81 FR 35105 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Designation of Longer Period for Commission Action on Proposed Rule Change To Amend Rule 6.64 With Respect to Opening Trading in an Options Series

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 105 (June 1, 2016)

Page Range		35105-35106
FR Document		2016-12774

Federal Register, Volume 81 Issue 105 (Wednesday, June 1, 2016)

[Federal Register Volume 81, Number 105 (Wednesday, June 1, 2016)]
[Notices]
[Pages 35105-35106]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-12774]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77912; File No. SR-NYSEArca-2016-49]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of 
Designation of Longer Period for Commission Action on Proposed Rule 
Change To Amend Rule 6.64 With Respect to Opening Trading in an Options 
Series

May 25, 2016.
    On March 23, 2016, NYSE Arca, Inc. (``Exchange'') filed with the 
Securities and Exchange Commission (``Commission''), pursuant to 
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ 
and Rule 19b-4 thereunder,\2\ a proposed rule change to amend the 
Exchange's process for opening trading in an options series. The 
proposed rule change was published for comment in the Federal Register 
on April 12, 2016.\3\ The Commission has received one comment letter on 
the proposal.\4\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 77539 (April 6, 
2016), 81 FR 21639.
    \4\ See Letter from Anonymous, dated May 3, 2016.
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    Section 19(b)(2) of the Act \5\ provides that within 45 days of the 
publication of notice of the filing of a proposed rule change, or 
within such longer period up to 90 days as the Commission may designate 
if it finds such longer period to be appropriate and publishes its 
reasons for so finding or as to which the self-regulatory organization 
consents, the Commission shall either approve the proposed rule change, 
disapprove the proposed rule change, or institute proceedings to 
determine whether these proposed rule changes should be disapproved. 
The 45th day for this filing is May 27, 2016.
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    \5\ 15 U.S.C. 78s(b)(2).
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    The Commission is extending the 45-day time period for Commission 
action on the proposed rule change. The Commission finds that it is 
appropriate to designate a longer period within which to take action on 
the proposed rule change so that it has sufficient time to consider and 
take action on the Exchange's proposed rule change.
    Accordingly, pursuant to Section 19(b)(2)(A)(ii)(I) of the Act \6\ 
and for the reasons stated above, the Commission designates July 11, 
2016 as the date by which the Commission should either approve or 
disapprove, or institute proceedings to determine whether to

[[Page 35106]]

disapprove, the proposed rule change (File No. SR-NYSEArca-2016-49).
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    \6\ 15 U.S.C. 78s(b)(2)(A)(ii)(I).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(31).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-12774 Filed 5-31-16; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 81, No. 105 / Wednesday, June 1, 2016 / Notices 35105

(Rule 144A securities), excluding Rule the Commission does not edit personal SECURITIES AND EXCHANGE
144A securities deemed illiquid by the identifying information from COMMISSION
Adviser. The Fund may hold up to an submissions. You should submit only
aggregate amount of 15% of its net information that you wish to make [Release No. 34–77912; File No. SR–
assets in illiquid assets (calculated at available publicly. All submissions NYSEArca–2016–49]
the time of investment), including Rule should refer to File Number SR–
144A securities deemed illiquid by the NYSEArca–2016–17 and should be Self-Regulatory Organizations; NYSE
Adviser, consistent with Commission submitted on or before June 22, 2016. Arca, Inc.; Notice of Designation of
guidance. Longer Period for Commission Action
This approval order is based on all of V. Accelerated Approval of the on Proposed Rule Change To Amend
the Exchange’s representations, Proposed Rule Change, as Modified by Rule 6.64 With Respect to Opening
including those set forth above and in Amendment No. 3 Trading in an Options Series
Amendment No. 3.
The Commission finds good cause to May 25, 2016.
IV. Solicitation of Comments on approve the proposed rule change, as On March 23, 2016, NYSE Arca, Inc.
Amendment No. 3 modified by Amendment No. 3, prior to (‘‘Exchange’’) filed with the Securities
Interested persons are invited to the thirtieth day after the date of and Exchange Commission
submit written data, views, and publication of Amendment No. 3 in the (‘‘Commission’’), pursuant to Section
arguments concerning the foregoing, Federal Register. Amendment No. 3 19(b)(1) of the Securities Exchange Act
including whether Amendment No. 3 to supplements the information provided of 1934 (‘‘Act’’) 1 and Rule 19b–4
the proposed rule change is consistent in the original proposed rule change by, thereunder,2 a proposed rule change to
with the Act. Comments may be among other things, clarifying amend the Exchange’s process for
submitted by any of the following surveillances related to trading in the opening trading in an options series.
methods: Shares and providing certain The proposed rule change was
Electronic Comments representations that should help make published for comment in the Federal
the fund’s portfolio less susceptible to Register on April 12, 2016.3 The
• Use the Commission’s Internet
manipulation. This information assisted Commission has received one comment
comment form (http://www.sec.gov/
the Commission in evaluating the letter on the proposal.4
rules/sro.shtml); or
• Send an email to rule-comments@ susceptibility of the Shares to Section 19(b)(2) of the Act 5 provides
sec.gov. Please include File Number SR– manipulation and the Exchange’s ability that within 45 days of the publication of
NYSEArca–2016–17 on the subject line. to detect and investigate possible notice of the filing of a proposed rule
manipulative activity. Accordingly, the change, or within such longer period up
Paper Comments to 90 days as the Commission may
Commission finds good cause for
• Send paper comments in triplicate approving the proposed rule change, as designate if it finds such longer period
to Secretary, Securities and Exchange modified by Amendment No. 3, on an to be appropriate and publishes its
Commission, 100 F Street NE., accelerated basis, pursuant to Section reasons for so finding or as to which the
Washington, DC 20549–1090. 19(b)(2) of the Act.31 self-regulatory organization consents,
All submissions should refer to File the Commission shall either approve the
Number SR–NYSEArca–2016–17. This VI. Conclusion proposed rule change, disapprove the
file number should be included on the proposed rule change, or institute
subject line if email is used. To help the It is therefore ordered, pursuant to proceedings to determine whether these
Commission process and review your Section 19(b)(2) of the Exchange Act,32 proposed rule changes should be
comments more efficiently, please use that the proposed rule change (SR– disapproved. The 45th day for this filing
only one method. The Commission will NYSEArca–2016–17), as modified by is May 27, 2016.
post all comments on the Commission’s Amendment No. 3 thereto, be, and it
The Commission is extending the 45-
Internet Web site (http://www.sec.gov/ hereby is, approved on an accelerated
day time period for Commission action
rules/sro.shtml). Copies of the basis. on the proposed rule change. The
submission, all subsequent For the Commission, by the Division of Commission finds that it is appropriate
amendments, all written statements Trading and Markets, pursuant to delegated to designate a longer period within
with respect to the proposed rule authority.33 which to take action on the proposed
change that are filed with the Brent J. Fields, rule change so that it has sufficient time
Commission, and all written to consider and take action on the
communications relating to the Secretary.
[FR Doc. 2016–12770 Filed 5–31–16; 8:45 am]
Exchange’s proposed rule change.
proposed rule change between the
Commission and any person, other than BILLING CODE 8011–01–P
Accordingly, pursuant to Section
those that may be withheld from the 19(b)(2)(A)(ii)(I) of the Act 6 and for the
public in accordance with the reasons stated above, the Commission
provisions of 5 U.S.C. 552, will be designates July 11, 2016 as the date by
available for Web site viewing and which the Commission should either
printing in the Commission’s Public approve or disapprove, or institute
Reference Room, 100 F Street NE., proceedings to determine whether to
sradovich on DSK3TPTVN1PROD with NOTICES

Washington, DC 20549 on official
1 15 U.S.C. 78s(b)(1).
business days between the hours of 2 17 CFR 240.19b–4.
10:00 a.m. and 3:00 p.m. Copies of the 3 See Securities Exchange Act Release No. 77539
filing also will be available for (April 6, 2016), 81 FR 21639.
inspection and copying at the principal 31 15 U.S.C. 78s(b)(2). 4 See Letter from Anonymous, dated May 3, 2016.

office of the Exchange. All comments 32 15 U.S.C. 78s(b)(2). 5 15 U.S.C. 78s(b)(2).

received will be posted without change; 33 17 CFR 200.30–3(a)(12). 6 15 U.S.C. 78s(b)(2)(A)(ii)(I).

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35106 Federal Register / Vol. 81, No. 105 / Wednesday, June 1, 2016 / Notices

disapprove, the proposed rule change II. Self-Regulatory Organization’s Rules have been identified and
(File No. SR–NYSEArca–2016–49). Statement of the Purpose of, and confirmed, the Exchange or FINRA as its
For the Commission, by the Division of
Statutory Basis for, the Proposed Rule agent will commence the enforcement
Trading and Markets, pursuant to delegated
Change process, which might result in, among
authority.7 In its filing with the Commission, the other things, a censure, a requirement to
Exchange included statements take certain remedial actions, one or
Brent J. Fields, more restrictions on future business
concerning the purpose of and basis for
Secretary. activities, a monetary fine, or even a
the proposed rule change and discussed
[FR Doc. 2016–12774 Filed 5–31–16; 8:45 am]
any comments it received on the temporary or permanent ban from the
BILLING CODE 8011–01–P proposed rule change. The text of these securities industry.
statements may be examined at the The process described above, from the
places specified in Item IV below. The identification of disruptive and
SECURITIES AND EXCHANGE Exchange has prepared summaries, set potentially manipulative or improper
COMMISSION forth in sections A, B, and C below, of quoting and trading activity to a final
the most significant aspects of such resolution of the matter, can often take
[Release No. 34–77914; File No. SR–BX– statements. several years. The Exchange believes
2016–028]
that this time period is generally
A. Self-Regulatory Organization’s necessary and appropriate to afford the
Self-Regulatory Organizations; Statement of the Purpose of, and the subject Member adequate due process,
NASDAQ BX, Inc.; Notice of Filing and Statutory Basis for, the Proposed Rule particularly in complex cases. However,
Change as described below, the Exchange
Immediate Effectiveness of Proposed
1. Purpose believes that there are certain obvious
Rule Change To Provide a Process for
and uncomplicated cases of disruptive
an Expedited Suspension Proceeding The Exchange is filing this proposal to and manipulative behavior or cases
and Adopt a Rule To Prohibit adopt a new rule to clearly prohibit where the potential harm to investors is
Disruptive Quoting and Trading disruptive quoting and trading activity so large that the Exchange should have
Activity on the Exchange for the equities market the authority to initiate an expedited
and to amend Exchange Rules to permit suspension proceeding in order to stop
May 25, 2016.
the Exchange to take prompt action to the behavior from continuing on the
Pursuant to Section 19(b)(1) of the suspend Members or their clients that Exchange.
Securities Exchange Act of 1934 (the violate such rule. In recent years, several cases have
‘‘Act’’),1 and Rule 19b–4 thereunder,2 Background been brought and resolved by the
notice is hereby given that on May 19, Exchange and other SROs that involved
2016, NASDAQ BX, Inc. (‘‘BX’’ or As a national securities exchange allegations of wide-spread market
‘‘Exchange’’) filed with the Securities registered pursuant to Section 6 of the manipulation, much of which was
and Exchange Commission Act, the Exchange is required to be ultimately being conducted by foreign
organized and to have the capacity to persons and entities using relatively
(‘‘Commission’’) the proposed rule
enforce compliance by its members and rudimentary technology to access the
change as described in Items I, II and III
persons associated with its members, markets and over which the Exchange
below, which Items have been prepared with the Act, the rules and regulations
by the Exchange. The Commission is and other SROs had no direct
thereunder, and the Exchange’s Rules. jurisdiction. In each case, the conduct
publishing this notice to solicit Further, the Exchange’s Rules are involved a pattern of disruptive quoting
comments on the proposed rule change required to be ‘‘designed to prevent and trading activity indicative of
from interested persons. fraudulent and manipulative acts and manipulative layering 4 or spoofing.5
I. Self-Regulatory Organization’s practices, to promote just and equitable The Exchange and other SROs were able
Statement of the Terms of Substance of principles of trade . . . and, in general, to identify the disruptive quoting and
the Proposed Rule Change to protect investors and the public trading activity in real-time or near real-
interest.’’ 3 In fulfilling these time; nonetheless, in accordance with
The Exchange proposes to adopt a requirements, the Exchange has Exchange Rules and the Act, the
new rule to adopt a new equity rule to developed a comprehensive regulatory Members responsible for such conduct
clearly prohibit disruptive quoting and program that includes automated or responsible for their customers’
trading activity on the Exchange, as surveillance of trading activity that is conduct were allowed to continue the
further described below. Further the both operated directly by Exchange staff disruptive quoting and trading activity
Exchange proposes to amend Exchange and by staff of the Financial Industry on the Exchange and other exchanges
Rules to permit the Exchange to take Regulatory Authority (‘‘FINRA’’) during the entirety of the subsequent
prompt action to suspend Members or pursuant to a Regulatory Services
their clients that violate such rule. Agreement (‘‘RSA’’). When disruptive 4 ‘‘Layering’’ is a form of market manipulation in

and potentially manipulative or which multiple, non-bona fide limit orders are
The text of the proposed rule change entered on one side of the market at various price
improper quoting and trading activity is levels in order to create the appearance of a change
is available on the Exchange’s Web site identified, the Exchange or FINRA in the levels of supply and demand, thereby
at http:// (acting as an agent of the Exchange) artificially moving the price of the security. An
nasdaqomxbx.cchwallstreet.com/, at the conducts an investigation into the order is then executed on the opposite side of the
sradovich on DSK3TPTVN1PROD with NOTICES

market at the artificially created price, and the non-
principal office of the Exchange, and at activity, requesting additional bona fide orders are cancelled.
the Commission’s Public Reference information from the Member or 5 ‘‘Spoofing’’ is a form of market manipulation

Room. Members involved. To the extent that involves the market manipulator placing non-
violations of the Act, the rules and bona fide orders that are intended to trigger some
type of market movement and/or response from
7 17 CFR 200.30–3(a)(31). regulations thereunder, or Exchange other market participants, from which the market
1 15 U.S.C. 78s(b)(1). manipulator might benefit by trading bona fide
2 17 CFR 240.19b–4. 3 15 U.S.C. 78f(b)(1). orders.

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Document Created: 2018-02-08 07:27:31
Document Modified: 2018-02-08 07:27:31

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 35105