed rule change.6 The Commission
interest; (ii) impose any significant 10:00 a.m. and 3:00 p.m. Copies of such has received no other comment on the
burden on competition; and (iii) become filing will also be available for proposal. This order institutes
operative for 30 days from the date on inspection and copying at the principal proceedings under section 19(b)(2)(B) of
which it was filed, or such shorter time office of the Exchange. All comments the Act 7 to determine whether to
as the Commission may designate, it has received will be posted without change; approve or disapprove the proposal.
become effective pursuant to Section the Commission does not edit personal
19(b)(3)(A) of the Act 12 and paragraph identifying information from II. Description of the Proposal
of Rule 19b–4(f)(6) thereunder.13 submissions. You should submit only The Exchange proposes to amend
At any time within 60 days of the information that you wish to make Exchange Rule 13—Equities by re-
filing of the proposed rule change, the available publicly. All submissions grouping and re-numbering existing
Commission summarily may should refer to File No. SR–BYX–2015– order types and order modifiers. The
temporarily suspend such rule change if 10 and should be submitted on or before Exchange also proposes to make
it appears to the Commission that such March 17, 2015. changes to certain order types and order
action is necessary or appropriate in the For the Commission, by the Division of modifiers. In addition, the Exchange
public interest, for the protection of Trading and Markets, pursuant to delegated proposes to amend certain rules to
investors, or otherwise in furtherance of authority.14 remove references to functionality that
the purposes of the Act. Brent J. Fields, is no longer operative. Under the
IV. Solicitation of Comments Secretary. proposal, Rule 13—Equities would be
[FR Doc. 2015–03669 Filed 2–23–15; 8:45 am] reorganized into six categories: (a)
Interested persons are invited to Primary order types; (b) time in force
BILLING CODE 8011–01–P
submit written data, views and modifiers; (c) auction-only orders; (d)
arguments concerning the foregoing, orders with instructions not to display
including whether the proposal is SECURITIES AND EXCHANGE all or a portion of the order; (e) orders
consistent with the Act. Comments may COMMISSION with instructions not to route; and (f)
be submitted by any of the following additional orders and modifiers.
methods: [Release No. 34–74298; File No. SR–
NYSEMKT–2014–95] A. Primary Order Types
Electronic Comments
Self-Regulatory Organizations; NYSE Proposed section (a) of Rule 13—
• Use the Commission’s Internet Equities would set forth two primary
comment form (http://www.sec.gov/ MKT LLC; Order Instituting
Proceedings to Determine Whether to order types—Market Orders and Limit
rules/sro.shtml); or Orders—and specify which orders are
• Send an email to rule-comments@ Approve or Disapprove a Proposed
Rule Change, as Modified by Partial eligible for automatic executions. The
sec.gov. Please include File No. SR–
Amendment No. 1 and Partial Exchange proposes to delete the current
BYX–2015–10 on the subject line.
Amendment No. 2, Amending Rule definition of ‘‘Auto Ex Order’’ and
Paper Comments 13—Equities and Related Rules
2 17 CFR 240.19b–4.
• Send paper comments in triplicate Governing Order Types and Modifiers 3 See Securities Exchange Act Release No. 73593
to Brent J. Fields, Secretary, Securities February 18, 2015. (Nov. 14, 2014), 79 FR 69153 (‘‘Notice’’).
and Exchange Commission, 100 F Street 4 The Exchange also submitted a copy of the
NE., Washington, DC 20549–1090. I. Introduction amendment to the public comment file. See Letter
from Sudhir Bhattacharyya, Vice President, New
All submissions should refer to File No. On October 31, 2014, NYSE MKT LLC York Stock Exchange, to Kevin M. O’Neill, Deputy
SR–BYX–2015–10. This file number (‘‘NYSE MKT’’ or ‘‘Exchange’’) filed Secretary, Commission (Nov. 14, 2014).
tkelley on DSK3SPTVN1PROD with NOTICES
should be included on the subject line with the Securities and Exchange 5 15 U.S.C. 78s(b)(2).
if email is used. To help the Commission (‘‘Commission’’), pursuant 6 See Securities Exchange Act Release No. 73913,
Commission process and review your to section 19(b)(1) of the Securities 79 FR 78531 (Dec. 30, 2014). The Commission
designated February 18, 2015, as the date by which
comments more efficiently, please use Exchange Act of 1934 (‘‘Act’’) 1 and Rule it should approve, disapprove, or institute
proceedings to determine whether to disapprove the
12 15 U.S.C. 78s(b)(3)(A). 14 17 CFR 200.30–3(a)(12). proposed rule change.
13 17 CFR 240.19b–4. 1 15 U.S.C. 78s(b)(1). 7 15 U.S.C. 78s(b)(2)(B).
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![Federal Register / Vol. 80, No. 36 / Tuesday, February 24, 2015 / Notices 9773
not offered any explanation as to why In particular, the Commission seeks Commission process and review your
permitting its pegging orders to peg to comment on the following: comments more efficiently, please use
hidden interest is, on balance, good for 1. As described above, the Exchange only one method. The Commission will
its members or the quality of its market proposes to add a new definition for ‘‘next post all comments on the Commission’s
or why it is otherwise consistent with available best-priced interest’’ in connection Internet Web site (http://www.sec.gov/
section 6(b)(5) of the Act. Similarly, the with pegging interest. As shown in the rules/sro.shtml). Copies of the
Exchange’s filing does not explain why Exchange’s example, discussed above,23 the submission, all subsequent
this use of an order type would be proposal would, when pegging interest is amendments, all written statements
available to floor brokers or to those entered with a limit price outside the PBBO, with respect to the proposed rule
allow pegging interest to peg to a Non- change that are filed with the
who submit orders through a floor Display Reserve Order or Non-Display
broker, but would not otherwise be Commission, and all written
Reserve e-Quote that is not at the top of the
available to other exchange members. Exchange’s book. Therefore, the functionality
communications relating to the
would allow the member entering pegging proposed rule change between the
IV. Procedure: Request for Written interest with a limit price to potentially Commission and any person, other than
Comments detect the presence of a hidden order outside those that may be withheld from the
the PBBO, if there are no other displayable public in accordance with the
The Commission requests that orders at that price point. Given that, as provisions of 5 U.S.C. 552, will be
interested persons provide written noted above,24 pegging interest was available for Web site viewing and
submissions of their views, data, and instituted originally to facilitate the ability of printing in the Commission’s Public
arguments with respect to the concerns manual Floor brokers to maintain orders at Reference Room, 100 F Street NE.,
identified above, as well as any other the best displayed prices, do commenters
Washington, DC 20549, on official
concerns they may have with the believe that allowing pegging interest to
potentially operate in this manner is
business days between the hours of
proposed rule change. Although there 10:00 a.m. and 3:00 p.m. Copies of such
do not appear to be any issues relevant beneficial, or detrimental, to Exchange
members or the quality of the Exchange’s filing also will be available for
to approval or disapproval which would market? 25 inspection and copying at the principal
be facilitated by an oral presentation of 2. Do commenters believe that the office of the Exchange. All comments
views, data, and arguments, the Exchange’s proposal sufficiently describes received will be posted without change;
Commission will consider, pursuant to the characteristics, functionality, priority, the Commission does not edit personal
Rule 19b–4, any request for an and execution pricing of each of its order identifying information from
opportunity to make an oral types and modifiers? If not, which aspects of submissions. You should submit only
presentation.21 Interested persons are the Exchange’s order types and modifiers
information that you wish to make
invited to submit written data, views, remain ambiguous or undescribed? Please be
specific.
available publicly. All submissions
and arguments regarding whether the should refer to File Number SR–
proposal should be approved or Comments may be submitted by any NYSEMKT–2014–95 and should be
disapproved by March 17, 2015. Any of the following methods: submitted on or before March 17, 2015.
person who wishes to file a rebuttal to Electronic Comments For the Commission, by the Division of
any other person’s submission must file Trading and Markets, pursuant to delegated
that rebuttal by March 31, 2015. • Use the Commission’s Internet authority.26
comment form (http://www.sec.gov/ Brent J. Fields,
The Commission invites the written
rules/sro.shtml); or
views of interested persons concerning Secretary.
• Send an email to rule-comments@
whether the proposal is consistent with [FR Doc. 2015–03678 Filed 2–23–15; 8:45 am]
sec.gov. Please include File Number SR–
section 6(b)(5) of the Act,22 any other BILLING CODE 8011–01–P
NYSEMKT–2014–95 on the subject line.
provision of the Act, or the rules and
regulations thereunder. The Paper Comments
Commission asks that commenters SECURITIES AND EXCHANGE
• Send paper comments in triplicate
address the sufficiency and merit of the COMMISSION
to Brent J. Fields, Secretary, Securities
Exchange’s statements in support of the and Exchange Commission, 100 F Street [Release No. 34–74289; File No. SR–FINRA–
proposed rule change, in addition to any NE., Washington, DC 20549–1090. 2015–003]
other comments they may wish to
submit about the proposed rule change. All submissions should refer to File Self-Regulatory Organizations;
Number SR–NYSEMKT–2014–95. This Financial Industry Regulatory
file number should be included on the Authority, Inc.; Notice of Filing of a
Floor brokers to stay with a quickly changing
quote.’’ See Securities Exchange Act Release No. subject line if email is used. To help the Proposed Rule Change To Amend the
61081 (Dec. 1, 2009), 74 FR 64105 (Dec. 7, 2009) Codes of Arbitration Procedure To
(approving the predecessor Exchange’s proposal to 23 See text accompanying note 16, supra.
update d-Quote functionality and provide for e- 24 See, supra, note 20 and accompanying text.
Increase the Late Cancellation Fee
Quotes to peg to the National Best Bid or Offer). The 25 The Commission notes that, while ALO orders
Commission further notes that the Exchange’s rules February 18, 2015.
or Day ISO orders on the Exchange can be re-priced
are based on the rules of the New York Stock in a manner that reveals the existence of hidden Pursuant to Section 19(b)(1) of the
Exchange, Inc. orders, ALO orders or Day ISO orders are displayed Securities Exchange Act of 1934
21 Section 19(b)(2) of the Act, as amended by the
and would tighten the quoted spread. The (‘‘Act’’) 1 and Rule 19b–4 thereunder,2
Securities Act Amendments of 1975, Public Law Commission approved the ALO order and the Day
94–29 (June 4, 1975), grants the Commission
notice is hereby given that on February
ISO order re-pricing mechanism on the basis that
flexibility to determine what type of proceeding— their re-pricing mechanism would contribute to 5, 2015, Financial Industry Regulatory
tkelley on DSK3SPTVN1PROD with NOTICES
either oral or notice and opportunity for written public price discovery, an objective consistent with Authority, Inc. (‘‘FINRA’’) filed with the
comments—is appropriate for consideration of a the requirements of the Act. See Securities Securities and Exchange Commission
particular proposal by a self-regulatory Exchange Act Release No. 73333 (Oct. 9, 2014), 79
organization. See Securities Act Amendments of
(‘‘SEC’’ or ‘‘Commission’’) the proposed
FR 62223 (Oct. 16, 2014) (approving the Exchange’s
1975, Senate Comm. on Banking, Housing & Urban proposal to make the Add Liquidity Only modifier
26 17 CFR 200.30–3(a)(57).
Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 available for Limit Orders and to make the Day
(1975). Time-In-Force condition and Add Liquidity Only 1 15 U.S.C. 78s(b)(1).
22 Id. modifier available for Intermarket Sweep Orders). 2 17 CFR 240.19b–4.
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Document Created: 2015-12-18 13:22:51
Document Modified: 2015-12-18 13:22:51
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| FR Citation | 80 FR 9770 |
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