81 FR 33278 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Rule 13 and Related Rules Regarding Market Orders
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 101 (May 25, 2016)
Federal Register Volume 81, Issue 101 (May 25, 2016)
| Page Range | 33278-33283 | |
| FR Document | 2016-12241 |
[Federal Register Volume 81, Number 101 (Wednesday, May 25, 2016)] [Notices] [Pages 33278-33283] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-12241] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77860; File No. SR-NYSE-2016-35] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Rule 13 and Related Rules Regarding Market Orders May 19, 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 16, 2016, New York Stock Exchange LLC (``NYSE'' or the ``Exchange'') 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 Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Rule 13 (Orders and Modifiers) and related rules regarding Market 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rule 13 (Orders and Modifiers) and related rules relating to Market Orders. The proposed changes are designed to simplify the Exchange's offering of order types by harmonizing the behavior of Market Orders with how similar orders operate on NYSE Arca Equities, Inc. (``NYSE Arca Equities''), the Exchange's affiliated equities marketplace, and by eliminating specified combinations of orders and modifiers.\4\ --------------------------------------------------------------------------- \4\ NYSE Arca Equities is a wholly-owned subsidiary of NYSE Arca, Inc., which is a national securities exchange. --------------------------------------------------------------------------- Overview Currently, Market Orders are defined in Rule 13(a)(1) as an order to buy or sell a stated amount of a security at the most advantageous price obtainable after the order is represented in the Trading Crowd or routed to Exchange systems. If a Market Order to sell has exhausted all eligible buy interest, any unfilled balance of the Market Order to sell will be cancelled. Market Orders may include an immediate-or-cancel (``IOC'') time-in-force modifier.\5\ In addition, a Market Order may include an instruction to either buy ``minus'' or sell ``plus.'' \6\ --------------------------------------------------------------------------- \5\ See Rule 13(b)(3). \6\ See Rule 13(f)(A) and (C). --------------------------------------------------------------------------- The Exchange proposes to simplify how Market Orders would function on the Exchange by harmonizing the behavior of Market Orders with how they operate on the Pillar trading platform on NYSE Arca Equities and by eliminating the ability to combine a Market Order with an IOC, buy ``minus,'' or sell ``plus'' instruction, which are not available on the NYSE Arca Equities trading platform. The Exchange believes that eliminating these order type combinations would streamline its rules and reduce complexity among its order type offerings.\7\ --------------------------------------------------------------------------- \7\ See, e.g., Mary Jo White, Chair, Securities and Exchange Commission, Speech at the Sandler O'Neill & Partners, L.P. Global Exchange and Brokerage Conference (June 5, 2014) (available at www.sec.gov/News/Speech/Detail/Speech/1370542004312#.U5HI-fmwJiw). --------------------------------------------------------------------------- Proposed Amendments to Market Orders To effect the proposed changes to how Market Orders would operate, the Exchange proposes to amend Rule 13(a)(1) to provide that a Market Order that is eligible for automatic execution would be an unpriced order to buy or sell a stated amount of a security that is to be traded at the best price obtainable without trading through the NBBO. This proposed rule text is based on the first sentence of NYSE Arca Equities Rule 7.31P(a)(1), which provides that a Market Order is an unpriced order to [[Page 33279]] buy or sell a stated amount of a security that is to be traded at the best price obtainable without trading through the NBBO. The Exchange proposes one difference for the NYSE version of the rule, which is to provide that the proposed definition is intended only for orders eligible for automatic execution. Rule 1000(a) provides that an automatically executing order shall receive an immediate, automatic execution against orders reflected in the Exchange published quotation and orders in the Exchange book. However, automatic executions are not available for securities if the closing price for a security, or if the security did not trade, the closing bid price of the security on the immediate previous trading day is $10,000 or more (i.e., ``high-priced securities'').\8\ Because the proposed new functionality relating to Market Orders would not be available for high-priced securities, the Exchange proposes to keep the current definition of Market Orders as proposed subsection (D) of Rule 13(a)(1) and specify that this subsection of the rule is only for Market Orders that are not eligible for automatic execution. --------------------------------------------------------------------------- \8\ See Rule 1000(a)(iii). There is currently one high-priced security listed on the Exchange, Berkshire Hathaway Inc. Class A (BRK-A). Automatic executions are also not available when trading in a security has been halted or if a block-sized transaction, as defined in Rule 127.10 that involves orders in the Exchange book is being reported manually. See Rule 1000(a)(i)-(ii). --------------------------------------------------------------------------- Proposed Rule 13(a)(1)(A) would define certain terms for purposes of Market Orders. Specifically, because the Exchange is proposing to adopt rule text based on NYSE Arca Equities Rule 7.31P(a)(1), which uses terms defined in the NYSE Arca Equities rules, the Exchange proposes to add the following defined terms to Rule 13:Proposed Rule 13(a)(1)(A)(i) would define the term ``Away Market,'' for purposes of Market Orders, to mean any exchange with which the Exchange maintains an electronic linkage and which provides instantaneous responses to orders routed from the Exchange. This proposed definition is based on NYSE Arca Equities Rule 1.1(ffP), which defines the term ``Away Market'' to mean any exchange, alternative trading system (``ATS'') or other broker-dealer (1) with which the NYSE Arca Marketplace maintains an electronic linkage and (2) which provides instantaneous responses to order routed from the NYSE Arca Marketplace. Because the Exchange does not route to any ATSs or other broker-dealers for execution, the Exchange would not include a reference to ATSs or broker-dealers in its definition of Away Market. Proposed Rule 13(a)(1)(A)(ii) would define the term ``NBBO'' to mean the national best bid or offer and the terms ``NBB'' to mean the national best bid and ``NBO'' to mean the national best offer. These proposed definitions are identical to those definitions in NYSE Arca Equities Rule 1.1(dd). Proposed Rule 13(a)(1)(A)(iii) would define the term ``working price'' to mean the price at which an order is eligible to trade at any given time. This proposed definition is based on NYSE Arca Equities Rule 7.36P(a)(3), which defines the term ``working price'' to mean the price at which an order is eligible to trade at any given time, which may be different from the limit price or display price of the order. The Exchange does not propose to include the last clause of the NYSE Arca Equities definition because the Exchange is proposing the definition of working price only for purposes of Market Orders, which do not include a limit price and which are not displayed. Proposed Rule 13(a)(1)(A)(iv) would define the term ``MPV'' to mean the minimum price variation for quoting and entry of orders as specified in Supplementary Material .10 to Rule 62. The Exchange uses the same pricing increments as NYSE Arca Equities.\9\ --------------------------------------------------------------------------- \9\ See NYSE Arca Equities Rule 7.6 (defining minimum price variation as $0.01, with the exception of securities that are priced less than $1.00, for which the MPV for quoting and entry is $0.0001). --------------------------------------------------------------------------- Proposed Rule 13(a)(1)(B) would specify how a Market Order would operate during continuous trading. The Exchange would specify how Market Orders would participate in auctions in proposed Rule 13(a)(1)(C), described in greater detail below. As proposed in Rule 13(a)(1)(B)(i), a Market Order would be rejected on arrival or cancelled if resting if there is no contra-side NBBO or if the best protected quotations are or become crossed. This proposed rule text is based on the second sentence of NYSE Arca Equities Rule 7.31P(a)(1), which provides that a Market Order must be designated Day and will be rejected on arrival or cancelled if resting if there is no contra-side NBBO. Because of technology differences between how the Exchange operates and how NYSE Arca Equities operates on the Pillar trading platform, the Exchange proposes that if protected quotations are or become crossed, the Exchange would reject newly arriving Market Orders or cancel resting unexecuted Market Orders. Proposed Rule 13(a)(1)(B)(ii) would provide that: On arrival, a Market Order to buy (sell) is assigned a working price of the NBO (NBB) and will trade with all sell (buy) orders on the Exchange priced at or below (above) the NBO (NBB) before routing to the NBO (NBB) on an Away Market. The quantity of a Market Order to buy (sell) not traded or routed will remain undisplayed on the Exchange at a working price of the NBO (NBB) and be eligible to trade with incoming sell (buy) orders at that price. When the NBO (NBB) is updated, the Market Order to buy (sell) will be assigned a new working price of the updated NBO (NBB) and will trade with all sell (buy) orders on the Exchange priced at or below (above) the updated NBO (NBB) before routing to the updated NBO (NBB) on an Away Market. Such assessment will continue at each new contra-side NBBO until the order is filled or a Trading Collar is reached. If the NBBO becomes locked or crossed either on arrival or while the order is held undisplayed, the Market Order to buy (sell) will be assigned a working price of the NBB (NBO). This proposed rule text is based on NYSE Arca Equities Rule 7.31P(a)(1)(A), which provides: On arrival, a Market Order to buy (sell) is assigned a working price of the NBO (NBB) and will trade with all sell (buy) orders on the NYSE Arca Book priced at or below (above) the NBO (NBB) before routing to the NBO (NBB) on an Away Market. The quantity of a Market Order to buy (sell) not traded or routed will remain undisplayed on the NYSE Arca Book at a working price of the NBO (NBB) and be eligible to trade with incoming sell (buy) orders at that price. When the updated NBO (NBB) is displayed, the Market Order to buy (sell) will be assigned a new working price of the updated NBO (NBB) and will trade with all sell (buy) orders on the NYSE Arca Book priced at or below (above) the updated NBO (NBB) before routing to the updated NBO (NBB) on an Away Market. Such assessment will continue at each new contra-side NBBO until the order is filled or a Trading Collar is reached. If the NBBO becomes locked or crossed while the order if held undisplayed, the Market Order to buy (sell) will be assigned a working price of the NBB (NBO). The Exchange proposes a non-substantive difference to use the term ``Exchange'' instead of ``NYSE Arca Book'' in proposed Rule 13(a)(1)(B)(ii). The Exchange also proposes a change from the NYSE Arca Equities Rule to specify that a Market Order would be priced to the same-side NBBO when the NBBO is crossed both on arrival and when resting. To this point, as described above, if the protected quotations are crossed, a resting Market Order would be cancelled, which differs from current NYSE Arca Equities behavior. However, [[Page 33280]] if the NBBO is crossed, but the best protected quotations are not crossed, the Exchange would price the Market Order based on the same- side NBBO, which is how Market Orders operate on NYSE Arca Equities.\10\ Finally, the Exchange proposes a change from the NYSE Arca Equities rule to provide that a Market Order will be assigned a new working price when the NBBO is updated, and not when an updated NBBO is displayed. The proposed Exchange functionality is identical to that of NYSE Arca Equities, but the Exchange believes its proposed rule language clarifies that it would incorporate updates to the NBBO based on executions at the Exchange that have not yet been displayed. --------------------------------------------------------------------------- \10\ The NBBO may differ from the best protected quotations (``PBBO'') because the NBBO includes manual quotations, which are defined as any quotation other than an automated quotation. 17 CFR 242.600(b)(37). By contrast, a protected quotation is an automated quotation that is the best bid or offer of a national securities exchange. 17 CFR 242.600(b)(57)(iii). In addition, when the Exchange routes interest to protected quotations, it adjusts the PBBO, but does not adjust the NBBO. See Securities Exchange Act Release No. 74410 (March 2, 2015), 80 FR 12240 (March 6, 2015) (SR-NYSE-2015- 09). --------------------------------------------------------------------------- Proposed Rule 13(a)(1)(B)(iii) would provide that unexecuted Market Orders that are held undisplayed in Exchange systems would not be available to the DMM either as part of aggregated interest at a price point or in disaggregated form and would not participate in intra-day manual executions. The Exchange proposes this rule text to reflect the Exchange's unique trading model, which, unlike NYSE Arca Equities, includes a DMM assigned to each security that trades on the Exchange.\11\ Unless otherwise specified, DMMs have access to specified order information while on the Trading Floor.\12\ Because unexecuted Market Orders would be held undisplayed at the contra-side NBBO, the Exchange proposes to treat such unexecuted orders similarly to other undisplayed orders and would not make information about them available to the DMM during intra-day trading. Accordingly, proposed Rule 13(a)(1)(B)(iii) is based on Rule 70(f)(ii) regarding the information available to a DMM regarding a Non-Display Reserve e-Quote that has been designated to be excluded from the DMM. In addition, because information about unexecuted Market Orders would not be available to DMMs when the Exchange is open for continuous trading, the Exchange further proposes to provide that such orders would not participate in intra-day manual executions, i.e., executions facilitated by the DMM while on the Trading Floor.\13\ --------------------------------------------------------------------------- \11\ See Rule 2(i) (defining the term ``Designated Market Maker'' or ``DMM'' to mean an individual member, officer, partner, employee or associated person of a DMM unit who is approved by the Exchange to act in the capacity of a DMM). \12\ See Rule 104(j)(ii). \13\ By contrast, the Exchange proposes that the participation of Market Orders would not change for auctions on the Exchange, including that availability of Market Orders would be made known to the DMM. See proposed Rule 13(a)(1)(C)(ii). DMMs are responsible for facilitating openings and reopenings and the close of trading. To comply with this requirement, the Exchange makes available to DMMs and DMM unit algorithms aggregate order information. See NYSE Rule 104(a)(2) and (3). --------------------------------------------------------------------------- Proposed Rule 13(a)(1)(C) would specify how Market Orders would participate in auctions. Because auctions on the Exchange are facilitated by DMMs, the Exchange proposes that Market Orders that have not been assigned a working price based on the contra-side NBBO or, during a halt, pause or trading suspension, have not yet traded, would continue to participate in an auction as Market Orders currently do and would continue to be included in the information made available to DMMs and the public no differently than today. Accordingly, as proposed in Rule 13(a)(1)(C)(i), a Market Order that was entered before the opening of trading, or was entered before or during a halt, pause or suspension in trading, would be made available to the DMM as provided for in Rule 104(a)(2) and (3) and would be included in Order Imbalance Information \14\ and allocated in the applicable auction as a Market Order. This would include all opening and reopening auctions,\15\ and closing auctions that follow a halt, pause or suspension in trading.\16\ In addition, if a Market Order arrives during continuous trading, is held undisplayed and assigned a working price, and then that security enters a halt or pause, such Market Order will revert and be considered an unpriced Market Order for purposes of allocation in the reopening auction. --------------------------------------------------------------------------- \14\ See Rules 15(c) and 123C(6). \15\ See Rule 115A(a)(i). \16\ See Rule 123C(7). --------------------------------------------------------------------------- By contrast, because a Market Order entered during continuous trading that remains unexecuted when the Exchange transitions to the closing transaction would have been assigned a working price, the Exchange proposes to handle such unexecuted Market Orders more similarly to a Limit Order in the closing transaction. Accordingly, as proposed in Rule 13(a)(1)(C)(ii), a Market Order that was entered during continuous trading and remains unexecuted for the close would be made available to the DMM as provided for in Rule 104(a)(3) and would be included in Order Imbalance Information and allocated in the closing transaction as a Limit Order with its limit price being the last working price assigned to the unexecuted Market Order. The Exchange proposes to address how short sale Market Orders would be allocated in an auction in proposed Rule 13(a)(1)(C)(iii). Similar to unexecuted Market Orders that would participate in the closing transaction as a Limit Order, during a Short Sale Period, as defined in Rule 440B(d), a short sale Market Order would also participate in any auction as a Limit Order, but with the limit price being the last Permitted Price before the applicable transaction. Accordingly, proposed Rule 13(a)(1)(C)(iii) would provide that during a Short Sale Period, as defined in Rule 440B(d), a short sale Market Order re-priced to a Permitted Price, as defined in Rule 440B(e), would be made available to the DMM as provided for in Rules 104(a)(2) and (3) and would be included in Order Imbalance Information and allocated in the applicable auction as a Limit Order. This proposed behavior would be applicable for any auction.\17\ --------------------------------------------------------------------------- \17\ This proposed behavior for short sale Market Orders on the Exchange is based on Commentary .01(a) to NYSE Arca Equities Rule 7.35P, which provides that 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)) will be processed as Limit Orders ranked Priority 2- Display Orders and will not be included in the Market Imbalance. --------------------------------------------------------------------------- The Exchange also proposes to amend Rule 72 to specify how an unexecuted Market Order would be allocated. First, the Exchange proposes to amend Rule 72(c)(i), which currently provides that an automatically executing order will trade first with displayable bids (offers) and if there is insufficient displayable volume to fill the order, will trade next with non-displayable interest. The Exchange proposes to amend this rule to provide that an automatically executing order would trade first with any unexecuted Market Orders, which would be allocated in time priority, and then with displayable bids (offers). Second, the Exchange proposes to amend Rule 72(c)(iii), which currently describes how in any execution at the Exchange BBO, a participant who has established priority under Rule 72(a) will receive fifteen percent of the volume of such executed amount or a minimum of one round lot, whichever is greater, until such setting interest has received a complete execution of its eligible priority interest. The Exchange proposes to amend this rule text to add that such priority allocation would be [[Page 33281]] after any unexecuted Market Orders have been satisfied. Both of these proposed amendments to Rule 72(c) are based on NYSE Arca Equities Rule 7.31P(a)(1), which provides that unexecuted Market Orders are ranked Priority 1--Market Orders. As defined in NYSE Arca Equities Rule 7.36P(e), at each price point, unexecuted Market Orders that are ranked Priority 1--Market Orders have priority over all other same-side orders with the same working price. The Exchange proposes to provide similar priority ranking of unexecuted Market Orders, which would harmonize how Market Orders behave on the two markets. To further harmonize the behavior of Market Orders on the Exchange with the behavior of Market Orders on NYSE Arca Equities, the Exchange proposes to amend Rule 80C(a)(5)(A) regarding how Market Orders would be handled if they cannot be fully executed at or within the Limit Up- Limit Down Price Bands.\18\ Currently, the Exchange would display the unexecuted portion of a buy (sell) market order at the Upper (Lower) Price Band if it cannot be fully executed at or within the Price Bands. The Exchange proposes to amend this Rule to provide that the Exchange would cancel the unexecuted portion of the buy (sell) market order if it cannot be fully executed at or within the Price Bands and would notify the member organization of the reason for such cancellation. This proposed rule text is based on NYSE Arca Equities Rule 7.11P(a)(5)(A), which provides that any untraded quantity of Market Orders that cannot be traded at prices at or within the Price Bands will be cancelled and the ETP Holder will be notified of the reason for such cancellation. In addition, because the Exchange does not offer Market Pegging Interest, the Exchange proposes a non-substantive change to delete the text in Rule 80C(a)(5)(E) relating to Market Pegging Interest and replace it with the text ``Reserved.'' \19\ --------------------------------------------------------------------------- \18\ See Rule 80C. \19\ The Exchange also proposes a non-substantive amendment to Rule 80C(a)(5)(A) to capitalize the term ``Market Order.'' --------------------------------------------------------------------------- In addition, the Exchange proposes to harmonize the behavior of sell short Market Orders during a Short Sale Period with how such orders are handled on NYSE Arca Equities. Currently, Rule 440B(e) provides that short sale market orders will be re-priced by Exchange systems one minimum price increment above the current national best bid (``Permitted Price.''). Because the Exchange proposes that unexecuted Market Orders would not be displayed, the Exchange proposes to amend Rule 440B(e) to provide that any unexecuted or any unexecuted portion of a short sale Market Order re-priced to a Permitted Price would rest on the Exchange's Book and be non-displayed and that they would be re- priced upward to a Permitted Price to correspond with a rise in the national best bid.\20\ This proposed rule change is based on NYSE Arca Equities Rule 7.16P(f)(5)(C), which provides that Market Orders will have a working price adjusted to a Permitted Price and will continuously adjust to a Permitted Price as the NBB moves both up and down. --------------------------------------------------------------------------- \20\ The Exchange also proposes a non-substantive amendment to Rule 440B(e) to capitalize the term ``Market Order.'' --------------------------------------------------------------------------- The Exchange also proposes to amend how Trading Collars would operate for Market Orders. Because of technology differences between the Exchange and NYSE Arca Equities, the Exchange proposes to keep the current behavior for Trading Collars, which use the NBBO as a reference price, rather than adopt the NYSE Arca Equities manner of determining Trading Collars, which use the consolidated last sale price as the reference price. Currently, Rule 1000(c) provides that Trading Collars are applicable to incoming market orders. Because as proposed, Market Orders would be re-evaluated for an execution or routing opportunity with each update to the NBBO, the Exchange proposes to apply the Trading Collar evaluation with each evaluation to trade or route an unexecuted Market Order. Accordingly, the Exchange proposes to amend Rule 1000(c) to provide that an unexecuted Market Order would be subject to a Trading Collar upon each evaluation to trade or route such order.\21\ --------------------------------------------------------------------------- \21\ The Exchange also proposes a non-substantive amendment to Rule 1000(c) to capitalize the terms ``Market Order'' and ``Limit Order.'' --------------------------------------------------------------------------- Finally, the Exchange proposes to amend Supplementary Material .10 to Rule 13 to specify how unexecuted Market Orders would be included in the definitions of ``best-priced sell interest'' and ``best-priced buy interest.'' These terms are used to describe how a Limit Order designated with an Add Liquidity Only (``ALO'') Modifier will be re- priced when such Limit Order, at the time of entry, is marketable against Exchange interest or would lock or cross a protected quotation.\22\ Specifically, a Limit Order designated ALO that, at the time of entry, is marketable against Exchange interest will be re- priced and displayed one MPV below the best-priced sell interest (for bids) or above the best-priced buy interest (for offers). Supplementary Material .10 to Rule 13 provides that the term best-priced sell (buy) interest refers to the lowest-priced sell (highest-priced buy) interest against which incoming buy (sell) interest would be required to execute with and/or route to, including Exchange displayed offers, Non-Display Reserve Orders, Non-Display Reserve e-Quotes, odd-lot sized sell (buy) interest, and protected offers (bids) on away markets, but does not include non-displayed sell (buy) interest that is priced based on the PBBO. The Exchange proposes to amend Supplementary Material .10 to Rule 13 to add unexecuted Market Orders to the list of interest that would be included in the term ``best-priced sell interest'' and ``best-priced buy interest.'' Accordingly, if there is an unexecuted Market Order being held undisplayed at a price, an incoming opposite-side Limit Order designated ALO would be re-priced and displayed one MPV away from the working price of such unexecuted Market Order. --------------------------------------------------------------------------- \22\ See Rule 13(e)(1)(B). --------------------------------------------------------------------------- Proposed Deletions The Exchange proposes to reduce complexity by reducing order type combinations that are infrequently used. As proposed, the Exchange proposes to eliminate the functionality to combine a Market Order with an IOC, buy ``minus,'' or sell ``plus'' instruction. First, to eliminate IOC instructions for Market Orders, the Exchange proposes to amend Rules 13(b)(3)(A) (renumbered as Rule 13(b)(2)(A)) regarding Regulation NMS-compliant IOC Orders and 13(b)(3)(B) (renumbered as Rule 13(b)(2)(B)) regarding NYSE IOC Orders to delete the references to Market Orders in the rule text. The Exchange further proposes to clarify Rule 13(b)(1) regarding the Day Modifier to specify that Market Orders can be designated Day, which is current functionality. The Exchange also proposes non-substantive, technical changes to change the subsection numbering from Rule 13(b)(3) to Rule 13(b)(2) and to capitalize the term ``Order'' in Rule 13(b)(2)(A). Second, to eliminate tick sensitive instructions for Market Orders, the Exchange proposes to amend Rule 13(f)(4) to delete references to Market Orders and to make other non-substantive changes. Rule 13(f)(4)(A) currently provides: A Market Order to sell ``plus'' is a Market Order to sell a stated amount of a stock provided that the price to be obtained is not lower than the last sale if the last sale was a ``plus'' or ``zero plus'' tick, and is not lower than the last sale plus the minimum fractional change in the stock if the last sale [[Page 33282]] was a ``minus'' or ``zero minus'' tick. A Limit Order to sell ``plus'' would have the additional restriction of stating the lowest price at which it could be executed. The Exchange proposes to delete references to Market Orders in the first sentence. In addition, the Exchange proposes to delete the last sentence and instead incorporate the concept of that sentence into the prior sentence. The proposed new rule text would provide: An order with an instruction to sell ``plus'' will not trade at a price [sic] lower than the last sale if the last sale was a ``plus'' or ``zero plus'' tick, and is not [sic] lower than the last sale plus the minimum fractional change in the stock if the last sale was a ``minus'' or ``zero minus'' tick, subject to the limit price of an order, if applicable. The Exchange proposes a similar change to Rule 13(f)(4)(C), which currently provides: A Market Order to buy ``minus'' is a Market Order to buy a stated amount of a stock provided that the price to be obtained is not higher than the last sale if the last sale was a ``minus'' or ``zero minus'' tick, and is not higher than the last sale minus the minimum fractional change in the stock if the last sale was a ``plus'' or ``zero plus'' tick. A Limit Order to buy ``minus'' would have the additional restriction of stating the highest price at which it could be executed. The proposed new rule text, which would be set forth in Rule 13(f)(4)(B), would provide: An order with an instruction to buy ``minus'' will not trade at a price [sic] higher than the last sale if the last sale was a ``minus'' or ``zero minus'' tick, and is not [sic] higher than the last sale minus the minimum fractional change in the stock if the last sale was a ``plus'' or ``zero plus'' tick, subject to the limit price of an order, if applicable. The Exchange further proposes to streamline the rule by deleting current Rule 13(f)(4)(B) and combining it with current Rule 13(f)(4)(D), which would be re-numbered as Rule 13(f)(4)(C).\23\ Proposed Rule 13(f)(4)(C) would also specify which orders may be combined with sell ``plus'' and buy ``minus'' instructions. Accordingly, as proposed, Rule 13(f)(4)(C) would provide: --------------------------------------------------------------------------- \23\ Consistent with the proposed re-numbering of Rule 13(f)(4), current Rule 13(f)(4)(E) would be re-numbered as Rule 13(f)(4)(D), with no changes to the rule text. Sell ``plus'' and buy ``minus'' instructions are available for Limit Orders, LOO Orders, LOC Orders, and MOC Orders. Orders with a buy ``minus'' or sell ``plus'' instruction that are systemically delivered to Exchange systems will be eligible to be automatically executed in accordance with, and to the extent provided by, Rules --------------------------------------------------------------------------- 1000-1004, consistent with the order's instructions. As noted above, sell ``plus'' and buy ``minus'' instructions, also referred to as ``tick-sensitive instructions,'' are currently available for Market Orders, but are also available for MOO and LOO Orders \24\ and MOC and LOC Orders.\25\ The Exchange proposes to clarify proposed Rule 13(f)(4)(C) to specify which orders could include tick-sensitive instructions. As proposed, Limit Orders, LOO Orders, LOC Orders and MOC Orders would continue to be eligible to be combined with a tick- sensitive instruction. As noted above, Market Orders would not be eligible to include tick-sensitive instructions, and the Exchange proposes to also exclude MOO Orders from including tick-sensitive instructions. To reflect these changes, the Exchange also proposes to amend Rule 13(c)(5) and Rule 115A(a)(1)(A) and (B) to delete references to tick-sensitive market and MOO orders. The Exchange also proposes a non-substantive amendment to Rule 115A(1)(A) to capitalize the term ``Market Order.'' --------------------------------------------------------------------------- \24\ See Rule 115A(1)(A) and (B). \25\ See Rule 123C(7). --------------------------------------------------------------------------- * * * * * Because of the technology changes associated with this proposed rule change, the Exchange will announce by Trader Update the implementation date. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the ``Act''),\26\ in general, and furthers the objectives of Section 6(b)(5),\27\ in particular, because it is 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. --------------------------------------------------------------------------- \26\ 15 U.S.C. 78f(b). \27\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes the proposed rule change would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would simplify how Market Orders would function on the Exchange by harmonizing the behavior of Market Orders with how they operate on the Pillar trading platform on NYSE Arca Equities. The Exchange further believes that the proposed changes would protect investors and the public interest because they are designed to prevent a Market Order from sweeping through multiple price points on the Exchange book, which may result in a Market Order executing at prices away from the prevailing quote. As proposed, a Market Order would be held undisplayed at the last contra-side NBBO price and wait for a pricing update before being eligible to trade or route again, thus reducing the potential for a Market Order to sweep through multiple price points on the Exchange's book. Instead, by waiting for updates to the NBBO before becoming eligible to trade again, a Market Order would have additional opportunity to route to Away Markets before sweeping through multiple price points on the Exchange's book. The Exchange further believes that eliminating IOC and tick- sensitive instructions for Market Orders would remove impediments to and perfect a national market system by simplifying functionality and complexity of its order types. Specifically, these are order type combinations that are infrequently used. For example, year-to-date, the Exchange and its affiliated exchange NYSE MKT LLC (``NYSE MKT''), which has identical rules, have not received any MOO Orders with tick- sensitive instructions, have not received any Market Orders with sell plus instructions, and have received only 17 Market Orders with buy minus instructions. Similarly, year-to-date, the Exchange and NYSE MKT have received only 20 Market Orders with IOC instructions. Accordingly, the Exchange believes that eliminating these order types would be consistent with the public interest and the protection of investors because investors will not be harmed and in fact would benefit from the removal of complex functionality. The Exchange further believes that deleting corresponding references in Exchange rules to deleted order types also would remove impediments to and perfect the mechanism of a free and open market by ensuring that members, regulators and the public can more easily navigate the Exchange's rulebook and better understand the orders types available for trading on the Exchange. Removing obsolete cross references also furthers the goal of transparency and adds clarity to the Exchange's rules. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change is not designed to address any competitive issue but [[Page 33283]] would rather harmonize the treatment of Market Orders between the Exchange and NYSE Arca Equities and remove complex functionality and obsolete cross-references, thereby reducing confusion and making the Exchange's rules easier to understand and navigate. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act \28\ and Rule 19b-4(f)(6) thereunder.\29\ 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. --------------------------------------------------------------------------- \28\ 15 U.S.C. 78s(b)(3)(A). \29\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange's intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \30\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\31\ the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange believes that waiving the operative delay would promote the protection of investors and the public interest because the proposed rule change would reduce the potential for a Market Order to trade at prices away from the prevailing quote and at potentially worse prices for the investor. Likewise, the Exchange believes that eliminating IOC and tick-sensitive instructions for Market Orders, without delay, would be consistent with the protection of investors and the public interest because these instructions are rarely used and their elimination would simplify the Exchange's offering of order types. The Commission believes that the proposed rule change is consistent with the protection of investors and the public interest, because the proposal would diminish the likelihood of Market Orders trading at prices that would be disadvantageous to investors, and because it would simplify the Exchange's order types by eliminating rarely used complex order functionality. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing.\32\ --------------------------------------------------------------------------- \30\ 17 CFR 240.19b-4(f)(6). \31\ 17 CFR 240.19b-4(f)(6)(iii). \32\ For purposes only of accelerating the operative date of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). --------------------------------------------------------------------------- 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) \33\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \33\ 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 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-NYSE-2016-35 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-NYSE-2016-35. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSE-2016-35 and should be submitted on or before June 15, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\34\ --------------------------------------------------------------------------- \34\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-12241 Filed 5-24-16; 8:45 am] BILLING CODE 8011-01-P
![33278 Federal Register / Vol. 81, No. 101 / Wednesday, May 25, 2016 / Notices
• Send an e-mail to rule-comments@ SECURITIES AND EXCHANGE related rules relating to Market Orders.
sec.gov. Please include File Number SR– COMMISSION The proposed changes are designed to
NASDAQ–2016–057 on the subject line. simplify the Exchange’s offering of order
[Release No. 34–77860; File No. SR–NYSE–
2016–35]
types by harmonizing the behavior of
Paper Comments Market Orders with how similar orders
• Send paper comments in triplicate Self-Regulatory Organizations; New operate on NYSE Arca Equities, Inc.
York Stock Exchange LLC; Notice of (‘‘NYSE Arca Equities’’), the Exchange’s
to Secretary, Securities and Exchange
Filing and Immediate Effectiveness of affiliated equities marketplace, and by
Commission, 100 F Street NE.,
Proposed Rule Change Amending eliminating specified combinations of
Washington, DC 20549–1090. orders and modifiers.4
NYSE Rule 13 and Related Rules
All submissions should refer to File Regarding Market Orders Overview
Number SR–NASDAQ–2016–057. This
file number should be included on the May 19, 2016. Currently, Market Orders are defined
subject line if e-mail is used. To help the Pursuant to Section 19(b)(1) 1 of the in Rule 13(a)(1) as an order to buy or
Securities Exchange Act of 1934 (the sell a stated amount of a security at the
Commission process and review your
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 most advantageous price obtainable
comments more efficiently, please use after the order is represented in the
notice is hereby given that on May 16,
only one method. The Commission will 2016, New York Stock Exchange LLC Trading Crowd or routed to Exchange
post all comments on the Commission’s (‘‘NYSE’’ or the ‘‘Exchange’’) filed with systems. If a Market Order to sell has
Internet website (http://www.sec.gov/ the Securities and Exchange exhausted all eligible buy interest, any
rules/sro.shtml). Copies of the Commission (the ‘‘Commission’’) the unfilled balance of the Market Order to
submission, all subsequent proposed rule change as described in sell will be cancelled. Market Orders
amendments, all written statements Items I and II, below, which Items have may include an immediate-or-cancel
with respect to the proposed rule been prepared by the self-regulatory (‘‘IOC’’) time-in-force modifier.5 In
change that are filed with the organization. The Commission is addition, a Market Order may include
Commission, and all written publishing this notice to solicit an instruction to either buy ‘‘minus’’ or
communications relating to the comments on the proposed rule change sell ‘‘plus.’’ 6
proposed rule change between the from interested persons. The Exchange proposes to simplify
Commission and any person, other than how Market Orders would function on
I. Self-Regulatory Organization’s the Exchange by harmonizing the
those that may be withheld from the Statement of the Terms of Substance of
public in accordance with the behavior of Market Orders with how
the Proposed Rule Change they operate on the Pillar trading
provisions of 5 U.S.C. 552, will be
The Exchange proposes to amend platform on NYSE Arca Equities and by
available for website viewing and
NYSE Rule 13 (Orders and Modifiers) eliminating the ability to combine a
printing in the Commission’s Public
and related rules regarding Market Market Order with an IOC, buy
Reference Room, 100 F Street NE., Orders. The proposed rule change is ‘‘minus,’’ or sell ‘‘plus’’ instruction,
Washington, DC 20549, on official available on the Exchange’s Web site at which are not available on the NYSE
business days between the hours of www.nyse.com, at the principal office of Arca Equities trading platform. The
10:00 a.m. and 3:00 p.m. Copies of such the Exchange, and at the Commission’s Exchange believes that eliminating these
filing will also be available for Public Reference Room. order type combinations would
inspection and copying at the principal streamline its rules and reduce
office of the Exchange. All comments II. Self-Regulatory Organization’s
complexity among its order type
received will be posted without change; Statement of the Purpose of, and
offerings.7
the Commission does not edit personal Statutory Basis for, the Proposed Rule
Change Proposed Amendments to Market
identifying information from
In its filing with the Commission, the Orders
submissions. You should submit only
information that you wish to make self-regulatory organization included To effect the proposed changes to how
available publicly. All submissions statements concerning the purpose of, Market Orders would operate, the
should refer to File Number SR– and basis for, the proposed rule change Exchange proposes to amend Rule
NASDAQ–2016–057 and should be and discussed any comments it received 13(a)(1) to provide that a Market Order
on the proposed rule change. The text that is eligible for automatic execution
submitted on or before June 15, 2016.
of those statements may be examined at would be an unpriced order to buy or
For the Commission, by the Division of the places specified in Item IV below. sell a stated amount of a security that is
Trading and Markets, pursuant to delegated The Exchange has prepared summaries, to be traded at the best price obtainable
authority.11 set forth in sections A, B, and C below, without trading through the NBBO. This
Robert W. Errett, of the most significant parts of such proposed rule text is based on the first
Deputy Secretary. statements. sentence of NYSE Arca Equities Rule
[FR Doc. 2016–12237 Filed 5–24–16; 8:45 am] 7.31P(a)(1), which provides that a
A. Self-Regulatory Organization’s Market Order is an unpriced order to
BILLING CODE 8011–01–P Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule 4 NYSE Arca Equities is a wholly-owned
Change subsidiary of NYSE Arca, Inc., which is a national
mstockstill on DSK3G9T082PROD with NOTICES
securities exchange.
1. Purpose 5 See Rule 13(b)(3).
The Exchange proposes to amend 6 See Rule 13(f)(A) and (C).
7 See, e.g., Mary Jo White, Chair, Securities and
Rule 13 (Orders and Modifiers) and
Exchange Commission, Speech at the Sandler
O’Neill & Partners, L.P. Global Exchange and
1 15 U.S.C. 78s(b)(1). Brokerage Conference (June 5, 2014) (available at
2 15 U.S.C. 78a. www.sec.gov/News/Speech/Detail/Speech/
11 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4. 1370542004312#.U5HI-fmwJiw).
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![33282 Federal Register / Vol. 81, No. 101 / Wednesday, May 25, 2016 / Notices
was a ‘‘minus’’ or ‘‘zero minus’’ tick. A Limit As noted above, sell ‘‘plus’’ and buy prevent a Market Order from sweeping
Order to sell ‘‘plus’’ would have the ‘‘minus’’ instructions, also referred to as through multiple price points on the
additional restriction of stating the lowest ‘‘tick-sensitive instructions,’’ are Exchange book, which may result in a
price at which it could be executed. currently available for Market Orders, Market Order executing at prices away
The Exchange proposes to delete but are also available for MOO and LOO from the prevailing quote. As proposed,
references to Market Orders in the first Orders 24 and MOC and LOC Orders.25 a Market Order would be held
sentence. In addition, the Exchange The Exchange proposes to clarify undisplayed at the last contra-side
proposes to delete the last sentence and proposed Rule 13(f)(4)(C) to specify NBBO price and wait for a pricing
instead incorporate the concept of that which orders could include tick- update before being eligible to trade or
sentence into the prior sentence. The sensitive instructions. As proposed, route again, thus reducing the potential
proposed new rule text would provide: Limit Orders, LOO Orders, LOC Orders for a Market Order to sweep through
and MOC Orders would continue to be multiple price points on the Exchange’s
An order with an instruction to sell ‘‘plus’’
eligible to be combined with a tick- book. Instead, by waiting for updates to
will not trade at a price [sic] lower than the
last sale if the last sale was a ‘‘plus’’ or ‘‘zero sensitive instruction. As noted above, the NBBO before becoming eligible to
plus’’ tick, and is not [sic] lower than the last Market Orders would not be eligible to trade again, a Market Order would have
sale plus the minimum fractional change in include tick-sensitive instructions, and additional opportunity to route to Away
the stock if the last sale was a ‘‘minus’’ or the Exchange proposes to also exclude Markets before sweeping through
‘‘zero minus’’ tick, subject to the limit price MOO Orders from including tick- multiple price points on the Exchange’s
of an order, if applicable. sensitive instructions. To reflect these book.
changes, the Exchange also proposes to The Exchange further believes that
The Exchange proposes a similar eliminating IOC and tick-sensitive
amend Rule 13(c)(5) and Rule
change to Rule 13(f)(4)(C), which instructions for Market Orders would
115A(a)(1)(A) and (B) to delete
currently provides: remove impediments to and perfect a
references to tick-sensitive market and
A Market Order to buy ‘‘minus’’ is a Market MOO orders. The Exchange also national market system by simplifying
Order to buy a stated amount of a stock proposes a non-substantive amendment functionality and complexity of its order
provided that the price to be obtained is not to Rule 115A(1)(A) to capitalize the term types. Specifically, these are order type
higher than the last sale if the last sale was combinations that are infrequently used.
‘‘Market Order.’’
a ‘‘minus’’ or ‘‘zero minus’’ tick, and is not
higher than the last sale minus the minimum * * * * * For example, year-to-date, the Exchange
fractional change in the stock if the last sale Because of the technology changes and its affiliated exchange NYSE MKT
was a ‘‘plus’’ or ‘‘zero plus’’ tick. A Limit associated with this proposed rule LLC (‘‘NYSE MKT’’), which has
Order to buy ‘‘minus’’ would have the change, the Exchange will announce by identical rules, have not received any
additional restriction of stating the highest Trader Update the implementation date. MOO Orders with tick-sensitive
price at which it could be executed. instructions, have not received any
2. Statutory Basis Market Orders with sell plus
The proposed new rule text, which instructions, and have received only 17
The proposed rule change is
would be set forth in Rule 13(f)(4)(B), Market Orders with buy minus
consistent with Section 6(b) of the
would provide: instructions. Similarly, year-to-date, the
Securities Exchange Act of 1934 (the
An order with an instruction to buy ‘‘Act’’),26 in general, and furthers the Exchange and NYSE MKT have received
‘‘minus’’ will not trade at a price [sic] higher objectives of Section 6(b)(5),27 in only 20 Market Orders with IOC
than the last sale if the last sale was a particular, because it is designed to instructions. Accordingly, the Exchange
‘‘minus’’ or ‘‘zero minus’’ tick, and is not believes that eliminating these order
[sic] higher than the last sale minus the
prevent fraudulent and manipulative
minimum fractional change in the stock if the acts and practices, to promote just and types would be consistent with the
last sale was a ‘‘plus’’ or ‘‘zero plus’’ tick, equitable principles of trade, to foster public interest and the protection of
subject to the limit price of an order, if cooperation and coordination with investors because investors will not be
applicable. persons engaged in facilitating harmed and in fact would benefit from
transactions in securities, to remove the removal of complex functionality.
The Exchange further proposes to impediments to, and perfect the The Exchange further believes that
streamline the rule by deleting current mechanism of, a free and open market deleting corresponding references in
Rule 13(f)(4)(B) and combining it with and a national market system and, in Exchange rules to deleted order types
current Rule 13(f)(4)(D), which would general, to protect investors and the also would remove impediments to and
be re-numbered as Rule 13(f)(4)(C).23 public interest. perfect the mechanism of a free and
Proposed Rule 13(f)(4)(C) would also The Exchange believes the proposed open market by ensuring that members,
specify which orders may be combined rule change would remove impediments regulators and the public can more
with sell ‘‘plus’’ and buy ‘‘minus’’ to and perfect the mechanism of a free easily navigate the Exchange’s rulebook
instructions. Accordingly, as proposed, and open market and a national market and better understand the orders types
Rule 13(f)(4)(C) would provide: system because it would simplify how available for trading on the Exchange.
Sell ‘‘plus’’ and buy ‘‘minus’’ instructions Market Orders would function on the Removing obsolete cross references also
are available for Limit Orders, LOO Orders, Exchange by harmonizing the behavior furthers the goal of transparency and
LOC Orders, and MOC Orders. Orders with of Market Orders with how they operate adds clarity to the Exchange’s rules.
a buy ‘‘minus’’ or sell ‘‘plus’’ instruction that on the Pillar trading platform on NYSE
are systemically delivered to Exchange B. Self-Regulatory Organization’s
Arca Equities. The Exchange further Statement on Burden on Competition
systems will be eligible to be automatically
mstockstill on DSK3G9T082PROD with NOTICES
executed in accordance with, and to the believes that the proposed changes
would protect investors and the public The Exchange does not believe that
extent provided by, Rules 1000–1004, the proposed rule change will impose
consistent with the order’s instructions. interest because they are designed to
any burden on competition that is not
23 Consistent with the proposed re-numbering of
24 See Rule 115A(1)(A) and (B). necessary or appropriate in furtherance
Rule 13(f)(4), current Rule 13(f)(4)(E) would be re-
25 See Rule 123C(7). of the purposes of the Act. The
numbered as Rule 13(f)(4)(D), with no changes to 26 15 U.S.C. 78f(b). proposed change is not designed to
the rule text. 27 15 U.S.C. 78f(b)(5). address any competitive issue but
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![Federal Register / Vol. 81, No. 101 / Wednesday, May 25, 2016 / Notices 33283
would rather harmonize the treatment of eliminating IOC and tick-sensitive Commission process and review your
Market Orders between the Exchange instructions for Market Orders, without comments more efficiently, please use
and NYSE Arca Equities and remove delay, would be consistent with the only one method. The Commission will
complex functionality and obsolete protection of investors and the public post all comments on the Commission’s
cross-references, thereby reducing interest because these instructions are Internet Web site (http://www.sec.gov/
confusion and making the Exchange’s rarely used and their elimination would rules/sro.shtml). Copies of the
rules easier to understand and navigate. simplify the Exchange’s offering of order submission, all subsequent
types. The Commission believes that the amendments, all written statements
C. Self-Regulatory Organization’s
proposed rule change is consistent with with respect to the proposed rule
Statement on Comments on the
the protection of investors and the change that are filed with the
Proposed Rule Change Received From
public interest, because the proposal Commission, and all written
Members, Participants, or Others
would diminish the likelihood of communications relating to the
No written comments were solicited Market Orders trading at prices that proposed rule change between the
or received with respect to the proposed would be disadvantageous to investors, Commission and any person, other than
rule change. and because it would simplify the those that may be withheld from the
III. Date of Effectiveness of the Exchange’s order types by eliminating public in accordance with the
Proposed Rule Change and Timing for rarely used complex order functionality. provisions of 5 U.S.C. 552, will be
Commission Action Accordingly, the Commission hereby available for Web site viewing and
waives the 30-day operative delay and printing in the Commission’s Public
The Exchange has filed the proposed Reference Room, 100 F Street NE.,
designates the proposal operative upon
rule change pursuant to Section Washington, DC 20549 on official
filing.32
19(b)(3)(A) of the Act 28 and Rule 19b– business days between the hours of
At any time within 60 days of the
4(f)(6) thereunder.29 Because the 10:00 a.m. and 3:00 p.m. Copies of the
filing of such proposed rule change, the
proposed rule change does not: (i) filing also will be available for
Commission summarily may
Significantly affect the protection of inspection and copying at the principal
temporarily suspend such rule change if
investors or the public interest; (ii) office of the Exchange. All comments
it appears to the Commission that such
impose any significant burden on received will be posted without change;
action is necessary or appropriate in the
competition; and (iii) become operative the Commission does not edit personal
public interest, for the protection of
prior to 30 days from the date on which identifying information from
investors, or otherwise in furtherance of
it was filed, or such shorter time as the submissions. You should submit only
the purposes of the Act. If the
Commission may designate, if information that you wish to make
consistent with the protection of Commission takes such action, the
Commission shall institute proceedings available publicly. All submissions
investors and the public interest, the should refer to File Number SR–NYSE–
proposed rule change has become under Section 19(b)(2)(B) 33 of the Act to
determine whether the proposed rule 2016–35 and should be submitted on or
effective pursuant to Section 19(b)(3)(A) before June 15, 2016.
of the Act and Rule 19b–4(f)(6)(iii) change should be approved or
thereunder. disapproved. For the Commission, by the Division of
A proposed rule change filed under Trading and Markets, pursuant to delegated
IV. Solicitation of Comments authority.34
Rule 19b–4(f)(6) 30 normally does not
Interested persons are invited to Robert W. Errett,
become operative prior to 30 days after
submit written data, views, and Deputy Secretary.
the date of the filing. However, pursuant
arguments concerning the foregoing, [FR Doc. 2016–12241 Filed 5–24–16; 8:45 am]
to Rule 19b–4(f)(6)(iii),31 the
including whether the proposed rule
Commission may designate a shorter BILLING CODE 8011–01–P
change is consistent with the Act.
time if such action is consistent with the
protection of investors and the public Comments may be submitted by any of
interest. The Exchange has asked the the following methods: SECURITIES AND EXCHANGE
Commission to waive the 30-day Electronic Comments COMMISSION
operative delay so that the proposal may • Use the Commission’s Internet [Release No. 34–77876; File No. SR–MIAX–
become operative immediately upon comment form (http://www.sec.gov/ 2016–08]
filing. The Exchange believes that rules/sro.shtml); or
waiving the operative delay would Self-Regulatory Organizations; Miami
• Send an email to rule-comments@
promote the protection of investors and International Securities Exchange LLC;
sec.gov. Please include File Number SR–
the public interest because the proposed Order Granting Approval of Proposed
NYSE–2016–35 on the subject line.
rule change would reduce the potential Rule Change to Amend the Exchange’s
for a Market Order to trade at prices Paper Comments Amended and Restated By-Laws
away from the prevailing quote and at • Send paper comments in triplicate Relating to the Removal of a Board
potentially worse prices for the investor. to Brent J. Fields, Secretary, Securities Restriction
Likewise, the Exchange believes that and Exchange Commission, 100 F Street May 20, 2016.
NE., Washington, DC 20549–1090.
28 15 U.S.C. 78s(b)(3)(A). All submissions should refer to File I. Introduction
29 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– Number SR–NYSE–2016–35. This file On March 29, 2016, Miami
4(f)(6)(iii) requires the Exchange to give the
number should be included on the International Securities Exchange LLC
mstockstill on DSK3G9T082PROD with NOTICES
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief subject line if email is used. To help the (the ‘‘Exchange’’ or ‘‘MIAX’’) filed with
description and text of the proposed rule change, the Securities and Exchange
at least five business days prior to the date of filing 32 For purposes only of accelerating the operative
Commission (the ‘‘Commission’’),
of the proposed rule change, or such shorter time date of this proposal, the Commission has
as designated by the Commission. The Exchange considered the proposed rule’s impact on
pursuant to Section 19(b)(1) of the
has satisfied this requirement. efficiency, competition, and capital formation. 15 Securities Exchange Act of 1934
30 17 CFR 240.19b–4(f)(6). U.S.C. 78c(f).
31 17 CFR 240.19b–4(f)(6)(iii). 33 15 U.S.C. 78s(b)(2)(B). 34 17 CFR 200.30–3(a)(12).
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Document Created: 2018-02-07 15:03:28
Document Modified: 2018-02-07 15:03:28
| 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 33278 |
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