81 FR 60094 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 13-Equities 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-Equities, 107B-Equities, 123C-Equities and 1004-Equities

SECURITIES AND EXCHANGE COMMISSION

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

Page Range		60094-60097
FR Document		2016-20959
Federal Register, Volume 81 Issue 169 (Wednesday, August 31, 2016)
[Federal Register Volume 81, Number 169 (Wednesday, August 31, 2016)]
[Notices]
[Pages 60094-60097]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-20959]



[[Page 60094]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78692; File No. SR-NYSEMKT-2016-81]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending Rule 13--
Equities 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--Equities, 107B--
Equities, 123C--Equities and 1004--Equities

August 26, 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, NYSE MKT LLC (the ``Exchange'' or ``NYSE 
MKT'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 13--Equities 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--Equities, 107B--Equities, 123C--
Equities and 1004--Equities. 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--Equities (``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--Equities (``Rule 104''), 107B--
Equities (``Rule 107B''), 123C--Equities (``Rule 123C'') and 1004--
Equities (``Rule 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)--Equities.
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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)--Equities.
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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 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.

[[Page 60095]]

    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--Equities, 
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 5% 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 5% 
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 
5% quoting requirement.
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    \10\ See Rule 107B(a)--Equities.
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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 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.''

[[Page 60096]]

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-NYSEMKT-2016-81 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEMKT-2016-81. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEMKT-2016-81 and should 
be submitted on or before September 21, 2016.


[[Page 60097]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-20959 Filed 8-30-16; 8:45 am]
 BILLING CODE 8011-01-P
60094 Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Notices

SECURITIES AND EXCHANGE of the most significant parts of such Second, the Exchange proposes to
COMMISSION statements. eliminate the buy ‘‘minus’’ order
instruction defined in Rule 13(f)(4)(B)
[Release No. 34–78692; File No. SR– A. Self-Regulatory Organization’s
and retain the ‘‘Buy Minus Zero Plus’’
NYSEMKT–2016–81] Statement of the Purpose of, and the
order. An order with a buy ‘‘minus’’
Statutory Basis for, the Proposed Rule
Self-Regulatory Organizations; NYSE instruction will not trade at a price that
Change is higher than the last sale if the last sale
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed 1. Purpose was a ‘‘minus’’ or ‘‘zero minus’’ tick or
Rule Change Amending Rule 13— that is higher than the last sale minus
The Exchange proposes to amend
Equities To Eliminate Orders With a the minimum fractional change in the
Rule 13—Equities (‘‘Rule 13’’) to
Sell ‘‘Plus’’ and Buy ‘‘Minus’’ stock if the last sale was a ‘‘plus’’ or
eliminate orders with a sell ‘‘plus’’ and
Instruction and Retain Orders With a ‘‘zero plus’’ tick, subject to the limit
buy ‘‘minus’’ instruction and retain
‘‘Buy Minus Zero Plus’’ Instruction, price of an order, if applicable.6
orders with a ‘‘Buy Minus Zero Plus’’ Exchange rules would continue to
and Make Conforming Changes to instruction, and make conforming
Rules 104—Equities, 107B—Equities, permit an order with a ‘‘Buy Minus Zero
changes to Rules 104—Equities (‘‘Rule Plus’’ instruction, which is currently a
123C—Equities and 1004—Equities 104’’), 107B—Equities (‘‘Rule 107B’’), sub-set of the instructions available
August 26, 2016.
123C—Equities (‘‘Rule 123C’’) and under Rule 13(f)(4)(B). A Buy Minus
Pursuant to Section 19(b)(1) 1 of the 1004—Equities (‘‘Rule 1004’’). The Zero Plus order instruction assists
Securities Exchange Act of 1934 (the Exchange proposes to eliminate orders member organizations with compliance
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 with a sell ‘‘plus’’ and buy ‘‘minus’’ with the ‘‘safe harbor’’ provisions of
notice is hereby given that on August instruction for all securities both to Rule 10b–18 under the Act (‘‘Rule 10b–
19, 2016, NYSE MKT LLC (the streamline its rules and reduce 18’’) for issuer repurchases.7 One of the
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with complexity among its order type four provisions required to meet the safe
the Securities and Exchange offerings.4 harbor provision is if the purchase price
Commission (the ‘‘Commission’’) the Because of the technology changes of a security does not exceed the highest
proposed rule change as described in associated with the proposed rule independent bid or the last independent
Items I and II below, which Items have change, the Exchange proposes to transaction price.8 Because an order
been prepared by the self-regulatory announce the implementation date of with a Buy Minus Zero Plus instruction
organization. The Commission is the elimination of the order types via will not trade at a price that is higher
publishing this notice to solicit Trader Update. than the last sale, member organizations
comments on the proposed rule change Elimination of Sell ‘‘Plus’’ and Buy can use this instruction to facilitate their
from interested persons. ‘‘Minus’’ Order Instructions (Rule 13) compliance with at least one of the
conditions of the safe harbor provision
I. Self-Regulatory Organization’s The Exchange proposes to eliminate, of Rule 10b–18.9
Statement of the Terms of Substance of and thus delete from its rules, sell To reflect elimination of the buy
the Proposed Rule Change ‘‘plus’’ and buy ‘‘minus’’ order ‘‘minus’’ order instruction and retention
The Exchange proposes to amend instructions, as defined in Rule of the ‘‘Buy Minus Zero Plus’’
Rule 13—Equities to eliminate orders 13(f)(4)(A) and (B), respectively. Rule instruction, the Exchange proposes to
with a sell ‘‘plus’’ and buy ‘‘minus’’ 13(f)(4)(B) would also be amended to add ‘‘Zero Plus’’ after ‘‘buy minus’’ in
instruction and retain orders with a retain a ‘‘Buy Minus Zero Plus’’ the first sentence of proposed new Rule
‘‘Buy Minus Zero Plus’’ instruction, and instruction. 13(f)(4)(A), capitalize ‘‘buy minus,’’ and
(2) make conforming changes to Rules First, the Exchange proposes to delete the phrase ‘‘if the last sale was a
104—Equities, 107B—Equities, 123C— eliminate the sell ‘‘plus’’ order ‘minus’ or ‘zero minus’ tick or that is
Equities and 1004—Equities. The instruction. An order with a sell ‘‘plus’’ higher than the last sale minus the
proposed rule change is available on the instruction is an order that will not minimum fractional change in the stock
Exchange’s Web site at www.nyse.com, trade at a price that is lower than the if the last sale was a ‘‘plus’’ or ‘‘zero
at the principal office of the Exchange, last sale if the last sale was a ‘‘plus’’ or plus’’ tick’’ following ‘‘will not trade at
and at the Commission’s Public ‘‘zero plus’’ tick or that is lower than the a price that is higher than the last sale.’’
Reference Room. last sale plus the minimum fractional As proposed, an order with an
change in the stock if the last sale was instruction to ‘‘Buy Minus Zero Plus’’
II. Self-Regulatory Organization’s a ‘‘minus’’ or ‘‘zero minus’’ tick, subject would not trade at a price that is higher
Statement of the Purpose of, and to the limit price of an order, if than the last sale, subject to the limit
Statutory Basis for, the Proposed Rule applicable.5 price of the order, if applicable.
Change To reflect elimination of the sell The remaining subsections of Rule
In its filing with the Commission, the ‘‘plus’’ order instruction, the Exchange 13(f)(4) would be amended to reflect
self-regulatory organization included proposes to delete subsection (f)(4)(A) of these proposed changes, as follows.
statements concerning the purpose of, Rule 13, which defines the sell ‘‘plus’’
and basis for, the proposed rule change instruction, in its entirety. Subsection 6 See Rule 13(f)(4)(B)—Equities.
and discussed any comments it received (4)(B) of Rule 13(f), amended as 7 See 17 CFR 240.10b–18.
8 See 17 CFR 240.10b–18(b)(3). The other three
on the proposed rule change. The text described below, would become new
conditions relate to time of purchases, volume of
mstockstill on DSK3G9T082PROD with NOTICES

of those statements may be examined at subsection (4)(A). purchases, and a requirement that only one broker
the places specified in Item IV below. or dealer be involved in such repurchases on a
4 See, e.g., Mary Jo White, Chair, Securities and single day.
The Exchange has prepared summaries,
Exchange Commission, Speech at the Sandler 9 The Exchange does not represent that an order
set forth in sections A, B, and C below, O’Neill & Partners, L.P. Global Exchange and with a Buy Minus Zero Plus instruction is
Brokerage Conference (June 5, 2014) (available at guaranteed to meet the requirements of the safe
1 15 U.S.C. 78s(b)(1). www.sec.gov/News/Speech/Detail/Speech/ harbor provision of Rule 10b–18; rather, this
2 15 U.S.C. 78a. 1370542004312#.U5HI-fmwJiw). instruction is available to member organizations to
3 17 CFR 240.19b–4. 5 See Rule 13(f)(4)(A)—Equities. facilitate their own compliance with Rule 10b–18.

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60096 Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Notices

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.
IV. Solicitation of Comments
which provides that automatic B. Self-Regulatory Organization’s
executions of transactions reported to Statement on Burden on Competition Interested persons are invited to
the Consolidated Tape shall elect, submit written data, views, and
The Exchange does not believe that
among others, buy minus and sell plus arguments concerning the foregoing,
the proposed rule change will impose
orders electable at the price of such including whether the proposed rule
any burden on competition that is not
executions. The Rule further provides change is consistent with the Act.
necessary or appropriate in furtherance
that any buy minus and sell plus orders Comments may be submitted by any of
of the purposes of the Act. The
so elected shall be automatically the following methods:
proposed change is not designed to
executed as market orders pursuant to
address any competitive issue but Electronic Comments
Exchange rules.
To reflect the elimination of orders would rather remove complex
with a Sell ‘‘Plus’’ and Buy ‘‘Minus’’ functionality and obsolete cross- • Use the Commission’s Internet
instruction and retention of ‘‘Buy Minus references, thereby reducing confusion comment form (http://www.sec.gov/
Zero Plus’’ orders, the Exchange and making the Exchange’s rules easier rules/sro.shtml); or
proposes to add ‘‘Zero Plus’’ after ‘‘buy to understand and navigate. • Send an email to rule-comments@
minus’’ in Rule 1004, capitalize ‘‘buy C. Self-Regulatory Organization’s sec.gov. Please include File Number SR–
minus,’’ and delete the phrase ‘‘and sell Statement on Comments on the NYSEMKT–2016–81 on the subject line.
plus’’ in two places. The Exchange also Proposed Rule Change Received From
proposes to capitalize ‘‘market orders.’’ Paper Comments
Members, Participants, or Others
As amended, Rule 1004 would allow for No written comments were solicited • Send paper comments in triplicate
the automatic execution of Buy Minus or received with respect to the proposed to Brent J. Fields, Secretary, Securities
Zero Plus orders electable at the price of rule change. and Exchange Commission, 100 F Street
such executions. NE., Washington, DC 20549–1090.
III. Date of Effectiveness of the
2. Statutory Basis Proposed Rule Change and Timing for All submissions should refer to File
The proposed rule change is Commission Action Number SR–NYSEMKT–2016–81. This
consistent with Section 6(b) 11 of the The Exchange has filed the proposed file number should be included on the
Act, in general, and furthers the rule change pursuant to Section subject line if email is used. To help the
objectives of Section 6(b)(5),12 in 19(b)(3)(A)(iii) of the Act 13 and Rule Commission process and review your
particular, in that it is designed to 19b–4(f)(6) thereunder.14 Because the comments more efficiently, please use
prevent fraudulent and manipulative proposed rule change does not: (i) only one method. The Commission will
acts and practices, to promote just and Significantly affect the protection of post all comments on the Commission’s
equitable principles of trade, to foster investors or the public interest; (ii) Internet Web site (http://www.sec.gov/
cooperation and coordination with impose any significant burden on rules/sro.shtml). Copies of the
persons engaged in facilitating competition; and (iii) become operative submission, all subsequent
transactions in securities, and to remove prior to 30 days from the date on which amendments, all written statements
impediments to and perfect the it was filed, or such shorter time as the with respect to the proposed rule
mechanism of a free and open market Commission may designate, if change that are filed with the
and a national market system. consistent with the protection of Commission, and all written
Specifically, the Exchange believes communications relating to the
investors and the public interest, the
that eliminating orders with a sell proposed rule change between the
proposed rule change has become
‘‘plus’’ and buy ‘‘minus’’ instruction Commission and any person, other than
effective pursuant to Section 19(b)(3)(A)
removes impediments to and perfects a those that may be withheld from the
of the Act and Rule 19b–4(f)(6)(iii)
national market system by simplifying public in accordance with the
thereunder.15
functionality and complexity of its order At any time within 60 days of the provisions of 5 U.S.C. 552, will be
types. The Exchange believes that filing of the proposed rule change, the available for Web site viewing and
eliminating these order types across all Commission summarily may printing in the Commission’s Public
securities would not be inconsistent temporarily suspend such rule change if Reference Room, 100 F Street NE.,
with the public interest and the it appears to the Commission that such Washington, DC 20549 on official
protection of investors because investors action is necessary or appropriate in the business days between the hours of
will not be harmed and in fact would public interest, for the protection of 10:00 a.m. and 3:00 p.m. Copies of the
benefit from the removal of complex investors, or otherwise in furtherance of filing also will be available for
functionality. the purposes of the Act. If the
The Exchange further believes that inspection and copying at the principal
Commission takes such action, the office of the Exchange. All comments
deleting corresponding references in
Commission shall institute proceedings received will be posted without change;
Exchange rules to deleted order types
also removes impediments to and the Commission does not edit personal
13 15 U.S.C. 78s(b)(3)(A)(iii). identifying information from
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perfects the mechanism of a free and 14 17 CFR 240.19b–4(f)(6).
open market by ensuring that members, 15 17 CFR 240.19b–4(f)(6). As required under Rule
submissions. You should submit only
regulators and the public can more 19b–4(f)(6)(iii), the Exchange provided the
information that you wish to make
easily navigate the Exchange’s rulebook Commission with written notice of its intent to file available publicly. All submissions
and better understand the orders types the proposed rule change, along with a brief should refer to File Number SR–
description and the text of the proposed rule NYSEMKT–2016–81 and should be
change, at least five business days prior to the date
11 15 U.S.C. 78f(b). of filing of the proposed rule change, or such
submitted on or before September 21,
12 15 U.S.C. 78f(b)(5). shorter time as designated by the Commission. 2016.

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Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Notices 60097

For the Commission, by the Division of II. Self-Regulatory Organization’s detail below. The Exchange notes that
Trading and Markets, pursuant to delegated Statement of the Purpose of, and having Wednesday expirations is not a
authority.16 Statutory Basis for, the Proposed Rule novel proposal. Specifically, the
Brent J. Fields, Change Chicago Board Options Exchange,
Secretary. In its filing with the Commission, the Incorporated (‘‘CBOE’’) recently
[FR Doc. 2016–20959 Filed 8–30–16; 8:45 am] Exchange included statements received approval to list Wednesday
expirations for broad-based indexes.7
BILLING CODE 8011–01–P concerning the purpose of and basis for
In regards to Wednesday SPY
the proposed rule change and discussed
Expirations, the Exchange is proposing
any comments it received on the
SECURITIES AND EXCHANGE to remove the current restriction
proposed rule change. The text of these
COMMISSION preventing it from listing Short Term
statements may be examined at the
Option Series that expire in the same
places specified in Item IV below. The
week in which monthly option series in
[Release No. 34–78697; File No. SR– Exchange has prepared summaries, set
the same class expire. Specifically, the
BatsBZX–2016–53] forth in Sections A, B, and C below, of
Exchange will be allowed to list
the most significant parts of such
Self-Regulatory Organizations; Bats Wednesday SPY Expirations in the same
statements.
BZX Exchange, Inc.; Notice of Filing week in which monthly option series in
and Immediate Effectiveness of A. Self-Regulatory Organization’s SPY expire. The current restriction to
Proposed Rule Change To Amend Rule Statement of the Purpose of, and prohibit the expiration of monthly and
19.6, Series of Options Contracts Open Statutory Basis for, the Proposed Rule Short Term Option Series from expiring
for Trading, To Allow Wednesday Change on the same trading day is reasonable to
Expirations for SPY Options avoid investor confusion. This
1. Purpose
confusion will not apply with
August 26, 2016. The purpose of the proposed rule Wednesday SPY Expirations and
change is to harmonize the Exchange’s standard monthly options because they
Pursuant to Section 19(b)(1) of the
rules with the rules governing Short will not expire on the same trading day,
Securities Exchange Act of 1934
Term Options Series programs of other as standard monthly options do not
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
options exchanges. Specifically, the expire on Wednesdays. Additionally, it
notice is hereby given that, on August
Exchange proposes to amend Rule 19.6, would lead to investor confusion if
25, 2016, Bats BZX Exchange, Inc. (the
entitled ‘‘Series of Options Contracts Wednesday SPY Expirations were not
‘‘Exchange’’ or ‘‘BZX’’) filed with the
Open for Trading,’’ related to the STOS listed for one week every month because
Securities and Exchange Commission
Program to allow Wednesday there was a monthly SPY expiration on
(‘‘Commission’’) the proposed rule
expirations for SPY options. The the Friday of that week.
change as described in Items I and II
Exchange also proposes to make certain Under the proposed Wednesday SPY
below, which Items have been prepared
corresponding changes to 16.1, entitled Expirations, the Exchange may list up to
by the Exchange. The Exchange has
‘‘Definitions.’’ The proposed rule five consecutive Wednesday SPY
designated this proposal as a ‘‘non-
change is based on the recent approval Expirations at one time. The Exchange
controversial’’ proposed rule change
of a filing submitted by the BOX may have no more than a total of five
pursuant to Section 19(b)(3)(A) of the
Options Exchange LLC (‘‘BOX’’).5 Wednesday SPY Expirations listed. This
Act 3 and Rule 19b–4(f)(6) thereunder,4
Currently, under the STOS Program, is the same listing procedure as Short
which renders it effective upon filing
the Exchange may open for trading on Term Option Series that expire on
with the Commission. The Commission
any Thursday or Friday that is a Fridays. The Exchange is also proposing
is publishing this notice to solicit
business day series of options on that to clarify that the five series limit in the
comments on the proposed rule change
class that expire on each of the next five current Short Term Option Series
from interested persons.
Fridays, provided that such Friday is Program Rule will not include any
I. Self-Regulatory Organization’s not a Friday in which monthly options Wednesday SPY Expirations.8 This
Statement of the Terms of Substance of series or Quarterly Options Series expire means, under the proposal, the
the Proposed Rule Change (‘‘Short Term Option Series’’). The Exchange would be allowed to list five
Exchange is now proposing to amend its Short Term Option Series expirations
The Exchange filed a proposal to rule to permit the listing of options for SPY expiring on Friday under the
amend Rule 19.6, entitled ‘‘Series of expiring on Wednesdays. Specifically, current rule and five Wednesday SPY
Options Contracts Open for Trading,’’ the Exchange is proposing that it may Expirations. The interval between strike
related to the Short Term Option Series open for trading on any Tuesday or prices for the proposed Wednesday SPY
(‘‘STOS’’) Program to allow Wednesday Wednesday that is a business day, series Expirations will be the same as those for
expirations for SPY options. The of options on the SPDR S&P 500 ETF the current Short Term Option Series.
Exchange also proposes to make Trust (‘‘SPY’’) to expire on any Specifically, the Wednesday SPY
corresponding changes to Rule 16.1, Wednesday of the month that is a Expirations will have $0.50 strike
entitled ‘‘Definitions.’’ The text of the business day and is not a Wednesday in intervals.
proposed rule change is available at the which Quarterly Options Series expire Currently, for each Short Term Option
Exchange’s Web site at (‘‘Wednesday SPY Expirations’’).6 The Expiration Date,9 the Exchange is
www.batstrading.com, at the principal proposed Wednesday SPY Expiration
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office of the Exchange, and at the series will be similar to the current 7 See Securities Exchange Act Release No. 76909

Commission’s Public Reference Room. Short Term Option Series, with certain (January 14, 2016), 81 FR 3512 (January 21, 2016)
(SR–CBOE–2015–106).
exceptions, as explained in greater 8 See proposed changes to Interpretation and
16 17 CFR 200.30–3(a)(12). Policy .05 to Rule 19.6.
1 15 U.S.C. 78s(b)(1). 5 See Securities and Exchange Act Release No. 9 The Exchange may open for trading on any
2 17 CFR 240.19b–4.
78668 (August 24, 2016) (SR–BOX–2016–28). Thursday or Friday that is a business day series of
3 15 U.S.C. 78s(b)(3)(A). 6 See proposed paragraph (g) of Interpretation and options on that class that expire on each of the next
4 17 CFR 240.19b–4(f)(6). Policy .05 to Rule 19.6. Continued

VerDate Sep<11>2014 21:59 Aug 30, 2016 Jkt 238001 PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 E:\FR\FM\31AUN1.SGM 31AUN1
Document Created: 2018-02-02 12:15:10
Document Modified: 2018-02-02 12:15:10
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 60094