81 FR 57639 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Pilot Period for the Exchange's Retail Liquidity Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 163 (August 23, 2016)

Page Range		57639-57640
FR Document		2016-20063
Federal Register, Volume 81 Issue 163 (Tuesday, August 23, 2016)
[Federal Register Volume 81, Number 163 (Tuesday, August 23, 2016)]
[Notices]
[Pages 57639-57640]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-20063]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78602; File No. SR-NYSEMKT-2016-76]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Extending the Pilot 
Period for the Exchange's Retail Liquidity Program

August 17, 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 August 8, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE 
MKT'') 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.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the pilot period for the Exchange's 
Retail Liquidity Program (the ``Retail Liquidity Program'' or the 
``Program''), which is currently scheduled to expire on August 31, 
2016, until December 31, 2016. 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 purpose of this filing is to extend the pilot period of the 
Retail Liquidity Program, currently scheduled to expire on August 31, 
2016,\4\ until December 31, 2016.
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    \4\ See Securities Exchange Act Release Nos. 77424 (March 23, 
2016), 81 FR 17522 (March 29, 2016) (SR-NYSEMKT-2016-39).
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Background
    In July 2012, the Commission approved the Retail Liquidity Program 
on a pilot basis.\5\ The Program is designed to attract retail order 
flow to the Exchange, and allows such order flow to receive potential 
price improvement. The Program is currently limited to trades occurring 
at prices equal to or greater than $1.00 per share. Under the Program, 
Retail Liquidity Providers (``RLPs'') are able to provide potential 
price improvement in the form of a non-displayed order that is priced 
better than the Exchange's best protected bid or offer (``PBBO''), 
called a Retail Price Improvement Order (``RPI''). When there is an RPI 
in a particular security, the Exchange disseminates an indicator, known 
as the Retail Liquidity Identifier, indicating that such interest 
exists. Retail Member Organizations (``RMOs'') can submit a Retail 
Order to the Exchange, which would interact, to the extent possible, 
with available contra-side RPIs.
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    \5\ See Securities Exchange Act Release No. 67347 (July 3, 
2012), 77 FR 40673 (July 10, 2012) (``RLP Approval Order'') (SR-
NYSEAmex-2011-84).
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    The Retail Liquidity Program was approved by the Commission on a 
pilot basis. Pursuant to NYSE MKT Rule 107C(m)--Equities, the pilot 
period for the Program is scheduled to end on August 31, 2016.
Proposal To Extend the Operation of the Program
    The Exchange established the Retail Liquidity Program in an attempt 
to attract retail order flow to the Exchange by potentially providing 
price improvement to such order flow. The Exchange believes that the 
Program promotes competition for retail order flow by allowing Exchange 
members to submit RPIs to interact with Retail Orders. Such competition 
has the ability to promote efficiency by facilitating the price 
discovery process and generating additional investor interest in 
trading securities, thereby promoting capital formation. The Exchange 
believes that extending the pilot is appropriate because it will allow 
the Exchange and the Commission additional time to analyze data 
regarding the Program that the Exchange has committed to provide.\6\ As 
such, the Exchange believes that it is appropriate to extend the 
current operation of the Program.\7\ Through this filing, the Exchange 
seeks to amend NYSE MKT Rule 107C(m)--Equities and extend the current 
pilot period of the Program until December 31, 2016.
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    \6\ See id. at 40681.
    \7\ Concurrently with this filing, the Exchange has submitted a 
request for an extension of the exemption under Regulation NMS Rule 
612 previously granted by the Commission that permits it to accept 
and rank the undisplayed RPIs. See Letter from Martha Redding, Asst. 
Corporate Secretary, NYSE Group, Inc. to Brent J. Fields, Secretary, 
Securities and Exchange Commission, dated August 8, 2016.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\8\ in general, and furthers the objectives of

[[Page 57640]]

Section 6(b)(5),\9\ in particular, in that it is designed to promote 
just and equitable principles of trade, 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. 
The Exchange believes that extending the pilot period for the Retail 
Liquidity Program is consistent with these principles because the 
Program is reasonably designed to attract retail order flow to the 
exchange environment, while helping to ensure that retail investors 
benefit from the better price that liquidity providers are willing to 
give their orders. Additionally, as previously stated, the competition 
promoted by the Program may facilitate the price discovery process and 
potentially generate additional investor interest in trading 
securities. The extension of the pilot period will allow the Commission 
and the Exchange to continue to monitor the Program for its potential 
effects on public price discovery, and on the broader market structure.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change 
simply extends an established pilot program for an additional six 
months, thus allowing the Retail Liquidity Program to enhance 
competition for retail order flow and contribute to the public price 
discovery process.

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 \10\ and Rule 19b-4(f)(6) thereunder.\11\ 
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 \12\ and Rule 19b-
4(f)(6) thereunder.\13\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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.
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    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\15\ 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 proposed 
rule change may become operative before the expiration of the current 
pilot period. The Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest, because waiver would allow the pilot period to continue 
uninterrupted after its current expiration date of August 31, 2016, 
thereby avoiding any potential investor confusion that could result 
from temporary interruption in the pilot program. For this reason, the 
Commission hereby waives the 30-day operative delay and designates the 
proposal operative upon filing.\16\
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the 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 to 
determine whether the proposed rule change should be approved or 
disapproved.

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-NYSEMKT-2016-76 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-NYSEMKT-2016-76. 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-NYSEMKT-2016-76 and should 
be submitted on or before September 13, 2016.
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    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Brent J. Fields,
Secretary.
[FR Doc. 2016-20063 Filed 8-22-16; 8:45 am]
 BILLING CODE 8011-01-P
57640 Federal Register / Vol. 81, No. 163 / Tuesday, August 23, 2016 / Notices

Section 6(b)(5),9 in particular, in that it it was filed, or such shorter time as the including whether the proposed rule
is designed to promote just and Commission may designate, if change is consistent with the Act.
equitable principles of trade, to remove consistent with the protection of Comments may be submitted by any of
impediments to and perfect the investors and the public interest, the the following methods:
mechanism of a free and open market proposed rule change has become
Electronic Comments
and a national market system, and, in effective pursuant to Section 19(b)(3)(A)
general, to protect investors and the of the Act 12 and Rule 19b–4(f)(6) • Use the Commission’s Internet
public interest. The Exchange believes thereunder.13 comment form (http://www.sec.gov/
that extending the pilot period for the A proposed rule change filed under rules/sro.shtml); or
Retail Liquidity Program is consistent Rule 19b–4(f)(6) 14 normally does not • Send an email to rule-comments@
with these principles because the become operative prior to 30 days after sec.gov. Please include File Number SR–
Program is reasonably designed to the date of the filing. However, pursuant NYSEMKT–2016–76 on the subject line.
attract retail order flow to the exchange to Rule 19b4(f)(6)(iii),15 the Commission
environment, while helping to ensure may designate a shorter time if such Paper Comments
that retail investors benefit from the action is consistent with the protection • Send paper comments in triplicate
better price that liquidity providers are of investors and the public interest. The to Brent J. Fields, Secretary, Securities
willing to give their orders. Exchange has asked the Commission to and Exchange Commission, 100 F Street
Additionally, as previously stated, the waive the 30-day operative delay so that NE., Washington, DC 20549–1090.
competition promoted by the Program the proposed rule change may become
may facilitate the price discovery operative before the expiration of the All submissions should refer to File
process and potentially generate current pilot period. The Commission Number SR–NYSEMKT–2016–76. This
additional investor interest in trading believes that waiving the 30-day file number should be included on the
securities. The extension of the pilot operative delay is consistent with the subject line if email is used. To help the
period will allow the Commission and protection of investors and the public Commission process and review your
the Exchange to continue to monitor the interest, because waiver would allow comments more efficiently, please use
Program for its potential effects on the pilot period to continue only one method. The Commission will
public price discovery, and on the uninterrupted after its current post all comments on the Commission’s
broader market structure. expiration date of August 31, 2016, Internet Web site (http://www.sec.gov/
thereby avoiding any potential investor rules/sro.shtml). Copies of the
B. Self-Regulatory Organization’s submission, all subsequent
confusion that could result from
Statement on Burden on Competition amendments, all written statements
temporary interruption in the pilot
The Exchange does not believe that program. For this reason, the with respect to the proposed rule
the proposed rule change will impose Commission hereby waives the 30-day change that are filed with the
any burden on competition that is not operative delay and designates the Commission, and all written
necessary or appropriate in furtherance proposal operative upon filing.16 communications relating to the
of the purposes of the Act. The At any time within 60 days of the proposed rule change between the
proposed rule change simply extends an filing of the proposed rule change, the Commission and any person, other than
established pilot program for an Commission summarily may those that may be withheld from the
additional six months, thus allowing the temporarily suspend such rule change if public in accordance with the
Retail Liquidity Program to enhance it appears to the Commission that such provisions of 5 U.S.C. 552, will be
competition for retail order flow and action is necessary or appropriate in the available for Web site viewing and
contribute to the public price discovery public interest, for the protection of printing in the Commission’s Public
process. investors, or otherwise in furtherance of Reference Room, 100 F Street NE.,
the purposes of the Act. If the Washington, DC 20549 on official
C. Self-Regulatory Organization’s business days between the hours of
Statement on Comments on the Commission takes such action, the
Commission shall institute proceedings 10:00 a.m. and 3:00 p.m. Copies of the
Proposed Rule Change Received From filing also will be available for
Members, Participants, or Others to determine whether the proposed rule
change should be approved or inspection and copying at the principal
No written comments were solicited disapproved. office of the Exchange. All comments
or received with respect to the proposed received will be posted without change;
rule change. IV. Solicitation of Comments the Commission does not edit personal
Interested persons are invited to identifying information from
III. Date of Effectiveness of the
submit written data, views, and submissions. You should submit only
Proposed Rule Change and Timing for
arguments concerning the foregoing, information that you wish to make
Commission Action
available publicly. All submissions
The Exchange has filed the proposed 12 15 U.S.C. 78s(b)(3)(A). should refer to File Number SR–
rule change pursuant to Section 13 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– NYSEMKT–2016–76 and should be
19(b)(3)(A) of the Act 10 and Rule 19b– 4(f)(6)(iii) requires the Exchange to give the submitted on or before September 13,
4(f)(6) thereunder.11 Because the Commission written notice of the Exchange’s intent 2016.
to file the proposed rule change, along with a brief
proposed rule change does not: (i) description and text of the proposed rule change, For the Commission, by the Division of
Significantly affect the protection of at least five business days prior to the date of filing Trading and Markets, pursuant to delegated
sradovich on DSK3GMQ082PROD with NOTICES

investors or the public interest; (ii) of the proposed rule change, or such shorter time authority.17
impose any significant burden on as designated by the Commission. The Exchange
has satisfied this requirement. Brent J. Fields,
competition; and (iii) become operative 14 17 CFR 240.19b–4(f)(6). Secretary.
prior to 30 days from the date on which 15 17 CFR 240.19b–4(f)(6)(iii).
[FR Doc. 2016–20063 Filed 8–22–16; 8:45 am]
16 For purposes only of waiving the 30-day
9 15 U.S.C. 78f(b)(5). BILLING CODE 8011–01–P
operative delay, the Commission has considered the
10 15 U.S.C. 78s(b)(3)(A). proposed rule’s impact on efficiency, competition,
11 17 CFR 240.19b–4(f)(6). and capital formation. See 15 U.S.C. 78c(f). 17 17 CFR 200.30–3(a)(12).

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Document Created: 2018-02-09 11:40:04
Document Modified: 2018-02-09 11:40:04
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 57639