81_FR_60203 81 FR 60034 - Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the Handling of Intermarket Sweep Orders

81 FR 60034 - Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the Handling of Intermarket Sweep Orders

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 169 (August 31, 2016)

Page Range60034-60037
FR Document2016-20885

Federal Register, Volume 81 Issue 169 (Wednesday, August 31, 2016) 
[Federal Register Volume 81, Number 169 (Wednesday, August 31, 2016)]
[Notices]
[Pages 60034-60037]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-20885]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78684; File No. SR-CHX-2016-15]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Modify the Handling of Intermarket Sweep Orders

August 25, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(''Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on August 17, 2016, the Chicago Stock Exchange, Inc. (''CHX'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(''Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by the Exchange. 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\ 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

    CHX proposes to amend the Rules of the Exchange (''CHX Rules'') to 
modify the handling of Intermarket Sweep Orders (''ISOs'').
    CHX has designated this proposed rule change as non-controversial 
pursuant to Section 19(b)(3)(A) \3\ of the Act and Rule 19b-4(f)(6) \4\ 
thereunder and has provided the Commission with the notice required by 
Rule 19b-4(f)(6)(iii).\5\
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    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ 17 CFR 240.19b-4(f)(6)(iii).
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    The text of this proposed rule change is available on the 
Exchange's Web site at (www.chx.com) and in 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 CHX included statements 
concerning the purpose of and basis for the proposed rule changes and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The CHX has prepared summaries, set forth in sections A, 
B and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Changes

1. Purpose
    The Exchange proposes various amendments to the CHX Rules to amend 
the operation of the Exchange's ISO modifiers as follows:

     Amend the operation of the ISO modifier to be similar 
to the ISO modifiers offered by other national securities 
exchanges.\6\ As amended, a limit order marked ISO (''ISO limit'') 
would behave like a simple limit order \7\ (i.e., executable through 
multiple price points not beyond its limit price with the unexecuted 
balance to be immediately cancelled or ranked on the CHX book 
depending on the attached Time-In-Force \8\ and display modifier 
\9\), but without regard to the Protected Quotations \10\ of away 
markets when it is being processed as a new incoming order.
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    \6\ See e.g., NYSE ARCA Equities Rule 7.31(e)(2); see also e.g., 
Bats BYX Rule 11.9(d).
    \7\ See CHX Article 1, Rule 2(a)(1).
    \8\ See CHX Article 1, Rule 2(d).
    \9\ See CHX Article 1, Rule 2(e).
    \10\ See 17 CFR 242.600(b)(58).
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     Require a limit order marked by any one of the 
Exchange's three ISO modifiers (i.e., BBO ISO,\11\ Price-Penetrating 
ISO,\12\ and ISO \13\) to be handled as if it were marked ISO, as 
amended.\14\
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    \11\ See CHX Article 1, Rule 2(b)(1)(A).
    \12\ See CHX Article 1, Rule 2(b)(1)(E).
    \13\ See CHX Article 1, Rule 2(b)(3)(B).
    \14\ In order to facilitate the transition to the amended ISO, 
the Exchange does not propose to eliminate the BBO ISO and Price-
Penetrating ISO modifiers at this time.

The Exchange also proposes to clarify the current handling of cross 
orders \15\ marked ISO (``ISO cross'') and Participants' \16\ 
obligations with respect to ISOs.
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    \15\ See CHX Article 1, Rule 2(a)(2).
    \16\ A ``Participant'' is a ``member'' of the Exchange for 
purposes of the Act. See CHX Article 1, Rule 1(s).

    The Exchange believes that the proposed rule change will harmonize 
the operation of the Exchange's ISO modifier with ISO modifiers offered 
by other national securities exchanges, as well as clarify and simplify 
the order types and modifiers offered by the Exchange, all of which 
further the objectives of the Act, as described below.
Current CHX ISOs
    The Exchange currently offers three different ISO modifiers: BBO 
ISO, Price-Penetrating ISO, and ISO.\17\ While all three modifiers can 
be used to mark an order as required by Rule 600(b)(30) of Regulation 
NMS,\18\ each modifier is handled differently by the CHX Matching 
System (''Matching System'').\19\
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    \17\ BBO ISO and Price-Penetrating ISOs are limit order 
modifiers, whereas ISO is a limit and cross order modifier. The 
Exchange last modified the operation of BBO ISO and Price-
Penetrating ISO in 2014. See Securities Exchange Act Release No. 
73572 (November 10, 2014), 79 FR 68736 (November 18, 2014) (SR-CHX-
2014-18).
    \18\ See 17 CFR 242.600(b)(30).
    \19\ The Matching System is an automated order execution system, 
which is a part of the Exchange's ``Trading Facilities,'' as defined 
under CHX Article 1, Rule 1(z).
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    An incoming BBO ISO will execute against orders resting on the CHX 
book at prices not to exceed the more restrictive of its limit price or 
the contra-side displayed best bid or offer. Any unexecuted balance of 
the BBO ISO will be immediately cancelled if -1- marked Immediate Or 
Cancel (''IOC'') \20\ or -2- the incoming BBO ISO sell (buy) order 
could execute against any resting order(s) priced below (above) the 
displayed best bid (offer), regardless of the Time-In-Force. If the 
unexecuted balance of the BBO ISO would not be cancelled as described 
above, it will be ranked on the CHX Book and will be displayable at its 
limit price. A limit order marked BBO ISO may not be marked Do Not 
Display.\21\ The Matching System, in executing the ISO as soon as the 
order is received by the Matching System, will not take any of the 
actions described in Article 20, Rule 5 to prevent an improper trade-
through or any of the actions described in Article 20, Rule 6 to 
prevent a locked or crossed market; provided, however, that in 
executing any initially unexecuted balance of the ISO that is placed in 
the Matching System, the requirements of Article 20, Rule 5 will be 
followed. These orders shall be executed on the assumption that the 
Participant routing the order to the Matching System has already 
satisfied the quotations of other markets as required by Rule 
600(b)(30) \22\ and shall be displayed

[[Page 60035]]

because the Participant routing the order to the Matching System has 
already satisfied the quotations of other markets as required by 
Article 20, Rule 6(c)(3). A limit order marked BBO ISO shall be deemed 
to have been received Do Not Route,\23\ which cannot be overridden by 
the order sender.
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    \20\ See CHX Article 1, Rule 2(d)(4).
    \21\ See CHX Article 1, Rule 2(c)(2).
    \22\ 17 CFR 242.600(b)(30).
    \23\ See CHX Article 1, Rule 2(b)(3)(A).
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    A Price-Penetrating ISO will execute at or better than its limit 
price as soon as the order is received by the Matching System, with any 
unexecuted balance of the order to be immediately cancelled, as it is 
always handled IOC. A Price-Penetrating ISO cannot be displayed or 
otherwise post to the CHX book. Price-Penetrating ISOs will execute 
against any eligible orders in the Matching System (including any 
Reserve Size or undisplayed orders) through multiple price points. The 
Matching System, in executing these orders, will not take any of the 
actions described in Article 20, Rule 5 to prevent an improper trade-
through. A limit order marked Price-Penetrating ISO shall be deemed to 
have been received IOC, which cannot be overridden by the order sender.
    ISO is a limit and cross order modifier. A limit order marked ISO 
that is not marked BBO ISO is deemed to have been received Price-
Penetrating ISO, which cannot be overridden by the order sender. Thus, 
a limit order marked ISO will always be handled as a BBO ISO or Price-
Penetrating ISO. A cross order marked ISO is handled like a simple 
cross order, except that the Exchange would not take any actions 
described in Article 20, Rule 5 to prevent an improper trade-
through.\24\
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    \24\ In eliminating the definition of ``ISO Cross'' in 2013, the 
Exchange explained that ``ISO Cross is simply a cross order marked 
ISO and not a distinct order modifier.'' See Exchange Act Release 
No. 69538 (May 8, 2013), 78 FR 28671 (May 15, 2013) (SR-CHX-2013-
10).
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Amended CHX ISOs
    The Exchange now proposes to amend the definition of ``ISO'' under 
Article 1, Rule 2(b)(3)(B) so that the amended ISOs behave like ISOs 
offered by other national securities exchanges.\25\ Specifically, the 
Exchange proposes to amend the definition of ISO to -1- require an ISO 
limit to behave like a simple limit order (i.e., executable through 
multiple price points not beyond its limit price with the unexecuted 
balance to be immediately cancelled or posted to the CHX book depending 
on the attached Time-In-Force), but without regard to the Protected 
Quotations of away markets when it is being processed as a new incoming 
order; \26\ -2- provide that the default Time-In-Force for an ISO limit 
is IOC, unless it is marked with another available Time-In-Force \27\ 
(i.e., Day \28\ or GTD); \29\ -3- clarify the current applicability of 
the ISO modifier to cross orders; -4- clarify that it is the 
Participant's responsibility in complying with the requirements of 
Regulation NMS when submitting an ISO to the Exchange; and -5- delete 
obviated language. The mechanical result of these proposed amendments 
is that an amended ISO limit will behave like the current Price-
Penetrating ISO, except that the amended ISO limit may have a Time-In-
Force other than IOC, which would permit the unexecuted balance of the 
amended ISO limit to be ranked on the CHX book and displayable at its 
limit price. To this end, amended Article 1, Rule 2(b)(3)(B) provides 
as follows:
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    \25\ See supra note 6.
    \26\ The Exchanges notes that the current BBO ISO may be ranked 
on the CHX book if it is -1- not marked IOC and -2- does not execute 
against any contra-side orders within the Matching System at prices 
inferior to the then-current best displayed contra-side order on the 
CHX book. See current CHX Article 1, Rule 2(b)(1)(A). As proposed, 
an ISO will be permitted to be ranked on the CHX book even if a 
portion of the ISO executes against contra-side orders within the 
Matching System at prices inferior to the then-current best 
displayed contra-side order on the CHX book.
    \27\ The Exchange notes that the Fill Or Kill modifier, as 
defined under CHX Article 1, Rule 2(d)(2), has been unavailable 
since December 4, 2013. Any order marked FOK will be rejected upon 
receipt. See CHX Market Regulation Department Information Memorandum 
No. MR-13-12 (December 3, 2013).
    \28\ See CHX Article 1, Rule 2(d)(1).
    \29\ See CHX Article 1, Rule 2(d)(3).

    ''Intermarket Sweep'' or ``ISO'': a limit or cross order 
modifier that marks an order as required by SEC Rule 600(b)(30).\30\ 
The Exchange relies on the marking of an order as an ISO when 
handling such an order, and thus, it is the entering Participant's 
responsibility, not the Exchange's responsibility, to comply with 
the requirements of Regulation NMS and Article 20, Rule 6(c)(3) \31\ 
relating to ISOs. Any new incoming order marked ISO will not be 
rejected or cancelled if it would lock, cross, or trade-through a 
Protected Quotation of an away market. ISOs shall be deemed to have 
been received ``Do Not Route,'' as defined under paragraph 
(b)(3)(A), which cannot be overridden by the order sender.
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    \30\ See 17 CFR 242.600(b)(30).
    \31\ CHX Article 20, Rule 6(c)(3) excepts a Participants [sic] 
from the locked and crossed markets prohibition described under CHX 
Article 20, Rule 6(b) if ``The Exchange Participant displaying the 
locking or crossing quotation simultaneously routed an intermarket 
sweep order to execute against the full displayed size of any locked 
or crossed protected quotation.''
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    (i) ISO limit. A new incoming limit order marked ISO (''ISO 
limit'') may be executed at one or multiple price levels in the 
Matching System without regard to Protected Quotations at away 
markets consistent with Regulation NMS. All ISO limits shall be 
deemed to have been received IOC, unless an ISO limit is marked with 
another Time-In-Force.
    (ii) ISO cross. A cross order marked ISO (''ISO cross'') may 
execute at its crossing price as soon as it is received by the 
Matching System without regard to Protected Quotations at away 
markets consistent with Regulation NMS. An ISO cross that could not 
be immediately executed within the Matching System upon receipt 
shall be immediately cancelled.\32\
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    \32\ Cross orders are always handled IOC. See CHX Article 1, 
Rule 2(a)(2).

    The Exchange also proposes to amend Article 1, Rule 2(b)(1)(A) and 
Article 1, Rule 2(b)(1)(E) to delete the current definition of BBO ISO 
and Price-Penetrating ISO, respectively, and replace each definition 
with language that provides that the modifier is a limit order modifier 
that shall be handled as an ISO, as defined under amended paragraph 
(b)(3)(B).\33\ Moreover, so as to contemplate the proposed default IOC 
handling of ISO limits, the Exchange proposes to amend the definition 
of ``Limit order'' under Article 1, Rule 2(a)(1) to provide that all 
limit orders, except those marked Price-Penetrating ISO, BBO ISO, and 
ISO, shall be deemed to have been received Day, if an order duration 
modifier is not specified.
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    \33\ See supra note 14.
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Interaction With Certain Order Modifiers
    The Exchange notes that the amended ISO would be compatible with 
all display modifiers (i.e., Always Quote,\34\ Do Not Display,\35\ and 
Reserve Size \36\). A new incoming ISO limit marked Day and Do Not 
Display would be permitted to trade-through and/or lock or cross 
Protected Quotations of away markets and the unexecuted balance would 
be ranked on the CHX book at its limit price. Similarly, a new incoming 
ISO limit marked Day and Reserve Size would be permitted to trade-
through and/or lock or cross Protected Quotations of away markets and 
the unexecuted balance would be ranked on the CHX book at its limit 
price with the displayable portion displayed at its limit price. Also, 
an ISO limit marked Day and Always Quote would be permitted to trade-
through and/or lock or cross Protected Quotations of away markets and 
the unexecuted balance would be ranked on the CHX book if it could be 
displayed at its limit price or cancelled if it could not be displayed 
at its limit price.
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    \34\ See CHX Article 1, Rule 2(c)(1).
    \35\ See CHX Article 1, Rule 2(c)(2).
    \36\ See CHX Article 1, Rule 2(c)(3).
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    Moreover, if the Exchange were to receive an ISO limit marked CHX

[[Page 60036]]

Only,\37\ the Exchange will ignore the CHX Only modifier and handle the 
ISO limit as if it were not marked CHX Only, which is consistent with 
current practice.\38\ This is because the ISO and CHX Only modifiers 
are incompatible in that ISO instructs the Exchange to ignore the 
Protected Quotations of away markets when initially processing the 
order, whereas CHX Only requires the Exchange to price slide the order 
upon initial receipt to prevent locked and crossed markets.
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    \37\ See CHX Article 1, Rule 2(b)(1)(C).
    \38\ See Securities Exchange Act Release No. 69075 (March 8, 
2013), 78 FR 16311 (March 14, 2013) (SR-CHX-2013-07).
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Examples
    The following Examples are illustrative of the amended ISO 
modifier, but do not exhaustively depict every possible scenario 
regarding ISOs. Moreover, the Examples do not necessarily depict the 
actual technical processes of prioritizing messages and executing 
orders.

    Example 1. Assume that proposed rule change is operative and the 
following:
     The NBBO for security XYZ is 10.00 x 10.01.
     The displayed CHX BBO for XYZ is 9.99 x 10.01.
     There is only one buy order for XYZ priced at 9.99 
resting on the CHX book (''CHX Buy Order'') and there are no 
undisplayed orders for XYZ resting on the CHX book.
     There is only one away market with a Protected Bid for 
XYZ at 10.00 (``Away Protected Bid'').
     All Protected Quotations in XYZ are for 100 shares.
    Assume then that the Exchange receives an ISO limit marked Day 
to sell 200 shares of XYZ at 9.99 (''Incoming Sell ISO Limit'').
    Under this Example 1, the Exchange would execute 100 shares of 
Incoming Sell ISO Limit against the CHX Buy Order at 9.99, without 
taking any actions to prevent a trade-through of Away Protected Bid. 
The Exchange would then rank and display the unexecuted 100 shares 
of Incoming Sell ISO Limit at 9.99, without taking any actions to 
prevent a crossed market.
    Example 2. Assume the same as Example 1, except that Incoming 
Sell ISO Limit is not marked with a Time-In-Force. Under Example 2, 
the unexecuted balance of Incoming Sell ISO Limit would be 
cancelled, as the default handling for ISO limits is IOC.
    Example 3. Assume the same as Example 1, except that Incoming 
Sell ISO Limit is marked Price-Penetrating ISO or BBO ISO and is 
also marked Day. Under Example 3, Incoming Sell ISO Limit would be 
handled as if it were marked ISO and would behave identically as 
described under Example 1.
    Example 4. Assume the same as Example 1, except that Incoming 
Sell ISO Limit is marked Price-Penetrating ISO or BBO ISO and is not 
marked by a Time-In-Force. Under this Example 4, the Exchange would 
cancel the unexecuted balance of Incoming Sell ISO Limit, as an ISO 
that does not have a Time-In-Force identified would be handled IOC.
Operative Date
    The proposed rule change shall be operative pursuant to notice to 
Participants on a date after the expiration of the 30-day preoperative 
waiting period.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act in general,\39\ and furthers the 
objectives of Section 6(b)(5) in particular,\40\ in that it is designed 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, to remove impediments and perfect the 
mechanisms of a free and open market, and, in general, to protect 
investors and the public interest; and is not designed to permit unfair 
discrimination between customers, issuers, brokers, or dealers. 
Specifically, the Exchange submits that harmonizing the operation of 
the ISO modifier with the ISO modifiers offered by other national 
securities exchanges, such as NYSE Arca and Bats BYX, would provide 
market participants with consistent and predictable handling of ISOs, 
which would facilitate their compliance with Regulation NMS regarding 
the use of ISOs, thereby removing impediments and perfecting the 
mechanisms of a free and open market.
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    \39\ 15 U.S.C. 78f(b).
    \40\ 15 U.S.C. 78f(b)(5).
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    Moreover, the Exchange believes that requiring the Exchange's 
various ISO modifiers to operate in the same manner and clarifying the 
handling of ISO crosses simplifies the CHX Rules, which furthers the 
objectives of Section 6(b)(1) \41\ in that it further enables the 
Exchange to be so organized as to have the capacity to be able to carry 
out the purposes of the Act and to comply, and to enforce compliance by 
its Participants and persons associated with its Participants, with the 
provisions of the Act, the rules and regulations thereunder, and the 
rules of the Exchange.
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    \41\ 15 U.S.C. 78f(b)(1).
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B. Self-Regulatory Organization's Statement of 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. To the contrary, the 
Exchange believes that the proposed rule change will reduce the 
regulatory burden placed on market participants engaged in trading 
activities across different markets by harmonizing the operation of the 
Exchange's ISO modifier with those of other national securities 
exchanges. The Exchange believes that such harmonization across the 
various markets will reduce burdens on competition by removing 
impediments to participation in the national market system.

C. Self-Regulatory Organization's Statement on Comments Regarding the 
Proposed Rule Changes Received From Members, Participants or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Changes and Timing for 
Commission Action

    The Exchange believes that the proposal qualifies for immediate 
effectiveness upon filing as non-controversial under Section 
19(b)(3)(A) of the Act \42\ and paragraph (f)(6) of Rule 19b-4 
thereunder.\43\
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    \42\ 15 U.S.C. 78s(b)(3)(A).
    \43\ 17 CFR 240.19b-4.
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    The Exchange asserts that the proposed rule change: (1) Will not 
significantly affect the protection of investors or the public 
interest, (2) will not impose any significant burden on competition, 
and (3) and will not become operative for 30 days from the date on 
which it was filed, or such shorter time as the Commission may 
designate. In addition, the Exchange provided the Commission with 
written notice of its 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, or such shorter time as 
designated by the Commission.\44\ The Exchange believes that the 
proposed rule change raises no novel issues, as the amended ISO 
modifier will operate similarly to the ISO modifiers of other national 
securities exchanges, such as NYSE Arca and Bats BYX.\45\ As such, the 
Exchange has designated this rule filing as non-controversial under 
Section 19(b)(3)(A) of the Act \46\ and paragraph (f)(6) of Rule 19b-4 
thereunder.\47\
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    \44\ 17 CFR 240.19b-4(f)(6)(iii).
    \45\ See supra note 6.
    \46\ 15 U.S.C. 78s(b)(3)(A).
    \47\ 17 CFR 240.19b-4.
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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

[[Page 60037]]

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) of the Act \48\ to determine whether the proposed 
rule should be approved or disapproved.
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    \48\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal 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 rule-comments@sec.gov. Please include 
File No. SR-CHX-2016-15 on the subject line.

Paper Comments

     Send paper comments in triplicate to Robert W. Errett, 
Deputy Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File No. SR-CHX-2016-15. 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 changes 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 CHX. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly.
    All submissions should refer to File No. SR-CHX-2016-15 and should 
be submitted on or before September 21, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\49\
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    \49\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-20885 Filed 8-30-16; 8:45 am]
 BILLING CODE 8011-01-P

60034 Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Notices 016–061 and should be submitted on or II. Self-Regulatory Organization’s modifier with ISO modifiers offered by before September 21, 2016. Statement of the Purpose of, and other national securities exchanges, as For the Commission, by the Division of Statutory Basis for, the Proposed Rule well as clarify and simplify the order Trading and Markets, pursuant to delegated Change types and modifiers offered by the authority.14 In its filing with the Commission, the Exchange, all of which further the CHX included statements concerning objectives of the Act, as described Brent J. Fields, below. Secretary. the purpose of and basis for the proposed rule changes and discussed Current CHX ISOs [FR Doc. 2016–20965 Filed 8–30–16; 8:45 am] any comments it received on the The Exchange currently offers three BILLING CODE 8011–01–P proposed rule change. The text of these different ISO modifiers: BBO ISO, Price- statements may be examined at the Penetrating ISO, and ISO.17 While all places specified in Item IV below. The three modifiers can be used to mark an SECURITIES AND EXCHANGE CHX has prepared summaries, set forth COMMISSION order as required by Rule 600(b)(30) of in sections A, B and C below, of the Regulation NMS,18 each modifier is most significant aspects of such handled differently by the CHX [Release No. 34–78684; File No. SR–CHX– statements. Matching System (’’Matching 2016–15] A. Self-Regulatory Organization’s System’’).19 Statement of the Purpose of, and An incoming BBO ISO will execute Self-Regulatory Organizations; Statutory Basis for, the Proposed Rule against orders resting on the CHX book Chicago Stock Exchange, Inc.; Notice Changes at prices not to exceed the more of Filing and Immediate Effectiveness restrictive of its limit price or the of a Proposed Rule Change To Modify 1. Purpose contra-side displayed best bid or offer. the Handling of Intermarket Sweep Any unexecuted balance of the BBO ISO The Exchange proposes various Orders will be immediately cancelled if -1- amendments to the CHX Rules to amend August 25, 2016. the operation of the Exchange’s ISO marked Immediate Or Cancel (’’IOC’’) 20 modifiers as follows: or -2- the incoming BBO ISO sell (buy) Pursuant to Section 19(b)(1) of the order could execute against any resting Securities Exchange Act of 1934 • Amend the operation of the ISO modifier to be similar to the ISO modifiers offered by order(s) priced below (above) the (’’Act’’),1 and Rule 19b–4 2 thereunder, other national securities exchanges.6 As displayed best bid (offer), regardless of notice is hereby given that on August amended, a limit order marked ISO (’’ISO the Time-In-Force. If the unexecuted 17, 2016, the Chicago Stock Exchange, limit’’) would behave like a simple limit balance of the BBO ISO would not be Inc. (’’CHX’’ or the ‘‘Exchange’’) filed order 7 (i.e., executable through multiple cancelled as described above, it will be with the Securities and Exchange price points not beyond its limit price with ranked on the CHX Book and will be Commission (’’Commission’’) the the unexecuted balance to be immediately displayable at its limit price. A limit proposed rule change as described in cancelled or ranked on the CHX book depending on the attached Time-In-Force 8 order marked BBO ISO may not be Items I, II and III below, which Items and display modifier 9), but without regard to marked Do Not Display.21 The Matching have been prepared by the Exchange. the Protected Quotations 10 of away markets System, in executing the ISO as soon as The Commission is publishing this when it is being processed as a new incoming the order is received by the Matching notice to solicit comments on the order. System, will not take any of the actions proposed rule change from interested • Require a limit order marked by any one described in Article 20, Rule 5 to persons. of the Exchange’s three ISO modifiers (i.e., prevent an improper trade-through or BBO ISO,11 Price-Penetrating ISO,12 and any of the actions described in Article I. Self-Regulatory Organization’s ISO 13) to be handled as if it were marked 20, Rule 6 to prevent a locked or crossed Statement of the Terms of Substance of ISO, as amended.14 market; provided, however, that in the Proposed Rule Change The Exchange also proposes to clarify executing any initially unexecuted the current handling of cross orders 15 balance of the ISO that is placed in the CHX proposes to amend the Rules of marked ISO (‘‘ISO cross’’) and Matching System, the requirements of the Exchange (’’CHX Rules’’) to modify Participants’ 16 obligations with respect Article 20, Rule 5 will be followed. the handling of Intermarket Sweep to ISOs. These orders shall be executed on the Orders (’’ISOs’’). The Exchange believes that the assumption that the Participant routing CHX has designated this proposed proposed rule change will harmonize the order to the Matching System has rule change as non-controversial the operation of the Exchange’s ISO already satisfied the quotations of other pursuant to Section 19(b)(3)(A) 3 of the markets as required by Rule Act and Rule 19b–4(f)(6) 4 thereunder 6 See e.g., NYSE ARCA Equities Rule 7.31(e)(2); 600(b)(30) 22 and shall be displayed and has provided the Commission with see also e.g., Bats BYX Rule 11.9(d). the notice required by Rule 19b– 7 See CHX Article 1, Rule 2(a)(1). 17 BBO ISO and Price-Penetrating ISOs are limit 8 See CHX Article 1, Rule 2(d). 4(f)(6)(iii).5 order modifiers, whereas ISO is a limit and cross 9 See CHX Article 1, Rule 2(e). order modifier. The Exchange last modified the The text of this proposed rule change 10 See 17 CFR 242.600(b)(58). operation of BBO ISO and Price-Penetrating ISO in is available on the Exchange’s Web site 11 See CHX Article 1, Rule 2(b)(1)(A). 2014. See Securities Exchange Act Release No. at (www.chx.com) and in the 12 See CHX Article 1, Rule 2(b)(1)(E). 73572 (November 10, 2014), 79 FR 68736 mstockstill on DSK3G9T082PROD with NOTICES Commission’s Public Reference Room. 13 See CHX Article 1, Rule 2(b)(3)(B). (November 18, 2014) (SR–CHX–2014–18). 14 In order to facilitate the transition to the 18 See 17 CFR 242.600(b)(30). 19 The Matching System is an automated order 14 17 amended ISO, the Exchange does not propose to CFR 200.30–3(a)(12). eliminate the BBO ISO and Price-Penetrating ISO execution system, which is a part of the Exchange’s 1 15 U.S.C. 78s(b)(1). modifiers at this time. ‘‘Trading Facilities,’’ as defined under CHX Article 2 17 CFR 240.19b–4. 15 See CHX Article 1, Rule 2(a)(2). 1, Rule 1(z). 3 15 U.S.C. 78s(b)(3)(A). 16 A ‘‘Participant’’ is a ‘‘member’’ of the Exchange 20 See CHX Article 1, Rule 2(d)(4). 4 17 CFR 240.19b–4(f)(6). 21 See CHX Article 1, Rule 2(c)(2). for purposes of the Act. See CHX Article 1, Rule 5 17 CFR 240.19b–4(f)(6)(iii). 1(s). 22 17 CFR 242.600(b)(30). VerDate Sep<11>2014 21:59 Aug 30, 2016 Jkt 238001 PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 E:\FR\FM\31AUN1.SGM 31AUN1

Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Notices 60035 because the Participant routing the incoming order; 26 -2- provide that the Regulation NMS. All ISO limits shall be order to the Matching System has default Time-In-Force for an ISO limit is deemed to have been received IOC, unless an already satisfied the quotations of other IOC, unless it is marked with another ISO limit is marked with another Time-In- Force. markets as required by Article 20, Rule available Time-In-Force 27 (i.e., Day 28 or (ii) ISO cross. A cross order marked ISO 6(c)(3). A limit order marked BBO ISO GTD); 29 -3- clarify the current (’’ISO cross’’) may execute at its crossing shall be deemed to have been received applicability of the ISO modifier to price as soon as it is received by the Do Not Route,23 which cannot be cross orders; -4- clarify that it is the Matching System without regard to Protected overridden by the order sender. Participant’s responsibility in Quotations at away markets consistent with A Price-Penetrating ISO will execute complying with the requirements of Regulation NMS. An ISO cross that could not Regulation NMS when submitting an be immediately executed within the at or better than its limit price as soon Matching System upon receipt shall be as the order is received by the Matching ISO to the Exchange; and -5- delete immediately cancelled.32 System, with any unexecuted balance of obviated language. The mechanical the order to be immediately cancelled, result of these proposed amendments is The Exchange also proposes to amend as it is always handled IOC. A Price- that an amended ISO limit will behave Article 1, Rule 2(b)(1)(A) and Article 1, Penetrating ISO cannot be displayed or like the current Price-Penetrating ISO, Rule 2(b)(1)(E) to delete the current otherwise post to the CHX book. Price- except that the amended ISO limit may definition of BBO ISO and Price- Penetrating ISOs will execute against have a Time-In-Force other than IOC, Penetrating ISO, respectively, and any eligible orders in the Matching which would permit the unexecuted replace each definition with language System (including any Reserve Size or balance of the amended ISO limit to be that provides that the modifier is a limit undisplayed orders) through multiple ranked on the CHX book and order modifier that shall be handled as price points. The Matching System, in displayable at its limit price. To this an ISO, as defined under amended executing these orders, will not take any end, amended Article 1, Rule 2(b)(3)(B) paragraph (b)(3)(B).33 Moreover, so as to provides as follows: contemplate the proposed default IOC of the actions described in Article 20, handling of ISO limits, the Exchange Rule 5 to prevent an improper trade- ’’Intermarket Sweep’’ or ‘‘ISO’’: a limit or cross order modifier that marks an order as proposes to amend the definition of through. A limit order marked Price- required by SEC Rule 600(b)(30).30 The ‘‘Limit order’’ under Article 1, Rule Penetrating ISO shall be deemed to have Exchange relies on the marking of an order 2(a)(1) to provide that all limit orders, been received IOC, which cannot be as an ISO when handling such an order, and except those marked Price-Penetrating overridden by the order sender. thus, it is the entering Participant’s ISO, BBO ISO, and ISO, shall be deemed ISO is a limit and cross order responsibility, not the Exchange’s to have been received Day, if an order modifier. A limit order marked ISO that responsibility, to comply with the duration modifier is not specified. is not marked BBO ISO is deemed to requirements of Regulation NMS and Article have been received Price-Penetrating 20, Rule 6(c)(3) 31 relating to ISOs. Any new Interaction With Certain Order ISO, which cannot be overridden by the incoming order marked ISO will not be Modifiers rejected or cancelled if it would lock, cross, order sender. Thus, a limit order marked or trade-through a Protected Quotation of an The Exchange notes that the amended ISO will always be handled as a BBO away market. ISOs shall be deemed to have ISO would be compatible with all ISO or Price-Penetrating ISO. A cross been received ‘‘Do Not Route,’’ as defined display modifiers (i.e., Always Quote,34 order marked ISO is handled like a under paragraph (b)(3)(A), which cannot be Do Not Display,35 and Reserve Size 36). simple cross order, except that the overridden by the order sender. A new incoming ISO limit marked Day Exchange would not take any actions (i) ISO limit. A new incoming limit order and Do Not Display would be permitted described in Article 20, Rule 5 to marked ISO (’’ISO limit’’) may be executed at to trade-through and/or lock or cross one or multiple price levels in the Matching prevent an improper trade-through.24 System without regard to Protected Protected Quotations of away markets Quotations at away markets consistent with and the unexecuted balance would be Amended CHX ISOs ranked on the CHX book at its limit The Exchange now proposes to amend 26 The Exchanges notes that the current BBO ISO price. Similarly, a new incoming ISO the definition of ‘‘ISO’’ under Article 1, may be ranked on the CHX book if it is -1- not limit marked Day and Reserve Size Rule 2(b)(3)(B) so that the amended marked IOC and -2- does not execute against any would be permitted to trade-through contra-side orders within the Matching System at ISOs behave like ISOs offered by other prices inferior to the then-current best displayed and/or lock or cross Protected national securities exchanges.25 contra-side order on the CHX book. See current Quotations of away markets and the Specifically, the Exchange proposes to CHX Article 1, Rule 2(b)(1)(A). As proposed, an ISO unexecuted balance would be ranked on amend the definition of ISO to -1- will be permitted to be ranked on the CHX book the CHX book at its limit price with the even if a portion of the ISO executes against contra- displayable portion displayed at its require an ISO limit to behave like a side orders within the Matching System at prices simple limit order (i.e., executable inferior to the then-current best displayed contra- limit price. Also, an ISO limit marked through multiple price points not side order on the CHX book. Day and Always Quote would be beyond its limit price with the 27 The Exchange notes that the Fill Or Kill permitted to trade-through and/or lock unexecuted balance to be immediately modifier, as defined under CHX Article 1, Rule or cross Protected Quotations of away 2(d)(2), has been unavailable since December 4, cancelled or posted to the CHX book 2013. Any order marked FOK will be rejected upon markets and the unexecuted balance depending on the attached Time-In- receipt. See CHX Market Regulation Department would be ranked on the CHX book if it Force), but without regard to the Information Memorandum No. MR–13–12 could be displayed at its limit price or Protected Quotations of away markets (December 3, 2013). cancelled if it could not be displayed at 28 See CHX Article 1, Rule 2(d)(1). when it is being processed as a new its limit price. 29 See CHX Article 1, Rule 2(d)(3). Moreover, if the Exchange were to mstockstill on DSK3G9T082PROD with NOTICES 30 See 17 CFR 242.600(b)(30). 23 See CHX Article 1, Rule 2(b)(3)(A). 31 CHX Article 20, Rule 6(c)(3) excepts a receive an ISO limit marked CHX 24 Ineliminating the definition of ‘‘ISO Cross’’ in Participants [sic] from the locked and crossed 32 Cross orders are always handled IOC. See CHX 2013, the Exchange explained that ‘‘ISO Cross is markets prohibition described under CHX Article simply a cross order marked ISO and not a distinct 20, Rule 6(b) if ‘‘The Exchange Participant Article 1, Rule 2(a)(2). 33 See supra note 14. order modifier.’’ See Exchange Act Release No. displaying the locking or crossing quotation 34 See CHX Article 1, Rule 2(c)(1). 69538 (May 8, 2013), 78 FR 28671 (May 15, 2013) simultaneously routed an intermarket sweep order (SR–CHX–2013–10). to execute against the full displayed size of any 35 See CHX Article 1, Rule 2(c)(2). 25 See supra note 6. locked or crossed protected quotation.’’ 36 See CHX Article 1, Rule 2(c)(3). VerDate Sep<11>2014 21:59 Aug 30, 2016 Jkt 238001 PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 E:\FR\FM\31AUN1.SGM 31AUN1

60036 Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Notices Only,37 the Exchange will ignore the this Example 4, the Exchange would cancel proposed rule change will reduce the CHX Only modifier and handle the ISO the unexecuted balance of Incoming Sell ISO regulatory burden placed on market limit as if it were not marked CHX Only, Limit, as an ISO that does not have a Time- participants engaged in trading In-Force identified would be handled IOC. which is consistent with current activities across different markets by practice.38 This is because the ISO and Operative Date harmonizing the operation of the CHX Only modifiers are incompatible in The proposed rule change shall be Exchange’s ISO modifier with those of that ISO instructs the Exchange to operative pursuant to notice to other national securities exchanges. The ignore the Protected Quotations of away Participants on a date after the Exchange believes that such markets when initially processing the expiration of the 30-day preoperative harmonization across the various order, whereas CHX Only requires the waiting period. markets will reduce burdens on Exchange to price slide the order upon competition by removing impediments initial receipt to prevent locked and 2. Statutory Basis to participation in the national market crossed markets. The Exchange believes that the system. Examples proposed rule change is consistent with C. Self-Regulatory Organization’s Section 6(b) of the Act in general,39 and Statement on Comments Regarding the The following Examples are furthers the objectives of Section 6(b)(5) illustrative of the amended ISO Proposed Rule Changes Received From in particular,40 in that it is designed to Members, Participants or Others modifier, but do not exhaustively depict promote just and equitable principles of every possible scenario regarding ISOs. trade, to foster cooperation and No written comments were either Moreover, the Examples do not coordination with persons engaged in solicited or received. necessarily depict the actual technical facilitating transactions in securities, to III. Date of Effectiveness of the processes of prioritizing messages and remove impediments and perfect the Proposed Rule Changes and Timing for executing orders. mechanisms of a free and open market, Commission Action Example 1. Assume that proposed rule and, in general, to protect investors and change is operative and the following: the public interest; and is not designed The Exchange believes that the • The NBBO for security XYZ is 10.00 x to permit unfair discrimination between proposal qualifies for immediate 10.01. customers, issuers, brokers, or dealers. effectiveness upon filing as non- • The displayed CHX BBO for XYZ is 9.99 Specifically, the Exchange submits that controversial under Section 19(b)(3)(A) x 10.01. harmonizing the operation of the ISO of the Act 42 and paragraph (f)(6) of Rule • There is only one buy order for XYZ modifier with the ISO modifiers offered 19b–4 thereunder.43 priced at 9.99 resting on the CHX book The Exchange asserts that the by other national securities exchanges, (’’CHX Buy Order’’) and there are no proposed rule change: (1) Will not undisplayed orders for XYZ resting on the such as NYSE Arca and Bats BYX, CHX book. would provide market participants with significantly affect the protection of • There is only one away market with a consistent and predictable handling of investors or the public interest, (2) will Protected Bid for XYZ at 10.00 (‘‘Away ISOs, which would facilitate their not impose any significant burden on Protected Bid’’). compliance with Regulation NMS competition, and (3) and will not • All Protected Quotations in XYZ are for regarding the use of ISOs, thereby become operative for 30 days from the 100 shares. removing impediments and perfecting date on which it was filed, or such Assume then that the Exchange receives an the mechanisms of a free and open shorter time as the Commission may ISO limit marked Day to sell 200 shares of market. designate. In addition, the Exchange XYZ at 9.99 (’’Incoming Sell ISO Limit’’). Moreover, the Exchange believes that provided the Commission with written Under this Example 1, the Exchange would requiring the Exchange’s various ISO notice of its intent to file the proposed execute 100 shares of Incoming Sell ISO Limit against the CHX Buy Order at 9.99, modifiers to operate in the same manner rule change, along with a brief without taking any actions to prevent a trade- and clarifying the handling of ISO description and text of the proposed through of Away Protected Bid. The crosses simplifies the CHX Rules, which rule change, at least five business days Exchange would then rank and display the furthers the objectives of Section prior to the date of filing, or such unexecuted 100 shares of Incoming Sell ISO 6(b)(1) 41 in that it further enables the shorter time as designated by the Limit at 9.99, without taking any actions to Exchange to be so organized as to have Commission.44 The Exchange believes prevent a crossed market. the capacity to be able to carry out the that the proposed rule change raises no Example 2. Assume the same as Example purposes of the Act and to comply, and novel issues, as the amended ISO 1, except that Incoming Sell ISO Limit is not to enforce compliance by its marked with a Time-In-Force. Under modifier will operate similarly to the Participants and persons associated ISO modifiers of other national Example 2, the unexecuted balance of Incoming Sell ISO Limit would be cancelled, with its Participants, with the securities exchanges, such as NYSE as the default handling for ISO limits is IOC. provisions of the Act, the rules and Arca and Bats BYX.45 As such, the Example 3. Assume the same as Example regulations thereunder, and the rules of Exchange has designated this rule filing 1, except that Incoming Sell ISO Limit is the Exchange. as non-controversial under Section marked Price-Penetrating ISO or BBO ISO 19(b)(3)(A) of the Act 46 and paragraph and is also marked Day. Under Example 3, B. Self-Regulatory Organization’s Statement of Burden on Competition (f)(6) of Rule 19b–4 thereunder.47 Incoming Sell ISO Limit would be handled At any time within 60 days of the as if it were marked ISO and would behave The Exchange does not believe that identically as described under Example 1. filing of the proposed rule change, the the proposed rule change will impose Commission summarily may Example 4. Assume the same as Example mstockstill on DSK3G9T082PROD with NOTICES any burden on competition that is not temporarily suspend such rule change if 1, except that Incoming Sell ISO Limit is necessary or appropriate in furtherance marked Price-Penetrating ISO or BBO ISO and is not marked by a Time-In-Force. Under of the purposes of the Act. To the 42 15 U.S.C. 78s(b)(3)(A). contrary, the Exchange believes that the 43 17 CFR 240.19b–4. 37 See 44 17 CFR 240.19b–4(f)(6)(iii). CHX Article 1, Rule 2(b)(1)(C). 38 See 39 15 U.S.C. 78f(b). 45 See supra note 6. Securities Exchange Act Release No. 69075 40 15 U.S.C. 78f(b)(5). 46 15 U.S.C. 78s(b)(3)(A). (March 8, 2013), 78 FR 16311 (March 14, 2013) (SR– CHX–2013–07). 41 15 U.S.C. 78f(b)(1). 47 17 CFR 240.19b–4. VerDate Sep<11>2014 21:59 Aug 30, 2016 Jkt 238001 PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 E:\FR\FM\31AUN1.SGM 31AUN1

Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Notices 60037 it appears to the Commission that such submissions. You should submit only The Exchange now seeks to extend action is necessary or appropriate in the information that you wish to make the exemption until December 31, public interest, for the protection of available publicly. 2016.5 The Exchange’s request was investors, or otherwise in furtherance of All submissions should refer to File made in conjunction with an the purposes of the Act. If the No. SR–CHX–2016–15 and should be immediately effective filing that extends Commission takes such action, the submitted on or before September 21, the operation of the Program through Commission shall institute proceedings 2016. the same date.6 In its request to extend under Section 19(b)(2)(B) of the Act 48 to For the Commission, by the Division of the exemption, the Exchange notes that determine whether the proposed rule Trading and Markets, pursuant to delegated the participation in the Program has should be approved or disapproved. authority.49 increased more recently. Accordingly, IV. Solicitation of Comments Robert W. Errett, the Exchange has asked for additional Deputy Secretary. time to allow itself and the Commission Interested persons are invited to submit written data, views and [FR Doc. 2016–20885 Filed 8–30–16; 8:45 am] to analyze more robust data concerning arguments concerning the foregoing, BILLING CODE 8011–01–P the Program, which the Exchange including whether the proposal is committed to provide to the consistent with the Act. Comments may Commission.7 For this reason and the be submitted by any of the following SECURITIES AND EXCHANGE reasons stated in the Order originally methods: COMMISSION granting the limited exemption, the Electronic Comments [Release No. 34–78677; File No. SR– Commission finds that extending the NYSEArca–2013–107] exemption, pursuant to its authority • Use the Commission’s Internet under Rule 612(c) of Regulation NMS, is comment form (http://www.sec.gov/ Self-Regulatory Organizations; NYSE appropriate in the public interest and rules/sro.shtml); or Arca, Inc.; Order Granting an consistent with the protection of • Send an email to rule-comments@ Extension to Limited Exemption From sec.gov. Please include File No. SR– investors. Rule 612(c) of Regulation NMS in CHX–2016–15 on the subject line. Connection With the Exchange’s Retail THEREFORE, IT IS HEREBY Liquidity Program Until December 31, ORDERED that, pursuant to Rule 612(c) Paper Comments 2016 of Regulation NMS, the Exchange is • Send paper comments in triplicate granted a limited exemption from Rule to Robert W. Errett, Deputy Secretary, August 25, 2016. 612 of Regulation NMS that allows it to Securities and Exchange Commission, On December 23, 2013, the Securities accept and rank orders priced equal to 100 F Street NE., Washington, DC and Exchange Commission or greater than $1.00 per share in 20549–1090. (‘‘Commission’’) issued an order increments of $0.001, in connection All submissions should refer to File No. pursuant to its authority under Rule with the operation of its Retail Liquidity SR–CHX–2016–15. This file number 612(c) of Regulation NMS (‘‘Sub-Penny Program, until August 31, 2016. should be included on the subject line Rule’’) 1 that granted NYSE Arca, Inc. if email is used. To help the (‘‘Exchange’’) a limited exemption from The limited and temporary exemption Commission process and review your the Sub-Penny Rule in connection with extended by this Order is subject to comments more efficiently, please use the operation of the Exchange’s Retail modification or revocation if at any time only one method. The Commission will Liquidity Program (‘‘Program’’).2 The the Commission determines that such post all comments on the Commission’s limited exemption was granted action is necessary or appropriate in Internet Web site (http://www.sec.gov/ concurrently with the Commission’s furtherance of the purposes of the rules/sro.shtml). Copies of the approval of the Exchange’s proposal to Securities Exchange Act of 1934. submission, all subsequent adopt the Program for a one-year pilot Responsibility for compliance with any amendments, all written statements term.3 The exemption was granted applicable provisions of the Federal with respect to the proposed rule coterminous with the effectiveness of securities laws must rest with the change that are filed with the the pilot Program; both the pilot persons relying on the exemption that is Commission, and all written Program and exemption are scheduled the subject of this Order. communications relating to the to expire on August 31, 2016.4 proposed rule changes between the 49 17 CFR 200.30–3(a)(12). Commission and any person, other than 1 17 CFR 242.612(c). those that may be withheld from the 2 See Securities Exchange Act Release No. 71176 public in accordance with the (December 23, 2013), 78 FR 79524 (December 30, provisions of 5 U.S.C. 552, will be 2013) (SR–NYSEArca–2013–107) (‘‘Order’’). Penny exemption through September 30, 2015, see available for Web site viewing and 3 See id. Securities Exchange Act Release No. 74609 (March printing in the Commission’s Public 4 The pilot term of the Program was originally 30, 2015), 80 FR 18272 (April 3, 2015), March 31, Reference Room, 100 F Street NE., scheduled to end on April 14, 2015, but the 2016, see Securities Exchange Act Release No. 34– Exchange initially extended the term through Washington, DC 20549 on official September 30, 2015, see Securities Exchange Act 76021 (September 29, 2015), 80 FR 60207 (October business days between the hours of Release No. 74572 (March 24, 2015), 80 FR 16705 5, 2015), and August 31, 2016, see Securities 10:00 a.m. and 3:00 p.m. Copies of the (March 30, 2015) (NYSEArca–2015–22), and then Exchange Act Release No. 34–77437 (March 24, subsequently extended the term again through 2016), 81 FR 17752 (March 30, 2016). filing also will be available for mstockstill on DSK3G9T082PROD with NOTICES August 31, 2016, see Securities Exchange Act 5 See Letter from Martha Redding, Assistant inspection and copying at the principal Release Nos. 75994 (September 28, 2015), 80 FR Secretary, NYSE, to Brent J. Fields, Secretary, office of the CHX. All comments 59834 (October 2, 2015) (SR–NYSEArca–2015–84), Securities and Exchange Commission, dated August received will be posted without change; 77236 (Feb. 25, 2016), 81 FR 10943 (March 2, 2016) 8, 2016. the Commission does not edit personal (SR–NYSEArca–2016–30), and 77425 (March 23, 6 See Securities Exchange Act Release No. 78601 2016), 81 FR 17523 (March 29, 2016) (SR– identifying information from NYSEArca–2016–47). Each time the pilot term of (August 17, 2016), 81 FR 57632 (August 23, 2016) the Program was extended, the Commission granted (SR–NYSEArca–2016–113). 48 15 U.S.C. 78s(b)(2)(B). the Exchange’s request to also extend the Sub- 7 See Order, supra note 2, 78 FR at 79529. VerDate Sep<11>2014 21:59 Aug 30, 2016 Jkt 238001 PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 E:\FR\FM\31AUN1.SGM 31AUN1


Document Created: 2018-02-02 12:15:17
Document Modified: 2018-02-02 12:15:17
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 60034 
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