81 FR 17532 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 13 to Expand the Availability of Self-Trade Prevention Modifiers to Non-Algorithmically Entered Floor Broker Interest

SECURITIES AND EXCHANGE COMMISSION

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

Page Range		17532-17533
FR Document		2016-06998

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

[Federal Register Volume 81, Number 60 (Tuesday, March 29, 2016)]
[Notices]
[Pages 17532-17533]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-06998]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77434; File No. SR-NYSE-2016-23]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending Rule 13 to Expand the Availability of Self-Trade Prevention
Modifiers to Non-Algorithmically Entered Floor Broker Interest

March 23, 2016.
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 March 15, 2016, New York Stock Exchange LLC (``NYSE'' or the
``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 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 amend Rule 13 to expand the availability
of self-trade prevention (``STP'') modifiers to non-algorithmically
entered Floor broker interest. 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 Exchange proposes to amend Rule 13 to expand the availability
of STP modifiers to non-algorithmically entered e-Quotes, pegging e-
Quotes, and g-Quotes.
STP modifiers are designed to prevent two orders from the same
market participant identifier (``MPID'') assigned to a member
organization from executing against each other. Use of the STP
modifiers is optional and is not automatically implemented by the
Exchange. Rather, a member organization can choose to add a STP
modifier on eligible orders. The STP modifier on the incoming order
determines the interaction between two orders marked with STP modifiers
and whether the incoming or the resting order would cancel. Both the
buy and the sell order must include an STP modifier in order to prevent
a trade from occurring and to effect a cancel instruction.\3\
Currently, under Rule 13(f)(3)(B), STP modifiers are available for
Limit Orders and Market Orders entered by off-Floor participants, and
for e-Quotes, pegging e-Quotes, and g-Quotes sent to the matching
engine by an algorithm on behalf of a Floor broker.
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\3\ See Rule 13(f)(3)(A); Securities Exchange Act Release No.
69102 (Mar. 11, 2013), 78 FR 16561 (Mar. 15, 2013) (SR-NYSE-2013-
17).
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The Exchange amended Rule 13 to add STP modifiers in 2013.\4\ At
the time, the supporting technology was not compatible with Floor
broker systems and the Exchange chose to deploy STP modifiers for other
market participants while it performed the technical modifications
required for the use of STP modifiers for Floor brokers.\5\ The
Exchange later made STP modifiers available for algorithms used by
Floor brokers to route interest to the Exchange's matching engine, but
the technology supporting STP modifiers was still incompatible with all
Floor broker systems.\6\ Now that the technology to extend STP
modifiers to all Floor broker systems is available, the Exchange
proposes to delete the clause ``sent to the matching engine by an
algorithm on behalf of a Floor broker'' in Rule 13 to make STP
modifiers available for eQuotes, pegging e-Quotes, and g-Quotes without
limitation. No other changes are proposed to Rule 13.
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\4\ See Securities Exchange Act Release No. 69102, 78 FR at
16561.
\5\ See id.
\6\ See Securities Exchange Act Release No. 69502 (May 2, 2013),
78 FR 26818 (May 8, 2013) (SR-NYSE-2013-30).
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Because of the technology changes associated with this rule
proposal, the Exchange will announce the implementation date in a
Trader Update.
2. Statutory Basis
The Exchange believes that 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) of the Act,\8\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
promote just and equitable principles of trade, 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. In
particular, the Exchange believes that extending STP modifiers to non-
algorithmically entered Floor broker interest would provide Floor
brokers with an additional opportunity to prevent unintended executions
by Floor broker customers with themselves or the potential for ``wash
sales'' that may occur as a result of the velocity of trading in
today's high-speed marketplace, thereby removing impediments to and
perfecting the mechanism of a free and open market. The Exchange notes
that STP modifiers would not alleviate, or otherwise exempt, broker-
dealers from their best execution obligations.
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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 Exchange believes that
the proposal would provide Floor brokers with an additional opportunity
to prevent unintended self-trades from occurring. The Exchange notes
that it operates in a highly competitive market in which market
participants can readily direct order flow to competing venues offering
similar functionality. Many competing venues offer similar
functionality to market participants. To this end, the Exchange is
proposing a market enhancement to provide greater protections from
inadvertent executions, and encourage market participants to trade on
the Exchange.

[[Page 17533]]

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 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 and Rule 19b-
4(f)(6)(iii) thereunder.
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\12\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
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At any time within 60 days of the filing of such 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 under
section 19(b)(2)(B) \13\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\13\ 15 U.S.C. 78s(b)(2)(B).
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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-NYSE-2016-23 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-NYSE-2016-23. 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-NYSE-2016-23, and should be
submitted on or before April 19, 2016.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-06998 Filed 3-28-16; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 81, No. 60 / Tuesday, March 29, 2016 / Notices 17533

C. Self-Regulatory Organization’s Electronic Comments SECURITIES AND EXCHANGE
Statement on Comments on the COMMISSION
Proposed Rule Change Received From • Use the Commission’s Internet
Members, Participants, or Others comment form (http://www.sec.gov/
[Release No. 34–77426 ; File No. SR–NYSE–
rules/sro.shtml); or
No written comments were solicited 2016–25]
• Send an email to rule-comments@
or received with respect to the proposed
rule change.
sec.gov. Please include File Number SR– Self-Regulatory Organizations; New
NYSE–2016–23 on the subject line. York Stock Exchange LLC; Notice of
III. Date of Effectiveness of the Filing and Immediate Effectiveness of
Paper Comments
Proposed Rule Change and Timing for Proposed Rule Change Extending the
Commission Action • Send paper comments in triplicate Pilot Period for the Exchange’s Retail
The Exchange has filed the proposed to Secretary, Securities and Exchange Liquidity Program
rule change pursuant to section Commission, 100 F Street NE.,
March 23, 2016.
19(b)(3)(A)(iii) of the Act 9 and Rule Washington, DC 20549–1090.
19b–4(f)(6) thereunder.10 Because the Pursuant to Section 19(b)(1) 1 of the
All submissions should refer to File Securities Exchange Act of 1934 (the
proposed rule change does not: (i) Number SR–NYSE–2016–23. This file
Significantly affect the protection of ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
number should be included on the notice is hereby given that on March 17,
investors or the public interest; (ii) subject line if email is used. To help the
impose any significant burden on 2016, New York Stock Exchange LLC
Commission process and review your (‘‘NYSE’’ or the ‘‘Exchange’’) filed with
competition; and (iii) become operative
comments more efficiently, please use the Securities and Exchange
prior to 30 days from the date on which
it was filed, or such shorter time as the only one method. The Commission will Commission (the ‘‘Commission’’) the
Commission may designate, if post all comments on the Commission’s proposed rule change as described in
consistent with the protection of Internet Web site (http://www.sec.gov/ Items I and II below, which Items have
investors and the public interest, the rules/sro.shtml). Copies of the been prepared by the self-regulatory
proposed rule change has become submission, all subsequent organization. The Commission is
effective pursuant to section 19(b)(3)(A) amendments, all written statements publishing this notice to solicit
of the Act and Rule 19b-4(f)(6)(iii) with respect to the proposed rule comments on the proposed rule change
thereunder. change that are filed with the from interested persons.
A proposed rule change filed under Commission, and all written
Rule 19b–4(f)(6) 11 normally does not communications relating to the I. Self-Regulatory Organization’s
become operative prior to 30 days after proposed rule change between the Statement of the Terms of Substance of
the date of the filing. However, pursuant Commission and any person, other than the Proposed Rule Change
to Rule 19b4(f)(6)(iii),12 the Commission those that may be withheld from the
public in accordance with the The Exchange proposes to extend the
may designate a shorter time if such pilot period for the Exchange’s Retail
action is consistent with the protection provisions of 5 U.S.C. 552, will be
available for Web site viewing and Liquidity Program (the ‘‘Retail Liquidity
of investors and the public interest.
printing in the Commission’s Public Program’’ or the ‘‘Program’’), which is
At any time within 60 days of the currently scheduled to expire on March
filing of such proposed rule change, the Reference Room, 100 F Street NE.,
Washington, DC 20549 on official 31, 2016, until August 31, 2016. The
Commission summarily may proposed rule change is available on the
temporarily suspend such rule change if business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the Exchange’s Web site at www.nyse.com,
it appears to the Commission that such
filing also will be available for at the principal office of the Exchange,
action is necessary or appropriate in the
inspection and copying at the principal and at the Commission’s Public
public interest, for the protection of
investors, or otherwise in furtherance of office of the Exchange. All comments Reference Room.
the purposes of the Act. If the received will be posted without change; II. Self-Regulatory Organization’s
Commission takes such action, the the Commission does not edit personal Statement of the Purpose of, and
Commission shall institute proceedings identifying information from Statutory Basis for, the Proposed Rule
under section 19(b)(2)(B) 13 of the Act to submissions. You should submit only Change
determine whether the proposed rule information that you wish to make
change should be approved or available publicly. All submissions In its filing with the Commission, the
disapproved. should refer to File Number SR–NYSE– self-regulatory organization included
IV. Solicitation of Comments 2016–23, and should be submitted on or statements concerning the purpose of,
before April 19, 2016. and basis for, the proposed rule change
Interested persons are invited to and discussed any comments it received
For the Commission, by the Division of
submit written data, views, and on the proposed rule change. The text
Trading and Markets, pursuant to delegated
arguments concerning the foregoing, of those statements may be examined at
authority.14
including whether the proposed rule the places specified in Item IV below.
change is consistent with the Act. Brent J. Fields,
The Exchange has prepared summaries,
mstockstill on DSK4VPTVN1PROD with NOTICES

Comments may be submitted by any of Secretary. set forth in sections A, B, and C below,
the following methods: [FR Doc. 2016–06998 Filed 3–28–16; 8:45 am] of the most significant parts of such
BILLING CODE 8011–01–P statements.
9 15 U.S.C. 78s(b)(3)(A)(iii).
10 17 CFR 240.19b–4(f)(6).
11 17 CFR 240.19b–4(f)(6). 1 15 U.S.C.78s(b)(1).
12 17 CFR 240.19b–4(f)(6)(iii). 2 15 U.S.C. 78a.
13 15 U.S.C. 78s(b)(2)(B). 14 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4.

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Document Created: 2016-03-30 08:29:23
Document Modified: 2016-03-30 08:29:23

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 17532