81_FR_93964 81 FR 93719 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting an Extension to Limited Exemption From Rule 612(c) of Regulation NMS in Connection With the Exchange's Retail Liquidity Program Until June 30, 2017

81 FR 93719 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting an Extension to Limited Exemption From Rule 612(c) of Regulation NMS in Connection With the Exchange's Retail Liquidity Program Until June 30, 2017

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 245 (December 21, 2016)

Page Range93719-93720
FR Document2016-30814

Federal Register, Volume 81 Issue 245 (Wednesday, December 21, 2016) 
[Federal Register Volume 81, Number 245 (Wednesday, December 21, 2016)]
[Notices]
[Pages 93719-93720]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-30814]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79586; File No. SR-NYSEArca-2013-107]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting an 
Extension to Limited Exemption From Rule 612(c) of Regulation NMS in 
Connection With the Exchange's Retail Liquidity Program Until June 30, 
2017

December 16, 2016.
    On December 23, 2013, the Securities and Exchange Commission 
(``Commission'') issued an order pursuant to its authority under Rule 
612(c) of Regulation NMS (``Sub-Penny Rule'') \1\ that granted NYSE 
Arca, Inc. (``Exchange'') a limited exemption from the Sub-Penny Rule 
in connection with the operation of the Exchange's Retail Liquidity 
Program (``Program'').\2\ The limited exemption was granted 
concurrently with the Commission's approval of the Exchange's proposal 
to adopt the Program for a one-year pilot term.\3\ The exemption was 
granted coterminous with the effectiveness of the pilot Program; both 
the pilot Program and exemption are scheduled to expire on December 31, 
2016.\4\
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    \1\ 17 CFR 242.612(c).
    \2\ See Securities Exchange Act Release No. 71176 (Dec. 23, 
2013), 78 FR 79524 (Dec. 30, 2013) (SR-NYSEArca-2013-107) 
(``Order'').
    \3\ See id.
    \4\ The pilot term of the Program was originally scheduled to 
end on April 14, 2015, but the Exchange initially extended the term 
through September 30, 2015, see Securities Exchange Act Release No. 
74572 (Mar. 24, 2015), 80 FR 16705 (Mar. 30, 2015) (NYSEArca-2015-
22), and then, through various extensions, through December 31, 
2016. See Securities Exchange Act Release Nos. 75994 (Sept. 28, 
2015), 80 FR 59834 (Oct. 2, 2015) (SR-NYSEArca-2015-84), 77236 (Feb. 
25, 2016), 81 FR 10943 (Mar. 2, 2016) (SR-NYSEArca-2016-30), 77425 
(Mar. 23, 2016), 81 FR 17523 (Mar. 29, 2016) (SR-NYSEArca-2016-47), 
and 78601 (Aug. 17, 2016), 81 FR 57632 (Aug. 23, 2016) (SR-NYSEArca-
2016-113). Each time the pilot term of the Program was extended, the 
Commission also granted the Exchange's request to extend the Sub-
Penny exemption. See Securities Exchange Act Release Nos. 74609 
(Mar. 30, 2015), 80 FR 18272 (Apr. 3, 2015); 76021 (Sept. 29, 2015), 
80 FR 60207 (Oct. 5, 2015); 77437 (Mar. 24, 2016), 81 FR 17752 (Mar. 
30, 2016); and 78677 (Aug. 25, 2016), 81 FR 60037 (Aug. 31, 2016). 
The current exemption expires December 31, 2016.

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[[Page 93720]]

    The Exchange now seeks to extend the exemption until June 30, 
2017.\5\ The Exchange's request was made in conjunction with an 
immediately effective filing that extends the operation of the Program 
through the same date.\6\ In its request to extend the exemption, the 
Exchange notes that the participation in the Program has increased more 
recently. Accordingly, the Exchange has asked for additional time to 
allow itself and the Commission to analyze more robust data concerning 
the Program, which the Exchange committed to provide to the 
Commission.\7\ For this reason and the reasons stated in the Order 
originally granting the limited exemption, the Commission finds that 
extending the exemption, pursuant to its authority under Rule 612(c) of 
Regulation NMS, is appropriate in the public interest and consistent 
with the protection of investors.
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    \5\ See Letter from Martha Redding, Assistant Secretary, NYSE, 
to Brent J. Fields, Secretary, Securities and Exchange Commission, 
dated November 28, 2016.
    \6\ See Securities Exchange Act Release No. 79495 (Dec. 7, 
2016), 81 FR 90033 (Dec. 13, 2016) (SR-NYSEArca-2016-157).
    \7\ See Order, supra note 2, 78 FR at 79529.
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    Therefore, it is hereby ordered that, pursuant to Rule 612(c) of 
Regulation NMS, the Exchange is granted a limited exemption from Rule 
612 of Regulation NMS that allows it to accept and rank orders priced 
equal to or greater than $1.00 per share in increments of $0.001, in 
connection with the operation of its Retail Liquidity Program, until 
June 30, 2017.
    The limited and temporary exemption extended by this Order is 
subject to modification or revocation if at any time the Commission 
determines that such action is necessary or appropriate in furtherance 
of the purposes of the Securities Exchange Act of 1934. Responsibility 
for compliance with any applicable provisions of the Federal securities 
laws must rest with the persons relying on the exemption that is the 
subject of this Order.
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    \8\ 17 CFR 200.30-3(a)(83).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Brent J. Fields,
Secretary.
[FR Doc. 2016-30814 Filed 12-20-16; 8:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 81, No. 245 / Wednesday, December 21, 2016 / Notices 93719 burden on competition; and (iii) become IV. Solicitation of Comments For the Commission, by the Division of operative for 30 days from the date on Trading and Markets, pursuant to delegated which it was filed, or such shorter time Interested persons are invited to authority.18 as the Commission may designate, it has submit written data, views, and Eduardo A. Aleman, become effective pursuant to Section arguments concerning the foregoing, Assistant Secretary. 19(b)(3)(A)(iii) of the Act 13 and including whether the proposed rule [FR Doc. 2016–30686 Filed 12–20–16; 8:45 am] subparagraph (f)(6) of Rule 19b–4 change is consistent with the Act. BILLING CODE 8011–01–P thereunder.14 Comments may be submitted by any of A proposed rule change filed under the following methods: Rule 19b–4(f)(6) normally does not Electronic Comments SECURITIES AND EXCHANGE become operative for 30 days after the COMMISSION date of filing. However, Rule 19b– • Use the Commission’s Internet 4(f)(6)(iii) 15 permits the Commission to comment form (http://www.sec.gov/ [Release No. 34–79586; File No. SR– designate a shorter time if such action rules/sro.shtml); or NYSEArca–2013–107] is consistent with the protection of • Send an email to rule- investors and the public interest. In its Self-Regulatory Organizations; NYSE filing with the Commission, the comments@sec.gov. Please include File Number SR–ISE–2016–28 on the subject Arca, Inc.; Order Granting an Exchange requests that the Commission Extension to Limited Exemption From waive the 30-day operative delay. The line. Rule 612(c) of Regulation NMS in Exchange proposes that the new billing Paper Comments Connection With the Exchange’s Retail process become operative on December Liquidity Program Until June 30, 2017 1, 2016. Starting December 1, 2016, the • Send paper comments in triplicate Exchange will bill the market data fees to Secretary, Securities and Exchange December 16, 2016. separately and will continue to direct Commission, 100 F Street NE., On December 23, 2013, the Securities debit its members for all of the other Washington, DC 20549–1090. and Exchange Commission fees that are covered under Rule 213, in (‘‘Commission’’) issued an order each case for the previous month’s All submissions should refer to File Number SR–ISE–2016–28. This file pursuant to its authority under Rule billing. The Exchange represents that 612(c) of Regulation NMS (‘‘Sub-Penny waiver of the 30-day operative delay number should be included on the subject line if email is used. To help the Rule’’) 1 that granted NYSE Arca, Inc. would allow it to conform its billing (‘‘Exchange’’) a limited exemption from process similar to the process in place Commission process and review your comments more efficiently, please use the Sub-Penny Rule in connection with at the Nasdaq exchanges.16 The the operation of the Exchange’s Retail Commission believes that waiving the only one method. The Commission will Liquidity Program (‘‘Program’’).2 The 30-day operative delay is consistent post all comments on the Commission’s limited exemption was granted with the protection of investors and the Internet Web site (http://www.sec.gov/ concurrently with the Commission’s public interest. Therefore, the rules/sro.shtml). Copies of the approval of the Exchange’s proposal to Commission designates the proposed submission, all subsequent adopt the Program for a one-year pilot rule change operative upon filing.17 amendments, all written statements term.3 The exemption was granted At any time within 60 days of the with respect to the proposed rule coterminous with the effectiveness of filing of the proposed rule change, the change that are filed with the the pilot Program; both the pilot Commission summarily may Commission, and all written Program and exemption are scheduled temporarily suspend such rule change if communications relating to the to expire on December 31, 2016.4 it appears to the Commission that such proposed rule change between the action is necessary or appropriate in the Commission and any person, other than 18 17 CFR 200.30–3(a)(12). public interest, for the protection of those that may be withheld from the 1 17 CFR 242.612(c). investors, or otherwise in furtherance of public in accordance with the 2 See Securities Exchange Act Release No. 71176 the purposes of the Act. If the provisions of 5 U.S.C. 552, will be (Dec. 23, 2013), 78 FR 79524 (Dec. 30, 2013) (SR– Commission takes such action, the NYSEArca–2013–107) (‘‘Order’’). available for Web site viewing and 3 See id. Commission shall institute proceedings printing in the Commission’s Public 4 The pilot term of the Program was originally to determine whether the proposed rule Reference Room, 100 F Street NE., scheduled to end on April 14, 2015, but the should be approved or disapproved. Washington, DC 20549, on official Exchange initially extended the term through September 30, 2015, see Securities Exchange Act business days between the hours of Release No. 74572 (Mar. 24, 2015), 80 FR 16705 13 15 U.S.C. 78s(b)(3)(A)(iii). 14 17 10:00 a.m. and 3:00 p.m. Copies of the (Mar. 30, 2015) (NYSEArca–2015–22), and then, CFR 240.19b–4(f)(6). In addition, Rule 19b– through various extensions, through December 31, 4(f)(6) requires a self-regulatory organization to give filing also will be available for 2016. See Securities Exchange Act Release Nos. the Commission written notice of its intent to file inspection and copying at the principal 75994 (Sept. 28, 2015), 80 FR 59834 (Oct. 2, 2015) the proposed rule change at least five business days office of the Exchange. All comments (SR–NYSEArca–2015–84), 77236 (Feb. 25, 2016), 81 prior to the date of filing of the proposed rule change, or such shorter time as designated by the received will be posted without change; FR 10943 (Mar. 2, 2016) (SR–NYSEArca–2016–30), 77425 (Mar. 23, 2016), 81 FR 17523 (Mar. 29, 2016) Commission. The Commission deems this the Commission does not edit personal (SR–NYSEArca–2016–47), and 78601 (Aug. 17, requirement to have been met. identifying information from asabaliauskas on DSK3SPTVN1PROD with NOTICES 2016), 81 FR 57632 (Aug. 23, 2016) (SR–NYSEArca– 15 17 CFR 240.19b–4(f)(6)(iii). submissions. You should submit only 2016–113). Each time the pilot term of the Program 16 See NASDAQ Phlx LLC Rule 909, The information that you wish to make was extended, the Commission also granted the NASDAQ Stock Market LLC Rule 7007, NASDAQ Exchange’s request to extend the Sub-Penny Options Market LLC Rules at Chapter XV, Section available publicly. All submissions exemption. See Securities Exchange Act Release 1, NASDAQ BX, Inc. Rule 7011 and BX Option should refer to File Number SR–ISE– Nos. 74609 (Mar. 30, 2015), 80 FR 18272 (Apr. 3, Rules at Chapter XV, Section 1. 2016–28 and should be submitted on or 2015); 76021 (Sept. 29, 2015), 80 FR 60207 (Oct. 5, 17 For purposes only of waiving the 30-day 2015); 77437 (Mar. 24, 2016), 81 FR 17752 (Mar. 30, operative delay, the Commission has considered the before January 11, 2017. 2016); and 78677 (Aug. 25, 2016), 81 FR 60037 proposed rule’s impact on efficiency, competition, (Aug. 31, 2016). The current exemption expires and capital formation. See 15 U.S.C. 78c(f). December 31, 2016. VerDate Sep<11>2014 18:38 Dec 20, 2016 Jkt 241001 PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 E:\FR\FM\21DEN1.SGM 21DEN1

93720 Federal Register / Vol. 81, No. 245 / Wednesday, December 21, 2016 / Notices The Exchange now seeks to extend SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s the exemption until June 30, 2017.5 The COMMISSION Statement of the Purpose of, and Exchange’s request was made in Statutory Basis for, the Proposed Rule conjunction with an immediately [Release No. 34–79570; File No. SR–FINRA– Change effective filing that extends the 2016–045] 1. Purpose operation of the Program through the FINRA proposes to amend Rule 4554 same date.6 In its request to extend the Self-Regulatory Organizations; (Alternative Trading Systems— exemption, the Exchange notes that the Financial Industry Regulatory Recording and Reporting Requirements participation in the Program has Authority, Inc.; Notice of Filing and of Order and Execution Information for increased more recently. Accordingly, Immediate Effectiveness of a Proposed NMS Stocks) to require ATSs to provide the Exchange has asked for additional Rule Change Relating to Rule 4554 additional order sequence information time to allow itself and the Commission Reporting Requirements for on reports submitted to the Order Audit to analyze more robust data concerning Alternative Trading Systems Trail System (‘‘OATS’’). In May 2016, the Program, which the Exchange the SEC approved Rule 4554 to further December 15, 2016. committed to provide to the enhance FINRA’s ability to reconstruct Commission.7 For this reason and the Pursuant to Section 19(b)(1) of the an ATS’s order book and better perform reasons stated in the Order originally Securities Exchange Act of 1934 its order-based surveillance, which granting the limited exemption, the (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 includes surveillance for layering, quote Commission finds that extending the notice is hereby given that on December spoofing and mid-point pricing exemption, pursuant to its authority 8, 2016, Financial Industry Regulatory manipulation. To accomplish this, Rule under Rule 612(c) of Regulation NMS, is Authority, Inc. (‘‘FINRA’’) filed with the 4554 requires ATSs to report order appropriate in the public interest and Securities and Exchange Commission information for each order they receive consistent with the protection of (‘‘SEC’’ or ‘‘Commission’’) the proposed in an NMS stock beyond that set forth investors. rule change as described in Items I, II, in the OATS rules, such as order re- and III below, which Items have been pricing events (e.g., changes to an order Therefore, it is hereby ordered that, that is pegged to the National Best Bid pursuant to Rule 612(c) of Regulation prepared by FINRA. FINRA has or Offer (‘‘NBBO’’)) and order display NMS, the Exchange is granted a limited designated the proposed rule change as and reserve size information.4 Rule 4554 exemption from Rule 612 of Regulation constituting a ‘‘non-controversial’’ rule sets forth four categories of reporting NMS that allows it to accept and rank change under paragraph (f)(6) of Rule requirements: (1) Data to be reported by orders priced equal to or greater than 19b–4 under the Act,3 which renders all ATSs at the time of order receipt; (2) $1.00 per share in increments of $0.001, the proposal effective upon receipt of data to be reported by all ATSs at the in connection with the operation of its this filing by the Commission. time of order execution; (3) data to be Retail Liquidity Program, until June 30, I. Self-Regulatory Organization’s reported by ATSs that display 2017. Statement of the Terms of the Substance subscriber orders; and (4) data specific of the Proposed Rule Change to ATSs that are registered as ADF The limited and temporary exemption Trading Centers. extended by this Order is subject to Rule 4554(b) requires that all ATSs modification or revocation if at any time FINRA is proposing to amend Rule 4554 to require alternative trading report eight categories of information at the Commission determines that such the time of order receipt, including the action is necessary or appropriate in systems (‘‘ATSs’’) to submit additional order information to FINRA. sequence number assigned to the order furtherance of the purposes of the event by the ATS’s matching engine.5 Securities Exchange Act of 1934. The text of the proposed rule change Responsibility for compliance with any is available on FINRA’s Web site at 4 See Securities Exchange Act Release No. 77798 applicable provisions of the Federal http://www.finra.org, at the principal (May 10, 2016), 81 FR 30395 (May 16, 2016) (SR– office of FINRA and at the FINRA–2016–010). With the exception of the securities laws must rest with the requirement for ATSs to report sequence numbers, persons relying on the exemption that is Commission’s Public Reference Room. Rule 4554 was implemented on November 7, 2016. the subject of this Order. II. Self-Regulatory Organization’s See Regulatory Notice 16–28 (August 2016). FINRA delayed the implementation for the requirement to For the Commission, by the Division of Statement of the Purpose of, and report sequence numbers until the requirement Trading and Markets, pursuant to delegated Statutory Basis for, the Proposed Rule could be extended to apply to all OATS reports. See authority.8 Securities Exchange Act Release No. 79289 Change (November 10, 2016), 81 FR 81202 (November 17, Brent J. Fields, 2016) (Notice of Filing and Immediate Effectiveness Secretary. In its filing with the Commission, of SR–FINRA–2016–041). FINRA included statements concerning 5 Rule 4554(b)(8). Rule 4554(b) also requires all [FR Doc. 2016–30814 Filed 12–20–16; 8:45 am] ATSs, at the time of order receipt, to report: (1) the purpose of and basis for the BILLING CODE 8011–01–P Whether the ATS displays subscriber orders outside proposed rule change and discussed any of the ATS and, if the ATS displays subscriber comments it received on the proposed orders outside of the ATS, whether subscriber rule change. The text of these statements orders are displayed to subscribers only, or are distributed for publication in the consolidated may be examined at the places specified asabaliauskas on DSK3SPTVN1PROD with NOTICES quotation data; (2) whether the ATS is an ADF 5 See Letter from Martha Redding, Assistant in Item IV below. FINRA has prepared Trading Center as defined in FINRA Rule 6220; (3) Secretary, NYSE, to Brent J. Fields, Secretary, summaries, set forth in sections A, B, whether the order can be routed away from the ATS Securities and Exchange Commission, dated for execution; (4) whether there are any counter- and C below, of the most significant party restrictions on the order; (5) a unique November 28, 2016. 6 See Securities Exchange Act Release No. 79495 aspects of such statements. identifier representing the specific order type other than market and limit orders that have no other (Dec. 7, 2016), 81 FR 90033 (Dec. 13, 2016) (SR– special handling instructions; (6) the NBBO (or NYSEArca–2016–157). 1 15 U.S.C. 78s(b)(1). relevant reference price) in effect at the time of 7 See Order, supra note 2, 78 FR at 79529. 2 17 CFR 240.19b–4. order receipt and the timestamp of when the ATS 8 17 CFR 200.30–3(a)(83). 3 17 CFR 240.19b–4(f)(6). captured the effective NBBO (or relevant reference VerDate Sep<11>2014 18:38 Dec 20, 2016 Jkt 241001 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 E:\FR\FM\21DEN1.SGM 21DEN1


Document Created: 2018-02-14 09:11:49
Document Modified: 2018-02-14 09:11:49
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 93719 
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