81 FR 64566 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing of Proposed Rule Change To Describe Changes to System Functionality Necessary To Implement the Tick Size Pilot Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 182 (September 20, 2016)

Page Range		64566-64573
FR Document		2016-22537
Federal Register, Volume 81 Issue 182 (Tuesday, September 20, 2016)
[Federal Register Volume 81, Number 182 (Tuesday, September 20, 2016)]
[Notices]
[Pages 64566-64573]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-22537]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78838; File No. SR-BX-2016-050]


Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing 
of Proposed Rule Change To Describe Changes to System Functionality 
Necessary To Implement the Tick Size Pilot Program

September 14, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 7, 2016, NASDAQ BX, Inc. (``BX'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``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

    The Exchange proposes to adopt paragraph (d) to Exchange Rule 4770 
to describe changes to System \3\ functionality necessary to implement 
the Regulation NMS Plan to Implement a Tick Size Pilot Program 
(``Plan'').\4\ The Exchange is also proposing amendments to Rule 
4770(a) and (c) to clarify how the Trade-at exception may be satisfied.
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    \3\ The term ``System'' is defined as the automated system for 
order execution and trade reporting owned and operated by the 
Exchange. The System comprises: (1) A montage for Quotes and Orders, 
referred to herein as the ``Exchange Book,'' that collects and ranks 
all Quotes and Orders submitted by Participants; (2) an Order 
execution service that enables Participants to automatically execute 
transactions in System Securities; and provides Participants with 
sufficient monitoring and updating capability to participate in an 
automated execution environment; (3) a trade reporting service that 
submits ``locked-in'' trades for clearing to a registered clearing 
agency for clearance and settlement; transmits last-sale reports of 
transactions automatically to the national trade reporting system, 
if required, for dissemination to the public and industry; and 
provides participants with monitoring and risk management 
capabilities to facilitate participation in a ``locked-in'' trading 
environment; and (4) data feeds that can be used to display with 
attribution to Participants' MPIDs all Quotes and displayed Orders 
on both the bid and offer side of the market for all price levels 
then within the NASDAQ OMX BX Equities Market, and that disseminate 
such additional information about Quotes, Orders, and transactions 
within the System as shall be reflected in the Exchange Rules. See 
Rule 4701(a).
    \4\ See Securities Exchange Act Release No. 74892 (May 6, 2015), 
80 FR 27513 (May 13, 2015) (``Approval Order'').
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    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaqbx.cchwallstreet.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 Exchange 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 these 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 aspects of such 
statements.

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

1. Purpose
Background
    On August 25, 2014, NYSE Group, Inc., on behalf of Bats BZX 
Exchange, Inc. (f/k/a BATS Exchange, Inc.), Bats BYX Exchange, Inc. (f/
k/a BATS Y-Exchange, Inc.), Chicago Stock Exchange, Inc., EDGA 
Exchange, Inc., EDGX Exchange, Inc., the Exchange, Financial Industry 
Regulatory Authority, Inc. (``FINRA''), The NASDAQ Stock Market LLC, 
New York Stock Exchange LLC, NASDAQ PHLX LLC, NYSE Arca, Inc., and the 
NYSE MKT LLC, (collectively ``Participants''), filed the Plan with the 
Commission pursuant to Section 11A of the Act \5\ and Rule 608 of 
Regulation NMS thereunder.\6\ The Participants filed the Plan to comply 
with an order issued by the Commission on June 24, 2014 (the ``June 
2014 Order'').\7\ The Plan \8\ was published for comment in the Federal 
Register on November 7, 2014,\9\ and approved by the Commission, as 
modified, on May 6, 2015.\10\
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    \5\ 15 U.S.C. 78k-1.
    \6\ See Letter from Brendon J. Weiss, Vice President, 
Intercontinental Exchange, Inc., to Secretary, Commission, dated 
August 25, 2014.
    \7\ See Securities Exchange Act Release No. 72460 (June 24, 
2014), 79 FR 36840 (June 30, 2014).
    \8\ Unless otherwise specified, capitalized terms used in this 
rule filing are based on the defined terms of the Plan.
    \9\ See Securities and Exchange Act Release No. 73511 (November 
3, 2014), 79 FR 66423 (File No. 4-657) (Tick Plan Filing).
    \10\ See Tick Plan Approval Order, supra note 4. See also 
Securities Exchange Act Release No. 77277 (March 3, 2016), 81 FR 
12162 (March 8, 2016) (File No. 4-657), which amended the Plan to 
add National Stock Exchange, Inc. as a Participant.
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    The Plan is designed to allow the Commission, market participants, 
and the public to study and assess the impact of increment conventions 
on the liquidity and trading of the common stocks of small 
capitalization companies. The Commission plans to use the Tick Size 
Pilot Program to assess whether wider tick sizes enhance the market 
quality of Pilot Securities for the benefit of issuers and investors. 
Each Participant is required to comply with, and to enforce compliance 
by its members, as applicable, with the provisions of the Plan.
    On October 9, 2015, the Operating Committee approved the Exchange's 
proposed rules as model Participant rules that would require compliance 
by a Participant's members with the provisions of the Plan, as 
applicable, and would establish written policies and procedures 
reasonably designed to comply with applicable quoting and trading 
requirements specified in the Plan.\11\ As described more fully below, 
the proposed rules would require members to comply with the Plan and 
provide for the widening of quoting and trading increments for Pilot 
Securities, consistent with the Plan.
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    \11\ The Operating Committee is required under Section III(C)(2) 
of the Plan to ``monitor the procedures established pursuant to the 
Plan and advise Participants with respect to any deficiencies, 
problems, or recommendations as the Operating Committee may deem 
appropriate.'' The Operating Committee is also required to 
``establish specifications and procedures for the implementation and 
operation of the Plan that are consistent with the provisions of the 
Plan.''
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    The Plan will include stocks of companies with $3 billion or less 
in market capitalization, an average daily trading volume of one 
million shares or less, and a volume weighted average price of at least 
$2.00 for every trading day. The Plan will consist of a control

[[Page 64567]]

group of approximately 1,400 Pilot Securities and three test groups 
with 400 Pilot Securities in each selected by a stratified 
sampling.\12\ During the pilot, Pilot Securities in the control group 
will be quoted at the current tick size increment of $0.01 per share 
and will trade at the currently permitted increments. Pilot Securities 
in the first test group (``Test Group One'') will be quoted in $0.05 
minimum increments but will continue to trade at any price increment 
that is currently permitted.\13\ Pilot Securities in the second test 
group (``Test Group Two'') will be quoted in $0.05 minimum increments 
and will trade at $0.05 minimum increments subject to a midpoint 
exception, a retail investor exception, and a negotiated trade 
exception.\14\ Pilot Securities in the third test group (``Test Group 
Three'') will be subject to the same terms as Test Group Two and also 
will be subject to the ``Trade-at'' requirement to prevent price 
matching by a person not displaying at a price of a Trading Center's 
``Best Protected Bid'' or ``Best Protected Offer,'' unless an 
enumerated exception applies.\15\ In addition to the exceptions 
provided under Test Group Two, an exception for Block Size orders and 
exceptions that closely resemble those under Rule 611 of Regulation NMS 
\16\ will apply to the Trade-at requirement.
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    \12\ See Section V of the Plan for identification of Pilot 
Securities, including criteria for selection and grouping.
    \13\ See Section VI(B) of the Plan. Pilot Securities in Test 
Group One will be subject to a midpoint exception and a retail 
investor exception.
    \14\ See Section VI(C) of the Plan.
    \15\ See Section VI(D) of the Plan.
    \16\ 17 CFR 242.611.
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    The Plan also contains requirements for the collection and 
transmission of data to the Commission and the public. A variety of 
data generated during the Plan will be released publicly on an 
aggregated basis to assist in analyzing the impact of wider tick sizes 
on smaller capitalization stocks.\17\
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    \17\ See Section VII of the Plan.
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    As noted above, the Plan requires the Exchange to establish, 
maintain, and enforce written policies and procedures that are 
reasonably designed to comply with the applicable quoting and trading 
requirements specified in the Plan. Accordingly, the Exchange adopted 
paragraph (c) of Rule 4770 to require members to comply with the 
quoting and trading provisions of the Plan. The Exchange also adopted 
paragraph (b) of Rule 4770 to require members to comply with the data 
collection provisions under Appendix B and C of the Plan.\18\ The 
Exchange is proposing to adopt paragraph (d) of Rule 4770 to describe 
the changes to System functionality necessary to implement the Plan and 
to amend certain rules under Rule 4770. As discussed below, certain of 
these proposed changes are intended to reduce risk in the System by 
eliminating unnecessary complexity or by eliminating functionality that 
would serve no purpose or meaningful benefit to the market. The 
Exchange believes that all of the proposed changes are designed to 
directly comply with the Plan and to assist the Exchange in meeting its 
regulatory obligations thereunder.
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    \18\ See Securities Exchange Act Release No. 72460 (June 24, 
2014), 79 FR 36840 (June 30, 2014).
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Proposed System Changes
    Proposed paragraph (d) of Rule 4770 would set forth the Exchange's 
specific procedures for handling, executing, repricing, and displaying 
of certain Order Types \19\ and Order Attributes \20\ applicable to 
Pilot Securities. Unless otherwise indicated, paragraph (d) of Rule 
4770 would apply to Order Types and Order Attributes in Pilot 
Securities in Test Groups One, Two, and Three and not to Pilot 
Securities included in the Control Group. The Exchange is proposing to 
adopt new Rule 4770(d)(1) to make it clear that it will not accept an 
Order in a Test Group Pilot Security that is not entered in the Pilot's 
minimum price increment of $0.05, applied to all Order Types that 
require a price and do not otherwise qualify for an exemption to the 
$0.05 minimum price increment required by the Plan. The Exchange is 
also clarifying under new Rule 4770(d)(1) that it will use the $0.05 
minimum price increment when the System reprices an Order, including 
when it rounds a derived price up or down. Although not required by the 
Plan nor prohibited, the Exchange has determined to apply the Trade-at 
restrictions during the Pre-Market Hours and Post-Market Hours trading 
sessions,\21\ in addition to the regular Market Hours trading 
session.\22\ The Exchange believes that applying the same process and 
requirements in Test Group Three Pilot Securities will simplify 
processing of Orders by the Exchange, avoiding market participant 
confusion that may be caused by applying only some of the Plan 
requirements and not others during the different market sessions.
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    \19\ An ``Order Type'' is a standardized set of instructions 
associated with an Order that define how it will behave with respect 
to pricing, execution, and/or posting to the Exchange Book when 
submitted to the System. See Rule 4701(e).
    \20\ An ``Order Attribute'' is a further set of variable 
instructions that may be associated with an Order to further define 
how it will behave with respect to pricing, execution, and/or 
posting to the Exchange Book when submitted to the System. The 
available Order Types and Order Attributes, and the Order Attributes 
that may be associated with particular Order Types, are described in 
Rules 4702 and 4703. One or more Order Attributes may be assigned to 
a single Order; provided, however, that if the use of multiple Order 
Attributes would provide contradictory instructions to an Order, the 
System will reject the Order or remove non-conforming Order 
Attributes. Id.
    \21\ As used in this proposal, the term ``Market Hours'' means 
the period of time beginning at 9:30 a.m. ET and ending at 4:00 p.m. 
ET (or such earlier time as may be designated by the Exchange on a 
day when the Exchange closes early). The term ``Pre-Market Hours'' 
means the period of time beginning at 7:00 a.m. ET and ending 
immediately prior to the commencement of Market Hours. The term 
``Post-Market Hours'' means the period of time beginning immediately 
after the end of Market Hours and ending at 7:00 p.m. ET. See Rule 
4701(g).
    \22\ Regular Trading Hours is defined by the Plan as having the 
same meaning as Rule 600(b)(64) of Regulation NMS.
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    In determining the scope of the proposed changes to implement the 
Plan, the Exchange carefully weighed the impact on the Plan, System 
complexity, and the usage of such Order Types and Order Attributes in 
Pilot Securities. The Exchange found that it can support nearly all 
Order Type and Order Attribute functionality; \23\ however, as 
described in detail below, it must amend such functionality in a 
handful of cases to address the requirements of the Plan. Thus, in 
addition to the changes of broad application discussed above, the 
Exchange is proposing the following select and discrete amendments to 
the operation of the following Order Types and Order Attributes, as 
discussed in detail below: (i) Price to Comply Orders; \24\ (ii) Non-
Displayed Orders; \25\ (iii) Post-Only Orders; \26\ (iv) Retail Price 
Improving Order; \27\ (v) Retail Order; \28\ (vi) Market Maker Peg 
Orders; \29\ (vii) Midpoint Pegging; \30\ (viii) Reserve Size; \31\ and 
(ix) Good-till-Cancelled.\32\
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    \23\ As discussed below, the Exchange cannot support 
Supplemental Orders in Test Group Three Pilot Securities.
    \24\ See Rule 4702(b)(1).
    \25\ See Rule 4702(b)(3).
    \26\ See Rule 4702(b)(4).
    \27\ See Rule 4702(b)(5).
    \28\ See Rule 4702(b)(6).
    \29\ See Rule 4702(b)(7).
    \30\ See Rule 4703(d).
    \31\ See Rule 4703(h).
    \32\ See Rule 4703(a)(3).
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    The Exchange is also proposing to amend existing rules under Rule 
4770 to clarify the operation of the Plan on the Exchange. 
Specifically, the Exchange is proposing to amend Rule 
4770(a)(1)(D)(ii), which defines the term ``Trade-at Intermarket Sweep 
Order,'' and Rule 4770(c)(3)(D)(iii)j, which describes an exception to 
the Trade-at prohibition of the Plan involving the use

[[Page 64568]]

of Trade-at Intermarket Sweep Orders, as described in detail below.
    Lastly, the Exchange is proposing to adopt new Commentary .12 to 
Rule 4770 to describe what qualifies as a Block Order for purposes of 
the Trade-at exception under Rule 4770(c)(3)(D)(iii).
Price To Comply Orders
    The Price to Comply Order is an Order Type designed to comply with 
Rule 610(d) under Regulation NMS by having its price and display 
characteristics adjusted to avoid the display of quotations that lock 
or cross any Protected Quotation in a System Security during Market 
Hours. The Price to Comply Order is also designed to provide potential 
price improvement. The System does not have a ``plain vanilla'' limit 
order that attempts to execute at its limit price and is then posted at 
its price or rejected if it cannot be posted; rather, the Price to 
Comply Order, with its price and display adjustment features, is one of 
the primary Order Types used by Participants to access and display 
liquidity in the System. The price and display adjustment features of 
the Order Type enhance efficiency and investor protection by offering 
an Order Type that first attempts to access available liquidity and 
then to post the remainder of the Order at prices that are designed to 
maximize their opportunities for execution.
    When a Price to Comply Order is entered by a market participant, 
the Price to Comply Order will be executed against previously posted 
Orders on the Exchange Book that are priced equal to or better than the 
price of the Price to Comply Order, up to the full amount of such 
previously posted Orders, unless such executions would trade through a 
Protected Quotation. Any portion of the Order that cannot be executed 
in this manner will be posted on the Exchange Book (and/or routed if it 
has been designated as Routable).\33\
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    \33\ See Rules 4703(f) and 4758.
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    During Market Hours, the price at which a Price to Comply Order is 
posted is determined in the following manner. If the entered limit 
price of the Price to Comply Order would lock or cross a Protected 
Quotation and the Price to Comply Order could not execute against an 
Order on the Exchange Book at a price equal to or better than the price 
of the Protected Quotation, the Price to Comply Order will be displayed 
on the Exchange Book at a price one minimum price increment below the 
current Best Offer (for a Price to Comply Order to buy) or above the 
current Best Bid (for a Price to Comply Order to sell) but will also be 
ranked on the Exchange Book with a non-displayed price equal to the 
current Best Offer (for a Price to Comply Order to buy) or to the 
current Best Bid (for a Price to Comply Order to sell). The posted 
Order will then be available for execution at its non-displayed price, 
thus providing opportunities for price improvement to incoming Orders.
    A Price to Comply Order in a Test Group Pilot Security will operate 
as described in Rule 4702(b)(1) except the Exchange is proposing to 
change how it handles a Price to Comply Order in a Test Group Three 
Pilot Security to ensure that it conforms with the Trade-at prohibition 
of the Plan. First, the Exchange is proposing that if the Exchange 
received a Price to Comply Order for a Test Group Three Pilot Security 
that locks or crosses a Protected Quotation of another market center, 
is partially executed upon entry, and the remainder of the Order would 
lock a Protected Quotation of another market center, the unexecuted 
portion of the Order will be cancelled. Second, if the limit price of a 
buy (sell) Price to Comply Order in a Test Group Three Pilot Security 
would lock or cross a Protected Quotation of another market center, and 
is not executable against any previously posted Orders on the Exchange 
Book, the Order will display at one minimum price increment below 
(above) the Protected Quotation, and the order will be added to the 
Exchange Book at the midpoint of the order's displayed price and the 
National Best Offer (National Best Bid).\34\ Thus, the Order would 
avoid possible execution at a prohibited price, but potentially receive 
price improvement and be displayed at a permissible price away from the 
Protected Quotation. Due to the Trade-at requirement of Test Group 
Three Pilot Securities, the Exchange is also proposing to adjust such 
Orders repeatedly towards the limit price of the order in accordance 
with changes to the NBBO until such time as the Price to Comply Order 
is able to be ranked and displayed at its original entered limit 
price.\35\
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    \34\ When the market is locked, the price and display logic for 
Orders that would lock or cross an away market is slightly 
different. Display Orders at the locking price will post at the 
locking price if there are other Orders already posted on BX at that 
price (i.e., BX is part of the locked market). Otherwise, the order 
will post at one minimum price increment away from the locking 
price. Non-Displayed orders received when the market is locked will 
always post one minimum price increment away from the locking price.
    \35\ The repricing of Price to Comply and Post-Only Orders in 
Test Group Three Pilot Securities described in this rule filing are 
not subject to the limitations on Order updates, as described in 
Rule 4756(a)(4).
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Non-Displayed Orders
    A Non-Displayed Order is an Order Type that is not displayed to 
other Participants, but nevertheless remains available for potential 
execution against incoming Orders until executed in full or cancelled. 
In addition to the Non-Displayed Order Type, there are other Order 
Types that are not displayed on the Exchange Book. Thus, ``Non-
Display'' is both a specific Order Type and an Order Attribute of 
certain other Order Types.
    When a Non-Displayed Order is entered, the Non-Displayed Order will 
be executed against previously posted Orders on the Exchange Book that 
are priced equal to or better than the price of the Non-Displayed 
Order, up to the full amount of such previously posted Orders, unless 
such executions would trade through a Protected Quotation. Any portion 
of the Non-Displayed Order that cannot be executed in this manner will 
be posted to the Exchange Book (unless the Non-Displayed Order has a 
Time-in-Force of IOC) and/or routed if it has been designated as 
Routable. During Market Hours, if the entered limit price of the Non-
Displayed Order would lock a Protected Quotation, the Non-Displayed 
Order will be placed on the Exchange Book at the locking price. If the 
Non-Displayed Order would cross a Protected Quotation, the Non-
Displayed Order will be repriced to a price that would lock the 
Protected Quotation and will be placed on the Exchange Book at that 
price.
    To avoid possible execution of a Non-Displayed Order at the 
Protected Quote on the Exchange in a Test Group Three Pilot Security, 
the Exchange is proposing to not allow execution of a Non-Displayed 
Order in a Test Group Three Pilot Security at the price of a Protected 
Quotation unless the incoming Order otherwise qualifies for an 
exception to the Trade-at prohibition. If the limit price of a buy 
(sell) Non-Displayed Order in a Test Group Three security would lock or 
cross a Protected Quotation of another Market Center, the Order will be 
added to the Exchange Book at either one minimum price increment 
($0.05) below (above) the National Best Offer (National Best Bid) or at 
the midpoint of the NBBO, whichever is higher (lower). Thus the Order 
would avoid possible execution at a prohibited price, but potentially 
receive price improvement or post at a permissible price away from the 
Protected Quotation. After posting and if conditions allow, such an 
Order will be adjusted repeatedly in accordance

[[Page 64569]]

with changes to the NBBO up (down) to the Order's limit price.\36\
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    \36\ The repricing of Non-Displayed Orders in Test Group Three 
Pilot Securities in accordance with changes to the NBBO up (down) to 
the Order's limit price are not subject to the limitations on Order 
updates, as described in Rule 4756(a)(4).
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    The Exchange is proposing a change to how a Non-Displayed Order in 
a Test Group Three Pilot Security would be treated to comply with the 
Trade-at requirement. Currently, for a Non-Displayed Order that is 
entered through a RASH or FIX port, if, after being posted to the 
Exchange Book, the NBBO changes so that the Non-Displayed Order would 
cross a Protected Quotation, the Non-Displayed Order will be repriced 
at a price that would lock the new NBBO and receive a new timestamp. 
For a Non-Displayed Order entered through OUCH or FLITE, if, after the 
Non-Displayed Order is posted to the Exchange Book, the NBBO changes so 
that the Non-Displayed Order would cross a Protected Quotation, the 
Non-Displayed Order will be cancelled back to the Participant. The 
Exchange is proposing to trigger repricing of a Non-Displayed Order in 
a Test Group Three Pilot Security if the Order would lock or cross a 
Protected Quotation by posting the Order to the Exchange Book at either 
one minimum price increment below (above) the National Best Offer 
(National Best Bid) or at the midpoint of the NBBO, whichever is higher 
(lower). Thus, the Order is repriced to avoid execution at the 
Protected Quotation, but may also receive price improvement. If market 
conditions allow, a Non-Displayed Order in a Test Group Three Pilot 
Security will be adjusted repeatedly in accordance with changes to the 
NBBO up (down) to the Order's limit price. For a Non-Displayed Order in 
a Test Group Three Pilot Security entered through RASH or FIX, if after 
being posted to the Exchange Book, the NBBO changes so that the Non-
Displayed Order would no longer be executable at its posted price due 
to the requirements of Regulation NMS or the Plan, the Non-Displayed 
Order will be repriced to a price that is at either one minimum 
increment below (above) the National Best Offer (National Best Bid) or 
at the midpoint of the NBBO, whichever is higher (lower) and will 
receive a new timestamp. For a Non-Displayed Order in a Test Group 
Three Pilot Security entered through OUCH or FLITE, if after such a 
Non-Displayed Order is posted to the Exchange Book, if the NBBO changes 
so that the Non-Displayed Order would no longer be executable at its 
posted price due to the requirements of Regulation NMS or the Plan, the 
Non-Displayed Order will be cancelled back to the Participant. A posted 
order is no longer eligible to execute at its posted price under three 
distinct scenarios. First, in Test Group Pilot Securities, if the NBBO 
moves such that the posted Order's price crosses a protected quotation, 
it is no longer executable due to the trade through prohibition under 
Regulation NMS (this is current functionality). Second, in Test Group 
Three Pilot Securities, if a Non-Displayed Order is posted at the 
midpoint and the NBBO moves such that its posted price is no longer a 
valid increment, the Order will be adjusted as described above. For 
example, if the NBB is $10.00 and the NBO is $10.05 in a Test Group 
Three Pilot Security, and a Non-Displayed Order to buy 100 shares of 
the security with a limit price of $10.05 is received by the System, 
the Order would be repriced and posted at $10.025 (the midpoint of the 
NBBO) to avoid locking the market. If subsequently the NBB changes to 
$9.95 and the NBO to $10.05, then the Order would no longer be eligible 
for the midpoint exception to the Plan's minimum price increment 
requirement and therefore would be adjusted and/or cancelled as 
described above. Third, in Test Group Three Pilot Securities, if the 
NBBO moves such that the Order's posted price locks a protected 
quotation, it is no longer executable due to the Trade-at prohibition 
under the Plan and would be adjusted and/or cancelled as described 
above.
Post-Only Orders
    A Post-Only Order is an Order Type designed to have its price 
adjusted as needed to post to the Exchange Book in compliance with Rule 
610(d) under Regulation NMS \37\ by avoiding the display of quotations 
that lock or cross any Protected Quotation in a System Security during 
Market Hours, or to execute against locking or crossing quotations in 
circumstances where economically beneficial to the Participant entering 
the Post-Only Order.
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    \37\ 17 CFR 242.610(d).
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    Post-Only Orders in Test Group Pilot Securities will operate as 
described under Rule 4702(b)(4), however, the Exchange is proposing 
changes to the handling of a Post-Only Order in Test Group Three Pilot 
Securities to ensure that the Trade-at prohibition is enforced. 
Specifically, the Exchange is proposing to modify how a Post-Only Order 
in a Test Group Three Pilot Security is handled if it locks or crosses 
the Protected Quotation of another market center. If the limit price of 
a buy (sell) Post-Only Order in a Test Group Three Pilot Security would 
lock or cross a Protected Quotation of another market center, the Order 
will display at one minimum price increment below (above) the Protected 
Quotation, and the Order will be added to the Exchange Book at the 
midpoint of the Order's displayed price and the National Best Offer 
(National Best Bid). Thus the Order would avoid possible execution at a 
prohibited price, but potentially receive price improvement or post at 
a permissible price away from the Protected Quotation. Thereafter and 
if market conditions allow, the Post-Only Order will be adjusted 
repeatedly towards its limit price in accordance with changes to the 
NBBO or the best price on the Exchange Book, as applicable, until such 
time as the Post-Only Order is able to be ranked and displayed at its 
original entered limit price.\38\
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    \38\ As discussed above, repricing of Price to Comply and Post-
Only Orders in Test Group Three Pilot Securities described in this 
rule filing are not subject to the limitations on Order updates, as 
described in Rule 4756(a)(4). Supra note 35.
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Retail Price Improving Order
    A Retail Price Improving Order or ``RPI Order'' is an Order Type 
with a Non-Display Order Attribute that is held on the Exchange Book in 
order to provide liquidity at a price at least $0.001 better than the 
NBBO through a special execution process described in Rule 4780. A 
Retail Price Improving Order may be entered in price increments of 
$0.001. RPI Orders collectively may be referred to as ``RPI Interest.'' 
An RPI Order will be posted to the Exchange Book regardless of its 
price, but an RPI Order may execute only against a Retail Order, and 
only if its price is at least $0.001 better than the NBBO.
    A Retail Price Improving Order in a Test Group Pilot Security will 
operate as described in Rule 4702(b)(5) except as provided under this 
paragraph. A Retail Price Improving Order in a Test Group Two or Three 
Pilot Security must be entered in a minimum price increment of $0.005 
and will only execute against Retail Orders if its price is at least 
$0.005 better than the NBBO.
Retail Order
    A Retail Order is an Order Type with a Non-Display Order Attribute 
submitted to the Exchange by a Retail Member Organization (as defined 
in Rule 4780). A Retail Order must be an agency Order, or riskless 
principal Order that satisfies the criteria of FINRA

[[Page 64570]]

Rule 5320.03. The Retail Order must reflect trading interest of a 
natural person with no change made to the terms of the underlying order 
of the natural person with respect to price (except in the case of a 
market order that is changed to a marketable limit order) or side of 
market and that does not originate from a trading algorithm or any 
other computerized methodology. A Retail Order may be designated as 
either a Type-1 Retail Order or a Type-2 Retail Order. Upon entry, a 
Type-1 Retail Order will attempt to execute against RPI Orders and any 
other Orders on the Exchange Book with a price that is (i) equal to or 
better than the price of the Type-1 Retail Order and (ii) at least 
$0.001 better than the NBBO. A Type-1 Retail Order is not Routable and 
will thereafter be cancelled.
    A Retail Order in a Test Group Pilot Security will operate as 
described in Rule 4702(b)(6) except in the following two circumstances. 
First, a Retail Order in a Test Group One Pilot Security must be 
entered with a limit price in a minimum price increment ($0.05), to 
comply with the Plan's minimum price increment requirement, and may 
execute in an increment other than a minimum price increment if the 
Order is provided with price improvement that is at least $0.001 better 
than the NBBO, which is the case today under the Retail Price 
Improvement Program. Second, a Retail Order in a Test Group Two or 
Three Pilot Security must be entered in a minimum price increment 
($0.05), to comply with the Plan's minimum price increment requirement, 
and may execute in an increment other than a minimum price increment if 
the Order is provided with price improvement that is at least $0.005 
better than the NBB or NBO. Test Group Two and Three Pilot Securities 
are subject to the Plan's minimum price increment requirement for both 
quoting and trading, however, Retail Investor Orders may be provided 
with price improvement that is at least $0.005 better than the NBBO or 
NBO.
Midpoint Peg Post-Only Orders
    A ``Midpoint Peg Post-Only Order'' is an Order Type with a Non-
Display Order Attribute that is priced at the midpoint between the NBBO 
and that will execute upon entry against locking or crossing quotes 
only in circumstances where economically beneficial to the party 
entering the Order. Because the Order is priced at the midpoint, it can 
provide price improvement to incoming Orders when it is executed after 
posting to the Exchange Book. The Midpoint Peg Post-Only Order is 
available during Market Hours only.
    The Plan allows Orders in Test Group Pilot Securities priced to 
execute at the midpoint of the NBBO to be ranked and accepted in 
increments less than the Plan's minimum price increment of $0.05. Thus, 
the Exchange is proposing to make it clear that Midpoint Peg Post-Only 
Orders in any of the Test Group Pilot Securities may execute in an 
increment other than the minimum price increment of the Plan.
Market Maker Peg Orders
    A ``Market Maker Peg Order'' is an Order Type designed to allow a 
Market Maker to maintain a continuous two-sided quotation at a price 
that is compliant with the quotation requirements for Market Makers set 
forth in Rule 4613(a)(2).\39\ The price of the Market Maker Peg Order 
is set with reference to a ``Reference Price'' in order to keep the 
price of the Market Maker Peg Order within a bounded price range. A 
Market Maker Peg Order may be entered through RASH or FIX only. A 
Market Maker Peg Order must be entered with a limit price beyond which 
the Order may not be priced. The Reference Price for a Market Maker Peg 
Order to buy (sell) is the then-current Best Bid (Best Offer) 
(including BX), or if no such Best Bid or Best Offer, the most recent 
reported last-sale eligible trade from the responsible single plan 
processor for that day, or if none, the previous closing price of the 
security as adjusted to reflect any corporate actions (e.g., dividends 
or stock splits) in the security.
---------------------------------------------------------------------------

    \39\ As with other Order Types, the Market Maker Peg Order must 
be an Order either to buy or to sell; thus, at least two Orders 
would be required to maintain a two-sided quotation.
---------------------------------------------------------------------------

    Upon entry, the price of a Market Maker Peg Order to buy (sell) is 
automatically set by the System at the Designated Percentage (as 
defined in Rule 4613) away from the Reference Price in order to comply 
with the quotation requirements for Market Makers set forth in Rule 
4613(a)(2). For example, if the Best Bid is $10 and the Designated 
Percentage for the security is 8%, the price of a Market Marker Peg 
Order to buy would be $9.20. If the limit price of the Order is not 
within the Designated Percentage, the Order will be sent back to the 
Participant.
    Once a Market Maker Peg Order has posted to the Exchange Book, its 
price is adjusted if needed as the Reference Price changes. 
Specifically, if as a result of a change to the Reference Price, the 
difference between the price of the Market Maker Peg Order and the 
Reference Price reaches the Defined Limit (as defined in Rule 4613), 
the price of a Market Maker Peg Order to buy (sell) will be adjusted to 
the Designated Percentage away from the Reference Price. In the 
foregoing example, if the Defined Limit is 9.5% and the Best Bid 
increased to $10.17, such that the price of the Market Maker Peg Order 
would be more than 9.5% away, the Order will be repriced to $9.35, or 
8% away from the Best Bid. Note that calculated prices of less than the 
minimum increment will be rounded in a manner that ensures that the 
posted price will be set at a level that complies with the percentages 
stipulated by this rule. If the limit price of the Order is outside the 
Defined Limit, the Order will be sent back to the Participant.
    Similarly, if as a result of a change to the Reference Price, the 
price of a Market Maker Peg Order to buy (sell) is within one minimum 
price variation more than (less than) a price that is 4% less than 
(more than) the Reference Price, rounded up (down), then the price of 
the Market Maker Peg Order to buy (sell) will be adjusted to the 
Designated Percentage away from the Reference Price. For example, if 
the Best Bid is $10 and the Designated Percentage for the security is 
8%, the price of a Market Marker Peg Order to buy would initially be 
$9.20. If the Best Bid then moved to $9.57, such that the price of the 
Market Maker Peg Order would be a minimum of $0.01 more than a price 
that is 4% less than the Best Bid, rounded up (i.e. $9.57-($9.57 x 
0.04) = $9.1872, rounding up to $9.19), the Order will be repriced to 
$8.81, or 8% away from the Best Bid.
    A Market Maker may enter a Market Maker Peg Order with a more 
aggressive offset than the Designated Percentage, but such an offset 
will be expressed as a price difference from the Reference Price. Such 
a Market Maker Peg Order will be repriced in the same manner as a Price 
to Display Order with Attribution and Primary Pegging. As a result, the 
price of the Order will be adjusted whenever the price to which the 
Order is pegged is changed.
    A new timestamp is created for a Market Maker Peg Order each time 
that its price is adjusted. In the absence of a Reference Price, a 
Market Maker Peg Order will be cancelled or rejected. If, after entry, 
a Market Maker Peg Order is priced based on a Reference Price other 
than the NBBO and such Market Maker Peg Order is established as the 
Best Bid or Best Offer, the Market Maker Peg Order will not be 
subsequently adjusted in accordance with this rule until a new 
Reference Price is established.
    In light of the minimum price increment requirement of the Plan, 
the

[[Page 64571]]

Exchange is proposing to require the displayed price of a Market Maker 
Peg Order in a Test Group One, Two or Three Pilot Security to be 
rounded up (down) to the nearest minimum price increment for bids 
(offers), if it would otherwise display at an increment smaller than 
minimum price increment. For example, if the NBB is $10.05 and the NBO 
is $10.15, and the Designated Percentage is 28%, the displayed price of 
a Market Maker Peg Order to buy 100 shares of a Test Group Pilot 
Security would be $7.25 (i.e. $10.05-($10.05 x 0.28) = $7.236, rounded 
up to $7.25). Using the same market, but with a Market Maker Peg Order 
to sell 100 shares, the Order would be displayed at $12.95 (i.e. $10.15 
+ ($10.15 x 0.28) = $12.992, rounded down to $12.95). Thus, the 
rounding done to derive the price of the Market Maker Peg Order in a 
Test Group Pilot Security will conform to the minimum price increment 
requirement of the Plan.
    As a consequence of conforming the Market Maker Peg Order to the 
minimum price increment of the Plan, a Market Maker Peg Order may have 
a higher likelihood of execution, particularly in lower priced 
securities. For example, if a member entered a Market Maker Peg Order 
to buy 100 shares of a Test Group Pilot Security with a limit price of 
$1.70 when the NBB is $1.60 and the NBO is $1.65, if the security is a 
Tier 2 security, the Order would be pegged at 28% from the NBB, which 
is $1.20 ($1.60 x .72 = $1.152 which rounds up to $1.20). If the market 
subsequently moves downward to a NBB of $1.20 and NBO of $1.30, the buy 
Market Maker Peg Order would not reprice because it had not reached one 
minimum price increment more than a price that is 4% less than the NBB 
(i.e., $1.20 x .96 = $1.152, which rounds up to $1.20 and which is not 
greater than the NBB + $0.05). Thus, the Market Maker Peg Order may 
receive an execution prior to reaching a point at which it would 
reprice. This increased likelihood of execution of Market Maker Peg 
Orders would occur in any Order in a Test Group Pilot Security with a 
price less than $1.25.
Midpoint Pegging
    Pegging is an Order Attribute that allows an Order to have its 
price automatically set with reference to the NBBO. An Order with a 
Pegging Order Attribute may be referred to as a ``Pegged Order.'' 
Midpoint Pegging means Pegging with reference to the midpoint between 
the Inside Bid and the Inside Offer (the ``Midpoint''). Thus, if the 
Inside Bid was $11 and the Inside Offer was $11.06, an Order with 
Midpoint Pegging would be priced at $11.03. An Order with Midpoint 
Pegging is not displayed. An Order with Midpoint Pegging may be 
executed in sub-pennies if necessary to obtain a midpoint price.
    As discussed above, the Plan allows Orders in Test Group Pilot 
Securities priced to execute at the midpoint of the NBBO to be ranked 
and accepted in increments less than the Plan's minimum price increment 
of $0.05. Thus, the Exchange is proposing to make it clear that an 
Order in a Test Group Pilot Security with Midpoint Pegging may execute 
in an increment other than the minimum price increment of the Plan.
Reserve Size
    Reserve Size is an Order Attribute that permits a Participant to 
stipulate that an Order Type that is displayed may have its displayed 
size replenished from additional non-displayed size. An Order with 
Reserve Size may be referred to as a ``Reserve Order.'' At the time of 
entry, the displayed size of such an Order selected by the Participant 
must be one or more normal units of trading; an Order with a displayed 
size of a mixed lot will be rounded down to the nearest round lot. A 
Reserve Order with displayed size of an odd lot will be accepted but 
with the full size of the Order displayed. Reserve Size is not 
available for Orders that are not displayed; provided, however, that if 
a Participant enters Reserve Size for a Non-Displayed Order with a 
Time-in-Force of IOC, the full size of the Order, including Reserve 
Size, will be processed as a Non-Displayed Order.
    Whenever a Participant enters an Order with Reserve Size, the 
System will process the Order as two Orders: A Displayed Order (with 
the characteristics of its selected Order Type) and a Non-Displayed 
Order. Upon entry, the full size of each such Order will be processed 
for potential execution in accordance with the parameters applicable to 
the Order Type. For example, a Participant might enter a Price to 
Display Order with 200 shares displayed and an additional 3,000 shares 
non-displayed. Upon entry, the Order would attempt to execute against 
available liquidity on the Exchange Book, up to 3,200 shares. 
Thereafter, unexecuted portions of the Order would post to the Exchange 
Book as a Price to Display Order and a Non-Displayed Order; provided, 
however, that if the remaining total size is less than the display size 
stipulated by the Participant, the Displayed Order will post without 
Reserve Size. Thus, if 3,050 shares executed upon entry, the Price to 
Display Order would post with a size of 150 shares and no Reserve Size.
    When an Order with Reserve Size is posted, if there is an execution 
against the Displayed Order that causes its size to decrease below a 
normal unit of trading, another Displayed Order will be entered at the 
level stipulated by the Participant while the size of the Non-Displayed 
Order will be reduced by the same amount. Any remaining size of the 
original Displayed Order will remain on the Exchange Book. The new 
Displayed Order will receive a new timestamp, but the Non-Displayed 
Order (and the original Displayed Order, if any) will not; although the 
new Displayed Order will be processed by the System as a new Order in 
most respects at that time, if it was designated as Routable, the 
System will not automatically route it upon reentry. For example, if a 
Price to Comply Order with Reserve Size posted with a Displayed Size of 
200 shares, along with a Non-Displayed Order of 3,000 and the 150 
shares of the Displayed Order was executed, the remaining 50 shares of 
the original Price to Comply Order would remain, a new Price to Comply 
Order would post with a size of 200 shares and a new timestamp, and the 
Non-Displayed Order would be decremented to 2,800 shares. Because a new 
Displayed Order is entered and the Non-Displayed Order is not 
reentered, there are circumstances in which the Displayed Order may 
receive a different price than the Non-Displayed Order. For example, 
if, upon reentry, a Price to Display Order would lock or cross a newly 
posted Protected Quotation, the price of the Order will be adjusted but 
its associated Non-Displayed Order would not be adjusted. In that 
circumstance, it would be possible for the better priced Non-Displayed 
Order to execute prior to the Price to Display Order.
    When the Displayed Order with Reserve Size is executed and 
replenished, applicable market data disseminated by the Exchange will 
show the execution and decrementation of the Displayed Order, followed 
by replenishment of the Displayed Order.
    In all cases, if the remaining size of the Non-Displayed Order is 
less than the fixed or random amount stipulated by the Participant, the 
full remaining size of the Non-Displayed Order will be displayed and 
the Non-Displayed Order will be removed.
    The Exchange is proposing to not allow a resting order in a Test 
Group Three Pilot Security with a Reserve Size to execute the non-
displayed Reserve Size at the price of a Protected Quotation of another 
market center unless the incoming order otherwise

[[Page 64572]]

qualifies for an exception to the Trade-at prohibition provided under 
Rule 4770(c)(3)(D). If the Exchange received a Reserve Order for a Test 
Group Three Pilot Security that locks or crosses a Protected Quotation 
of another market center, is partially executed upon entry, and the 
remainder of the Order would lock a Protected Quotation of another 
market center, the unexecuted portion of the Order will be cancelled. 
If the limit price of a buy (sell) Reserve Order in a Test Group Three 
Pilot Security that is not attributable would lock or cross a Protected 
Quotation of another market center, and is not executable against any 
previously posted Orders on the Exchange Book, the displayed portion of 
the Order will display at one minimum price increment below (above) the 
Protected Quotation, and the Order will be added to the Exchange Book 
at the midpoint of the Order's displayed price and the National Best 
Offer (National Best Bid). Thus, the Order would avoid possible 
execution at a prohibited price, but potentially receive price 
improvement and be displayed at a permissible price away from the 
Protected Quotation. If the limit price of a buy (sell) Reserve Order 
in a Test Group Three Pilot Security that is attributable would lock or 
cross a Protected Quotation of another market center, and is not 
executable against any previously posted Orders on the Exchange Book, 
the displayed portion of the Order will be adjusted and displayed at 
one minimum price increment below (above) the Protected Quotation, and 
the non-displayed Reserve Size will be added to the Exchange Book at 
the midpoint of the Order's displayed price and the National Best Offer 
(National Best Bid). If after being posted to the Exchange Book, the 
NBBO changes so that the Reserve Order, if it is not attributable, 
would lock or cross a Protected Quotation, the displayed portion of the 
Reserve Order will display one minimum price increment below (above) 
the Protected Quotation, and the Order will be repriced to the midpoint 
of the Order's displayed price and the National Best Offer (National 
Best Bid).\40\ If after being posted to the Exchange Book, the NBBO 
changes so that the Reserve Order in a Test Group Three Pilot Security, 
if it is attributable, would no longer be executable at its posted 
price due to the requirements of Regulation NMS or the Plan, the 
displayed portion of the Reserve Order will be adjusted and display one 
minimum price increment below (above) the Protected Quotation, and the 
non-displayed Reserve Size will be repriced to the midpoint of the 
Order's displayed price and the National Best Offer (National Best 
Bid). Thus, the Order would continue to comply with the Trade-at 
requirement by avoiding potential execution at a prohibited price.
---------------------------------------------------------------------------

    \40\ Both a Price to Comply Order and a Price to Display Order 
with a Reserve Attribute would be repriced pursuant to Reserve Order 
process described in proposed Rule 4770(d)(9). A Price to Display 
Order is an Order Type designed to comply with Rule 610(d) under 
Regulation NMS by avoiding the display of quotations that lock or 
cross any Protected Quotation in a System Security during Market 
Hours, and are available solely to Participants that are Market 
Makers. See Rule 4702(b)(2).
---------------------------------------------------------------------------

Good-Till-Cancelled
    Good-till-Cancelled is a Time-in-Force Order Attribute that is 
designated to deactivate one year after entry. Under certain 
circumstances at the election of the member, an Order designated as 
Good-till-Cancelled must be adjusted to account for corporate actions 
related to a dividend, payment or distribution. Rule 4761(b) sets forth 
the circumstances and method by which an Order designated as Good-till-
Cancelled is adjusted. The Exchange is making it clear that an order in 
a Test Group Pilot Security with a Good-till-Cancelled Time-in-Force 
that is adjusted pursuant to Rule 4761(b) will be adjusted based on a 
$0.05 increment.
Rule 4770(a) and (c) Changes
    Rule 4770(a) provides definitions of terms used under the Rule. 
Rule 4770(a) defines the term ``Trade-at Intermarket Sweep Order'' as 
``a limit order for a Pilot Security that meets the following 
requirements: (i) When routed to a Trading Center, the limit order is 
identified as a Trade-at Intermarket Sweep Order; and (ii) 
Simultaneously with the routing of the limit order identified as a 
Trade-at Intermarket Sweep Order, one or more additional limit orders, 
as necessary, are routed to execute against the full size of any 
protected bid, in the case of a limit order to sell, or the full 
displayed size of any protected offer, in the case of a limit order to 
buy, for the Pilot Security with a price that is better than or equal 
to the limit price of the limit order identified as a Trade-at 
Intermarket Sweep Order. These additional routed orders also must be 
marked as Trade-at Intermarket Sweep Orders.'' Rule 
4770(c)(3)(D)(iii)j. provides an exception to the Trade-at prohibition, 
requiring that, to satisfy the exception, the order is executed by a 
Trading Center that simultaneously routed Trade-at Intermarket Sweep 
Orders or Intermarket Sweep Orders to execute against the full 
displayed size of the Protected Quotation that was traded at.
    The Exchange is proposing to amend paragraph (ii) of Rule 4770(a) 
and Rule 4770(c)(3)(D)(iii)j. to allow the Exchange to use Intermarket 
Sweep Orders in lieu of Trade-at Intermarket Sweep Orders, when it is 
in receipt of an Order from a member that would trade through a 
protected price on another market. An Intermarket Sweep Order or 
``ISO'' is an Order Attribute that allows the Order to be executed 
within the System by Participants at multiple price levels without 
respect to Protected Quotations of other market centers within the 
meaning of Rule 600(b) under Regulation NMS. ISOs are immediately 
executable within the System against Orders against which they are 
marketable.
    For purposes of the Exchange's satisfaction of the Trade-at 
Intermarket Sweep Order exception to the Trade-at prohibition of Test 
Group Three Pilot Securities, the ISO Order will operate functionally 
identically to the use of a Trade-at Intermarket Sweep Order. 
Intermarket Sweep Orders are sent by the exchange to execute against 
displayed size represented in away market centers' Protected Quotation 
and thus provide the same function as a Trade-at Intermarket Sweep 
Order because either order type would execute against the displayed 
portion of the away market centers' liquidity. The Exchange's routing 
broker is currently programmed to accept and route ISO Orders and 
adding an additional functionality to support routing of Trade-at 
Intermarket Sweep Orders would add complexity to the process with no 
functional benefit. Accordingly, the Exchange is proposing to use ISOs 
when routing Orders to satisfy the exception to the Trade-at 
prohibition.
New Commentary .12
    The Exchange is proposing to adopt a new Commentary .12 to Rule 
4770 to clarify what qualifies as a Block Order for purposes of the 
Block Size exception to the Trade-at prohibition. Rule 
4770(c)(3)(D)(iii)c. provides an exception to the Trade-at prohibition 
for an Order that is of Block Size at the time of origin and is not an 
aggregation of non-block Orders, broken into Orders smaller than Block 
Size prior to submitting the Order to a Trading Center for execution, 
or is executed on multiple Trading Centers. The Plan defines Block Size 
as an Order of at least 5,000 shares or for a quantity of stock having 
a market value of at least $100,000. The Exchange has assessed the 
technological complexity and effort required to change the System to

[[Page 64573]]

identify the market value of a quantity of stock and found that it 
would be exceedingly burdensome and complex without any clear benefit 
to the Exchange, its members, and the marketplace as a whole. As a 
consequence, the Exchange is proposing to only allow Orders that have a 
minimum size of 5,000 shares to qualify as Block Size for purposes of 
the exception provided by Rule 4770(c)(3)(D)(iii)c. and will only 
execute if the execution in aggregate is at least 5,000 shares.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\41\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\42\ in particular, in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to remove impediments to and perfect 
the mechanism of a free and open market and a national market system, 
and, in general, to protect investors and the public interest. The 
Exchange believes that the proposed rule change is consistent with the 
Act because it allows the Exchange to make changes to its handling of 
Order Types and Order Attributes necessary to implement the 
requirements of the Plan on its System. The Plan, which was approved by 
the Commission pursuant to an order issued by the Commission in 
reliance on Section 11A of the Act,\43\ provides the Exchange authority 
to establish, maintain, and enforce written policies and procedures 
that are reasonably designed to comply with applicable quoting and 
trading requirements specified in the Plan. The Exchange believes that 
the proposed rule change is consistent with the authority granted to it 
by the Plan to establish specifications and procedures for the 
implementation and operation of the Plan that are consistent with the 
provisions of the Plan. Likewise, the Exchange believes that the 
proposed rule change provides interpretations of the Plan that are 
consistent with the Act, in general, and furthers the objectives of the 
Act, in particular.
---------------------------------------------------------------------------

    \41\ 15 U.S.C. 78f(b).
    \42\ 15 U.S.C. 78f(b)(5).
    \43\ 15 U.S.C. 78k-1.
---------------------------------------------------------------------------

    The Exchange is a Participant under the Plan and is subject to the 
Plan's provisions. The proposed rule change ensures that the Exchange's 
systems would not display or execute trading interests outside the 
requirements specified in such Plan, which otherwise may occur given 
existing System functionality. The proposal would also help allow 
market participants to continue to trade NMS Stocks, within quoting and 
trading requirements that are in compliance with the Plan, with 
certainty on how certain orders and trading interests would be treated. 
This, in turn, will help encourage market participants to continue to 
provide liquidity in the marketplace.

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 changes are 
being made to establish, maintain, and enforce written policies and 
procedures that are reasonably designed to comply with the trading and 
quoting requirements specified in the Plan, of which other equities 
exchanges are also Participants. Other competing national securities 
exchanges are subject to the same trading and quoting requirements 
specified in the Plan, and must take the same steps that the Exchange 
has to conform its existing rules to the requirements of the Plan. 
Therefore, the proposed changes would not impose any burden on 
competition, while providing certainty of treatment and execution of 
trading interests on the Exchange to market participants in NMS Stocks 
that are acting in compliance with the requirements specified in the 
Plan.

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

    No written comments were either solicited or received.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission shall: (a) By order approve 
or disapprove such proposed rule change, or (b) institute proceedings 
to determine whether the proposed rule change should be 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 rule-comments@sec.gov. Please include 
File Number SR-BX-2016-050 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BX-2016-050. 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-BX-2016-050, and should be 
submitted on or before October 4, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\44\
---------------------------------------------------------------------------

    \44\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-22537 Filed 9-19-16; 8:45 am]
 BILLING CODE 8011-01-P
64566 Federal Register / Vol. 81, No. 182 / Tuesday, September 20, 2016 / Notices

and the rules and regulations functionality necessary to implement thereunder.6 The Participants filed the
thereunder. the Regulation NMS Plan to Implement Plan to comply with an order issued by
a Tick Size Pilot Program (‘‘Plan’’).4 The the Commission on June 24, 2014 (the
V. Conclusion
Exchange is also proposing amendments ‘‘June 2014 Order’’).7 The Plan 8 was
It is therefore ordered, pursuant to to Rule 4770(a) and (c) to clarify how published for comment in the Federal
Section 19(b)(2) of the Act,53 that the the Trade-at exception may be satisfied. Register on November 7, 2014,9 and
proposed rule change (SR–FINRA– The text of the proposed rule change approved by the Commission, as
2016–022) be, and hereby is, approved. is available on the Exchange’s Web site modified, on May 6, 2015.10
For the Commission, by the Division The Plan is designed to allow the
at http://nasdaqbx.cchwallstreet.com/,
of Trading and Markets, pursuant to Commission, market participants, and
at the principal office of the Exchange,
delegated authority.54 the public to study and assess the
and at the Commission’s Public
Robert W. Errett, Reference Room. impact of increment conventions on the
Deputy Secretary. liquidity and trading of the common
II. Self-Regulatory Organization’s stocks of small capitalization
[FR Doc. 2016–22535 Filed 9–19–16; 8:45 am] Statement of the Purpose of, and companies. The Commission plans to
BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule use the Tick Size Pilot Program to assess
Change. whether wider tick sizes enhance the
SECURITIES AND EXCHANGE In its filing with the Commission, the market quality of Pilot Securities for the
COMMISSION Exchange included statements benefit of issuers and investors. Each
concerning the purpose of and basis for Participant is required to comply with,
[Release No. 34–78838; File No. SR–BX– and to enforce compliance by its
2016–050] the proposed rule change and discussed
any comments it received on the members, as applicable, with the
Self-Regulatory Organizations; proposed rule change. The text of these provisions of the Plan.
statements may be examined at the On October 9, 2015, the Operating
NASDAQ BX, Inc.; Notice of Filing of
places specified in Item IV below. The Committee approved the Exchange’s
Proposed Rule Change To Describe
Exchange has prepared summaries, set proposed rules as model Participant
Changes to System Functionality
forth in sections A, B, and C below, of rules that would require compliance by
Necessary To Implement the Tick Size
the most significant aspects of such a Participant’s members with the
Pilot Program
statements. provisions of the Plan, as applicable,
September 14, 2016. and would establish written policies
Pursuant to Section 19(b)(1) of the A. Self-Regulatory Organization’s and procedures reasonably designed to
Securities Exchange Act of 1934 Statement of the Purpose of, and the comply with applicable quoting and
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Statutory Basis for, the Proposed Rule trading requirements specified in the
notice is hereby given that on Change Plan.11 As described more fully below,
September 7, 2016, NASDAQ BX, Inc. 1. Purpose the proposed rules would require
(‘‘BX’’ or ‘‘Exchange’’) filed with the members to comply with the Plan and
Securities and Exchange Commission Background provide for the widening of quoting and
(‘‘SEC’’ or ‘‘Commission’’) the proposed On August 25, 2014, NYSE Group, trading increments for Pilot Securities,
rule change as described in Items I, II, Inc., on behalf of Bats BZX Exchange, consistent with the Plan.
and III, below, which Items have been Inc. (f/k/a BATS Exchange, Inc.), Bats The Plan will include stocks of
prepared by the Exchange. The BYX Exchange, Inc. (f/k/a BATS Y- companies with $3 billion or less in
Commission is publishing this notice to Exchange, Inc.), Chicago Stock market capitalization, an average daily
solicit comments on the proposed rule Exchange, Inc., EDGA Exchange, Inc., trading volume of one million shares or
change from interested persons. EDGX Exchange, Inc., the Exchange, less, and a volume weighted average
Financial Industry Regulatory price of at least $2.00 for every trading
I. Self-Regulatory Organization’s day. The Plan will consist of a control
Statement of the Terms of Substance of Authority, Inc. (‘‘FINRA’’), The
the Proposed Rule Change NASDAQ Stock Market LLC, New York 6 See Letter from Brendon J. Weiss, Vice
Stock Exchange LLC, NASDAQ PHLX President, Intercontinental Exchange, Inc., to
The Exchange proposes to adopt LLC, NYSE Arca, Inc., and the NYSE Secretary, Commission, dated August 25, 2014.
paragraph (d) to Exchange Rule 4770 to MKT LLC, (collectively ‘‘Participants’’), 7 See Securities Exchange Act Release No. 72460
describe changes to System 3 filed the Plan with the Commission (June 24, 2014), 79 FR 36840 (June 30, 2014).
8 Unless otherwise specified, capitalized terms
53 15
pursuant to Section 11A of the Act 5 and
U.S.C. 78s(b)(2). used in this rule filing are based on the defined
54 17 CFR 200.30–3(a)(12).
Rule 608 of Regulation NMS terms of the Plan.
1 15 U.S.C. 78s(b)(1). 9 See Securities and Exchange Act Release No.
2 17 CFR 240.19b–4. reporting system, if required, for dissemination to 73511 (November 3, 2014), 79 FR 66423 (File No.
3 The term ‘‘System’’ is defined as the automated the public and industry; and provides participants 4–657) (Tick Plan Filing).
system for order execution and trade reporting with monitoring and risk management capabilities 10 See Tick Plan Approval Order, supra note 4.

owned and operated by the Exchange. The System to facilitate participation in a ‘‘locked-in’’ trading See also Securities Exchange Act Release No. 77277
comprises: (1) A montage for Quotes and Orders, environment; and (4) data feeds that can be used to (March 3, 2016), 81 FR 12162 (March 8, 2016) (File
referred to herein as the ‘‘Exchange Book,’’ that display with attribution to Participants’ MPIDs all No. 4–657), which amended the Plan to add
collects and ranks all Quotes and Orders submitted Quotes and displayed Orders on both the bid and National Stock Exchange, Inc. as a Participant.
by Participants; (2) an Order execution service that offer side of the market for all price levels then 11 The Operating Committee is required under
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enables Participants to automatically execute within the NASDAQ OMX BX Equities Market, and Section III(C)(2) of the Plan to ‘‘monitor the
transactions in System Securities; and provides that disseminate such additional information about procedures established pursuant to the Plan and
Participants with sufficient monitoring and Quotes, Orders, and transactions within the System advise Participants with respect to any deficiencies,
updating capability to participate in an automated as shall be reflected in the Exchange Rules. See problems, or recommendations as the Operating
execution environment; (3) a trade reporting service Rule 4701(a). Committee may deem appropriate.’’ The Operating
4 See Securities Exchange Act Release No. 74892
that submits ‘‘locked-in’’ trades for clearing to a Committee is also required to ‘‘establish
registered clearing agency for clearance and (May 6, 2015), 80 FR 27513 (May 13, 2015) specifications and procedures for the
settlement; transmits last-sale reports of (‘‘Approval Order’’). implementation and operation of the Plan that are
transactions automatically to the national trade 5 15 U.S.C. 78k–1. consistent with the provisions of the Plan.’’

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64568 Federal Register / Vol. 81, No. 182 / Tuesday, September 20, 2016 / Notices

of Trade-at Intermarket Sweep Orders, a Price to Comply Order to sell) but will Non-Displayed Orders
as described in detail below. also be ranked on the Exchange Book
Lastly, the Exchange is proposing to with a non-displayed price equal to the A Non-Displayed Order is an Order
adopt new Commentary .12 to Rule current Best Offer (for a Price to Comply Type that is not displayed to other
4770 to describe what qualifies as a Order to buy) or to the current Best Bid Participants, but nevertheless remains
Block Order for purposes of the Trade- (for a Price to Comply Order to sell). available for potential execution against
at exception under Rule The posted Order will then be available incoming Orders until executed in full
4770(c)(3)(D)(iii). for execution at its non-displayed price, or cancelled. In addition to the Non-
thus providing opportunities for price Displayed Order Type, there are other
Price To Comply Orders
improvement to incoming Orders. Order Types that are not displayed on
The Price to Comply Order is an A Price to Comply Order in a Test the Exchange Book. Thus, ‘‘Non-
Order Type designed to comply with Group Pilot Security will operate as Display’’ is both a specific Order Type
Rule 610(d) under Regulation NMS by described in Rule 4702(b)(1) except the and an Order Attribute of certain other
having its price and display Exchange is proposing to change how it Order Types.
characteristics adjusted to avoid the handles a Price to Comply Order in a
display of quotations that lock or cross When a Non-Displayed Order is
Test Group Three Pilot Security to
any Protected Quotation in a System entered, the Non-Displayed Order will
ensure that it conforms with the Trade-
Security during Market Hours. The Price be executed against previously posted
at prohibition of the Plan. First, the
to Comply Order is also designed to Exchange is proposing that if the Orders on the Exchange Book that are
provide potential price improvement. Exchange received a Price to Comply priced equal to or better than the price
The System does not have a ‘‘plain Order for a Test Group Three Pilot of the Non-Displayed Order, up to the
vanilla’’ limit order that attempts to Security that locks or crosses a full amount of such previously posted
execute at its limit price and is then Protected Quotation of another market Orders, unless such executions would
posted at its price or rejected if it cannot center, is partially executed upon entry, trade through a Protected Quotation.
be posted; rather, the Price to Comply and the remainder of the Order would Any portion of the Non-Displayed Order
Order, with its price and display lock a Protected Quotation of another that cannot be executed in this manner
adjustment features, is one of the market center, the unexecuted portion will be posted to the Exchange Book
primary Order Types used by of the Order will be cancelled. Second, (unless the Non-Displayed Order has a
Participants to access and display if the limit price of a buy (sell) Price to Time-in-Force of IOC) and/or routed if
liquidity in the System. The price and Comply Order in a Test Group Three it has been designated as Routable.
display adjustment features of the Order Pilot Security would lock or cross a During Market Hours, if the entered
Type enhance efficiency and investor Protected Quotation of another market limit price of the Non-Displayed Order
protection by offering an Order Type center, and is not executable against any would lock a Protected Quotation, the
that first attempts to access available previously posted Orders on the Non-Displayed Order will be placed on
liquidity and then to post the remainder Exchange Book, the Order will display the Exchange Book at the locking price.
of the Order at prices that are designed at one minimum price increment below If the Non-Displayed Order would cross
to maximize their opportunities for (above) the Protected Quotation, and the a Protected Quotation, the Non-
execution. order will be added to the Exchange Displayed Order will be repriced to a
When a Price to Comply Order is Book at the midpoint of the order’s price that would lock the Protected
entered by a market participant, the displayed price and the National Best Quotation and will be placed on the
Price to Comply Order will be executed Offer (National Best Bid).34 Thus, the Exchange Book at that price.
against previously posted Orders on the Order would avoid possible execution at
Exchange Book that are priced equal to To avoid possible execution of a Non-
a prohibited price, but potentially Displayed Order at the Protected Quote
or better than the price of the Price to receive price improvement and be
Comply Order, up to the full amount of on the Exchange in a Test Group Three
displayed at a permissible price away
such previously posted Orders, unless Pilot Security, the Exchange is
from the Protected Quotation. Due to the
such executions would trade through a proposing to not allow execution of a
Trade-at requirement of Test Group
Protected Quotation. Any portion of the Non-Displayed Order in a Test Group
Three Pilot Securities, the Exchange is
Order that cannot be executed in this Three Pilot Security at the price of a
also proposing to adjust such Orders
manner will be posted on the Exchange repeatedly towards the limit price of the Protected Quotation unless the
Book (and/or routed if it has been order in accordance with changes to the incoming Order otherwise qualifies for
designated as Routable).33 NBBO until such time as the Price to an exception to the Trade-at prohibition.
During Market Hours, the price at Comply Order is able to be ranked and If the limit price of a buy (sell) Non-
which a Price to Comply Order is posted displayed at its original entered limit Displayed Order in a Test Group Three
is determined in the following manner. price.35 security would lock or cross a Protected
If the entered limit price of the Price to Quotation of another Market Center, the
Comply Order would lock or cross a 34 When the market is locked, the price and Order will be added to the Exchange
Protected Quotation and the Price to display logic for Orders that would lock or cross an Book at either one minimum price
away market is slightly different. Display Orders at increment ($0.05) below (above) the
Comply Order could not execute against the locking price will post at the locking price if
an Order on the Exchange Book at a there are other Orders already posted on BX at that
National Best Offer (National Best Bid)
price equal to or better than the price of price (i.e., BX is part of the locked market). or at the midpoint of the NBBO,
Otherwise, the order will post at one minimum whichever is higher (lower). Thus the
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the Protected Quotation, the Price to
price increment away from the locking price. Non- Order would avoid possible execution at
Comply Order will be displayed on the Displayed orders received when the market is
Exchange Book at a price one minimum locked will always post one minimum price a prohibited price, but potentially
price increment below the current Best increment away from the locking price. receive price improvement or post at a
Offer (for a Price to Comply Order to 35 The repricing of Price to Comply and Post-Only
permissible price away from the
Orders in Test Group Three Pilot Securities Protected Quotation. After posting and
buy) or above the current Best Bid (for described in this rule filing are not subject to the
limitations on Order updates, as described in Rule if conditions allow, such an Order will
33 See Rules 4703(f) and 4758. 4756(a)(4). be adjusted repeatedly in accordance

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with changes to the NBBO up (down) to requirements of Regulation NMS or the the Protected Quotation of another
the Order’s limit price.36 Plan, the Non-Displayed Order will be market center. If the limit price of a buy
The Exchange is proposing a change cancelled back to the Participant. A (sell) Post-Only Order in a Test Group
to how a Non-Displayed Order in a Test posted order is no longer eligible to Three Pilot Security would lock or cross
Group Three Pilot Security would be execute at its posted price under three a Protected Quotation of another market
treated to comply with the Trade-at distinct scenarios. First, in Test Group center, the Order will display at one
requirement. Currently, for a Non- Pilot Securities, if the NBBO moves minimum price increment below
Displayed Order that is entered through such that the posted Order’s price (above) the Protected Quotation, and the
a RASH or FIX port, if, after being crosses a protected quotation, it is no Order will be added to the Exchange
posted to the Exchange Book, the NBBO longer executable due to the trade Book at the midpoint of the Order’s
changes so that the Non-Displayed through prohibition under Regulation displayed price and the National Best
Order would cross a Protected NMS (this is current functionality). Offer (National Best Bid). Thus the
Quotation, the Non-Displayed Order Second, in Test Group Three Pilot Order would avoid possible execution at
will be repriced at a price that would Securities, if a Non-Displayed Order is a prohibited price, but potentially
lock the new NBBO and receive a new posted at the midpoint and the NBBO receive price improvement or post at a
timestamp. For a Non-Displayed Order moves such that its posted price is no permissible price away from the
entered through OUCH or FLITE, if, longer a valid increment, the Order will Protected Quotation. Thereafter and if
after the Non-Displayed Order is posted be adjusted as described above. For market conditions allow, the Post-Only
to the Exchange Book, the NBBO example, if the NBB is $10.00 and the Order will be adjusted repeatedly
changes so that the Non-Displayed NBO is $10.05 in a Test Group Three towards its limit price in accordance
Order would cross a Protected Pilot Security, and a Non-Displayed with changes to the NBBO or the best
Quotation, the Non-Displayed Order Order to buy 100 shares of the security price on the Exchange Book, as
will be cancelled back to the with a limit price of $10.05 is received applicable, until such time as the Post-
Participant. The Exchange is proposing by the System, the Order would be Only Order is able to be ranked and
to trigger repricing of a Non-Displayed repriced and posted at $10.025 (the displayed at its original entered limit
Order in a Test Group Three Pilot midpoint of the NBBO) to avoid locking price.38
Security if the Order would lock or the market. If subsequently the NBB
Retail Price Improving Order
cross a Protected Quotation by posting changes to $9.95 and the NBO to $10.05,
the Order to the Exchange Book at either then the Order would no longer be A Retail Price Improving Order or
eligible for the midpoint exception to ‘‘RPI Order’’ is an Order Type with a
one minimum price increment below
the Plan’s minimum price increment Non-Display Order Attribute that is held
(above) the National Best Offer (National
requirement and therefore would be on the Exchange Book in order to
Best Bid) or at the midpoint of the
adjusted and/or cancelled as described provide liquidity at a price at least
NBBO, whichever is higher (lower).
above. Third, in Test Group Three Pilot $0.001 better than the NBBO through a
Thus, the Order is repriced to avoid
Securities, if the NBBO moves such that special execution process described in
execution at the Protected Quotation,
the Order’s posted price locks a Rule 4780. A Retail Price Improving
but may also receive price
protected quotation, it is no longer Order may be entered in price
improvement. If market conditions
executable due to the Trade-at increments of $0.001. RPI Orders
allow, a Non-Displayed Order in a Test
prohibition under the Plan and would collectively may be referred to as ‘‘RPI
Group Three Pilot Security will be Interest.’’ An RPI Order will be posted
adjusted repeatedly in accordance with be adjusted and/or cancelled as
described above. to the Exchange Book regardless of its
changes to the NBBO up (down) to the price, but an RPI Order may execute
Order’s limit price. For a Non-Displayed Post-Only Orders only against a Retail Order, and only if
Order in a Test Group Three Pilot A Post-Only Order is an Order Type its price is at least $0.001 better than the
Security entered through RASH or FIX, designed to have its price adjusted as NBBO.
if after being posted to the Exchange needed to post to the Exchange Book in A Retail Price Improving Order in a
Book, the NBBO changes so that the compliance with Rule 610(d) under Test Group Pilot Security will operate as
Non-Displayed Order would no longer Regulation NMS 37 by avoiding the described in Rule 4702(b)(5) except as
be executable at its posted price due to display of quotations that lock or cross provided under this paragraph. A Retail
the requirements of Regulation NMS or any Protected Quotation in a System Price Improving Order in a Test Group
the Plan, the Non-Displayed Order will Security during Market Hours, or to Two or Three Pilot Security must be
be repriced to a price that is at either execute against locking or crossing entered in a minimum price increment
one minimum increment below (above) quotations in circumstances where of $0.005 and will only execute against
the National Best Offer (National Best economically beneficial to the Retail Orders if its price is at least
Bid) or at the midpoint of the NBBO, Participant entering the Post-Only $0.005 better than the NBBO.
whichever is higher (lower) and will Order.
receive a new timestamp. For a Non- Retail Order
Post-Only Orders in Test Group Pilot
Displayed Order in a Test Group Three Securities will operate as described A Retail Order is an Order Type with
Pilot Security entered through OUCH or under Rule 4702(b)(4), however, the a Non-Display Order Attribute
FLITE, if after such a Non-Displayed Exchange is proposing changes to the submitted to the Exchange by a Retail
Order is posted to the Exchange Book, handling of a Post-Only Order in Test Member Organization (as defined in
if the NBBO changes so that the Non- Rule 4780). A Retail Order must be an
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Group Three Pilot Securities to ensure
Displayed Order would no longer be that the Trade-at prohibition is agency Order, or riskless principal
executable at its posted price due to the enforced. Specifically, the Exchange is Order that satisfies the criteria of FINRA
proposing to modify how a Post-Only
36 The repricing of Non-Displayed Orders in Test 38 As discussed above, repricing of Price to
Order in a Test Group Three Pilot
Group Three Pilot Securities in accordance with Comply and Post-Only Orders in Test Group Three
changes to the NBBO up (down) to the Order’s limit Security is handled if it locks or crosses Pilot Securities described in this rule filing are not
price are not subject to the limitations on Order subject to the limitations on Order updates, as
updates, as described in Rule 4756(a)(4). 37 17 CFR 242.610(d). described in Rule 4756(a)(4). Supra note 35.

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Rule 5320.03. The Retail Order must The Plan allows Orders in Test Group price of a Market Maker Peg Order to
reflect trading interest of a natural Pilot Securities priced to execute at the buy (sell) will be adjusted to the
person with no change made to the midpoint of the NBBO to be ranked and Designated Percentage away from the
terms of the underlying order of the accepted in increments less than the Reference Price. In the foregoing
natural person with respect to price Plan’s minimum price increment of example, if the Defined Limit is 9.5%
(except in the case of a market order that $0.05. Thus, the Exchange is proposing and the Best Bid increased to $10.17,
is changed to a marketable limit order) to make it clear that Midpoint Peg Post- such that the price of the Market Maker
or side of market and that does not Only Orders in any of the Test Group Peg Order would be more than 9.5%
originate from a trading algorithm or Pilot Securities may execute in an away, the Order will be repriced to
any other computerized methodology. A increment other than the minimum $9.35, or 8% away from the Best Bid.
Retail Order may be designated as either price increment of the Plan. Note that calculated prices of less than
a Type-1 Retail Order or a Type-2 Retail the minimum increment will be
Order. Upon entry, a Type-1 Retail Market Maker Peg Orders rounded in a manner that ensures that
Order will attempt to execute against A ‘‘Market Maker Peg Order’’ is an the posted price will be set at a level
RPI Orders and any other Orders on the Order Type designed to allow a Market that complies with the percentages
Exchange Book with a price that is (i) Maker to maintain a continuous two- stipulated by this rule. If the limit price
equal to or better than the price of the sided quotation at a price that is of the Order is outside the Defined
Type-1 Retail Order and (ii) at least compliant with the quotation Limit, the Order will be sent back to the
$0.001 better than the NBBO. A Type- requirements for Market Makers set Participant.
1 Retail Order is not Routable and will forth in Rule 4613(a)(2).39 The price of Similarly, if as a result of a change to
thereafter be cancelled. the Market Maker Peg Order is set with the Reference Price, the price of a
A Retail Order in a Test Group Pilot reference to a ‘‘Reference Price’’ in order Market Maker Peg Order to buy (sell) is
Security will operate as described in to keep the price of the Market Maker within one minimum price variation
Rule 4702(b)(6) except in the following Peg Order within a bounded price range. more than (less than) a price that is 4%
two circumstances. First, a Retail Order A Market Maker Peg Order may be less than (more than) the Reference
in a Test Group One Pilot Security must entered through RASH or FIX only. A Price, rounded up (down), then the
be entered with a limit price in a Market Maker Peg Order must be price of the Market Maker Peg Order to
minimum price increment ($0.05), to entered with a limit price beyond which buy (sell) will be adjusted to the
comply with the Plan’s minimum price the Order may not be priced. The Designated Percentage away from the
increment requirement, and may Reference Price for a Market Maker Peg Reference Price. For example, if the Best
execute in an increment other than a Order to buy (sell) is the then-current Bid is $10 and the Designated
minimum price increment if the Order Best Bid (Best Offer) (including BX), or Percentage for the security is 8%, the
is provided with price improvement if no such Best Bid or Best Offer, the price of a Market Marker Peg Order to
that is at least $0.001 better than the most recent reported last-sale eligible buy would initially be $9.20. If the Best
NBBO, which is the case today under trade from the responsible single plan Bid then moved to $9.57, such that the
the Retail Price Improvement Program. processor for that day, or if none, the price of the Market Maker Peg Order
Second, a Retail Order in a Test Group previous closing price of the security as would be a minimum of $0.01 more
Two or Three Pilot Security must be adjusted to reflect any corporate actions than a price that is 4% less than the Best
entered in a minimum price increment (e.g., dividends or stock splits) in the Bid, rounded up (i.e. $9.57¥($9.57 ×
($0.05), to comply with the Plan’s security. 0.04) = $9.1872, rounding up to $9.19),
minimum price increment requirement, Upon entry, the price of a Market the Order will be repriced to $8.81, or
and may execute in an increment other Maker Peg Order to buy (sell) is 8% away from the Best Bid.
than a minimum price increment if the A Market Maker may enter a Market
automatically set by the System at the
Order is provided with price Maker Peg Order with a more aggressive
Designated Percentage (as defined in
improvement that is at least $0.005 offset than the Designated Percentage,
Rule 4613) away from the Reference
better than the NBB or NBO. Test Group but such an offset will be expressed as
Price in order to comply with the
Two and Three Pilot Securities are a price difference from the Reference
quotation requirements for Market
subject to the Plan’s minimum price Price. Such a Market Maker Peg Order
Makers set forth in Rule 4613(a)(2). For
increment requirement for both quoting will be repriced in the same manner as
example, if the Best Bid is $10 and the
and trading, however, Retail Investor a Price to Display Order with
Designated Percentage for the security is
Orders may be provided with price Attribution and Primary Pegging. As a
8%, the price of a Market Marker Peg
improvement that is at least $0.005 result, the price of the Order will be
Order to buy would be $9.20. If the limit
better than the NBBO or NBO. adjusted whenever the price to which
price of the Order is not within the
the Order is pegged is changed.
Midpoint Peg Post-Only Orders Designated Percentage, the Order will be A new timestamp is created for a
A ‘‘Midpoint Peg Post-Only Order’’ is sent back to the Participant. Market Maker Peg Order each time that
an Order Type with a Non-Display Once a Market Maker Peg Order has its price is adjusted. In the absence of
Order Attribute that is priced at the posted to the Exchange Book, its price a Reference Price, a Market Maker Peg
midpoint between the NBBO and that is adjusted if needed as the Reference Order will be cancelled or rejected. If,
will execute upon entry against locking Price changes. Specifically, if as a result after entry, a Market Maker Peg Order is
or crossing quotes only in circumstances of a change to the Reference Price, the priced based on a Reference Price other
where economically beneficial to the difference between the price of the
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than the NBBO and such Market Maker
party entering the Order. Because the Market Maker Peg Order and the Peg Order is established as the Best Bid
Order is priced at the midpoint, it can Reference Price reaches the Defined or Best Offer, the Market Maker Peg
provide price improvement to incoming Limit (as defined in Rule 4613), the Order will not be subsequently adjusted
Orders when it is executed after posting 39 As with other Order Types, the Market Maker
in accordance with this rule until a new
to the Exchange Book. The Midpoint Peg Order must be an Order either to buy or to sell; Reference Price is established.
Peg Post-Only Order is available during thus, at least two Orders would be required to In light of the minimum price
Market Hours only. maintain a two-sided quotation. increment requirement of the Plan, the

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Exchange is proposing to require the Midpoint Pegging would be priced at Price to Display Order would post with
displayed price of a Market Maker Peg $11.03. An Order with Midpoint a size of 150 shares and no Reserve Size.
Order in a Test Group One, Two or Pegging is not displayed. An Order with When an Order with Reserve Size is
Three Pilot Security to be rounded up Midpoint Pegging may be executed in posted, if there is an execution against
(down) to the nearest minimum price sub-pennies if necessary to obtain a the Displayed Order that causes its size
increment for bids (offers), if it would midpoint price. to decrease below a normal unit of
otherwise display at an increment As discussed above, the Plan allows trading, another Displayed Order will be
smaller than minimum price increment. Orders in Test Group Pilot Securities entered at the level stipulated by the
For example, if the NBB is $10.05 and priced to execute at the midpoint of the Participant while the size of the Non-
the NBO is $10.15, and the Designated NBBO to be ranked and accepted in Displayed Order will be reduced by the
Percentage is 28%, the displayed price increments less than the Plan’s same amount. Any remaining size of the
of a Market Maker Peg Order to buy 100 minimum price increment of $0.05. original Displayed Order will remain on
shares of a Test Group Pilot Security Thus, the Exchange is proposing to the Exchange Book. The new Displayed
would be $7.25 (i.e. $10.05¥($10.05 × make it clear that an Order in a Test Order will receive a new timestamp, but
0.28) = $7.236, rounded up to $7.25). Group Pilot Security with Midpoint the Non-Displayed Order (and the
Using the same market, but with a Pegging may execute in an increment original Displayed Order, if any) will
Market Maker Peg Order to sell 100 other than the minimum price not; although the new Displayed Order
shares, the Order would be displayed at increment of the Plan. will be processed by the System as a
$12.95 (i.e. $10.15 + ($10.15 × 0.28) = Reserve Size
new Order in most respects at that time,
$12.992, rounded down to $12.95). if it was designated as Routable, the
Thus, the rounding done to derive the Reserve Size is an Order Attribute that System will not automatically route it
price of the Market Maker Peg Order in permits a Participant to stipulate that an upon reentry. For example, if a Price to
a Test Group Pilot Security will conform Order Type that is displayed may have Comply Order with Reserve Size posted
to the minimum price increment its displayed size replenished from with a Displayed Size of 200 shares,
requirement of the Plan. additional non-displayed size. An Order along with a Non-Displayed Order of
As a consequence of conforming the with Reserve Size may be referred to as 3,000 and the 150 shares of the
Market Maker Peg Order to the a ‘‘Reserve Order.’’ At the time of entry, Displayed Order was executed, the
minimum price increment of the Plan, the displayed size of such an Order remaining 50 shares of the original Price
a Market Maker Peg Order may have a selected by the Participant must be one to Comply Order would remain, a new
higher likelihood of execution, or more normal units of trading; an Price to Comply Order would post with
particularly in lower priced securities. Order with a displayed size of a mixed a size of 200 shares and a new
For example, if a member entered a lot will be rounded down to the nearest timestamp, and the Non-Displayed
Market Maker Peg Order to buy 100 round lot. A Reserve Order with Order would be decremented to 2,800
shares of a Test Group Pilot Security displayed size of an odd lot will be shares. Because a new Displayed Order
with a limit price of $1.70 when the accepted but with the full size of the is entered and the Non-Displayed Order
NBB is $1.60 and the NBO is $1.65, if Order displayed. Reserve Size is not is not reentered, there are circumstances
the security is a Tier 2 security, the available for Orders that are not in which the Displayed Order may
Order would be pegged at 28% from the displayed; provided, however, that if a receive a different price than the Non-
NBB, which is $1.20 ($1.60 × .72 = Participant enters Reserve Size for a Displayed Order. For example, if, upon
$1.152 which rounds up to $1.20). If the Non-Displayed Order with a Time-in- reentry, a Price to Display Order would
market subsequently moves downward Force of IOC, the full size of the Order, lock or cross a newly posted Protected
to a NBB of $1.20 and NBO of $1.30, the including Reserve Size, will be Quotation, the price of the Order will be
buy Market Maker Peg Order would not processed as a Non-Displayed Order. adjusted but its associated Non-
reprice because it had not reached one Whenever a Participant enters an Displayed Order would not be adjusted.
minimum price increment more than a Order with Reserve Size, the System In that circumstance, it would be
price that is 4% less than the NBB (i.e., will process the Order as two Orders: A possible for the better priced Non-
$1.20 × .96 = $1.152, which rounds up Displayed Order (with the Displayed Order to execute prior to the
to $1.20 and which is not greater than characteristics of its selected Order Price to Display Order.
the NBB + $0.05). Thus, the Market Type) and a Non-Displayed Order. Upon When the Displayed Order with
Maker Peg Order may receive an entry, the full size of each such Order Reserve Size is executed and
execution prior to reaching a point at will be processed for potential replenished, applicable market data
which it would reprice. This increased execution in accordance with the disseminated by the Exchange will
likelihood of execution of Market Maker parameters applicable to the Order show the execution and decrementation
Peg Orders would occur in any Order in Type. For example, a Participant might of the Displayed Order, followed by
a Test Group Pilot Security with a price enter a Price to Display Order with 200 replenishment of the Displayed Order.
less than $1.25. shares displayed and an additional In all cases, if the remaining size of
3,000 shares non-displayed. Upon entry, the Non-Displayed Order is less than the
Midpoint Pegging the Order would attempt to execute fixed or random amount stipulated by
Pegging is an Order Attribute that against available liquidity on the the Participant, the full remaining size
allows an Order to have its price Exchange Book, up to 3,200 shares. of the Non-Displayed Order will be
automatically set with reference to the Thereafter, unexecuted portions of the displayed and the Non-Displayed Order
NBBO. An Order with a Pegging Order Order would post to the Exchange Book
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will be removed.
Attribute may be referred to as a as a Price to Display Order and a Non- The Exchange is proposing to not
‘‘Pegged Order.’’ Midpoint Pegging Displayed Order; provided, however, allow a resting order in a Test Group
means Pegging with reference to the that if the remaining total size is less Three Pilot Security with a Reserve Size
midpoint between the Inside Bid and than the display size stipulated by the to execute the non-displayed Reserve
the Inside Offer (the ‘‘Midpoint’’). Thus, Participant, the Displayed Order will Size at the price of a Protected
if the Inside Bid was $11 and the Inside post without Reserve Size. Thus, if Quotation of another market center
Offer was $11.06, an Order with 3,050 shares executed upon entry, the unless the incoming order otherwise

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64572 Federal Register / Vol. 81, No. 182 / Tuesday, September 20, 2016 / Notices

qualifies for an exception to the Trade- Three Pilot Security, if it is attributable, against the full displayed size of the
at prohibition provided under Rule would no longer be executable at its Protected Quotation that was traded at.
4770(c)(3)(D). If the Exchange received a posted price due to the requirements of The Exchange is proposing to amend
Reserve Order for a Test Group Three Regulation NMS or the Plan, the paragraph (ii) of Rule 4770(a) and Rule
Pilot Security that locks or crosses a displayed portion of the Reserve Order 4770(c)(3)(D)(iii)j. to allow the Exchange
Protected Quotation of another market will be adjusted and display one to use Intermarket Sweep Orders in lieu
center, is partially executed upon entry, minimum price increment below of Trade-at Intermarket Sweep Orders,
and the remainder of the Order would (above) the Protected Quotation, and the when it is in receipt of an Order from
lock a Protected Quotation of another non-displayed Reserve Size will be a member that would trade through a
market center, the unexecuted portion repriced to the midpoint of the Order’s protected price on another market. An
of the Order will be cancelled. If the displayed price and the National Best Intermarket Sweep Order or ‘‘ISO’’ is an
limit price of a buy (sell) Reserve Order Offer (National Best Bid). Thus, the Order Attribute that allows the Order to
in a Test Group Three Pilot Security that Order would continue to comply with be executed within the System by
is not attributable would lock or cross the Trade-at requirement by avoiding Participants at multiple price levels
a Protected Quotation of another market potential execution at a prohibited without respect to Protected Quotations
center, and is not executable against any price. of other market centers within the
previously posted Orders on the meaning of Rule 600(b) under
Exchange Book, the displayed portion of Good-Till-Cancelled Regulation NMS. ISOs are immediately
the Order will display at one minimum Good-till-Cancelled is a Time-in-Force executable within the System against
price increment below (above) the Order Attribute that is designated to Orders against which they are
Protected Quotation, and the Order will deactivate one year after entry. Under marketable.
be added to the Exchange Book at the For purposes of the Exchange’s
certain circumstances at the election of
midpoint of the Order’s displayed price satisfaction of the Trade-at Intermarket
the member, an Order designated as
and the National Best Offer (National Sweep Order exception to the Trade-at
Good-till-Cancelled must be adjusted to
Best Bid). Thus, the Order would avoid prohibition of Test Group Three Pilot
account for corporate actions related to
possible execution at a prohibited price, Securities, the ISO Order will operate
a dividend, payment or distribution.
but potentially receive price functionally identically to the use of a
Rule 4761(b) sets forth the
improvement and be displayed at a Trade-at Intermarket Sweep Order.
circumstances and method by which an
permissible price away from the Intermarket Sweep Orders are sent by
Order designated as Good-till-Cancelled
Protected Quotation. If the limit price of the exchange to execute against
is adjusted. The Exchange is making it
a buy (sell) Reserve Order in a Test displayed size represented in away
clear that an order in a Test Group Pilot market centers’ Protected Quotation and
Group Three Pilot Security that is Security with a Good-till-Cancelled
attributable would lock or cross a thus provide the same function as a
Time-in-Force that is adjusted pursuant Trade-at Intermarket Sweep Order
Protected Quotation of another market to Rule 4761(b) will be adjusted based
center, and is not executable against any because either order type would execute
on a $0.05 increment. against the displayed portion of the
previously posted Orders on the
Exchange Book, the displayed portion of Rule 4770(a) and (c) Changes away market centers’ liquidity. The
the Order will be adjusted and Exchange’s routing broker is currently
displayed at one minimum price Rule 4770(a) provides definitions of programmed to accept and route ISO
increment below (above) the Protected terms used under the Rule. Rule 4770(a) Orders and adding an additional
Quotation, and the non-displayed defines the term ‘‘Trade-at Intermarket functionality to support routing of
Reserve Size will be added to the Sweep Order’’ as ‘‘a limit order for a Trade-at Intermarket Sweep Orders
Exchange Book at the midpoint of the Pilot Security that meets the following would add complexity to the process
Order’s displayed price and the requirements: (i) When routed to a with no functional benefit. Accordingly,
National Best Offer (National Best Bid). Trading Center, the limit order is the Exchange is proposing to use ISOs
If after being posted to the Exchange identified as a Trade-at Intermarket when routing Orders to satisfy the
Book, the NBBO changes so that the Sweep Order; and (ii) Simultaneously exception to the Trade-at prohibition.
Reserve Order, if it is not attributable, with the routing of the limit order
identified as a Trade-at Intermarket New Commentary .12
would lock or cross a Protected
Quotation, the displayed portion of the Sweep Order, one or more additional The Exchange is proposing to adopt a
Reserve Order will display one limit orders, as necessary, are routed to new Commentary .12 to Rule 4770 to
minimum price increment below execute against the full size of any clarify what qualifies as a Block Order
(above) the Protected Quotation, and the protected bid, in the case of a limit for purposes of the Block Size exception
Order will be repriced to the midpoint order to sell, or the full displayed size to the Trade-at prohibition. Rule
of the Order’s displayed price and the of any protected offer, in the case of a 4770(c)(3)(D)(iii)c. provides an
National Best Offer (National Best limit order to buy, for the Pilot Security exception to the Trade-at prohibition for
Bid).40 If after being posted to the with a price that is better than or equal an Order that is of Block Size at the time
Exchange Book, the NBBO changes so to the limit price of the limit order of origin and is not an aggregation of
that the Reserve Order in a Test Group identified as a Trade-at Intermarket non-block Orders, broken into Orders
Sweep Order. These additional routed smaller than Block Size prior to
40 Both a Price to Comply Order and a Price to orders also must be marked as Trade-at submitting the Order to a Trading
Intermarket Sweep Orders.’’ Rule Center for execution, or is executed on
sradovich on DSK3GMQ082PROD with NOTICES

Display Order with a Reserve Attribute would be
repriced pursuant to Reserve Order process 4770(c)(3)(D)(iii)j. provides an exception multiple Trading Centers. The Plan
described in proposed Rule 4770(d)(9). A Price to
Display Order is an Order Type designed to comply to the Trade-at prohibition, requiring defines Block Size as an Order of at least
with Rule 610(d) under Regulation NMS by that, to satisfy the exception, the order 5,000 shares or for a quantity of stock
avoiding the display of quotations that lock or cross is executed by a Trading Center that having a market value of at least
any Protected Quotation in a System Security
during Market Hours, and are available solely to
simultaneously routed Trade-at $100,000. The Exchange has assessed
Participants that are Market Makers. See Rule Intermarket Sweep Orders or the technological complexity and effort
4702(b)(2). Intermarket Sweep Orders to execute required to change the System to

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Federal Register / Vol. 81, No. 182 / Tuesday, September 20, 2016 / Notices 64573

identify the market value of a quantity functionality. The proposal would also including whether the proposed rule
of stock and found that it would be help allow market participants to change is consistent with the Act.
exceedingly burdensome and complex continue to trade NMS Stocks, within Comments may be submitted by any of
without any clear benefit to the quoting and trading requirements that the following methods:
Exchange, its members, and the are in compliance with the Plan, with
marketplace as a whole. As a Electronic Comments
certainty on how certain orders and
consequence, the Exchange is proposing trading interests would be treated. This, • Use the Commission’s Internet
to only allow Orders that have a in turn, will help encourage market comment form (http://www.sec.gov/
minimum size of 5,000 shares to qualify participants to continue to provide rules/sro.shtml); or
as Block Size for purposes of the liquidity in the marketplace.
exception provided by Rule • Send an email to rule-comments@
4770(c)(3)(D)(iii)c. and will only execute B. Self-Regulatory Organization’s sec.gov. Please include File Number SR–
if the execution in aggregate is at least Statement on Burden on Competition BX–2016–050 on the subject line.
5,000 shares. The Exchange does not believe that Paper Comments
the proposed rule change will impose
2. Statutory Basis any burden on competition that is not • Send paper comments in triplicate
The Exchange believes that its necessary or appropriate in furtherance to Secretary, Securities and Exchange
proposal is consistent with Section 6(b) of the purposes of the Act. The Commission, 100 F Street NE.,
of the Act,41 in general, and furthers the proposed changes are being made to Washington, DC 20549–1090.
objectives of Section 6(b)(5) of the Act,42 establish, maintain, and enforce written
in particular, in that it is designed to policies and procedures that are All submissions should refer to File
prevent fraudulent and manipulative reasonably designed to comply with the Number SR–BX–2016–050. This file
acts and practices, to promote just and trading and quoting requirements number should be included on the
equitable principles of trade, to remove specified in the Plan, of which other subject line if email is used. To help the
impediments to and perfect the equities exchanges are also Participants. Commission process and review your
mechanism of a free and open market Other competing national securities comments more efficiently, please use
and a national market system, and, in exchanges are subject to the same only one method. The Commission will
general, to protect investors and the trading and quoting requirements post all comments on the Commission’s
public interest. The Exchange believes specified in the Plan, and must take the Internet Web site (http://www.sec.gov/
that the proposed rule change is same steps that the Exchange has to rules/sro.shtml). Copies of the
consistent with the Act because it conform its existing rules to the submission, all subsequent
allows the Exchange to make changes to requirements of the Plan. Therefore, the amendments, all written statements
its handling of Order Types and Order proposed changes would not impose with respect to the proposed rule
Attributes necessary to implement the any burden on competition, while change that are filed with the
requirements of the Plan on its System. providing certainty of treatment and Commission, and all written
The Plan, which was approved by the execution of trading interests on the communications relating to the
Commission pursuant to an order issued Exchange to market participants in NMS proposed rule change between the
by the Commission in reliance on Stocks that are acting in compliance Commission and any person, other than
Section 11A of the Act,43 provides the with the requirements specified in the those that may be withheld from the
Exchange authority to establish, Plan. public in accordance with the
maintain, and enforce written policies provisions of 5 U.S.C. 552, will be
and procedures that are reasonably C. Self-Regulatory Organization’s available for Web site viewing and
designed to comply with applicable Statement on Comments on the printing in the Commission’s Public
quoting and trading requirements Proposed Rule Change Received From Reference Room, 100 F Street NE.,
specified in the Plan. The Exchange Members, Participants, or Others Washington, DC 20549, on official
believes that the proposed rule change No written comments were either business days between the hours of
is consistent with the authority granted solicited or received. 10:00 a.m. and 3:00 p.m. Copies of the
to it by the Plan to establish filing also will be available for
III. Date of Effectiveness of the inspection and copying at the principal
specifications and procedures for the
Proposed Rule Change and Timing for office of the Exchange. All comments
implementation and operation of the
Commission Action received will be posted without change;
Plan that are consistent with the
provisions of the Plan. Likewise, the Within 45 days of the date of the Commission does not edit personal
Exchange believes that the proposed publication of this notice in the Federal identifying information from
rule change provides interpretations of Register or within such longer period (i) submissions. You should submit only
the Plan that are consistent with the as the Commission may designate up to information that you wish to make
Act, in general, and furthers the 90 days of such date if it finds such available publicly. All submissions
objectives of the Act, in particular. longer period to be appropriate and should refer to File Number SR–BX–
The Exchange is a Participant under publishes its reasons for so finding or 2016–050, and should be submitted on
the Plan and is subject to the Plan’s (ii) as to which the Exchange consents, or before October 4, 2016.
provisions. The proposed rule change the Commission shall: (a) By order For the Commission, by the Division of
ensures that the Exchange’s systems approve or disapprove such proposed Trading and Markets, pursuant to delegated
sradovich on DSK3GMQ082PROD with NOTICES

would not display or execute trading rule change, or (b) institute proceedings authority.44
interests outside the requirements to determine whether the proposed rule Robert W. Errett,
specified in such Plan, which otherwise change should be disapproved.
Deputy Secretary.
may occur given existing System IV. Solicitation of Comments [FR Doc. 2016–22537 Filed 9–19–16; 8:45 am]
41 15 U.S.C. 78f(b). Interested persons are invited to BILLING CODE 8011–01–P
42 15 U.S.C. 78f(b)(5). submit written data, views, and
43 15 U.S.C. 78k–1. arguments concerning the foregoing, 44 17 CFR 200.30–3(a)(12).

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Document Created: 2018-02-09 13:20:38
Document Modified: 2018-02-09 13:20:38
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 64566