82 FR 11379 - Self-Regulatory Organizations; NYSE MKT LLC; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change Amending Rule 104-Equities To Delete Subsection (g)(i)(A)(III) Prohibiting Designated Market Makers From Establishing a New High (Low) Price on the Exchange in a Security the DMM Has a Long (Short) Position During the Last Ten Minutes Prior to the Close of Trading
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 34 (February 22, 2017)
Federal Register Volume 82, Issue 34 (February 22, 2017)
| Page Range | 11379-11381 | |
| FR Document | 2017-03398 |
[Federal Register Volume 82, Number 34 (Wednesday, February 22, 2017)] [Notices] [Pages 11379-11381] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-03398] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80043; File No. SR-NYSEMKT-2016-99] Self-Regulatory Organizations; NYSE MKT LLC; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change Amending Rule 104--Equities To Delete Subsection (g)(i)(A)(III) Prohibiting Designated Market Makers From Establishing a New High (Low) Price on the Exchange in a Security the DMM Has a Long (Short) Position During the Last Ten Minutes Prior to the Close of Trading February 15, 2017. I. Introduction On October 27, 2016, NYSE MKT LLC (``Exchange'' or ``NYSE MKT'') filed with the Securities and Exchange Commission (``Commission'') pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change amending Rule 104--Equities to delete subsection (g)(i)(A)(III), which prohibits Designated Market Makers (``DMMs'') from establishing, during the last ten minutes of trading before the close, a new high (low) price for the day on the Exchange in a security in which the DMM has a long (short) position (``Rule 104(g)(i)(A)(III) Prohibition''). The proposed rule change was published for comment in the Federal Register on November 17, 2016.\3\ --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 79283 (Nov. 10, 2016), 81 FR 81210 (Nov. 17, 2016) (``Notice''). --------------------------------------------------------------------------- On December, 20, 2016, the Commission extended to February 15, 2017, the time period in which to approve the proposal, disapprove the proposal, or institute proceedings to determine whether to approve or disapprove the proposal.\4\ The Commission has received no comments on the proposal. This order institutes proceedings under Section 19(b)(2)(B) of the Act to determine whether to approve or disapprove the proposal. --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 79611 (Dec. 20, 2016), 81 FR 95205 (Dec. 27, 2016). --------------------------------------------------------------------------- II. Description of the Proposal Currently, under Exchange Rule 104--Equities (g)(i)(A)(III), a DMM with a long (short) position in a security cannot, during the last ten minutes before the close of trading, make a purchase (sale) in that security that results in a new high (low) price on the Exchange for that day.\5\ The Exchange proposes to remove this prohibition from its rulebook. --------------------------------------------------------------------------- \5\ See Exchange Rule 104--Equities (g)(i)(A)(III). Exchange Rule 104--Equities (g)(i)(A)(III)(2) provides two exceptions to this general prohibition. --------------------------------------------------------------------------- The Exchange asserts that, in light of developments in the equity markets and in the Exchange's own trading model, Rule 104(g)(i)(A)(III) has lost its original purpose and utility.\6\ Specifically, the Exchange asserts that, in today's electronic marketplace, where DMMs have replaced specialists, and control of pricing decisions has moved away from market participants on the Exchange trading floor, the purpose behind the Rule 104(g)(i)(A)(III) Prohibition is no longer necessary, and eliminating the prohibition would not eliminate other existing safeguards that prevent DMMs from inappropriately influencing or manipulating the close.\7\ --------------------------------------------------------------------------- \6\ See Notice, 81 FR at 81211. \7\ See id. at 81211-81212. --------------------------------------------------------------------------- The Exchange argues that the rationale behind preventing specialists from setting the price of a security on the Exchange in the final ten minutes of [[Page 11380]] trading was to prevent specialists from inappropriately influencing the price of a security at the close to advantage a specialist's proprietary position.\8\ In today's fragmented marketplace, according to the Exchange, a new high or low price for a security on the Exchange in the last ten minutes of trading does not have a significant effect on the market price for that security, because a new high or low price on the Exchange may not be the new high or low for a security--prices may be higher or lower in away markets, where the majority of intra-day trading in NYSEMKT-listed securities takes place--and because any advantage to a DMM by establishing a new high or low on the Exchange during the last ten minutes can rapidly evaporate following trades in away markets. Because DMMs do not have the ability to direct or influence trading, or to control intra-day prices, that specialists had before the implementation of Regulation NMS, the Exchange asserts, the Rule 104(g)(i)(A)(III) Prohibition is anachronistic.\9\ --------------------------------------------------------------------------- \8\ See id. at 81211. \9\ See id. --------------------------------------------------------------------------- III. Proceedings To Determine Whether To Disapprove SR-NYSEMKT-2016-99 and Grounds for Disapproval Under Consideration The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act \10\ to determine whether the proposal should be disapproved. Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposal, as discussed below. Institution of disapproval proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described in greater detail below, the Commission seeks and encourages interested persons to provide additional comment on the proposal. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- Pursuant to Section 19(b)(2)(B) of the Act, the Commission is providing notice of the grounds for disapproval under consideration. The Commission is instituting proceedings to allow for additional analysis of the proposed rule change's consistency with Section 6(b)(5) of the Act,\11\ which requires that the rules of an exchange be designed, among other things, to prevent fraudulent and manipulative acts and practices, 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. In addition, Section 6(b)(5) of the Act prohibits the rules of an exchange from being designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Rule 104(g)(i)(A)(III) Prohibition was originally approved as part of the New York Stock Exchange LLC (``NYSE'') pilot program called the ``New Market Model \12\ which was subsequently incorporated into the Exchange's rulebook.\13\ As the Commission stated when approving the NYSE proposal to conduct the New Market Model pilot, ``[w]e carefully review trading rule proposals that seek to offer special advantages to market makers. Although an exchange may reward such participants for the benefits they provide to the exchange's market, such rewards must not be disproportionate to the services provided.'' \14\ In 2015, when the Commission approved the NYSE's proposal to make the New Market Model permanent,\15\ the Commission noted the Rule 104(g)(i)(A)(III) Prohibition,\16\ among many aspects of the New Market Model, and reiterated that the pilot program had been conducted, among other reasons, to seek ``further evidence that the benefits proposed for DMMs are not disproportionate to their obligations.'' \17\ --------------------------------------------------------------------------- \12\ See Securities Exchange Act Release No. 58845 (Oct. 24, 2008), 73 FR 64379 (Oct. 29, 2008) (SR-NYSE-2008-46) (approving NYSE New Market Model pilot program) (``NMM Pilot Approval Order''). \13\ See Securities Exchange Act Release No. 59022 (Nov. 26, 2008), 73 FR 63683 (Dec. 3, 2008) (NYSEALTR-2008-10) (amending equity rules to conform to NYSE NMM pilot rules). \14\ See NMM Pilot Approval Order, 73 FR at 64388. \15\ See Securities Exchange Act Release No. 75578 (Jul. 31, 2015), 80 FR 47008 (Aug. 6, 2015) (SR-NYSE-2015-26) (``NMM Approval Order''). See also Securities Exchange Act Release No. 75952 (Sep. 18, 2015), 80 FR 57645 (Sep. 24, 2015) (SR-NYSEMKT-2015-64) (notice of filing and immediate effectiveness of proposed rule change to make permanent the rules of the New Market Model pilot). \16\ See NMM Approval Order, 80 FR at 47010. \17\ See id. at 47013. --------------------------------------------------------------------------- Under the proposal, the Exchange seeks to eliminate the Rule 104(g)(i)(A)(III) Prohibition--an obligation imposed on DMMs--thereby altering the existing set of obligations and benefits of DMM status. Accordingly, the Commission seeks public comment on whether the Exchange's proposal would maintain an appropriate balance between the benefits and obligations of being a DMM on the Exchange and whether the obligations of DMMs under remaining Exchange rules are reasonably designed to prevent DMMs from inappropriately influencing or manipulating the close in light of DMMs' special responsibility for closing auctions under Exchange rules. IV. Solicitation of Comments The Commission requests that interested persons provide written submissions of their views, data and arguments with respect to the concerns identified above, as well as any others they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal is inconsistent with Section 6(b)(5) or any other provision of the Act, or the rules and regulation thereunder. Although there do not appear to be any issues relevant to approval or disapproval which would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.\18\ --------------------------------------------------------------------------- \18\ Section 19(b)(2) of the Act, as amended by the Securities Act Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the Commission flexibility to determine what type of proceeding--either oral or notice and opportunity for written comments--is appropriate for consideration of a particular proposal by a self-regulatory organization. See Securities Act Amendments of 1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). --------------------------------------------------------------------------- Interested persons are invited to submit written data, views and arguments regarding whether the proposal should be disapproved by March 15, 2017. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by March 29, 2017. 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-2016-99 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 Numbers SR-NYSEMKT-2016-99. The 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 [[Page 11381]] 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 proposal that are filed with the Commission, and all written communications relating to the proposal 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 filings also will be available for inspection and copying at the principal office of the Exchanges. 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-2016-99 and should be submitted on or before March 15, 2017. Rebuttal comments should be submitted by March 29, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\19\ --------------------------------------------------------------------------- \19\ 17 CFR 200.30-3(a)(57). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-03398 Filed 2-21-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 34 / Wednesday, February 22, 2017 / Notices 11379
Exchange will lose market share as a rules/sro.shtml). Copies of the 19b–4 thereunder,2 a proposed rule
result. Accordingly, the Exchange does submission, all subsequent change amending Rule 104—Equities to
not believe that the proposed changes amendments, all written statements delete subsection (g)(i)(A)(III), which
will impair the ability of members or with respect to the proposed rule prohibits Designated Market Makers
competing order execution venues to change that are filed with the (‘‘DMMs’’) from establishing, during the
maintain their competitive standing in Commission, and all written last ten minutes of trading before the
the financial markets. communications relating to the close, a new high (low) price for the day
proposed rule change between the on the Exchange in a security in which
C. Self-Regulatory Organization’s Commission and any person, other than the DMM has a long (short) position
Statement on Comments on the those that may be withheld from the (‘‘Rule 104(g)(i)(A)(III) Prohibition’’).
Proposed Rule Change Received From public in accordance with the The proposed rule change was
Members, Participants, or Others provisions of 5 U.S.C. 552, will be published for comment in the Federal
No written comments were either available for Web site viewing and Register on November 17, 2016.3
solicited or received. printing in the Commission’s Public On December, 20, 2016, the
Reference Room, 100 F Street NE., Commission extended to February 15,
III. Date of Effectiveness of the
Washington, DC 20549 on official 2017, the time period in which to
Proposed Rule Change and Timing for
business days between the hours of approve the proposal, disapprove the
Commission Action
10:00 a.m. and 3:00 p.m. Copies of the proposal, or institute proceedings to
The foregoing rule change has become filing also will be available for determine whether to approve or
effective pursuant to Section inspection and copying at the principal disapprove the proposal.4 The
19(b)(3)(A)(ii) of the Act.16 office of the Exchange. All comments Commission has received no comments
At any time within 60 days of the received will be posted without change; on the proposal. This order institutes
filing of the proposed rule change, the the Commission does not edit personal proceedings under Section 19(b)(2)(B) of
Commission summarily may identifying information from the Act to determine whether to approve
temporarily suspend such rule change if submissions. You should submit only or disapprove the proposal.
it appears to the Commission that such information that you wish to make
action is: (i) Necessary or appropriate in available publicly. All submissions II. Description of the Proposal
the public interest; (ii) for the protection should refer to File Number SR– Currently, under Exchange Rule 104—
of investors; or (iii) otherwise in NASDAQ–2017–016, and should be Equities (g)(i)(A)(III), a DMM with a long
furtherance of the purposes of the Act. submitted on or before March 15, 2017. (short) position in a security cannot,
If the Commission takes such action, the For the Commission, by the Division of during the last ten minutes before the
Commission shall institute proceedings Trading and Markets, pursuant to delegated close of trading, make a purchase (sale)
to determine whether the proposed rule authority.17 in that security that results in a new
should be approved or disapproved. Eduardo A. Aleman, high (low) price on the Exchange for
IV. Solicitation of Comments Assistant Secretary. that day.5 The Exchange proposes to
[FR Doc. 2017–03460 Filed 2–21–17; 8:45 am] remove this prohibition from its
Interested persons are invited to rulebook.
BILLING CODE 8011–01–P
submit written data, views, and The Exchange asserts that, in light of
arguments concerning the foregoing, developments in the equity markets and
including whether the proposed rule SECURITIES AND EXCHANGE in the Exchange’s own trading model,
change is consistent with the Act. COMMISSION Rule 104(g)(i)(A)(III) has lost its original
Comments may be submitted by any of purpose and utility.6 Specifically, the
the following methods: [Release No. 34–80043; File No. SR–
NYSEMKT–2016–99]
Exchange asserts that, in today’s
Electronic Comments electronic marketplace, where DMMs
Self-Regulatory Organizations; NYSE have replaced specialists, and control of
• Use the Commission’s Internet
MKT LLC; Order Instituting pricing decisions has moved away from
comment form (http://www.sec.gov/
Proceedings To Determine Whether To market participants on the Exchange
rules/sro.shtml); or
Approve or Disapprove a Proposed trading floor, the purpose behind the
• Send an email to rule-
Rule Change Amending Rule 104— Rule 104(g)(i)(A)(III) Prohibition is no
comments@sec.gov. Please include File
Equities To Delete Subsection longer necessary, and eliminating the
Number SR–NASDAQ–2017–016 on the
(g)(i)(A)(III) Prohibiting Designated prohibition would not eliminate other
subject line.
Market Makers From Establishing a existing safeguards that prevent DMMs
Paper Comments New High (Low) Price on the Exchange from inappropriately influencing or
• Send paper comments in triplicate in a Security the DMM Has a Long manipulating the close.7
to Secretary, Securities and Exchange (Short) Position During the Last Ten The Exchange argues that the
Commission, 100 F Street NE., Minutes Prior to the Close of Trading rationale behind preventing specialists
Washington, DC 20549–1090. from setting the price of a security on
February 15, 2017. the Exchange in the final ten minutes of
All submissions should refer to File
Number SR–NASDAQ–2017–016. This I. Introduction
2 17 CFR 240.19b–4.
file number should be included on the On October 27, 2016, NYSE MKT LLC 3 See Securities Exchange Act Release No. 79283
sradovich on DSK3GMQ082PROD with NOTICES
subject line if email is used. To help the (‘‘Exchange’’ or ‘‘NYSE MKT’’) filed (Nov. 10, 2016), 81 FR 81210 (Nov. 17, 2016)
Commission process and review your with the Securities and Exchange (‘‘Notice’’).
4 See Securities Exchange Act Release No. 79611
comments more efficiently, please use Commission (‘‘Commission’’) pursuant
(Dec. 20, 2016), 81 FR 95205 (Dec. 27, 2016).
only one method. The Commission will to Section 19(b)(1) of the Securities 5 See Exchange Rule 104—Equities (g)(i)(A)(III).
post all comments on the Commission’s Exchange Act of 1934 (‘‘Act’’) 1 and Rule Exchange Rule 104—Equities (g)(i)(A)(III)(2)
Internet Web site (http://www.sec.gov/ provides two exceptions to this general prohibition.
17 17 CFR 200.30–3(a)(12). 6 See Notice, 81 FR at 81211.
16 15 U.S.C. 78s(b)(3)(A)(ii). 1 15 U.S.C. 78s(b)(1). 7 See id. at 81211–81212.
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![11380 Federal Register / Vol. 82, No. 34 / Wednesday, February 22, 2017 / Notices
trading was to prevent specialists from mechanism of a free and open market obligations of DMMs under remaining
inappropriately influencing the price of and a national market system and, in Exchange rules are reasonably designed
a security at the close to advantage a general, to protect investors and the to prevent DMMs from inappropriately
specialist’s proprietary position.8 In public interest. In addition, Section influencing or manipulating the close in
today’s fragmented marketplace, 6(b)(5) of the Act prohibits the rules of light of DMMs’ special responsibility for
according to the Exchange, a new high an exchange from being designed to closing auctions under Exchange rules.
or low price for a security on the permit unfair discrimination between IV. Solicitation of Comments
Exchange in the last ten minutes of customers, issuers, brokers, or dealers.
trading does not have a significant effect The Rule 104(g)(i)(A)(III) Prohibition The Commission requests that
on the market price for that security, was originally approved as part of the interested persons provide written
because a new high or low price on the New York Stock Exchange LLC submissions of their views, data and
Exchange may not be the new high or (‘‘NYSE’’) pilot program called the arguments with respect to the concerns
low for a security—prices may be higher ‘‘New Market Model 12 which was identified above, as well as any others
or lower in away markets, where the subsequently incorporated into the they may have with the proposal. In
majority of intra-day trading in Exchange’s rulebook.13 As the particular, the Commission invites the
NYSEMKT-listed securities takes Commission stated when approving the written views of interested persons
place—and because any advantage to a NYSE proposal to conduct the New concerning whether the proposal is
DMM by establishing a new high or low Market Model pilot, ‘‘[w]e carefully inconsistent with Section 6(b)(5) or any
on the Exchange during the last ten review trading rule proposals that seek other provision of the Act, or the rules
minutes can rapidly evaporate following to offer special advantages to market and regulation thereunder. Although
trades in away markets. Because DMMs makers. Although an exchange may there do not appear to be any issues
do not have the ability to direct or reward such participants for the benefits relevant to approval or disapproval
influence trading, or to control intra-day they provide to the exchange’s market, which would be facilitated by an oral
prices, that specialists had before the such rewards must not be presentation of views, data, and
implementation of Regulation NMS, the disproportionate to the services arguments, the Commission will
Exchange asserts, the Rule provided.’’ 14 In 2015, when the consider, pursuant to Rule 19b–4, any
104(g)(i)(A)(III) Prohibition is Commission approved the NYSE’s request for an opportunity to make an
anachronistic.9 proposal to make the New Market oral presentation.18
Model permanent,15 the Commission Interested persons are invited to
III. Proceedings To Determine Whether submit written data, views and
To Disapprove SR–NYSEMKT–2016–99 noted the Rule 104(g)(i)(A)(III)
Prohibition,16 among many aspects of arguments regarding whether the
and Grounds for Disapproval Under proposal should be disapproved by
Consideration the New Market Model, and reiterated
that the pilot program had been March 15, 2017. Any person who
The Commission is instituting conducted, among other reasons, to seek wishes to file a rebuttal to any other
proceedings pursuant to Section ‘‘further evidence that the benefits person’s submission must file that
19(b)(2)(B) of the Act 10 to determine proposed for DMMs are not rebuttal by March 29, 2017.
whether the proposal should be disproportionate to their obligations.’’ 17 Comments may be submitted by any
disapproved. Institution of such Under the proposal, the Exchange of the following methods:
proceedings is appropriate at this time seeks to eliminate the Rule Electronic Comments
in view of the legal and policy issues 104(g)(i)(A)(III) Prohibition—an
raised by the proposal, as discussed • Use the Commission’s Internet
obligation imposed on DMMs—thereby comment form (http://www.sec.gov/
below. Institution of disapproval altering the existing set of obligations
proceedings does not indicate that the rules/sro.shtml); or
and benefits of DMM status. • Send an email to rule-comments@
Commission has reached any Accordingly, the Commission seeks
conclusions with respect to any of the sec.gov. Please include File Number SR–
public comment on whether the NYSEMKT–2016–99 on the subject line.
issues involved. Rather, as described in Exchange’s proposal would maintain an
greater detail below, the Commission appropriate balance between the Paper Comments
seeks and encourages interested persons benefits and obligations of being a DMM • Send paper comments in triplicate
to provide additional comment on the on the Exchange and whether the to Brent J. Fields, Secretary, Securities
proposal.
Pursuant to Section 19(b)(2)(B) of the and Exchange Commission, 100 F Street
12 See Securities Exchange Act Release No. 58845
Act, the Commission is providing notice NE., Washington, DC 20549–1090.
(Oct. 24, 2008), 73 FR 64379 (Oct. 29, 2008) (SR–
of the grounds for disapproval under NYSE–2008–46) (approving NYSE New Market All submissions should refer to File
consideration. The Commission is Model pilot program) (‘‘NMM Pilot Approval Numbers SR–NYSEMKT–2016–99. The
Order’’). file number should be included on the
instituting proceedings to allow for 13 See Securities Exchange Act Release No. 59022
additional analysis of the proposed rule subject line if email is used. To help the
(Nov. 26, 2008), 73 FR 63683 (Dec. 3, 2008)
change’s consistency with Section (NYSEALTR–2008–10) (amending equity rules to Commission process and review your
6(b)(5) of the Act,11 which requires that conform to NYSE NMM pilot rules). comments more efficiently, please use
the rules of an exchange be designed, 14 See NMM Pilot Approval Order, 73 FR at only one method. The Commission will
64388.
among other things, to prevent 15 See Securities Exchange Act Release No. 75578 18 Section 19(b)(2) of the Act, as amended by the
fraudulent and manipulative acts and (Jul. 31, 2015), 80 FR 47008 (Aug. 6, 2015) (SR– Securities Act Amendments of 1975, Public Law
sradovich on DSK3GMQ082PROD with NOTICES
practices, to promote just and equitable NYSE–2015–26) (‘‘NMM Approval Order’’). See 94–29 (June 4, 1975), grants the Commission
principles of trade, to remove also Securities Exchange Act Release No. 75952 flexibility to determine what type of proceeding—
(Sep. 18, 2015), 80 FR 57645 (Sep. 24, 2015) (SR– either oral or notice and opportunity for written
impediments to and perfect the NYSEMKT–2015–64) (notice of filing and comments—is appropriate for consideration of a
immediate effectiveness of proposed rule change to particular proposal by a self-regulatory
8 See id. at 81211. make permanent the rules of the New Market Model organization. See Securities Act Amendments of
9 See id. pilot). 1975, Senate Comm. on Banking, Housing & Urban
10 15 U.S.C. 78s(b)(2)(B). 16 See NMM Approval Order, 80 FR at 47010.
Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30
11 15 U.S.C. 78f(b)(5). 17 See id. at 47013. (1975).
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![Federal Register / Vol. 82, No. 34 / Wednesday, February 22, 2017 / Notices 11381
post all comments on the Commission’s Commission is publishing this notice to per mnemonic 6 for Order Entry Ports,7
Internet Web site (http://www.sec.gov/ solicit comments on the proposed rule CTI Ports,8 BX Depth Ports,9 BX TOP
rules/sro.shtml). Copies of the change from interested persons. Ports,10 and Order Entry DROP Ports 11
submission, all subsequent without a cap on how much a
amendments, all written statements I. Self-Regulatory Organization’s
Participant is assessed.12 The Exchange
with respect to the proposal that are Statement of the Terms of Substance of
the Proposed Rule Change is proposing to increase the fee assessed
filed with the Commission, and all for Order Entry Ports, CTI Ports, BX
written communications relating to the The Exchange proposes to increase Depth Ports, BX TOP Ports, and Order
proposal between the Commission and the BX Options Market port fees and Entry DROP Ports to $650 per port, per
any person, other than those that may be institute a fee cap at Chapter XV Section month, per mnemonic, which is
withheld from the public in accordance consistent with the fees assessed by The
3.
with the provisions of 5 U.S.C. 552, will
The text of the proposed rule change NASDAQ Stock Market for comparable
be available for Web site viewing and
is available on the Exchange’s Web site connectivity.13 The Exchange is also
printing in the Commission’s Public
Reference Room, 100 F Street NE., at http://nasdaqbx.cchwallstreet.com/,
6 A ‘‘mnemonic’’ is a unique identifier consisting
Washington, DC 20549, on official at the principal office of the Exchange,
of a four character alpha code.
business days between the hours of and at the Commission’s Public 7 The Order Entry Port Fee is a connectivity fee
10:00 a.m. and 3:00 p.m. Copies of such Reference Room. in connection with routing orders to the Exchange
filings also will be available for via an external order entry port. BX Options Market
II. Self-Regulatory Organization’s Participants access the Exchange’s network through
inspection and copying at the principal
Statement of the Purpose of, and order entry ports. A BX Options Market Participant
office of the Exchanges. All comments
Statutory Basis for, the Proposed Rule may have more than one order entry port.
received will be posted without change; 8 CTI offers real-time clearing trade updates. A
the Commission does not edit personal Change
real-time clearing trade update is a message that is
identifying information from In its filing with the Commission, the sent to a member after an execution has occurred
submissions. You should submit only and contains trade details. The message containing
Exchange included statements the trade details is also simultaneously sent to The
information that you wish to make concerning the purpose of and basis for Options Clearing Corporation. The trade messages
available publicly. All submissions the proposed rule change and discussed are routed to a member’s connection containing
should refer to File Number SR– any comments it received on the certain information. The administrative and market
NYSEMKT–2016–99 and should be event messages include, but are not limited to:
proposed rule change. The text of these System event messages to communicate
submitted on or before March 15, 2017. statements may be examined at the operational-related events; options directory
Rebuttal comments should be submitted places specified in Item IV below. The messages to relay basic option symbol and contract
by March 29, 2017. information for options traded on the Exchange;
Exchange has prepared summaries, set complex strategy messages to relay information for
For the Commission, by the Division of forth in sections A, B, and C below, of those strategies traded on the Exchange; trading
Trading and Markets, pursuant to delegated the most significant aspects of such action messages to inform market participants when
authority.19 a specific option or strategy is halted or released for
statements.
Eduardo A. Aleman, trading on the Exchange; and an indicator which
A. Self-Regulatory Organization’s distinguishes electronic and non-electronically
Assistant Secretary.
delivered orders.
[FR Doc. 2017–03398 Filed 2–21–17; 8:45 am] Statement of the Purpose of, and 9 A BX Depth Port provides access to BX Depth,
BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule which is a data feed that provides quotation
Change information for individual orders on the BX book,
last sale information for trades executed on BX, and
1. Purpose Order Imbalance Information as set forth in BX
SECURITIES AND EXCHANGE Options Rules Chapter VI, Section 8. BX Depth is
COMMISSION The purpose of the proposed rule the options equivalent of the BX TotalView/ITCH
change is to increase the BX Options data feed that BX offers under BX Rule 7023 with
[Release No. 34–80055; File No. SR–BX– respect to equities traded on BX. As with
2017–009] Market port fees and institute a fee cap TotalView, members use BX Depth to ‘‘build’’ their
at Chapter XV Section 3(b).3 The view of the BX book by adding individual orders
Self-Regulatory Organizations; Exchange notes that it has not increased that appear on the feed, and subtracting individual
NASDAQ BX, Inc.; Notice of Filing and fees for the connectivity provided under orders that are executed. See Chapter VI, Section
1(a)(3)(A).
Immediate Effectiveness of Proposed the rule since its adoption in January 10 BX TOP Port is a data feed that provides the
Rule Change To Increase the BX 2015 4 notwithstanding that the costs BX Best Bid and Offer (‘‘BBO’’) and last sale
Options Market Port Fees and Institute that the Exchange incurs in offering the information for trades executed on BX. The BBO
a Fee Cap at Chapter XV Section 3 connectivity have increased. As and last sale information are identical to the
information that BX sends to the Options Price
February 16, 2017. described below, the Exchange is also Regulatory Authority (‘‘OPRA’’) and which OPRA
Pursuant to Section 19(b)(1) of the proposing to limit the total amount that disseminates via the consolidated data feed for
Securities Exchange Act of 1934 an Options Participant 5 may be options. BX TOP Port is the options equivalent of
assessed under the rule. the BX Basic data feed offered for equities under BX
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Rule 7047. See Chapter VI, Section 1(a)(3)(B).
notice is hereby given that on February Under the Chapter XV Section 3(b), 11 The DROP interface provides real time
8, 2017, NASDAQ BX, Inc. (‘‘BX’’ or the Exchange assesses an Options information regarding orders sent to the BX Options
‘‘Exchange’’) filed with the Securities Participant $200 per port, per month, Market and executions that occurred on the BX
Options Market. The DROP interface is not a trading
and Exchange Commission (‘‘SEC’’ or interface and does not accept order messages.
sradovich on DSK3GMQ082PROD with NOTICES
‘‘Commission’’) the proposed rule 3 The Exchange initially filed the proposed 12 The Exchange also assesses a $500 SQF Port
change as described in Items I, II, and pricing changes on February 1, 2017 (SR–BX–2017– fee, which is assessed per port, per month. A SQF
III below, which Items have been 005). On February 8, 2017, the Exchange withdrew Port is a port that allows a Participant acting as
that filing and submitted this filing. options Market Maker to enter its markets into the
prepared by the Exchange. The 4 See Securities Exchange Act Release No. 73894 BX Options Market. The Exchange is not proposing
(December 19, 2014), 79 FR 78119 (December 29, to amend the fees assessed for SQF Ports or apply
19 17 CFR 200.30–3(a)(57). 2014) (SR–BX–2014–060). the proposed limit on fees to SQF Port fees.
1 15 U.S.C. 78s(b)(1). 5 As defined by BX Options Rules Chapter II, 13 See NASDAQ Options Rules Chapter XV,
2 17 CFR 240.19b–4. Section 1. Section 3(b).
VerDate Sep<11>2014 16:05 Feb 21, 2017 Jkt 241001 PO 00000 Frm 00046 Fmt 4703 Sfmt 4703 E:\FR\FM\22FEN1.SGM 22FEN1](https://thefederalregister.org/doc/82_FR_11413/page/3.svg)
Document Created: 2017-02-22 00:08:24
Document Modified: 2017-02-22 00:08:24
| 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 | 82 FR 11379 |
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