81 FR 90033 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot Period for the Exchange's Retail Liquidity Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 239 (December 13, 2016)
Federal Register Volume 81, Issue 239 (December 13, 2016)
| Page Range | 90033-90035 | |
| FR Document | 2016-29800 |
[Federal Register Volume 81, Number 239 (Tuesday, December 13, 2016)] [Notices] [Pages 90033-90035] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-29800] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79495; File No. SR-NYSEARCA-2016-157] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot Period for the Exchange's Retail Liquidity Program December 7, 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 28, 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, II, and III 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, on behalf of its wholly-owned corporation, NYSE Arca Equities, Inc., proposes to extend the pilot period for the Exchange's Retail Liquidity Program (the ``Retail Liquidity Program'' or the ``Program''), which is currently scheduled to expire on December 31, 2016, until June 30, 2017. 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 [[Page 90034]] 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 purpose of this filing is to extend the pilot period of the Retail Liquidity Program, currently scheduled to expire on December 31, 2016,\4\ until June 30, 2017. --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 78601 (August 17, 2016), 81 FR 57632 (August 23, 2016) (SR-NYSEArca-2016-113). --------------------------------------------------------------------------- Background In December 2013, the Commission approved the Retail Liquidity Program on a pilot basis.\5\ The Program is designed to attract retail order flow to the Exchange, and allows such order flow to receive potential price improvement. The Program is currently limited to trades occurring at prices equal to or greater than $1.00 per share. Under the Program, Retail Liquidity Providers (``RLPs'') are able to provide potential price improvement in the form of a non-displayed order that is priced better than the Exchange's best protected bid or offer (``PBBO''), called a Retail Price Improvement Order (``RPI''). When there is an RPI in a particular security, the Exchange disseminates an indicator, known as the Retail Liquidity Identifier, indicating that such interest exists. Retail Member Organizations (``RMOs'') can submit a Retail Order to the Exchange, which would interact, to the extent possible, with available contra-side RPIs. --------------------------------------------------------------------------- \5\ See Securities Exchange Act Release No. 71176 (December 23, 2013), 78 FR 79524 (December 30, 2013) (SR-NYSEArca-2013-107) (``RLP Approval Order''). --------------------------------------------------------------------------- The Retail Liquidity Program was approved by the Commission on a pilot basis. Pursuant to NYSE Arca Equities Rule 7.44(m), the pilot period for the Program is scheduled to end on December 31, 2016. Proposal To Extend the Operation of the Program The Exchange established the Retail Liquidity Program in an attempt to attract retail order flow to the Exchange by potentially providing price improvement to such order flow. The Exchange believes that the Program promotes competition for retail order flow by allowing Exchange members to submit RPIs to interact with Retail Orders. Such competition has the ability to promote efficiency by facilitating the price discovery process and generating additional investor interest in trading securities, thereby promoting capital formation. The Exchange believes that extending the pilot is appropriate because it will allow the Exchange and the Commission additional time to analyze data regarding the Program that the Exchange has committed to provide.\6\ As such, the Exchange believes that it is appropriate to extend the current operation of the Program.\7\ Through this filing, the Exchange seeks to amend NYSE Arca Equities Rule 7.44(m) and extend the current pilot period of the Program until June 30, 2017. --------------------------------------------------------------------------- \6\ See RLP Approval Order, supra n. 4, 78 FR at 79529. \7\ Concurrently with this filing, the Exchange has submitted a request for an extension of the exemption under Regulation NMS Rule 612 previously granted by the Commission that permits it to accept and rank the undisplayed RPIs. See Letter from Martha Redding, Asst. Corporate Secretary, NYSE Group, Inc. to Brent J. Fields, Secretary, Securities and Exchange Commission, dated November 28, 2016. --------------------------------------------------------------------------- 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act,\8\ in general, and furthers the objectives of Section 6(b)(5),\9\ in particular, in that it is designed 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 extending the pilot period for the Retail Liquidity Program is consistent with these principles because the Program is reasonably designed to attract retail order flow to the exchange environment, while helping to ensure that retail investors benefit from the better price that liquidity providers are willing to give their orders. Additionally, as previously stated, the competition promoted by the Program may facilitate the price discovery process and potentially generate additional investor interest in trading securities. The extension of the pilot period will allow the Commission and the Exchange to continue to monitor the Program for its potential effects on public price discovery, and on the broader market structure. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78f(b). \9\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- 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 simply extends an established pilot program for an additional six months, thus allowing the Retail Liquidity Program to enhance competition for retail order flow and contribute to the public price discovery process. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\ 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. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(b)(3)(A)(iii). \11\ 17 CFR 240.19b-4(f)(6). 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. --------------------------------------------------------------------------- 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) \12\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views, and [[Page 90035]] 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-NYSEARCA-2016-157 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-2016-157. 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-NYSEARCA-2016-157 and should be submitted on or before January 3, 2017. --------------------------------------------------------------------------- \13\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\13\ Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2016-29800 Filed 12-12-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 239 / Tuesday, December 13, 2016 / Notices 90033
mechanisms of a free and open market approve or disapprove such proposed For the Commission, by the Division of
and a national market system by rule change, or (b) institute proceedings Trading and Markets, pursuant to delegated
providing meaningful price to determine whether the proposed rule authority.16
improvement for orders executed change should be disapproved. Eduardo A. Aleman,
through PRIME, regardless of the NBBO Assistant Secretary.
IV. Solicitation of Comments
bid/ask differential. Additionally, the [FR Doc. 2016–29805 Filed 12–12–16; 8:45 am]
proposal protects investors and the Interested persons are invited to BILLING CODE 8011–01–P
public interest by showing that there is submit written data, views, and
an active and liquid market functioning arguments concerning the foregoing,
on the Exchange outside of the PRIME. including whether the proposed rule SECURITIES AND EXCHANGE
Furthermore, the proposed rule change is consistent with the Act. COMMISSION
change removes impediments to and Comments may be submitted by any of [Release No. 34–79495; File No. SR–
perfects the mechanisms of a free and the following methods: NYSEARCA–2016–157]
open market and a national market
Electronic Comments
system by establishing the new manner Self-Regulatory Organizations; NYSE
in which the Exchange will handle • Use the Commission’s Internet Arca, Inc.; Notice of Filing and
Agency Orders received with a size of comment form (http://www.sec.gov/ Immediate Effectiveness of Proposed
under 50 contracts when the NBBO has rules/sro.shtml); or Rule Change To Extend the Pilot
a bid/ask differential of $0.01. • Send an email to rule-comments@ Period for the Exchange’s Retail
sec.gov. Please include File Number SR– Liquidity Program
B. Self-Regulatory Organization’s
MIAX–2016–46 on the subject line.
Statement on Burden on Competition December 7, 2016.
The Exchange does not believe that Paper Comments Pursuant to Section 19(b)(1) 1 of the
the proposed rule change will impose • Send paper comments in triplicate Securities Exchange Act of 1934 (the
any burden on competition not to Secretary, Securities and Exchange ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
necessary or appropriate in furtherance Commission, 100 F Street NE., notice is hereby given that, on
of the purposes of the Act. Washington, DC 20549–1090. November 28, 2016, NYSE Arca, Inc.
The PRIME Auction enables the All submissions should refer to File (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
Exchange to compete for order flow Number SR–MIAX–2016–46. This file with the Securities and Exchange
with other exchanges that have similar number should be included on the Commission (the ‘‘Commission’’) the
price improvement mechanisms in subject line if email is used. To help the proposed rule change as described in
place. As stated above, the Exchange Commission process and review your Items I, II, and III below, which Items
believes that there is meaningful comments more efficiently, please use have been prepared by the self-
competition in PRIME Auctions for all only one method. The Commission will regulatory organization. The
size orders, there are opportunities for post all comments on the Commission’s Commission is publishing this notice to
significant price improvement for orders Internet Web site (http://www.sec.gov/ solicit comments on the proposed rule
executed through PRIME, and that there rules/sro.shtml). Copies of the change from interested persons.
is an active and liquid market submission, all subsequent
functioning on the Exchange outside of I. Self-Regulatory Organization’s
amendments, all written statements Statement of the Terms of Substance of
PRIME. with respect to the proposed rule
The Exchange believes that approving the Proposed Rule Change
change that are filed with the
the Pilot on a permanent basis will not The Exchange, on behalf of its wholly-
Commission, and all written
significantly impact competition, as it owned corporation, NYSE Arca
communications relating to the
will continue to accept and process Equities, Inc., proposes to extend the
proposed rule change between the
Agency Orders for potential price pilot period for the Exchange’s Retail
Commission and any person, other than
improvement except in the very limited Liquidity Program (the ‘‘Retail Liquidity
those that may be withheld from the
circumstance where the Agency Order is Program’’ or the ‘‘Program’’), which is
public in accordance with the
for a size of less than 50 contracts and currently scheduled to expire on
provisions of 5 U.S.C. 552, will be
the NBBO bid/ask differential is $0.01. December 31, 2016, until June 30, 2017.
available for Web site viewing and
The proposed rule change is available
C. Self-Regulatory Organization’s printing in the Commission’s Public
on the Exchange’s Web site at
Statement on Comments on the Reference Room, 100 F Street NE.,
www.nyse.com, at the principal office of
Proposed Rule Change Received From Washington, DC 20549, on official
the Exchange, and at the Commission’s
Members, Participants, or Others business days between the hours of
Public Reference Room.
Written comments were neither 10:00 a.m. and 3:00 p.m. Copies of the
solicited nor received. filing also will be available for II. Self-Regulatory Organization’s
inspection and copying at the principal Statement of the Purpose of, and
III. Date of Effectiveness of the office of the Exchange. All comments Statutory Basis for, the Proposed Rule
Proposed Rule Change and Timing for received will be posted without change; Change
Commission Action the Commission does not edit personal In its filing with the Commission, the
Within 45 days of the date of identifying information from self-regulatory organization included
pmangrum on DSK3GDR082PROD with NOTICES
publication of this notice in the Federal submissions. You should submit only statements concerning the purpose of,
Register or within such longer period (i) information that you wish to make and basis for, the proposed rule change
as the Commission may designate up to available publicly. All submissions and discussed any comments it received
90 days of such date if it finds such should refer to File Number SR–MIAX– on the proposed rule change. The text
longer period to be appropriate and 2016–46 and should be submitted on or
publishes its reasons for so finding or before January 3, 2017. 1 15 U.S.C. 78s(b)(1).
(ii) as to which the Exchange consents, 2 15 U.S.C. 78a.
the Commission shall: (a) By order 16 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4.
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![Federal Register / Vol. 81, No. 239 / Tuesday, December 13, 2016 / Notices 90035
arguments concerning the foregoing, SECURITIES AND EXCHANGE II. Self-Regulatory Organization’s
including whether the proposed rule COMMISSION Statement of the Purpose of, and
change is consistent with the Act. Statutory Basis for, the Proposed Rule
Comments may be submitted by any of [Release No. 34–79502; File No. SR–IEX– Change
the following methods: 2016–18] In its filing with the Commission, the
Electronic Comments self-regulatory organization included
Self-Regulatory Organizations;
• Use the Commission’s Internet statements concerning the purpose of
Investors Exchange LLC; Notice of
comment form (http://www.sec.gov/ and basis for the proposed rule change
Filing of Proposed Rule Change to: (i)
rules/sro.shtml); or and discussed any comments it received
Amend Rules 11.190(a)(3) and
• Send an email to rule-comments@ on the proposed rule change. The text
11.190(b)(8) To Modify the Operation of
sec.gov. Please include File Number SR– of these statements may be examined at
the Primary Peg Order Type; (ii)
NYSEARCA–2016–157 on the subject the places specified in Item IV below.
Amend Rule 11.190(h)(C)(ii) and (D)(ii)
line. The self-regulatory organization has
Regarding Price Sliding in Locked and
prepared summaries, set forth in
Paper Comments Crossed Markets To Simplify the Price
Sections A, B, and C below, of the most
Sliding Process for Both Primary Peg
• Send paper comments in triplicate Orders and Discretionary Peg Orders
significant aspects of such statements.
to Brent J. Fields, Secretary, Securities Resting on or Posting to the Order A. Self-Regulatory Organization’s
and Exchange Commission, 100 F Street Book; and (iii) Make Minor Statement of the Purpose of, and
NE., Washington, DC 20549–1090. Housekeeping Changes To Conform Statutory Basis for, the Proposed Rule
All submissions should refer to File Certain Terminology Change
Number SR–NYSEARCA–2016–157.
This file number should be included on December 7, 2016. 1. Purpose
the subject line if email is used. To help Pursuant to Section 19(b)(1) 1 of the Background
the Commission process and review Securities Exchange Act of 1934 2 and
Rule 19b–4 thereunder,3 notice is The purpose of the proposed rule
your comments more efficiently, please change is to amend Rules 11.190(a)(3)
use only one method. The Commission hereby given that, on November 29,
2016, the Investors Exchange LLC filed and 11.190(b)(8) to modify the operation
will post all comments on the of the primary peg order type offered by
Commission’s Internet Web site (http:// with the Securities and Exchange
Commission the proposed rule change the Exchange, and to amend Rule
www.sec.gov/rules/sro.shtml). Copies of 11.190(h)(C)(ii) and (D)(ii) [sic]
the submission, all subsequent as described in Items I, II, and III below,
which Items have been prepared by the regarding price sliding in locked and
amendments, all written statements crossed markets to simplify the price
with respect to the proposed rule self-regulatory organization. The
Commission is publishing this notice to sliding process for both primary peg
change that are filed with the orders and Discretionary Peg orders
Commission, and all written solicit comments on the proposed rule
change from interested persons. resting on or posting to the Order Book.
communications relating to the Currently, the Exchange offers three
proposed rule change between the I. Self-Regulatory Organization’s types of pegged orders—primary peg,
Commission and any person, other than Statement of the Terms of Substance of midpoint peg and discretionary peg—
those that may be withheld from the the Proposed Rule Change each of which are non-displayed orders
public in accordance with the that upon entry into the System and
provisions of 5 U.S.C. 552, will be Pursuant to the provisions of Section
19(b)(1) under the Securities Exchange while resting on the Order Book, are
available for Web site viewing and pegged to a reference price based on the
printing in the Commission’s Public Act of 1934 (‘‘Act’’),4 and Rule 19b-4
thereunder,5 Investors Exchange LLC national best bid and offer (‘‘NBBO’’)
Reference Room, 100 F Street NE., and the price of the order is
Washington, DC 20549 on official (‘‘IEX’’ or ‘‘Exchange’’) is filing with the
Securities and Exchange Commission automatically adjusted by the System in
business days between the hours of response to changes in the NBBO. As set
10:00 a.m. and 3:00 p.m. Copies of the (‘‘Commission’’) proposed rule changes
to (i) amend Rules 11.190(a)(3) and forth in Rule 11.190(b)(8), a primary peg
filing also will be available for order is a pegged order that upon entry
inspection and copying at the principal 11.190(b)(8) to modify the operation of
the primary peg order type; (ii) amend and when posting to the Order Book, the
office of the Exchange. All comments price of the order is automatically
received will be posted without change; Rule 11.190(h)(C)(ii) and (D)(ii) [sic]
regarding price sliding in locked and adjusted by the System to be equal to
the Commission does not edit personal and ranked at the less aggressive of the
identifying information from crossed markets to simplify the price
sliding process for both primary peg primary quote (i.e., the national best bid
submissions. You should submit only (‘‘NBB’’) for buy orders and the national
information that you wish to make orders and Discretionary Peg orders
resting on or posting to the Order Book; best offer (‘‘NBO’’) for sell orders) or the
available publicly. All submissions order’s limit price, if any. While resting
should refer to File Number SR– and (iii) make minor housekeeping
changes to conform certain terminology. on the Order Book, the order is
NYSEARCA–2016–157 and should be automatically adjusted by the System in
submitted on or before January 3, 2017. The text of the proposed rule change
is available at the Exchange’s Web site response to the changes in the NBB
For the Commission, by the Division of (NBO) for buy (sell) orders up (down) to
at www.iextrading.com, at the principal
Trading and Markets, pursuant to delegated
pmangrum on DSK3GDR082PROD with NOTICES
office of the Exchange, and at the the order’s limit price, if any.
authority.13 In the event the NBBO becomes
Commission’s Public Reference Room.
Eduardo A. Aleman, locked or crossed, primary peg orders,
Assistant Secretary. 1 15 as well as Discretionary Peg orders,
U.S.C. 78s(b)(1).
[FR Doc. 2016–29800 Filed 12–12–16; 8:45 am] 2 15 U.S.C. 78a. resting on or posting to the Order Book
BILLING CODE 8011–01–P 3 17 CFR 240.19b–4. are priced to the less aggressive of either
4 15 U.S.C. 78s(b)(1). the prior non-locked or non-crossing
13 17 CFR 200.30–3(a)(12). 5 17 CFR 240.19b–4. near side quote (i.e., the prior unlocked
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Document Created: 2016-12-13 02:44:21
Document Modified: 2016-12-13 02:44:21
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 90033 |
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