81 FR 60080 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 13 To Eliminate Orders With a Sell “Plus” and Buy “Minus” Instruction and Retain Orders With a “Buy Minus Zero Plus” Instruction, and Make Conforming Changes to Rules 104, 107B, 123C and 1004

SECURITIES AND EXCHANGE COMMISSION

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

Page Range		60080-60083
FR Document		2016-20892
Federal Register, Volume 81 Issue 169 (Wednesday, August 31, 2016)
[Federal Register Volume 81, Number 169 (Wednesday, August 31, 2016)]
[Notices]
[Pages 60080-60083]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-20892]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78679; File No. SR-NYSE-2016-59]


 Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Rule 13 To Eliminate Orders With a Sell ``Plus'' and Buy 
``Minus'' Instruction and Retain Orders With a ``Buy Minus Zero Plus'' 
Instruction, and Make Conforming Changes to Rules 104, 107B, 123C and 
1004

August 25, 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 19, 2016, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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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 (1) amend Rule 13 to eliminate orders with 
a sell ``plus'' and buy ``minus'' instruction and retain orders with a 
``Buy Minus Zero Plus'' instruction, and (2) make conforming changes to 
Rules 104, 107B, 123C and 1004. The proposed rule change is available 
on the Exchange's Web site at www.nyse.com, at the principal office of 
the Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

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

1. Purpose
    The Exchange proposes to amend Rule 13 to eliminate orders with a 
sell ``plus'' and buy ``minus'' instruction and retain orders with a 
``Buy Minus Zero Plus'' instruction, and make conforming changes to 
Rules 104, 107B, 123C and 1004. The Exchange proposes to eliminate 
orders with a sell ``plus'' and buy ``minus'' instruction for all 
securities both to streamline its rules and reduce complexity among its 
order type offerings.\4\
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    \4\ See, e.g., Mary Jo White, Chair, Securities and Exchange 
Commission, Speech at the Sandler O'Neill & Partners, L.P. Global 
Exchange and Brokerage Conference (June 5, 2014) (available at 
www.sec.gov/News/Speech/Detail/Speech/1370542004312#.U5HI-fmwJiw).
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    Because of the technology changes associated with the proposed rule 
change, the Exchange proposes to announce the implementation date of 
the elimination of the order types via Trader Update.
Elimination of Sell ``Plus'' and Buy ``Minus'' Order Instructions (Rule 
13)
    The Exchange proposes to eliminate, and thus delete from its rules, 
sell ``plus'' and buy ``minus'' order instructions, as defined in Rule 
13(f)(4)(A) and (B), respectively. Rule 13(f)(4)(B) would also be 
amended to retain a ``Buy Minus Zero Plus'' instruction.
    First, the Exchange proposes to eliminate the sell ``plus'' order 
instruction. An order with a sell ``plus'' instruction is an order that 
will not trade at a price that is lower than the last sale if the last 
sale was a ``plus'' or ``zero plus'' tick or that is lower than the 
last sale plus the minimum fractional change in the stock if the last 
sale was a ``minus'' or ``zero minus'' tick, subject to the limit price 
of an order, if applicable.\5\
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    \5\ See Rule 13(f)(4)(A).
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    To reflect elimination of the sell ``plus'' order instruction, the 
Exchange proposes to delete subsection (f)(4)(A) of Rule 13, which 
defines the sell ``plus'' instruction, in its entirety. Subsection 
(4)(B) of Rule 13(f), amended as described below, would become new 
subsection (4)(A).
    Second, the Exchange proposes to eliminate the buy ``minus'' order 
instruction defined in Rule 13(f)(4)(B) and retain the ``Buy Minus Zero 
Plus'' order. An order with a buy ``minus'' instruction will not trade 
at a price that is higher than the last sale if the last sale was a 
``minus'' or ``zero minus'' tick or that is higher than the last sale 
minus the minimum fractional change in the stock if the last sale was a 
``plus'' or ``zero plus'' tick, subject to the limit price of an order, 
if applicable.\6\
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    \6\ See Rule 13(f)(4)(B).
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    Exchange rules would continue to permit an order with a ``Buy Minus 
Zero Plus'' instruction, which is currently a sub-set of the 
instructions available under Rule 13(f)(4)(B). A Buy Minus Zero Plus 
order instruction assists member organizations with compliance with the 
``safe harbor'' provisions of Rule 10b-18 under the Act (``Rule 10b-
18'') for issuer repurchases.\7\ One of the four provisions required to 
meet the safe harbor provision is if the purchase price of a security 
does not exceed the highest independent bid or the last independent 
transaction price.\8\ Because an order with a Buy Minus Zero Plus 
instruction will not trade at a price that is higher than the last 
sale, member organizations can use this instruction to facilitate their 
compliance with at least one of the conditions of the safe harbor 
provision of Rule 10b-18.\9\
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    \7\ See 17 CFR 240.10b-18.
    \8\ See 17 CFR 240.10b-18(b)(3). The other three conditions 
relate to time of purchases, volume of purchases, and a requirement 
that only one broker or dealer be involved in such repurchases on a 
single day.
    \9\ The Exchange does not represent that an order with a Buy 
Minus Zero Plus instruction is guaranteed to meet the requirements 
of the safe harbor provision of Rule 10b-18; rather, this 
instruction is available to member organizations to facilitate their 
own compliance with Rule 10b-18.
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    To reflect elimination of the buy ``minus'' order instruction and 
retention of the ``Buy Minus Zero Plus'' instruction, the Exchange 
proposes to add ``Zero Plus'' after ``buy minus'' in the first sentence 
of proposed new Rule 13(f)(4)(A), capitalize ``buy minus,'' and delete 
the phrase ``if the last sale was a `minus' or `zero minus' tick or 
that is higher than the last sale minus the minimum fractional change 
in the stock

[[Page 60081]]

if the last sale was a ``plus'' or ``zero plus'' tick'' following 
``will not trade at a price that is higher than the last sale.'' As 
proposed, an order with an instruction to ``Buy Minus Zero Plus'' would 
not trade at a price that is higher than the last sale, subject to the 
limit price of the order, if applicable.
    The remaining subsections of Rule 13(f)(4) would be amended to 
reflect these proposed changes, as follows.
    Current subsection (C) provides that sell ``plus'' and buy 
``minus'' instructions are available for Limit Orders, Limit-on-Open 
(``LOO'') Orders, Limit-on-Close (``LOC'') Orders, and Market-on-Close 
(``MOC'') Orders. Further, the current rule provides that orders with a 
buy ``minus'' instruction that are systemically delivered to Exchange 
systems will be eligible to be automatically executed in accordance 
with, and to the extent provided by, Rules 1000-1004, consistent with 
the order's instructions.
    Current subsection (C) would become subsection (B) and would be 
amended to reflect that the ``Buy Minus Zero Plus'' order instruction 
would only be available for limit orders. The Exchange would 
accordingly amend the first sentence of current subsection (C) to:
     Delete ``sell `plus' and'';
     add ``Zero Plus'' after ``buy minus'' and capitalize ``buy 
minus'';
     delete ``LOO Orders, LOC Orders, and MOC Orders''; and
     add the word ``only'' after ``Limit Orders''.
    The second sentence of proposed new subsection (B) would be amended 
to:
     Add ``Zero Plus'' after ``buy minus'' and capitalize ``buy 
minus''; and
     delete the clause ``or sell `plus' ''.
    Finally, current subsection (D), which provides that odd-lot sized 
transactions shall not be considered the last sale for purposes of 
executing sell ``plus'' or ``buy'' minus orders would become new 
subsection (C) of Rule 13(f)(4). Proposed new subsection (C) would be 
amended to:
    Delete the clause ``sell `plus' or'' before ``buy minus''; and 
capitalize ``buy minus''; and
     add ``Zero Plus'' after ``buy minus''.
Conforming Amendments
    The Exchange proposes certain conforming amendments to Rules 104, 
107B, 123C and 1004 to reflect the elimination of sell ``plus'' and buy 
``minus'' instruction as described above as follows.
Rule 104
    The Exchange proposes to amend Rule 104 (Dealings and 
Responsibilities of Designated Market Makers (``DMMs'')). Specifically, 
Rule 104(b)(vi) provides that DMM units may not enter certain orders 
and modifiers including, among others, orders with Sell ``Plus''--Buy 
``Minus'' Instructions.
    To conform Rule 104, the Exchange proposes to delete ``Sell 
`Plus'--'' and the quotes around the word ``Minus'' from Rule 
104(b)(vi) and add the phrase ``Zero Plus'' after ``Minus'' and before 
``Instructions.'' As proposed, Rule 104(b)(vi) would provide that DMM 
units may not enter orders with Buy Minus Zero Plus Instructions.
Rule 107B
    The Exchange proposes to amend Rule 107B (Supplemental Liquidity 
Providers), which sets forth the rules governing Supplemental Liquidity 
Providers (``SLPs''). An SLP is an Exchange member organization that 
electronically enters proprietary orders or quotes from off the Floor 
into the systems and facilities of the Exchange and is obligated, among 
other things, to maintain a bid or an offer at the NBB or NBO in each 
assigned security in round lots for at least 10% of the trading day, on 
average, and for all assigned SLP securities.\10\ Rules 107B(g) sets 
forth how the Exchange calculates whether an SLP is meeting its 10% 
quoting requirement. Subsection (D)(iii) of Rule 107B(g) provides that 
tick sensitive orders such as `` `Sell Plus', `Buy Minus' (see Rule 13) 
and `Buy Minus Zero Plus' '' will not be counted as credit towards the 
10% quoting requirement.
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    \10\ See Rule 107B(a).
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    To conform Rule 107B, the Exchange proposes to delete the phrase 
``Tick sensitive orders (i.e., ``Sell Plus'' and ``Buy Minus'' orders 
(see Rule 13) and'' in subsection (D)(iii), add the word ``orders'' 
following ``Buy Minus Zero Plus,'' and delete a parenthesis and 
quotation marks. As amended, Rule 107B(D)(iii) would provide that Buy 
Minus Zero Plus orders will not be counted as credit towards the 10% 
quoting requirement.
Rule 123C
    The Exchange proposes to amend Rule 123C (The Closing Procedures), 
which specifies the procedures to be followed at the close of trading 
on the Exchange.
    Rule 123C(4)(a) describes how the Exchange calculates MOC and LOC 
imbalances, which is intended to provide market participants with a 
snapshot of the prices at which interest eligible to participate in the 
closing transaction would be executed in full against each other at the 
time the data feed is disseminated. Subsection (vi) of Rule 123C(4)(a) 
provides that tick sensitive MOC and LOC interest and LOC orders priced 
equal to the last sale can reduce the Buy or Sell Imbalance to bring 
the imbalance quantity as close to zero as possible. The Rule also 
provides that the volume of tick sensitive MOC and LOC orders eligible 
to reduce the imbalance shall not cause the imbalance to change to the 
other side.
    Rule 123C(4)(a)(vi)(A) specifies that, in the event of a Buy 
Imbalance, only Sell Plus MOC orders, Sell Plus LOC orders priced equal 
to or below the last sale price, and Sell and Sell Short LOC orders 
priced equal to the last sale will be included to offset the imbalance, 
and that Sell Plus MOC and Sell Plus LOC orders will be included to 
offset the imbalance only if such orders could be executed consistent 
with the terms of their tick restrictions.
    Rule 123C(4)(a)(vi)(B) specifies that, in the event of a Sell 
Imbalance, only Buy Minus MOC orders, Buy Minus LOC orders priced equal 
to or above the last sale price, and Buy LOC orders priced equal to the 
last sale will be included to offset the imbalance. The Rule also 
provides that Buy Minus MOC and Buy Minus LOC orders will be included 
to offset the imbalance only if such orders could be executed 
consistent with the terms of their tick restrictions.
    To reflect the elimination of orders with a sell ``plus'' 
instruction and buy ``minus'' instructions, i.e., tick-sensitive 
orders, and the fact that as proposed, Buy Minus Zero Plus orders would 
not be available for MOC or LOC Orders, the Exchange proposes to amend 
Rule 123C as follows:
     Amend Rule 123C(4)(a)(vi) to delete the phrase ``tick 
sensitive MOC orders and LOC orders and'' before ``LOC orders priced 
equal to the last sale to bring the imbalance quantity as close to zero 
as possible.'' The Exchange also proposes to delete the last sentence 
in Rule 123C(4)(a)(vi), which provides that ``[t]he volume of tick 
sensitive MOC and LOC orders eligible to reduce the imbalance shall not 
cause the imbalance to change to the other side.''
     Amend Rule 123C(4)(a)(vi) (A) to remove references to Sell 
Plus MOC orders and Sell Plus LOC orders priced equal to or below the 
last sale price. The Exchange also proposes to delete the last sentence 
of the subsection (A), which provides that ``Sell Plus MOC and Sell 
Plus LOC orders will be included to offset the imbalance only if such 
orders could be executed consistent with the terms of their tick 
restrictions.''
     Amend Rule 123C(4)(a)(vi)(B) to remove references to Buy 
Minus MOC

[[Page 60082]]

orders and Buy Minus LOC orders priced equal to or above the last sale 
price. The Exchange also proposes to delete the last sentence of the 
subsection (B), which provides that ``Buy Minus MOC and Buy Minus LOC 
orders will be included to offset the imbalance only if such orders 
could be executed consistent with the terms of their tick 
restrictions.''
Rule 1004
    Finally, the Exchange proposes to amend Rule 1004 (Election of Buy 
Minus, Sell Plus and Stop Orders), which provides that automatic 
executions of transactions reported to the Consolidated Tape shall 
elect, among others, buy minus and sell plus orders electable at the 
price of such executions. The Rule further provides that any buy minus 
and sell plus orders so elected shall be automatically executed as 
market orders pursuant to Exchange rules.
    To reflect the elimination of orders with a Sell ``Plus'' and Buy 
``Minus'' instruction and retention of ``Buy Minus Zero Plus'' orders, 
the Exchange proposes to add ``Zero Plus'' after ``buy minus'' in Rule 
1004, capitalize ``buy minus,'' and delete the phrase ``and sell plus'' 
in two places. The Exchange also proposes to capitalize ``market 
orders.'' As amended, Rule 1004 would allow for the automatic execution 
of Buy Minus Zero Plus orders electable at the price of such 
executions.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \11\ of 
the Act, in general, and furthers the objectives of Section 
6(b)(5),\12\ in particular, in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that eliminating orders with a 
sell ``plus'' and buy ``minus'' instruction removes impediments to and 
perfects a national market system by simplifying functionality and 
complexity of its order types. The Exchange believes that eliminating 
these order types across all securities would not be inconsistent with 
the public interest and the protection of investors because investors 
will not be harmed and in fact would benefit from the removal of 
complex functionality.
    The Exchange further believes that deleting corresponding 
references in Exchange rules to deleted order types also removes 
impediments to and perfects the mechanism of a free and open market by 
ensuring that members, regulators and the public can more easily 
navigate the Exchange's rulebook and better understand the orders types 
available for trading on the Exchange. Removing obsolete cross 
references also furthers the goal of transparency and adds clarity to 
the Exchange's rules.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change is not 
designed to address any competitive issue but would rather remove 
complex functionality and obsolete cross-references, thereby reducing 
confusion and making the Exchange's rules easier to understand and 
navigate.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \13\ and Rule 19b-4(f)(6) thereunder.\14\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder. \15\
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    \13\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the 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.
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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-NYSE-2016-59 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2016-59. 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

[[Page 60083]]

identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSE-2016-59 and should be submitted on 
or before September 21, 2016.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-20892 Filed 8-30-16; 8:45 am]
 BILLING CODE 8011-01-P
60080 Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Notices

2016–28, and should be submitted on or II. Self-Regulatory Organization’s to the limit price of an order, if
before September 21, 2016. Statement of the Purpose of, and applicable.5
Statutory Basis for, the Proposed Rule To reflect elimination of the sell
For the Commission, by the Division of
Change ‘‘plus’’ order instruction, the Exchange
Trading and Markets, pursuant to delegated
proposes to delete subsection (f)(4)(A) of
authority.21 In its filing with the Commission, the Rule 13, which defines the sell ‘‘plus’’
Robert W. Errett, self-regulatory organization included instruction, in its entirety. Subsection
Deputy Secretary. statements concerning the purpose of, (4)(B) of Rule 13(f), amended as
[FR Doc. 2016–20894 Filed 8–30–16; 8:45 am]
and basis for, the proposed rule change described below, would become new
and discussed any comments it received subsection (4)(A).
BILLING CODE 8011–01–P
on the proposed rule change. The text Second, the Exchange proposes to
of those statements may be examined at eliminate the buy ‘‘minus’’ order
SECURITIES AND EXCHANGE the places specified in Item IV below. instruction defined in Rule 13(f)(4)(B)
The Exchange has prepared summaries, and retain the ‘‘Buy Minus Zero Plus’’
COMMISSION
set forth in sections A, B, and C below, order. An order with a buy ‘‘minus’’
of the most significant parts of such instruction will not trade at a price that
[Release No. 34–78679; File No. SR–NYSE– statements. is higher than the last sale if the last sale
2016–59]
A. Self-Regulatory Organization’s was a ‘‘minus’’ or ‘‘zero minus’’ tick or
Self-Regulatory Organizations; New Statement of the Purpose of, and the that is higher than the last sale minus
York Stock Exchange LLC; Notice of Statutory Basis for, the Proposed Rule the minimum fractional change in the
Change stock if the last sale was a ‘‘plus’’ or
Filing and Immediate Effectiveness of
‘‘zero plus’’ tick, subject to the limit
Proposed Rule Change Amending Rule 1. Purpose price of an order, if applicable.6
13 To Eliminate Orders With a Sell Exchange rules would continue to
‘‘Plus’’ and Buy ‘‘Minus’’ Instruction The Exchange proposes to amend
Rule 13 to eliminate orders with a sell permit an order with a ‘‘Buy Minus Zero
and Retain Orders With a ‘‘Buy Minus Plus’’ instruction, which is currently a
Zero Plus’’ Instruction, and Make ‘‘plus’’ and buy ‘‘minus’’ instruction
and retain orders with a ‘‘Buy Minus sub-set of the instructions available
Conforming Changes to Rules 104, under Rule 13(f)(4)(B). A Buy Minus
Zero Plus’’ instruction, and make
107B, 123C and 1004 Zero Plus order instruction assists
conforming changes to Rules 104, 107B,
123C and 1004. The Exchange proposes member organizations with compliance
August 25, 2016.
to eliminate orders with a sell ‘‘plus’’ with the ‘‘safe harbor’’ provisions of
Pursuant to Section 19(b)(1) 1 of the and buy ‘‘minus’’ instruction for all Rule 10b–18 under the Act (‘‘Rule 10b–
Securities Exchange Act of 1934 (the securities both to streamline its rules 18’’) for issuer repurchases.7 One of the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 and reduce complexity among its order four provisions required to meet the safe
notice is hereby given that on August type offerings.4 harbor provision is if the purchase price
19, 2016, New York Stock Exchange of a security does not exceed the highest
Because of the technology changes
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed independent bid or the last independent
associated with the proposed rule
with the Securities and Exchange transaction price.8 Because an order
change, the Exchange proposes to
Commission (the ‘‘Commission’’) the with a Buy Minus Zero Plus instruction
announce the implementation date of
proposed rule change as described in will not trade at a price that is higher
the elimination of the order types via
Items I and II below, which Items have than the last sale, member organizations
Trader Update.
been prepared by the self-regulatory can use this instruction to facilitate their
organization. The Commission is Elimination of Sell ‘‘Plus’’ and Buy compliance with at least one of the
‘‘Minus’’ Order Instructions (Rule 13) conditions of the safe harbor provision
publishing this notice to solicit
of Rule 10b–18.9
comments on the proposed rule change The Exchange proposes to eliminate, To reflect elimination of the buy
from interested persons. and thus delete from its rules, sell ‘‘minus’’ order instruction and retention
‘‘plus’’ and buy ‘‘minus’’ order of the ‘‘Buy Minus Zero Plus’’
I. Self-Regulatory Organization’s instructions, as defined in Rule
Statement of the Terms of Substance of instruction, the Exchange proposes to
13(f)(4)(A) and (B), respectively. Rule add ‘‘Zero Plus’’ after ‘‘buy minus’’ in
the Proposed Rule Change 13(f)(4)(B) would also be amended to the first sentence of proposed new Rule
retain a ‘‘Buy Minus Zero Plus’’ 13(f)(4)(A), capitalize ‘‘buy minus,’’ and
The Exchange proposes to (1) amend
instruction. delete the phrase ‘‘if the last sale was a
Rule 13 to eliminate orders with a sell
First, the Exchange proposes to ‘minus’ or ‘zero minus’ tick or that is
‘‘plus’’ and buy ‘‘minus’’ instruction
eliminate the sell ‘‘plus’’ order higher than the last sale minus the
and retain orders with a ‘‘Buy Minus
instruction. An order with a sell ‘‘plus’’ minimum fractional change in the stock
Zero Plus’’ instruction, and (2) make
instruction is an order that will not
conforming changes to Rules 104, 107B, trade at a price that is lower than the 5 See Rule 13(f)(4)(A).
123C and 1004. The proposed rule last sale if the last sale was a ‘‘plus’’ or 6 See Rule 13(f)(4)(B).
change is available on the Exchange’s ‘‘zero plus’’ tick or that is lower than the 7 See 17 CFR 240.10b–18.
Web site at www.nyse.com, at the last sale plus the minimum fractional 8 See 17 CFR 240.10b–18(b)(3). The other three

principal office of the Exchange, and at change in the stock if the last sale was conditions relate to time of purchases, volume of
mstockstill on DSK3G9T082PROD with NOTICES

the Commission’s Public Reference purchases, and a requirement that only one broker
a ‘‘minus’’ or ‘‘zero minus’’ tick, subject or dealer be involved in such repurchases on a
Room. single day.
4 See, e.g., Mary Jo White, Chair, Securities and 9 The Exchange does not represent that an order

21 17 CFR 200.30–3(a)(12). Exchange Commission, Speech at the Sandler with a Buy Minus Zero Plus instruction is
1 15 U.S.C. 78s(b)(1).
O’Neill & Partners, L.P. Global Exchange and guaranteed to meet the requirements of the safe
Brokerage Conference (June 5, 2014) (available at harbor provision of Rule 10b–18; rather, this
2 15 U.S.C. 78a.
www.sec.gov/News/Speech/Detail/Speech/ instruction is available to member organizations to
3 17 CFR 240.19b–4. 1370542004312#.U5HI-fmwJiw). facilitate their own compliance with Rule 10b–18.

VerDate Sep<11>2014 21:59 Aug 30, 2016 Jkt 238001 PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 E:\FR\FM\31AUN1.SGM 31AUN1
60082 Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Notices

orders and Buy Minus LOC orders benefit from the removal of complex At any time within 60 days of the
priced equal to or above the last sale functionality. filing of the proposed rule change, the
price. The Exchange also proposes to The Exchange further believes that Commission summarily may
delete the last sentence of the deleting corresponding references in temporarily suspend such rule change if
subsection (B), which provides that Exchange rules to deleted order types it appears to the Commission that such
‘‘Buy Minus MOC and Buy Minus LOC also removes impediments to and action is necessary or appropriate in the
orders will be included to offset the perfects the mechanism of a free and public interest, for the protection of
imbalance only if such orders could be open market by ensuring that members, investors, or otherwise in furtherance of
executed consistent with the terms of regulators and the public can more the purposes of the Act. If the
their tick restrictions.’’ easily navigate the Exchange’s rulebook Commission takes such action, the
and better understand the orders types Commission shall institute proceedings
Rule 1004 available for trading on the Exchange. to determine whether the proposed rule
Finally, the Exchange proposes to Removing obsolete cross references also change should be approved or
amend Rule 1004 (Election of Buy furthers the goal of transparency and disapproved.
Minus, Sell Plus and Stop Orders), adds clarity to the Exchange’s rules.
which provides that automatic IV. Solicitation of Comments
executions of transactions reported to B. Self-Regulatory Organization’s Interested persons are invited to
Statement on Burden on Competition submit written data, views, and
the Consolidated Tape shall elect,
among others, buy minus and sell plus The Exchange does not believe that arguments concerning the foregoing,
orders electable at the price of such the proposed rule change will impose including whether the proposed rule
executions. The Rule further provides any burden on competition that is not change is consistent with the Act.
that any buy minus and sell plus orders necessary or appropriate in furtherance Comments may be submitted by any of
so elected shall be automatically of the purposes of the Act. The the following methods:
executed as market orders pursuant to proposed change is not designed to
address any competitive issue but Electronic Comments
Exchange rules.
To reflect the elimination of orders would rather remove complex • Use the Commission’s Internet
with a Sell ‘‘Plus’’ and Buy ‘‘Minus’’ functionality and obsolete cross- comment form (http://www.sec.gov/
instruction and retention of ‘‘Buy Minus references, thereby reducing confusion rules/sro.shtml); or
Zero Plus’’ orders, the Exchange and making the Exchange’s rules easier • Send an email to rule-comments@
proposes to add ‘‘Zero Plus’’ after ‘‘buy to understand and navigate. sec.gov. Please include File Number SR–
minus’’ in Rule 1004, capitalize ‘‘buy NYSE–2016–59 on the subject line.
C. Self-Regulatory Organization’s
minus,’’ and delete the phrase ‘‘and sell Statement on Comments on the Paper Comments
plus’’ in two places. The Exchange also Proposed Rule Change Received From • Send paper comments in triplicate
proposes to capitalize ‘‘market orders.’’ Members, Participants, or Others to Brent J. Fields, Secretary, Securities
As amended, Rule 1004 would allow for
No written comments were solicited and Exchange Commission, 100 F Street
the automatic execution of Buy Minus
or received with respect to the proposed NE., Washington, DC 20549–1090.
Zero Plus orders electable at the price of
such executions. rule change. All submissions should refer to File
Number SR–NYSE–2016–59. This file
2. Statutory Basis III. Date of Effectiveness of the
number should be included on the
Proposed Rule Change and Timing for
The proposed rule change is subject line if email is used. To help the
Commission Action
consistent with Section 6(b) 11 of the Commission process and review your
Act, in general, and furthers the The Exchange has filed the proposed comments more efficiently, please use
objectives of Section 6(b)(5),12 in rule change pursuant to Section only one method. The Commission will
19(b)(3)(A)(iii) of the Act 13 and Rule post all comments on the Commission’s
particular, in that it is designed to
19b–4(f)(6) thereunder.14 Because the Internet Web site (http://www.sec.gov/
prevent fraudulent and manipulative
proposed rule change does not: (i) rules/sro.shtml). Copies of the
acts and practices, to promote just and
Significantly affect the protection of submission, all subsequent
equitable principles of trade, to foster
investors or the public interest; (ii) amendments, all written statements
cooperation and coordination with
impose any significant burden on with respect to the proposed rule
persons engaged in facilitating
competition; and (iii) become operative change that are filed with the
transactions in securities, and to remove
prior to 30 days from the date on which Commission, and all written
impediments to and perfect the
it was filed, or such shorter time as the communications relating to the
mechanism of a free and open market
Commission may designate, if proposed rule change between the
and a national market system.
consistent with the protection of Commission and any person, other than
Specifically, the Exchange believes
investors and the public interest, the those that may be withheld from the
that eliminating orders with a sell
proposed rule change has become public in accordance with the
‘‘plus’’ and buy ‘‘minus’’ instruction
effective pursuant to Section 19(b)(3)(A) provisions of 5 U.S.C. 552, will be
removes impediments to and perfects a
of the Act and Rule 19b–4(f)(6)(iii) available for Web site viewing and
national market system by simplifying
thereunder. 15 printing in the Commission’s Public
functionality and complexity of its order
types. The Exchange believes that 13 15
Reference Room, 100 F Street NE.,
U.S.C. 78s(b)(3)(A)(iii).
Washington, DC 20549 on official
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eliminating these order types across all 14 17 CFR 240.19b–4(f)(6).
securities would not be inconsistent 15 17 CFR 240.19b–4(f)(6). As required under Rule business days between the hours of
with the public interest and the 19b–4(f)(6)(iii), the Exchange provided the 10:00 a.m. and 3:00 p.m. Copies of the
protection of investors because investors Commission with written notice of its intent to file filing also will be available for
the proposed rule change, along with a brief inspection and copying at the principal
will not be harmed and in fact would description and the text of the proposed rule
change, at least five business days prior to the date
office of the Exchange. All comments
11 15 U.S.C. 78f(b). of filing of the proposed rule change, or such received will be posted without change;
12 15 U.S.C. 78f(b)(5). shorter time as designated by the Commission. the Commission does not edit personal

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Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Notices 60083

identifying information from Associated with ETP Holders.4 The subject to the examination and
submissions. You should submit only Exchange’s rule proposal is intended to continuing education requirements
information that you wish to make align its rules with those of other self- necessary for their business function;
available publicly. All submissions regulatory organizations (‘‘SROs’’) and (iii) align the Exchange’s qualification,
should refer to File Number SR–NYSE– thus promote consistency within the registration and examination rules with
2016–59 and should be submitted on or securities industry. The Exchange is those of the Financial Industry
before September 21, 2016. also proposing to amend NSX Rule 1.5, Regulatory Authority (‘‘FINRA’’) and
For the Commission, by the Division of Definitions, and make technical or other SROs so as to promote uniform
Trading and Markets, pursuant to delegated conforming changes to certain other standards across the securities industry;
authority.16 NSX rules. (iv) provide for the Securities Trader
Robert W. Errett, The Exchange has designated this rule registration (Series 57) and Securities
proposal as a ‘‘non-controversial’’ rule Trader Principal registration; and (v)
Deputy Secretary.
change pursuant to Section 19(b)(3)(A) reorganize certain rules, add new
[FR Doc. 2016–20892 Filed 8–30–16; 8:45 am]
of the Act 5 and provided the definitions of terms, and make other
BILLING CODE 8011–01–P Commission with the notice required by conforming or ministerial, non-
Rule 19b–4(f)(6)(iii) under the Act.6 substantive amendments designed to
The text of the proposed rule change enhance the comprehensiveness and
SECURITIES AND EXCHANGE is available on the Exchange’s Web site
COMMISSION clarity of the Exchange’s rules. The
at http://www.nsx.com, at the principal proposed changes are discussed below.
office of the Exchange, and at the
[Release No. 34–78676; File No. SR–NSX– Commission’s Public Reference Room. Amendments to NSX Rule 1.5—
2016–07] Definitions
II. Self-Regulatory Organization’s
Self-Regulatory Organizations; Statement of the Purpose of, and The Exchange is proposing to amend
National Stock Exchange, Inc.; Notice Statutory Basis for, the Proposed Rule NSX Rule 1.5 to add new definitions,
of Filing and Immediate Effectiveness Change revise certain definitions in the current
of Proposed Rule Change To Amend rule, and make non-substantive changes
In its filing with the Commission, the
Rules Regarding Qualification, to the rule text. The Exchange first
Exchange included statements
Registration and Continuing Education proposes to amend the definition of an
concerning the purpose of and basis for
for Persons Associated With Equity ETP in NSX Rule 1.5E.(1). As currently
the proposed rule change and discussed
Trading Permit Holders, To Add any comments it received on the defined in the rule, the term ETP ‘‘. . .
Definitions, Amend Definitions, and To proposed rule change. The text of these shall refer to an Equity Trading Permit
Make Technical, Non-Substantive and statements may be examined at the issued by the Exchange for effecting
Conforming Amendments to Rules places specified in Item IV below. The approved securities transactions on the
Exchange has prepared summaries, set Exchange’s trading facilities. An ETP
August 25, 2016. may be issued to a sole proprietor,
forth in sections A, B, and C below, of
Pursuant to Section 19(b)(1) of the the most significant parts of such partnership, corporation, limited
Securities Exchange Act of 1934 (the statements. liability company or other organization
‘‘Exchange Act’’ or ‘‘Act’’) 1 and Rule which is a registered broker or dealer
19b–4 thereunder,2 notice is hereby A. Self-Regulatory Organization’s pursuant to Section 15 of the Act, and
given that on August 24, 2016, National Statement of the Purpose of, and which has been approved by the
Stock Exchange, Inc. (‘‘NSX’’ or the Statutory Basis for, the Proposed Rule Exchange.’’
‘‘Exchange’’) filed with the Securities Change Under the Exchange’s proposed
and Exchange Commission 1. Purpose amendment, the definition of an ‘‘ETP’’
(‘‘Commission’’) the proposed rule would retain the text that an ETP shall
The Exchange proposes to amend its refer to an Equity Trading Permit issued
change, as described in Items I, II, and qualification, registration, and
III below, which Items have been by the Exchange for effecting approved
continuing education requirements securities transactions on the
prepared by the Exchange. The applicable to ETP Holders and Persons
Commission is publishing this notice to Exchange’s trading facilities. However,
Associated with ETP Holders. The
solicit comments on the proposed rule the subsequent text in the current rule,
proposed amendments are intended to:
change from interested persons. which provides that an ETP may be
(i) Provide transparency and clarity with
issued to a sole proprietor, partnership,
I. Self-Regulatory Organization’s respect to the Exchange’s registration,
corporation, limited liability company
Statement of the Terms of Substance of qualification, and examination
or other organization which is a
the Proposed Rule Change requirements; (ii) ensure that all persons
registered broker or dealer pursuant to
engaging in trading on the Exchange or
The Exchange is proposing Section 15 of the Act, will be moved to
performing supervisory or operational
amendments to its rules regarding NSX Rule 2.3, entitled ‘‘ETP Holder
functions are properly registered and
qualification, registration and Eligibility,’’ where it is more logically
continuing education requirements 4 Exchange Rule 1.5P.(2) defines ‘‘Person placed given the content of that rule.
applicable to Equity Trading Permit Associated with an ETP Holder’’ as ‘‘. . . any Additionally, the relocated text will be
(‘‘ETP’’) Holders 3 and Persons partner, officer, director, or branch manager of an amended to add a requirement that the
ETP Holder (or any person occupying a similar prospective ETP Holder must be a
mstockstill on DSK3G9T082PROD with NOTICES

status or performing similar functions), any person
16 17 CFR 200.30–3(a)(12). directly or indirectly controlling, controlled by, or
member of another national securities
1 15 U.S.C. 78s(b)(1). under common control with an ETP Holder, or any exchange or national securities
2 17 CFR 240.19b–4. employee of such ETP Holder, except that any association in order to be eligible to
3 Exchange Rule 1.5E.(1) defines the term ‘‘ETP,’’ person associated with an ETP Holder whose become an ETP Holder of NSX. The
in relevant part, as ‘‘. . . an Equity Trading Permit functions are solely clerical or ministerial shall not
be included in the meaning of such terms.’’
Exchange is proposing this amendment
issued by the Exchange for effecting approved
securities transactions on the Exchange’s trading 5 15 U.S.C. 78s(b)(3)(A). because it will not act as the Designated
facilities. . . .’’ 6 17 CFR 240.19b–4(f)(6)(iii). Examining Authority for any ETP

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Document Created: 2018-02-02 12:15:21
Document Modified: 2018-02-02 12:15:21
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 60080