81 FR 31981 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Definition of Professional Customer in Rule 6.1A(a)(4A)
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 98 (May 20, 2016)
Federal Register Volume 81, Issue 98 (May 20, 2016)
| Page Range | 31981-31983 | |
| FR Document | 2016-11878 |
[Federal Register Volume 81, Number 98 (Friday, May 20, 2016)] [Notices] [Pages 31981-31983] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-11878] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77837; File No. SR-NYSEARCA-2016-65] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Definition of Professional Customer in Rule 6.1A(a)(4A) May 16, 2016. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that on May 3, 2016, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE Arca'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to amend the definition of Professional Customer in Rule 6.1A(a)(4A) to specify the manner in which the Exchange calculates average daily order submissions for purposes of counting Professional Customer orders. The proposed rule change is available on the Exchange's Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the definition of Professional Customer in Rule 6.1A(a)(4A) to adopt a methodology for counting average daily order submissions in listed options to determine whether a person or entity meets the definition of a Professional Customer (``Professional Customer order counting''). The proposed rule change is designed to harmonize Professional Customer order counting with the recently adopted rules of competing options exchanges--specifically the Chicago Board of Options Exchange, Inc. (``CBOE'') and NASDAQ OMX PHLX LLC (``PHLX'').\4\ --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release Nos. 77450 (March 25, 2016), 81 FR 18668, (March 31, 2016) (SR-CBOE-2016-005); 77449 (March 25, 2016), 81 FR 18665, (March 31, 2016) (SR-Phlx-2016-10) (approval orders). The Exchange notes that it recently issued guidance regarding Professional Customer order counting. See e.g., NYSE Arca, Inc.'s and NYSE MKT LLC's Joint Regulatory Bulletin (RBO- 15-03 and RBO-15-06, respectively) dated September 9, 2015. This proposal codifies that guidance in a manner that is consistent with CBOE and PHLX's approved rules. --------------------------------------------------------------------------- Rule 6.1A(a)(4A) defines Professional Customer ``as an individual or organization that (i) is not a Broker/Dealer in securities, and (ii) places more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s).'' In adopting the Rule 6.1A(a)(4A), the Exchange noted that identifying Professional Customer accounts based upon the average number of orders entered in qualified accounts is an appropriate, objective approach that will reasonably distinguish such persons and entities from non-professional, retail investors or market participants. In order to properly represent orders entered on the Exchange, OTP Holders and OTP Firms are required to indicate whether Customer orders are ``Professional Customer'' orders.\5\ To comply with this requirement, member organizations are required to review their Customers' activity on at least a quarterly basis to determine whether orders that are not for the account of a broker-dealer should be represented as Customer orders or Professional Customer orders.\6\ --------------------------------------------------------------------------- \5\ See e.g., Rule 6.69 (Reporting Duties), Commentary .03 (requiring that manual orders submitted be marked with an origin code ``PC.''). \6\ Orders for any customer that had an average of more than 390 orders per day during any month of a calendar quarter must be represented as Professional Customer orders for the next calendar quarter. OTP Holders and OTP Firms would be required to conduct a quarterly review and make any appropriate changes to the way in which they are representing orders within five business days after the end of each calendar quarter. While members only would be required to review their accounts on a quarterly basis, if during a quarter the Exchange identifies a customer for which orders are being represented as Customer orders but that has averaged more than 390 orders per day during a month, the Exchange would notify the OTP Holder and the OTP Holder would be required to change the manner in which it is representing the customer's orders within five business days. --------------------------------------------------------------------------- The advent of new multi-leg spread products and the proliferation of the use of complex orders and algorithmic execution strategies by both institutional and retail market participants has raised questions as to what should be counted as an ``order'' for Professional Customer order counting purposes. The proposed changes would specifically address the [[Page 31982]] counting of multi-leg spread products, algorithm generated orders, and complex orders for purposes of determining Professional Customer status. In addition, the proposal is intended to provide guidance regarding the methodology used by the Exchange when calculating average daily orders for Professional order counting purposes.\7\ --------------------------------------------------------------------------- \7\ This proposal is consistent with CBOE and PHLX's approved rules. See supra n. 4. --------------------------------------------------------------------------- As proposed, the rule would provide that an order would count as one order for Professional Customer counting purposes, unless one of the exceptions enumerated in the proposed rule stipulates otherwise (each an ``Exception''). The first Exception relates to the treatment of complex orders for purposes of computing orders for Professional order counting purposes. Specifically, the proposed rule provides that a complex order of eight legs or less would count as one order, whereas a complex order comprised of nine (9) option legs or more counts as multiple orders with each option leg counting as its own separate order.\8\ The Exchange believes the distinction between complex orders with up to eight legs from those with nine or more legs is appropriate in light of the purposes for which Rule 6.1A(a)(4A) was adopted. In particular, the Exchange notes that multi-leg complex order strategies with nine or more legs are more complex in nature and thus, more likely to be used by professional traders than traditional two, three, and four leg complex order strategies such as the strangle, straddle, butterfly, collar, and condor strategies, and combinations thereof with eight legs or fewer, which are generally not algorithmically generated and are frequently used by non-professional, retail investors. Thus, the types of complex orders traditionally placed by retail investors would continue to count as only one order while the more complex strategy orders that are typically used by professional traders would count as multiple orders for Professional Customer order counting purposes.\9\ --------------------------------------------------------------------------- \8\ See proposed Rule 6.1A(a)(4A)(A)(1)(i)-(ii). \9\ See also supra n. 4. --------------------------------------------------------------------------- The second Exception relates to calculations for parent/child orders. As proposed, if a parent order submitted for the beneficial account(s) of a person or entity other than a broker or dealer is subsequently broken up into multiple child orders on the same side (buy/sell) and series by a broker or dealer, or by an algorithm housed at the broker or dealer, or by an algorithm licensed from the broker or dealer but housed with the customer, then the order would count as one order even if the child orders are routed across several exchanges.\10\ The Exchange believes this proposed change would allow the orders of public customers to be ``worked'' by a broker (or a broker's algorithm) in order to achieve best execution without counting the multiple child orders as separate orders for Professional Customer order counting purposes. Conversely, if a parent order, including a strategy order,\11\ is broken into multiple child orders on both sides (buy/ sell) of a series and/or multiple series, then each child order would count as a separate new order per side and series.\12\ This proposed change would allow the Exchange, for Professional Customer order counting purposes, to count as multiple orders those ``child'' orders of ``parent'' orders generated by algorithms that are typically used by sophisticated traders to continuously update their orders in concert with market updates in order to keep their overall trading strategies in balance. --------------------------------------------------------------------------- \10\ See proposed Rule 6.1A(a)(4A)(A)(2)(i). \11\ The term ``strategy order'' refers to an execution strategy, trading instruction, or algorithm whereby multiple ``child'' orders on both sides of a series and/or multiple series are generated prior to being sent to an options exchange(s). \12\ See proposed Rule 6.1A(a)(4A)(A)(2)(ii). --------------------------------------------------------------------------- The third Exception would govern the counting methodology for cancel/replace orders. As proposed, any order that cancels and replaces an existing order would count as a separate order (or multiple orders in the case of complex orders of nine legs or more) for Professional Customer order counting purposes.\13\ However, the Exchange proposes that an order to cancel and replace a child order would not count as a new order if the parent order that was placed for the beneficial account(s) of a non-broker or dealer had been subsequently broken into multiple child orders on the same side and series as the parent order by a broker or dealer, algorithm at a broker or dealer, or algorithm licensed from a broker or dealer but housed at the customer.\14\ By contrast, the Exchange proposes that an order that cancels and replaces a child order resulting from a parent order, including a strategy order, that generated child orders on both sides (buy/sell) of a series and/or in multiple series would count as a new order per side and series (``Both Sides/Multiple Series'').\15\ Finally, the Exchange proposes that, notwithstanding the treatment of a cancel/replace relating to Both Sides/Multiple Series orders, an order that cancels and replaces any child order resulting from a parent order being pegged to the Exchange's best bid or offer (``BBO'') or the national best bid or offer (``NBBO'') or that cancels and replaces any child order pursuant to an algorithm that uses the BBO or NBBO in the calculation of child orders and attempts to move with or follow the BBO or NBBO of a particular options series would count as a new order each time the order cancels and replaces in order to attempt to move with or follow the BBO or NBBO.\16\ --------------------------------------------------------------------------- \13\ See proposed Rule 6.1A(a)(4A)(A)(3)(i). \14\ See proposed Rule 6.1A(a)(4A)(A)(3)(ii). \15\ See proposed Rule 6.1A(a)(4A)(A)(3)(iii). \16\ See proposed Rule 6.1A(a)(4A)(A)(3)(iv). --------------------------------------------------------------------------- Implementation The Exchange proposes to implement the rule on July 1, 2016, which would be announced via Trader Update. 2. Statutory Basis The Exchange believes that the proposed change is consistent with Section 6(b) of the Act,\17\ in general, and furthers the objectives of Section 6(b)(5),\18\ in particular, in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitation transactions in securities, to remove impediments to, and perfect the mechanism of a free and open market and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78f(b). \18\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Specifically, the Exchange believes that the proposal is designed to adopt a reasonable and objective approach to determine Professional Customer status that is consistent with the approach being utilized on other options exchanges, which benefits market participants by providing consistency across exchanges regarding the Professional Customer order counting.\19\ In this regard, the Exchange believes that codifying the manner in which the Exchange would conduct Professional Customer order counting would provide OTP Holders and OTP Firms with certainty and provide them with insight as they conduct their own quarterly reviews for purposes of designating orders. --------------------------------------------------------------------------- \19\ See supra n. 4. --------------------------------------------------------------------------- The Exchange notes that it is not amending the threshold of 390 orders in listed options per day but, consisting with other exchanges is revising the method for counting Professional Customer orders in the context of multi-part orders and cancel/replace activity. In short, the proposal addresses how to account for complex orders, parent/ [[Page 31983]] child orders, and cancel/replace orders. The Exchange believes that distinguishing between complex orders with 9 or more options legs and those orders with 8 or fewer options legs is a reasonable and objective approach. In addition, the Exchange believes the proposal appropriately distinguishes between parent/child orders that are generated by a broker's efforts to obtain an execution on a larger size order while minimizing market impact and multi-part orders that used by more sophisticated market participants. Similarly, the Exchange believes that the proposal that cancel/replace orders would count as separate orders with limited exceptions is a reasonable and objective approach to distinguish the orders of retail customers that are ``worked'' by a broker from orders generated by algorithms used by more sophisticated market participants. Thus, the Exchange believes the proposal, which establishes an objective methodology for counting average daily order submissions for Professional Customer order counting purposes, is consistent with the Act. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that this proposed rule change would impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the proposed rule change is a competitive change that is substantially similar to recent rule changes filed by the CBOE and PHLX.\20\ --------------------------------------------------------------------------- \20\ See id. --------------------------------------------------------------------------- The Exchange notes that one of the purposes of the Professional Customer designation is to help ensure fairness in the marketplace and promote competition among all market participants. The Exchange believes that this proposal would help establish more competition among market participants and promote the purposes for which the Exchange's Professional Customer rule was originally adopted. Moreover, the proposal would stem ensure consistency and stem potential confusion as to the manner in which options exchanges compute the Professional Customer order volume. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \21\ and Rule 19b-4(f)(6) thereunder.\22\ Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b- 4(f)(6)(iii) thereunder. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78s(b)(3)(A)(iii). \22\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) \23\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \23\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File No. SR-NYSEARCA-2016-65 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-NYSEARCA-2016-65. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-NYSEARCA-2016-65, and should be submitted on or before June 10, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\24\ --------------------------------------------------------------------------- \24\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-11878 Filed 5-19-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 98 / Friday, May 20, 2016 / Notices 31981
and Exchange Commission, 100 F Street ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 Inc. (‘‘CBOE’’) and NASDAQ OMX
NE., Washington, DC 20549–1090. notice is hereby given that on May 3, PHLX LLC (‘‘PHLX’’).4
All submissions should refer to File No. 2016, NYSE Arca, Inc. (the ‘‘Exchange’’ Rule 6.1A(a)(4A) defines Professional
SR–NASDAQ–2016–066. This file or ‘‘NYSE Arca’’) filed with the Customer ‘‘as an individual or
number should be included on the Securities and Exchange Commission organization that (i) is not a Broker/
subject line if email is used. To help the (the ‘‘Commission’’) the proposed rule Dealer in securities, and (ii) places more
Commission process and review your change as described in Items I and II than 390 orders in listed options per day
comments more efficiently, please use below, which Items have been prepared on average during a calendar month for
only one method. The Commission will by the self-regulatory organization. The its own beneficial account(s).’’ In
post all comments on the Commission’s Commission is publishing this notice to adopting the Rule 6.1A(a)(4A), the
Internet Web site (http://www.sec.gov/ solicit comments on the proposed rule Exchange noted that identifying
rules/sro.shtml). Copies of the change from interested persons. Professional Customer accounts based
submission, all subsequent upon the average number of orders
I. Self-Regulatory Organization’s entered in qualified accounts is an
amendments, all written statements Statement of the Terms of the Substance
with respect to the proposed rule appropriate, objective approach that
of the Proposed Rule Change will reasonably distinguish such
change that are filed with the
Commission, and all written The Exchange proposes to amend the persons and entities from non-
communications relating to the definition of Professional Customer in professional, retail investors or market
proposed rule change between the Rule 6.1A(a)(4A) to specify the manner participants. In order to properly
Commission and any person, other than in which the Exchange calculates represent orders entered on the
average daily order submissions for Exchange, OTP Holders and OTP Firms
those that may be withheld from the
purposes of counting Professional are required to indicate whether
public in accordance with the
Customer orders. The proposed rule Customer orders are ‘‘Professional
provisions of 5 U.S.C. 552, will be
change is available on the Exchange’s Customer’’ orders.5 To comply with this
available for Web site viewing and
Web site at www.nyse.com, at the requirement, member organizations are
printing in the Commission’s Public
principal office of the Exchange, and at required to review their Customers’
Reference Room, 100 F Street NE.,
the Commission’s Public Reference activity on at least a quarterly basis to
Washington, DC 20549, on official
Room. determine whether orders that are not
business days between the hours of
for the account of a broker-dealer should
10:00 a.m. and 3:00 p.m. Copies of such II. Self-Regulatory Organization’s be represented as Customer orders or
filing will also be available for Statement of the Purpose of, and Professional Customer orders.6
inspection and copying at the principal Statutory Basis for, the Proposed Rule The advent of new multi-leg spread
office of the Exchange. All comments Change products and the proliferation of the use
received will be posted without change; of complex orders and algorithmic
the Commission does not edit personal In its filing with the Commission, the
self-regulatory organization included execution strategies by both
identifying information from institutional and retail market
submissions. You should submit only statements concerning the purpose of,
and basis for, the proposed rule change participants has raised questions as to
information that you wish to make what should be counted as an ‘‘order’’
available publicly. All submissions and discussed any comments it received
on the proposed rule change. The text for Professional Customer order
should refer to File No. SR–NASDAQ– counting purposes. The proposed
2016–066 and should be submitted on of those statements may be examined at
the places specified in Item IV below. changes would specifically address the
or before June 10, 2016.
The Exchange has prepared summaries, 4 See Securities Exchange Act Release Nos. 77450
For the Commission, by the Division of set forth in sections A, B, and C below,
Trading and Markets, pursuant to delegated (March 25, 2016), 81 FR 18668, (March 31, 2016)
of the most significant parts of such (SR–CBOE–2016–005); 77449 (March 25, 2016), 81
authority.11
statements. FR 18665, (March 31, 2016) (SR–Phlx–2016–10)
Robert W. Errett, (approval orders). The Exchange notes that it
Deputy Secretary. A. Self-Regulatory Organization’s recently issued guidance regarding Professional
[FR Doc. 2016–11879 Filed 5–19–16; 8:45 am] Statement of the Purpose of, and Customer order counting. See e.g., NYSE Arca,
Statutory Basis for, the Proposed Rule Inc.’s and NYSE MKT LLC’s Joint Regulatory
BILLING CODE 8011–01–P Bulletin (RBO–15–03 and RBO–15–06, respectively)
Change dated September 9, 2015. This proposal codifies
that guidance in a manner that is consistent with
1. Purpose CBOE and PHLX’s approved rules.
SECURITIES AND EXCHANGE
COMMISSION The Exchange proposes to amend the 5 See e.g., Rule 6.69 (Reporting Duties),
definition of Professional Customer in Commentary .03 (requiring that manual orders
[Release No. 34–77837; File No. SR– submitted be marked with an origin code ‘‘PC.’’).
Rule 6.1A(a)(4A) to adopt a 6 Orders for any customer that had an average of
NYSEARCA–2016–65] methodology for counting average daily more than 390 orders per day during any month of
order submissions in listed options to a calendar quarter must be represented as
Self-Regulatory Organizations; NYSE Professional Customer orders for the next calendar
determine whether a person or entity
Arca, Inc.; Notice of Filing and quarter. OTP Holders and OTP Firms would be
meets the definition of a Professional
Immediate Effectiveness of Proposed required to conduct a quarterly review and make
Customer (‘‘Professional Customer order any appropriate changes to the way in which they
Rule Change To Amend the Definition
counting’’). The proposed rule change is are representing orders within five business days
of Professional Customer in Rule after the end of each calendar quarter. While
designed to harmonize Professional
mstockstill on DSK3G9T082PROD with NOTICES
6.1A(a)(4A) members only would be required to review their
Customer order counting with the accounts on a quarterly basis, if during a quarter the
May 16, 2016. recently adopted rules of competing Exchange identifies a customer for which orders are
Pursuant to Section 19(b)(1) 1 of the options exchanges—specifically the being represented as Customer orders but that has
Chicago Board of Options Exchange, averaged more than 390 orders per day during a
Securities Exchange Act of 1934 (the month, the Exchange would notify the OTP Holder
and the OTP Holder would be required to change
11 17 CFR 200.30–3(a)(12). 2 15 U.S.C. 78a. the manner in which it is representing the
1 15 U.S.C. 78s(b)(1). 3 17 CFR 240.19b–4. customer’s orders within five business days.
VerDate Sep<11>2014 17:40 May 19, 2016 Jkt 238001 PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 E:\FR\FM\20MYN1.SGM 20MYN1](https://thefederalregister.org/doc/81_FR_32079/page/1.svg)
![Federal Register / Vol. 81, No. 98 / Friday, May 20, 2016 / Notices 31983
child orders, and cancel/replace orders. III. Date of Effectiveness of the comments more efficiently, please use
The Exchange believes that Proposed Rule Change and Timing for only one method. The Commission will
distinguishing between complex orders Commission Action post all comments on the Commission’s
with 9 or more options legs and those The Exchange has filed the proposed Internet Web site (http://www.sec.gov/
orders with 8 or fewer options legs is a rule change pursuant to Section rules/sro.shtml). Copies of the
reasonable and objective approach. In 19(b)(3)(A)(iii) of the Act 21 and Rule submission, all subsequent
addition, the Exchange believes the 19b–4(f)(6) thereunder.22 Because the amendments, all written statements
proposal appropriately distinguishes proposed rule change does not: (i) with respect to the proposed rule
between parent/child orders that are Significantly affect the protection of change that are filed with the
generated by a broker’s efforts to obtain investors or the public interest; (ii) Commission, and all written
an execution on a larger size order while impose any significant burden on communications relating to the
minimizing market impact and multi- competition; and (iii) become operative proposed rule change between the
part orders that used by more prior to 30 days from the date on which Commission and any person, other than
sophisticated market participants. it was filed, or such shorter time as the those that may be withheld from the
Similarly, the Exchange believes that Commission may designate, if public in accordance with the
the proposal that cancel/replace orders consistent with the protection of provisions of 5 U.S.C. 552, will be
would count as separate orders with investors and the public interest, the available for Web site viewing and
limited exceptions is a reasonable and proposed rule change has become printing in the Commission’s Public
objective approach to distinguish the effective pursuant to Section 19(b)(3)(A) Reference Room, 100 F Street NE.,
orders of retail customers that are of the Act and Rule 19b–4(f)(6)(iii) Washington, DC 20549 on official
‘‘worked’’ by a broker from orders thereunder. business days between the hours of
generated by algorithms used by more At any time within 60 days of the 10:00 a.m. and 3:00 p.m. Copies of such
sophisticated market participants. filing of such proposed rule change, the filing also will be available for
Thus, the Exchange believes the Commission summarily may inspection and copying at the principal
proposal, which establishes an objective temporarily suspend such rule change if office of the Exchange. All comments
methodology for counting average daily it appears to the Commission that such received will be posted without change;
order submissions for Professional action is necessary or appropriate in the the Commission does not edit personal
Customer order counting purposes, is public interest, for the protection of identifying information from
consistent with the Act. investors, or otherwise in furtherance of submissions. You should submit only
the purposes of the Act. If the information that you wish to make
B. Self-Regulatory Organization’s Commission takes such action, the available publicly. All submissions
Statement on Burden on Competition Commission shall institute proceedings should refer to File No. SR–
under Section 19(b)(2)(B) 23 of the Act to NYSEARCA–2016–65, and should be
The Exchange does not believe that submitted on or before June 10, 2016.
determine whether the proposed rule
this proposed rule change would
change should be approved or For the Commission, by the Division of
impose any burden on competition not
disapproved. Trading and Markets, pursuant to delegated
necessary or appropriate in furtherance
IV. Solicitation of Comments authority.24
of the purposes of the Act. To the
contrary, the proposed rule change is a Robert W. Errett,
Interested persons are invited to
competitive change that is substantially Deputy Secretary.
submit written data, views, and
similar to recent rule changes filed by arguments concerning the foregoing, [FR Doc. 2016–11878 Filed 5–19–16; 8:45 am]
the CBOE and PHLX.20 including whether the proposed rule BILLING CODE 8011–01–P
The Exchange notes that one of the change is consistent with the Act.
purposes of the Professional Customer Comments may be submitted by any of
SECURITIES AND EXCHANGE
designation is to help ensure fairness in the following methods:
COMMISSION
the marketplace and promote Electronic Comments
competition among all market Proposed Collection; Comment
participants. The Exchange believes that • Use the Commission’s Internet
Request
this proposal would help establish more comment form (http://www.sec.gov/
competition among market participants rules/sro.shtml); or Upon Written Request, Copies Available
and promote the purposes for which the • Send an email to rule-comments@ From: Securities and Exchange
Exchange’s Professional Customer rule sec.gov. Please include File No. SR– Commission, Office of FOIA Services,
was originally adopted. Moreover, the NYSEARCA–2016–65 on the subject 100 F Street NE., Washington, DC
proposal would stem ensure consistency line. 20549–2736.
and stem potential confusion as to the Paper Comments Extension:
manner in which options exchanges Rule 19b–5 and Form PILOT, SEC File No.
• Send paper comments in triplicate
compute the Professional Customer 270–448, OMB Control No. 3235–0507.
to Secretary, Securities and Exchange
order volume. Notice is hereby given that, pursuant
Commission, 100 F Street NE.,
C. Self-Regulatory Organization’s Washington, DC 20549–1090. to the Paperwork Reduction Act of 1995
Statement on Comments on the All submissions should refer to File No. (‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
mstockstill on DSK3G9T082PROD with NOTICES
Proposed Rule Change Received From SR–NYSEARCA–2016–65. This file
Members, Participants, or Others number should be included on the (‘‘Commission’’) is soliciting comments
subject line if email is used. To help the on the existing collection of information
No written comments were solicited Commission process and review your provided for in Rule 19b–5 (17 CFR
or received with respect to the proposed 240.19b–5) and Form PILOT (17 CFR
rule change. 21 15 U.S.C. 78s(b)(3)(A)(iii). 249.821) under the Securities Exchange
22 17 CFR 240.19b–4(f)(6).
20 See id. 23 15 U.S.C. 78s(b)(2)(B). 24 17 CFR 200.30–3(a)(12).
VerDate Sep<11>2014 17:40 May 19, 2016 Jkt 238001 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 E:\FR\FM\20MYN1.SGM 20MYN1](https://thefederalregister.org/doc/81_FR_32079/page/3.svg)
Document Created: 2016-05-20 02:00:14
Document Modified: 2016-05-20 02:00:14
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 31981 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR