81 FR 17522 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Pilot Period for the Exchange's Retail Liquidity Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 60 (March 29, 2016)

Page Range		17522-17523
FR Document		2016-06989

Federal Register, Volume 81 Issue 60 (Tuesday, March 29, 2016)

[Federal Register Volume 81, Number 60 (Tuesday, March 29, 2016)]
[Notices]
[Pages 17522-17523]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-06989]

[[Page 17522]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77424; File No. SR-NYSEMKT-2016-39]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Extending the Pilot
Period for the Exchange's Retail Liquidity Program

March 23, 2016.
Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on March 17, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE
MKT'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C.78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

The Exchange proposes to extend the pilot period for the Exchange's
Retail Liquidity Program (the ``Retail Liquidity Program'' or the
``Program''), which is currently scheduled to expire on March 31, 2016,
until August 31, 2016. 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 March 31,
2016, until August 31, 2016.\4\
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\4\ See Securities Exchange Act Release No. 75995 (September 28,
2015), 80 FR 59836 (October 2, 2015) (SR-NYSEMKT-2015-69).
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Background
In July 2012, the Commission approved the Retail Liquidity Program
on a pilot basis.\5\ 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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\5\ See Securities Exchange Act Release No. 67347 (July 3,
2012), 77 FR 40673 (July 10, 2012) (``RLP Approval Order'') (SR-
NYSEAmex-2011-84).
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The Retail Liquidity Program was approved by the Commission on a
pilot basis. Pursuant to NYSE MKT Rule 107C(m)--Equities, the pilot
period for the Program is scheduled to end on March 31, 2016.
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.\6\ As
such, the Exchange believes that it is appropriate to extend the
current operation of the Program.\7\ Through this filing, the Exchange
seeks to amend NYSE MKT Rule 107C(m)--Equities and extend the current
pilot period of the Program until August 31, 2016.
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\6\ See id. at 40681.
\7\ 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 March 17, 2016.
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2. Statutory Basis
The proposed rule change is consistent with section 6(b) of the
Act,\8\ in general, and furthers the objectives of section 6(b)(5),\9\
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 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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\8\ 15 U.S.C. 78f(b).
\9\ 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

[[Page 17523]]

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) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
Because the proposed rule change does not: (i) significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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) \14\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\15\ 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 Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest, because waiver would allow the pilot period to continue
uninterrupted after its current expiration date of March 31, 2016,
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.\16\
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ 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-NYSEMKT-2016-39 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-NYSEMKT-2016-39. 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 the 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-2016-39 and should
be submitted on or before April 19, 2016.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-06989 Filed 3-28-16; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 81, No. 60 / Tuesday, March 29, 2016 / Notices 17523

contribute to the public price discovery Commission hereby waives the 30-day Washington, DC 20549 on official
process. operative delay and designates the business days between the hours of
proposal operative upon filing.16 10:00 a.m. and 3:00 p.m. Copies of the
C. Self-Regulatory Organization’s
At any time within 60 days of the filing also will be available for
Statement on Comments on the
filing of the proposed rule change, the inspection and copying at the principal
Proposed Rule Change Received From
Commission summarily may office of the Exchange. All comments
Members, Participants, or Others
temporarily suspend such rule change if received will be posted without change;
No written comments were solicited it appears to the Commission that such the Commission does not edit personal
or received with respect to the proposed action is necessary or appropriate in the identifying information from
rule change. public interest, for the protection of submissions. You should submit only
III. Date of Effectiveness of the investors, or otherwise in furtherance of information that you wish to make
Proposed Rule Change and Timing for the purposes of the Act. If the available publicly. All submissions
Commission Action Commission takes such action, the should refer to File Number SR–
Commission shall institute proceedings NYSEMKT–2016–39 and should be
The Exchange has filed the proposed submitted on or before April 19, 2016.
to determine whether the proposed rule
rule change pursuant to section
change should be approved or For the Commission, by the Division of
19(b)(3)(A) of the Act 10 and Rule 19b–
disapproved. Trading and Markets, pursuant to delegated
4(f)(6) thereunder.11 Because the authority.17
proposed rule change does not: (i) IV. Solicitation of Comments
Brent J. Fields,
significantly affect the protection of Interested persons are invited to Secretary.
investors or the public interest; (ii) submit written data, views, and
impose any significant burden on [FR Doc. 2016–06989 Filed 3–28–16; 8:45 am]
arguments concerning the foregoing, BILLING CODE 8011–01–P
competition; and (iii) become operative
including whether the proposed rule
prior to 30 days from the date on which
change is consistent with the Act.
it was filed, or such shorter time as the
Commission may designate, if
Comments may be submitted by any of SECURITIES AND EXCHANGE
consistent with the protection of
the following methods: COMMISSION
investors and the public interest, the Electronic Comments [Release No. 34–77425; File No. SR–
proposed rule change has become NYSEArca–2016–47]
• Use the Commission’s Internet
effective pursuant to section 19(b)(3)(A) comment form (http://www.sec.gov/
of the Act 12 and Rule 19b–4(f)(6) Self-Regulatory Organizations; NYSE
rules/sro.shtml); or Arca, Inc.; Notice of Filing and
thereunder.13 • Send an email to rule-comments@
A proposed rule change filed under Immediate Effectiveness of Proposed
sec.gov. Please include File Number SR– Rule Change To Extend the Pilot
Rule 19b–4(f)(6) 14 normally does not NYSEMKT–2016–39 on the subject line.
become operative prior to 30 days after Period for the Exchange’s Retail
the date of the filing. However, pursuant Paper Comments Liquidity Program, Which Is Currently
to Rule 19b4(f)(6)(iii),15 the Commission Scheduled To Expire on March 31,
• Send paper comments in triplicate 2016, Until August 31, 2016
may designate a shorter time if such to Secretary, Securities and Exchange
action is consistent with the protection Commission, 100 F Street NE., March 23, 2016.
of investors and the public interest. The Washington, DC 20549–1090. Pursuant to Section 19(b)(1) 1 of the
Exchange has asked the Commission to Securities Exchange Act of 1934 (the
All submissions should refer to File
waive the 30-day operative delay so that ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
Number SR–NYSEMKT–2016–39. This
the proposed rule change may become notice is hereby given that, on March
file number should be included on the
operative before the current expiration 21, 2016, NYSE Arca, Inc. (the
subject line if email is used. To help the
of the pilot period. The Commission ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
Commission process and review your
believes that waiving the 30-day the Securities and Exchange
comments more efficiently, please use
operative delay is consistent with the Commission (the ‘‘Commission’’) the
only one method. The Commission will
protection of investors and the public proposed rule change as described in
post all comments on the Commission’s
interest, because waiver would allow Items I and II below, which Items have
Internet Web site (http://www.sec.gov/
the pilot period to continue been prepared by the self-regulatory
rules/sro.shtml). Copies of the
uninterrupted after its current organization. The Commission is
submission, all subsequent
expiration date of March 31, 2016, publishing this notice to solicit
amendments, all written statements
thereby avoiding any potential investor comments on the proposed rule change
with respect to the proposed rule
confusion that could result from from interested persons.
change that are filed with the
temporary interruption in the pilot
Commission, and all written I. Self-Regulatory Organization’s
program. For this reason, the
communications relating to the Statement of the Terms of Substance of
10 15 U.S.C. 78s(b)(3)(A).
proposed rule change between the the Proposed Rule Change
11 17 CFR 240.19b-4(f)(6). Commission and any person, other than
12 15 U.S.C. 78s(b)(3)(A). those that may be withheld from the The Exchange proposes to extend the
13 17 CFR 240.19b-4(f)(6). In addition, Rule 19b- public in accordance with the pilot period for the Exchange’s Retail
4(f)(6)(iii) requires the Exchange to give the provisions of 5 U.S.C. 552, will be Liquidity Program (the ‘‘Retail Liquidity
mstockstill on DSK4VPTVN1PROD with NOTICES

Commission written notice of the Exchange’s intent available for Web site viewing and Program’’ or the ‘‘Program’’), which is
to file the proposed rule change, along with a brief currently scheduled to expire on March
description and text of the proposed rule change, printing in the Commission’s Public
at least five business days prior to the date of filing Reference Room, 100 F Street NE., 31, 2016, until August 31, 2016. The
of the proposed rule change, or such shorter time
17 17 CFR 200.30–3(a)(12).
as designated by the Commission. The Exchange 16 For purposes only of waiving the 30-day
has satisfied this requirement. operative delay, the Commission has considered the
1 15 U.S.C.78s(b)(1).
14 17 CFR 240.19b–4(f)(6). 2 15 U.S.C. 78a.
proposed rule’s impact on efficiency, competition,
15 17 CFR 240.19b–4(f)(6)(iii). and capital formation. See 15 U.S.C. 78c(f). 3 17 CFR 240.19b–4.

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Document Created: 2016-03-30 08:29:22
Document Modified: 2016-03-30 08:29:22

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		81 FR 17522