81_FR_2286 81 FR 2276 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of Proposed Rule Change, and Notice of Filing and Order Granting Accelerated Approval of Amendment Nos. 1 and 3 Thereto, Relating to Auctions for Pillar, the Exchange's New Trading Technology Platform

81 FR 2276 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of Proposed Rule Change, and Notice of Filing and Order Granting Accelerated Approval of Amendment Nos. 1 and 3 Thereto, Relating to Auctions for Pillar, the Exchange's New Trading Technology Platform

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 10 (January 15, 2016)

Page Range2276-2282
FR Document2016-00645

Federal Register, Volume 81 Issue 10 (Friday, January 15, 2016)
[Federal Register Volume 81, Number 10 (Friday, January 15, 2016)]
[Notices]
[Pages 2276-2282]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-00645]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76869; File No. SR-NYSEArca-2015-86]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Approval of Proposed Rule Change, and Notice of Filing and Order 
Granting Accelerated Approval of Amendment Nos. 1 and 3 Thereto, 
Relating to Auctions for Pillar, the Exchange's New Trading Technology 
Platform

January 11, 2016.

I. Introduction

    On September 22, 2015, NYSE Arca, Inc. (``Exchange'' or ``Arca'') 
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 
adopt new equity trading rules relating to auctions for Pillar, the 
Exchange's new trading technology platform. The proposed rule change 
was published for comment in the Federal

[[Page 2277]]

Register on October 13, 2015.\3\ The Commission received no comments on 
the proposed rule change. On November 20, 2015, 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 approve or disapprove the proposed rule 
change.\4\ On December 22, 2015, the Exchange filed Amendment No. 1 to 
the proposed rule change.\5\ On January 7, 2016, the Exchange filed 
Amendment No. 3 to the proposed rule change.\6\ The Commission is 
publishing this notice to solicit comment on Amendment Nos. 1 and 3 
from interested persons, and is approving the proposed rule change, as 
modified by Amendment Nos. 1 and 3, on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 76085 (October 6, 
2015), 80 FR 61513 (``Notice'').
    \4\ See Securities Exchange Act Release No. 76493, 80 FR 74169 
(November 27, 2015).
    \5\ In Amendment No. 1, the Exchange: (i) Amends proposed Rule 
7.35P(h) to provide that the rule would address how orders would be 
handled not only in the transition to continuous trading following 
an auction, but also when transitioning from one trading session to 
the next trading session; (ii) amends proposed Rule 7.35P(h)(3)(B) 
to provide that, before continuous trading following a prior trading 
session or an auction begins, the display price and working price of 
orders would be adjusted as provided for in Rule 7.31P, and that 
when transitioning to continuous trading, the display price and 
working price of Day ISOs would be adjusted in the same manner as 
Arca Only Orders until the Day ISO is either traded in full or 
displayed at its limit price; and (iii) provides additional 
discussions related to certain proposed rules.
    \6\ Amendment No. 3 superseded Amendment No. 2 in its entirety. 
In Amendment No. 3, the Exchange: (i) Specifies the percentages for 
the Auction Collar thresholds; (ii) removes the reference to the 
Trading Halt Auction in the definition of Auction Collar; (iii) 
states that the Exchange would provide prior notice to ETP Holders 
if additional UTP Securities are to be designated as Auction-
Eligible Securities; (iv) includes cross-references to Rule 7.16P in 
Commentary .01 to proposed Rule 7.35P to clarify where certain terms 
are defined; and (v) provides additional discussions related to 
certain proposed rules.
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    The Exchange proposes to adopt Rule 7.35P, which relates to 
auctions for Pillar, the Exchange's new trading technology platform. 
The Exchange also proposes to amend existing definitions in Rule 
1.1.\7\
---------------------------------------------------------------------------

    \7\ The Exchange proposes to amend Rules 1.1(r) and (s) to 
specify that the definition of ``Imbalance'' and ``Indicative Match 
Price'' in those rules would be applicable only for auctions 
conducted on the current trading platform. The Exchange states that 
these changes would remove impediments to and perfect the mechanism 
of a fair and orderly market because they would not make any 
substantive changes, but rather are designed to reduce confusion by 
specifying that Rules 1.1(r) and (s) would be applicable to auctions 
on the current trading platform only. See Notice at 61525.
---------------------------------------------------------------------------

A. Background

    The Exchange represents that Pillar is an integrated trading 
technology platform designed to use a single specification for 
connecting to the equities and options markets operated by Arca and its 
affiliates, New York Stock Exchange LLC (``NYSE'') and NYSE MKT LLC 
(``NYSE MKT'').\8\ On April 30, 2015, the Exchange filed the first rule 
filing relating to the implementation of Pillar, which adopted rules 
relating to Trading Sessions, Order Ranking and Display, and Order 
Execution.\9\ On July 7, 2015, the Exchange filed the second rule 
filing relating to the implementation of Pillar, which adopted rules 
relating to Orders and Modifiers and the Retail Liquidity Program.\10\ 
On July 1, 2015, the Exchange filed the third rule filing relating to 
the implementation of Pillar, which adopted rules relating to Trading 
Halts, Short Sales, Limit Up-Limit Down, and Odd Lots and Mixed 
Lots.\11\
---------------------------------------------------------------------------

    \8\ See Notice at 61513.
    \9\ See Securities Exchange Act Release No. 74951 (May 13, 
2015), 80 FR 28721 (May 19, 2015) (SR-NYSEArca-2015-38) (``Pillar I 
Filing''). The Commission approved the Pillar I Filing on July 20, 
2015. See Securities Exchange Act Release No. 75494 (July 20, 2015), 
80 FR 44170 (July 24, 2015).
    \10\ See Securities Exchange Act Release No. 75497 (July 21, 
2015), 80 FR 45022 (July 28, 2015) (SR-NYSEArca-2015-56) (``Pillar 
II Filing''). The Commission approved the Pillar II Filing on 
October 26, 2015. See Securities Exchange Act Release No. 76267 
(October 26, 2015), 80 FR 66951 (October 30, 2015).
    \11\ See Securities Exchange Act Release No. 75467 (July 16, 
2015), 80 FR 43515 (July 22, 2015) (SR-NYSEArca-2015-58) (``Pillar 
III Filing''). The Commission approved the Pillar III Filing on 
October 20, 2015. See Securities Exchange Act Release No. 76198 
(October 20, 2015), 80 FR 65274 (October 26, 2015). See also 
Securities Exchange Act Release No. 76198A (October 28, 2015), 80 FR 
67822 (November 3, 2015).
---------------------------------------------------------------------------

    This filing is the fourth set of proposed rule changes to support 
Pillar implementation. As proposed, the new rule governing trading on 
Pillar would have the same numbering as the current rule, but with the 
modifier ``P'' appended to the rule number. Specifically, Rule 7.35, 
which governs auctions, would remain unchanged and continue to apply to 
any trading in symbols on the current trading platform. Proposed Rule 
7.35P would govern auctions for trading in symbols migrated to the 
Pillar platform.

B. Proposed Modifications

    As stated in the Notice, the Exchange proposes new Rule 7.35P to 
describe auctions on Pillar, which would be based on Rule 7.35 and 
Rules 1.1(r) and (s).\12\ The Exchange states that auctions on Pillar 
would function similarly to auctions on the current trading 
platform.\13\ According to the Exchange, proposed Rule 7.35P would use 
Pillar terminology and include both substantive and non-substantive 
differences and clarifications from the current rule text.\14\ The 
proposed changes that are more substantive in nature are noted in 
Section III below and are discussed in the Notice.
---------------------------------------------------------------------------

    \12\ See Notice at 61513.
    \13\ See Notice at 61513-14.
    \14\ See Notice at 61514.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\15\ In 
particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\16\ which requires, among 
other things, that the rules of a national securities exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest and that the rules are not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
---------------------------------------------------------------------------

    \15\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission notes that, in the proposal, the Exchange states its 
belief that proposed Rule 7.35P, together with rules from the three 
previous Pillar filings, would remove impediments to and perfect the 
mechanism of a free and open market because they would promote 
transparency by using consistent terminology for rules governing 
equities trading, thereby ensuring that members, regulators, and the 
public can more easily navigate the Exchange's rulebook and better 
understand how equity trading would be conducted on Pillar.\17\ The 
Exchange also states that the proposed use of Pillar terminology would 
promote consistency in the Exchange's rulebook regarding how the 
Exchange would process orders during an auction.\18\ Moreover, the 
Exchange states that adding new rules with the modifier ``P'' to denote 
the rules that would be

[[Page 2278]]

operative for Pillar would remove impediments to and perfect the 
mechanism of a free and open market by providing transparency regarding 
which rules govern trading once a symbol has been migrated to 
Pillar.\19\
---------------------------------------------------------------------------

    \17\ See Notice at 61525.
    \18\ See id.
    \19\ See id.
---------------------------------------------------------------------------

    The Commission also notes that, with respect to the substantive 
differences between proposed Rule 7.35P and the current rules, the 
Exchange states that they would remove impediments to and perfect the 
mechanism of a fair and orderly market.\20\ In particular, the Exchange 
proposes to make several changes that are more substantive in nature, 
which include:
---------------------------------------------------------------------------

    \20\ See id.
---------------------------------------------------------------------------

Definitions
    Auction-Eligible Security: The Exchange proposes a new definition 
for the term ``Auction-Eligible Security.'' \21\ According to the 
Exchange, as with the current rule, all securities for which the 
Exchange is the primary listing market would be Auction-Eligible 
Securities.\22\ However, for Pillar, the Exchange would designate UTP 
Securities \23\ that would be Auction-Eligible Securities for the Early 
Open Auction, the Core Open Auction, and the Closing Auction.\24\ 
According to the Exchange, this approach would support the initiatives 
of the Exchange, NYSE, and the NASDAQ Stock Market LLC (``Nasdaq'') to 
increase resiliency by having auctions on Arca serve as a backup to 
either NYSE or Nasdaq if one of those markets is unable to conduct an 
auction.\25\
---------------------------------------------------------------------------

    \21\ See proposed Rule 7.35P(a)(1).
    \22\ See Notice at 61515.
    \23\ The term ``UTP Security'' means a security that is listed 
on a national securities exchange other than the Exchange and that 
trades on the NYSE Arca Marketplace pursuant to unlisted trading 
privileges. See Rule 1.1(ii).
    \24\ See Notice at 61515. According to the Exchange, consistent 
with Rule 7.18P(b), for the Trading Halt Auction, Auction-Eligible 
Securities means securities for which Arca is the primary listing 
market. See id.
    \25\ See id.
---------------------------------------------------------------------------

    Auction Imbalance Information: The Exchange proposes to define 
``Auction Imbalance Information'' to mean the information that is 
disseminated by the Corporation \26\ for an auction.\27\ As proposed, 
Auction Imbalance Information would be updated at least every second 
(unless there is no change to the information), rather than on a real-
time basis.\28\ According to the Exchange, by updating Auction 
Imbalance Information on a one-second basis, ETP Holders that are 
interested in entering offsetting interest during an Auction Imbalance 
Freeze would have greater certainty of the Imbalance in effect at the 
time of order entry.\29\
---------------------------------------------------------------------------

    \26\ The term ``Corporation'' means NYSE Arca Equities, Inc. See 
Rule 1.1(k).
    \27\ See proposed Rule 7.35P(a)(4).
    \28\ See proposed Rule 7.35P(a)(4)(A).
    \29\ See Amendment No. 1.
---------------------------------------------------------------------------

    Auction NBBO: The Exchange proposes to define ``Auction NBBO'' to 
mean an NBBO that is used for purposes of pricing an auction. As 
proposed, an NBBO is an Auction NBBO when (i) there is an NBB above 
zero and NBO for the security and (ii) the NBBO is not crossed.\30\ In 
addition, for the Core Open Auction, an NBBO is an Auction NBBO when 
the midpoint of the NBBO, when multiplied by a designated percentage, 
is greater than or equal to the spread of that NBBO.\31\ According to 
the Exchange, this approach would promote transparency regarding how 
the Exchange determines pricing for its auctions.\32\ Moreover, 
according to the Exchange, the proposed method for determining the 
Auction NBBO for the Core Open Auction is designed to validate whether 
an NBBO bears a relation to the value of the security.\33\
---------------------------------------------------------------------------

    \30\ See proposed Rule 7.35P(a)(5).
    \31\ See id. The designated percentage would be determined by 
the Corporation from time to time upon prior notice to ETP Holders. 
See id.
    \32\ See Notice at 61516 and 61526.
    \33\ See Notice at 61516.
---------------------------------------------------------------------------

    Auction Ranking: The Exchange proposes to define ``Auction 
Ranking'' to mean how orders on the side of an Imbalance would be 
ranked for allocation in an Auction. Specifically, orders on the side 
of the Imbalance would be ranked in price-time priority under Rule 
7.36P(c)-(g) consistent with the priority ranking associated with each 
order, provided that: (i) MOO and MOC Orders would be ranked Priority 
1--Market Orders; (ii) LOO and LOC Orders would be ranked Priority 2--
Display Orders; and (iii) the limit price of Limit, LOO, and LOC orders 
would be used for ranking purposes.\34\ According to the Exchange, the 
only order ranked Priority 3--Non-Display Orders that would be eligible 
to participate in an auction would be the non-displayed quantity of a 
Reserve Order.\35\ The Exchange states that the proposed approach would 
promote transparency in Exchange rules by consolidating into a single 
location how orders would be ranked for auctions.\36\ The Exchange also 
states that using the same methodology to rank and allocate orders on 
the side of the Imbalance for all auctions based on the priority 
ranking described in Rule 7.36P would promote consistency in how the 
Exchange would rank orders on Pillar, whether for continuous trading or 
for auctions.\37\ In addition, during a Short Sale Period (as defined 
in Rule 7.16P(f)(4)), for purposes of pricing an auction and ranking 
orders for allocation in an auction, sell short Market Orders that are 
adjusted to a Permitted Price (as defined in Rule 7.16P(f)(5)(A)) would 
be processed as Limit Orders ranked Priority 2--Display Orders, and 
would not be included in the Market Imbalance.\38\ The Exchange states 
that, once adjusted to a Permitted Price, a sell short Market Order has 
a price and such price could be used for purposes of determining the 
price of the auction.\39\ As such, the Exchange believes that it is 
appropriate to treat these re-priced Market Orders as Limit Orders for 
purposes of determining allocation in an auction, and that this 
approach would promote transparency by processing all orders that have 
a price similarly in an auction.\40\
---------------------------------------------------------------------------

    \34\ See proposed Rule 7.35P(a)(6).
    \35\ See Notice at note 29.
    \36\ See Notice at 61526.
    \37\ See id.
    \38\ See proposed Rule 7.35P, Commentary .01(a). As proposed, 
sell short orders that are included in the Auction Imbalance 
Information, but are not eligible for continuous trading before the 
applicable auction, would be adjusted to a Permitted Price as the 
NBB moves both up and down. See proposed Rule 7.35P, Commentary 
.01(b). The Exchange states that continuously re-pricing sell short 
orders consistent with Rule 7.16P(f)(5), even though they are not 
yet eligible to trade, would provide greater transparency regarding 
the price at which such orders would be included in the Auction 
Imbalance Information. See Notice at 61525 and Amendment No. 1.
    \39\ See Notice at 61525 and Amendment No. 1.
    \40\ See Notice at 61526.
---------------------------------------------------------------------------

    Market Orders: The Exchange proposes that, for purposes of Rule 
7.35P, unless otherwise specified, the term ``Market Orders'' would 
include MOO Orders (for the Core Open Auction and Trading Halt Auction) 
and MOC Orders (for the Closing Auction).\41\ According to the 
Exchange, consistent with Rule 7.31P(c)(2), the term ``Market Orders'' 
in proposed Rule 7.35P would include MOO Orders for the Trading Halt 
Auction.\42\ Also, the Exchange states that because unexecuted Market 
Orders that are held at a Trading Collar or NBBO would be eligible to 
participate in the Closing Auction and would be included in Closing 
Auction Imbalance Information, proposed Rule 7.35P would refer to 
Market Orders generally for the Closing Auction, which would include 
MOC Orders.\43\
---------------------------------------------------------------------------

    \41\ See proposed Rule 7.35P(a).
    \42\ See Notice at 61514-15.
    \43\ See Notice at 61515.
---------------------------------------------------------------------------

    Market Imbalance: As proposed, the term ``Market Imbalance'' would 
mean the imbalance of any remaining buy (sell) Market Orders that are 
not matched for trading in an auction against any interest, and not 
just Market Orders not matched for trading against

[[Page 2279]]

other Market Orders.\44\ The Exchange states its belief that the 
proposed approach would provide transparency regarding the volume of 
Market Orders not paired up against any interest.\45\
---------------------------------------------------------------------------

    \44\ See proposed Rule 7.35P(a)(7)(B).
    \45\ See Notice at 61517.
---------------------------------------------------------------------------

    Indicative Match Price: As proposed, the term ``Indicative Match 
Price'' would mean the best price at which the maximum volume of 
shares, including the non-displayed quantity of Reserve Orders, is 
tradable in the applicable auction, subject to the Auction Collars.\46\ 
If there are two or more prices at which the maximum volume of shares 
is tradable, the Indicative Match Price would be the price closest to 
the ``Auction Reference Price'' (provided that the Indicative Match 
Price would not be lower (higher) than the price of an order to buy 
(sell) ranked Priority 2 that was eligible to participate in the 
auction).\47\ If the Matched Volume for an auction consists of Market 
Orders only, the Indicative Match Price would be: (i) for the Core open 
Auction, the Auction Reference Price; (ii) for the Closing Auction, the 
midpoint of the Auction NBBO as of the time the auction is conducted, 
provided that if the Auction NBBO is locked, the locked price, and if 
there is no Auction NBBO, the Auction Reference Price; and (iii) for 
the Trading Halt Auction, the Auction Reference Price.\48\ In addition, 
if there is a BBO but no Matched Volume, the Indicative Match Price and 
Total Imbalance for the Auction Imbalance Information would be the side 
of the BBO that has the higher volume, and if the volume of BB equals 
the volume of BO, the BB.\49\ As proposed, if there is no Matched 
Volume and Market Orders on only one side of the market, the Indicative 
Match Price would be zero.\50\
---------------------------------------------------------------------------

    \46\ See proposed Rule 7.35P(a)(8). As proposed, the Indicative 
Match Price would be determined for all securities in the same 
manner, regardless of whether the Exchange is the primary listing 
market for a security or the security is a UTP Security. See Notice 
at 61514. The Exchange states that this would promote clarity and 
transparency in Exchange rules and streamline how auctions would be 
processed. See Notice at 61526.
    \47\ See proposed Rule 7.35P(a)(8)(A). If there are two prices 
at which the maximum volume of shares is tradable and both prices 
are equidistant to the Auction Reference Price, the Indicative Match 
Price would be the Auction Reference Price. See proposed Rule 
7.35P(a)(8)(B).
    \48\ See proposed Rule 7.35P(a)(8)(C).
    \49\ See proposed Rule 7.35P(a)(8)(D). According to the 
Exchange, while there would be no Matched Volume, the Indicative 
Match Price would be a benchmark price that could attract more 
interest for participation in the auction, thereby promoting price 
discovery. See Notice at 61526.
    \50\ See proposed Rule 7.35P(a)(8)(E).
---------------------------------------------------------------------------

    Auction Reference Price: The Auction Reference Price for the Core 
Open Auction would be the midpoint of an Auction NBBO or, if the 
Auction NBBO is locked, the locked price. If there is no Auction NBBO, 
the Exchange would use the prior trading day's Official Closing 
Price.\51\ The Exchange states its belief that using the midpoint of 
the Auction NBBO for the Core Open Auction would better reflect the 
most recent value of the security, as compared to a closing price from 
the prior trading day.\52\ The Auction Reference Price for the Trading 
Halt Auction and the Closing Auction would be the last consolidated 
round-lot price of that trading day and, if none, the prior trading 
day's Official Closing Price.\53\ The Exchange states that the Auction 
Reference Price for the Trading Halt Auction and the Closing Auction is 
based on Rule 1.1(s), with additional specificity that it would be a 
last consolidated round-lot price of that trading day, and to specify 
the reference price if there were no last consolidated round-lot trades 
that day.\54\ The Exchange states its belief that the last consolidated 
round-lot price prior to a Trading Halt Auction would reflect the most 
recent value for a security, and that the last consolidated round-lot 
price would be representative of the value of the security going into 
the Closing Auction.\55\ With respect to the IPO Auction, the Exchange 
proposes that the Auction Reference Price would be zero, unless the 
Corporation is provided with a price for the security.\56\ The Exchange 
states that it proposes to use zero (unless the Corporation is provided 
with a price for the security) because there would not be any prior 
trading in that security.\57\
---------------------------------------------------------------------------

    \51\ See proposed Rule 7.35P(a)(8).
    \52\ See Amendment No. 1.
    \53\ See proposed Rule 7.35P(a)(8).
    \54\ See Notice at 61518.
    \55\ See Amendment No. 1.
    \56\ See proposed Rule 7.35P(a)(8).
    \57\ See Notice at 61518. As with the current rule, the Auction 
Reference Price for the Early Open Auction would be the prior day's 
Official Closing Price. See proposed Rule 7.35P(a)(8).
---------------------------------------------------------------------------

    Auction Collar: The Exchange proposes to define ``Auction Collar'' 
to mean the price collar thresholds for the Indicative Match Price for 
the Core Open Auction and Closing Auction.\58\ As proposed, the Auction 
Collar would be based on a price that is a specified percentage away 
from the Auction Reference Price.\59\ An Indicative Match Price that is 
equal to or outside the Auction Collar would be adjusted to be one 
minimum price variation (``MPV'') inside the Auction Collar, and orders 
eligible to participate in the applicable auction would trade at the 
collared Indicative Match Price.\60\ According to the Exchange, if the 
Auction Collars are based on the clearly erroneous execution thresholds 
(which is currently the case for the Core Open Auction), pricing an 
auction one MPV inside the Auction Collar would potentially prevent an 
auction from being a clearly erroneous execution.\61\ Under the 
proposal, the specified percentages for the Auction Collar would 
be:\62\
---------------------------------------------------------------------------

    \58\ See proposed Rule 7.35P(a)(10) and Amendment No. 3.
    \59\ See proposed Rule 7.35P(a)(10)(A).
    \60\ See proposed Rule 7.35P(a)(10)(B).
    \61\ See Notice at 61526.
    \62\ See proposed Rule 7.35P(a)(10) and Amendment No. 3. These 
thresholds are the same as the current price collar thresholds for 
the Market Order Auction and the Closing Auction.

------------------------------------------------------------------------
                                             Core open        Closing
         Auction reference price            auction (%)     auction (%)
------------------------------------------------------------------------
$25.00 or less..........................              10               5
Greater than $25.00 but less than or                   5               2
 equal to $50.00........................
Greater than $50.00.....................               3               1
------------------------------------------------------------------------

Early Open Auction
    Similar to the Core Open Auction, the non-displayed quantity of 
Reserve Orders eligible to participate in the Early Open Auction would 
not be included in the Matched Volume or Total Imbalance until the 
Early Open Auction Imbalance Freeze begins.\63\
---------------------------------------------------------------------------

    \63\ See proposed Rule 7.35P(b)(1) and discussion below 
regarding the Core Open Auction.
---------------------------------------------------------------------------

    There would not be any order entry or cancellation restrictions 
during the one-minute Auction Imbalance Freeze before the Early Open 
Auction. According to the Exchange, there is not any trading occurring 
before the Early Open Auction, and therefore the risk to manipulate 
market prices before the Early Open Auction is minimal.\64\ The 
Exchange also notes that, because an

[[Page 2280]]

Early Open Auction would occur at 4:00 a.m. Eastern Time, which is well 
before regular market hours, the Exchange generally does not receive 
sufficient buying and selling interest to warrant conducting such an 
auction in the vast majority of Exchange-listed securities.\65\ The 
Exchange notes that, because it generally conducts an Early Open 
Auction in fewer than 20 securities on a given trading day, the need 
for order entry or cancellation restrictions in advance of such 
auctions is abated.\66\
---------------------------------------------------------------------------

    \64\ See Notice at 61526.
    \65\ See Amendment No. 1.
    \66\ See id.
---------------------------------------------------------------------------

Core Open Auction
    As proposed, the non-displayed quantity of Reserve Orders eligible 
to participate in the Core Open Auction would not be included in the 
Matched Volume, Total Imbalance, or Market Imbalance until the Core 
Open Auction Imbalance Freeze begins.\67\ The Exchange states its 
belief that it is appropriate to exclude the volume of the non-
displayed portion of Reserve Orders until the Core Open Auction 
Imbalance Freeze begins because it reduces the potential for market 
participants to identify the volume of interest that is intended to be 
non-displayed.\68\ The Exchange also states its belief that it is 
appropriate to include this information once the Core Open Auction 
Imbalance Freeze begins so that market participants can have greater 
certainty of the full size of the Imbalance in order to assess whether 
to enter offsetting interest and to promote transparency regarding the 
pricing of an auction.\69\
---------------------------------------------------------------------------

    \67\ See proposed Rule 7.35P(c)(1).
    \68\ See Amendment No. 1. According to the Exchange, the 
Indicative Match Price would include the volume of the non-displayed 
portion of Reserve Orders at all times because that data point only 
provides pricing information, and not volume of shares eligible to 
trade. See id.
    \69\ See Amendment No. 3. Also, according to the Exchange, 
because the proposed rule would specify that reserve interest would 
be included in specified Auction Imbalance Information, ETP Holders 
that enter these orders would be on notice that certain information 
about the reserve quantity of their orders would be included in the 
information provided in advance of an auction. See id.
---------------------------------------------------------------------------

    As proposed, the Core Open Auction Imbalance Freeze would be five 
seconds, instead of one minute.\70\ According to the Exchange, this 
shorter Freeze period would provide additional time for market 
participants to enter orders for the Core Open Auction without 
restriction, thereby promoting price discovery for the auction.\71\ The 
Exchange also states its belief that, with today's faster technology, 
five seconds provides sufficient time for industry participants to 
respond to a published Imbalance and enter offsetting interest, if 
applicable.\72\
---------------------------------------------------------------------------

    \70\ See proposed Rule 7.35P(c)(3). However, similar to the 
current rule, the Exchange would reject requests to cancel and 
requests to cancel and replace MOO and LOO Orders beginning one 
minute before the scheduled time for the Core Open Auction. See 
proposed Rule 7.35P(c)(2).
    \71\ See Notice at 61521 and 61526.
    \72\ See Amendment No. 1.
---------------------------------------------------------------------------

    Under the proposal, because of the shorter Freeze period, MOO and 
LOO Orders entered during the Freeze would be rejected regardless of 
side.\73\ The Exchange states its belief that rejecting all MOO and LOO 
Orders would remove the potential for such orders to impact the 
Imbalance.\74\ As proposed, during the Freeze, the Exchange would 
accept Market Orders (other than MOO Orders) and Limit Orders 
designated for the Core Trading Session on both sides of the market, 
but such orders would be eligible to participate in the auction only to 
offset the Imbalance that remains after all orders entered before the 
Freeze are allocated in the Core Open Auction.\75\ The Exchange states 
that this approach would eliminate the possibility for these orders to 
create or increase an Imbalance.\76\ The Exchange also states that it 
proposes to process Market Orders (other than MOO Orders) and Limit 
Orders differently from MOO and LOO Orders because Market Orders (other 
than MOO Orders) and Limit Orders would not expire at the end of the 
auction.\77\ Therefore, rather than rejecting these orders upon entry, 
they would be accepted and would be eligible to be offsetting interest 
for the auction.\78\ If these orders do not participate in the Core 
Open Auction, they would become eligible to participate in the Core 
Trading Session.\79\ As proposed, during the Freeze, requests to cancel 
and requests to cancel and replace Market Orders (other than MOO 
Orders) and Limit Orders designated for the Core Trading Session only 
would be accepted but would not be processed until after the Core Open 
Auction concludes.\80\ All other order instructions would be accepted 
during the Freeze.\81\
---------------------------------------------------------------------------

    \73\ See proposed Rule 7.35P(c)(3)(A).
    \74\ See Notice at 61526.
    \75\ See proposed Rule 7.35P(c)(3)(B).
    \76\ See Notice at 61526.
    \77\ See Notice at 61521.
    \78\ See id.
    \79\ See id.
    \80\ See proposed Rule 7.35P(c)(3)(C).
    \81\ See proposed Rule 7.35P(c)(3)(D).
---------------------------------------------------------------------------

Closing Auction
    As with the Core Open Auction, the non-displayed quantity of 
Reserve Orders eligible to participate in the Closing Auction would not 
be included in the Matched Volume, Total Imbalance, or Market Imbalance 
until the Closing Auction Imbalance Freeze begins.\82\
---------------------------------------------------------------------------

    \82\ See proposed Rule 7.35P(d)(1).
---------------------------------------------------------------------------

    As proposed, the Exchange would conduct a Closing Auction in Pillar 
even if there are only Market Orders eligible to participate in the 
Closing Auction.\83\ According to the Exchange, this proposal would 
increase the potential for market participants that have entered MOC 
Orders to receive an execution in an auction that is priced based on 
the prevailing value of the security.\84\
---------------------------------------------------------------------------

    \83\ See discussion above regarding the determination of 
Indicative Match Price where the Matched Volume for an auction 
consists of Market Orders only.
    \84\ See Notice at 61526. The Exchange states that the midpoint 
of the Auction NBBO in effect as of the scheduled time of the 
Closing Auction as bound by Auction Collars that would be based on 
the last consolidated round-lot price of that trading day would 
reflect the most recent quoting activity and price in a stock. See 
Amendment No. 3. In addition, the Exchange states that pricing an 
auction with only Market Orders on both sides of the market based on 
the midpoint of an uncrossed NBBO is not novel. See id.
---------------------------------------------------------------------------

Trading Halt Auction
    As proposed, a Trading Halt Auction would be conducted to re-open 
trading in an Auction-Eligible Security following a halt or pause of 
trading in that security in the Early Trading Session, Core Trading 
Session, or Late Trading Session, as applicable.\85\ As proposed, 
during a trading halt or pause in an Auction-Eligible Security, entry 
and cancellation of orders eligible to participate in the Trading Halt 
Auction would be processed as provided for in Rule 7.18P(c).\86\
---------------------------------------------------------------------------

    \85\ See proposed Rule 7.35P(e).
    \86\ See proposed Rule 7.35P(e)(3).
---------------------------------------------------------------------------

    Under current Rule 7.35(f)(3)(C), the Corporation, if it deems such 
action necessary, will disseminate the time, prior to the time that 
orders are matched pursuant to the Trading Halt Auction, at which 
orders may no longer be cancelled. The Exchange states that, on the 
current trading platform, it has not invoked this authority, and it 
proposes to not include it in the Pillar rules.\87\
---------------------------------------------------------------------------

    \87\ See Amendment No. 1.
---------------------------------------------------------------------------

IPO Auction
    As proposed, an IPO Auction would be conducted during the Core 
Trading Session on the first day of trading for any security, including 
a Derivative Securities Product,\88\ for which Arca is

[[Page 2281]]

the primary listing market, excluding transfers.\89\ As proposed, an 
IPO Auction would follow the processing rules of a Core Open Auction, 
provided that NYSE Arca Marketplace would specify the time that an IPO 
Auction would be conducted.\90\ Also, there would be no Auction 
Imbalance Freeze, Auction Collars, or restrictions on the entry or 
cancellation of orders for an IPO Auction.\91\ According to the 
Exchange, because an IPO Auction would not be set at a specific time, 
nor would there be any trading in the security before the IPO Auction, 
the Exchange does not believe that an Auction Imbalance Freeze or 
Auction Collars would assist in the price discovery process or would be 
necessary to prevent fraudulent and manipulative acts and 
practices.\92\ Moreover, according to the Exchange, because the time of 
an IPO Auction may change, the Exchange does not believe that there 
needs to be any restrictions on the entry or cancellation of orders 
before an IPO Auction.\93\ The Exchange states that if there is an 
Imbalance going into an IPO Auction, the Exchange could extend the time 
for the IPO Auction in order to attract additional offsetting interest 
or allow ETP Holders to cancel orders that are on the side of the 
Imbalance.\94\ Finally, an IPO Auction would not be conducted if there 
are only Market Orders on both sides of the market.\95\ According to 
the Exchange, if there are only Market Orders on both sides of the 
market, the Exchange has the flexibility to change the time in order to 
attract more interest for the auction.\96\
---------------------------------------------------------------------------

    \88\ The Exchange notes that although the first day of trading 
of a Derivative Securities Product may not technically be an initial 
public offering, it proposes to use the term IPO as signifying that 
this would be the auction on the first day of trading of a new 
listing on the Exchange. See Notice at 61523.
    \89\ See proposed Rule 7.35P(f).
    \90\ See proposed Rule 7.35P(f)(1).
    \91\ See proposed Rule 7.35P(f)(2).
    \92\ See Notice at 61523.
    \93\ See id.
    \94\ See Amendment No. 1.
    \95\ See proposed Rule 7.35P(f)(3).
    \96\ See Notice at 61523-24.
---------------------------------------------------------------------------

Auction Processing Period
    As proposed, new orders, requests to cancel, and requests to cancel 
and replace an order that are received during the Auction Processing 
Period \97\ would be accepted but would not be processed until after 
the auction concludes.\98\ The Exchange states its belief that it is 
appropriate to wait to process such new order instructions until after 
the auction processing concludes in order to provide certainty 
regarding the timing and pricing of an auction.\99\ Moreover, as 
proposed, a request to cancel and replace an order that was entered 
during the Auction Processing Period for an order that was also entered 
during the Auction Processing Period would be rejected.\100\
---------------------------------------------------------------------------

    \97\ The Exchange proposes to define ``Auction Processing 
Period'' to mean the period during which the applicable auction is 
being processed. See proposed Rule 7.35P(a)(2).
    \98\ See proposed Rule 7.35P(g).
    \99\ See Amendment No. 1.
    \100\ See proposed Rule 7.35P(g).
---------------------------------------------------------------------------

Transition to Continuous Trading
    As proposed, after auction processing concludes, including if there 
is no Matched Volume and an auction is not conducted, or when 
transitioning from one trading session to another, orders that are no 
longer eligible to trade would expire.\101\ Orders that are designated 
for a trading session and that were received during a prior trading 
session or during the Auction Processing Period and that did not 
participate in the auction would become eligible to trade.\102\ Also, 
before continuous trading following a prior trading session or an 
auction begins, any order instructions received during either the 
Auction Imbalance Freeze or Auction Processing Period that were not 
processed would be processed.\103\ The display price and working price 
of orders would be adjusted based on the PBBO or NBBO as provided in 
Rule 7.31P.\104\ Moreover, when transitioning to continuous trading, 
the display price and working price of Day ISOs would be adjusted in 
the same manner as Arca Only Orders until the Day ISO is either traded 
in full or displayed at its limit price.\105\
---------------------------------------------------------------------------

    \101\ See proposed Rule 7.35P(h)(1) and Amendment No. 1.
    \102\ See proposed Rule 7.35P(h)(2) and Amendment No. 1.
    \103\ See proposed Rule 7.35P(h)(3)(A) and Amendment No. 1.
    \104\ See proposed Rule 7.35P(h)(3)(B) and Amendment No. 1.
    \105\ See proposed Rule 7.35P(h)(3)(B) and Amendment No. 1. The 
Exchange states its belief that this proposed treatment of Day ISO 
orders would be consistent with the original terms of the order. See 
Amendment No. 1.
---------------------------------------------------------------------------

    As proposed, if orders eligible to trade in the next trading 
session are marketable, such orders would trade and/or route based on 
price-time priority of individual orders, as provided in Rule 
7.37P.\106\ According to the Exchange, if such orders are marketable, 
they would trade or route, as applicable, rather than publishing a 
locked or crossed quote from the NYSE Arca Book.\107\ After marketable 
orders have traded or routed, the NYSE Arca Marketplace would publish a 
quote for the next trading session.\108\
---------------------------------------------------------------------------

    \106\ See proposed Rule 7.35(h)(3)(C) and Amendment No. 1.
    \107\ See Amendment No. 1.
    \108\ See proposed Rule 7.35(h)(3)(D).
---------------------------------------------------------------------------

    Based on the Exchange's representations, the Commission believes 
that the proposed rule change does not raise any novel regulatory 
considerations and should provide greater specificity with respect to 
the functionality available on the Exchange as symbols are migrated to 
the Pillar platform. For these reasons, the Commission believes that 
the proposal should help 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, in general, protect investors and the 
public interest.

IV. Accelerated Approval of Amendment Nos. 1 and 3

    As noted above, in Amendment No. 1, the Exchange: (i) Amends 
proposed Rule 7.35P(h) to provide that the rule would address how 
orders would be handled not only in the transition to continuous 
trading following an auction, but also when transitioning from one 
trading session to the next trading session; (ii) amends proposed Rule 
7.35P(h)(3)(B) to provide that, before continuous trading following a 
prior trading session or an auction begins, the display price and 
working price of orders would be adjusted as provided for in Rule 
7.31P, and that when transitioning to continuous trading, the display 
price and working price of Day ISOs would be adjusted in the same 
manner as Arca Only Orders until the Day ISO is either traded in full 
or displayed at its limit price; and (iii) provides additional 
discussions related to certain proposed rules. In addition, in 
Amendment No. 3, the Exchange: (i) Specifies the percentages for the 
Auction Collar thresholds; (ii) removes the reference to the Trading 
Halt Auction in the definition of Auction Collar; (iii) states that the 
Exchange would provide prior notice to ETP Holders if additional UTP 
Securities are to be designated as Auction-Eligible Securities; (iv) 
includes cross-references to Rule 7.16P in Commentary .01 to proposed 
Rule 7.35P to clarify where certain terms are defined; and (v) provides 
additional discussions related to certain proposed rules. The 
Commission believes that the changes proposed in Amendment Nos. 1 and 3 
do not raise novel regulatory issues and provide further discussions 
regarding the proposed rules governing Pillar. Accordingly, the 
Commission finds good cause, pursuant to Section 19(b)(2) of the 
Act,\109\ to approve the proposed

[[Page 2282]]

rule change, as modified by Amendment Nos. 1 and 3, on an accelerated 
basis.
---------------------------------------------------------------------------

    \109\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

V. Solicitation of Comments on Amendment Nos. 1 and 3

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether Amendment Nos. 1 
and 3 are 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 [email protected]. Please include 
File Number SR-NYSEArca-2015-86 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-NYSEArca-2015-86. 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-NYSEArca-2015-86 and should 
be submitted on or before February 5, 2016.

VI. Conclusion

    IT IS THEREFORE ORDERED, pursuant to Section 19(b)(2) of the 
Act,\110\ that the proposed rule change (SR-NYSEArca-2015-86), as 
modified by Amendment Nos. 1 and 3, be, and hereby is, approved on an 
accelerated basis.
---------------------------------------------------------------------------

    \110\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\111\
---------------------------------------------------------------------------

    \111\ 17 CFR 200.30-3(a)(12).

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-00645 Filed 1-14-16; 8:45 am]
BILLING CODE 8011-01-P



                                                  2276                           Federal Register / Vol. 81, No. 10 / Friday, January 15, 2016 / Notices

                                                  have been widely adopted by equities                    competition, as such change is intended                 change that are filed with the
                                                  and options exchanges and are equitable                 to incentivize participants to increase                 Commission, and all written
                                                  because they are open to all Members on                 their participation on the Exchange.                    communications relating to the
                                                  an equal basis and provide additional                                                                           proposed rule change between the
                                                                                                          (C) Self-Regulatory Organization’s
                                                  benefits or discounts that are reasonably                                                                       Commission and any person, other than
                                                                                                          Statement on Comments on the
                                                  related to the value to an exchange’s                                                                           those that may be withheld from the
                                                  market quality associated with higher                   Proposed Rule Change Received From
                                                                                                                                                                  public in accordance with the
                                                  levels of market activity, such as higher               Members, Participants or Others
                                                                                                                                                                  provisions of 5 U.S.C. 552, will be
                                                  levels of liquidity provision and/or                      The Exchange has not solicited, and                   available for Web site viewing and
                                                  growth patterns, and introduction of                    does not intend to solicit, comments on                 printing in the Commission’s Public
                                                  higher volumes of orders into the price                 this proposed rule change. The                          Reference Room, 100 F Street NE.,
                                                  and volume discovery processes. Easing                  Exchange has not received any written                   Washington, DC 20549, on official
                                                  the criteria for the Customer Step-Up                   comments from members or other                          business days between the hours of
                                                  Volume Tier is intended to incentivize                  interested parties.                                     10:00 a.m. and 3:00 p.m. Copies of such
                                                  Members to send additional orders to                                                                            filing will also be available for
                                                                                                          III. Date of Effectiveness of the
                                                  the Exchange in an effort to qualify for                                                                        inspection and copying at the principal
                                                                                                          Proposed Rule Change and Timing for
                                                  the enhanced rebate available by the                                                                            office of the Exchange. All comments
                                                                                                          Commission Action
                                                  respective tier.                                                                                                received will be posted without change;
                                                     The Exchange believes that this                         The foregoing rule change has become                 the Commission does not edit personal
                                                  change is reasonable, fair and equitable                effective pursuant to Section 19(b)(3)(A)               identifying information from
                                                  and non-discriminatory, for the reasons                 of the Act 9 and paragraph (f) of Rule                  submissions. You should submit only
                                                  set forth with respect to volume-based                  19b–4 thereunder.10 At any time within                  information that you wish to make
                                                  pricing generally and because such                      60 days of the filing of the proposed rule              available publicly. All submissions
                                                  change will either incentivize                          change, the Commission summarily may                    should refer to File No. SR–BATS–
                                                  participants to further contribute to                   temporarily suspend such rule change if                 2015–120 and should be submitted on
                                                  market quality on the Exchange or will                  it appears to the Commission that such                  or before February 5, 2016.
                                                  allow the Exchange to earn additional                   action is necessary or appropriate in the
                                                  revenue that can be used to offset the                  public interest, for the protection of                    For the Commission, by the Division of
                                                                                                                                                                  Trading and Markets, pursuant to delegated
                                                  addition of new pricing incentives. The                 investors, or otherwise in furtherance of               authority.11
                                                  Exchange also believes that the                         the purposes of the Act.
                                                                                                                                                                  Robert W. Errett,
                                                  proposed rebate remains consistent with
                                                  pricing previously offered by the                       IV. Solicitation of Comments                            Deputy Secretary.
                                                  Exchange as well as competitors of the                    Interested persons are invited to                     [FR Doc. 2016–00640 Filed 1–14–16; 8:45 am]
                                                  Exchange and does not represent a                       submit written data, views, and                         BILLING CODE 8011–01–P
                                                  significant departure from the                          arguments concerning the foregoing,
                                                  Exchange’s general pricing structure.                   including whether the proposed rule
                                                                                                          change is consistent with the Act.                      SECURITIES AND EXCHANGE
                                                  (B) Self-Regulatory Organization’s                                                                              COMMISSION
                                                                                                          Comments may be submitted by any of
                                                  Statement on Burden on Competition
                                                                                                          the following methods:
                                                     The Exchange believes the proposed                                                                           [Release No. 34–76869; File No. SR–
                                                  amendment to its fee schedule would                     Electronic Comments                                     NYSEArca–2015–86]
                                                  not impose any burden on competition                      • Use the Commission’s Internet                       Self-Regulatory Organizations; NYSE
                                                  that is not necessary or appropriate in                 comment form (http://www.sec.gov/                       Arca, Inc.; Order Granting Approval of
                                                  furtherance of the purposes of the Act.                 rules/sro.shtml); or                                    Proposed Rule Change, and Notice of
                                                  The Exchange does not believe that the                    • Send an email to rule-comments@
                                                                                                                                                                  Filing and Order Granting Accelerated
                                                  proposed change represents a significant                sec.gov. Please include File No. SR–
                                                                                                                                                                  Approval of Amendment Nos. 1 and 3
                                                  departure from previous pricing offered                 BATS–2015–120 on the subject line.
                                                                                                                                                                  Thereto, Relating to Auctions for Pillar,
                                                  by the Exchange or pricing offered by
                                                                                                          Paper Comments                                          the Exchange’s New Trading
                                                  the Exchange’s competitors.
                                                                                                             • Send paper comments in triplicate                  Technology Platform
                                                  Additionally, Members may opt to
                                                  disfavor the Exchange’s pricing if they                 to Secretary, Securities and Exchange                   January 11, 2016.
                                                  believe that alternatives offer them                    Commission, 100 F Street NE.,
                                                  better value. Accordingly, the Exchange                 Washington, DC 20549–1090.                              I. Introduction
                                                  does not believe that the proposed                      All submissions should refer to File No.                  On September 22, 2015, NYSE Arca,
                                                  change will impair the ability of                       SR–BATS–2015–120. This file number                      Inc. (‘‘Exchange’’ or ‘‘Arca’’) filed with
                                                  Members or competing venues to                          should be included on the subject line                  the Securities and Exchange
                                                  maintain their competitive standing in                  if email is used. To help the                           Commission (‘‘Commission’’), pursuant
                                                  the financial markets. The Exchange                     Commission process and review your                      to Section 19(b)(1) of the Securities
                                                  does not believe that the proposed                      comments more efficiently, please use                   Exchange Act of 1934 (‘‘Act’’) 1 and Rule
                                                  change to the Exchange’s tiered pricing                 only one method. The Commission will                    19b-4 thereunder,2 a proposed rule
                                                  structure burdens competition, but                      post all comments on the Commission’s                   change to adopt new equity trading
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                  instead, enhances competition as it is                  Internet Web site (http://www.sec.gov/                  rules relating to auctions for Pillar, the
                                                  intended to increase the                                rules/sro.shtml). Copies of the                         Exchange’s new trading technology
                                                  competitiveness of the Exchange by                      submission, all subsequent                              platform. The proposed rule change was
                                                  easing the criteria necessary to qualify                amendments, all written statements                      published for comment in the Federal
                                                  for the Customer Step-Up Volume tier.                   with respect to the proposed rule
                                                  Also, the Exchange believes that the                                                                              11 17 CFR 200.30–3(a)(12).
                                                  decrease to the tier’s threshold                          9 15 U.S.C. 78s(b)(3)(A).                               1 15 U.S.C. 78s(b)(1).
                                                  contributes to, rather than burdens                       10 17 CFR 240.19b–4(f).                                 2 17 CFR 240.19b–4.




                                             VerDate Sep<11>2014   20:01 Jan 14, 2016   Jkt 238001   PO 00000   Frm 00117   Fmt 4703    Sfmt 4703   E:\FR\FM\15JAN1.SGM     15JAN1


                                                                                  Federal Register / Vol. 81, No. 10 / Friday, January 15, 2016 / Notices                                                     2277

                                                  Register on October 13, 2015.3 The                        A. Background                                         platform.13 According to the Exchange,
                                                  Commission received no comments on                           The Exchange represents that Pillar is             proposed Rule 7.35P would use Pillar
                                                  the proposed rule change. On November                     an integrated trading technology                      terminology and include both
                                                  20, 2015, the Commission designated a                     platform designed to use a single                     substantive and non-substantive
                                                  longer period within which to approve                     specification for connecting to the                   differences and clarifications from the
                                                  the proposed rule change, disapprove                      equities and options markets operated                 current rule text.14 The proposed
                                                  the proposed rule change, or institute                    by Arca and its affiliates, New York                  changes that are more substantive in
                                                  proceedings to determine whether to                       Stock Exchange LLC (‘‘NYSE’’) and                     nature are noted in Section III below
                                                  approve or disapprove the proposed                        NYSE MKT LLC (‘‘NYSE MKT’’).8 On                      and are discussed in the Notice.
                                                  rule change.4 On December 22, 2015,                       April 30, 2015, the Exchange filed the                III. Discussion and Commission
                                                  the Exchange filed Amendment No. 1 to                     first rule filing relating to the                     Findings
                                                  the proposed rule change.5 On January                     implementation of Pillar, which
                                                  7, 2016, the Exchange filed Amendment                                                                              The Commission finds that the
                                                                                                            adopted rules relating to Trading
                                                  No. 3 to the proposed rule change.6 The                                                                         proposed rule change is consistent with
                                                                                                            Sessions, Order Ranking and Display,
                                                  Commission is publishing this notice to                                                                         the requirements of the Act and the
                                                                                                            and Order Execution.9 On July 7, 2015,
                                                  solicit comment on Amendment Nos. 1                                                                             rules and regulations thereunder
                                                                                                            the Exchange filed the second rule filing
                                                  and 3 from interested persons, and is                                                                           applicable to a national securities
                                                                                                            relating to the implementation of Pillar,
                                                  approving the proposed rule change, as                                                                          exchange.15 In particular, the
                                                                                                            which adopted rules relating to Orders
                                                  modified by Amendment Nos. 1 and 3,                                                                             Commission finds that the proposed
                                                                                                            and Modifiers and the Retail Liquidity
                                                  on an accelerated basis.                                                                                        rule change is consistent with Section
                                                                                                            Program.10 On July 1, 2015, the
                                                                                                                                                                  6(b)(5) of the Act,16 which requires,
                                                  II. Description of the Proposed Rule                      Exchange filed the third rule filing
                                                                                                                                                                  among other things, that the rules of a
                                                  Change                                                    relating to the implementation of Pillar,
                                                                                                                                                                  national securities exchange be
                                                                                                            which adopted rules relating to Trading
                                                     The Exchange proposes to adopt Rule                                                                          designed to prevent fraudulent and
                                                                                                            Halts, Short Sales, Limit Up-Limit
                                                  7.35P, which relates to auctions for                                                                            manipulative acts and practices, to
                                                                                                            Down, and Odd Lots and Mixed Lots.11
                                                  Pillar, the Exchange’s new trading                           This filing is the fourth set of                   promote just and equitable principles of
                                                  technology platform. The Exchange also                    proposed rule changes to support Pillar               trade, to foster cooperation and
                                                  proposes to amend existing definitions                    implementation. As proposed, the new                  coordination with persons engaged in
                                                  in Rule 1.1.7                                             rule governing trading on Pillar would                facilitating transactions in securities, to
                                                                                                            have the same numbering as the current                remove impediments to and perfect the
                                                     3 See Securities Exchange Act Release No. 76085
                                                                                                            rule, but with the modifier ‘‘P’’                     mechanism of a free and open market
                                                  (October 6, 2015), 80 FR 61513 (‘‘Notice’’).                                                                    and a national market system and, in
                                                     4 See Securities Exchange Act Release No. 76493,       appended to the rule number.
                                                                                                            Specifically, Rule 7.35, which governs                general, to protect investors and the
                                                  80 FR 74169 (November 27, 2015).
                                                     5 In Amendment No. 1, the Exchange: (i) Amends
                                                                                                            auctions, would remain unchanged and                  public interest and that the rules are not
                                                  proposed Rule 7.35P(h) to provide that the rule           continue to apply to any trading in                   designed to permit unfair
                                                  would address how orders would be handled not
                                                                                                            symbols on the current trading platform.              discrimination between customers,
                                                  only in the transition to continuous trading                                                                    issuers, brokers, or dealers.
                                                  following an auction, but also when transitioning         Proposed Rule 7.35P would govern
                                                                                                                                                                     The Commission notes that, in the
                                                  from one trading session to the next trading session;     auctions for trading in symbols migrated
                                                  (ii) amends proposed Rule 7.35P(h)(3)(B) to provide                                                             proposal, the Exchange states its belief
                                                                                                            to the Pillar platform.
                                                  that, before continuous trading following a prior                                                               that proposed Rule 7.35P, together with
                                                  trading session or an auction begins, the display         B. Proposed Modifications                             rules from the three previous Pillar
                                                  price and working price of orders would be
                                                  adjusted as provided for in Rule 7.31P, and that             As stated in the Notice, the Exchange              filings, would remove impediments to
                                                  when transitioning to continuous trading, the             proposes new Rule 7.35P to describe                   and perfect the mechanism of a free and
                                                  display price and working price of Day ISOs would         auctions on Pillar, which would be                    open market because they would
                                                  be adjusted in the same manner as Arca Only                                                                     promote transparency by using
                                                  Orders until the Day ISO is either traded in full or      based on Rule 7.35 and Rules 1.1(r) and
                                                  displayed at its limit price; and (iii) provides          (s).12 The Exchange states that auctions              consistent terminology for rules
                                                  additional discussions related to certain proposed        on Pillar would function similarly to                 governing equities trading, thereby
                                                  rules.                                                    auctions on the current trading                       ensuring that members, regulators, and
                                                     6 Amendment No. 3 superseded Amendment No.
                                                                                                                                                                  the public can more easily navigate the
                                                  2 in its entirety. In Amendment No. 3, the
                                                  Exchange: (i) Specifies the percentages for the
                                                                                                              8 See  Notice at 61513.                             Exchange’s rulebook and better
                                                  Auction Collar thresholds; (ii) removes the                 9 See  Securities Exchange Act Release No. 74951    understand how equity trading would
                                                  reference to the Trading Halt Auction in the              (May 13, 2015), 80 FR 28721 (May 19, 2015) (SR–       be conducted on Pillar.17 The Exchange
                                                  definition of Auction Collar; (iii) states that the       NYSEArca–2015–38) (‘‘Pillar I Filing’’). The          also states that the proposed use of
                                                  Exchange would provide prior notice to ETP                Commission approved the Pillar I Filing on July 20,
                                                  Holders if additional UTP Securities are to be            2015. See Securities Exchange Act Release No.         Pillar terminology would promote
                                                  designated as Auction-Eligible Securities; (iv)           75494 (July 20, 2015), 80 FR 44170 (July 24, 2015).   consistency in the Exchange’s rulebook
                                                  includes cross-references to Rule 7.16P in                   10 See Securities Exchange Act Release No. 75497
                                                                                                                                                                  regarding how the Exchange would
                                                  Commentary .01 to proposed Rule 7.35P to clarify          (July 21, 2015), 80 FR 45022 (July 28, 2015) (SR–     process orders during an auction.18
                                                  where certain terms are defined; and (v) provides         NYSEArca–2015–56) (‘‘Pillar II Filing’’). The
                                                  additional discussions related to certain proposed        Commission approved the Pillar II Filing on           Moreover, the Exchange states that
                                                  rules.                                                    October 26, 2015. See Securities Exchange Act         adding new rules with the modifier ‘‘P’’
                                                     7 The Exchange proposes to amend Rules 1.1(r)          Release No. 76267 (October 26, 2015), 80 FR 66951     to denote the rules that would be
                                                  and (s) to specify that the definition of ‘‘Imbalance’’   (October 30, 2015).
                                                                                                               11 See Securities Exchange Act Release No. 75467
                                                  and ‘‘Indicative Match Price’’ in those rules would
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                                                                                                                                    13 See Notice at 61513–14.
                                                  be applicable only for auctions conducted on the          (July 16, 2015), 80 FR 43515 (July 22, 2015) (SR–       14 See
                                                                                                            NYSEArca–2015–58) (‘‘Pillar III Filing’’). The                 Notice at 61514.
                                                  current trading platform. The Exchange states that                                                                15 In approving this proposed rule change, the
                                                  these changes would remove impediments to and             Commission approved the Pillar III Filing on
                                                  perfect the mechanism of a fair and orderly market        October 20, 2015. See Securities Exchange Act         Commission has considered the proposed rule’s
                                                  because they would not make any substantive               Release No. 76198 (October 20, 2015), 80 FR 65274     impact on efficiency, competition, and capital
                                                  changes, but rather are designed to reduce                (October 26, 2015). See also Securities Exchange      formation. See 15 U.S.C. 78c(f).
                                                                                                                                                                    16 15 U.S.C. 78f(b)(5).
                                                  confusion by specifying that Rules 1.1(r) and (s)         Act Release No. 76198A (October 28, 2015), 80 FR
                                                                                                            67822 (November 3, 2015).                               17 See Notice at 61525.
                                                  would be applicable to auctions on the current
                                                  trading platform only. See Notice at 61525.                  12 See Notice at 61513.                              18 See id.




                                             VerDate Sep<11>2014    20:01 Jan 14, 2016   Jkt 238001   PO 00000   Frm 00118   Fmt 4703   Sfmt 4703   E:\FR\FM\15JAN1.SGM   15JAN1


                                                  2278                           Federal Register / Vol. 81, No. 10 / Friday, January 15, 2016 / Notices

                                                  operative for Pillar would remove                       Auction Imbalance Freeze would have                    auctions.37 In addition, during a Short
                                                  impediments to and perfect the                          greater certainty of the Imbalance in                  Sale Period (as defined in Rule
                                                  mechanism of a free and open market by                  effect at the time of order entry.29                   7.16P(f)(4)), for purposes of pricing an
                                                  providing transparency regarding which                     Auction NBBO: The Exchange                          auction and ranking orders for
                                                  rules govern trading once a symbol has                  proposes to define ‘‘Auction NBBO’’ to                 allocation in an auction, sell short
                                                  been migrated to Pillar.19                              mean an NBBO that is used for purposes                 Market Orders that are adjusted to a
                                                    The Commission also notes that, with                  of pricing an auction. As proposed, an                 Permitted Price (as defined in Rule
                                                  respect to the substantive differences                  NBBO is an Auction NBBO when (i)                       7.16P(f)(5)(A)) would be processed as
                                                  between proposed Rule 7.35P and the                     there is an NBB above zero and NBO for                 Limit Orders ranked Priority 2—Display
                                                  current rules, the Exchange states that                 the security and (ii) the NBBO is not                  Orders, and would not be included in
                                                  they would remove impediments to and                    crossed.30 In addition, for the Core Open              the Market Imbalance.38 The Exchange
                                                  perfect the mechanism of a fair and                     Auction, an NBBO is an Auction NBBO                    states that, once adjusted to a Permitted
                                                  orderly market.20 In particular, the                    when the midpoint of the NBBO, when                    Price, a sell short Market Order has a
                                                  Exchange proposes to make several                       multiplied by a designated percentage,                 price and such price could be used for
                                                  changes that are more substantive in                    is greater than or equal to the spread of              purposes of determining the price of the
                                                  nature, which include:                                  that NBBO.31 According to the                          auction.39 As such, the Exchange
                                                                                                          Exchange, this approach would promote                  believes that it is appropriate to treat
                                                  Definitions
                                                                                                          transparency regarding how the                         these re-priced Market Orders as Limit
                                                     Auction-Eligible Security: The                       Exchange determines pricing for its                    Orders for purposes of determining
                                                  Exchange proposes a new definition for                  auctions.32 Moreover, according to the                 allocation in an auction, and that this
                                                  the term ‘‘Auction-Eligible Security.’’ 21              Exchange, the proposed method for                      approach would promote transparency
                                                  According to the Exchange, as with the                  determining the Auction NBBO for the                   by processing all orders that have a
                                                  current rule, all securities for which the              Core Open Auction is designed to                       price similarly in an auction.40
                                                  Exchange is the primary listing market                  validate whether an NBBO bears a                         Market Orders: The Exchange
                                                  would be Auction-Eligible Securities.22                 relation to the value of the security.33               proposes that, for purposes of Rule
                                                  However, for Pillar, the Exchange would                    Auction Ranking: The Exchange                       7.35P, unless otherwise specified, the
                                                  designate UTP Securities 23 that would                  proposes to define ‘‘Auction Ranking’’                 term ‘‘Market Orders’’ would include
                                                  be Auction-Eligible Securities for the                  to mean how orders on the side of an                   MOO Orders (for the Core Open Auction
                                                  Early Open Auction, the Core Open                       Imbalance would be ranked for                          and Trading Halt Auction) and MOC
                                                  Auction, and the Closing Auction.24                     allocation in an Auction. Specifically,                Orders (for the Closing Auction).41
                                                  According to the Exchange, this                         orders on the side of the Imbalance                    According to the Exchange, consistent
                                                  approach would support the initiatives                  would be ranked in price-time priority                 with Rule 7.31P(c)(2), the term ‘‘Market
                                                  of the Exchange, NYSE, and the                          under Rule 7.36P(c)–(g) consistent with                Orders’’ in proposed Rule 7.35P would
                                                  NASDAQ Stock Market LLC (‘‘Nasdaq’’)                    the priority ranking associated with                   include MOO Orders for the Trading
                                                  to increase resiliency by having auctions               each order, provided that: (i) MOO and                 Halt Auction.42 Also, the Exchange
                                                  on Arca serve as a backup to either                     MOC Orders would be ranked Priority                    states that because unexecuted Market
                                                  NYSE or Nasdaq if one of those markets                  1—Market Orders; (ii) LOO and LOC                      Orders that are held at a Trading Collar
                                                  is unable to conduct an auction.25                      Orders would be ranked Priority 2—                     or NBBO would be eligible to
                                                     Auction Imbalance Information: The                   Display Orders; and (iii) the limit price              participate in the Closing Auction and
                                                  Exchange proposes to define ‘‘Auction                   of Limit, LOO, and LOC orders would                    would be included in Closing Auction
                                                  Imbalance Information’’ to mean the                     be used for ranking purposes.34                        Imbalance Information, proposed Rule
                                                  information that is disseminated by the                 According to the Exchange, the only                    7.35P would refer to Market Orders
                                                  Corporation 26 for an auction.27 As                     order ranked Priority 3—Non-Display                    generally for the Closing Auction, which
                                                  proposed, Auction Imbalance                             Orders that would be eligible to                       would include MOC Orders.43
                                                  Information would be updated at least                   participate in an auction would be the                   Market Imbalance: As proposed, the
                                                  every second (unless there is no change                 non-displayed quantity of a Reserve                    term ‘‘Market Imbalance’’ would mean
                                                  to the information), rather than on a                   Order.35 The Exchange states that the                  the imbalance of any remaining buy
                                                  real-time basis.28 According to the                     proposed approach would promote                        (sell) Market Orders that are not
                                                  Exchange, by updating Auction                           transparency in Exchange rules by                      matched for trading in an auction
                                                  Imbalance Information on a one-second                   consolidating into a single location how               against any interest, and not just Market
                                                  basis, ETP Holders that are interested in               orders would be ranked for auctions.36                 Orders not matched for trading against
                                                  entering offsetting interest during an                  The Exchange also states that using the
                                                                                                          same methodology to rank and allocate                    37 See  id.
                                                    19 See  id.                                           orders on the side of the Imbalance for                  38 See  proposed Rule 7.35P, Commentary .01(a).
                                                     20 See id.
                                                                                                          all auctions based on the priority                     As proposed, sell short orders that are included in
                                                     21 See proposed Rule 7.35P(a)(1).                                                                           the Auction Imbalance Information, but are not
                                                     22 See Notice at 61515.
                                                                                                          ranking described in Rule 7.36P would                  eligible for continuous trading before the applicable
                                                     23 The term ‘‘UTP Security’’ means a security that   promote consistency in how the                         auction, would be adjusted to a Permitted Price as
                                                  is listed on a national securities exchange other       Exchange would rank orders on Pillar,                  the NBB moves both up and down. See proposed
                                                  than the Exchange and that trades on the NYSE           whether for continuous trading or for                  Rule 7.35P, Commentary .01(b). The Exchange
                                                  Arca Marketplace pursuant to unlisted trading                                                                  states that continuously re-pricing sell short orders
                                                  privileges. See Rule 1.1(ii).                                                                                  consistent with Rule 7.16P(f)(5), even though they
                                                                                                            29 See Amendment No. 1.
                                                     24 See Notice at 61515. According to the                                                                    are not yet eligible to trade, would provide greater
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                                                                            30 See proposed Rule 7.35P(a)(5).
                                                  Exchange, consistent with Rule 7.18P(b), for the                                                               transparency regarding the price at which such
                                                                                                            31 See id. The designated percentage would be        orders would be included in the Auction Imbalance
                                                  Trading Halt Auction, Auction-Eligible Securities
                                                  means securities for which Arca is the primary          determined by the Corporation from time to time        Information. See Notice at 61525 and Amendment
                                                  listing market. See id.                                 upon prior notice to ETP Holders. See id.              No. 1.
                                                     25 See id.                                             32 See Notice at 61516 and 61526.                       39 See Notice at 61525 and Amendment No. 1.

                                                     26 The term ‘‘Corporation’’ means NYSE Arca            33 See Notice at 61516.                                 40 See Notice at 61526.

                                                  Equities, Inc. See Rule 1.1(k).                           34 See proposed Rule 7.35P(a)(6).                       41 See proposed Rule 7.35P(a).
                                                     27 See proposed Rule 7.35P(a)(4).                      35 See Notice at note 29.                               42 See Notice at 61514–15.
                                                     28 See proposed Rule 7.35P(a)(4)(A).                   36 See Notice at 61526.                                 43 See Notice at 61515.




                                             VerDate Sep<11>2014   20:01 Jan 14, 2016   Jkt 238001   PO 00000   Frm 00119   Fmt 4703   Sfmt 4703   E:\FR\FM\15JAN1.SGM   15JAN1


                                                                                            Federal Register / Vol. 81, No. 10 / Friday, January 15, 2016 / Notices                                                                                  2279

                                                  other Market Orders.44 The Exchange                                        BBO that has the higher volume, and if                                     price would be representative of the
                                                  states its belief that the proposed                                        the volume of BB equals the volume of                                      value of the security going into the
                                                  approach would provide transparency                                        BO, the BB.49 As proposed, if there is no                                  Closing Auction.55 With respect to the
                                                  regarding the volume of Market Orders                                      Matched Volume and Market Orders on                                        IPO Auction, the Exchange proposes
                                                  not paired up against any interest.45                                      only one side of the market, the                                           that the Auction Reference Price would
                                                     Indicative Match Price: As proposed,                                    Indicative Match Price would be zero.50                                    be zero, unless the Corporation is
                                                  the term ‘‘Indicative Match Price’’                                           Auction Reference Price: The Auction                                    provided with a price for the security.56
                                                  would mean the best price at which the                                     Reference Price for the Core Open                                          The Exchange states that it proposes to
                                                  maximum volume of shares, including                                        Auction would be the midpoint of an                                        use zero (unless the Corporation is
                                                  the non-displayed quantity of Reserve                                      Auction NBBO or, if the Auction NBBO                                       provided with a price for the security)
                                                  Orders, is tradable in the applicable                                      is locked, the locked price. If there is no                                because there would not be any prior
                                                  auction, subject to the Auction                                            Auction NBBO, the Exchange would use                                       trading in that security.57
                                                  Collars.46 If there are two or more prices                                 the prior trading day’s Official Closing                                      Auction Collar: The Exchange
                                                  at which the maximum volume of                                             Price.51 The Exchange states its belief                                    proposes to define ‘‘Auction Collar’’ to
                                                  shares is tradable, the Indicative Match                                   that using the midpoint of the Auction                                     mean the price collar thresholds for the
                                                  Price would be the price closest to the                                    NBBO for the Core Open Auction would                                       Indicative Match Price for the Core
                                                  ‘‘Auction Reference Price’’ (provided                                      better reflect the most recent value of                                    Open Auction and Closing Auction.58
                                                  that the Indicative Match Price would                                      the security, as compared to a closing                                     As proposed, the Auction Collar would
                                                  not be lower (higher) than the price of                                    price from the prior trading day.52 The                                    be based on a price that is a specified
                                                  an order to buy (sell) ranked Priority 2                                   Auction Reference Price for the Trading                                    percentage away from the Auction
                                                  that was eligible to participate in the                                    Halt Auction and the Closing Auction                                       Reference Price.59 An Indicative Match
                                                  auction).47 If the Matched Volume for an                                   would be the last consolidated round-lot                                   Price that is equal to or outside the
                                                  auction consists of Market Orders only,                                    price of that trading day and, if none,                                    Auction Collar would be adjusted to be
                                                  the Indicative Match Price would be: (i)                                   the prior trading day’s Official Closing                                   one minimum price variation (‘‘MPV’’)
                                                  for the Core open Auction, the Auction                                     Price.53 The Exchange states that the                                      inside the Auction Collar, and orders
                                                  Reference Price; (ii) for the Closing                                      Auction Reference Price for the Trading                                    eligible to participate in the applicable
                                                  Auction, the midpoint of the Auction                                       Halt Auction and the Closing Auction is                                    auction would trade at the collared
                                                  NBBO as of the time the auction is                                         based on Rule 1.1(s), with additional                                      Indicative Match Price.60 According to
                                                  conducted, provided that if the Auction                                    specificity that it would be a last                                        the Exchange, if the Auction Collars are
                                                  NBBO is locked, the locked price, and                                      consolidated round-lot price of that                                       based on the clearly erroneous
                                                  if there is no Auction NBBO, the                                           trading day, and to specify the reference                                  execution thresholds (which is currently
                                                  Auction Reference Price; and (iii) for the                                 price if there were no last consolidated                                   the case for the Core Open Auction),
                                                  Trading Halt Auction, the Auction                                          round-lot trades that day.54 The                                           pricing an auction one MPV inside the
                                                  Reference Price.48 In addition, if there is                                Exchange states its belief that the last                                   Auction Collar would potentially
                                                  a BBO but no Matched Volume, the                                           consolidated round-lot price prior to a                                    prevent an auction from being a clearly
                                                  Indicative Match Price and Total                                           Trading Halt Auction would reflect the                                     erroneous execution.61 Under the
                                                  Imbalance for the Auction Imbalance                                        most recent value for a security, and                                      proposal, the specified percentages for
                                                  Information would be the side of the                                       that the last consolidated round-lot                                       the Auction Collar would be:62

                                                                                                                                                                                                                              Core open         Closing
                                                                                                                    Auction reference price                                                                                    auction          auction
                                                                                                                                                                                                                                 (%)              (%)

                                                  $25.00 or less ..........................................................................................................................................................            10                   5
                                                  Greater than $25.00 but less than or equal to $50.00 ............................................................................................                                     5                   2
                                                  Greater than $50.00 ................................................................................................................................................                  3                   1



                                                  Early Open Auction                                                         Total Imbalance until the Early Open                                       the Exchange, there is not any trading
                                                                                                                             Auction Imbalance Freeze begins.63                                         occurring before the Early Open
                                                    Similar to the Core Open Auction, the
                                                                                                                               There would not be any order entry or                                    Auction, and therefore the risk to
                                                  non-displayed quantity of Reserve
                                                                                                                             cancellation restrictions during the one-                                  manipulate market prices before the
                                                  Orders eligible to participate in the
                                                                                                                             minute Auction Imbalance Freeze before                                     Early Open Auction is minimal.64 The
                                                  Early Open Auction would not be
                                                  included in the Matched Volume or                                          the Early Open Auction. According to                                       Exchange also notes that, because an

                                                    44 See  proposed Rule 7.35P(a)(7)(B).                                    would be the Auction Reference Price. See                                    57 See Notice at 61518. As with the current rule,

                                                    45 See  Notice at 61517.                                                 proposed Rule 7.35P(a)(8)(B).                                              the Auction Reference Price for the Early Open
                                                     46 See proposed Rule 7.35P(a)(8). As proposed,
                                                                                                                               48 See proposed Rule 7.35P(a)(8)(C).                                     Auction would be the prior day’s Official Closing
                                                                                                                               49 See proposed Rule 7.35P(a)(8)(D). According to                        Price. See proposed Rule 7.35P(a)(8).
                                                  the Indicative Match Price would be determined for                                                                                                      58 See proposed Rule 7.35P(a)(10) and
                                                                                                                             the Exchange, while there would be no Matched
                                                  all securities in the same manner, regardless of
                                                                                                                             Volume, the Indicative Match Price would be a                              Amendment No. 3.
                                                  whether the Exchange is the primary listing market                         benchmark price that could attract more interest for                         59 See proposed Rule 7.35P(a)(10)(A).
                                                  for a security or the security is a UTP Security. See
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                                                                                             participation in the auction, thereby promoting                              60 See proposed Rule 7.35P(a)(10)(B).
                                                  Notice at 61514. The Exchange states that this                             price discovery. See Notice at 61526.                                        61 See Notice at 61526.
                                                  would promote clarity and transparency in                                    50 See proposed Rule 7.35P(a)(8)(E).
                                                                                                                                                                                                          62 See proposed Rule 7.35P(a)(10) and
                                                  Exchange rules and streamline how auctions would                             51 See proposed Rule 7.35P(a)(8).
                                                                                                                                                                                                        Amendment No. 3. These thresholds are the same
                                                  be processed. See Notice at 61526.                                           52 See Amendment No. 1.
                                                                                                                                                                                                        as the current price collar thresholds for the Market
                                                     47 See proposed Rule 7.35P(a)(8)(A). If there are                         53 See proposed Rule 7.35P(a)(8).
                                                                                                                                                                                                        Order Auction and the Closing Auction.
                                                  two prices at which the maximum volume of shares                             54 See Notice at 61518.                                                    63 See proposed Rule 7.35P(b)(1) and discussion
                                                  is tradable and both prices are equidistant to the                           55 See Amendment No. 1.                                                  below regarding the Core Open Auction.
                                                  Auction Reference Price, the Indicative Match Price                          56 See proposed Rule 7.35P(a)(8).                                          64 See Notice at 61526.




                                             VerDate Sep<11>2014         20:01 Jan 14, 2016         Jkt 238001      PO 00000       Frm 00120        Fmt 4703      Sfmt 4703       E:\FR\FM\15JAN1.SGM              15JAN1


                                                  2280                           Federal Register / Vol. 81, No. 10 / Friday, January 15, 2016 / Notices

                                                  Early Open Auction would occur at 4:00    price discovery for the auction.71 The                               in the Matched Volume, Total
                                                  a.m. Eastern Time, which is well before   Exchange also states its belief that, with                           Imbalance, or Market Imbalance until
                                                  regular market hours, the Exchange        today’s faster technology, five seconds                              the Closing Auction Imbalance Freeze
                                                  generally does not receive sufficient     provides sufficient time for industry                                begins.82
                                                  buying and selling interest to warrant    participants to respond to a published                                  As proposed, the Exchange would
                                                  conducting such an auction in the vast    Imbalance and enter offsetting interest,                             conduct a Closing Auction in Pillar even
                                                  majority of Exchange-listed securities.65 if applicable.72                                                     if there are only Market Orders eligible
                                                  The Exchange notes that, because it          Under the proposal, because of the                                to participate in the Closing Auction.83
                                                  generally conducts an Early Open          shorter Freeze period, MOO and LOO                                   According to the Exchange, this
                                                  Auction in fewer than 20 securities on    Orders entered during the Freeze would                               proposal would increase the potential
                                                  a given trading day, the need for order   be rejected regardless of side.73 The                                for market participants that have
                                                  entry or cancellation restrictions in     Exchange states its belief that rejecting                            entered MOC Orders to receive an
                                                  advance of such auctions is abated.66     all MOO and LOO Orders would remove                                  execution in an auction that is priced
                                                                                            the potential for such orders to impact                              based on the prevailing value of the
                                                  Core Open Auction                         the Imbalance.74 As proposed, during                                 security.84
                                                     As proposed, the non-displayed         the Freeze, the Exchange would accept
                                                                                            Market Orders (other than MOO Orders)                                Trading Halt Auction
                                                  quantity of Reserve Orders eligible to
                                                  participate in the Core Open Auction      and Limit Orders designated for the                                    As proposed, a Trading Halt Auction
                                                  would not be included in the Matched      Core Trading Session on both sides of                                would be conducted to re-open trading
                                                  Volume, Total Imbalance, or Market        the market, but such orders would be                                 in an Auction-Eligible Security
                                                  Imbalance until the Core Open Auction     eligible to participate in the auction                               following a halt or pause of trading in
                                                  Imbalance Freeze begins.67 The            only to offset the Imbalance that                                    that security in the Early Trading
                                                  Exchange states its belief that it is     remains after all orders entered before                              Session, Core Trading Session, or Late
                                                  appropriate to exclude the volume of      the Freeze are allocated in the Core                                 Trading Session, as applicable.85 As
                                                  the non-displayed portion of Reserve      Open Auction.75 The Exchange states                                  proposed, during a trading halt or pause
                                                  Orders until the Core Open Auction        that this approach would eliminate the                               in an Auction-Eligible Security, entry
                                                  Imbalance Freeze begins because it        possibility for these orders to create or                            and cancellation of orders eligible to
                                                  reduces the potential for market          increase an Imbalance.76 The Exchange                                participate in the Trading Halt Auction
                                                  participants to identify the volume of    also states that it proposes to process                              would be processed as provided for in
                                                  interest that is intended to be non-      Market  Orders (other than MOO Orders)                               Rule 7.18P(c).86
                                                  displayed.68 The Exchange also states its and Limit Orders differently from MOO                                  Under current Rule 7.35(f)(3)(C), the
                                                  belief that it is appropriate to include  and LOO Orders because Market Orders                                 Corporation, if it deems such action
                                                  this information once the Core Open       (other than MOO Orders) and Limit                                    necessary, will disseminate the time,
                                                  Auction Imbalance Freeze begins so that Orders would       not expire at the end of                            prior to the time that orders are matched
                                                  market participants can have greater      the auction.77 Therefore, rather than                                pursuant to the Trading Halt Auction, at
                                                  certainty of the full size of the         rejecting these orders upon entry, they                              which orders may no longer be
                                                  Imbalance in order to assess whether to   would be accepted and would be                                       cancelled. The Exchange states that, on
                                                  enter offsetting interest and to promote  eligible to be offsetting interest for the                           the current trading platform, it has not
                                                  transparency regarding the pricing of an auction. If these orders do not
                                                                                                     78
                                                                                                                                                                 invoked this authority, and it proposes
                                                  auction.   69                             participate  in the Core Open Auction,                               to not include it in the Pillar rules.87
                                                                                            they would become eligible to
                                                     As proposed, the Core Open Auction                                                                          IPO Auction
                                                                                            participate in the Core Trading
                                                  Imbalance Freeze would be five
                                                                                            Session.79 As proposed, during the                                     As proposed, an IPO Auction would
                                                  seconds, instead of one minute.70
                                                                                            Freeze, requests to cancel and requests                              be conducted during the Core Trading
                                                  According to the Exchange, this shorter
                                                                                            to cancel and replace Market Orders                                  Session on the first day of trading for
                                                  Freeze period would provide additional
                                                                                            (other than MOO Orders) and Limit                                    any security, including a Derivative
                                                  time for market participants to enter
                                                                                            Orders designated for the Core Trading                               Securities Product,88 for which Arca is
                                                  orders for the Core Open Auction
                                                                                            Session only would be accepted but
                                                  without restriction, thereby promoting
                                                                                            would not be processed until after the                                 82 See proposed Rule 7.35P(d)(1).
                                                                                                                                                                   83 See discussion above regarding the
                                                                                            Core Open Auction concludes.80 All
                                                    65 See Amendment No. 1.                                                                                      determination of Indicative Match Price where the
                                                    66 See id.
                                                                                            other order instructions would be                                    Matched Volume for an auction consists of Market
                                                    67 See proposed Rule 7.35P(c)(1).
                                                                                            accepted during the Freeze.81                                        Orders only.
                                                                                                                                                                   84 See Notice at 61526. The Exchange states that
                                                    68 See Amendment No. 1. According to the
                                                                                                          Closing Auction
                                                  Exchange, the Indicative Match Price would                                                                     the midpoint of the Auction NBBO in effect as of
                                                  include the volume of the non-displayed portion of        As with the Core Open Auction, the                   the scheduled time of the Closing Auction as bound
                                                  Reserve Orders at all times because that data point     non-displayed quantity of Reserve                      by Auction Collars that would be based on the last
                                                  only provides pricing information, and not volume                                                              consolidated round-lot price of that trading day
                                                                                                          Orders eligible to participate in the                  would reflect the most recent quoting activity and
                                                  of shares eligible to trade. See id.
                                                    69 See Amendment No. 3. Also, according to the
                                                                                                          Closing Auction would not be included                  price in a stock. See Amendment No. 3. In addition,
                                                  Exchange, because the proposed rule would specify                                                              the Exchange states that pricing an auction with
                                                  that reserve interest would be included in specified      71 See Notice at 61521 and 61526.                    only Market Orders on both sides of the market
                                                  Auction Imbalance Information, ETP Holders that           72 See Amendment No. 1.                              based on the midpoint of an uncrossed NBBO is not
                                                  enter these orders would be on notice that certain        73 See proposed Rule 7.35P(c)(3)(A).                 novel. See id.
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                                                                                                                                   85 See proposed Rule 7.35P(e).
                                                  information about the reserve quantity of their           74 See Notice at 61526.
                                                                                                                                                                   86 See proposed Rule 7.35P(e)(3).
                                                  orders would be included in the information               75 See proposed Rule 7.35P(c)(3)(B).
                                                  provided in advance of an auction. See id.                76 See Notice at 61526.
                                                                                                                                                                   87 See Amendment No. 1.
                                                    70 See proposed Rule 7.35P(c)(3). However,                                                                     88 The Exchange notes that although the first day
                                                                                                            77 See Notice at 61521.
                                                  similar to the current rule, the Exchange would           78 See id.
                                                                                                                                                                 of trading of a Derivative Securities Product may
                                                  reject requests to cancel and requests to cancel and                                                           not technically be an initial public offering, it
                                                                                                            79 See id.
                                                  replace MOO and LOO Orders beginning one                                                                       proposes to use the term IPO as signifying that this
                                                                                                            80 See proposed Rule 7.35P(c)(3)(C).
                                                  minute before the scheduled time for the Core Open                                                             would be the auction on the first day of trading of
                                                  Auction. See proposed Rule 7.35P(c)(2).                   81 See proposed Rule 7.35P(c)(3)(D).                 a new listing on the Exchange. See Notice at 61523.



                                             VerDate Sep<11>2014   20:01 Jan 14, 2016   Jkt 238001   PO 00000   Frm 00121   Fmt 4703   Sfmt 4703   E:\FR\FM\15JAN1.SGM   15JAN1


                                                                                 Federal Register / Vol. 81, No. 10 / Friday, January 15, 2016 / Notices                                             2281

                                                  the primary listing market, excluding                   as proposed, a request to cancel and                   believes that the proposed rule change
                                                  transfers.89 As proposed, an IPO                        replace an order that was entered during               does not raise any novel regulatory
                                                  Auction would follow the processing                     the Auction Processing Period for an                   considerations and should provide
                                                  rules of a Core Open Auction, provided                  order that was also entered during the                 greater specificity with respect to the
                                                  that NYSE Arca Marketplace would                        Auction Processing Period would be                     functionality available on the Exchange
                                                  specify the time that an IPO Auction                    rejected.100                                           as symbols are migrated to the Pillar
                                                  would be conducted.90 Also, there                       Transition to Continuous Trading                       platform. For these reasons, the
                                                  would be no Auction Imbalance Freeze,                                                                          Commission believes that the proposal
                                                  Auction Collars, or restrictions on the                    As proposed, after auction processing               should help prevent fraudulent and
                                                  entry or cancellation of orders for an                  concludes, including if there is no                    manipulative acts and practices,
                                                  IPO Auction.91 According to the                         Matched Volume and an auction is not
                                                                                                                                                                 promote just and equitable principles of
                                                  Exchange, because an IPO Auction                        conducted, or when transitioning from
                                                                                                                                                                 trade, remove impediments to and
                                                  would not be set at a specific time, nor                one trading session to another, orders
                                                                                                                                                                 perfect the mechanism of a free and
                                                  would there be any trading in the                       that are no longer eligible to trade
                                                                                                          would expire.101 Orders that are                       open market and a national market
                                                  security before the IPO Auction, the                                                                           system, and, in general, protect
                                                  Exchange does not believe that an                       designated for a trading session and that
                                                                                                          were received during a prior trading                   investors and the public interest.
                                                  Auction Imbalance Freeze or Auction
                                                  Collars would assist in the price                       session or during the Auction                          IV. Accelerated Approval of
                                                  discovery process or would be necessary                 Processing Period and that did not                     Amendment Nos. 1 and 3
                                                  to prevent fraudulent and manipulative                  participate in the auction would become
                                                  acts and practices.92 Moreover,                         eligible to trade.102 Also, before                        As noted above, in Amendment No. 1,
                                                  according to the Exchange, because the                  continuous trading following a prior                   the Exchange: (i) Amends proposed
                                                  time of an IPO Auction may change, the                  trading session or an auction begins, any              Rule 7.35P(h) to provide that the rule
                                                  Exchange does not believe that there                    order instructions received during either              would address how orders would be
                                                  needs to be any restrictions on the entry               the Auction Imbalance Freeze or                        handled not only in the transition to
                                                  or cancellation of orders before an IPO                 Auction Processing Period that were not                continuous trading following an
                                                  Auction.93 The Exchange states that if                  processed would be processed.103 The                   auction, but also when transitioning
                                                  there is an Imbalance going into an IPO                 display price and working price of                     from one trading session to the next
                                                  Auction, the Exchange could extend the                  orders would be adjusted based on the                  trading session; (ii) amends proposed
                                                                                                          PBBO or NBBO as provided in Rule                       Rule 7.35P(h)(3)(B) to provide that,
                                                  time for the IPO Auction in order to
                                                                                                          7.31P.104 Moreover, when transitioning                 before continuous trading following a
                                                  attract additional offsetting interest or
                                                                                                          to continuous trading, the display price               prior trading session or an auction
                                                  allow ETP Holders to cancel orders that
                                                                                                          and working price of Day ISOs would be                 begins, the display price and working
                                                  are on the side of the Imbalance.94
                                                                                                          adjusted in the same manner as Arca                    price of orders would be adjusted as
                                                  Finally, an IPO Auction would not be
                                                                                                          Only Orders until the Day ISO is either                provided for in Rule 7.31P, and that
                                                  conducted if there are only Market
                                                                                                          traded in full or displayed at its limit               when transitioning to continuous
                                                  Orders on both sides of the market.95
                                                                                                          price.105                                              trading, the display price and working
                                                  According to the Exchange, if there are                    As proposed, if orders eligible to trade
                                                  only Market Orders on both sides of the                                                                        price of Day ISOs would be adjusted in
                                                                                                          in the next trading session are                        the same manner as Arca Only Orders
                                                  market, the Exchange has the flexibility                marketable, such orders would trade
                                                  to change the time in order to attract                                                                         until the Day ISO is either traded in full
                                                                                                          and/or route based on price-time
                                                  more interest for the auction.96                                                                               or displayed at its limit price; and (iii)
                                                                                                          priority of individual orders, as
                                                                                                                                                                 provides additional discussions related
                                                  Auction Processing Period                               provided in Rule 7.37P.106 According to
                                                                                                                                                                 to certain proposed rules. In addition, in
                                                                                                          the Exchange, if such orders are
                                                    As proposed, new orders, requests to                  marketable, they would trade or route,                 Amendment No. 3, the Exchange: (i)
                                                  cancel, and requests to cancel and                      as applicable, rather than publishing a                Specifies the percentages for the
                                                  replace an order that are received during               locked or crossed quote from the NYSE                  Auction Collar thresholds; (ii) removes
                                                  the Auction Processing Period 97 would                  Arca Book.107 After marketable orders                  the reference to the Trading Halt
                                                  be accepted but would not be processed                  have traded or routed, the NYSE Arca                   Auction in the definition of Auction
                                                  until after the auction concludes.98 The                Marketplace would publish a quote for                  Collar; (iii) states that the Exchange
                                                  Exchange states its belief that it is                   the next trading session.108                           would provide prior notice to ETP
                                                  appropriate to wait to process such new                    Based on the Exchange’s                             Holders if additional UTP Securities are
                                                  order instructions until after the auction              representations, the Commission                        to be designated as Auction-Eligible
                                                  processing concludes in order to                                                                               Securities; (iv) includes cross-references
                                                  provide certainty regarding the timing                    100 See proposed Rule 7.35P(g).                      to Rule 7.16P in Commentary .01 to
                                                  and pricing of an auction.99 Moreover,                    101 See proposed Rule 7.35P(h)(1) and                proposed Rule 7.35P to clarify where
                                                                                                          Amendment No. 1.                                       certain terms are defined; and (v)
                                                    89 See                                                  102 See proposed Rule 7.35P(h)(2) and
                                                           proposed Rule 7.35P(f).                                                                               provides additional discussions related
                                                    90 See proposed Rule 7.35P(f)(1).                     Amendment No. 1.
                                                    91 See proposed Rule 7.35P(f)(2).
                                                                                                            103 See proposed Rule 7.35P(h)(3)(A) and             to certain proposed rules. The
                                                    92 See Notice at 61523.                               Amendment No. 1.                                       Commission believes that the changes
                                                    93 See id.
                                                                                                            104 See proposed Rule 7.35P(h)(3)(B) and
                                                                                                                                                                 proposed in Amendment Nos. 1 and 3
                                                                                                          Amendment No. 1.                                       do not raise novel regulatory issues and
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                    94 See Amendment No. 1.
                                                                                                            105 See proposed Rule 7.35P(h)(3)(B) and
                                                    95 See proposed Rule 7.35P(f)(3).
                                                                                                          Amendment No. 1. The Exchange states its belief
                                                                                                                                                                 provide further discussions regarding
                                                    96 See Notice at 61523–24.
                                                                                                          that this proposed treatment of Day ISO orders         the proposed rules governing Pillar.
                                                    97 The Exchange proposes to define ‘‘Auction          would be consistent with the original terms of the     Accordingly, the Commission finds
                                                  Processing Period’’ to mean the period during           order. See Amendment No. 1.                            good cause, pursuant to Section 19(b)(2)
                                                  which the applicable auction is being processed.          106 See proposed Rule 7.35(h)(3)(C) and

                                                  See proposed Rule 7.35P(a)(2).                          Amendment No. 1.                                       of the Act,109 to approve the proposed
                                                    98 See proposed Rule 7.35P(g).                          107 See Amendment No. 1.
                                                    99 See Amendment No. 1.                                 108 See proposed Rule 7.35(h)(3)(D).                   109 15   U.S.C. 78s(b)(2).



                                             VerDate Sep<11>2014   20:01 Jan 14, 2016   Jkt 238001   PO 00000   Frm 00122   Fmt 4703   Sfmt 4703   E:\FR\FM\15JAN1.SGM   15JAN1


                                                  2282                           Federal Register / Vol. 81, No. 10 / Friday, January 15, 2016 / Notices

                                                  rule change, as modified by Amendment                   Act,110 that the proposed rule change                  II. Self-Regulatory Organization’s
                                                  Nos. 1 and 3, on an accelerated basis.                  (SR–NYSEArca–2015–86), as modified                     Statement of the Purpose of, and
                                                                                                          by Amendment Nos. 1 and 3, be, and                     Statutory Basis for, the Proposed Rule
                                                  V. Solicitation of Comments on
                                                                                                          hereby is, approved on an accelerated                  Change
                                                  Amendment Nos. 1 and 3
                                                                                                          basis.                                                    In its filing with the Commission, the
                                                    Interested persons are invited to
                                                                                                            For the Commission, by the Division                  Exchange included statements
                                                  submit written data, views, and
                                                                                                          of Trading and Markets, pursuant to                    concerning the purpose of and basis for
                                                  arguments concerning the foregoing,
                                                                                                          delegated authority.111                                the proposed rule change and discussed
                                                  including whether Amendment Nos. 1
                                                                                                                                                                 any comments it received on the
                                                  and 3 are consistent with the Act.                      Robert W. Errett,                                      proposed rule change. The text of these
                                                  Comments may be submitted by any of                     Deputy Secretary.                                      statements may be examined at the
                                                  the following methods:
                                                                                                          [FR Doc. 2016–00645 Filed 1–14–16; 8:45 am]            places specified in Item IV below. The
                                                  Electronic Comments                                     BILLING CODE 8011–01–P                                 Exchange has prepared summaries, set
                                                    • Use the Commission’s Internet                                                                              forth in Sections A, B, and C below, of
                                                  comment form (http://www.sec.gov/                                                                              the most significant parts of such
                                                  rules/sro.shtml); or                                    SECURITIES AND EXCHANGE                                statements.
                                                    • Send an email to rule-comments@                     COMMISSION                                             A. Self-Regulatory Organization’s
                                                  sec.gov. Please include File Number SR–                                                                        Statement of the Purpose of, and
                                                  NYSEArca–2015–86 on the subject line.                   [Release No. 34–76862; File No. SR–BATS–               Statutory Basis for, the Proposed Rule
                                                  Paper Comments                                          2015–94]                                               Change
                                                     • Send paper comments in triplicate                  Self-Regulatory Organizations; BATS                    1. Purpose
                                                  to Brent J. Fields, Secretary, Securities               Exchange, Inc., Notice of Filing of                       The Exchange proposes to list and
                                                  and Exchange Commission, 100 F Street                   Proposed Rule Change To List and                       trade the Shares under BATS Rule
                                                  NE., Washington, DC 20549–1090.                         Trade Shares of the SPDR DoubleLine                    14.11(i), which governs the listing and
                                                  All submissions should refer to File                    Emerging Markets Fixed Income ETF                      trading of Managed Fund Shares on the
                                                  Number SR–NYSEArca–2015–86. This                        of the SSgA Active Trust                               Exchange.3 The Fund will be an actively
                                                  file number should be included on the                                                                          managed fund. The Shares will be
                                                  subject line if email is used. To help the              January 11, 2016.                                      offered by the Trust, which was
                                                  Commission process and review your                         Pursuant to Section 19(b)(1) of the                 established as a Massachusetts business
                                                  comments more efficiently, please use                   Securities Exchange Act of 1934 (the                   trust on March 30, 2011. The Trust is
                                                  only one method. The Commission will                    ‘‘Act’’),1 and Rule 19b–4 thereunder,2                 registered with the Commission as an
                                                  post all comments on the Commission’s                   notice is hereby given that on December                open-end investment company and has
                                                  Internet Web site (http://www.sec.gov/                  28, 2015, BATS Exchange, Inc. (the                     filed a registration statement on behalf
                                                  rules/sro.shtml). Copies of the                         ‘‘Exchange’’ or ‘‘BATS’’) filed with the               of the Fund on Form N–1A
                                                  submission, all subsequent                              Securities and Exchange Commission                     (‘‘Registration Statement’’) with the
                                                  amendments, all written statements                      (‘‘Commission’’) the proposed rule                     Commission.4
                                                  with respect to the proposed rule                       change as described in Items I and II,                 Description of the Shares and the Fund
                                                  change that are filed with the                          below, which Items have been prepared
                                                  Commission, and all written                                                                                       SSGA Funds Management, Inc. will
                                                                                                          by the Exchange. The Commission is                     be the investment adviser (‘‘SSGA FM’’
                                                  communications relating to the                          publishing this notice to solicit
                                                  proposed rule change between the                                                                               or ‘‘Adviser’’) to the Fund. The Adviser
                                                                                                          comments on the proposed rule change                   will serve as the administrator for the
                                                  Commission and any person, other than                   from interested persons.
                                                  those that may be withheld from the                                                                            Fund (the ‘‘Administrator’’). DoubleLine
                                                  public in accordance with the                           I. Self-Regulatory Organization’s                      Capital LP will be the Fund’s sub-
                                                  provisions of 5 U.S.C. 552, will be                     Statement of the Terms of Substance of                 adviser (‘‘Sub-Adviser’’). State Street
                                                  available for Web site viewing and                      the Proposed Rule Change                               Global Markets, LLC (the ‘‘Distributor’’)
                                                  printing in the Commission’s Public                                                                            will be the principal underwriter and
                                                  Reference Room, 100 F Street NE.,                          The Exchange is proposing a rule                    distributor of the Fund’s Shares. State
                                                  Washington, DC 20549, on official                       change to list and trade shares of the                 Street Bank and Trust Company (the
                                                  business days between the hours of                      SPDR® DoubleLine® Emerging Markets                     ‘‘Sub-Administrator’’, ‘‘Custodian’’,
                                                  10:00 a.m. and 3:00 p.m. Copies of the                  Fixed Income ETF (the ‘‘Fund’’) of the                 ‘‘Transfer Agent’’ or ‘‘Lending Agent’’)
                                                  filing also will be available for                       SSgA Active Trust (the ‘‘Trust’’) under                will serve as sub-administrator,
                                                  inspection and copying at the principal                 BATS Rule 14.11(i) (‘‘Managed Fund                     custodian, transfer agent, and, where
                                                  office of the Exchange. All comments                    Shares’’). The shares of the Fund are                  applicable, lending agent for the Fund.
                                                  received will be posted without change;                 collectively referred to herein as the
                                                                                                                                                                   3 The Commission approved BATS Rule 14.11(i)
                                                  the Commission does not edit personal                   ‘‘Shares.’’
                                                                                                                                                                 in Securities Exchange Act Release No. 65225
                                                  identifying information from                               The text of the proposed rule change                (August 30, 2011), 76 FR 55148 (September 6, 2011)
                                                  submissions. You should submit only                     is available at the Exchange’s Web site                (SR–BATS–2011–018).
                                                                                                                                                                   4 See Registration Statement on Form N–1A for
                                                  information that you wish to make                       at www.batstrading.com, at the
                                                                                                                                                                 the Trust, dated October 8, 2015 (File Nos. 333–
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                  available publicly. All submissions                     principal office of the Exchange, and at               173276 and 811–22542). The descriptions of the
                                                  should refer to File Number SR–                         the Commission’s Public Reference                      Fund and the Shares contained herein are based, in
                                                  NYSEArca–2015–86 and should be                          Room.                                                  part, on information in the Registration Statement.
                                                  submitted on or before February 5, 2016.                                                                       The Commission has issued an order granting
                                                                                                            110 15
                                                                                                                                                                 certain exemptive relief to the Trust under the
                                                                                                                  U.S.C. 78s(b)(2).
                                                  VI. Conclusion                                            111 17
                                                                                                                                                                 Investment Company Act of 1940 (15 U.S.C. 80a–
                                                                                                                  CFR 200.30–3(a)(12).                           1) (‘‘1940 Act’’) (the ‘‘Exemptive Order’’). See
                                                    IT IS THEREFORE ORDERED,                                1 15 U.S.C. 78s(b)(1).
                                                                                                                                                                 Investment Company Act Release No. 29524
                                                  pursuant to Section 19(b)(2) of the                       2 17 CFR 240.19b–4.                                  (December 13, 2010) (File No. 812–13487).



                                             VerDate Sep<11>2014   20:01 Jan 14, 2016   Jkt 238001   PO 00000   Frm 00123   Fmt 4703   Sfmt 4703   E:\FR\FM\15JAN1.SGM   15JAN1



Document Created: 2018-02-02 12:32:18
Document Modified: 2018-02-02 12:32:18
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 2276 

2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR