81 FR 86365 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 15-Equities Relating to Pre-Opening Indications
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 230 (November 30, 2016)
Federal Register Volume 81, Issue 230 (November 30, 2016)
| Page Range | 86365-86368 | |
| FR Document | 2016-28779 |
[Federal Register Volume 81, Number 230 (Wednesday, November 30, 2016)] [Notices] [Pages 86365-86368] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-28779] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79389; File No. SR-NYSEMKT-2016-107)] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 15-- Equities Relating to Pre-Opening Indications November 23, 2016. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that on November 17, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') filed with the Securities and Exchange [[Page 86366]] Commission (the ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the self- regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 15--Equities relating to pre- opening indications. The proposed rule change is available on the Exchange's Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rule 15--Equities (``Rule 15'') relating to pre-opening indications. The proposed rule changes would restore the obligation for a DMM to publish a pre-opening indication if a security has not opened by 10:00 a.m. Eastern Time and add a new parameter for when a pre-opening indication should be published for lower-priced securities. Background The Exchange recently amended Exchange rules to consolidate and amend requirements relating to pre-opening indications in Rule 15.\4\ Rule 15(a) provides that a pre-opening indication will include the security and the price range within which the opening price is anticipated to occur and that a pre-opening indication will be published via the securities information processor and proprietary data feeds. Rule 15(b) specifies the conditions for publishing a pre-opening indication, and Rule 15(b)(1) provides that a DMM will publish a pre- opening indication, as described in Rule 15(e), before a security opens if the opening transaction on the Exchange is anticipated to be at a price that represents a change of more than the ``Applicable Price Range'' from a specified ``Reference Price'' before the security opens. --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 78673 (August 25, 2016), 81 FR 60038 (August 31, 2016) (SR-NYSEMKT-2016-79) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change) (``Opening Filing''). The Exchange implemented the changes described in the Opening Filing on September 12, 2016. --------------------------------------------------------------------------- Under Rule 15(c), the Reference Price for a security, other than an ADR, is the securities last reported stale price on the Exchange, the security's offering price in the case of an initial public offering (``IPO''), or the security's last reported sale price in the securities market from which the security is being transferred to the Exchange. Rule 15(d)(1) provides that, except under conditions set forth in Rule 15(d)(2), the Applicable Price Range for determining whether to publish a pre-opening indication will be 5%. Rule 15(d)(2) provides that if as of 9:00 a.m. Eastern Time, the E-mini S&P 500 Futures are +/-2% from the prior day's closing price of the E-mini S&P 500 Futures, when reopening trading following a market-wide trading halt under Rule 80B-- Equities, or if the Exchange determines that it is necessary or appropriate for the maintenance of a fair and orderly market, the Applicable Price Range for determining whether to publish a pre-opening indication will be 10%. Proposed Rule Change The Exchange proposes to amend Rule 15(b)(1) to add another condition for when a DMM would be required to publish a pre-opening indication. As proposed, a DMM would be required to publish a pre- opening indication if a security has not opened by 10:00 a.m. Eastern Time. This requirement was previously set forth in rule text in Rule 123D(b)--Equities that was deleted in the Opening Filing.\5\ The Exchange proposes to restore this requirement, as modified. Specifically, the Exchange would not retain the prior rule text that required Executive Floor Governor approval to extend the 30-minute time frame. The Exchange believes that current Rule 15(e)(1), which requires a Floor Governor to supervise and approve the publication of a pre- opening indication, provides for appropriate oversight of the publication of a pre-opening indication, including if such publication would be after 10:00 a.m. --------------------------------------------------------------------------- \5\ See Opening Filing, supra note 4 at 60039. Before being amended in the Opening Filing, Rule 123D(b)--Equities provided: ``If an indication is disseminated after the opening bell, it must be considered a delayed opening. In addition, any stock that is not opened with a trade or a reasonable quotation within 30 minutes after the opening of business must be considered a delayed opening (except for IPOs) and requires Floor Official supervision, as well as an indication. That 30-minute time frame may only be extended by an Executive Floor Governor on a Floor-wide basis.'' --------------------------------------------------------------------------- The Exchange believes that restoring the requirement to publish a pre-opening indication if a security is not opened by 10:00 a.m. Eastern Time would promote transparency in the opening process for securities that do not open on either a trade or a quote by such time. The Exchange believes that there are limited circumstances when a security would not be opened by 10:00 a.m. and for which a pre-opening indication has not already been published. For example, if the reason a security has not opened by 10:00 a.m. is due to an order imbalance, the DMM would have already published a pre-opening indication, as required by current Rule 15(b)(1). By contrast, if there is no trading interest in a security, such as the first day of trading of a security listed on a when issued basis, the proposed requirement to publish a pre-opening indication for such security would provide investors with additional information regarding the indicative price for such security so they can evaluate whether to submit trading interest to participate in the opening. The Exchange believes that 10:00 a.m. is an appropriate time threshold for publishing a pre-opening indication in such circumstances as it would provide sufficient time for the DMM to gather pricing information for a security that may otherwise have no trading interest.\6\ --------------------------------------------------------------------------- \6\ For example, a security that is listed on a when issued basis generally does not have an offering document that specifies a price for such security. In the absence of trading interest to provide an indication of how market participants would price such a security, a DMM would have to look to other sources, such as research analyst reports, to identify the appropriate pricing. The Exchange notes that in such scenarios, there may be wide fluctuations on the estimated price. The first published pre-opening indication therefore may be wide, but would serve the purpose of providing transparency regarding the potential pricing for such a security. --------------------------------------------------------------------------- To effect this proposed change, the Exchange proposes to amend Rule 15(b)(1) to add sub-numbering within the paragraph, delete the phrase ``before the security opens'' as duplicative of a prior reference to the same phrase, and add the new text, as follows (new text is in italics, deleted text bracketed): (b) Conditions for publishing a pre-opening indication: [[Page 86367]] (1) A DMM will publish a pre-opening indication, as described in paragraph (e), (i) before a security opens if the opening transaction on the Exchange is anticipated to be at a price that represents a change of more than the ``Applicable Price Range,'' as specified in paragraph (d) of this Rule, from a specified ``Reference Price,'' as specified in paragraph (c) of this Rule[, before the security opens]; or (ii) if a security has not opened by 10:00 a.m. Eastern Time. The Exchange also proposes to amend Rule 15(d) to add a new Applicable Price Range for securities priced $3.00 and lower. As proposed, for these securities, the Applicable Price Range would be $0.15 on regular trading days. To effect this proposed change, the Exchange proposes to amend Rule 15(d)(1) to provide that, except under the conditions set forth in Rule 15(d)(2), the Applicable Price Range for determining whether to publish a pre-opening indication would be 5% for securities with a Reference Price over $3.00 and $0.15 for securities with a Reference Price equal to or lower than $3.00. The Exchange proposes to make a related change to Rule 15(d)(2) to provide for what the Applicable Price Range would be for securities priced $3.00 and lower if as of 9:00 a.m. Eastern Time, the E-mini S&P 500 Futures are +/- 2% from the prior day's closing price of the E-mini S&P 500 Futures, when reopening trading following a market-wide trading halt under Rule 80B [sic], or if the Exchange determines that it is necessary or appropriate for the maintenance of a fair and orderly market. As proposed, in such case, the Applicable Price Range would be $0.30. The Exchange believes a price range movement of more than $0.15 for lower-priced securities on regular trading days, and more than $0.30 price range movement on more volatile trading days, would better reflect when an opening price for such securities is significantly away from the Reference Price, thus warranting a pre-opening indication. By contrast, the Exchange believes that the current 5% Applicable Price Range applicable to securities priced $3.00 and below is too narrow and would result in a disproportionate number of pre-opening indications for these securities as compared to how many pre-opening indications are required for securities priced above $3.00. Requiring pre-opening indications when they would not otherwise be warranted would also reduce the number of securities that would be eligible to be opened by a DMM electronically. For example, based on Exchange data from January 2016 through October 2016, if the Exchange had applied the 5% Applicable Price Range, there would have been 18 securities requiring a pre-opening indication. By contrast, using a $0.15 Applicable Price Change for this same period would have resulted in only two securities requiring a pre-opening indication.\7\ This reduced number of required pre-opening indications would mean that more securities would have been eligible to be opened electronically by the DMM. The Exchange further notes that the proposed break point of which parameter would be used is based on the current price buckets used in the Regulation NMS Plan to Address Extraordinary Market Volatility (``LULD Plan'') (providing that securities priced $3.00 and below are subject to wider percentage parameters than securities priced above $3.00).\8\ --------------------------------------------------------------------------- \7\ When applying the proposed double-wide Applicable Price Change for volatile trading days, as provided for in Rule 15(d)(2), to trade data from August 25, 2015, the change to a $0.30 Applicable Price Change instead of a 10% Applicable Price Change would have resulted in four securities requiring pre-opening indications instead of 63. Similarly, applying these Applicable Price Changes to June 24, 2016, a 10% move would have resulted in 55 securities requiring pre-opening indications, whereas a $0.30 parameter would have resulted in one security requiring pre-opening indication. \8\ See Securities Exchange Act Release No. 77679 (April 21, 2016), 81 FR 24908 (April 27, 2016) (File No. 4-631) (Order approving 10th Amendment to the LULD Plan). --------------------------------------------------------------------------- * * * * * There are no technology changes associated with this proposed rule change. However, because the proposed rule change would require DMMs to change behavior, the Exchange will announce the operative date by a Trader Update that describes the proposed changes. The Exchange will publish this Trader Update no later than 10 days after the operative date of this filing. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,\9\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\10\ in particular, because it is designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest. The Exchange believes that amending Rule 15(b)(1) to restore the requirement that a pre-opening indication be published if a security has not opened by 10:00 a.m. Eastern Time would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would provide additional transparency to the opening process if a security has not opened by 10:00 a.m. As such, the Exchange believes that the proposal would advance the efficiency and transparency of the opening process, thereby fostering accurate price discovery at the open of trading. For the same reasons, the proposal is also designed to protect investors as well as the public interest. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f(b). \10\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange further believes that providing for a $0.15 Applicable Price Range for securities priced $3.00 and lower on regular trading days, and a $0.30 Applicable Price Range for such securities on more volatile trading days, would remove impediments to and perfect a free and open market and a national market system because it would require a wider range of price movement before a pre-opening indication must be published for these lower-priced securities. The Exchange believes that these proposed changes would balance the goal of providing price transparency if there would be significant price dislocation in the opening price of a security compared to the Reference Price with the manual process involved with publishing pre-opening indications. Moreover, the Exchange believes that any reduction in number of pre- opening indications published for these lower-priced securities would not result in less transparency because the Exchange would continue to publish Order Imbalance Information for such securities, as provided for in Rule 15(g). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is not intended to address competitive issues but rather promote greater efficiency and transparency at the open of trading on the Exchange. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section [[Page 86368]] 19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\ Because the proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b- 4(f)(6)(iii) thereunder.\13\ --------------------------------------------------------------------------- \11\ 15 U.S.C. 78s(b)(3)(A). \12\ 17 CFR 240.19b-4(f)(6). \13\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange's intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b4(f)(6)(iii),\15\ the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. --------------------------------------------------------------------------- \14\ 17 CFR 240.19b-4(f)(6). \15\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \16\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NYSEMKT-2016-107 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEMKT-2016-107. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEMKT-2016-107 and should be submitted on or before December 21, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\17\ --------------------------------------------------------------------------- \17\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-28779 Filed 11-29-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 230 / Wednesday, November 30, 2016 / Notices 86365
In support of this proposal, the (8) The Exchange represents that the compliance with the applicable listing
Exchange represented that: Manager and the Sub-Advisers are not requirements, the Exchange will
broker-dealers but are affiliated with one or commence delisting procedures under
(1) The Funds will continue to comply more broker-dealers and have each
with all initial and continued listing NYSE Arca Equities Rule 5.5(m).
implemented a fire wall with respect to such
requirements under NYSE Arca Equities Rule broker-dealers regarding access to This approval order is based on all of
8.600. information concerning the composition and/ the Exchange’s representations,
(2) Each Fund may include Rule 144A or changes to the portfolios, and will be including those set forth above and in
securities within a Fund’s principal subject to procedures designed to prevent the the Notice, as modified by Amendment
investments in debt securities (i.e., debt use and dissemination of material non-public Nos. 1 and 2 to the proposed rule
securities in which at least 80% of a Fund’s information regarding the portfolios.
assets are invested), provided that no more change. The Commission notes that the
(9) The Exchange will obtain a Funds must comply with the
than 35% of a Fund’s assets may be invested
representation from the issuer of the Shares requirements of NYSE Arca Equities
in Rule 144A securities.
that the net asset value (‘‘NAV’’) per Share
(3) All of the Rule 144A securities in which Rule 8.600 to be listed and traded on the
will be calculated daily and that the NAV
a Fund invests will be corporate debt Exchange on an initial and continuing
and the Disclosed Portfolio will be made
securities for which transactions are reported basis.
available to all market participants at the
in TRACE. For the foregoing reasons, the
same time.
(4) Trading in the Shares will be subject to
(10) The Portfolio Indicative Value with Commission finds that the proposed
the existing trading surveillances
administered by the Exchange, as well as
respect to Shares of each Fund will be widely rule change, as modified by Amendment
cross-market surveillances administered by disseminated by one or more major market Nos.1 and 2 thereto, is consistent with
FINRA, on behalf of the Exchange, which are data vendors at least every 15 seconds during Section 6(b)(5) of the Act 24 and the
designed to detect violations of Exchange the Exchange’s Core Trading Session. rules and regulations thereunder
(11) On each business day, before
rules and applicable federal securities laws. applicable to a national securities
These procedures are adequate to properly commencement of trading in Shares in the
Core Trading Session on the Exchange, each exchange.
monitor Exchange trading of the Shares in all
trading sessions and to deter and detect Fund will disclose on the Trust’s Web site IV. Conclusion
violations of Exchange rules and federal the Disclosed Portfolio that will form the
basis for a Fund’s calculation of NAV at the It is therefore ordered, pursuant to
securities laws applicable to trading on the
Exchange. end of the business day. Section 19(b)(2) of the Exchange Act,25
(5) The Exchange or FINRA, on behalf of (12) The Trust’s Web site will include a that the proposed rule change (SR–
the Exchange, or both, will communicate as form of the prospectus for the Funds and NYSEArca–2016–70), as modified by
needed regarding trading in the Shares and additional data relating to NAV and other Amendment Nos. 1 and 2 thereto, be,
underlying exchange-traded options, futures, applicable quantitative information. and it hereby is, approved.
exchange-traded equity securities (including The Exchange also represents that all For the Commission, by the Division of
ADRs, EDRs, and GDRs), and other exchange- statements and representations made in
traded instruments with other markets and Trading and Markets, pursuant to delegated
this filing and the Prior Corporate Bond authority.26
other entities that are members of the ISG,
and the Exchange or FINRA, on behalf of the Releases and Prior Total Bond Releases Robert W. Errett,
Exchange, or both, may obtain trading regarding (a) the description of the Deputy Secretary.
information regarding trading in the Shares Funds’ respective portfolios, (b) [FR Doc. 2016–28774 Filed 11–29–16; 8:45 am]
and underlying exchange-traded options, limitations on portfolio holdings or
BILLING CODE 8011–01–P
futures, exchange-traded equity securities reference assets, or (c) the applicability
(including ADRs, EDRs, and GDRs), and of Exchange rules and surveillance
other exchange-traded instruments from such procedures shall constitute continued
markets and other entities. The Exchange SECURITIES AND EXCHANGE
listing requirements for listing the COMMISSION
may obtain information regarding trading in
the Shares and underlying exchange-traded Shares of the Funds on the Exchange. In
addition, the Adviser has represented to [Release No. 34–79389; File No. SR–
options, futures, exchange-traded equity NYSEMKT–2016–107)]
securities (including ADRs, EDRs, and the Exchange that it will advise the
GDRs), and other exchange-traded Exchange of any failure by a Fund to
Self-Regulatory Organizations; NYSE
instruments from markets and other entities comply with the continued listing
that are members of ISG or with which the MKT LLC; Notice of Filing and
requirements, and, pursuant to its
Exchange has in place a comprehensive Immediate Effectiveness of Proposed
obligations under Section 19(g)(1) of the
surveillance sharing agreement. Rule Change Amending Rule 15—
Act, the Exchange will monitor for
(6) FINRA, on behalf of the Exchange, is Equities Relating to Pre-Opening
able to access, as needed, trade information compliance with the continued listing
Indications
for the Rule 144A securities as well as certain requirements.23 If a Fund is not in
other fixed income securities held by the November 23, 2016.
23 The Commission notes that certain other
Funds reported to TRACE. In addition, as Pursuant to Section 19(b)(1) 1 of the
stated in the Prior Corporate Bond Releases proposals for the listing and trading of Managed
Fund Shares include a representation that the Securities Exchange Act of 1934 (the
and the Prior Total Bond Releases, investors ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
exchange will ‘‘surveil’’ for compliance with the
have ready access to information regarding
the Funds’ holdings, the Portfolio Indicative
continued listing requirements. See, e.g., Securities notice is hereby given that on November
Exchange Act Release No. 77499 (Apr. 1, 2016), 81 17, 2016, NYSE MKT LLC (the
Value, the Disclosed Portfolio, and quotation FR 20428 (Apr. 7, 2016) (Notice of Filing of
and last-sale information for the Shares. Amendment No. 2, and Order Granting Accelerated ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with
(7) Trading in Shares of a Fund will be Approval of a Proposed Rule Change, as Modified the Securities and Exchange
halted if the circuit breaker parameters in by Amendment No. 2, to List and Trade Shares of
sradovich on DSK3GMQ082PROD with NOTICES
NYSE Arca Equities Rule 7.12 have been the SPDR DoubleLine Short Duration Total Return obligation than ‘‘surveil’’ with respect to the
reached or because of market conditions or Tactical ETF of the SSgA Active Trust), available continued listing requirements.
for reasons that, in the view of the Exchange, at: http://www.sec.gov/rules/sro/bats/2016/34- 24 15 U.S.C. 78f(b)(5).
77499.pdf. In the context of this representation, it
make trading in the Shares inadvisable, and is the Commission’s view that ‘‘monitor’’ and
25 15 U.S.C. 78s(b)(2).
trading in the Shares will be subject to NYSE ‘‘surveil’’ both mean ongoing oversight of the
26 17 CFR 200.30–3(a)(12).
Arca Equities Rule 8.600(d)(2)(D), which sets Fund’s compliance with the continued listing
1 15 U.S.C. 78s(b)(1).
forth circumstances under which Shares of a requirements. Therefore, the Commission does not 2 15 U.S.C. 78a.
Fund may be halted. view ‘‘monitor’’ as a more or less stringent 3 17 CFR 240.19b–4.
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![Federal Register / Vol. 81, No. 230 / Wednesday, November 30, 2016 / Notices 86367
(1) A DMM will publish a pre-opening through October 2016, if the Exchange perfect the mechanism of a free and
indication, as described in paragraph had applied the 5% Applicable Price open market and a national market
(e), (i) before a security opens if the Range, there would have been 18 system because it would provide
opening transaction on the Exchange is securities requiring a pre-opening additional transparency to the opening
anticipated to be at a price that indication. By contrast, using a $0.15 process if a security has not opened by
represents a change of more than the Applicable Price Change for this same 10:00 a.m. As such, the Exchange
‘‘Applicable Price Range,’’ as specified period would have resulted in only two believes that the proposal would
in paragraph (d) of this Rule, from a securities requiring a pre-opening advance the efficiency and transparency
specified ‘‘Reference Price,’’ as specified indication.7 This reduced number of of the opening process, thereby fostering
in paragraph (c) of this Rule[, before the required pre-opening indications would accurate price discovery at the open of
security opens]; or (ii) if a security has mean that more securities would have trading. For the same reasons, the
not opened by 10:00 a.m. Eastern Time. been eligible to be opened electronically proposal is also designed to protect
The Exchange also proposes to amend by the DMM. The Exchange further investors as well as the public interest.
Rule 15(d) to add a new Applicable notes that the proposed break point of The Exchange further believes that
Price Range for securities priced $3.00 which parameter would be used is providing for a $0.15 Applicable Price
and lower. As proposed, for these based on the current price buckets used Range for securities priced $3.00 and
securities, the Applicable Price Range in the Regulation NMS Plan to Address lower on regular trading days, and a
would be $0.15 on regular trading days. Extraordinary Market Volatility (‘‘LULD $0.30 Applicable Price Range for such
To effect this proposed change, the Plan’’) (providing that securities priced securities on more volatile trading days,
Exchange proposes to amend Rule $3.00 and below are subject to wider would remove impediments to and
15(d)(1) to provide that, except under percentage parameters than securities perfect a free and open market and a
the conditions set forth in Rule 15(d)(2), priced above $3.00).8 national market system because it
the Applicable Price Range for * * * * * would require a wider range of price
determining whether to publish a pre- There are no technology changes movement before a pre-opening
opening indication would be 5% for associated with this proposed rule indication must be published for these
securities with a Reference Price over change. However, because the proposed lower-priced securities. The Exchange
$3.00 and $0.15 for securities with a rule change would require DMMs to believes that these proposed changes
Reference Price equal to or lower than change behavior, the Exchange will would balance the goal of providing
$3.00. The Exchange proposes to make announce the operative date by a Trader price transparency if there would be
a related change to Rule 15(d)(2) to Update that describes the proposed significant price dislocation in the
provide for what the Applicable Price changes. The Exchange will publish this opening price of a security compared to
Range would be for securities priced Trader Update no later than 10 days the Reference Price with the manual
$3.00 and lower if as of 9:00 a.m. after the operative date of this filing. process involved with publishing pre-
Eastern Time, the E-mini S&P 500 opening indications. Moreover, the
Futures are +/¥ 2% from the prior day’s 2. Statutory Basis
Exchange believes that any reduction in
closing price of the E-mini S&P 500 The Exchange believes that the number of pre-opening indications
Futures, when reopening trading proposed rule change is consistent with published for these lower-priced
following a market-wide trading halt Section 6(b) of the Act,9 in general, and securities would not result in less
under Rule 80B [sic], or if the Exchange furthers the objectives of Section 6(b)(5) transparency because the Exchange
determines that it is necessary or of the Act,10 in particular, because it is would continue to publish Order
appropriate for the maintenance of a fair designed to prevent fraudulent and Imbalance Information for such
and orderly market. As proposed, in manipulative acts and practices, securities, as provided for in Rule 15(g).
such case, the Applicable Price Range promote just and equitable principles of
would be $0.30. trade, remove impediments to and B. Self-Regulatory Organization’s
The Exchange believes a price range perfect the mechanism of a free and Statement on Burden on Competition
movement of more than $0.15 for lower- open market and a national market The Exchange does not believe that
priced securities on regular trading system, and protect investors and the the proposed rule change will impose
days, and more than $0.30 price range public interest. The Exchange believes any burden on competition that is not
movement on more volatile trading that amending Rule 15(b)(1) to restore necessary or appropriate in furtherance
days, would better reflect when an the requirement that a pre-opening of the purposes of the Act. The
opening price for such securities is indication be published if a security has proposed rule change is not intended to
significantly away from the Reference not opened by 10:00 a.m. Eastern Time address competitive issues but rather
Price, thus warranting a pre-opening would remove impediments to and promote greater efficiency and
indication. By contrast, the Exchange transparency at the open of trading on
believes that the current 5% Applicable 7 When applying the proposed double-wide
the Exchange.
Price Range applicable to securities Applicable Price Change for volatile trading days,
priced $3.00 and below is too narrow as provided for in Rule 15(d)(2), to trade data from C. Self-Regulatory Organization’s
August 25, 2015, the change to a $0.30 Applicable Statement on Comments on the
and would result in a disproportionate Price Change instead of a 10% Applicable Price
number of pre-opening indications for Change would have resulted in four securities Proposed Rule Change Received From
these securities as compared to how requiring pre-opening indications instead of 63. Members, Participants, or Others
Similarly, applying these Applicable Price Changes
many pre-opening indications are to June 24, 2016, a 10% move would have resulted No written comments were solicited
sradovich on DSK3GMQ082PROD with NOTICES
required for securities priced above in 55 securities requiring pre-opening indications, or received with respect to the proposed
$3.00. Requiring pre-opening whereas a $0.30 parameter would have resulted in rule change.
indications when they would not one security requiring pre-opening indication.
otherwise be warranted would also 8 See Securities Exchange Act Release No. 77679 III. Date of Effectiveness of the
reduce the number of securities that (April 21, 2016), 81 FR 24908 (April 27, 2016) (File Proposed Rule Change and Timing for
No. 4–631) (Order approving 10th Amendment to Commission Action
would be eligible to be opened by a the LULD Plan).
DMM electronically. For example, based 9 15 U.S.C. 78f(b). The Exchange has filed the proposed
on Exchange data from January 2016 10 15 U.S.C. 78f(b)(5). rule change pursuant to Section
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![86368 Federal Register / Vol. 81, No. 230 / Wednesday, November 30, 2016 / Notices
19(b)(3)(A) of the Act 11 and Rule 19b– NYSEMKT–2016–107 on the subject SECURITIES AND EXCHANGE
4(f)(6) thereunder.12 Because the line. COMMISSION
proposed rule change does not: (i)
significantly affect the protection of Paper Comments [Release No. 34–79388; File No. SR–
NYSEArca–2016–136]
investors or the public interest; (ii) • Send paper comments in triplicate
impose any significant burden on to Brent J. Fields, Secretary, Securities Self-Regulatory Organizations; NYSE
competition; and (iii) become operative and Exchange Commission, 100 F Street Arca, Inc.; Notice of Designation of a
prior to 30 days from the date on which Longer Period for Commission Action
NE., Washington, DC 20549–1090.
it was filed, or such shorter time as the on a Proposed Rule Change Amending
Commission may designate, if All submissions should refer to File NYSE Arca Equities Rule 7.35P To
consistent with the protection of Number SR–NYSEMKT–2016–107. This Provide for Widened Price Collar
investors and the public interest, the file number should be included on the Thresholds for the Core Open Auction
proposed rule change has become subject line if email is used. To help the on Volatile Trading Days
effective pursuant to Section 19(b)(3)(A) Commission process and review your
of the Act and Rule 19b–4(f)(6)(iii) November 23, 2016.
comments more efficiently, please use
thereunder.13 On September 28, 2016, NYSE Arca,
only one method. The Commission will
A proposed rule change filed under Inc. (the ‘‘Exchange’’ or ‘‘NYSE Arca’’)
post all comments on the Commission’s filed with the Securities and Exchange
Rule 19b–4(f)(6) 14 normally does not Internet Web site (http://www.sec.gov/
become operative prior to 30 days after Commission (‘‘Commission’’), pursuant
rules/sro.shtml). Copies of the to Section 19(b)(1) of the Securities
the date of the filing. However, pursuant submission, all subsequent
to Rule 19b4(f)(6)(iii),15 the Commission Exchange Act of 1934 (‘‘Act’’) 1 and Rule
amendments, all written statements 19b–4 thereunder,2 a proposed rule
may designate a shorter time if such with respect to the proposed rule
action is consistent with the protection change to amend NYSE Arca Equities
change that are filed with the Rule 7.35P 3 to widen price collar
of investors and the public interest.
Commission, and all written thresholds for the Core Open Auction
At any time within 60 days of the communications relating to the on volatile trading days. The proposed
filing of such proposed rule change, the
proposed rule change between the rule change was published for comment
Commission summarily may in the Federal Register on October 14,
Commission and any person, other than
temporarily suspend such rule change if 2016.4 The Commission received no
those that may be withheld from the
it appears to the Commission that such comment letters on the proposed rule
action is necessary or appropriate in the public in accordance with the
provisions of 5 U.S.C. 552, will be change.
public interest, for the protection of Section 19(b)(2) of the Act 5 provides
investors, or otherwise in furtherance of available for Web site viewing and
printing in the Commission’s Public that, within 45 days of the publication
the purposes of the Act. If the of notice of the filing of a proposed rule
Commission takes such action, the Reference Room, 100 F Street NE.,
change, or within such longer period up
Commission shall institute proceedings Washington, DC 20549 on official
to 90 days as the Commission may
under Section 19(b)(2)(B) 16 of the Act to business days between the hours of
designate if it finds such longer period
determine whether the proposed rule 10:00 a.m. and 3:00 p.m. Copies of the to be appropriate and publishes its
change should be approved or filing also will be available for reasons for so finding or as to which the
disapproved. inspection and copying at the principal self-regulatory organization consents,
office of the Exchange. All comments the Commission shall either approve the
IV. Solicitation of Comments
received will be posted without change; proposed rule change, disapprove the
Interested persons are invited to the Commission does not edit personal proposed rule change, or institute
submit written data, views, and identifying information from proceedings to determine whether the
arguments concerning the foregoing, submissions. You should submit only proposed rule change should be
including whether the proposed rule information that you wish to make disapproved. The 45th day after
change is consistent with the Act. available publicly. All submissions publication of the notice for this
Comments may be submitted by any of should refer to File Number SR– proposed rule change is November 28,
the following methods: NYSEMKT–2016–107 and should be 2016. The Commission is extending this
Electronic Comments submitted on or before December 21, 45-day time period.
2016. The Commission finds that it is
• Use the Commission’s Internet appropriate to designate a longer period
comment form (http://www.sec.gov/ For the Commission, by the Division of within which to take action on the
rules/sro.shtml); or Trading and Markets, pursuant to delegated proposed rule change so that it has
• Send an email to rule-comments@ authority.17 sufficient time to consider the proposed
sec.gov. Please include File Number SR– Robert W. Errett, rule change. Accordingly, the
Deputy Secretary. Commission, pursuant to Section
11 15 U.S.C. 78s(b)(3)(A). [FR Doc. 2016–28779 Filed 11–29–16; 8:45 am] 19(b)(2) of the Act,6 designates January
12 17 CFR 240.19b–4(f)(6). BILLING CODE 8011–01–P
13 In addition, Rule 19b–4(f)(6)(iii) requires the 1 15 U.S.C. 78s(b)(1).
Exchange to give the Commission written notice of 2 17 CFR 240.19b–4.
the Exchange’s intent to file the proposed rule 3 The Commission notes that the Exchange
sradovich on DSK3GMQ082PROD with NOTICES
change, along with a brief description and text of recently re-designated NYSE Arca Equities Rule
the proposed rule change, at least five business days 7.35P as NYSE Arca Equities Rule 7.35. See
prior to the date of filing of the proposed rule Securities Exchange Act Release No. 79078 (October
change, or such shorter time as designated by the 11, 2016), 81 FR 71559 (October 17, 2016) (SR–
Commission. The Exchange has satisfied this NYSEArca–2016–135).
requirement. 4 See Securities Exchange Act Release No. 79068
14 17 CFR 240.19b–4(f)(6). (October 7, 2016), 81 FR 71127.
15 17 CFR 240.19b–4(f)(6)(iii). 5 15 U.S.C. 78s(b)(2).
16 15 U.S.C. 78s(b)(2)(B). 17 17 CFR 200.30–3(a)(12). 6 15 U.S.C. 78s(b)(2).
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Document Created: 2016-11-30 02:17:51
Document Modified: 2016-11-30 02:17:51
| 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 86365 |
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