81 FR 91230 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Commentary .02 to Rule 960NY in Order To Extend the Penny Pilot in Options Classes in Certain Issues
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 242 (December 16, 2016)
Federal Register Volume 81, Issue 242 (December 16, 2016)
| Page Range | 91230-91232 | |
| FR Document | 2016-30253 |
[Federal Register Volume 81, Number 242 (Friday, December 16, 2016)] [Notices] [Pages 91230-91232] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-30253] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79525; File No. SR-NYSEMKT-2016-111] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Commentary .02 to Rule 960NY in Order To Extend the Penny Pilot in Options Classes in Certain Issues December 12, 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 MKT LLC (the ``Exchange'' or ``NYSE MKT'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I, 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 proposes to amend Commentary .02 to Rule 960NY in order to extend the Penny Pilot in options classes in certain issues (``Pilot Program'' or ``Pilot'') previously approved by the Securities and Exchange Commission (``Commission'') through June 30, 2017. The Pilot Program is currently scheduled to expire on December 31, 2016. 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 [[Page 91231]] 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 extend the Pilot Program,\4\ which is currently scheduled to expire on December 31, 2016, until June 30, 2017.\5\ The Exchange believes that extending the Pilot would allow for further analysis of the Pilot Program and a determination of how the Pilot Program should be structured in the future. --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 55162 (January 24, 2007), 72 FR 4738 (February 1, 2007) (original approval of Pilot). The Pilot has been extended several times since the original approval, the most recent extension was obtained in earlier this year. See Securities Exchange Act Release No. 78176 (June 28, 2016), 81 FR 43320 (July 1, 2016) (SR-NYSEMKT-2016-61) (most recent extension of the Pilot until December 31, 2016). \5\ See proposed Commentary .02 to Rule 960NY. --------------------------------------------------------------------------- During this extension of the Pilot, as is the case today, the Exchange may replace any option class that is currently included in the Pilot Program and that has been delisted with the next most actively traded, multiply listed option class that is not yet participating in the Pilot Program (``replacement class''). In light of the extension, the Exchange also proposes that any replacement class would be determined based on national average daily volume in the preceding six months, and would be added on the second trading day following January 1, 2017.\6\ --------------------------------------------------------------------------- \6\ See id. The month immediately preceding a replacement class's addition to the Pilot Program (i.e., December) would not be used for purposes of the analysis for determining the replacement class. Thus, a replacement class to be added on the second trading day following January 1, 2017 would be identified based on The Option Clearing Corporation's trading volume data from June 1, 2016 through November 30, 2016. The Exchange will announce the replacement issues to the Exchange's membership through a Trader Update. --------------------------------------------------------------------------- This filing does not propose any substantive changes to the Pilot Program: All classes currently participating will remain the same and all minimum increments will remain unchanged. The Exchange believes the benefits to public customers and other market participants who will be able to express their true prices to buy and sell options have been demonstrated to outweigh the increase in quote traffic. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) \7\ of the Securities Exchange Act of 1934 (the ``Act''), in general, and furthers the objectives of Section 6(b)(5),\8\ in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanisms of a free and open market and a national market system. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78f(b). \8\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- In particular, the proposed rule change, which extends the Penny Pilot Program for six months, allows the Exchange to continue to participate in a program that has been viewed as beneficial to traders, investors and public customers and viewed as successful by the other options exchanges participating in it. Accordingly, the Exchange believes that the proposal is consistent with the Act because it would allow the Exchange to extend the Pilot Program prior to its expiration on December 31, 2016. The Exchange notes that this proposal does not propose any new policies or provisions that are unique or unproven, but instead relates to the continuation of an existing program that operates on a pilot basis. The Exchange believes that the Pilot Program promotes just and equitable principles of trade by enabling public customers and other market participants to express their true prices to buy and sell options to the benefit of all market participants. The proposal to extend the Pilot Program is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanisms of a free and open market and a national market system, by allowing the Exchange and the Commission additional time to analyze the impact of the Pilot Program while also allowing the Exchange to continue to compete for order flow with other exchanges in option issues trading as part of the Pilot Program. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange believes that, by extending the expiration of the Pilot Program, the proposed rule change would allow for further analysis of the Pilot Program and a determination of how the Program should be structured in the future. In doing so, the proposed rule change would also serve to promote regulatory clarity and consistency, thereby reducing burdens on the marketplace and facilitating investor protection. The Pilot Program is an industry-wide initiative supported by all other option exchanges. The Exchange believes that extending the Pilot Program would allow for continued competition between Exchange market participants trading similar products as their counterparts on other exchanges, while at the same time allowing the Exchange to continue to compete for order flow with other exchanges in option issues trading as part of the Pilot Program. 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 \9\ and Rule 19b-4(f)(6) thereunder.\10\ 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 \11\ and Rule 19b- 4(f)(6)(iii) thereunder.\12\ --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(3)(A)(iii). \10\ 17 CFR 240.19b-4(f)(6). \11\ 15 U.S.C. 78s(b)(3)(A). \12\ 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 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. The Exchange has satisfied this pre-filing requirement. --------------------------------------------------------------------------- [[Page 91232]] 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)\13\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \13\ 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-2016-111 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-NYSEMKT-2016-111. 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 20549-1090 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-2016-111 and should be submitted on or before January 6, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\ Eduardo A. Aleman, Assistant Secretary. --------------------------------------------------------------------------- \14\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2016-30253 Filed 12-15-16; 8:45 am] BILLING CODE 8011-01-P
![91230 Federal Register / Vol. 81, No. 242 / Friday, December 16, 2016 / Notices
Permanent approval of the Pilot (B) institute proceedings to determine For the Commission, by the Division of
Programs would continue to provide whether the proposed rule change Trading and Markets, pursuant to delegated
investors with real and significant price should be disapproved. authority.22
improvement regardless of the size of Eduardo A. Aleman,
the order. The Exchange believes that IV. Solicitation of Comments Assistant Secretary.
allowing price improvement to any size Interested persons are invited to [FR Doc. 2016–30258 Filed 12–15–16; 8:45 am]
order removes impediments to a free submit written data, views and BILLING CODE 8011–01–P
and open market and national market
arguments concerning the foregoing,
system, therefore creating more
including whether the proposed rule
competition for the best execution of all SECURITIES AND EXCHANGE
change is consistent with the Act.
orders. The Exchange also believes that COMMISSION
Comments may be submitted by any of
making the Pilot Programs permanent [Release No. 34–79525; File No. SR–
does not raise any unique regulatory the following methods:
NYSEMKT–2016–111]
concerns. Electronic Comments
Lastly, the Exchange also believes that Self-Regulatory Organizations; NYSE
the proposed rule change, which • Use the Commission’s Internet MKT LLC; Notice of Filing and
provides all market participants, comment form (http://www.sec.gov/ Immediate Effectiveness of Proposed
including public investors, with rules/sro.shtml); or Rule Change To Amend Commentary
opportunity to trade with small • Send an email to rule-comments@ .02 to Rule 960NY in Order To Extend
customer orders of less than 50 sec.gov. Please include File Number SR– the Penny Pilot in Options Classes in
contracts in the PIP and COPIP, is BOX–2016–58 on the subject line. Certain Issues
appropriate in the public interest and
for the protection of investors Paper Comments December 12, 2016.
Pursuant to Section 19(b)(1) 1 of the
B. Self-Regulatory Organization’s • Send paper comments in triplicate Securities Exchange Act of 1934 (the
Statement on Burden on Competition to Secretary, Securities and Exchange ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
The Exchange does not believe that Commission, 100 F Street NE., notice is hereby given that on November
the proposed rule change will impose Washington, DC 20549–1090. 28, 2016, NYSE MKT LLC (the
any burden on competition either ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with
All submissions should refer to File
among BOX Participants, or among the the Securities and Exchange
Number SR–BOX–2016–58. This file
various options exchanges, which is not Commission (the ‘‘Commission’’) the
necessary or appropriate in furtherance number should be included on the
proposed rule change as described in
of the purposes of the Act. Specifically, subject line if email is used. To help the
Items I, II, and III below, which Items
the PIP and COPIP mechanisms are Commission process and review your
have been prepared by the self-
offered to all BOX Participants and comments more efficiently, please use regulatory organization. The
making the Pilot Programs permanent only one method. The Commission will Commission is publishing this notice to
will not impose a competitive burden post all comments on the Commission’s solicit comments on the proposed rule
on any participant. Additionally, the Internet Web site (http://www.sec.gov/ change from interested persons.
Exchange believes that the proposed rules/sro.shtml). Copies of the
change will not have impact on submission, all subsequent I. Self-Regulatory Organization’s
intermarket competition, as noted above amendments, all written statements Statement of the Terms of Substance of
many other exchanges have similar pilot with respect to the proposed rule the Proposed Rule Change
programs in place in their auction change that are filed with the The Exchange proposes to amend
mechanisms and are free to file to make Commission, and all written Commentary .02 to Rule 960NY in order
these permanent as well. communications relating to the to extend the Penny Pilot in options
proposed rule change between the classes in certain issues (‘‘Pilot
C. Self-Regulatory Organization’s Commission and any person, other than Program’’ or ‘‘Pilot’’) previously
Statement on Comments on the those that may be withheld from the approved by the Securities and
Proposed Rule Change Received From public in accordance with the Exchange Commission (‘‘Commission’’)
Members, Participants, or Others
provisions of 5 U.S.C. 552, will be through June 30, 2017. The Pilot
The Exchange has neither solicited available for Web site viewing and Program is currently scheduled to
nor received comments on the proposed printing in the Commission’s Public expire on December 31, 2016. The
rule change. Reference Room, 100 F Street NE., proposed rule change is available on the
III. Date of Effectiveness of the Washington, DC 20549 on official Exchange’s Web site at www.nyse.com,
Proposed Rule Change and Timing for business days between the hours of at the principal office of the Exchange,
Commission Action 10:00 a.m. and 3:00 p.m. Copies of such and at the Commission’s Public
filing also will be available for Reference Room.
Within 45 days of the date of
inspection and copying at the principal II. Self-Regulatory Organization’s
publication of this notice in the Federal
office of the Exchange. All comments Statement of the Purpose of, and
Register or within such longer period (i)
received will be posted without change; Statutory Basis for, the Proposed Rule
as the Commission may designate up to
90 days of such date if it finds such the Commission does not edit personal Change
mstockstill on DSK3G9T082PROD with NOTICES
longer period to be appropriate and identifying information from
submissions. You should submit only In its filing with the Commission, the
publishes its reasons for so finding or self-regulatory organization included
(ii) as to which the self-regulatory information that you wish to make
organization consents, the Commission available publicly. All submissions 22 17 CFR 200.30–3(a)(12).
will: should refer to File Number SR–BOX– 1 15 U.S.C. 78s (b)(1).
(A) By order approve or disapprove 2016–58 and should be submitted on or 2 15 U.S.C. 78a.
the proposed rule change, or before January 6, 2017. 3 17 CFR 240.19b–4.
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![91232 Federal Register / Vol. 81, No. 242 / Friday, December 16, 2016 / Notices
At any time within 60 days of the business days between the hours of Commission did not receive any
filing of such proposed rule change, the 10:00 a.m. and 3:00 p.m. Copies of the comments on the Proposed Rule
Commission summarily may filing also will be available for Changes. Pursuant to Section 19(b)(2) of
temporarily suspend such rule change if inspection and copying at the principal the Act,4 on October 26, 2016, the
it appears to the Commission that such office of the Exchange. All comments Commission designated a longer period
action is necessary or appropriate in the received will be posted without change; within which to approve the Proposed
public interest, for the protection of the Commission does not edit personal Rule Changes, disapprove the Proposed
investors, or otherwise in furtherance of identifying information from Rule Changes, or institute proceedings
the purposes of the Act. If the submissions. You should submit only to determine whether to approve or
Commission takes such action, the information that you wish to make disapprove the Proposed Rule Changes.5
Commission shall institute proceedings available publicly. All submissions On December 7, 2016, DTC, FICC, and
under Section 19(b)(2)(B)13 of the Act to should refer to File Number SR– NSCC each filed Amendment No. 1 to
determine whether the proposed rule NYSEMKT–2016–111 and should be their respective Proposed Rule Changes
change should be approved or submitted on or before January 6, 2017. (‘‘Amendments No. 1’’), as discussed
disapproved. For the Commission, by the Division of below. The Commission is publishing
Trading and Markets, pursuant to delegated this notice to solicit comments on
IV. Solicitation of Comments authority.14 Amendments No. 1 from interested
Interested persons are invited to Eduardo A. Aleman, persons and is approving on an
submit written data, views, and Assistant Secretary. accelerated basis the Proposed Rule
arguments concerning the foregoing, [FR Doc. 2016–30253 Filed 12–15–16; 8:45 am] Changes, as modified by Amendments
including whether the proposed rule BILLING CODE 8011–01–P No. 1.6
change is consistent with the Act.
Comments may be submitted by any of I. Description of the Proposed Rule
the following methods: Changes and Notice of Filing of
SECURITIES AND EXCHANGE Amendments No. 1
Electronic Comments COMMISSION
As described by the Clearing
• Use the Commission’s Internet [Release No. 34–79528; File Nos. SR–DTC– Agencies, the Proposed Rule Changes,
comment form (http://www.sec.gov/ 2016–007; SR–FICC–2016–005; SR–NSCC–
2016–003]
as modified by Amendments No. 1,
rules/sro.shtml); or would adopt the Clearing Agency
• Send an email to rule-comments@ Self-Regulatory Organizations; The Investment Policy, which would govern
sec.gov. Please include File Number SR– Depository Trust Company; Fixed the management, custody, and
NYSEMKT–2016–111 on the subject Income Clearing Corporation; National investment of cash deposited to the
line. Securities Clearing Corporation; respective NSCC and FICC Clearing
Paper Comments Notice of Filing of Amendments No. 1 Funds and the DTC Participants Fund,7
and Order Granting Accelerated the proprietary liquid net assets (cash
• Send paper comments in triplicate Approval of Proposed Rule Changes, and cash equivalents) of the Clearing
to Secretary, Securities and Exchange as Modified by Amendments No. 1, Agencies, and other funds held by the
Commission, 100 F Street NE., Relating to Clearing Agency Clearing Agencies pursuant to their
Washington, DC 20549–1090. Investment Policy respective rules. Investment of these
All submissions should refer to File funds was previously governed by the
Number SR–NYSEMKT–2016–111. This December 12, 2016. investment policy of The Depository
file number should be included on the On August 25, 2016, The Depository Trust & Clearing Corporation (‘‘DTCC’’),
subject line if email is used. To help the Trust Company (‘‘DTC’’), Fixed Income which is the parent company of the
Commission process and review your Clearing Corporation (‘‘FICC’’), and Clearing Agencies.
comments more efficiently, please use National Securities Clearing Corporation The Clearing Agency Investment
only one method. The Commission will (‘‘NSCC,’’ and together with DTC and Policy would include, generally, a
post all comments on the Commission’s FICC, the ‘‘Clearing Agencies’’) filed glossary of key terms, the roles and
Internet Web site (http://www.sec.gov/ with the Securities and Exchange
rules/sro.shtml). Copies of the Commission (‘‘Commission’’) proposed 4 15 U.S.C. 78s(b)(2).
submission, all subsequent rule changes SR–DTC–2016–007, SR– 5 See Securities Exchange Act Release No. 79165
amendments, all written statements FICC–2016–005, and SR–NSCC–2016– (October 26, 2016), 81 FR 75865 (November 1,
003 (‘‘Proposed Rule Changes’’) 2016). The Commission designated December 12,
with respect to the proposed rule 2016, as the date by which it should approve,
change that are filed with the pursuant to Section 19(b)(1) of the disapprove, or institute proceedings to determine
Commission, and all written Securities Exchange Act of 1934 whether to approve or disapprove the Proposed
communications relating to the (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Rule Changes.
proposed rule change between the to adopt the Clearing Agency 6 Capitalized terms not defined herein are defined
Investment Policy, which governs the in the NSCC’s Rules & Procedures (‘‘NSCC Rules’’),
Commission and any person, other than DTC’s Rules, By-laws and Organizational Certificate
those that may be withheld from the investment of funds of the Clearing (‘‘DTC Rules’’), FICC’s Mortgage-Backed Securities
public in accordance with the Agencies. Division Clearing Rules (‘‘MBSD Rules’’), or FICC’s
The Proposed Rule Changes were Government Securities Division Rulebook (‘‘GSD
provisions of 5 U.S.C. 552, will be Rules’’), as applicable, available at http://dtcc.com/
published for comment in the Federal
available for Web site viewing and legal/rules-and-procedures.
Register on September 13, 2016.3 The
mstockstill on DSK3G9T082PROD with NOTICES
printing in the Commission’s Public 7 The NSCC and FICC Clearing Funds, and the
Reference Room, 100 F Street NE., DTC Participants Fund are described further in the
14 17 CFR 200.30–3(a)(12). rules of each of the Clearing Agencies. See Rule 4
Washington, DC 20549–1090 on official 1 15 U.S.C. 78s(b)(1). (Clearing Fund) of the NSCC Rules, Rule 4
2 17 CFR 240.19b–4. (Participants Fund and Participants Investment) of
of filing of the proposed rule change, or such 3 See Securities Exchange Act Release No. 78778 the DTC Rules, Rule 4 (Clearing Fund and Loss
shorter time as designated by the Commission. The (September 7, 2016), 81 FR 62963 (September 13, Allocation) of the GSD Rules and Rule 4 (Clearing
Exchange has satisfied this pre-filing requirement. 2016) (SR–DTC–2016–007; SR–FICC–2016–005; Fund and Loss Allocation) of the MBSD Rules.
13 15 U.S.C. 78s(b)(2)(B). SR–NSCC–2016–003). Supra, note 6.
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Document Created: 2018-02-14 09:07:14
Document Modified: 2018-02-14 09:07:14
| 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 91230 |
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