82 FR 42866 - Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Commentary .06 to Rule 980NY To Enhance the Price Protections for Complex Orders Executed on the Exchange
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 175 (September 12, 2017)
Federal Register Volume 82, Issue 175 (September 12, 2017)
| Page Range | 42866-42869 | |
| FR Document | 2017-19239 |
[Federal Register Volume 82, Number 175 (Tuesday, September 12, 2017)] [Notices] [Pages 42866-42869] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-19239] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81537; File No. SR-NYSEAMER-2017-07] Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Commentary .06 to Rule 980NY To Enhance the Price Protections for Complex Orders Executed on the Exchange September 6, 2017. Pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on August 25, 2017, NYSE American LLC (the ``Exchange'' or ``NYSE American'') filed with the Securities and Exchange Commission (``Commission'') a proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to adopt Commentary .06 to Rule 980NY (Electronic Complex Order Trading) to enhance the price protections for Complex Orders executed on the Exchange. 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 Exchange 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 these 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 aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to adopt Commentary .06 to Rule 980NY to enhance the price protections applicable to Electronic Complex Orders (or ``ECOs'').\3\ --------------------------------------------------------------------------- \3\ Rule 900.3NY(e) defines a Complex Order as any order involving the simultaneous purchase and/or sale of two or more different option series in the same underlying security, for the same account, in a ratio that is equal to or greater than one-to- three (.333) and less than or equal to three-to-one (3.00) and for the purpose of executing particular investment strategy. Per Rule 980NY, an ECO is a Complex Order that has been entered into the NYSE System for possible execution. See Rule 980NY(a). --------------------------------------------------------------------------- The Exchange currently provides price protection to ECOs, which is designed to prevent the execution of orders at prices that are priced a certain percentage away from the current market and, therefore, are potentially erroneous.\4\ The Exchange proposes an additional price protection that would be another check on whether an ECO's limit price is correctly aligned to the complex strategy and would reject erroneously priced incoming ECOs (the ``Reasonability Checks'').\5\ As discussed herein, the proposed price protections are materially identical to price protections available on other options exchanges, including Nasdaq ISE, LLC (``ISE'').\6\ --------------------------------------------------------------------------- \4\ See Commentary .05 to Rule 980NY (providing for the rejection of ECOs that are priced away from the current market by a ``Specified Amount,'' which Specified Amount varies depending on the smallest MPV of any leg in the ECO) (the ``Price Protection Filter'' or ``Filter'') . \5\ See proposed Commentary .06 to Rule 980NY which would provide that the Exchange would reject any incoming ECO that has a strategy described in paragraphs (a)(1)-(3) of proposed Commentary .06 to Rule 980NY. Because Reasonability Checks would be performed before the Price Protection Filter, the proposed rule text would provide that ``[a]ny incoming Electronic Complex Order that passes this Reasonability Check would still be subject to the Price Protection Filter, per Commentary .05(b) of this Rule.'' See id. \6\ See e.g., ISE Rule 722, Supplementary Material .07 (Price limits for complex orders and quotes). The Exchange notes that, as discussed herein, the proposed Reasonability Checks are similar to those initially adopted by ISE and do not include a later adopted pre-set value ``buffer.'' See infra nn. 12 [sic] and 15 [sic]. Moreover, because the Exchange does not support ECOs entered as market orders, the Exchange has not adopted price checks related to such orders (which orders ISE supports). See e.g., ISE Rule 722, Supplementary Material .07(c)(1),(3). The Exchange also notes that the Chicago Board Options Exchange, Inc. (``CBOE'') likewise includes complex strategy price checks, which cover more strategies than proposed herein, but are nonetheless designed to accomplish the same goal of avoiding execution of erroneously priced complex orders. See CBOE Rule 6.53C, Interpretations and Policies .08 (Price Check Parameters). --------------------------------------------------------------------------- First, the Exchange proposes Commentary .06(a)(1) to Rule 980NY, pursuant to which, upon entry into the System, the Exchange would reject any incoming order for a complex strategy where all legs are to sell (buy) if it is entered at a price that is less (more) than the minimum (maximum) price, which is calculated as the sum of the ratio on each leg of the Complex Order multiplied by $0.01 (-$0.01) per leg (e.g., an order to sell (buy) 2 calls and sell (buy) 1 put would have a minimum (maximum) price of $0.03 (-$0.03)).\7\ --------------------------------------------------------------------------- \7\ See proposed Commentary .06(a)(1) to Rule 980NY. --------------------------------------------------------------------------- For example, an order to sell 2 calls and sell 1 put would have a minimum net credit price of $0.03. If such an order were entered at a price of $0.02, it would not be executable, as a price of zero would have to be assigned to one of the legs of the order. As proposed, this order would be rejected. As another example, if a market participant is entering the following ``all sell'' complex strategy for a debit:Leg A: 100 x 0.01-0.02 x 100 Leg B: 100 x 0.01-0.02 x 100 Order 1: Sell 1 Leg A, Sell 2 Leg B; Net price: -$0.03 Result: As proposed, Order 1 would be rejected because it is priced less than the minimum order price of $0.03. Based on each individual leg trading for at least $0.01, this complex strategy would never trade at a net credit price of less than $0.03. Thus, any sell order for this strategy with a limit price less than $0.03 would be rejected. If, for example, a market participant is entering the following ``all buy'' complex strategy: Leg A: 100 x 0.01-0.02 x 100 Leg B: 100 x 0.01-0.02 x 100 Order 1: Buy Leg A, Buy 2 Leg B; Net price: -$0.02 Result: As proposed, Order 1 would be rejected because it is priced greater than the maximum net debit price of -$0.03 (and only orders priced at -$0.03 or less would be accepted). Because debit orders are entered into the Exchange System as a negative value, the ``maximum'' price check for buy orders is effectively a check for the minimum order price. Here, Order 1 @-$0.02 would represent an order to buy [[Page 42867]] for a net debit price of $0.02, and therefore would be rejected. The Exchange notes that the price check in proposed Commentary .06(a)(1) to Rule 980NY is materially identical to price protections available on at least one other options exchange, ISE.\8\ --------------------------------------------------------------------------- \8\ See Securities Exchange Act Release No. 71406 (January 27, 2014), 79 FR 31372, 31373 (January 31, 2014) (SR-ISE-2014-05) (``ISE Price Reasonability Filing'') (adopting ``minimum net price'' protection feature, providing that the ISE system would ``reject any complex order strategy where all legs are to buy if it is entered at a price that is less than the minimum price, which is calculated as the sum of the ratio on each leg of the complex order multiplied by $0.01 per leg (e.g., an order to buy 2 calls and buy 1 put would have a minimum price of $0.03)''). --------------------------------------------------------------------------- Second, the Exchange proposes Commentary .06(a)(2) to Rule 980NY, pursuant to which, upon entry into the System, the Exchange would reject any incoming order for a vertical spread strategy (i.e., an order to sell a call (put) option and to buy another call (put) option in the same security with the same expiration but at a higher (lower) strike price) when entered with a net debit price of -$0.01 or less.\9\ --------------------------------------------------------------------------- \9\ See proposed Commentary .06(a)(2) to Rule 980NY. --------------------------------------------------------------------------- For example, if a market participant is entering the following vertical call credit spread for a debit: Leg A: April SPY 240 Call: 100 x 1.72-1.73 x 100 Leg B: April SPY 241 Call: 100 x 1.36-1.37 x 100 Order 1: Sell 1 Leg A, Buy 1 Leg B; Quantity 50; Net price: - $0.35 Result: As proposed, Order 1 would be rejected because it priced less than or equal to -$0.01 (i.e., it has a negative limit price). The Exchange notes that the lower strike call will always be more expensive than the higher strike call within the same expiration.\10\ Thus, entering this sell order with a negative limit price would result in it being rejected. --------------------------------------------------------------------------- \10\ The principle behind this check is based on the standard trading principle of ``buy low, sell high.'' The ability to buy stock at a lower price is more valuable than the ability to buy stock at a higher price, and thus a call with a lower strike price has more value, and thus is more expensive, than a call with a higher strike price. Similarly, the ability to sell stock at a higher price is more valuable than the ability to sell stock at a lower price, and thus a put with a higher strike price has more value, and thus is more expensive, than a put with a lower strike price. --------------------------------------------------------------------------- The Exchange notes that the price check in proposed Commentary .06(a)(2) to Rule 980NY is materially identical to price protections available on at least one other options exchange, ISE.\11\ --------------------------------------------------------------------------- \11\ See supra note 9 [sic], ISE Price Reasonability Filing (providing that, subject to certain limitations, the ISE system would ``reject a vertical spread order (i.e., an order to buy a call (put) option and to sell another call (put) option in the same security with the same expiration but at a higher (lower) strike price) when entered with a net price of less than zero''). The Exchange notes that ISE amended Supplementary Material .07(c)(1) to ISE Rule 722 to add a ``pre-set value'' less than zero to allow a buffer within which certain orders would not be rejected. See, e.g., See Securities Exchange Act Release No. 72254 (May 27, 2014), 79 FR 31372, 31373 (June 2, 2014) (SR-ISE-2014-26) (``ISE Price Reasonability Modification Filing''). The Exchange has opted to hard code the reject value as -$0.01, which aligns with the ISE Price Reasonability Filing and, would nonetheless operate in a manner similar to ISE's current rule, notwithstanding the ``buffer.'' --------------------------------------------------------------------------- Finally, upon entry into the System, the Exchange proposes to reject any incoming order for a credit calendar spread strategy (i.e., an order to sell a call (put) option with a longer expiration and to buy another call (put) option with a shorter expiration in the same security at the same strike price) when entered with a net price of - $0.01 or less.\12\ --------------------------------------------------------------------------- \12\ See proposed Commentary .06(a)(3) to Rule 980NY. --------------------------------------------------------------------------- For example, if a market participant is entering the following calendar credit spread for a debit: Leg A: May SPY 240 Call: 100 x 3.41-3.43 x 100 Leg B: April SPY 240 Call: 100 x 1.72-1.73 x 100 Order 1: Sell 1 Leg A, Buy 1 Leg B; Quantity: 50; Net price: - $1.68 Result: As proposed, Order 1 would be rejected because it is priced less than or equal to -$0.01. The Exchange notes that the further out expiring call being sold will always be more expensive than a nearer expiring call being bought at the same strike price, and should always generate a credit.\13\ Thus, any order to sell the far expiration and buy the near expiration entered with a price of -0.01 or less would result in this order being rejected. --------------------------------------------------------------------------- \13\ The principle behind this check is based on the general concept that locking in a price further into the future involves more risk for the buyer and seller and thus is more valuable, making an option (call or put) with a farther expiration more expensive than an option with a nearer expiration. This is similar, for example, to interest rates for mortgages: In general, an interest rate on a 30-year mortgage is higher than the interest rate on a 15- year mortgage due to the risk of potential interest rate changes over the longer period of time to both the mortgagor and mortgagee. --------------------------------------------------------------------------- The Exchange notes that the price check in proposed Commentary .06(a)(3) to Rule 980NY is materially identical to price protections available on at least one other options exchange, ISE.\14\ --------------------------------------------------------------------------- \14\ See, e.g., ISE Rule 722, Supplementary Material .07(c)(3) (providing, in part, that the ISE system will ``reject a calendar spread order (i.e., an order to buy a call (put) option with a longer expiration and to sell another call (put) option with a shorter expiration in the same security at the same strike price) when entered with a net price of less than zero (minus a pre-set value).'' See also supra note 12 [sic], ISE Price Reasonability Modification Filing (adopting ISE Rule 722, Supplementary Material .07(c)(2)). Rather than utilize a ``pre-set value'' (or buffer), the Exchange has opted to hard code the reject value as -$0.01. See id. --------------------------------------------------------------------------- Regarding calendar spread orders, the Exchange also proposes to retain discretion to deactivate this price check in the interest of fair and orderly markets.\15\ For example, the Exchange may deactivate this price check if there is a corporate action in a complex symbol that would result in an otherwise valid strategy being rejected by the proposed check.\16\ The Exchange believes this discretion to deactivate the Reasonability Check would be consistent with its obligation to assure a fair and orderly market, and that the need for such flexibility is recognized in other Exchange rules, such as those related to position limits, quote-width differentials and price protection filters.\17\ As proposed, the Exchange would announce by electronic message to ATP Holders that request to receive such messages if the Exchange deactivates (and later reactivates) the Reasonability Check for calendar spread orders. --------------------------------------------------------------------------- \15\ See proposed Commentary .06(a)(3)(i) to Rule 980NY. \16\ The Exchange has not similarly retained discretion to deactivate the Reasonability Checks for minimum price and vertical spreads because corporate actions will not create a scenario where a lower strike call would be cheaper than a higher strike call, or a higher strike put will be cheaper than a lower strike put. \17\ See, e.g., Rules 904 (regarding position limits); 925NY (regarding maximum quotation spreads); 967NY (regarding price protection for orders); 925.1NY (regarding price protection for Market Maker quotes) and Commentary .05 to Rule 980NY (regarding the Price Protection Filter for ECOs). --------------------------------------------------------------------------- Further, the Exchange does not propose to apply the Reasonability Check on calendar orders entered on the Trading Floor, as such orders are subject to manual handling by individuals who will have evaluated the price of an order based on then-market conditions.\18\ The Exchange notes that other exchanges that offer price protections similar to those proposed for calendar spreads have similarly retained discretion to limit the application of this check.\19\ --------------------------------------------------------------------------- \18\ See proposed Commentary .06(a)(3)(i) to Rule 980NY. \19\ See, e.g., CBOE Rule 6.53C, Interpretations and Policies .08(c)(6) (excluding from debit/credit reasonability checks ``orders routed from a PAR workstation or order management terminal'' because such orders would be subject to manual handling). The Exchange notes that CBOE's exclusion of complex orders entered on the floor from its debit/credit reasonability checks is not limited to calendar spreads but applies to all such orders entered from the floor of the CBOE. --------------------------------------------------------------------------- The Exchange notes that ECOs that are not rejected by the Reasonability Checks would still be subject to the Price Protection Filter.\20\ --------------------------------------------------------------------------- \20\ See proposed Commentary .06(b) to Rule 980NY; see also supra note 6 [sic]. --------------------------------------------------------------------------- [[Page 42868]] Implementation The Exchange will announce by Trader Update the implementation date of the proposed rule change within 90 days of the effective date of this rule filing. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the ``Act''),\21\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\22\ in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78f(b). \22\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- In particular, the Exchange believes the proposed Reasonability Checks would protect investors and the public interest and maintain fair and orderly markets by mitigating potential risks associated with market participants entering Complex Orders at clearly unintended prices that are inconsistent with their strategies. Specifically, a Complex Order strategy where all legs are to sell (buy) will be rejected if it is entered at a price that is less (more) than the minimum (maximum) price. The Exchange believes it is reasonable to reject such orders upon entry as they are not executable. Allowing such orders to be entered would create investor confusion; as such orders would not receive an execution and would remain pending until canceled. Similarly, the Exchange believes that rejecting orders for vertical spread strategies--as well as calendar spread strategies--that are entered at a negative price also protects investors from executing orders that were likely entered in error. Regarding orders for calendar spreads, the Exchange recognizes that it may not be appropriate to apply the Reasonability Checks to calendar spreads in unusual market conditions, such as corporate actions that result in changes in price to the underlying security.\23\ The Exchange therefore believes it would remove impediments and perfect the mechanism of a free and open market and a national market system for the Exchange to temporarily deactivate the checks in the event of unusual market conditions, which flexibility is consistent with other exchange rules.\24\ Further, the Exchange also recognizes that the applicable protections are not appropriate for orders entered manually on the Trading Floor, because such orders would be subject to an additional check of then-market conditions by the individual entering the order, which flexibility is consistent with the rules of other exchanges.\25\ --------------------------------------------------------------------------- \23\ See supra note 17 [sic]. \24\ See supra note 18 [sic]. \25\ See supra note 20 [sic]. --------------------------------------------------------------------------- The Exchange's proposed Reasonability Checks are similar to similar protections offered on other options exchanges, including ISE. To the extent there are differences between the proposed Reasonability Checks, as described above (see supra notes 12 [sic] and 15 [sic]), the Exchange does not believe such differences raise any new or significant policy concerns. Further, despite the differences, the proposed Reasonability Checks would otherwise operate in a similar manner to the checks on ISE. As such, the Exchange merely desires to adopt functionality that is similar to what already exists on ISE.\26\ Permitting the Exchange to operate on an even playing field relative to other exchanges that have similar functionality removes impediments to and perfects the mechanism for a free and open market and a national market system. --------------------------------------------------------------------------- \26\ See supra note 7 [sic]. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed Reasonability Checks specify circumstances in which the Exchange would reject certain ECOs in the interest of protecting investors against the execution of erroneous orders or the execution of orders at erroneous prices. As such, the proposal does not impose any burden on competition. To the contrary, the Exchange believes that the proposed Reasonability Checks may foster more competition. Specifically, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues. The Exchange's proposed rule change would enhance its ability to compete with other exchanges that already offer similar reasonability checks. Thus, the Exchange believes that this type of competition amongst exchanges is beneficial to the market place as a whole as it can result in enhanced processes, functionality, and technologies. The Exchange further believes that because the proposed rule change would be applicable to all OTP [sic] Holders and OTP [sic] Firms, it would not impose any burden on intra-market competition that is not necessary or appropriate in furtherance of the purposes of the Act. 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 Because the proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative 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) of the Act \27\ and Rule 19b-4(f)(6) thereunder.\28\ --------------------------------------------------------------------------- \27\ 15 U.S.C. 78s(b)(3)(A). \28\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b- 4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. --------------------------------------------------------------------------- A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act \29\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \30\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. NYSE American has asked the Commission to waive the 30-day operative delay. NYSE American believes that waiving the operative delay would protect investors by enabling the Exchange to provide greater protections from potentially erroneous executions and potentially reduce the attendant risks of such executions. As noted above, the proposal provides that a Complex Order strategy where all legs are to sell (buy) will be rejected if it is entered at a price that is less (more) than the minimum (maximum) price. NYSE American notes that such an order is not executable, and that allowing such an order to be entered would create investor confusion because the order would not receive an execution and would remain pending until canceled. Similarly, the Exchange believes that [[Page 42869]] rejecting orders for vertical and calendar spread strategies that are entered at a negative price will protect investors from executing orders that were likely entered in error.\31\ The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest because the proposed rules are designed to reduce investor confusion and to prevent the entry and execution of erroneously priced ECOs. Therefore, the Commission hereby waives the operative delay and designates the proposed rule change operative upon filing.\32\ --------------------------------------------------------------------------- \29\ 17 CFR 240.19b-4(f)(6). \30\ 17 CFR 240.19b-4(f)(6)(iii). \31\ As discussed above, the proposal also allows the Exchange to deactivate the Reasonability Check for calendar spread strategies. The Exchange will notify ATP Holders and ATP Firms by electronic message of any such deactivation or re-activation. The Exchange believes that this discretion is necessary because a corporate action, for example, could result in the Reasonability Check for calendar spread strategies rejecting an otherwise valid strategy. The proposal also provides that the Reasonability Check for calendar spread strategies will not apply to ECOs that are entered on the Trading Floor. The Exchange notes that such orders are subject to manual handling by individuals who will have evaluated the price of the order based on market conditions. The Exchange further notes that another exchange has adopted a similar rule. See note 19, supra. \32\ For purposes only of waiving the 30-day operative delay, the Commission also has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the 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 to determine whether the proposed rule change should be approved or disapproved. 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-NYSEAMER-2017-07 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-NYSEAMER-2017-07. 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-NYSEAMER-2017-07 and should be submitted on or before October 3, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\33\ --------------------------------------------------------------------------- \33\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-19239 Filed 9-11-17; 8:45 am] BILLING CODE 8011-01-P
![42866 Federal Register / Vol. 82, No. 175 / Tuesday, September 12, 2017 / Notices
On September 1, 2017, NYSE Arca the proposed rule change and discussed First, the Exchange proposes
withdrew the proposed rule change any comments it received on the Commentary .06(a)(1) to Rule 980NY,
(SR–NYSEArca–2016–176). proposed rule change. The text of these pursuant to which, upon entry into the
For the Commission, by the Division of statements may be examined at the System, the Exchange would reject any
Trading and Markets, pursuant to delegated places specified in Item IV below. The incoming order for a complex strategy
authority.9 Exchange has prepared summaries, set where all legs are to sell (buy) if it is
Eduardo A. Aleman, forth in sections A, B, and C below, of entered at a price that is less (more) than
Assistant Secretary. the most significant aspects of such the minimum (maximum) price, which
statements. is calculated as the sum of the ratio on
[FR Doc. 2017–19240 Filed 9–11–17; 8:45 am]
A. Self-Regulatory Organization’s each leg of the Complex Order
BILLING CODE 8011–01–P
Statement of the Purpose of, and multiplied by $0.01 (¥$0.01) per leg
Statutory Basis for, the Proposed Rule (e.g., an order to sell (buy) 2 calls and
SECURITIES AND EXCHANGE Change sell (buy) 1 put would have a minimum
COMMISSION (maximum) price of $0.03 (¥$0.03)).7
1. Purpose For example, an order to sell 2 calls
[Release No. 34–81537; File No. SR– The Exchange is proposing to adopt and sell 1 put would have a minimum
NYSEAMER–2017–07] net credit price of $0.03. If such an
Commentary .06 to Rule 980NY to
enhance the price protections applicable order were entered at a price of $0.02,
Self-Regulatory Organizations; NYSE
to Electronic Complex Orders (or it would not be executable, as a price of
American LLC; Notice of Filing and
‘‘ECOs’’).3 zero would have to be assigned to one
Immediate Effectiveness of a Proposed
The Exchange currently provides of the legs of the order. As proposed,
Rule Change To Adopt Commentary
price protection to ECOs, which is this order would be rejected.
.06 to Rule 980NY To Enhance the
designed to prevent the execution of As another example, if a market
Price Protections for Complex Orders
orders at prices that are priced a certain participant is entering the following ‘‘all
Executed on the Exchange
percentage away from the current sell’’ complex strategy for a debit:
September 6, 2017. market and, therefore, are potentially • Leg A: 100 × 0.01¥0.02 × 100
Pursuant to the provisions of Section erroneous.4 The Exchange proposes an • Leg B: 100 × 0.01¥0.02 × 100
19(b)(1) of the Securities Exchange Act additional price protection that would • Order 1: Sell 1 Leg A, Sell 2 Leg B;
of 1934 (‘‘Act’’) 1 and Rule 19b–4 be another check on whether an ECO’s Net price: ¥$0.03
thereunder,2 notice is hereby given that limit price is correctly aligned to the Result: As proposed, Order 1 would
on August 25, 2017, NYSE American complex strategy and would reject be rejected because it is priced less than
LLC (the ‘‘Exchange’’ or ‘‘NYSE erroneously priced incoming ECOs (the the minimum order price of $0.03.
American’’) filed with the Securities ‘‘Reasonability Checks’’).5 As discussed Based on each individual leg trading for
and Exchange Commission herein, the proposed price protections at least $0.01, this complex strategy
(‘‘Commission’’) a proposed rule change are materially identical to price would never trade at a net credit price
as described in Items I and II below, protections available on other options of less than $0.03. Thus, any sell order
which Items have been prepared by the exchanges, including Nasdaq ISE, LLC for this strategy with a limit price less
Exchange. The Commission is (‘‘ISE’’).6 than $0.03 would be rejected.
publishing this notice to solicit If, for example, a market participant is
3 Rule 900.3NY(e) defines a Complex Order as
comments on the proposed rule change entering the following ‘‘all buy’’
any order involving the simultaneous purchase
from interested persons. and/or sale of two or more different option series complex strategy:
I. Self-Regulatory Organization’s in the same underlying security, for the same • Leg A: 100 × 0.01¥0.02 × 100
Statement of the Terms of Substance of
account, in a ratio that is equal to or greater than • Leg B: 100 × 0.01¥0.02 × 100
one-to-three (.333) and less than or equal to three-
the Proposed Rule Change to-one (3.00) and for the purpose of executing • Order 1: Buy Leg A, Buy 2 Leg B; Net
particular investment strategy. Per Rule 980NY, an price: ¥$0.02
The Exchange proposes to adopt ECO is a Complex Order that has been entered into
Commentary .06 to Rule 980NY Result: As proposed, Order 1 would
the NYSE System for possible execution. See Rule
(Electronic Complex Order Trading) to 980NY(a). be rejected because it is priced greater
enhance the price protections for 4 See Commentary .05 to Rule 980NY (providing than the maximum net debit price of
Complex Orders executed on the for the rejection of ECOs that are priced away from ¥$0.03 (and only orders priced at
the current market by a ‘‘Specified Amount,’’ which ¥$0.03 or less would be accepted).
Exchange. The proposed rule change is Specified Amount varies depending on the smallest
available on the Exchange’s Web site at MPV of any leg in the ECO) (the ‘‘Price Protection
Because debit orders are entered into
www.nyse.com, at the principal office of Filter’’ or ‘‘Filter’’) . the Exchange System as a negative
the Exchange, and at the Commission’s 5 See proposed Commentary .06 to Rule 980NY value, the ‘‘maximum’’ price check for
Public Reference Room. which would provide that the Exchange would buy orders is effectively a check for the
reject any incoming ECO that has a strategy minimum order price. Here, Order 1 @
II. Self-Regulatory Organization’s described in paragraphs (a)(1)–(3) of proposed
Commentary .06 to Rule 980NY. Because ¥$0.02 would represent an order to buy
Statement of the Purpose of, and Reasonability Checks would be performed before
Statutory Basis for, the Proposed Rule the Price Protection Filter, the proposed rule text Exchange has not adopted price checks related to
Change would provide that ‘‘[a]ny incoming Electronic such orders (which orders ISE supports). See e.g.,
Complex Order that passes this Reasonability Check ISE Rule 722, Supplementary Material .07(c)(1),(3).
In its filing with the Commission, the
pmangrum on DSK3GDR082PROD with NOTICES1
would still be subject to the Price Protection Filter, The Exchange also notes that the Chicago Board
Exchange included statements per Commentary .05(b) of this Rule.’’ See id. Options Exchange, Inc. (‘‘CBOE’’) likewise includes
concerning the purpose of and basis for 6 See e.g., ISE Rule 722, Supplementary Material complex strategy price checks, which cover more
.07 (Price limits for complex orders and quotes). strategies than proposed herein, but are nonetheless
The Exchange notes that, as discussed herein, the designed to accomplish the same goal of avoiding
comments/sr-nysearca-2016-176/ proposed Reasonability Checks are similar to those execution of erroneously priced complex orders.
nysearca2016176.htm. initially adopted by ISE and do not include a later See CBOE Rule 6.53C, Interpretations and Policies
9 17 CFR 200.30–3(a)(12).
adopted pre-set value ‘‘buffer.’’ See infra nn. 12 [sic] .08 (Price Check Parameters).
1 15 U.S.C. 78s(b)(1).
and 15 [sic]. Moreover, because the Exchange does 7 See proposed Commentary .06(a)(1) to Rule
2 17 CFR 240.19b–4. not support ECOs entered as market orders, the 980NY.
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![Federal Register / Vol. 82, No. 175 / Tuesday, September 12, 2017 / Notices 42867
for a net debit price of $0.02, and Finally, upon entry into the System, Regarding calendar spread orders, the
therefore would be rejected. the Exchange proposes to reject any Exchange also proposes to retain
The Exchange notes that the price incoming order for a credit calendar discretion to deactivate this price check
check in proposed Commentary .06(a)(1) spread strategy (i.e., an order to sell a in the interest of fair and orderly
to Rule 980NY is materially identical to call (put) option with a longer markets.15 For example, the Exchange
price protections available on at least expiration and to buy another call (put) may deactivate this price check if there
one other options exchange, ISE.8 option with a shorter expiration in the is a corporate action in a complex
Second, the Exchange proposes same security at the same strike price) symbol that would result in an
Commentary .06(a)(2) to Rule 980NY, when entered with a net price of otherwise valid strategy being rejected
pursuant to which, upon entry into the ¥$0.01 or less.12 by the proposed check.16 The Exchange
System, the Exchange would reject any For example, if a market participant is believes this discretion to deactivate the
incoming order for a vertical spread entering the following calendar credit Reasonability Check would be
strategy (i.e., an order to sell a call (put) spread for a debit: consistent with its obligation to assure
option and to buy another call (put) • Leg A: May SPY 240 Call: 100 × a fair and orderly market, and that the
option in the same security with the 3.41¥3.43 × 100 need for such flexibility is recognized in
same expiration but at a higher (lower) • Leg B: April SPY 240 Call: 100 × other Exchange rules, such as those
strike price) when entered with a net 1.72¥1.73 × 100 related to position limits, quote-width
debit price of ¥$0.01 or less.9 • Order 1: Sell 1 Leg A, Buy 1 Leg B; differentials and price protection
For example, if a market participant is Quantity: 50; Net price: ¥$1.68 filters.17 As proposed, the Exchange
entering the following vertical call would announce by electronic message
Result: As proposed, Order 1 would
credit spread for a debit: to ATP Holders that request to receive
be rejected because it is priced less than
• Leg A: April SPY 240 Call: 100 × or equal to ¥$0.01. The Exchange notes such messages if the Exchange
1.72¥1.73 × 100 that the further out expiring call being deactivates (and later reactivates) the
• Leg B: April SPY 241 Call: 100 × sold will always be more expensive than Reasonability Check for calendar spread
1.36¥1.37 × 100 a nearer expiring call being bought at orders.
• Order 1: Sell 1 Leg A, Buy 1 Leg B; Further, the Exchange does not
the same strike price, and should always
Quantity 50; Net price: ¥$0.35 propose to apply the Reasonability
generate a credit.13 Thus, any order to
Result: As proposed, Order 1 would Check on calendar orders entered on the
sell the far expiration and buy the near
be rejected because it priced less than or Trading Floor, as such orders are subject
expiration entered with a price of ¥0.01
equal to ¥$0.01 (i.e., it has a negative to manual handling by individuals who
or less would result in this order being
limit price). The Exchange notes that the will have evaluated the price of an order
rejected.
lower strike call will always be more based on then-market conditions.18 The
The Exchange notes that the price
expensive than the higher strike call Exchange notes that other exchanges
check in proposed Commentary .06(a)(3)
within the same expiration.10 Thus, that offer price protections similar to
to Rule 980NY is materially identical to
entering this sell order with a negative those proposed for calendar spreads
price protections available on at least
limit price would result in it being have similarly retained discretion to
one other options exchange, ISE.14
rejected. limit the application of this check.19
The Exchange notes that the price the same expiration but at a higher (lower) strike
The Exchange notes that ECOs that
check in proposed Commentary .06(a)(2) price) when entered with a net price of less than are not rejected by the Reasonability
to Rule 980NY is materially identical to zero’’). The Exchange notes that ISE amended Checks would still be subject to the
price protections available on at least Supplementary Material .07(c)(1) to ISE Rule 722 to Price Protection Filter.20
add a ‘‘pre-set value’’ less than zero to allow a
one other options exchange, ISE.11 buffer within which certain orders would not be
rejected. See, e.g., See Securities Exchange Act .07(c)(2)). Rather than utilize a ‘‘pre-set value’’ (or
8 See Securities Exchange Act Release No. 71406 Release No. 72254 (May 27, 2014), 79 FR 31372, buffer), the Exchange has opted to hard code the
(January 27, 2014), 79 FR 31372, 31373 (January 31, 31373 (June 2, 2014) (SR–ISE–2014–26) (‘‘ISE Price reject value as ¥$0.01. See id.
15 See proposed Commentary .06(a)(3)(i) to Rule
2014) (SR–ISE–2014–05) (‘‘ISE Price Reasonability Reasonability Modification Filing’’). The Exchange
Filing’’) (adopting ‘‘minimum net price’’ protection has opted to hard code the reject value as ¥$0.01, 980NY.
16 The Exchange has not similarly retained
feature, providing that the ISE system would ‘‘reject which aligns with the ISE Price Reasonability Filing
any complex order strategy where all legs are to buy and, would nonetheless operate in a manner similar discretion to deactivate the Reasonability Checks
if it is entered at a price that is less than the to ISE’s current rule, notwithstanding the ‘‘buffer.’’ for minimum price and vertical spreads because
minimum price, which is calculated as the sum of 12 See proposed Commentary .06(a)(3) to Rule corporate actions will not create a scenario where
the ratio on each leg of the complex order 980NY. a lower strike call would be cheaper than a higher
multiplied by $0.01 per leg (e.g., an order to buy 13 The principle behind this check is based on the strike call, or a higher strike put will be cheaper
2 calls and buy 1 put would have a minimum price general concept that locking in a price further into than a lower strike put.
of $0.03)’’). 17 See, e.g., Rules 904 (regarding position limits);
the future involves more risk for the buyer and
9 See proposed Commentary .06(a)(2) to Rule
seller and thus is more valuable, making an option 925NY (regarding maximum quotation spreads);
980NY. (call or put) with a farther expiration more 967NY (regarding price protection for orders);
10 The principle behind this check is based on the expensive than an option with a nearer expiration. 925.1NY (regarding price protection for Market
standard trading principle of ‘‘buy low, sell high.’’ This is similar, for example, to interest rates for Maker quotes) and Commentary .05 to Rule 980NY
The ability to buy stock at a lower price is more mortgages: In general, an interest rate on a 30-year (regarding the Price Protection Filter for ECOs).
18 See proposed Commentary .06(a)(3)(i) to Rule
valuable than the ability to buy stock at a higher mortgage is higher than the interest rate on a 15-
price, and thus a call with a lower strike price has year mortgage due to the risk of potential interest 980NY.
more value, and thus is more expensive, than a call rate changes over the longer period of time to both 19 See, e.g., CBOE Rule 6.53C, Interpretations and
with a higher strike price. Similarly, the ability to the mortgagor and mortgagee. Policies .08(c)(6) (excluding from debit/credit
pmangrum on DSK3GDR082PROD with NOTICES1
sell stock at a higher price is more valuable than 14 See, e.g., ISE Rule 722, Supplementary Material reasonability checks ‘‘orders routed from a PAR
the ability to sell stock at a lower price, and thus .07(c)(3) (providing, in part, that the ISE system will workstation or order management terminal’’
a put with a higher strike price has more value, and ‘‘reject a calendar spread order (i.e., an order to buy because such orders would be subject to manual
thus is more expensive, than a put with a lower a call (put) option with a longer expiration and to handling). The Exchange notes that CBOE’s
strike price. sell another call (put) option with a shorter exclusion of complex orders entered on the floor
11 See supra note 9 [sic], ISE Price Reasonability expiration in the same security at the same strike from its debit/credit reasonability checks is not
Filing (providing that, subject to certain limitations, price) when entered with a net price of less than limited to calendar spreads but applies to all such
the ISE system would ‘‘reject a vertical spread order zero (minus a pre-set value).’’ See also supra note orders entered from the floor of the CBOE.
(i.e., an order to buy a call (put) option and to sell 12 [sic], ISE Price Reasonability Modification Filing 20 See proposed Commentary .06(b) to Rule
another call (put) option in the same security with (adopting ISE Rule 722, Supplementary Material 980NY; see also supra note 6 [sic].
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![42868 Federal Register / Vol. 82, No. 175 / Tuesday, September 12, 2017 / Notices
Implementation also recognizes that the applicable change would be applicable to all OTP
The Exchange will announce by protections are not appropriate for [sic] Holders and OTP [sic] Firms, it
Trader Update the implementation date orders entered manually on the Trading would not impose any burden on intra-
of the proposed rule change within 90 Floor, because such orders would be market competition that is not necessary
days of the effective date of this rule subject to an additional check of then- or appropriate in furtherance of the
filing. market conditions by the individual purposes of the Act.
entering the order, which flexibility is
2. Statutory Basis C. Self-Regulatory Organization’s
consistent with the rules of other
Statement on Comments on the
The Exchange believes that its exchanges.25
The Exchange’s proposed Proposed Rule Change Received From
proposal is consistent with Section 6(b) Members, Participants, or Others
of the Securities Exchange Act of 1934 Reasonability Checks are similar to
(the ‘‘Act’’),21 in general, and furthers similar protections offered on other No written comments were solicited
the objectives of Section 6(b)(5) of the options exchanges, including ISE. To or received with respect to the proposed
Act,22 in particular, in that it is designed the extent there are differences between rule change.
to prevent fraudulent and manipulative the proposed Reasonability Checks, as III. Date of Effectiveness of the
acts and practices, to promote just and described above (see supra notes 12 [sic] Proposed Rule Change and Timing for
equitable principles of trade, to remove and 15 [sic]), the Exchange does not Commission Action
impediments to and perfect the believe such differences raise any new
or significant policy concerns. Further, Because the proposed rule change
mechanism of a free and open market
despite the differences, the proposed does not (i) significantly affect the
and a national market system, and, in
Reasonability Checks would otherwise protection of investors or the public
general, to protect investors and the
operate in a similar manner to the interest; (ii) impose any significant
public interest.
In particular, the Exchange believes checks on ISE. As such, the Exchange burden on competition; and (iii) become
the proposed Reasonability Checks merely desires to adopt functionality operative for 30 days from the date on
would protect investors and the public that is similar to what already exists on which it was filed, or such shorter time
interest and maintain fair and orderly ISE.26 Permitting the Exchange to as the Commission may designate, it has
markets by mitigating potential risks operate on an even playing field relative become effective pursuant to Section
associated with market participants to other exchanges that have similar 19(b)(3)(A) of the Act 27 and Rule 19b–
entering Complex Orders at clearly functionality removes impediments to 4(f)(6) thereunder.28
and perfects the mechanism for a free A proposed rule change filed
unintended prices that are inconsistent
and open market and a national market pursuant to Rule 19b–4(f)(6) under the
with their strategies. Specifically, a
system. Act 29 normally does not become
Complex Order strategy where all legs
operative for 30 days after the date of its
are to sell (buy) will be rejected if it is B. Self-Regulatory Organization’s filing. However, Rule 19b–4(f)(6)(iii) 30
entered at a price that is less (more) than Statement on Burden on Competition permits the Commission to designate a
the minimum (maximum) price. The
The Exchange does not believe that shorter time if such action is consistent
Exchange believes it is reasonable to
the proposed rule change would impose with the protection of investors and the
reject such orders upon entry as they are
any burden on competition that is not public interest. NYSE American has
not executable. Allowing such orders to
necessary or appropriate in furtherance asked the Commission to waive the 30-
be entered would create investor
of the purposes of the Act. day operative delay. NYSE American
confusion; as such orders would not
The proposed Reasonability Checks believes that waiving the operative
receive an execution and would remain
specify circumstances in which the delay would protect investors by
pending until canceled. Similarly, the
Exchange would reject certain ECOs in enabling the Exchange to provide
Exchange believes that rejecting orders
the interest of protecting investors greater protections from potentially
for vertical spread strategies—as well as
against the execution of erroneous erroneous executions and potentially
calendar spread strategies—that are
orders or the execution of orders at reduce the attendant risks of such
entered at a negative price also protects
erroneous prices. As such, the proposal executions. As noted above, the
investors from executing orders that
does not impose any burden on proposal provides that a Complex Order
were likely entered in error.
Regarding orders for calendar spreads, competition. To the contrary, the strategy where all legs are to sell (buy)
the Exchange recognizes that it may not Exchange believes that the proposed will be rejected if it is entered at a price
Reasonability Checks may foster more that is less (more) than the minimum
be appropriate to apply the
competition. Specifically, the Exchange (maximum) price. NYSE American
Reasonability Checks to calendar
notes that it operates in a highly notes that such an order is not
spreads in unusual market conditions,
competitive market in which market executable, and that allowing such an
such as corporate actions that result in
participants can readily favor competing order to be entered would create
changes in price to the underlying
venues. The Exchange’s proposed rule investor confusion because the order
security.23 The Exchange therefore
change would enhance its ability to would not receive an execution and
believes it would remove impediments
compete with other exchanges that would remain pending until canceled.
and perfect the mechanism of a free and
already offer similar reasonability Similarly, the Exchange believes that
open market and a national market
system for the Exchange to temporarily checks. Thus, the Exchange believes 27 15 U.S.C. 78s(b)(3)(A).
deactivate the checks in the event of that this type of competition amongst
pmangrum on DSK3GDR082PROD with NOTICES1
28 17 CFR 240.19b–4(f)(6). As required under Rule
unusual market conditions, which exchanges is beneficial to the market 19b–4(f)(6)(iii), the Exchange provided the
flexibility is consistent with other place as a whole as it can result in Commission with written notice of its intent to file
exchange rules.24 Further, the Exchange enhanced processes, functionality, and the proposed rule change, along with a brief
technologies. The Exchange further description and the text of the proposed rule
change, at least five business days prior to the date
21 15 U.S.C. 78f(b). believes that because the proposed rule of filing of the proposed rule change, or such
22 15 U.S.C. 78f(b)(5). shorter time as designated by the Commission.
23 See supra note 17 [sic]. 25 See supra note 20 [sic]. 29 17 CFR 240.19b–4(f)(6).
24 See supra note 18 [sic]. 26 See supra note 7 [sic]. 30 17 CFR 240.19b–4(f)(6)(iii).
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![Federal Register / Vol. 82, No. 175 / Tuesday, September 12, 2017 / Notices 42869
rejecting orders for vertical and calendar Paper Comments Notice of an application for an order
spread strategies that are entered at a • Send paper comments in triplicate under section 12(d)(1)(J) of the
negative price will protect investors to Brent J. Fields, Secretary, Securities Investment Company Act of 1940 (the
from executing orders that were likely and Exchange Commission, 100 F Street ‘‘Act’’) for an exemption from sections
entered in error.31 The Commission NE., Washington, DC 20549–1090. 12(d)(1)(A), (B), and (C) of the Act and
believes that waiver of the operative under sections 6(c) and 17(b) of the Act
All submissions should refer to File
delay is consistent with the protection for an exemption from sections 17(a)(1)
Number SR–NYSEAMER–2017–07. This
of investors and the public interest and (2) of the Act. The requested order
file number should be included on the
because the proposed rules are designed would permit certain registered open-
subject line if email is used. To help the end investment companies to acquire
to reduce investor confusion and to
Commission process and review your shares of certain registered open-end
prevent the entry and execution of
comments more efficiently, please use investment companies, registered
erroneously priced ECOs. Therefore, the
only one method. The Commission will closed-end investment companies,
Commission hereby waives the
post all comments on the Commission’s business development companies, as
operative delay and designates the
Internet Web site (http://www.sec.gov/ defined in section 2(a)(48) of the Act
proposed rule change operative upon
rules/sro.shtml). Copies of the (‘‘BDCs’’), and registered unit
filing.32
submission, all subsequent investment trusts (collectively,
At any time within 60 days of the amendments, all written statements
filing of the proposed rule change, the ‘‘Underlying Funds’’) that are within
with respect to the proposed rule and outside the same group of
Commission summarily may change that are filed with the
temporarily suspend such rule change if investment companies as the acquiring
Commission, and all written investment companies, in excess of the
it appears to the Commission that such communications relating to the
action is necessary or appropriate in the limits in section 12(d)(1) of the Act.
proposed rule change between the APPLICANTS: Active Weighting Funds
public interest, for the protection of Commission and any person, other than
investors, or otherwise in furtherance of ETF Trust (the ‘‘Trust’’), a Delaware
those that may be withheld from the statutory trust that will be registered
the purposes of the Act. If the public in accordance with the
Commission takes such action, the under the Act as an open-end
provisions of 5 U.S.C. 552, will be management investment company with
Commission shall institute proceedings available for Web site viewing and
to determine whether the proposed rule multiple series, and Active Weighting
printing in the Commission’s Public Advisors LLC (the ‘‘Initial Advisor’’), a
change should be approved or Reference Room, 100 F Street NE.,
disapproved. limited liability company organized
Washington, DC 20549, on official under the laws of the state of Delaware
IV. Solicitation of Comments business days between the hours of that is, or will be, registered as an
10:00 a.m. and 3:00 p.m. Copies of the investment adviser under the
Interested persons are invited to filing also will be available for
submit written data, views, and Investment Advisers Act of 1940.
inspection and copying at the principal
arguments concerning the foregoing, FILING DATES: The application was filed
office of the Exchange. All comments
including whether the proposed rule on August 31, 2016, and amended on
received will be posted without change;
change is consistent with the Act. January 13, 2017, and May 25, 2017.
the Commission does not edit personal
Comments may be submitted by any of Applicants have agreed to file an
identifying information from
the following methods: amendment during the notice period,
submissions. You should submit only
the substance of which is reflected in
Electronic Comments information that you wish to make
this notice.
available publicly. All submissions
• Use the Commission’s Internet should refer to File Number SR– HEARING OR NOTIFICATION OF HEARING: An
comment form (http://www.sec.gov/ NYSEAMER–2017–07 and should be order granting the requested relief will
rules/sro.shtml); or submitted on or before October 3, 2017. be issued unless the Commission orders
• Send an email to rule-comments@ a hearing. Interested persons may
For the Commission, by the Division of request a hearing by writing to the
sec.gov. Please include File Number SR– Trading and Markets, pursuant to delegated
NYSEAMER–2017–07 on the subject Commission’s Secretary and serving
authority.33
line. applicants with a copy of the request,
Eduardo A. Aleman,
personally or by mail. Hearing requests
Assistant Secretary. should be received by the Commission
31 As discussed above, the proposal also allows
[FR Doc. 2017–19239 Filed 9–11–17; 8:45 am] by 5:30 p.m. on October 2, 2017, and
the Exchange to deactivate the Reasonability Check
for calendar spread strategies. The Exchange will BILLING CODE 8011–01–P should be accompanied by proof of
notify ATP Holders and ATP Firms by electronic service on the applicants, in the form of
message of any such deactivation or re-activation.
The Exchange believes that this discretion is
an affidavit, or, for lawyers, a certificate
SECURITIES AND EXCHANGE of service. Pursuant to rule 0–5 under
necessary because a corporate action, for example,
could result in the Reasonability Check for calendar COMMISSION the Act, hearing requests should state
spread strategies rejecting an otherwise valid [Investment Company Act Release No. the nature of the writer’s interest, any
strategy. The proposal also provides that the
Reasonability Check for calendar spread strategies
32808; File No. 812–14697] facts bearing upon the desirability of a
will not apply to ECOs that are entered on the hearing on the matter, the reason for the
Trading Floor. The Exchange notes that such orders Active Weighting Funds ETF Trust and request, and the issues contested.
pmangrum on DSK3GDR082PROD with NOTICES1
are subject to manual handling by individuals who Active Weighting Advisors LLC Persons who wish to be notified of a
will have evaluated the price of the order based on
hearing may request notification by
market conditions. The Exchange further notes that September 6, 2017.
another exchange has adopted a similar rule. See writing to the Commission’s Secretary.
AGENCY: Securities and Exchange
note 19, supra. ADDRESSES: Secretary, U.S. Securities
32 For purposes only of waiving the 30-day
Commission (‘‘Commission’’).
and Exchange Commission, 100 F Street
operative delay, the Commission also has ACTION: Notice.
considered the proposed rule’s impact on
NE., Washington, DC 20549–1090.
efficiency, competition, and capital formation. See Applicants, 490 Royal Lake Drive, Cape
15 U.S.C. 78c(f). 33 17 CFR 200.30–3(a)(12). Girardeau, MO 63701.
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Document Created: 2018-10-24 14:16:25
Document Modified: 2018-10-24 14:16:25
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 82 FR 42866 |
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