82_FR_36180 82 FR 36033 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change for Trading UTP Securities on Pillar, the Exchange's New Trading Technology Platform

82 FR 36033 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change for Trading UTP Securities on Pillar, the Exchange's New Trading Technology Platform

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 147 (August 2, 2017)

Page Range36033-36037
FR Document2017-16206

Federal Register, Volume 82 Issue 147 (Wednesday, August 2, 2017)
[Federal Register Volume 82, Number 147 (Wednesday, August 2, 2017)]
[Notices]
[Pages 36033-36037]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-16206]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81225; File No. SR-NYSE-2017-35]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
for Trading UTP Securities on Pillar, the Exchange's New Trading 
Technology Platform

July 27, 2017.
    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 July 13, 2017, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes rules for trading UTP Securities on Pillar, 
the Exchange's new trading technology platform. The proposed rule 
change is available on the Exchange's Web site at www.nyse.com, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

[[Page 36034]]

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On January 29, 2015, the Exchange announced the implementation of 
Pillar, which is an integrated trading technology platform designed to 
use a single specification for connecting to the equities and options 
markets operated by the Exchange and its affiliates, NYSE Arca, Inc. 
(``NYSE Arca'') and NYSE MKT LLC (``NYSE MKT'').\4\ NYSE Arca Equities, 
Inc. (``NYSE Arca Equities),\5\ which operates the cash equities 
trading platform for NYSE Arca, was the first trading system to migrate 
to Pillar.\6\ NYSE MKT's equities market will transition to Pillar in 
the second quarter of 2017 and as part of this transition, will be 
renamed NYSE American LLC (``NYSE American'').\7\ In this filing, the 
Exchange proposes to refer to the rules of NYSE MKT as ``NYSE American 
Rule X.'' \8\
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    \4\ See Trader Update dated January 29, 2015, available here: 
www.nyse.com/pillar.
    \5\ NYSE Arca Equities is a wholly-owned corporation of NYSE 
Arca and operates as a facility of NYSE Arca.
    \6\ In connection with the NYSE Arca implementation of Pillar, 
NYSE Arca filed four rule proposals relating to Pillar. See 
Securities Exchange Act Release Nos. 74951 (May 13, 2015), 80 FR 
28721 (May 19, 2015) (Notice) and 75494 (July 20, 2015), 80 FR 44170 
(July 24, 2015) (SR-NYSEArca-2015-38) (Approval Order of NYSE Arca 
Pillar I Filing, adopting rules for Trading Sessions, Order Ranking 
and Display, and Order Execution); Securities Exchange Act Release 
Nos. 75497 (July 21, 2015), 80 FR 45022 (July 28, 2015) (Notice) and 
76267 (October 26, 2015), 80 FR 66951 (October 30, 2015) (SR-
NYSEArca-2015-56) (Approval Order of NYSE Arca Pillar II Filing, 
adopting rules for Orders and Modifiers and the Retail Liquidity 
Program); Securities Exchange Act Release Nos. 75467 (July 16, 
2015), 80 FR 43515 (July 22, 2015) (Notice) and 76198 (October 20, 
2015), 80 FR 65274 (October 26, 2015) (SR-NYSEArca-2015-58) 
(Approval Order of NYSE Arca Pillar III Filing, adopting rules for 
Trading Halts, Short Sales, Limit Up-Limit Down, and Odd Lots and 
Mixed Lots); and Securities Exchange Act Release Nos. 76085 (October 
6, 2015), 80 FR 61513 (October 13, 2015) (Notice) and 76869 (January 
11, 2016), 81 FR 2276 (January 15, 2016) (Approval Order of NYSE 
Arca Pillar IV Filing, adopting rules for Auctions).
    \7\ See Securities Exchange Act Release Nos. 80283 (March 21, 
2017), 82 FR 15244 (March 27, 2017) (SR-NYSEMKT-201714) (Notice of 
filing and immediate effectiveness of proposed rule change to change 
the name of NYSE MKT to NYSE American) and 80748 (May 23, 2017), 82 
FR 24764, 24765 (SR-NYSEMKT-2017-20) (Notice of filing and immediate 
effectiveness of proposed rule change to change the name of NYSE MKT 
to NYSE American) (``NYSE American Filings''). In connection with 
the NYSE American implementation of Pillar, NYSE MKT filed several 
rule changes. See Securities Exchange Act Release Nos. 79242 
(November 4, 2016), 81 FR 79081 (November 10, 2016) (SR-NYSEMKT-
2016-97) (Notice and Filing of Immediate Effectiveness of Proposed 
Rule Change of framework rules); 81038 (June 28, 2017), 82 FR 31118 
(July 5, 2017) (SR-NYSEMKT-2016-103) (Approval Order) (the ``ETP 
Listing Rules Filing''); 80590 (May 4, 2017), 82 FR 21843 (May 10, 
2017) (Approval Order) (NYSE MKT rules governing automated trading); 
80577 (May 2, 2017), 82 FR 21446 (May 8, 2017) (SR-NYSEMKT-2017-04) 
(Approval Order) (NYSE MKT rules governing market makers); 80700 
(May 16, 2017), 82 FR 23381 (May 22, 2017) (SR-NYSEMKT-2017-05) 
(Approval Order) (NYSE MKT rules governing delay mechanism).
    \8\ In the NYSE American Filings, id., NYSE MKT represented that 
the name change to NYSE American would become operative upon the 
effectiveness of an amendment to NYSE MKT's Certificate of 
Formation, which is expected to be no later than July 31, 2017. 
Because the NYSE American name would become operative before the 
operative date of this proposed rule change, the Exchange believes 
it would promote transparency and reduce confusion to refer to NYSE 
MKT rules as ``NYSE American'' rules.
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Overview
    The Exchange previously amended its rules to add the Pillar 
Platform Rules, as set forth in Rules 1P-13P.\9\ With this proposed 
rule change, the Exchange proposes additional rules for Rules 1P 
Definitions and 7P Equities Trading to support trading of UTP 
Securities.\10\ The proposed rules address general order processing and 
post-trade functions for the Pillar trading platform and are based on 
the rules of NYSE Arca Equities and NYSE American without any 
substantive differences.\11\
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    \9\ See Securities Exchange Act Release Nos. 76803 (December 30, 
2015), 81 FR 536 (January 6, 2016) (SR-NYSE-2015-67) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change) 
(``Framework Filing'').
    \10\ The term ``UTP Security'' means a security that is listed 
on a national securities exchange other than the Exchange and that 
trades on the Exchange pursuant to unlisted trading privileges. See 
Rule 1.1(ii). The Exchange has authority to extend unlisted trading 
privileges to any security that is an NMS Stock that is listed on 
another national securities exchange or with respect to which 
unlisted trading privileges may otherwise be extended in accordance 
with Section 12(f) of the Act. See Rule 5.1(a)(1).
    \11\ The Exchange will file a separate proposed rule change to 
add additional rules that would govern trading of UTP Securities on 
the Exchange on the Pillar trading platform.
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    Once trading on the Pillar trading platform begins, specified 
current Exchange rules would not be applicable. For each current rule 
that would not be applicable for trading UTP Securities on the Pillar 
trading platform, the Exchange proposes to state in a preamble to such 
rule that ``this Rule is not applicable to trading UTP Securities on 
the Pillar trading platform.'' \12\ Current Exchange rules governing 
trading that do not have this preamble will govern Exchange operations 
on Pillar.
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    \12\ The Exchange proposes to amend the description of Pillar 
Platform Rules, which precedes Rule 1P, to delete the last sentence, 
which currently provides that ``[t]he following rules will not be 
applicable to trading on the Pillar trading platform: Rules 7, 55, 
56, and 62.'' As proposed, the inapplicability of these rules on the 
Pillar platform would be addressed in the preamble that the Exchange 
proposes to add to each of these rules.
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    Subject to rule approvals, the Exchange will announce the 
implementation of trading of UTP Securities on the Pillar trading 
system by Trader Update, which the Exchange anticipates will be in the 
fourth quarter of 2017.
Proposed Rule Changes
    As noted above, the Exchange proposes rules that would be 
applicable to trading UTP Securities on Pillar that are based on the 
rules of NYSE Arca Equities and NYSE American. As a global matter, the 
Exchange proposes non-substantive differences as compared to the NYSE 
Arca Equities rules to use the terms ``Exchange'' instead of the terms 
``NYSE Arca Marketplace,'' ``NYSE Arca,'' or ``Corporation,'' and to 
use the terms ``mean'' or ``have meaning'' instead of the terms ``shall 
mean'' or ``shall have the meaning.'' In addition, the Exchange will 
use the term ``member organization,'' which is defined in Rule 2, 
instead of ``ETP Holder.'' \13\
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    \13\ Because these non-substantive differences would be applied 
throughout the proposed rules, the Exchange will not note these 
differences separately for each proposed rule.
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    The Framework Filing established Rule 1P Definitions and Rule 1.1 
thereunder with definitions used for trading on the Pillar trading 
platform. The Exchange proposes the following additional definitions:
     Rule 1.1(a) would define the term ``Exchange Book'' to 
refer to the Exchange's electronic file of orders, which contains all 
orders entered on the Exchange. This proposed rule is based on NYSE 
American Rule 1.1E(a) without any substantive differences.
     Rule 1.1(g) would define the term ``Authorized Trader'' or 
``AT'' to mean a person who may submit orders to the Exchange on behalf 
of his or her member organization. This proposed rule is based on NYSE 
American Rule 1.1E(g) without any substantive differences.
     Rule 1.1(j) would define the term ``Core Trading Hours'' 
to mean the hours of 9:30 a.m. Eastern Time through 4:00 p.m. Eastern 
Time or such other hours as may be determined by the Exchange from time 
to time. This proposed rule is based on NYSE Arca Equities Rule 1.1(j) 
and NYSE American Rule 1.1E(j) without any substantive differences.
     Rule 1.1(k) would define the term ``Exchange'' to mean the 
New York Stock Exchange LLC. This proposed rule is based on NYSE Arca 
Equities Rule

[[Page 36035]]

1.1(k) and NYSE American Rule 1.1E(k), but uses the Exchange's name.
     Rule 1.1(p) would define the term ``General Authorized 
Trader'' or ``GAT'' to mean an AT who performs only non-market making 
activities on behalf of a member organization. This proposed rule is 
based on NYSE Arca Equities Rule 1.1(p) and NYSE American Rule 1.1E(p) 
without any substantive differences.
     Proposed Rule 1.1(u) would define the term ``Marketable'' 
to mean, for a Limit Order, an order that can be immediately executed 
or routed and that Market Orders are always considered Marketable. This 
proposed rule is based on NYSE Arca Equities Rule 1.1(u) and NYSE 
American Rule 1.1E(u) without any substantive differences.
     Proposed Rule 1.1(rr) would define the terms ``security'' 
and ``securities'' to mean any security as defined in Section 3(a)(10) 
under the Securities Exchange Act of 1934; provided, however, that for 
purposes of Rule 7P, such term means any NMS stock. This proposed rule 
is based on NYSE Arca Equities Rule 1.1(rr) and NYSE American Rule 
1.1E(rr) without any substantive differences. In addition, because the 
term ``security'' would be defined in proposed Rule 1.1(rr), the 
Exchange proposes that Rules 3 and 4, which define the terms 
``Security'' and ``Stock,'' would not be applicable to trading UTP 
Securities on the Pillar trading platform.
     Proposed Rule 1.1(ss) would define the terms ``self-
regulatory organization'' and ``SRO'' to have the same meaning as set 
forth in the provisions of the Securities Exchange Act of 1934 relating 
to national securities exchanges. This proposed rule is based on NYSE 
Arca Equities Rule 1.1(ss) and NYSE American Rule 1.1E(ss) without any 
substantive differences.
     Proposed Rule 1.1(xx) would define the term ``Trading 
Facilities'' or ``Facilities'' to mean any and all electronic or 
automatic trading systems provided by the Exchange to member 
organizations. This proposed rule is based on NYSE Arca Equities Rule 
1.1(xx) and NYSE American Rule 1.1E(xx) without any substantive 
differences.
    Section 1 of Rule 7P sets forth the General Provisions relating to 
trading on the Pillar trading platform. The Exchange proposes the 
following additional rules in this section of Rule 7P:
     Proposed Rule 7.1 (Hours of Business) would specify that 
the Exchange would be open for the transaction of business on every 
business day. The proposed rule also sets forth when the CEO may take 
specified actions, such as halting or suspending trading in some or all 
securities on the Exchange. The proposed rule is based on NYSE Arca 
Equities Rule 7.1, NYSE American Rule 7.1E, Rule 51, and Rule 52. The 
Exchange proposes that Rules 51 and 52 would not be applicable to 
trading UTP Securities on the Pillar trading platform. In addition, 
because the definition of the term ``business day'' in Rule 12 would be 
redundant of proposed Rule 7.1E, the Exchange proposes that Rule 12 
would not be applicable to trading on the Pillar trading platform.
     Proposed Rule 7.2 (Holidays) would establish the holidays 
when the Exchange would not be open for business. The proposed rule is 
based on NYSE Arca Equities Rule 7.2, NYSE American Rule 7.2, and 
Supplementary Material .10 to Rule 51, including text that provides 
that when any holiday observed by the Exchange falls on a Sunday, the 
Exchange would not be open for business on the succeeding Monday, which 
is in Rule 51.
     Rule 7.8 (Bid or Offer Deemed Regular Way) would establish 
that all bids and offers would be considered to be ``regular way.'' 
This proposed rule is based on NYSE Arca Equities Rule 7.8 and NYSE 
American Rule 7.8E without any substantive differences. The Exchange 
proposes that Rule 14 would not be applicable to trading of UTP 
Securities on the Pillar trading platform.
     Proposed Rule 7.9 (Execution Price Binding) would 
establish that, notwithstanding Exchange rules governing clearly 
erroneous executions, the price at which an order is executed is 
binding notwithstanding that an erroneous report is rendered. This 
proposed rule is based on NYSE Arca Equities Rule 7.9 and NYSE American 
Rule 7.9E without any substantive differences. The Exchange proposes 
that Rules 71 (Precedence of Highest Bid and Lowest Offer) and 411 
(Erroneous Reports) would not be applicable to trading of UTP 
Securities on the Pillar trading platform.
     Proposed Rule 7.14 (Clearance and Settlement) would 
establish the requirements regarding a member organization's 
arrangements for clearing UTP Securities on Pillar. Because all post-
trade functions on the Exchange's Pillar trading platform would follow 
same procedures for post-trade processing as NYSE Arca Equities and 
NYSE American follow, the Exchange proposes rules that are based on 
NYSE Arca Equities and NYSE American rules governing clearing. 
Accordingly, the proposed rule is based on NYSE Arca Equities Rule 7.14 
and NYSE American Rule 7.14E without any substantive differences. The 
Exchange proposes that its current rules governing clearing, Rules 130 
and 132 would not be applicable to trading UTP Securities on the Pillar 
trading platform.\14\
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    \14\ See also infra proposed Rules 7.33 (Capacity Codes) and 
7.41 (Clearance and Settlement).
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     Proposed Rule 7.17 (Firm Orders and Quotes) would 
establish requirements that all orders and quotes must be firm. This 
proposed rule is based on NYSE Arca Equities Rule 7.17 and NYSE 
American Rule 7.17E without any substantive differences. Because on the 
Pillar trading platform, the Exchange would only publish automated 
quotations consistent with proposed Rule 7.17, the Exchange proposes 
that Rule 60--Equities (Dissemination of Quotations) would not be 
applicable to trading UTP Securities on the Pillar trading platform.
    Section 3 of Rule 7P sets forth Exchange Trading on the Pillar 
trading platform. The Exchange proposes the following additional rules 
for this section of Rule 7P:
     Proposed Rule 7.29 (Access) would provide that the 
Exchange would be available for entry and cancellation of orders by 
member organizations with authorized access. To obtain authorized 
access to the Exchange, each member organization would be required to 
enter into a User Agreement. Proposed Rule 7.29 is based on NYSE Arca 
Equities Rule 7.29(a) and NYSE American Rule 7.29E(a), without any 
substantive differences. The Exchange does not propose to include rule 
text based on NYSE Arca Equities Rule 7.29(b) because the Exchange 
would not offer sponsored access.
     Proposed Rule 7.30 (Authorized Traders) would establish 
requirements for member organizations relating to ATs. The proposed 
rule is based on NYSE Arca Equities Rule 7.30 and NYSE American Rule 
7.30E, with one non-substantive difference to refer to ``the Rules and 
procedures of the Exchange'' rather than to refer to ``the trading 
rules and procedures related to the NYSE Arca Marketplace and all other 
Rules of the Corporation.''.
     Proposed Rule 7.32 (Order Entry) would establish 
requirements for order entry size. The proposed rule is based on NYSE 
Arca Equities Rule 7.32 and NYSE American Rule 7.32E without any 
substantive differences. The Exchange proposes that the paragraph of 
Rule 1000 (Automatic Executions) relating to ``Maximum Order Size for 
Automatic Executions'' would not be applicable to

[[Page 36036]]

trading UTP Securities on the Pillar trading platform.
     Proposed Rule 7.33 (Capacity Codes) would establish 
requirements for capacity code information that member organizations 
must include with every order. The proposed rule is based on NYSE Arca 
Equities Rule 7.33 and NYSE American Rule 7.33E without any substantive 
differences. The Exchange proposes to use the title ``Capacity Codes'' 
instead of ``ETP Holder User,'' for proposed Rule 7.33, which the 
Exchange believes provides more clarity regarding the content of the 
proposed rule. The Exchange proposes that the capacity code 
requirements in Supplementary Material .30(9) to Rule 132 would not be 
applicable to trading UTP Securities on the Pillar trading platform.
     Proposed Rule 7.40 (Trade Execution and Reporting) would 
establish the Exchange's obligation to report trades to an appropriate 
consolidated transaction reporting system. The proposed rule is based 
on NYSE Arca Equities Rule 7.40 and NYSE American Rule 7.40E without 
any substantive differences. Because all reporting of transactions 
would be automated, the Exchange proposes that Rules 128A and 128B 
would not be applicable to trading UTP Securities on the Pillar trading 
platform.
     Proposed Rule 7.41 (Clearance and Settlement) would 
establish requirements that all trades be processed for clearance and 
settlement on a locked-in and anonymous basis. The proposed rule is 
based on NYSE American Rule 7.41E with a non-substantive difference to 
cross reference Supplementary Material .10 to Rule 132 to define the 
term ``Qualified Clearing Agency.'' In addition, proposed Rules 
7.41(a), (b), (d), and (e) are based on NYSE Arca Equities Rule 
7.41(a), (b), (d), and (e) with non-substantive differences not to 
include references to sponsored access, because the Exchange will not 
offer sponsored access. Because all trades would be reported by the 
Exchange on a locked-in basis, the Exchange proposes to specify that 
the following rules relating to clearance and settlement would not be 
applicable to trading UTP Securities on the Pillar trading system:
    [cir] Rule 130 (Overnight Comparison of Exchange Transactions),
    [cir] Rule 131 (Comparison--Requirements for Reporting Trades and 
Providing Facilities),
    [cir] Rule 132 (Comparison and Settlement of Transactions Through a 
Fully-Interfaced or Qualified Clearing Agency),
    [cir] Rule 133 (Comparison--Non-cleared Transactions),
    [cir] Rule 134 (Differences and Omissions--Cleared Transactions 
QTs),
    [cir] Rule 135 (Differences and Omissions--Non-cleared Transactions 
(`DKs')), and
    [cir] Rule 136 (Comparison--Transactions Excluded from a 
Clearance).
    The Exchange further proposes to specify that the following 
additional rules, which also relate to post-trade functions and have no 
analog on either NYSE Arca Equities or NYSE American would not be 
applicable to trading UTP Securities on the Pillar trading platform: 
Rules 137 (Written Contracts), Rule 137A (Samples of Written 
Contracts), 138 (Give-Ups), 139 (Recording), 140 (Members Closing 
Contracts--Conditions), 141 (``Fail to Deliver'' Confirmations), 142 
(Effect on Contracts of Errors in Comparison, etc.), 165-168 (Marking 
to the Market), 175-227 (Settlement of Contracts), 235-251 (Dividends, 
Interest, Rights, etc.), 255-259 (Due-Bills), 265-275 (Reclamations), 
280-295 (Closing Contracts), 296 (Liquidation of Securities Loans and 
Borrowings), and 297-299C (Miscellaneous Floor Procedure).
* * * * *
    As discussed above, because of the technology changes associated 
with the migration to the Pillar trading platform, the Exchange will 
announce by Trader Update when the Pillar rules for trading UTP 
Securities will become operative.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\15\ in general, and 
furthers the objectives of Section 6(b)(5),\16\ in particular, because 
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, 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 the proposed rules would remove impediments to and 
perfect the mechanism of a free and open market because they provide 
for additional rules to support trading of UTP Securities on the Pillar 
trading platform.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
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    More specifically, the Exchange believes that the proposed 
definitions for Rule 1.1 would remove impediments to and perfect the 
mechanism of a free and open market and a national market system 
because the proposed definitions are terms that would be used in the 
additional rules proposed by the Exchange. The proposed rules are 
definitional and would promote transparency in Exchange rules regarding 
the use of those terms.
    The Exchange believes that the additional rules proposed for Rule 
7P would remove impediments to and perfect the mechanism of a free and 
open market and a national market system because they would establish 
rules governing general order processing and post-trade functions for 
the Pillar trading platform. The proposed rules are based on the rules 
of NYSE Arca Equities and NYSE American without any substantive 
differences. The proposed rule change would therefore remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system because they are based on the approved rules 
of another exchange.
    The Exchange further believes that it would remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system to specify which current rules would not be applicable to 
trading UTP Securities on the Pillar trading platform. The Exchange 
believes that the following legend, which would be added to existing 
rules, ``This rule is not applicable to trading UTP Securities on the 
Pillar trading platform,'' would promote transparency regarding which 
rules would govern trading on the Exchange once it transitions to 
Pillar. The Exchange has proposed to add this legend to rules that 
would be superseded by proposed rules.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change is 
designed to propose rules to support the Exchange's new Pillar trading 
platform and to introduce trading of UTP Securities on the Exchange on 
that platform. The Exchange operates in a highly competitive 
environment in which its unaffiliated exchange competitors operate 
multiple affiliated exchanges that operate under common rules. By 
basing its rules on those of NYSE Arca Equities and NYSE American, the 
Exchange will provide its member

[[Page 36037]]

organizations with consistency across affiliated exchanges, thereby 
enabling the Exchange to compete with unaffiliated exchange competitors 
that similarly operate multiple exchanges on the same trading 
platforms.

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 \17\ and Rule 19b-4(f)(6) thereunder.\18\ 
Because the foregoing proposed rule change does not: (i) Significantly 
affect the protection of investors or the public interest; (ii) impose 
any significant burden on competition; and (iii) become operative for 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, it has become effective pursuant to 
Section 19(b)(3)(A)(iii) of the Act \19\ and subparagraph (f)(6) Rule 
19b-4 thereunder.\20\
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    \17\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \18\ 17 CFR 240.19b-4(f)(6).
    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 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.
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    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) \21\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \21\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSE-2017-35 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-NYSE-2017-35. 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-NYSE-2017-35 and should be 
submitted on or before August 23, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-16206 Filed 8-1-17; 8:45 am]
 BILLING CODE 8011-01-P



                                                                           Federal Register / Vol. 82, No. 147 / Wednesday, August 2, 2017 / Notices                                              36033

                                                based on NAV. Applicants state that (a)                 valued in the same manner as those                      SECURITIES AND EXCHANGE
                                                secondary market trading in shares does                 investment positions currently held by                  COMMISSION
                                                not involve a Fund as a party and will                  the Funds. Applicants also seek relief
                                                not result in dilution of an investment                 from the prohibitions on affiliated                     [Release No. 34–81225; File No. SR–NYSE–
                                                in shares, and (b) to the extent different              transactions in section 17(a) to permit a               2017–35]
                                                prices exist during a given trading day,                Fund to sell its shares to and redeem its
                                                or from day to day, such variances occur                shares from a Fund of Funds, and to                     Self-Regulatory Organizations; New
                                                as a result of third-party market forces,               engage in the accompanying in-kind                      York Stock Exchange LLC; Notice of
                                                such as supply and demand. Therefore,                   transactions with the Fund of Funds.3                   Filing and Immediate Effectiveness of
                                                applicants assert that secondary market
                                                                                                        The purchase of Creation Units by a                     Proposed Rule Change for Trading
                                                transactions in shares will not lead to
                                                                                                        Fund of Funds directly from a Fund will                 UTP Securities on Pillar, the
                                                discrimination or preferential treatment
                                                among purchasers. Finally, applicants                   be accomplished in accordance with the                  Exchange’s New Trading Technology
                                                represent that share market prices will                 policies of the Fund of Funds and will                  Platform
                                                be disciplined by arbitrage                             be based on the NAVs of the Funds.
                                                                                                                                                                July 27, 2017.
                                                opportunities, which should prevent                        9. Section 6(c) of the Act permits the
                                                shares from trading at a material                       Commission to exempt any persons or                        Pursuant to Section 19(b)(1) 1 of the
                                                discount or premium from NAV.                           transactions from any provision of the                  Securities Exchange Act of 1934 (the
                                                   6. With respect to Funds that effect                 Act if such exemption is necessary or                   ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
                                                creations and redemptions of Creation                   appropriate in the public interest and                  notice is hereby given that on July 13,
                                                Units in kind and that are based on                     consistent with the protection of                       2017, New York Stock Exchange LLC
                                                certain Underlying Indexes that include                 investors and the purposes fairly                       (‘‘NYSE’’ or the ‘‘Exchange’’) filed with
                                                foreign securities, applicants request                  intended by the policy and provisions of                the Securities and Exchange
                                                relief from the requirement imposed by                                                                          Commission (the ‘‘Commission’’) the
                                                                                                        the Act. Section 12(d)(1)(J) of the Act
                                                section 22(e) in order to allow such                                                                            proposed rule change as described in
                                                                                                        provides that the Commission may
                                                Funds to pay redemption proceeds                                                                                Items I and II below, which Items have
                                                within fifteen calendar days following                  exempt any person, security, or
                                                                                                        transaction, or any class or classes of                 been prepared by the self-regulatory
                                                the tender of Creation Units for                                                                                organization. The Commission is
                                                redemption. Applicants assert that the                  persons, securities, or transactions, from
                                                                                                        any provision of section 12(d)(1) if the                publishing this notice to solicit
                                                requested relief would not be
                                                                                                        exemption is consistent with the public                 comments on the proposed rule change
                                                inconsistent with the spirit and intent of
                                                                                                        interest and the protection of investors.               from interested persons.
                                                section 22(e) to prevent unreasonable,
                                                undisclosed or unforeseen delays in the                 Section 17(b) of the Act authorizes the                 I. Self-Regulatory Organization’s
                                                actual payment of redemption proceeds.                  Commission to grant an order                            Statement of the Terms of Substance of
                                                   7. Applicants request an exemption to                permitting a transaction otherwise                      the Proposed Rule Change
                                                permit Funds of Funds to acquire Fund                   prohibited by section 17(a) if it finds
                                                shares beyond the limits of section                     that (a) the terms of the proposed                         The Exchange proposes rules for
                                                12(d)(1)(A) of the Act; and the Funds,                  transaction are fair and reasonable and                 trading UTP Securities on Pillar, the
                                                and any principal underwriter for the                   do not involve overreaching on the part                 Exchange’s new trading technology
                                                Funds, and/or any broker or dealer                      of any person concerned; (b) the                        platform. The proposed rule change is
                                                registered under the Exchange Act, to                   proposed transaction is consistent with                 available on the Exchange’s Web site at
                                                sell shares to Funds of Funds beyond                    the policies of each registered                         www.nyse.com, at the principal office of
                                                the limits of section 12(d)(1)(B) of the                                                                        the Exchange, and at the Commission’s
                                                                                                        investment company involved; and (c)
                                                Act. The application’s terms and                                                                                Public Reference Room.
                                                                                                        the proposed transaction is consistent
                                                conditions are designed to, among other
                                                things, help prevent any potential (i)                  with the general purposes of the Act.                   II. Self-Regulatory Organization’s
                                                undue influence over a Fund through                       For the Commission, by the Division of                Statement of the Purpose of, and
                                                control or voting power, or in                          Investment Management, under delegated                  Statutory Basis for, the Proposed Rule
                                                connection with certain services,                       authority.                                              Change
                                                transactions, and underwritings, (ii)                   Eduardo A. Aleman,
                                                excessive layering of fees, and (iii)                   Assistant Secretary.
                                                                                                                                                                  In its filing with the Commission, the
                                                overly complex fund structures, which                                                                           self-regulatory organization included
                                                                                                        [FR Doc. 2017–16200 Filed 8–1–17; 8:45 am]
                                                are the concerns underlying the limits                                                                          statements concerning the purpose of,
                                                                                                        BILLING CODE 8011–01–P
                                                in sections 12(d)(1)(A) and (B) of the                                                                          and basis for, the proposed rule change
                                                Act.                                                                                                            and discussed any comments it received
                                                   8. Applicants request an exemption                                                                           on the proposed rule change. The text
                                                from sections 17(a)(1) and 17(a)(2) of the                                                                      of those statements may be examined at
                                                Act to permit persons that are Affiliated                                                                       the places specified in Item IV below.
                                                Persons, or Second Tier Affiliates, of the                                                                      The Exchange has prepared summaries,
                                                Funds, solely by virtue of certain                         3 The requested relief would apply to direct sales
                                                                                                                                                                set forth in sections A, B, and C below,
                                                ownership interests, to effectuate                      of shares in Creation Units by a Fund to a Fund of
                                                                                                                                                                of the most significant parts of such
                                                purchases and redemptions in-kind. The
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                                                                                                        Funds and redemptions of those shares. Applicants,
                                                                                                        moreover, are not seeking relief from section 17(a)
                                                                                                                                                                statements.
                                                deposit procedures for in-kind
                                                purchases of Creation Units and the                     for, and the requested relief will not apply to,
                                                                                                        transactions where a Fund could be deemed an
                                                redemption procedures for in-kind
                                                                                                        Affiliated Person, or a Second-Tier Affiliate, of a
                                                redemptions of Creation Units will be                   Fund of Funds because an Adviser or an entity
                                                the same for all purchases and                          controlling, controlled by or under common control
                                                                                                                                                                 1 15 U.S.C. 78s(b)(1).
                                                redemptions and Deposit Instruments                     with an Adviser provides investment advisory             2 15 U.S.C. 78a.
                                                and Redemption Instruments will be                      services to that Fund of Funds.                          3 17 CFR 240.19b–4.




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                                                36034                       Federal Register / Vol. 82, No. 147 / Wednesday, August 2, 2017 / Notices

                                                A. Self-Regulatory Organization’s                       Exchange proposes to refer to the rules                  this preamble will govern Exchange
                                                Statement of the Purpose of, and the                    of NYSE MKT as ‘‘NYSE American Rule                      operations on Pillar.
                                                Statutory Basis for, the Proposed Rule                  X.’’ 8                                                     Subject to rule approvals, the
                                                Change                                                                                                           Exchange will announce the
                                                                                                        Overview                                                 implementation of trading of UTP
                                                1. Purpose
                                                                                                           The Exchange previously amended its                   Securities on the Pillar trading system
                                                   On January 29, 2015, the Exchange                                                                             by Trader Update, which the Exchange
                                                                                                        rules to add the Pillar Platform Rules, as
                                                announced the implementation of Pillar,                                                                          anticipates will be in the fourth quarter
                                                                                                        set forth in Rules 1P–13P.9 With this
                                                which is an integrated trading                                                                                   of 2017.
                                                                                                        proposed rule change, the Exchange
                                                technology platform designed to use a
                                                                                                        proposes additional rules for Rules 1P                   Proposed Rule Changes
                                                single specification for connecting to the
                                                equities and options markets operated                   Definitions and 7P Equities Trading to
                                                                                                        support trading of UTP Securities.10 The                    As noted above, the Exchange
                                                by the Exchange and its affiliates, NYSE                                                                         proposes rules that would be applicable
                                                Arca, Inc. (‘‘NYSE Arca’’) and NYSE                     proposed rules address general order
                                                                                                        processing and post-trade functions for                  to trading UTP Securities on Pillar that
                                                MKT LLC (‘‘NYSE MKT’’).4 NYSE Arca                                                                               are based on the rules of NYSE Arca
                                                Equities, Inc. (‘‘NYSE Arca Equities),5                 the Pillar trading platform and are based
                                                                                                        on the rules of NYSE Arca Equities and                   Equities and NYSE American. As a
                                                which operates the cash equities trading                                                                         global matter, the Exchange proposes
                                                platform for NYSE Arca, was the first                   NYSE American without any
                                                                                                        substantive differences.11                               non-substantive differences as
                                                trading system to migrate to Pillar.6                                                                            compared to the NYSE Arca Equities
                                                NYSE MKT’s equities market will                            Once trading on the Pillar trading                    rules to use the terms ‘‘Exchange’’
                                                transition to Pillar in the second quarter              platform begins, specified current                       instead of the terms ‘‘NYSE Arca
                                                of 2017 and as part of this transition,                 Exchange rules would not be applicable.                  Marketplace,’’ ‘‘NYSE Arca,’’ or
                                                will be renamed NYSE American LLC                       For each current rule that would not be                  ‘‘Corporation,’’ and to use the terms
                                                (‘‘NYSE American’’).7 In this filing, the               applicable for trading UTP Securities on                 ‘‘mean’’ or ‘‘have meaning’’ instead of
                                                                                                        the Pillar trading platform, the Exchange                the terms ‘‘shall mean’’ or ‘‘shall have
                                                   4 See Trader Update dated January 29, 2015,
                                                                                                        proposes to state in a preamble to such                  the meaning.’’ In addition, the Exchange
                                                available here: www.nyse.com/pillar.                    rule that ‘‘this Rule is not applicable to
                                                   5 NYSE Arca Equities is a wholly-owned                                                                        will use the term ‘‘member
                                                corporation of NYSE Arca and operates as a facility
                                                                                                        trading UTP Securities on the Pillar                     organization,’’ which is defined in Rule
                                                of NYSE Arca.                                           trading platform.’’ 12 Current Exchange                  2, instead of ‘‘ETP Holder.’’ 13
                                                   6 In connection with the NYSE Arca                   rules governing trading that do not have                    The Framework Filing established
                                                implementation of Pillar, NYSE Arca filed four rule
                                                proposals relating to Pillar. See Securities Exchange
                                                                                                                                                                 Rule 1P Definitions and Rule 1.1
                                                                                                        21446 (May 8, 2017) (SR–NYSEMKT–2017–04)                 thereunder with definitions used for
                                                Act Release Nos. 74951 (May 13, 2015), 80 FR
                                                                                                        (Approval Order) (NYSE MKT rules governing
                                                28721 (May 19, 2015) (Notice) and 75494 (July 20,
                                                                                                        market makers); 80700 (May 16, 2017), 82 FR 23381
                                                                                                                                                                 trading on the Pillar trading platform.
                                                2015), 80 FR 44170 (July 24, 2015) (SR–NYSEArca–                                                                 The Exchange proposes the following
                                                                                                        (May 22, 2017) (SR–NYSEMKT–2017–05)
                                                2015–38) (Approval Order of NYSE Arca Pillar I
                                                Filing, adopting rules for Trading Sessions, Order
                                                                                                        (Approval Order) (NYSE MKT rules governing               additional definitions:
                                                Ranking and Display, and Order Execution);
                                                                                                        delay mechanism).                                           • Rule 1.1(a) would define the term
                                                                                                           8 In the NYSE American Filings, id., NYSE MKT
                                                Securities Exchange Act Release Nos. 75497 (July                                                                 ‘‘Exchange Book’’ to refer to the
                                                21, 2015), 80 FR 45022 (July 28, 2015) (Notice) and     represented that the name change to NYSE
                                                                                                        American would become operative upon the                 Exchange’s electronic file of orders,
                                                76267 (October 26, 2015), 80 FR 66951 (October 30,
                                                2015) (SR–NYSEArca–2015–56) (Approval Order of          effectiveness of an amendment to NYSE MKT’s              which contains all orders entered on the
                                                NYSE Arca Pillar II Filing, adopting rules for Orders   Certificate of Formation, which is expected to be no     Exchange. This proposed rule is based
                                                and Modifiers and the Retail Liquidity Program);        later than July 31, 2017. Because the NYSE               on NYSE American Rule 1.1E(a) without
                                                Securities Exchange Act Release Nos. 75467 (July        American name would become operative before the
                                                                                                        operative date of this proposed rule change, the         any substantive differences.
                                                16, 2015), 80 FR 43515 (July 22, 2015) (Notice) and
                                                76198 (October 20, 2015), 80 FR 65274 (October 26,      Exchange believes it would promote transparency             • Rule 1.1(g) would define the term
                                                2015) (SR–NYSEArca–2015–58) (Approval Order of          and reduce confusion to refer to NYSE MKT rules          ‘‘Authorized Trader’’ or ‘‘AT’’ to mean
                                                NYSE Arca Pillar III Filing, adopting rules for         as ‘‘NYSE American’’ rules.                              a person who may submit orders to the
                                                                                                           9 See Securities Exchange Act Release Nos. 76803
                                                Trading Halts, Short Sales, Limit Up-Limit Down,                                                                 Exchange on behalf of his or her
                                                and Odd Lots and Mixed Lots); and Securities            (December 30, 2015), 81 FR 536 (January 6, 2016)
                                                Exchange Act Release Nos. 76085 (October 6, 2015),      (SR–NYSE–2015–67) (Notice of Filing and                  member organization. This proposed
                                                80 FR 61513 (October 13, 2015) (Notice) and 76869       Immediate Effectiveness of Proposed Rule Change)         rule is based on NYSE American Rule
                                                (January 11, 2016), 81 FR 2276 (January 15, 2016)       (‘‘Framework Filing’’).                                  1.1E(g) without any substantive
                                                                                                           10 The term ‘‘UTP Security’’ means a security that
                                                (Approval Order of NYSE Arca Pillar IV Filing,                                                                   differences.
                                                adopting rules for Auctions).                           is listed on a national securities exchange other
                                                   7 See Securities Exchange Act Release Nos. 80283     than the Exchange and that trades on the Exchange           • Rule 1.1(j) would define the term
                                                (March 21, 2017), 82 FR 15244 (March 27, 2017)          pursuant to unlisted trading privileges. See Rule        ‘‘Core Trading Hours’’ to mean the
                                                (SR–NYSEMKT–201714) (Notice of filing and               1.1(ii). The Exchange has authority to extend            hours of 9:30 a.m. Eastern Time through
                                                immediate effectiveness of proposed rule change to      unlisted trading privileges to any security that is an   4:00 p.m. Eastern Time or such other
                                                change the name of NYSE MKT to NYSE American)           NMS Stock that is listed on another national
                                                                                                        securities exchange or with respect to which             hours as may be determined by the
                                                and 80748 (May 23, 2017), 82 FR 24764, 24765 (SR–
                                                NYSEMKT–2017–20) (Notice of filing and                  unlisted trading privileges may otherwise be             Exchange from time to time. This
                                                immediate effectiveness of proposed rule change to      extended in accordance with Section 12(f) of the         proposed rule is based on NYSE Arca
                                                change the name of NYSE MKT to NYSE American)           Act. See Rule 5.1(a)(1).                                 Equities Rule 1.1(j) and NYSE American
                                                                                                           11 The Exchange will file a separate proposed rule
                                                (‘‘NYSE American Filings’’). In connection with the                                                              Rule 1.1E(j) without any substantive
                                                NYSE American implementation of Pillar, NYSE            change to add additional rules that would govern
                                                MKT filed several rule changes. See Securities          trading of UTP Securities on the Exchange on the         differences.
                                                Exchange Act Release Nos. 79242 (November 4,            Pillar trading platform.                                    • Rule 1.1(k) would define the term
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                                                2016), 81 FR 79081 (November 10, 2016) (SR–                12 The Exchange proposes to amend the
                                                                                                                                                                 ‘‘Exchange’’ to mean the New York
                                                NYSEMKT–2016–97) (Notice and Filing of                  description of Pillar Platform Rules, which precedes     Stock Exchange LLC. This proposed rule
                                                Immediate Effectiveness of Proposed Rule Change         Rule 1P, to delete the last sentence, which currently
                                                of framework rules); 81038 (June 28, 2017), 82 FR       provides that ‘‘[t]he following rules will not be        is based on NYSE Arca Equities Rule
                                                31118 (July 5, 2017) (SR–NYSEMKT–2016–103)              applicable to trading on the Pillar trading platform:
                                                (Approval Order) (the ‘‘ETP Listing Rules Filing’’);    Rules 7, 55, 56, and 62.’’ As proposed, the                13 Because these non-substantive differences

                                                80590 (May 4, 2017), 82 FR 21843 (May 10, 2017)         inapplicability of these rules on the Pillar platform    would be applied throughout the proposed rules,
                                                (Approval Order) (NYSE MKT rules governing              would be addressed in the preamble that the              the Exchange will not note these differences
                                                automated trading); 80577 (May 2, 2017), 82 FR          Exchange proposes to add to each of these rules.         separately for each proposed rule.



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                                                                           Federal Register / Vol. 82, No. 147 / Wednesday, August 2, 2017 / Notices                                                    36035

                                                1.1(k) and NYSE American Rule 1.1E(k),                  business day. The proposed rule also                  Equities Rule 7.14 and NYSE American
                                                but uses the Exchange’s name.                           sets forth when the CEO may take                      Rule 7.14E without any substantive
                                                   • Rule 1.1(p) would define the term                  specified actions, such as halting or                 differences. The Exchange proposes that
                                                ‘‘General Authorized Trader’’ or ‘‘GAT’’                suspending trading in some or all                     its current rules governing clearing,
                                                to mean an AT who performs only non-                    securities on the Exchange. The                       Rules 130 and 132 would not be
                                                market making activities on behalf of a                 proposed rule is based on NYSE Arca                   applicable to trading UTP Securities on
                                                member organization. This proposed                      Equities Rule 7.1, NYSE American Rule                 the Pillar trading platform.14
                                                rule is based on NYSE Arca Equities                     7.1E, Rule 51, and Rule 52. The                          • Proposed Rule 7.17 (Firm Orders
                                                Rule 1.1(p) and NYSE American Rule                      Exchange proposes that Rules 51 and 52                and Quotes) would establish
                                                1.1E(p) without any substantive                         would not be applicable to trading UTP                requirements that all orders and quotes
                                                differences.                                            Securities on the Pillar trading platform.            must be firm. This proposed rule is
                                                   • Proposed Rule 1.1(u) would define                  In addition, because the definition of                based on NYSE Arca Equities Rule 7.17
                                                the term ‘‘Marketable’’ to mean, for a                  the term ‘‘business day’’ in Rule 12                  and NYSE American Rule 7.17E without
                                                Limit Order, an order that can be                       would be redundant of proposed Rule                   any substantive differences. Because on
                                                immediately executed or routed and                      7.1E, the Exchange proposes that Rule                 the Pillar trading platform, the Exchange
                                                that Market Orders are always                           12 would not be applicable to trading on              would only publish automated
                                                considered Marketable. This proposed                    the Pillar trading platform.                          quotations consistent with proposed
                                                rule is based on NYSE Arca Equities                        • Proposed Rule 7.2 (Holidays) would               Rule 7.17, the Exchange proposes that
                                                Rule 1.1(u) and NYSE American Rule                      establish the holidays when the                       Rule 60—Equities (Dissemination of
                                                1.1E(u) without any substantive                         Exchange would not be open for                        Quotations) would not be applicable to
                                                differences.                                            business. The proposed rule is based on               trading UTP Securities on the Pillar
                                                   • Proposed Rule 1.1(rr) would define                 NYSE Arca Equities Rule 7.2, NYSE                     trading platform.
                                                the terms ‘‘security’’ and ‘‘securities’’ to            American Rule 7.2, and Supplementary
                                                mean any security as defined in Section                                                                          Section 3 of Rule 7P sets forth
                                                                                                        Material .10 to Rule 51, including text               Exchange Trading on the Pillar trading
                                                3(a)(10) under the Securities Exchange                  that provides that when any holiday
                                                Act of 1934; provided, however, that for                                                                      platform. The Exchange proposes the
                                                                                                        observed by the Exchange falls on a                   following additional rules for this
                                                purposes of Rule 7P, such term means                    Sunday, the Exchange would not be
                                                any NMS stock. This proposed rule is                                                                          section of Rule 7P:
                                                                                                        open for business on the succeeding
                                                based on NYSE Arca Equities Rule                                                                                 • Proposed Rule 7.29 (Access) would
                                                                                                        Monday, which is in Rule 51.
                                                1.1(rr) and NYSE American Rule                             • Rule 7.8 (Bid or Offer Deemed                    provide that the Exchange would be
                                                1.1E(rr) without any substantive                        Regular Way) would establish that all                 available for entry and cancellation of
                                                differences. In addition, because the                   bids and offers would be considered to                orders by member organizations with
                                                term ‘‘security’’ would be defined in                   be ‘‘regular way.’’ This proposed rule is             authorized access. To obtain authorized
                                                proposed Rule 1.1(rr), the Exchange                     based on NYSE Arca Equities Rule 7.8                  access to the Exchange, each member
                                                proposes that Rules 3 and 4, which                      and NYSE American Rule 7.8E without                   organization would be required to enter
                                                define the terms ‘‘Security’’ and                       any substantive differences. The                      into a User Agreement. Proposed Rule
                                                ‘‘Stock,’’ would not be applicable to                   Exchange proposes that Rule 14 would                  7.29 is based on NYSE Arca Equities
                                                trading UTP Securities on the Pillar                    not be applicable to trading of UTP                   Rule 7.29(a) and NYSE American Rule
                                                trading platform.                                       Securities on the Pillar trading platform.            7.29E(a), without any substantive
                                                   • Proposed Rule 1.1(ss) would define                    • Proposed Rule 7.9 (Execution Price               differences. The Exchange does not
                                                the terms ‘‘self-regulatory organization’’              Binding) would establish that,                        propose to include rule text based on
                                                and ‘‘SRO’’ to have the same meaning as                 notwithstanding Exchange rules                        NYSE Arca Equities Rule 7.29(b)
                                                set forth in the provisions of the                      governing clearly erroneous executions,               because the Exchange would not offer
                                                Securities Exchange Act of 1934 relating                the price at which an order is executed               sponsored access.
                                                to national securities exchanges. This                  is binding notwithstanding that an                       • Proposed Rule 7.30 (Authorized
                                                proposed rule is based on NYSE Arca                     erroneous report is rendered. This                    Traders) would establish requirements
                                                Equities Rule 1.1(ss) and NYSE                          proposed rule is based on NYSE Arca                   for member organizations relating to
                                                American Rule 1.1E(ss) without any                      Equities Rule 7.9 and NYSE American                   ATs. The proposed rule is based on
                                                substantive differences.                                Rule 7.9E without any substantive                     NYSE Arca Equities Rule 7.30 and
                                                   • Proposed Rule 1.1(xx) would define                 differences. The Exchange proposes that               NYSE American Rule 7.30E, with one
                                                the term ‘‘Trading Facilities’’ or                      Rules 71 (Precedence of Highest Bid and               non-substantive difference to refer to
                                                ‘‘Facilities’’ to mean any and all                      Lowest Offer) and 411 (Erroneous                      ‘‘the Rules and procedures of the
                                                electronic or automatic trading systems                 Reports) would not be applicable to                   Exchange’’ rather than to refer to ‘‘the
                                                provided by the Exchange to member                      trading of UTP Securities on the Pillar               trading rules and procedures related to
                                                organizations. This proposed rule is                    trading platform.                                     the NYSE Arca Marketplace and all
                                                based on NYSE Arca Equities Rule                           • Proposed Rule 7.14 (Clearance and                other Rules of the Corporation.’’.
                                                1.1(xx) and NYSE American Rule                          Settlement) would establish the                          • Proposed Rule 7.32 (Order Entry)
                                                1.1E(xx) without any substantive                        requirements regarding a member                       would establish requirements for order
                                                differences.                                            organization’s arrangements for clearing              entry size. The proposed rule is based
                                                   Section 1 of Rule 7P sets forth the                  UTP Securities on Pillar. Because all                 on NYSE Arca Equities Rule 7.32 and
                                                General Provisions relating to trading on               post-trade functions on the Exchange’s                NYSE American Rule 7.32E without any
                                                                                                        Pillar trading platform would follow
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                                                the Pillar trading platform. The                                                                              substantive differences. The Exchange
                                                Exchange proposes the following                         same procedures for post-trade                        proposes that the paragraph of Rule
                                                additional rules in this section of Rule                processing as NYSE Arca Equities and                  1000 (Automatic Executions) relating to
                                                7P:                                                     NYSE American follow, the Exchange                    ‘‘Maximum Order Size for Automatic
                                                   • Proposed Rule 7.1 (Hours of                        proposes rules that are based on NYSE                 Executions’’ would not be applicable to
                                                Business) would specify that the                        Arca Equities and NYSE American rules
                                                Exchange would be open for the                          governing clearing. Accordingly, the                    14 See also infra proposed Rules 7.33 (Capacity

                                                transaction of business on every                        proposed rule is based on NYSE Arca                   Codes) and 7.41 (Clearance and Settlement).



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                                                36036                      Federal Register / Vol. 82, No. 147 / Wednesday, August 2, 2017 / Notices

                                                trading UTP Securities on the Pillar                       Æ Rule 133 (Comparison—Non-                             More specifically, the Exchange
                                                trading platform.                                       cleared Transactions),                                  believes that the proposed definitions
                                                   • Proposed Rule 7.33 (Capacity                          Æ Rule 134 (Differences and                          for Rule 1.1 would remove impediments
                                                Codes) would establish requirements for                 Omissions—Cleared Transactions QTs),                    to and perfect the mechanism of a free
                                                capacity code information that member                      Æ Rule 135 (Differences and                          and open market and a national market
                                                organizations must include with every                   Omissions—Non-cleared Transactions                      system because the proposed definitions
                                                order. The proposed rule is based on                    (‘DKs’)), and                                           are terms that would be used in the
                                                NYSE Arca Equities Rule 7.33 and                           Æ Rule 136 (Comparison—                              additional rules proposed by the
                                                NYSE American Rule 7.33E without any                    Transactions Excluded from a                            Exchange. The proposed rules are
                                                substantive differences. The Exchange                   Clearance).                                             definitional and would promote
                                                proposes to use the title ‘‘Capacity                       The Exchange further proposes to                     transparency in Exchange rules
                                                Codes’’ instead of ‘‘ETP Holder User,’’                 specify that the following additional                   regarding the use of those terms.
                                                for proposed Rule 7.33, which the                       rules, which also relate to post-trade                     The Exchange believes that the
                                                Exchange believes provides more clarity                 functions and have no analog on either                  additional rules proposed for Rule 7P
                                                regarding the content of the proposed                   NYSE Arca Equities or NYSE American                     would remove impediments to and
                                                rule. The Exchange proposes that the                    would not be applicable to trading UTP                  perfect the mechanism of a free and
                                                capacity code requirements in                           Securities on the Pillar trading platform:              open market and a national market
                                                Supplementary Material .30(9) to Rule                   Rules 137 (Written Contracts), Rule                     system because they would establish
                                                132 would not be applicable to trading                  137A (Samples of Written Contracts),                    rules governing general order processing
                                                UTP Securities on the Pillar trading                    138 (Give-Ups), 139 (Recording), 140                    and post-trade functions for the Pillar
                                                platform.                                               (Members Closing Contracts—                             trading platform. The proposed rules are
                                                   • Proposed Rule 7.40 (Trade                          Conditions), 141 (‘‘Fail to Deliver’’                   based on the rules of NYSE Arca
                                                Execution and Reporting) would                          Confirmations), 142 (Effect on Contracts                Equities and NYSE American without
                                                establish the Exchange’s obligation to                  of Errors in Comparison, etc.), 165–168                 any substantive differences. The
                                                report trades to an appropriate                         (Marking to the Market), 175–227                        proposed rule change would therefore
                                                consolidated transaction reporting                      (Settlement of Contracts), 235–251                      remove impediments to and perfect the
                                                system. The proposed rule is based on                   (Dividends, Interest, Rights, etc.), 255–               mechanism of a free and open market
                                                NYSE Arca Equities Rule 7.40 and                        259 (Due-Bills), 265–275                                and a national market system because
                                                NYSE American Rule 7.40E without any                    (Reclamations), 280–295 (Closing                        they are based on the approved rules of
                                                substantive differences. Because all                    Contracts), 296 (Liquidation of                         another exchange.
                                                                                                                                                                   The Exchange further believes that it
                                                reporting of transactions would be                      Securities Loans and Borrowings), and
                                                                                                                                                                would remove impediments to and
                                                automated, the Exchange proposes that                   297–299C (Miscellaneous Floor
                                                                                                                                                                perfect the mechanism of a free and
                                                Rules 128A and 128B would not be                        Procedure).
                                                                                                                                                                open market and a national market
                                                applicable to trading UTP Securities on                 *     *     *     *    *                                system to specify which current rules
                                                the Pillar trading platform.                               As discussed above, because of the                   would not be applicable to trading UTP
                                                   • Proposed Rule 7.41 (Clearance and                  technology changes associated with the                  Securities on the Pillar trading platform.
                                                Settlement) would establish                             migration to the Pillar trading platform,               The Exchange believes that the
                                                requirements that all trades be                         the Exchange will announce by Trader                    following legend, which would be
                                                processed for clearance and settlement                  Update when the Pillar rules for trading                added to existing rules, ‘‘This rule is not
                                                on a locked-in and anonymous basis.                     UTP Securities will become operative.                   applicable to trading UTP Securities on
                                                The proposed rule is based on NYSE                                                                              the Pillar trading platform,’’ would
                                                American Rule 7.41E with a non-                         2. Statutory Basis
                                                                                                                                                                promote transparency regarding which
                                                substantive difference to cross reference                  The proposed rule change is                          rules would govern trading on the
                                                Supplementary Material .10 to Rule 132                  consistent with Section 6(b) of the                     Exchange once it transitions to Pillar.
                                                to define the term ‘‘Qualified Clearing                 Securities Exchange Act of 1934 (the                    The Exchange has proposed to add this
                                                Agency.’’ In addition, proposed Rules                   ‘‘Act’’),15 in general, and furthers the                legend to rules that would be
                                                7.41(a), (b), (d), and (e) are based on                 objectives of Section 6(b)(5),16 in                     superseded by proposed rules.
                                                NYSE Arca Equities Rule 7.41(a), (b),                   particular, because it is designed to
                                                (d), and (e) with non-substantive                       prevent fraudulent and manipulative                     B. Self-Regulatory Organization’s
                                                differences not to include references to                acts and practices, to promote just and                 Statement on Burden on Competition
                                                sponsored access, because the Exchange                  equitable principles of trade, to foster                   The Exchange does not believe that
                                                will not offer sponsored access. Because                cooperation and coordination with                       the proposed rule change will impose
                                                all trades would be reported by the                     persons engaged in facilitating                         any burden on competition that is not
                                                Exchange on a locked-in basis, the                      transactions in securities, to remove                   necessary or appropriate in furtherance
                                                Exchange proposes to specify that the                   impediments to, and perfect the                         of the purposes of the Act. The
                                                following rules relating to clearance and               mechanism of, a free and open market                    proposed change is designed to propose
                                                settlement would not be applicable to                   and a national market system and, in                    rules to support the Exchange’s new
                                                trading UTP Securities on the Pillar                    general, to protect investors and the                   Pillar trading platform and to introduce
                                                trading system:                                         public interest. The Exchange believes                  trading of UTP Securities on the
                                                   Æ Rule 130 (Overnight Comparison of                  that the proposed rules would remove                    Exchange on that platform. The
                                                Exchange Transactions),                                 impediments to and perfect the                          Exchange operates in a highly
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                                                   Æ Rule 131 (Comparison—                              mechanism of a free and open market                     competitive environment in which its
                                                Requirements for Reporting Trades and                   because they provide for additional                     unaffiliated exchange competitors
                                                Providing Facilities),                                  rules to support trading of UTP                         operate multiple affiliated exchanges
                                                   Æ Rule 132 (Comparison and                           Securities on the Pillar trading platform.              that operate under common rules. By
                                                Settlement of Transactions Through a                                                                            basing its rules on those of NYSE Arca
                                                Fully-Interfaced or Qualified Clearing                    15 15   U.S.C. 78f(b).                                Equities and NYSE American, the
                                                Agency),                                                  16 15   U.S.C. 78f(b)(5).                             Exchange will provide its member


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                                                                             Federal Register / Vol. 82, No. 147 / Wednesday, August 2, 2017 / Notices                                                 36037

                                                organizations with consistency across                     Comments may be submitted by any of                    SECURITIES AND EXCHANGE
                                                affiliated exchanges, thereby enabling                    the following methods:                                 COMMISSION
                                                the Exchange to compete with
                                                unaffiliated exchange competitors that                    Electronic Comments                                    [Release No. 34–81250; File No. SR–
                                                                                                                                                                 NASDAQ–2017–075]
                                                similarly operate multiple exchanges on                     • Use the Commission’s Internet
                                                the same trading platforms.                               comment form (http://www.sec.gov/                      Self-Regulatory Organizations; The
                                                C. Self-Regulatory Organization’s                         rules/sro.shtml); or                                   NASDAQ Stock Market LLC; Notice of
                                                Statement on Comments on the                                                                                     Filing and Immediate Effectiveness of
                                                                                                            • Send an email to rule-comments@                    Proposed Rule Change To Delay the
                                                Proposed Rule Change Received From                        sec.gov. Please include File Number SR–
                                                Members, Participants, or Others                                                                                 Effective Date of the TotalView and
                                                                                                          NYSE–2017–35 on the subject line.                      OpenView Depth-of-Book Products
                                                  No written comments were solicited                      Paper Comments
                                                or received with respect to the proposed                                                                         July 28, 2017.
                                                rule change.                                                • Send paper comments in triplicate                     Pursuant to Section 19(b)(1) of the
                                                                                                          to Brent J. Fields, Secretary, Securities              Securities Exchange Act of 1934
                                                III. Date of Effectiveness of the                                                                                (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                Proposed Rule Change and Timing for                       and Exchange Commission, 100 F Street
                                                                                                                                                                 notice is hereby given that on July 21,
                                                Commission Action                                         NE., Washington, DC 20549–1090.
                                                                                                                                                                 2017, The NASDAQ Stock Market LLC
                                                   The Exchange has filed the proposed                    All submissions should refer to File                   (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
                                                rule change pursuant to Section                           Number SR–NYSE–2017–35. This file                      Securities and Exchange Commission
                                                19(b)(3)(A)(iii) of the Act 17 and Rule                   number should be included on the                       (‘‘SEC’’ or ‘‘Commission’’) the proposed
                                                19b–4(f)(6) thereunder.18 Because the                     subject line if email is used. To help the             rule change as described in Items I and
                                                foregoing proposed rule change does                       Commission process and review your                     II below, which Items have been
                                                not: (i) Significantly affect the                         comments more efficiently, please use                  prepared by the Exchange. The
                                                protection of investors or the public                     only one method. The Commission will                   Commission is publishing this notice to
                                                interest; (ii) impose any significant                     post all comments on the Commission’s                  solicit comments on the proposed rule
                                                burden on competition; and (iii) become                                                                          change from interested persons.
                                                                                                          Internet Web site (http://www.sec.gov/
                                                operative for 30 days from the date on                    rules/sro.shtml). Copies of the                        I. Self-Regulatory Organization’s
                                                which it was filed, or such shorter time                  submission, all subsequent                             Statement of the Terms of Substance of
                                                as the Commission may designate, it has                   amendments, all written statements                     the Proposed Rule Change
                                                become effective pursuant to Section                      with respect to the proposed rule                         The Exchange proposes to delay the
                                                19(b)(3)(A)(iii) of the Act 19 and                        change that are filed with the                         effective date of the merger of TotalView
                                                subparagraph (f)(6) Rule 19b–4                            Commission, and all written                            and OpenView by 31 days, until
                                                thereunder.20                                             communications relating to the                         September 1, 2017.
                                                   At any time within 60 days of the                      proposed rule change between the
                                                filing of such proposed rule change, the                                                                         II. Self-Regulatory Organization’s
                                                                                                          Commission and any person, other than                  Statement of the Purpose of, and
                                                Commission summarily may                                  those that may be withheld from the
                                                temporarily suspend such rule change if                                                                          Statutory Basis for, the Proposed Rule
                                                                                                          public in accordance with the                          Change
                                                it appears to the Commission that such
                                                                                                          provisions of 5 U.S.C. 552, will be
                                                action is necessary or appropriate in the                                                                           In its filing with the Commission, the
                                                                                                          available for Web site viewing and
                                                public interest, for the protection of                                                                           Exchange included statements
                                                investors, or otherwise in furtherance of                 printing in the Commission’s Public
                                                                                                                                                                 concerning the purpose of and basis for
                                                the purposes of the Act. If the                           Reference Room, 100 F Street NE.,
                                                                                                                                                                 the proposed rule change and discussed
                                                Commission takes such action, the                         Washington, DC 20549 on official                       any comments it received on the
                                                Commission shall institute proceedings                    business days between the hours of                     proposed rule change. The text of these
                                                under Section 19(b)(2)(B) 21 of the Act to                10:00 a.m. and 3:00 p.m. Copies of the                 statements may be examined at the
                                                determine whether the proposed rule                       filing also will be available for                      places specified in Item IV below. The
                                                change should be approved or                              inspection and copying at the principal                Exchange has prepared summaries, set
                                                disapproved.                                              office of the Exchange. All comments                   forth in sections A, B, and C below, of
                                                                                                          received will be posted without change;                the most significant aspects of such
                                                IV. Solicitation of Comments                              the Commission does not edit personal                  statements.
                                                  Interested persons are invited to                       identifying information from
                                                                                                          submissions. You should submit only                    A. Self-Regulatory Organization’s
                                                submit written data, views, and
                                                                                                          information that you wish to make                      Statement of the Purpose of, and the
                                                arguments concerning the foregoing,
                                                                                                          available publicly. All submissions                    Statutory Basis for, the Proposed Rule
                                                including whether the proposed rule
                                                                                                          should refer to File Number SR–NYSE–                   Change
                                                change is consistent with the Act.
                                                                                                          2017–35 and should be submitted on or                  1. Purpose
                                                  17 15  U.S.C. 78s(b)(3)(A)(iii).                        before August 23, 2017.                                   The purpose of this filing is to delay
                                                   18 17 CFR 240.19b–4(f)(6).
                                                   19 15 U.S.C. 78s(b)(3)(A).
                                                                                                            For the Commission, by the Division of               the effective date of the merger of
                                                   20 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
                                                                                                          Trading and Markets, pursuant to delegated             TotalView and OpenView by 31 days,
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                                                4(f)(6)(iii) requires the Exchange to give the            authority.22                                           from August 1, 2017, until September 1,
                                                Commission written notice of the Exchange’s intent        Eduardo A. Aleman,                                     2017.
                                                to file the proposed rule change, along with a brief                                                                On May 26, 2017, the Exchange filed
                                                description and text of the proposed rule change,         Assistant Secretary.
                                                                                                                                                                 with the Commission a proposed rule
                                                at least five business days prior to the date of filing   [FR Doc. 2017–16206 Filed 8–1–17; 8:45 am]
                                                of the proposed rule change, or such shorter time                                                                change (‘‘Proposal’’) to merge the
                                                                                                          BILLING CODE 8011–01–P
                                                as designated by the Commission. The Exchange
                                                has satisfied this requirement.                                                                                    1 15   U.S.C. 78s(b)(1).
                                                   21 15 U.S.C. 78s(b)(2)(B).                               22 17   CFR 200.30–3(a)(12).                           2 17   CFR 240.19b–4.



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Document Created: 2017-08-02 07:10:07
Document Modified: 2017-08-02 07:10:07
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 Citation82 FR 36033 

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