82 FR 45653 - Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 928NY To Allow Certain Order Types To Be Excluded From the Risk Limitation Mechanism
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 188 (September 29, 2017)
Federal Register Volume 82, Issue 188 (September 29, 2017)
| Page Range | 45653-45656 | |
| FR Document | 2017-20891 |
[Federal Register Volume 82, Number 188 (Friday, September 29, 2017)] [Notices] [Pages 45653-45656] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-20891] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81716; File No. SR-NYSEAMER-2017-10] Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 928NY To Allow Certain Order Types To Be Excluded From the Risk Limitation Mechanism September 25, 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 September 11, 2017, NYSE American LLC (the ``Exchange'' or ``NYSE American'') 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 the Substance of the Proposed Rule Change The Exchange proposes to amend Rule 928NY (Risk Limitation Mechanism) to allow certain order types to be excluded from the risk limitation mechanism. The proposed rule change is available on the Exchange's Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. [[Page 45654]] A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rule 928NY (Risk Limitation Mechanism) to allow certain order types to be excluded from the risk limitation mechanism. Specifically, the Exchange proposes to provide ATP Holders with the option to exclude Immediate-Or-Cancel (``IOC'') orders from being counted against risk limitation thresholds.\4\ --------------------------------------------------------------------------- \4\ An IOC order is ``[a] Limit Order that is to be executed in whole or in part on the Exchange as soon as such order is received, and the portion not so executed is to be canceled.'' See Rule 900.3NY(k). --------------------------------------------------------------------------- Risk Limitation Mechanisms The Exchange offers ATP Holders the option of utilizing risk limitation settings to assist ATP Holders in managing risk related to submitting orders during periods of increased and significant trading activity.\5\ An ATP Holder can utilize one of three risk limitation mechanisms for its orders--based on the number of transactions executed, the number of contracts traded, or the percent of the ATP Holder's order size--which automatically cancels such orders when certain parameter settings are breached.\6\ The Exchange maintains trade counters that increment based on the number of trades executed, either from a single-leg order or any leg of a Complex Order, in any series in a specified class.\7\ The trade counters reset after an Exchange-determined time period.\8\ When an ATP Holder has breached its risk settings (i.e., has traded more than the contract or volume limit or cumulative percentage limit of a class during the specified measurement interval), the Exchange will cancel all of the ATP Holder's open orders in that class until the ATP Holder notifies the Exchange it will resume submitting orders.\9\ The temporary suspension of orders from the market that results when the risk settings are triggered is meant to operate as a safety valve that enables ATP Holders to re- evaluate their positions before requesting to re-enter the market. --------------------------------------------------------------------------- \5\ See Commentary .04(b) to Rule 928NY (providing that ATP Holders may avail themselves of one of the three risk limitation mechanisms for certain of their orders). Under the current Rule, Market Makers are required to utilize the risk limitation settings for quotes and the Exchange is not proposing to alter any aspect of this Rule in this regard. See also Commentary .04(a) to Rule 928NY; and Rule 928NY(b)(2), (c)(2), (d)(2) and (e)(2). \6\ See 928NY(b)(1), (c)(1), (d)(1) and Commentaries .01 to Rule 928NY (regarding the cancellation of orders once the risk settings have been breached). \7\ See Rule 928NY(a)(1), (f). See also Commentaries .05-.07 to Rule 928NY (regarding the operation of the trade counters). \8\ See Commentary .06 to Rule 928NY. \9\ See Commentaries .01 and .02 to Rule 928NY (requiring that an ATP Holder request that it be re-enabled after a breach of its risk settings). In the event that an ATP Holder experiences multiple, successive triggers of its risk settings, the Exchange would cancel all of the open orders--as opposed to cancelling only those in the option class (underlying symbol) in which the risk settings were triggered. See Rule 928NY(f) and Commentary .02 to Rule 928NY. --------------------------------------------------------------------------- Proposed Exclusion of IOC Orders From Risk Settings Under the current Rule, an ATP Holder may activate a Risk Limitation Mechanism, and corresponding settings, for orders in a specified class and, once activated, the mechanism and the settings established will remain active unless, and until, the ATP Holder deactivates the Risk Limitation Mechanism or changes the settings.\10\ Thus, once an ATP Holder activates risk settings for orders in a specified class, the risk settings apply to all order types in that options class. The Exchange proposes to modify the rule to provide an ATP Holder that chooses to utilize risk settings for its orders the option to exclude both single-legged orders and Complex Orders designated as IOC from being considered by the trade counter. To effect this change, proposed Commentary .07 to Rule 928NY would be amended to provide that ``[a]ny ATP Holder that activates the Risk Limitation Mechanisms for orders pursuant to Commentary .04(b) of this Rule may opt to exclude any orders (i.e., whether single-leg orders or Complex Orders) designated with a time-in-force of IOC from being considered by a trade counter.'' \11\ --------------------------------------------------------------------------- \10\ See Commentary .04(b) to Rule 928NY. \11\ See proposed Commentary .07 to Rule 928NY. The Exchange also proposes to correct a typographical error and make singular the reference to Complex Orders in the sentence providing that ``[e]xecutions of each leg of a Complex Orders will be considered by a trade counter as an individual transaction928NY.'' See id. --------------------------------------------------------------------------- By their terms, IOC orders (or portions thereof) will cancel if not immediately executed. As such, IOC orders are never ranked (as resting interest) in the Consolidated Book. The Exchange believes that certain OTPs [sic] utilize IOC orders to access liquidity on the Exchange. Thus, the proposed change is designed to accommodate participants that utilize IOCs in this manner by enabling them to exclude IOC orders from being counted and avoid potentially triggering their risk settings (prematurely), resulting in the cancellation of open orders. The Exchange believes that providing ATP Holders this additional flexibility may encourage more ATP Holders to utilize the risk settings, which benefits all market participants. The Exchange also believes that the proposed change would result in risk settings that may be better calibrated to suit the needs of certain ATP Holders (i.e., those that routinely utilize IOC orders to access liquidity on the Exchange), which improved risk settings should encourage ATP Holders to direct additional order flow and liquidity to the Exchange. The Exchange notes that the proposed change is limited to IOC orders being counted towards whether a risk limitation threshold has been reached. In the event an ATP Holder breaches its risk limitation settings, any new orders in the specified class, including incoming IOC orders, sent by the ATP Holder would be rejected until the ATP Holder requests that the Exchange enable the entry of new orders.\12\ --------------------------------------------------------------------------- \12\ See Commentary .02 to Rule 928NY. --------------------------------------------------------------------------- Implementation The Exchange will announce by Trader Update the implementation date of the proposed rule change, which implementation will be no later than 90 days after the effectiveness of this rule change. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the ``Act''),\13\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\14\ in particular, in that 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 regulating, clearing, settling, processing information with respect to, and 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. --------------------------------------------------------------------------- \13\ 15 U.S.C. 78f(b). \14\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that the proposed rule change removes impediments to and perfects the mechanism of a free and open market by providing ATP Holders greater control and flexibility over setting their risk tolerance, which may enhance the efficacy of the risk settings. By their terms, IOC orders (or portions thereof) will cancel if not immediately executed. As such, IOC orders are never ranked (as resting interest) in the Consolidated Book. The Exchange believes that [[Page 45655]] certain market participants utilize IOC orders to access liquidity on the Exchange. Thus, the proposed change is designed to accommodate participants that utilize IOCs in this manner by enabling them to exclude IOC orders from being counted and avoid potentially triggering their risk settings (prematurely), resulting in the cancellation of open orders. The Exchange believes that providing ATP Holders this additional flexibility may encourage more ATP Holders to utilize the risk settings, which benefits all market participants. Further, the proposed change would promote just and equitable principles of trade because it would result in risk settings that may be better calibrated to suit the needs of certain OTPs [sic] (i.e., those that routinely utilize IOC orders to access liquidity on the Exchange), which improved risk settings should encourage ATP Holders to direct additional order flow and liquidity to the Exchange. To the extent additional order flow is submitted to the Exchange as a result of the proposed change, all market participants stand to benefit from increased trading.\15\ --------------------------------------------------------------------------- \15\ The Exchange believes that the proposed correct of a typographical error in current Commentary .07 to Rule 928NY (see supra note 11) would add clarify [sic] and transparency to the Rule which benefits investors and the public interest. --------------------------------------------------------------------------- The Exchange notes that an ATP Holder has the option of utilizing risk settings for all orders submitted to the Exchange and, as proposed, would have the additional option of excluding from these risk settings any IOC orders in a given options class submitted to the Exchange. This proposed change, which was specifically requested by some ATP Holders, would foster cooperation and coordination with persons engaged in regulating, clearing, settling, and processing information with respect to, and facilitating transactions in, securities as it will be available to all OTPs [sic] on an optional basis and may encourage more ATP Holders to utilize this enhanced functionality to [sic] benefit of all market participants. Because the risk controls are designed to prevent the execution of erroneously priced trades, the Exchange believes that any proposal designed to increase the number of ATP Holders that utilize the functionality would benefit all market participants. 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 is proposing a market enhancement that would provide ATP Holders with greater control and flexibility over setting their risk tolerance and, potentially, more protection over risk exposure. The proposal is structured to offer the same enhancement to all ATP Holders, regardless of size, and would not impose a competitive burden on any participant. The Exchange does not believe that the proposed enhancement to the existing risk limitation mechanism would impose a burden on competing options exchanges. Rather, the availability of this mechanism 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. When an exchange offers enhanced functionality that distinguishes it from the competition and participants find it useful, it has been the Exchange's experience that competing exchanges will move to adopt similar functionality. Thus, the Exchange believes that this type of competition amongst exchanges is beneficial to the market place [sic] as a whole as it can result in enhanced processes, functionality, and technologies. 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 \16\ and Rule 19b-4(f)(6) thereunder.\17\ --------------------------------------------------------------------------- \16\ 15 U.S.C. 78s(b)(3)(A). \17\ 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 \18\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \19\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the Exchange can implement the proposal without delay. The Exchange believes that waiver of the operative delay would be consistent with the protection of investors and the public interest because it would enable the Exchange to implement without delay the proposed optional functionality, which the Exchange believes may, in turn, encourage more ATP Holders to utilize the optional risk settings for orders. Thus, the Exchange believes waiver of the operative delay would protect investors by enabling the Exchange to provide greater flexibility to its Risk Limitation Mechanisms for orders, which may result in increased usage of the risk settings to the benefit of all market participants. The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest because it will provide ATP Holders with the flexibility to exclude IOC orders from consideration by a trade counter, which, the Exchange believes, could encourage additional ATP Holders to use the risk limitation settings. As noted above, the risk limitation settings are designed to assist ATP Holders in managing risk related to submitting orders during periods of increased and significant trading activity. Under the proposal, the ability to exclude IOC orders from consideration by a trade counter is optional; thus, an ATP Holder that utilizes the risk limitation settings and wishes to continue to have its IOC orders considered by a trade counter will be able to do so. Accordingly, the Commission hereby waives the operative delay and designates the proposed rule change operative upon filing.\20\ --------------------------------------------------------------------------- \18\ 17 CFR 240.19b-4(f)(6). \19\ 17 CFR 240.19b-4(f)(6)(iii). \20\ 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 [[Page 45656]] 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NYSEAMER-2017-10 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-2017-10. 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 such 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-2017-10, and should be submitted on or before October 20, 2017. --------------------------------------------------------------------------- \21\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\21\ Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-20891 Filed 9-28-17; 8:45 am] BILLING CODE 8011-01-P
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equally in the options market. Paper Comments SECURITIES AND EXCHANGE
Furthermore, when the Exchange COMMISSION
employs the end-of-day indicative value • Send paper comments in triplicate
process, market participants determine to Secretary, Securities and Exchange
[Release No. 34–81716; File No. SR–
whether to utilize the indicative value. Commission, 100 F Street NE.,
NYSEAMER–2017–10]
Washington, DC 20549–1090.
C. Self-Regulatory Organization’s
Statement on Comments on the All submissions should refer to File Self-Regulatory Organizations; NYSE
Proposed Rule Change Received From Number SR–CBOE–2017–062. This file American LLC; Notice of Filing and
Members, Participants, or Others number should be included on the Immediate Effectiveness of Proposed
subject line if email is used. To help the Rule Change To Amend Rule 928NY To
The Exchange neither solicited nor
Commission process and review your Allow Certain Order Types To Be
received written comments on the
comments more efficiently, please use Excluded From the Risk Limitation
proposed rule change.
only one method. The Commission will Mechanism
III. Date of Effectiveness of the post all comments on the Commission’s
Proposed Rule Change and Timing for September 25, 2017.
Internet Web site (http://www.sec.gov/
Commission Action rules/sro.shtml). Copies of the Pursuant to Section 19(b)(1) 1 of the
Because the foregoing proposed rule submission, all subsequent Securities Exchange Act of 1934 (the
change does not: (i) Significantly affect amendments, all written statements ‘‘Act’’),2 and Rule 19b–4 thereunder,3
the protection of investors or the public with respect to the proposed rule notice is hereby given that on
interest; (ii) impose any significant change that are filed with the September 11, 2017, NYSE American
burden on competition; and (iii) become Commission, and all written LLC (the ‘‘Exchange’’ or ‘‘NYSE
operative for 30 days from the date on communications relating to the American’’) filed with the Securities
which it was filed, or such shorter time proposed rule change between the and Exchange Commission (the
as the Commission may designate, it has Commission and any person, other than ‘‘Commission’’) the proposed rule
become effective pursuant to Section those that may be withheld from the change as described in Items I and II
19(b)(3)(A)(iii) of the Act 16 and public in accordance with the below, which Items have been prepared
subparagraph (f)(6) of Rule 19b–4 provisions of 5 U.S.C. 552, will be by the self-regulatory organization. The
thereunder.17 available for Web site viewing and Commission is publishing this notice to
At any time within 60 days of the printing in the Commission’s Public solicit comments on the proposed rule
filing of the proposed rule change, the Reference Room, 100 F Street NE., change from interested persons.
Commission summarily may Washington, DC 20549 on official
temporarily suspend such rule change if I. Self-Regulatory Organization’s
business days between the hours of Statement of the Terms of the Substance
it appears to the Commission that such
10:00 a.m. and 3:00 p.m. Copies of such of the Proposed Rule Change
action is: (i) Necessary or appropriate in
filing also will be available for
the public interest; (ii) for the protection
of investors; or (iii) otherwise in inspection and copying at the principal The Exchange proposes to amend
furtherance of the purposes of the Act. office of the Exchange. All comments Rule 928NY (Risk Limitation
If the Commission takes such action, the received will be posted without change; Mechanism) to allow certain order types
Commission shall institute proceedings the Commission does not edit personal to be excluded from the risk limitation
to determine whether the proposed rule identifying information from mechanism. The proposed rule change
should be approved or disapproved. submissions. You should submit only is available on the Exchange’s Web site
information that you wish to make at www.nyse.com, at the principal office
IV. Solicitation of Comments available publicly. All submissions of the Exchange, and at the
Interested persons are invited to should refer to File Number SR–CBOE– Commission’s Public Reference Room.
submit written data, views, and 2017–062, and should be submitted on
arguments concerning the foregoing, II. Self-Regulatory Organization’s
or before October 20, 2017.
including whether the proposed rule Statement of the Purpose of, and
For the Commission, by the Division of Statutory Basis for, the Proposed Rule
change is consistent with the Act. Trading and Markets, pursuant to delegated
Comments may be submitted by any of Change
authority.18
the following methods: In its filing with the Commission, the
Eduardo A. Aleman,
Electronic Comments Assistant Secretary. self-regulatory organization included
• Use the Commission’s Internet [FR Doc. 2017–20889 Filed 9–28–17; 8:45 am] statements concerning the purpose of,
comment form (http://www.sec.gov/ and basis for, the proposed rule change
BILLING CODE 8011–01–P
rules/sro.shtml); or and discussed any comments it received
• Send an email to rule-comments@ on the proposed rule change. The text
sec.gov. Please include File Number SR– of those statements may be examined at
CBOE–2017–062 on the subject line. the places specified in Item IV below.
The Exchange has prepared summaries,
asabaliauskas on DSKBBXCHB2PROD with NOTICES
16 15 U.S.C. 78s(b)(3)(A)(iii). set forth in sections A, B, and C below,
17 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– of the most significant parts of such
4(f)(6) requires a self-regulatory organization to give statements.
the Commission written notice of its intent to file
the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing 1 15 U.S.C. 78s(b)(1).
of the proposed rule change, or such shorter time
2 15 U.S.C. 78a.
as designated by the Commission. The Exchange
has satisfied this requirement. 18 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4.
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A. Self-Regulatory Organization’s temporary suspension of orders from the Holders this additional flexibility may
Statement of the Purpose of, and market that results when the risk encourage more ATP Holders to utilize
Statutory Basis for, the Proposed Rule settings are triggered is meant to operate the risk settings, which benefits all
Change as a safety valve that enables ATP market participants. The Exchange also
Holders to re-evaluate their positions believes that the proposed change
1. Purpose
before requesting to re-enter the market. would result in risk settings that may be
The Exchange proposes to amend better calibrated to suit the needs of
Rule 928NY (Risk Limitation Proposed Exclusion of IOC Orders From
certain ATP Holders (i.e., those that
Mechanism) to allow certain order types Risk Settings
routinely utilize IOC orders to access
to be excluded from the risk limitation Under the current Rule, an ATP liquidity on the Exchange), which
mechanism. Specifically, the Exchange Holder may activate a Risk Limitation improved risk settings should encourage
proposes to provide ATP Holders with Mechanism, and corresponding settings, ATP Holders to direct additional order
the option to exclude Immediate-Or- for orders in a specified class and, once flow and liquidity to the Exchange.
Cancel (‘‘IOC’’) orders from being activated, the mechanism and the The Exchange notes that the proposed
counted against risk limitation settings established will remain active change is limited to IOC orders being
thresholds.4 unless, and until, the ATP Holder counted towards whether a risk
Risk Limitation Mechanisms deactivates the Risk Limitation limitation threshold has been reached.
Mechanism or changes the settings.10 In the event an ATP Holder breaches its
The Exchange offers ATP Holders the Thus, once an ATP Holder activates risk risk limitation settings, any new orders
option of utilizing risk limitation settings for orders in a specified class, in the specified class, including
settings to assist ATP Holders in the risk settings apply to all order types incoming IOC orders, sent by the ATP
managing risk related to submitting in that options class. The Exchange Holder would be rejected until the ATP
orders during periods of increased and
proposes to modify the rule to provide Holder requests that the Exchange
significant trading activity.5 An ATP
an ATP Holder that chooses to utilize enable the entry of new orders.12
Holder can utilize one of three risk
risk settings for its orders the option to
limitation mechanisms for its orders— Implementation
exclude both single-legged orders and
based on the number of transactions The Exchange will announce by
Complex Orders designated as IOC from
executed, the number of contracts Trader Update the implementation date
being considered by the trade counter.
traded, or the percent of the ATP of the proposed rule change, which
To effect this change, proposed
Holder’s order size—which implementation will be no later than 90
Commentary .07 to Rule 928NY would
automatically cancels such orders when days after the effectiveness of this rule
be amended to provide that ‘‘[a]ny ATP
certain parameter settings are breached.6 change.
Holder that activates the Risk Limitation
The Exchange maintains trade counters
Mechanisms for orders pursuant to 2. Statutory Basis
that increment based on the number of
Commentary .04(b) of this Rule may opt
trades executed, either from a single-leg The Exchange believes that its
to exclude any orders (i.e., whether
order or any leg of a Complex Order, in proposal is consistent with Section 6(b)
single-leg orders or Complex Orders)
any series in a specified class.7 The of the Securities Exchange Act of 1934
designated with a time-in-force of IOC
trade counters reset after an Exchange- (the ‘‘Act’’),13 in general, and furthers
from being considered by a trade
determined time period.8 When an ATP the objectives of Section 6(b)(5) of the
counter.’’ 11
Holder has breached its risk settings Act,14 in particular, in that it is designed
By their terms, IOC orders (or portions
(i.e., has traded more than the contract to prevent fraudulent and manipulative
thereof) will cancel if not immediately
or volume limit or cumulative acts and practices, to promote just and
executed. As such, IOC orders are never
percentage limit of a class during the equitable principles of trade, to foster
ranked (as resting interest) in the
specified measurement interval), the cooperation and coordination with
Consolidated Book. The Exchange
Exchange will cancel all of the ATP persons engaged in regulating, clearing,
believes that certain OTPs [sic] utilize
Holder’s open orders in that class until settling, processing information with
IOC orders to access liquidity on the
the ATP Holder notifies the Exchange it respect to, and facilitating transactions
Exchange. Thus, the proposed change is
will resume submitting orders.9 The in securities, to remove impediments to
designed to accommodate participants
that utilize IOCs in this manner by and perfect the mechanism of a free and
4 An IOC order is ‘‘[a] Limit Order that is to be
enabling them to exclude IOC orders open market and a national market
executed in whole or in part on the Exchange as
soon as such order is received, and the portion not from being counted and avoid system and, in general, to protect
so executed is to be canceled.’’ See Rule potentially triggering their risk settings investors and the public interest.
900.3NY(k). The Exchange believes that the
(prematurely), resulting in the
5 See Commentary .04(b) to Rule 928NY
cancellation of open orders. The proposed rule change removes
(providing that ATP Holders may avail themselves impediments to and perfects the
of one of the three risk limitation mechanisms for Exchange believes that providing ATP
certain of their orders). Under the current Rule, mechanism of a free and open market by
Market Makers are required to utilize the risk event that an ATP Holder experiences multiple, providing ATP Holders greater control
limitation settings for quotes and the Exchange is successive triggers of its risk settings, the Exchange and flexibility over setting their risk
not proposing to alter any aspect of this Rule in this would cancel all of the open orders—as opposed to tolerance, which may enhance the
regard. See also Commentary .04(a) to Rule 928NY; cancelling only those in the option class
and Rule 928NY(b)(2), (c)(2), (d)(2) and (e)(2). efficacy of the risk settings. By their
(underlying symbol) in which the risk settings were
asabaliauskas on DSKBBXCHB2PROD with NOTICES
6 See 928NY(b)(1), (c)(1), (d)(1) and Commentaries
triggered. See Rule 928NY(f) and Commentary .02 terms, IOC orders (or portions thereof)
.01 to Rule 928NY (regarding the cancellation of to Rule 928NY. will cancel if not immediately executed.
orders once the risk settings have been breached). 10 See Commentary .04(b) to Rule 928NY. As such, IOC orders are never ranked (as
7 See Rule 928NY(a)(1), (f). See also 11 See proposed Commentary .07 to Rule 928NY.
resting interest) in the Consolidated
Commentaries .05–.07 to Rule 928NY (regarding the The Exchange also proposes to correct a
operation of the trade counters). Book. The Exchange believes that
typographical error and make singular the reference
8 See Commentary .06 to Rule 928NY.
to Complex Orders in the sentence providing that
9 See Commentaries .01 and .02 to Rule 928NY 12 See Commentary .02 to Rule 928NY.
‘‘[e]xecutions of each leg of a Complex Orders will
13 15 U.S.C. 78f(b).
(requiring that an ATP Holder request that it be re- be considered by a trade counter as an individual
enabled after a breach of its risk settings). In the transaction928NY.’’ See id. 14 15 U.S.C. 78f(b)(5).
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certain market participants utilize IOC of the purposes of the Act. The operative for 30 days after the date of its
orders to access liquidity on the Exchange is proposing a market filing. However, Rule 19b–4(f)(6)(iii) 19
Exchange. Thus, the proposed change is enhancement that would provide ATP permits the Commission to designate a
designed to accommodate participants Holders with greater control and shorter time if such action is consistent
that utilize IOCs in this manner by flexibility over setting their risk with the protection of investors and the
enabling them to exclude IOC orders tolerance and, potentially, more public interest. The Exchange has asked
from being counted and avoid protection over risk exposure. The the Commission to waive the 30-day
potentially triggering their risk settings proposal is structured to offer the same operative delay so that the Exchange can
(prematurely), resulting in the enhancement to all ATP Holders, implement the proposal without delay.
cancellation of open orders. The regardless of size, and would not The Exchange believes that waiver of
Exchange believes that providing ATP impose a competitive burden on any the operative delay would be consistent
Holders this additional flexibility may participant. The Exchange does not with the protection of investors and the
encourage more ATP Holders to utilize believe that the proposed enhancement public interest because it would enable
the risk settings, which benefits all to the existing risk limitation the Exchange to implement without
market participants. Further, the mechanism would impose a burden on delay the proposed optional
proposed change would promote just competing options exchanges. Rather, functionality, which the Exchange
and equitable principles of trade the availability of this mechanism may believes may, in turn, encourage more
because it would result in risk settings foster more competition. Specifically, ATP Holders to utilize the optional risk
that may be better calibrated to suit the the Exchange notes that it operates in a settings for orders. Thus, the Exchange
needs of certain OTPs [sic] (i.e., those highly competitive market in which believes waiver of the operative delay
that routinely utilize IOC orders to market participants can readily favor would protect investors by enabling the
access liquidity on the Exchange), competing venues. When an exchange Exchange to provide greater flexibility
which improved risk settings should offers enhanced functionality that to its Risk Limitation Mechanisms for
encourage ATP Holders to direct distinguishes it from the competition orders, which may result in increased
additional order flow and liquidity to and participants find it useful, it has usage of the risk settings to the benefit
the Exchange. To the extent additional been the Exchange’s experience that of all market participants. The
order flow is submitted to the Exchange competing exchanges will move to Commission believes that waiver of the
as a result of the proposed change, all adopt similar functionality. Thus, the operative delay is consistent with the
market participants stand to benefit Exchange believes that this type of protection of investors and the public
from increased trading.15 competition amongst exchanges is interest because it will provide ATP
The Exchange notes that an ATP beneficial to the market place [sic] as a Holders with the flexibility to exclude
Holder has the option of utilizing risk whole as it can result in enhanced IOC orders from consideration by a
settings for all orders submitted to the processes, functionality, and trade counter, which, the Exchange
Exchange and, as proposed, would have technologies. believes, could encourage additional
the additional option of excluding from ATP Holders to use the risk limitation
these risk settings any IOC orders in a C. Self-Regulatory Organization’s
settings. As noted above, the risk
given options class submitted to the Statement on Comments on the
limitation settings are designed to assist
Exchange. Proposed Rule Change Received From
ATP Holders in managing risk related to
This proposed change, which was Members, Participants, or Others
submitting orders during periods of
specifically requested by some ATP No written comments were solicited increased and significant trading
Holders, would foster cooperation and or received with respect to the proposed activity. Under the proposal, the ability
coordination with persons engaged in rule change. to exclude IOC orders from
regulating, clearing, settling, and consideration by a trade counter is
III. Date of Effectiveness of the
processing information with respect to, optional; thus, an ATP Holder that
Proposed Rule Change and Timing for
and facilitating transactions in, utilizes the risk limitation settings and
Commission Action
securities as it will be available to all wishes to continue to have its IOC
OTPs [sic] on an optional basis and may Because the proposed rule change orders considered by a trade counter
encourage more ATP Holders to utilize does not (i) significantly affect the will be able to do so. Accordingly, the
this enhanced functionality to [sic] protection of investors or the public Commission hereby waives the
benefit of all market participants. interest; (ii) impose any significant operative delay and designates the
Because the risk controls are designed to burden on competition; and (iii) become proposed rule change operative upon
prevent the execution of erroneously operative for 30 days from the date on filing.20
priced trades, the Exchange believes which it was filed, or such shorter time At any time within 60 days of the
that any proposal designed to increase as the Commission may designate, it has filing of the proposed rule change, the
the number of ATP Holders that utilize become effective pursuant to Section Commission summarily may
the functionality would benefit all 19(b)(3)(A) of the Act 16 and Rule 19b– temporarily suspend such rule change if
market participants. 4(f)(6) thereunder.17 it appears to the Commission that such
A proposed rule change filed action is necessary or appropriate in the
B. Self-Regulatory Organization’s pursuant to Rule 19b–4(f)(6) under the
Statement on Burden on Competition public interest, for the protection of
Act 18 normally does not become investors, or otherwise in furtherance of
The Exchange does not believe that
asabaliauskas on DSKBBXCHB2PROD with NOTICES
the purposes of the Act. If the
the proposed rule change will impose 16 15 U.S.C. 78s(b)(3)(A).
Commission takes such action, the
17 17 CFR 240.19b–4(f)(6). As required under Rule
any burden on competition that is not Commission shall institute proceedings
19b–4(f)(6)(iii), the Exchange provided the
necessary or appropriate in furtherance Commission with written notice of its intent to file
the proposed rule change, along with a brief 19 17 CFR 240.19b–4(f)(6)(iii).
15 The Exchange believes that the proposed description and the text of the proposed rule 20 For purposes only of waiving the 30-day
correct of a typographical error in current change, at least five business days prior to the date operative delay, the Commission also has
Commentary .07 to Rule 928NY (see supra note 11) of filing of the proposed rule change, or such considered the proposed rule’s impact on
would add clarify [sic] and transparency to the Rule shorter time as designated by the Commission. efficiency, competition, and capital formation. See
which benefits investors and the public interest. 18 17 CFR 240.19b–4(f)(6). 15 U.S.C. 78c(f).
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![45656 Federal Register / Vol. 82, No. 188 / Friday, September 29, 2017 / Notices
to determine whether the proposed rule For the Commission, by the Division of Form Number: 2402.
change should be approved or Trading and Markets, pursuant to delegated Estimated Annual Responses: 12,490.
disapproved. authority.21 Estimated Annual Hour Burden:
Eduardo A. Aleman, 33,075.
IV. Solicitation of Comments Assistant Secretary.
Curtis B. Rich,
Interested persons are invited to [FR Doc. 2017–20891 Filed 9–28–17; 8:45 am]
submit written data, views, and Management Analyst.
BILLING CODE 8011–01–P
arguments concerning the foregoing, [FR Doc. 2017–20897 Filed 9–28–17; 8:45 am]
including whether the proposed rule BILLING CODE 8025–01–P
change is consistent with the Act.
SMALL BUSINESS ADMINISTRATION
Comments may be submitted by any of
the following methods: Reporting and Recordkeeping DEPARTMENT OF STATE
Electronic Comments Requirements Under OMB Review [Public Notice: 10143]
• Use the Commission’s Internet AGENCY: Small Business Administration. 30-Day Notice of Proposed Information
comment form (http://www.sec.gov/ ACTION: 30-day notice. Collection: Affidavit Regarding a
rules/sro.shtml); or Change of Name
• Send an email to rule-comments@ SUMMARY: The Small Business
sec.gov. Please include File Number SR– Administration (SBA) is publishing this ACTION:Notice of request for public
NYSEAMER–2017–10 on the subject notice to comply with requirements of comment and submission to OMB of
line. the Paperwork Reduction Act (PRA), proposed collection of information.
Paper Comments which requires agencies to submit
proposed reporting and recordkeeping SUMMARY: The Department of State has
• Send paper comments in triplicate requirements to OMB for review and submitted the information collection
to Brent J. Fields, Secretary, Securities approval, and to publish a notice in the described below to the Office of
and Exchange Commission, 100 F Street Federal Register notifying the public Management and Budget (OMB) for
NE., Washington, DC 20549–1090. that the agency has made such a approval. In accordance with the
All submissions should refer to File submission. This notice also allows an Paperwork Reduction Act of 1995 we
Number SR–NYSEAMER–2017–10. This additional 30 days for public comments. are requesting comments on this
file number should be included on the collection from all interested
DATES: Submit comments on or before
subject line if email is used. To help the individuals and organizations. The
October 30, 2017.
Commission process and review your purpose of this Notice is to allow 30
comments more efficiently, please use ADDRESSES: Comments should refer to days for public comment.
only one method. The Commission will the information collection by name and/ DATES: Submit comments directly to the
post all comments on the Commission’s or OMB Control Number and should be Office of Management and Budget
Internet Web site (http://www.sec.gov/ sent to: Agency Clearance Officer, Curtis (OMB) up to November 1, 2017.
rules/sro.shtml). Copies of the Rich, Small Business Administration,
ADDRESSES: Direct comments to the
submission, all subsequent 409 3rd Street SW., 5th Floor,
Department of State Desk Officer in the
amendments, all written statements Washington, DC 20416; and SBA Desk
Office of Information and Regulatory
with respect to the proposed rule Officer, Office of Information and
Affairs at the Office of Management and
change that are filed with the Regulatory Affairs, Office of
Budget (OMB). You may submit
Commission, and all written Management and Budget, New
comments by the following methods:
Executive Office Building, Washington,
communications relating to the • Email: oira_submission@
proposed rule change between the DC 20503.
omb.eop.gov. You must include the DS
Commission and any person, other than FOR FURTHER INFORMATION CONTACT: form number, information collection
those that may be withheld from the Curtis Rich, Agency Clearance Officer, title, and the OMB control number in
public in accordance with the (202) 205–7030 curtis.rich@sba.gov. the subject line of your message.
provisions of 5 U.S.C. 552, will be Copies: A copy of the Form OMB 83– • Fax: 202–395–5806. Attention: Desk
available for Web site viewing and 1, supporting statement, and other Officer for Department of State.
printing in the Commission’s Public documents submitted to OMB for FOR FURTHER INFORMATION CONTACT:
Reference Room, 100 F Street NE., review may be obtained from the Direct requests for additional
Washington, DC 20549 on official Agency Clearance Officer. information regarding the collection
business days between the hours of SUPPLEMENTARY INFORMATION: listed in this notice, including requests
10:00 a.m. and 3:00 p.m. Copies of such for copies of the proposed collection
filing also will be available for Summary of Information Collections
instrument and supporting documents,
inspection and copying at the principal This information is provided by by mail to: Alexys Stanley, U.S.
office of the Exchange. All comments Lenders, Pool Originators and Pool Department of State, CA/PPT/S/L/LA,
received will be posted without change; Investors who participate in SBA’s 44132 Mercure Cir, P.O. Box 1227,
the Commission does not edit personal Secondary Market Guarantee Program Sterling, VA 20166–1227, by phone at
identifying information from for First Lien Position 504 Loan Pools. (202) 485–6538, or by email at
asabaliauskas on DSKBBXCHB2PROD with NOTICES
submissions. You should submit only SBA uses the information primarily for PPTFormsOfficer@state.gov.
information that you wish to make loan pool monitoring, portfolio risk SUPPLEMENTARY INFORMATION:
available publicly. All submissions management, and program • Title of Information Collection:
should refer to File Number SR– administration and reporting purposes. Affidavit Regarding a Change of Name.
NYSEAMER–2017–10, and should be (1) Title: Secondary Market for • OMB Control Number: 1405–0133.
submitted on or before October 20, Section 504 First Mortgage Loan Pool • Type of Request: Revision of a
2017. Program. Currently Approved Collection.
Description of Respondents: SBA • Originating Office: Department of
21 17 CFR 200.30–3(a)(12). Lenders. State, Bureau of Consular Affairs,
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Document Created: 2017-09-29 03:26:53
Document Modified: 2017-09-29 03:26:53
| 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 45653 |
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