81 FR 8812 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 7.35P To Provide for Price Collar Thresholds for Trading Halt Auctions

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 34 (February 22, 2016)

[Federal Register Volume 81, Number 34 (Monday, February 22, 2016)]
[Notices]
[Pages 8812-8813]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-03523]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77140; File No. SR-NYSEArca-2016-27]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Rule 7.35P 
To Provide for Price Collar Thresholds for Trading Halt Auctions

February 16, 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 February 4, 2016, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 7.35P to provide for price 
collar thresholds for Trading Halt Auctions. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 7.35P to provide for price 
collar thresholds for Trading Halt Auctions on Pillar. As previously 
described, the Exchange is in the process of implementing Pillar, its 
new trading platform.\4\ The Exchange anticipates beginning migrating 
symbols to Pillar on February 22, 2016. As symbols migrate to Pillar, 
specified current rules not designated with ``P'' will no longer be 
applicable, and rules with a ``P'' designation will govern the 
applicable conduct. With respect to auctions, on Pillar, current Rules 
1.1(s) and 7.35 will no longer govern trading; Rule 7.35P will govern 
all aspects of auctions on Pillar.\5\
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    \4\ See Securities Exchange Act Release Nos. 74951 (May 13, 
2015), 80 FR 28721 (May 19, 2015) (Notice) and 75494 (July 20, 
2015), 80 FR 44170 (July 24, 2015) (Order) (SR-NYSEArca-2015-38) 
(``Pillar I Filing''); 75497 (July 21, 2015), 80 FR 45022 (July 28, 
2015) (Notice) and 76267 (Oct. 26, 2015), 80 FR 66951 (Oct. 30, 
2015) (Order) (SR-NYSEArca-2015-56)(``Pillar II Filing''); 75467 
(July 16, 2015), 80 FR 43515 (July 22, 2015) (Notice) and 76198 
(Oct. 20, 2015), 80 FR 65274 (Oct. 26, 2015) (Order) (SR-NYSEArca-
2015-58) (``Pillar III Filing''); and 76085 (Oct. 6, 2015), 80 FR 
61513 (Oct. 13, 2015) (Notice) and 76869 (Jan. 11, 2016), 81 FR 2276 
(Jan. 15, 2016) (Order) (SR-NYSEArca-2015-86) (``Pillar Auction 
Filing'').
    \5\ See Pillar Auction Filing.
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    The Exchange recently amended Rule 1.1(s) to provide for price 
collar thresholds for Trading Halt Auctions on a temporary basis.\6\ 
However, Rule 1.1(s)(B) will not be applicable to trading on Pillar. 
Accordingly, the Exchange proposes to amend Rule 7.35P to adopt price 
collar thresholds for Trading Halt Auctions on the same terms and 
conditions as approved in Rule 1.1(s)(B). As proposed, Rule 
7.35P(a)(10) would be amended to add reference to Trading Halt Auctions 
by providing that ``Auction Collar'' would mean the price collar 
thresholds for the Indicative Match Price for the Core Open Auction, 
Trading Halt Auction, or Closing Auction.
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    \6\ See Securities Exchange Act Release No. 76994 (Jan. 28, 
2016) (SR-NYSEArca-2015-121) (Approval Order) (``Trading Halt 
Auction Collar Filing''). Rule 1.1(s)(B) will be in effect until 
July 28, 2016.
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    The Exchange would further amend Rule 7.35P(a)(10)(A) to add the 
specified percentages for price collar thresholds for Trading Halt 
Auctions. Consistent with Rule 1.1(s)(B), the price collar thresholds 
for Trading Halt Auctions would be 10% for securities with a 
consolidated last sale price of $25.00 or less, 5% for securities with 
a consolidated last sale price greater than $25.00 but less than or 
equal to $50.00, and 3% for securities with a consolidated last sale 
price greater than $50.00. The Exchange proposes a non-substantive 
difference from Rule 1.1(s) to refer to the ``Auction Reference Price'' 
in Rule 7.35P instead of the last consolidated sale price. Rule 7.35P 
defines the term ``Auction Reference Price'' for the Trading Halt 
Auction to be the last consolidated round-lot price of that trading 
day, and if none, the prior trading day's Official Closing Price. 
Because the Rule 7.35P Auction Reference Price for Trading Halt 
Auctions is based on the same reference price for Trading Halt Auctions 
as specified in Rule 1.1(s)(B), the Exchange proposes in Rule 7.35P to 
reference the term ``Auction Reference Price'' rather than refer to the 
last consolidated sale price.
    Finally, as with Rule 1.1(s), the Exchange proposes that the price 
collar thresholds for Trading Halt Auctions would be in effect 
temporarily. Because the Rule 1.1(s)(B) Trading Halt Auction collars 
will be in effect until July 28, 2016, the Exchange proposes that the 
price collar thresholds specified in Rule 7.35P(a)(10)(A) applicable to 
Trading Halt Auctions would similarly be in effect until July 28, 2016.
    As the Exchange noted in the Trading Halt Auction Collar Filing, 
the Exchange is continuing its analysis to identify what changes, if 
any, would be appropriate for how the Exchange conducts its Trading 
Halt Auctions and, based on this analysis, will file a separate rule 
proposal to either make the price collar thresholds for Trading Halt 
Auctions permanent or propose other or additional changes to the re-
opening auction process.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\7\ in general, and 
furthers the objectives of Section 6(b)(5),\8\ in particular, because 
it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster

[[Page 8813]]

cooperation and coordination with persons engaged in facilitating 
transactions in securities, 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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange recently amended Rule 1.1(s) to provide price collar 
thresholds for Trading Halt Auctions on a temporary basis. However, the 
Exchange will be migrating symbols to its Pillar trading platform and 
Rule 1.1(s) will no longer govern auctions on the Exchange once a 
symbol trades on Pillar. The Exchange therefore believes that it would 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system to provide that the rule that 
governs auctions on the Exchange on Pillar be amended to reflect 
recently approved changes to Rule 1.1(s)(B). The Exchange further 
believes the proposed price collar thresholds for Trading Halt 
Auctions, which would be based on the numerical guidelines set forth in 
Rule 7.10(c)(1) and Rule 1.1(s)(B), would also remove impediments to 
and perfect the mechanism of a fair and orderly market and protect 
investors and the public interest because they would reduce the 
potential for a Trading Halt Auction to be a clearly erroneous 
execution on Pillar.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change is not 
designed to address any competitive issue but rather to provide for a 
price protection mechanism to prevent Trading Halt Auctions from 
occurring at prices that could be a clearly erroneous execution.

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

    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 for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \11\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \12\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The Exchange 
stated that it anticipates beginning the migration of symbols to Pillar 
on February 22, 2016 and therefore there would be symbols trading on 
the Exchange that will no longer be governed by Rule 7.35 or 1.1(s) in 
less than 30 days. The Exchange stated that waiver of the operative 
delay would allow the Exchange to immediately implement the approved 
changes to Rule 1.1(s)(B) on its Pillar trading platform without delay. 
The Commission believes the waiver of the operative delay is consistent 
with the protection of investors and the public interest. Therefore, 
the Commission hereby waives the operative delay and designates the 
proposal operative upon filing.\13\
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2016-27 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-NYSEArca-2016-27. 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 such 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-NYSEArca-2016-27, and should 
be submitted on or before March 14, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-03523 Filed 2-19-16; 8:45 am]
 BILLING CODE 8011-01-P