82 FR 43609 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend NYSE Arca Rule 7.35-E, NYSE Arca Rule 7.31-E and NYSE Arca Rule 7.23-E
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 179 (September 18, 2017)
Federal Register Volume 82, Issue 179 (September 18, 2017)
| Page Range | 43609-43611 | |
| FR Document | 2017-19812 |
[Federal Register Volume 82, Number 179 (Monday, September 18, 2017)] [Notices] [Pages 43609-43611] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-19812] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81603; File No. SR-NYSEARCA-2017-102] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend NYSE Arca Rule 7.35-E, NYSE Arca Rule 7.31-E and NYSE Arca Rule 7.23-E September 13, 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 August 31, 2017, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE Arca'') 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend (i) NYSE Arca Rule 7.35-E (Auctions) to provide that Market-on-Open (``MOO''), Limit-on-Open (``LOO'') Orders, and Imbalance Offset (``IO'') Orders would be cancelled if the Re-Opening Time for a Trading Halt Auction would be in the last ten minutes of trading before the end of Core Trading Hours; (ii) NYSE Arca Rule 7.31-E (Orders and Modifiers) regarding IO Orders; and (iii) NYSE Arca Rule 7.23-E (Obligations of Market Makers) to amend obsolete cross references. 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. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend (i) NYSE Arca Rule 7.35-E (Auctions) (``Rule 7.35-E'') to provide that MOO, LOO, and IO Orders would be cancelled if the Re-Opening Time for a Trading Halt Auction would be in the last ten minutes of trading before the end of Core Trading Hours; (ii) NYSE Arca Rule 7.31-E (Orders and Modifiers) (``Rule 7.31-E'') regarding IO Orders; and (iii) NYSE Arca Rule 7.23-E (Obligations of Market Makers) (``Rule 7.23-E'') to amend obsolete cross references. Rule 7.35-E(e)(10) provides that if the Reopening Time for a Trading Halt Auction would be in the last ten minutes of trading before the end of Core Trading Hours, the Exchange will not conduct a Trading Halt Auction in that security, will not transition to continuous trading, will remain paused, and will conduct a Closing Auction in such security as provided for in Rule 7.35-E(d). Rule 7.35-E(e)(10)(A) further provides that in such circumstances, MOO Orders, LOO Orders, and IO Orders entered during the pause or halt will not participate in the Closing Auction and will expire at the end of the Core Trading Session. The Exchange proposes to amend Rule 7.35-E(e)(10)(A) to provide that in such circumstances, MOO Orders, LOO Orders, and IO Orders entered during the pause or halt will not participate in the Closing Auction and will be cancelled. This proposed rule change is not intended to make any functional changes to when MOO Orders, LOO Orders, and IO Orders are eligible to trade at the Exchange; these orders still would not participate in a Closing [[Page 43610]] Auction. However, as proposed, if a trading pause or halt extends past 3:50 p.m., these orders would be cancelled back to the entering firm at 3:50 p.m. instead of remaining on the Exchange Book and expiring after Core Trading Hours concludes. The Exchange believes this proposed change would provide ETP Holders with more timely information regarding the status of pending orders. The Exchange also proposes to amend Rule 7.31-E(c)(5), which defines the term IO Order, to provide that such orders would be available only to ETP Holders using Pillar phase II protocols.\4\ The Exchange previously filed a proposed rule change describing that when it implements Pillar phase II protocols, the Exchange will be able to support new order functionality.\5\ Because there will be a period when both Pillar phase I and Pillar phase II protocols will be available to ETP Holders, the Exchange amended its rules to describe how an ETP Holder's orders would behave depending on the protocol that an ETP Holder chooses to use. Because IO Orders would be available only via Pillar phase II protocols, the Exchange proposes to amend Rule 7.31- E(c)(5) to specify this requirement. --------------------------------------------------------------------------- \4\ The Exchange established IO Orders in the Reopening Filing, infra note 5 [sic]. \5\ See Securities Exchange Act Release No. 79688 (December 23, 2016), 82 FR 96534 (December 30, 2016) (SR-NYSEArca-2016-170) (Notice of Filing). The Pillar phase II protocols were implemented on August 21, 2017. See Trader Update dated August 17, 2017, available here: https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/Pillar_Update_NYSE_Arca_August_17_2017.pdf. --------------------------------------------------------------------------- The Exchange proposes to implement the proposed amendments to Rules 7.35-E and 7.31-E at the same time that it implements previously- approved changes to Rule 7.35-E and 7.31-E, which the Exchange previously stated that it anticipated implementing in the third quarter of 2017.\6\ As described in greater detail in the Reopening Filing, the Exchange amended its rules relating to the reopening of trading in conjunction with the twelfth amendment to the Regulation NMS Plan to Address Extraordinary Market Volatility (``Plan''), which the Commission approved.\7\ The Exchange proposes to implement the changes described in the Reopening Filing, as amended by this proposed rule change, at the same time that the twelfth amendment to the Plan is implemented, which, subject to technology changes and effectiveness of the extension of the implementation date for the changes made in the twelfth amendment to the Plan, is anticipated to be in the fourth quarter of 2017. --------------------------------------------------------------------------- \6\ See Securities Exchange Act Release No. 79846 (January 19, 2017), 82 FR 8548 (January 26, 2017) (SR-NYSEArca-2016-130) (Approval Order) (the ``Reopening Filing''). \7\ See Securities Exchange Act Release No. 79845 (January 19, 2017), 82 FR 8551 (January 26, 2017) (File No. 4-631) (Order approving twelfth amendment to the Plan). --------------------------------------------------------------------------- The Exchange also proposes to amend NYSE Arca Equities Rules 7.23- E(a)(1)(B)(iii) and (iv) to remove obsolete cross references and to reflect that the applicable percentages are based on how a security is designated under the Plan.\8\ Rule 7.23-E(a)(1)(B) sets forth among other things, the obligation of Market Makers to maintain a bid (offer) not more than the ``Designated Percentage'' away from the then current National Best Bid (Offer) (``NBBO'') and if the NBBO changes such that the Market Maker's bid/offer is more than the ``Defined Limit'' away from the NBBO, the Market Maker must enter an updated bid (offer). The Exchange proposes to amend Rule 7.23-E(a)(1)(B)(iii) and Rule 7.23- E(a)(1)(B)(iv) to remove cross-references to Rule 7.11-E and instead use Plan definitions for specifying which securities are subject to which ``Designated Percentages'' and ``Defined Limits.'' Accordingly, as proposed: --------------------------------------------------------------------------- \8\ The Exchange's affiliated equities exchange has adopted a similar change to its rules. See Securities Exchange Act Release No. 80577 (May 2, 2017), 82 FR 21446 (May 8, 2017) (SR-NYSEMKT-2017-04) (Order approving NYSE American LLC (``NYSE American'') Rule 7.23E(a)(1)(B)(iii) and (iv)). The proposed rule changes are also based on Bats BZX, Inc. (``BZX'') Rule 11.8(d)(2)(D) and (E). ---------------------------------------------------------------------------The phrase ``securities subject to Rule 7.11-E(a)(i)'' would be replaced with the phrases ``Tier 1 NMS Stocks under the Limit Up-Limit Down Plan'' or ``Tier 1 NMS Stocks;'' the phrase ``securities subject to Rule 7.11-E(a)(ii)'' would be replaced with the phrases ``Tier 2 NMS Stocks under the Limit Up-Limit Down Plan with a price equal to or greater than $1.00'' or ``Tier 2 NMS Stocks with a price equal to or greater than $1.00;'' the phrase ``securities subject to Rule 7.11-E(a)(iii)'' would be replaced with the phrase ``Tier 2 NMS Stocks with a price lower than $1.00;'' and the phrase ``when Rule 7.11-E is not in effect'' would be deleted. Because rights and warrants are not subject to the Plan, but are subject to market maker quoting requirements, the Exchange proposes to provide that for purposes of Rule 7.23-E(a)(1)(B)(iii) and (iv), rights and warrants would be considered Tier 2 NMS Stocks. This proposed rule text is consistent with current practice and the now-obsolete cross references to Rule 7.11.\9\ The Exchange also proposes a non- substantive amendment to Rules 7.23-E(a)(1)(B)(iii) and (iv) to change references from Pacific Time to Eastern Time. --------------------------------------------------------------------------- \9\ Securities previously subject to Rule 7.11(a)(ii) were all NMS Stocks, other than securities included in the S&P 500[supreg] Index, Russell 1000[supreg] Index, and a pilot list of Exchange Traded Products, with a price equal to or greater than $1 and securities previously subject to Rule 7.11(a)(iii) were all NMS Stocks, other than securities included in the S&P 500[supreg] Index, Russell 1000[supreg] Index, and a pilot list of Exchange Traded Products, with a price less than $1.00. See Securities Exchange Act Release No. 64422 (May 6, 2011), 76 FR 27691 (May 12, 2011) (SR- NYSEArca-2011-26) (Notice of filing). --------------------------------------------------------------------------- The Exchange also proposes a non-substantive amendment to Rule 7.23-E(a)(2) to replace the current reference to ``Rule 4.1-E'' with a reference to ``the provisions of Rule 15c3-1 under the Securities Exchange Act of 1934.'' Rule 4.1-E requires ETP Holders to maintain minimum net capital in accordance with the provisions of Rule 15c3-1 under the Act. Accordingly, by referencing Rule 15c3-1 under the Act instead of Rule 4.1-E, the proposed rule change to Rule 7.23-E(a)(2) would not make any substantive changes to the rule. This proposed rule change is based on NYSE American Rule 7.23E(a)(2). The Exchange proposes that the amendments to Rule 7.23-E would be operative upon the operative date of this proposed rule change. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the ``Act''),\10\ in general, and furthers the objectives of Section 6(b)(5),\11\ 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. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78f(b). \11\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that the proposed amendments to Rule 7.35-E would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed rule change would provide ETP Holders with timely information regarding the status of MOO Orders, LOO Orders, and IO Orders, which are intended to participate in a Trading Halt Auction, if there is a trading pause or halt that extends past the last ten minutes of trading of Core Trading Hours. In such [[Page 43611]] case, because the Exchange would not be conducting a Trading Halt Auction, the Exchange would provide ETP Holders with more timely information about the status of their orders. The proposed rule change would not make any substantive differences regarding how such orders would execute on the Exchange. Accordingly, the proposed rule change is designed to enhance transparency. The Exchange believes that the proposed amendment to Rule 7.31-E would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed rule change would provide transparency to ETP Holders regarding which communication protocol should be used for entering IO Orders. The Exchange believes that the proposed amendments to Rule 7.23-E would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed rule change is designed to remove obsolete cross references. The proposed rule change is based on the rules of NYSE American and BZX. 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 Exchange believes that the proposed rule change is not designed to address any competitive issues but rather to provide ETP Holders with more timely information about the status of orders intended for a Trading Halt Auction and which communication protocol to use for entering IO Orders. In addition, the proposed rule change is designed to remove obsolete cross references and is based on the rules of NYSE American and BZX. 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 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) of the Act \12\ and Rule 19b- 4(f)(6) thereunder.\13\ --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A). \13\ 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. --------------------------------------------------------------------------- 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-NYSEARCA-2017-102 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-NYSEARCA-2017-102. 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-NYSEARCA-2017-102 and should be submitted on or before October 10, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\ --------------------------------------------------------------------------- \14\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-19812 Filed 9-15-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 43609
At any time within 60 days of the submissions. You should submit only the Exchange, and at the Commission’s
filing of the proposed rule change, the information that you wish to make Public Reference Room.
Commission summarily may available publicly. All submissions
II. Self-Regulatory Organization’s
temporarily suspend such rule change if should refer to File Number SR–Phlx–
Statement of the Purpose of, and
it appears to the Commission that such 2017–72, and should be submitted on or
Statutory Basis for, the Proposed Rule
action is: (i) Necessary or appropriate in before October 10, 2017.
the public interest; (ii) for the protection Change
For the Commission, by the Division of
of investors; or (iii) otherwise in Trading and Markets, pursuant to delegated In its filing with the Commission, the
furtherance of the purposes of the Act. authority.11 self-regulatory organization included
If the Commission takes such action, the Eduardo A. Aleman, statements concerning the purpose of,
Commission shall institute proceedings Assistant Secretary.
and basis for, the proposed rule change
to determine whether the proposed rule and discussed any comments it received
[FR Doc. 2017–19708 Filed 9–15–17; 8:45 am]
should be approved or disapproved. on the proposed rule change. The text
BILLING CODE 8011–01–P
of those statements may be examined at
IV. Solicitation of Comments
the places specified in Item IV below.
Interested persons are invited to The Exchange has prepared summaries,
submit written data, views, and SECURITIES AND EXCHANGE
set forth in sections A, B, and C below,
arguments concerning the foregoing, COMMISSION
of the most significant parts of such
including whether the proposed rule statements.
[Release No. 34–81603; File No. SR–
change is consistent with the Act. NYSEARCA–2017–102]
Comments may be submitted by any of A. Self-Regulatory Organization’s
the following methods: Self-Regulatory Organizations; NYSE Statement of the Purpose of, and the
Arca, Inc.; Notice of Filing and Statutory Basis for, the Proposed Rule
Electronic Comments Change
Immediate Effectiveness of Proposed
• Use the Commission’s Internet Rule Change To Amend NYSE Arca 1. Purpose
comment form (http://www.sec.gov/ Rule 7.35–E, NYSE Arca Rule 7.31–E
rules/sro.shtml); or The Exchange proposes to amend (i)
and NYSE Arca Rule 7.23–E
• Send an email to rule-comments@ NYSE Arca Rule 7.35–E (Auctions)
sec.gov. Please include File Number SR– September 13, 2017. (‘‘Rule 7.35–E’’) to provide that MOO,
Phlx–2017–72 on the subject line. Pursuant to Section 19(b)(1) 1 of the LOO, and IO Orders would be cancelled
Securities Exchange Act of 1934 (the if the Re-Opening Time for a Trading
Paper Comments
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 Halt Auction would be in the last ten
• Send paper comments in triplicate notice is hereby given that, on August minutes of trading before the end of
to Secretary, Securities and Exchange 31, 2017, NYSE Arca, Inc. (the Core Trading Hours; (ii) NYSE Arca
Commission, 100 F Street NE., ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with Rule 7.31–E (Orders and Modifiers)
Washington, DC 20549–1090. the Securities and Exchange (‘‘Rule 7.31–E’’) regarding IO Orders;
All submissions should refer to File Commission (the ‘‘Commission’’) the and (iii) NYSE Arca Rule 7.23–E
Number SR–Phlx–2017–72. This file proposed rule change as described in (Obligations of Market Makers) (‘‘Rule
number should be included on the Items I and II below, which Items have 7.23–E’’) to amend obsolete cross
subject line if email is used. To help the been prepared by the self-regulatory references.
Commission process and review your organization. The Commission is Rule 7.35–E(e)(10) provides that if the
comments more efficiently, please use publishing this notice to solicit Reopening Time for a Trading Halt
only one method. The Commission will comments on the proposed rule change Auction would be in the last ten
post all comments on the Commission’s from interested persons. minutes of trading before the end of
Internet Web site (http://www.sec.gov/ Core Trading Hours, the Exchange will
rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s not conduct a Trading Halt Auction in
submission, all subsequent Statement of the Terms of Substance of that security, will not transition to
amendments, all written statements the Proposed Rule Change continuous trading, will remain paused,
with respect to the proposed rule The Exchange proposes to amend (i) and will conduct a Closing Auction in
change that are filed with the NYSE Arca Rule 7.35–E (Auctions) to such security as provided for in Rule
Commission, and all written provide that Market-on-Open (‘‘MOO’’), 7.35–E(d). Rule 7.35–E(e)(10)(A) further
communications relating to the Limit-on-Open (‘‘LOO’’) Orders, and provides that in such circumstances,
proposed rule change between the Imbalance Offset (‘‘IO’’) Orders would MOO Orders, LOO Orders, and IO
Commission and any person, other than be cancelled if the Re-Opening Time for Orders entered during the pause or halt
those that may be withheld from the a Trading Halt Auction would be in the will not participate in the Closing
public in accordance with the last ten minutes of trading before the Auction and will expire at the end of
provisions of 5 U.S.C. 552, will be end of Core Trading Hours; (ii) NYSE the Core Trading Session.
available for Web site viewing and Arca Rule 7.31–E (Orders and The Exchange proposes to amend
printing in the Commission’s Public Modifiers) regarding IO Orders; and (iii) Rule 7.35–E(e)(10)(A) to provide that in
Reference Room, 100 F Street NE., NYSE Arca Rule 7.23–E (Obligations of such circumstances, MOO Orders, LOO
Washington, DC 20549, on official Market Makers) to amend obsolete cross Orders, and IO Orders entered during
business days between the hours of the pause or halt will not participate in
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references. The proposed rule change is
10:00 a.m. and 3:00 p.m. Copies of the available on the Exchange’s Web site at the Closing Auction and will be
filing also will be available for www.nyse.com, at the principal office of cancelled. This proposed rule change is
inspection and copying at the principal not intended to make any functional
office of the Exchange. All comments 11 17 CFR 200.30–3(a)(12). changes to when MOO Orders, LOO
received will be posted without change; 1 15 U.S.C. 78s(b)(1). Orders, and IO Orders are eligible to
the Commission does not edit personal 2 15 U.S.C. 78a. trade at the Exchange; these orders still
identifying information from 3 17 CFR 240.19b–4. would not participate in a Closing
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Auction. However, as proposed, if a amendment to the Plan is implemented, Exchange also proposes a non-
trading pause or halt extends past 3:50 which, subject to technology changes substantive amendment to Rules 7.23–
p.m., these orders would be cancelled and effectiveness of the extension of the E(a)(1)(B)(iii) and (iv) to change
back to the entering firm at 3:50 p.m. implementation date for the changes references from Pacific Time to Eastern
instead of remaining on the Exchange made in the twelfth amendment to the Time.
Book and expiring after Core Trading Plan, is anticipated to be in the fourth The Exchange also proposes a non-
Hours concludes. The Exchange quarter of 2017. substantive amendment to Rule 7.23–
believes this proposed change would The Exchange also proposes to amend E(a)(2) to replace the current reference
provide ETP Holders with more timely NYSE Arca Equities Rules 7.23– to ‘‘Rule 4.1–E’’ with a reference to ‘‘the
information regarding the status of E(a)(1)(B)(iii) and (iv) to remove provisions of Rule 15c3–1 under the
pending orders. obsolete cross references and to reflect Securities Exchange Act of 1934.’’ Rule
The Exchange also proposes to amend that the applicable percentages are 4.1–E requires ETP Holders to maintain
Rule 7.31–E(c)(5), which defines the based on how a security is designated minimum net capital in accordance
term IO Order, to provide that such under the Plan.8 Rule 7.23–E(a)(1)(B) with the provisions of Rule 15c3–1
orders would be available only to ETP sets forth among other things, the under the Act. Accordingly, by
Holders using Pillar phase II protocols.4 obligation of Market Makers to maintain referencing Rule 15c3–1 under the Act
The Exchange previously filed a a bid (offer) not more than the instead of Rule 4.1–E, the proposed rule
proposed rule change describing that ‘‘Designated Percentage’’ away from the change to Rule 7.23–E(a)(2) would not
when it implements Pillar phase II then current National Best Bid (Offer) make any substantive changes to the
protocols, the Exchange will be able to (‘‘NBBO’’) and if the NBBO changes rule. This proposed rule change is based
support new order functionality.5 such that the Market Maker’s bid/offer on NYSE American Rule 7.23E(a)(2).
Because there will be a period when is more than the ‘‘Defined Limit’’ away The Exchange proposes that the
both Pillar phase I and Pillar phase II from the NBBO, the Market Maker must amendments to Rule 7.23–E would be
protocols will be available to ETP enter an updated bid (offer). The operative upon the operative date of this
Holders, the Exchange amended its Exchange proposes to amend Rule 7.23– proposed rule change.
rules to describe how an ETP Holder’s E(a)(1)(B)(iii) and Rule 7.23– 2. Statutory Basis
orders would behave depending on the E(a)(1)(B)(iv) to remove cross-references
protocol that an ETP Holder chooses to to Rule 7.11–E and instead use Plan The proposed rule change is
use. Because IO Orders would be definitions for specifying which consistent with Section 6(b) of the
available only via Pillar phase II securities are subject to which Securities Exchange Act of 1934 (the
protocols, the Exchange proposes to ‘‘Designated Percentages’’ and ‘‘Defined ‘‘Act’’),10 in general, and furthers the
amend Rule 7.31–E(c)(5) to specify this Limits.’’ Accordingly, as proposed: objectives of Section 6(b)(5),11 in
requirement. • The phrase ‘‘securities subject to particular, because it is designed to
The Exchange proposes to implement Rule 7.11–E(a)(i)’’ would be replaced prevent fraudulent and manipulative
the proposed amendments to Rules with the phrases ‘‘Tier 1 NMS Stocks acts and practices, to promote just and
7.35–E and 7.31–E at the same time that under the Limit Up-Limit Down Plan’’ equitable principles of trade, to foster
it implements previously-approved or ‘‘Tier 1 NMS Stocks;’’ cooperation and coordination with
changes to Rule 7.35–E and 7.31–E, • the phrase ‘‘securities subject to persons engaged in facilitating
which the Exchange previously stated Rule 7.11–E(a)(ii)’’ would be replaced transactions in securities, to remove
that it anticipated implementing in the with the phrases ‘‘Tier 2 NMS Stocks impediments to, and perfect the
third quarter of 2017.6 As described in under the Limit Up-Limit Down Plan mechanism of, a free and open market
greater detail in the Reopening Filing, with a price equal to or greater than and a national market system and, in
the Exchange amended its rules relating $1.00’’ or ‘‘Tier 2 NMS Stocks with a general, to protect investors and the
to the reopening of trading in price equal to or greater than $1.00;’’ public interest.
conjunction with the twelfth • the phrase ‘‘securities subject to The Exchange believes that the
amendment to the Regulation NMS Plan Rule 7.11–E(a)(iii)’’ would be replaced proposed amendments to Rule 7.35–E
to Address Extraordinary Market with the phrase ‘‘Tier 2 NMS Stocks would remove impediments to and
Volatility (‘‘Plan’’), which the with a price lower than $1.00;’’ and perfect the mechanism of a free and
Commission approved.7 The Exchange • the phrase ‘‘when Rule 7.11–E is open market and a national market
proposes to implement the changes not in effect’’ would be deleted. system because the proposed rule
described in the Reopening Filing, as Because rights and warrants are not change would provide ETP Holders
amended by this proposed rule change, subject to the Plan, but are subject to with timely information regarding the
at the same time that the twelfth market maker quoting requirements, the status of MOO Orders, LOO Orders, and
Exchange proposes to provide that for IO Orders, which are intended to
4 The Exchange established IO Orders in the purposes of Rule 7.23–E(a)(1)(B)(iii) and participate in a Trading Halt Auction, if
Reopening Filing, infra note 5 [sic]. (iv), rights and warrants would be there is a trading pause or halt that
5 See Securities Exchange Act Release No. 79688 considered Tier 2 NMS Stocks. This extends past the last ten minutes of
(December 23, 2016), 82 FR 96534 (December 30, proposed rule text is consistent with
2016) (SR–NYSEArca–2016–170) (Notice of Filing). trading of Core Trading Hours. In such
The Pillar phase II protocols were implemented on
current practice and the now-obsolete
August 21, 2017. See Trader Update dated August cross references to Rule 7.11.9 The in the S&P 500® Index, Russell 1000® Index, and
17, 2017, available here: https://www.nyse.com/ a pilot list of Exchange Traded Products, with a
publicdocs/nyse/markets/nyse-arca/Pillar_Update_ 8 The Exchange’s affiliated equities exchange has price equal to or greater than $1 and securities
sradovich on DSKBBY8HB2PROD with NOTICES
NYSE_Arca_August_17_2017.pdf. adopted a similar change to its rules. See Securities previously subject to Rule 7.11(a)(iii) were all NMS
6 See Securities Exchange Act Release No. 79846 Exchange Act Release No. 80577 (May 2, 2017), 82 Stocks, other than securities included in the S&P
(January 19, 2017), 82 FR 8548 (January 26, 2017) FR 21446 (May 8, 2017) (SR–NYSEMKT–2017–04) 500® Index, Russell 1000® Index, and a pilot list
(SR–NYSEArca–2016–130) (Approval Order) (the (Order approving NYSE American LLC (‘‘NYSE of Exchange Traded Products, with a price less than
‘‘Reopening Filing’’). American’’) Rule 7.23E(a)(1)(B)(iii) and (iv)). The $1.00. See Securities Exchange Act Release No.
7 See Securities Exchange Act Release No. 79845 proposed rule changes are also based on Bats BZX, 64422 (May 6, 2011), 76 FR 27691 (May 12, 2011)
(January 19, 2017), 82 FR 8551 (January 26, 2017) Inc. (‘‘BZX’’) Rule 11.8(d)(2)(D) and (E). (SR–NYSEArca–2011–26) (Notice of filing).
10 15 U.S.C. 78f(b).
(File No. 4–631) (Order approving twelfth 9 Securities previously subject to Rule 7.11(a)(ii)
amendment to the Plan). were all NMS Stocks, other than securities included 11 15 U.S.C. 78f(b)(5).
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![Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 43611
case, because the Exchange would not which it was filed, or such shorter time Commission and any person, other than
be conducting a Trading Halt Auction, as the Commission may designate, it has those that may be withheld from the
the Exchange would provide ETP become effective pursuant to Section public in accordance with the
Holders with more timely information 19(b)(3)(A) of the Act 12 and Rule 19b– provisions of 5 U.S.C. 552, will be
about the status of their orders. The 4(f)(6) thereunder.13 available for Web site viewing and
proposed rule change would not make At any time within 60 days of the printing in the Commission’s Public
any substantive differences regarding filing of the proposed rule change, the Reference Room, 100 F Street NE.,
how such orders would execute on the Commission summarily may Washington, DC 20549 on official
Exchange. Accordingly, the proposed temporarily suspend such rule change if business days between the hours of
rule change is designed to enhance it appears to the Commission that such 10:00 a.m. and 3:00 p.m. Copies of the
transparency. action is necessary or appropriate in the filing also will be available for
The Exchange believes that the public interest, for the protection of inspection and copying at the principal
proposed amendment to Rule 7.31–E investors, or otherwise in furtherance of office of the Exchange. All comments
would remove impediments to and the purposes of the Act. If the received will be posted without change;
perfect the mechanism of a free and Commission takes such action, the the Commission does not edit personal
open market and a national market Commission shall institute proceedings identifying information from
system because the proposed rule to determine whether the proposed rule submissions. You should submit only
change would provide transparency to change should be approved or information that you wish to make
ETP Holders regarding which disapproved. available publicly. All submissions
communication protocol should be used should refer to File Number SR–
for entering IO Orders. IV. Solicitation of Comments NYSEARCA–2017–102 and should be
The Exchange believes that the Interested persons are invited to submitted on or before October 10,
proposed amendments to Rule 7.23–E submit written data, views, and 2017.
would remove impediments to and arguments concerning the foregoing, For the Commission, by the Division of
perfect the mechanism of a free and including whether the proposed rule Trading and Markets, pursuant to delegated
open market and a national market change is consistent with the Act. authority.14
system because the proposed rule Comments may be submitted by any of Eduardo A. Aleman,
change is designed to remove obsolete the following methods: Assistant Secretary.
cross references. The proposed rule [FR Doc. 2017–19812 Filed 9–15–17; 8:45 am]
Electronic Comments
change is based on the rules of NYSE BILLING CODE 8011–01–P
American and BZX. • Use the Commission’s Internet
comment form (http://www.sec.gov/
B. Self-Regulatory Organization’s rules/sro.shtml); or
Statement on Burden on Competition SECURITIES AND EXCHANGE
• Send an email to rule-comments@ COMMISSION
The Exchange does not believe that sec.gov. Please include File Number SR–
the proposed rule change will impose NYSEARCA–2017–102 on the subject [Release No. 34–81591; File No. SR–
any burden on competition that is not NASDAQ–2017–091]
line.
necessary or appropriate in furtherance
Paper Comments Self-Regulatory Organizations; The
of the purposes of the Act. The
NASDAQ Stock Market LLC; Notice of
Exchange believes that the proposed • Send paper comments in triplicate
Filing of Proposed Rule Change To
rule change is not designed to address to Brent J. Fields, Secretary, Securities
List and Trade Shares of Calvert Ultra-
any competitive issues but rather to and Exchange Commission, 100 F Street
Short Income NextSharesTM
provide ETP Holders with more timely NE., Washington, DC 20549–1090.
information about the status of orders All submissions should refer to File September 13, 2017.
intended for a Trading Halt Auction and Number SR–NYSEARCA–2017–102. Pursuant to Section 19(b)(1) of the
which communication protocol to use This file number should be included on Securities Exchange Act of 1934
for entering IO Orders. In addition, the the subject line if email is used. To help (‘‘Act’’),1 and Rule 19b–4 thereunder,2
proposed rule change is designed to the Commission process and review notice is hereby given that on August
remove obsolete cross references and is your comments more efficiently, please 30, 2017, The NASDAQ Stock Market
based on the rules of NYSE American use only one method. The Commission LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed
and BZX. will post all comments on the with the Securities and Exchange
C. Self-Regulatory Organization’s Commission’s Internet Web site (http:// Commission (‘‘Commission’’) the
Statement on Comments on the www.sec.gov/rules/sro.shtml). Copies of proposed rule change as described in
Proposed Rule Change Received From the submission, all subsequent Items I and II below, which Items have
Members, Participants, or Others amendments, all written statements been prepared by the Exchange. The
with respect to the proposed rule Commission is publishing this notice to
No written comments were solicited change that are filed with the solicit comments on the proposed rule
or received with respect to the proposed Commission, and all written change from interested persons.
rule change. communications relating to the I. Self-Regulatory Organization’s
III. Date of Effectiveness of the proposed rule change between the Statement of the Terms of Substance of
Proposed Rule Change and Timing for the Proposed Rule Change
sradovich on DSKBBY8HB2PROD with NOTICES
12 15 U.S.C. 78s(b)(3)(A).
Commission Action
13 17 CFR 240.19b–4(f)(6). As required under Rule The Exchange proposes to list and
Because the foregoing proposed rule 19b–4(f)(6)(iii), the Exchange provided the trade under Nasdaq Rule 5745
change does not: (i) Significantly affect Commission with written notice of its intent to file (Exchange-Traded Managed Fund
the protection of investors or the public the proposed rule change, along with a brief
description and the text of the proposed rule
interest; (ii) impose any significant change, at least five business days prior to the date
14 17 CFR 200.30–3(a)(12).
burden on competition; and (iii) become of filing of the proposed rule change, or such 1 15 U.S.C. 78s(b)(1).
operative for 30 days from the date on shorter time as designated by the Commission. 2 17 CFR 240.19b–4.
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Document Created: 2017-09-16 00:52:56
Document Modified: 2017-09-16 00:52:56
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 82 FR 43609 |
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