83_FR_47402 83 FR 47221 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Options Rules To Make Certain Non-Substantive Changes and To Harmonize Certain Rules With Those of Its Affiliate, NYSE American LLC

83 FR 47221 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Options Rules To Make Certain Non-Substantive Changes and To Harmonize Certain Rules With Those of Its Affiliate, NYSE American LLC

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 181 (September 18, 2018)

Page Range47221-47229
FR Document2018-20193

Federal Register, Volume 83 Issue 181 (Tuesday, September 18, 2018)
[Federal Register Volume 83, Number 181 (Tuesday, September 18, 2018)]
[Notices]
[Pages 47221-47229]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-20193]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84098; File No. SR-NYSEARCA-2018-65]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Its 
Options Rules To Make Certain Non-Substantive Changes and To Harmonize 
Certain Rules With Those of Its Affiliate, NYSE American LLC

September 12, 2018.
    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, 2018, 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

[[Page 47222]]

organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its options rules to make certain 
non-substantive changes and to harmonize certain rules with those of 
its affiliate, NYSE American LLC (``NYSE American''), to reduce 
unnecessary complexity and promote standardization. The proposed rule 
change is available on the Exchange's website 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 its options rules to make certain 
non-substantive changes and to harmonize certain rules with those of 
its affiliate, NYSE American. The proposed amendments are designed to 
reduce unnecessary complexity within the Exchange's rules and to 
promote standardization and clarity amongst similar rules of the 
Exchange and its affiliate, NYSE American. Specifically, the Exchange 
proposes to:
     Make a ministerial, non-substantive change to Exchange 
Rule 6.17-O, Commentary .01.
     harmonize Exchange Rule 6.37-O, Obligations of Market 
Makers, with NYSE American Rule 925NY, Obligations of Market Makers, 
and make related changes to Exchange Rules 6.37A-O, 6.37B-O, and 6.37B-
O; \4\
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    \4\ The Exchange also proposes to update various cross-
references to these rules throughout the rulebook to reflect the 
updated rule numbers.
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     delete the text of Exchange Rule 6.41-O, Market Maker 
Marketing Reports;
     harmonize Exchange Rule 6.43-O, Options Floor Broker 
Defined, with NYSE American Rule 930NY by replacing the term 
``Professional Customer'' with ``Qualified Customer''; \5\
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    \5\ See Securities Exchange Act Release No. 81670 (September 21, 
2017), 82 FR 45095 (September 27, 2017) (SR-NYSEAMER-2017-18) 
(Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Update and Amend its Options Rules, as Described Herein, 
To Reduce Unnecessary Complexity and To Promote Standardization and 
Clarity).
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     amend Exchange Rule 6.47-O, Crossing Orders, to update the 
references to the current Order Protection Rule and harmonize it with 
NYSE American Rule 934NY; \6\
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    \6\ Id.
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     harmonize Exchange Rule 6.67-O(d)(2)(A) with NYSE American 
Rule 955NY(d)(2)(A) by replacing an outdated reference to a required 
timestamp synchronized to the ``NIST Clock'' with a reference to the 
current operative Consolidated Audit Trail (``CAT'') clock 
synchronization rule; \7\
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    \7\ Id.
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     harmonize Exchange Rule 6.69-O(b)(iii) with NYSE American 
Rule 957NY(b)(iii) by conforming the Exchange's rule governing the 
priority of complex orders in open outcry to its rule governing 
electronic complex orders; \8\ and
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    \8\ Id.
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     harmonize Exchange Rule 6.75-O, Priority and Order 
Allocation Procedures--Open Outcry, with NYSE American Rules 
963NY(d).\9\
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    \9\ Id.
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    Each of these proposed changes are explained in detail below.
Exchange Rule 6.17-O. Verification of Compared Trades and 
Reconciliation of Uncompared Trades
    The Exchange proposes to make ministerial, non-substantive changes 
to Exchange Rule 6.17-O, Commentary .01 to remove superfluous language. 
In particular, the Exchange proposes to amend the third paragraph of 
Commentary .01 of Exchange Rule 6.17-O to remove the duplicative phrase 
``or accessible via telephone or email''. The proposed deletion of this 
phrase does not alter the meaning or application of Rule 6.17-O.
Exchange Rule 6.37-O, Obligations of Market Makers, and Exchange Rules 
6.37A-O, 6.37B-O, and 6.37C-O
    The Exchange proposes to harmonize the Market Maker quoting 
obligations set forth under Exchange Rule 6.37-O, Obligations of Market 
Makers, with NYSE American Rule 925NY, Obligations of Market Makers, 
and make related changes to Exchange Rules 6.37A-O, 6.37B-O, and 6.37C-
O. Exchange Rule 6.37-O sets forth the continuous quoting obligations 
of Market Makers for options contracts to which they are appointed 
pursuant to Exchange Rule 6.35-O. The Exchange proposes to delete the 
text of Rule 6.37-O, except for paragraph (a), and replace it with the 
relevant text from NYSE American Rule 925NY.\10\ The proposed rule 
change would not result in an easing of the quoting obligations in 
place on the Exchange. Instead, the proposed rule change would 
harmonize the Market Maker obligations across the Exchange and its 
affiliate, NYSE American, while requiring the same level of 
obligations. Harmonized rules would provide investors, as well as those 
that engage in market making activities on both the Exchange and NYSE 
American, with standardized obligations and consistent rules across 
both markets. A description of the proposed amendments are described 
below.
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    \10\ The Exchange notes that paragraph (a) of Exchange Rule 
6.37-O is identical to paragraph (a) of NYSE American Rule 925NY.
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    The Exchange notes that current Exchange Rule 6.37-O sets forth 
Market Maker obligations when quoting on the Trading Floor and Exchange 
Rule 6.37A-O sets forth Market Maker obligations when quoting on the 
NYSE Arca OX electronic trading system. Like NYSE American 925NY, the 
obligations under amended Exchange Rule 6.37-O would apply equally to 
Maker Makers on the Trading Floor and those quoting on the Exchange's 
electronic trading system. The Exchange also notes that the current 
text of Exchange Rule 6.37A-O is substantially similar to the text of 
NYSE American Rule 925NY, which the Exchange propose to adopt herein. 
Nonetheless, the proposed text would be more detailed than current Rule 
6.37A-O by including detailed bid-ask differentials under paragraph 
(b)(4) as well as provisions governing leaves of absence under proposed 
Commentary .01. Therefore, the Exchange proposes to delete the text of 
Exchange Rule 6.37A-O and renumber Exchange Rules 6.37B-O as 6.37A-O 
and 6.37C-O as 6.37B-O. The Exchange also proposes to update various 
cross-references to these rules in Exchange Rules 6.33-O(a), 6.64-
O(b)(D) and (E), 6.82-O(c)(4), 10.12(h) and (k), and 10.16(e)(2) to 
reflect the updated rule numbers.
    Proposed Paragraph (b), Obligations in Appointed Classes. Paragraph 
(b) of Exchange Rule 6.37-O would continue

[[Page 47223]]

to impose the continuous quoting obligations that a Market Maker is 
expected to engage, to a reasonable degree under the existing 
circumstances, in dealings for his own account when there exists, or it 
is reasonably anticipated that there will exist, a lack of price 
continuity, a temporary disparity between the supply of and demand for 
a particular option contract, or a temporary distortion of the price 
relationships between option contracts of the same class. Market Makers 
would continue to be expected to perform the following activities in 
the course of maintaining a fair and orderly market.
    Proposed paragraphs (1) through (3) of Exchange Rule 6.37-O(b) 
would require Market Makers to: (1) Compete with other Market Makers to 
improve the market in all series of options classes to which the Market 
Maker is appointed; (2) make markets that will be honored for the 
number of contracts entered into the System in all series of options 
classes within the Market Maker's appointment; and (3) update market 
quotations in response to changed market conditions in all series of 
options classes within the Market Maker's appointment. Each of these 
provisions mirror NYSE American Rule 925NY(b)(1) through (3).
    Current paragraphs (b)(1)(A) through (E) of Rule 6.37-O require 
that Market Maker bids and/or offers create differences of no more 
than: (A) .25 between the bid and the offer for each option contract 
for which the bid is less than $2, (B) .40 where the bid is $2 or more 
but does not exceed $5, (C) .50 where the bid is more than $5 but does 
not exceed $10, (D) .80 where the bid is more than $10 but does not 
exceed $20, and (E) $1 when the last bid is $20.01 or more, provided 
that two Trading Officials may establish differences other than the 
above for one or more series or classes of options. These provisions 
would be set forth under new paragraph (b)(4)(A) through (E) of 
Exchange Rule 6.37-O with one proposed change from the current Exchange 
rule. Current paragraph (b)(1)(E) of Rule 6.37-O requires that Market 
Maker bids and/or offers create differences of no more than $1 when the 
last bid is $20.01 or more, provided that two Trading Officials may 
establish differences other than the above for one or more series or 
classes of options. Proposed paragraph (b)(4)(E) of Exchange Rule 6.37-
O would allow for one Trading Official, rather than two, to establish 
differences for one or more series or classes of options. The Exchange 
believes that requiring two Trading Officials to act in this scenario 
is unnecessary and allowing a single Trading Official to act would 
allow for a more efficient process, especially in cases where a 
decision must be made quickly in light of fast moving market events. 
The Exchange also notes that NYSE American Rule 925NY(b)(1)(E), the 
rule it seeks to harmonize Exchange Rule 6.37-O, allows for a single 
Trading Official to establish differences for one or more series or 
classes of options. Each of these provisions would mirror NYSE American 
Rule 925NY(b)(1)(A) through (E).
    Current paragraph (b)(1)(F) of Rule 6.37-O states that a Trading 
Official may, with respect to options trading with a bid price less 
than $2, establish bid-ask differentials that are no more than $0.50 
wide (``double-width'') when the primary market for the underlying 
security: (a) Reports a trade outside of its disseminated quote 
(including any Liquidity Quote); or (b) disseminates an inverted quote. 
The imposition of double-width relief must automatically terminate when 
the condition that necessitated the double-width relief (i.e., 
condition (a) or (b)) is no longer present. Market Makers that have not 
automated this process may not avail themselves of the relief provided 
herein (i.e. they may not manually adjust prices). The Exchange notes 
that NYSE American Rule 925NY does not contain a similar provision and, 
therefore, the Exchange does not propose to carry over current 
paragraph (b)(1)(F) of Rule 6.37-O to the harmonized rule. Furthermore, 
the Exchange notes that this provision is not necessary because a 
Trading Official would have the ability to widen differences for one or 
more series or classes of options in such scenario pursuant to 
paragraph (b)(4)(E) of Exchange Rule 6.37-O discussed above.
    Current paragraph (b)(1)(G) of Rule 6.37-O states that quotes given 
in open outcry may not be quoted with $5 widths and instead must comply 
with the legal width requirements specified in paragraph (b)(1)(A)-(F) 
of Rule 6.37-O. This requirement would be moved to paragraph (b)(5) of 
Rule 6.37-O and be rephrased to be harmonized with NYSE American Rule 
925NY(b)(5) and would require that electronically submitted quotes to 
the System during Core Trading Hours may not have a difference 
exceeding $5 between the bid and offer regardless of the price of the 
bid. Paragraph (b)(5) of Rule 6.37-O would also provide that two 
Trading Officials may establish quote width differences other than as 
provided in paragraph (b)(5) of Rule 6.37-O for one or more option 
series. This is consistent with NYSE American Rule 925NY(b)(5).
    The Exchange proposes to adopt the text of NYSE American Rule 
925NY(b)(6) under proposed paragraph (b)(6) of Exchange Rule 6.37-O and 
require that, in response to a call for a market from a Floor Broker, a 
Market Maker may bid no more than $1 lower and/or offer no more than $1 
higher than the last preceding transaction price for the particular 
option contract. However, this standard would not ordinarily apply if 
the price per share (or other unit of trading) of the underlying 
security or Exchange-Traded Fund Share has changed since the last 
preceding transaction for the particular option contract, in which 
event a Market Maker may then bid no lower than or offer no more than 
$1 plus the aggregate change in the price per share (or other unit of 
trading) of the underlying security or Exchange-Traded Fund Share since 
the time of the last preceding transaction for the particular option 
contract. This provision would apply from one day's close to the next 
day's opening and from one transaction to the next in intra-day 
transactions. With respect to inter-day transactions, this provision 
applies if the closing transaction occurred within one hour of the 
close and the opening transaction occurred within one hour after the 
opening. With respect to intra-day transactions, this provision applies 
to transactions occurring within one hour of one another. A Trading 
Official may waive the provisions of this paragraph in an index option 
when the primary underlying securities market for that index is not 
trading. Nothing in paragraph (b)(6) of Exchange Rule 6.37-O would 
alter the maximum bid/ask differentials established by paragraph 
(b)(4)-(5) of Rule 6.37-O discussed above.
    Proposed Paragraph (c), Unusual Conditions--Opening Auction. The 
Exchange proposes to adopt the text of NYSE American Rule 925NY(c) 
under proposed paragraph (c) of Exchange Rule 6.37-O which would govern 
quote width differentials where a Trading Official declares an Unusual 
Market Condition during the opening auction. Current paragraph (b)(4) 
of Exchange Rule 6.37-O discusses where a Trading Official may declare 
a fast market and declare wider quote width differentials and these 
provisions would be substantially similar to proposed paragraph (c) of 
Exchange Rule 6.37-O. As proposed, if the Trading Official finds that 
it in the interest of maintaining a fair and orderly market so 
requires, he or she may declare that unusual market conditions exist in 
a particular issue and allow Market Makers in that issue to make 
auction bids and offers with spread differentials

[[Page 47224]]

of up to two times, or in exceptional circumstances, up to three times, 
the legal limits permitted under proposed Exchange Rule 6.37-O. In 
making such determinations to allow wider markets, the Trading Official 
should consider the following factors: (A) whether there is pending 
news, a news announcement or other special events; (B) whether the 
underlying security or Exchange-Traded Fund Share is trading outside of 
the bid or offer in such security then being disseminated; (C) whether 
OTP Holders and OTP Firms receive no response to orders placed to buy 
or sell the underlying security; and (D) whether a vendor quote feed is 
clearly stale or unreliable.
    Paragraph (c)(1) of Exchange Rule 6.37-O would further require that 
a Trading Official who declared the unusual market conditions to file a 
report with Exchange Operations setting forth the relief granted, the 
time and duration of such relief and the reasons behind declaring an 
unusual market condition. This provision would mirror NYSE American 
Rule 925NY(c)(1).
    Proposed Paragraph (d), In Classes of Option Contracts Other Than 
Those to Which Appointed. Current Exchange Rule 6.37-O(c) governs a 
Market Maker's activities in options classes in which it has not been 
assigned pursuant to Exchange Rule 6.35-O. The Exchange proposes to 
renumber paragraph (c) of Exchange Rule 6.37-O as paragraph (d) and 
replace its text with that of NYSE American Rule 925NY(d). Proposed 
paragraph (d) of Exchange Rule 6.37-O would be substantially similar to 
current paragraph (c). As proposed, Market Makers would continue to be 
prohibited from engaging in transactions for an account in which they 
have an interest that are disproportionate in relation to, or in 
derogation of, the performance of their obligations as specified in 
Rule 6.37-O with respect to the classes in their appointment. Whenever 
Market Makers enter the trading crowd for a class of options in which 
they do not hold an appointment, they must fulfill the obligations 
established by Exchange Rule 6.37-O. In addition, when present anywhere 
on the Trading Floor, with regard to all securities traded on the 
Trading Floor, Market Makers are expected to undertake the obligations 
specified in paragraph (b) of Exchange Rule 6.37-O discussed above in 
response to a demand therefore from the Trading Official that the 
performance of such obligations by other Market Makers requires 
supplementation.
    Current paragraphs (c)(2) and (3) also prohibit Market Makers from 
individually or as a group, intentionally or unintentionally, 
dominating the market in option contracts of a particular class and 
effecting purchases or sales on the floor of the Exchange except in a 
reasonable and orderly manner. These provisions would be renumbered as 
paragraphs (d)(1) and (2) under Exchange Rule 6.37-O and would mirror 
NYSE American Rule 925NY(d). The only difference from the current text 
is that paragraph (d)(2) of Exchange Rule 6.37-O would not specifically 
reference the floor of the Exchange as the rule would apply equally to 
all Market Makers, regardless of whether they are located on the floor 
of the Exchange or engage in market making electronically from a 
location off the Exchange floor.
    Current paragraphs (c)(1) and (c)(4) of Exchange Rule 6.37-O would 
not be carried over as part of the new rule. The Exchange notes that 
these provision are outdated and are not included in the current NYSE 
American Rule 925NY to which the Exchange seeks to harmonize its Market 
Maker obligations. Paragraph (c)(1) of Exchange Rule 6.37-O currently 
prohibits Market Makers from congregating in a particular class of 
option contract. The purpose of this rule was to prevent Market Makers 
from dominating the market for an option when options were listed and 
traded verbally on a single exchange. Today, options are traded on 
numerous exchanges electronically significantly reducing the ability of 
a group of Market Makers on a single exchange from engaging in 
manipulative activity. Further, other Exchange rules address the 
manipulation concern that current paragraph (c)(1) of Rule 6.37-O was 
intended to address. For example, Exchange Rule 11.5 prohibits market 
manipulation on the Exchange generally. Exchange Rule 11.20(a)(1) also 
prohibits members, including Market Makers, from knowingly managing or 
financing a manipulative operation, which would include congregating in 
a particular class of securities to manipulate or dominate the market.
    Paragraph (c)(4) of Exchange Rule 6.37-O states that whenever a 
Floor Broker enters a trading crowd and calls for a market in a 
particular option series, each Market Maker present at the trading post 
will be obligated to vocalize a two-sided, legal-width market (pursuant 
to former Exchange Rule 6.37-O(b)(1)) for a minimum of 10 contracts. 
Market Makers would continue to be required to make legal-wide markets 
in compliance with proposed Exchange Rule 6.37-O(b). However, Market 
Makers would no longer be required to quote for a least 10 contracts. 
The 10 contract requirement is antiquated and not necessary in a market 
environment where options are traded electronically on multiple 
exchanges. Furthermore, the 10 contract requirement is not included in 
the rules of NYSE American Rule 925NY or other options exchanges.\11\ 
Current Exchange Rule 6.37B-O(b) and (c) (proposed to be renumbered as 
Exchange Rule 6.37A-O) would require that Market Maker quotations meet 
the legal quote width requirements of proposed Exchange Rule 6.37-O.
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    \11\ See e.g., Cboe Exchange, Inc. Rule 8.7 and Nasdaq Options 
Rules, Chapter VII, Sections 5 and 6 (no including a requirement 
that a market maker's quotation be for at least 10 contracts).
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    Paragraph (c)(4) of Exchange Rule 6.37-O states that its obligation 
to provide a legal-width market only applies to: (A) Market Makers who 
have executed a transaction in the issue, but not those who have been 
assigned contracts by the Trading Official pursuant to Commentary .05, 
on the day of the Floor Broker's call for a market or on the previous 
business day; (B) option issues that are ranked in the 120 most 
actively traded equity options based on the total number of contracts 
traded nationally as reported by the Options Clearing Corporation (for 
each current month, the Exchange's determination of whether an equity 
option ranks in the top 120 most active issues is based on volume 
statistics for the one month of trading activity that occurred two 
months prior to the current month); (C) non-broker-dealer orders; and 
(D) series not designated as LEAPS (pursuant to Exchange Rule 6.4). 
With respect to (A) and (B) above, the provision to provide a legal-
width market under proposed Exchange Rule 6.37-O(b) would apply to all 
options to which a Market Maker is appointed and would not be limited. 
With respect to (C) above regarding providing a quote to non-broker-
dealer orders, paragraph (e) of Exchange Rule 6.37B-O (proposed to be 
renumbered as Exchange Rule 6.37A-O) would continue to state that ``[a] 
Market Maker shall be compelled to buy/sell a specified quantity of 
option contracts at the disseminated bid/offer pursuant to his 
obligations under Rule 6.86-O.'' This rule would preclude a Market 
Maker from not honoring its quotation against non-broker-dealer orders. 
Therefore, current paragraph (c)(4)(C) is not necessary to be included 
in proposed Rule 6.37-O(c). Lastly, current paragraph (D) states that 
the paragraph (c)(4) would not apply to series designated as LEAPS. The 
Exchange notes that current paragraph (b) and (c) of Exchange Rule 
6.37B-O (proposed to

[[Page 47225]]

be renumbered as Exchange Rule 6.37A-O) set forth Market Maker quoting 
obligation and Commentary .01 of that rule states that those quoting 
obligation ``shall not apply to Market Makers with respect to adjusted 
option series, and series with a time to expiration of nine months or 
greater'', i.e., LEAPS. Therefore, as amended, the quoting obligations 
set forth in proposed Rule 6.37-O would continue to not apply to LEAPS.
    Deletion of Current Paragraph (d), In Person Requirements for 
Market Makers. The Exchange proposes to remove the text of current 
paragraph (d) of Exchange Rule 6.37-O because no similar provision is 
included in NYSE American Rule 925NY to which the Exchange seeks to 
harmonize its Market Maker obligations. Furthermore, this provision is 
unnecessary as it conflicts with more stringent requirements set forth 
in current Exchange Rule 6.35-O described below. Current Exchange Rule 
6.37-O(d) sets forth in-person requirements for Market Makers and 
requires that an adequate number of Market Makers be available 
throughout each trading session. Exchange Rule 6.37-O(d) requires the 
following minimum in-person trading requirements: At least 60% of a 
Market Maker's transactions must be executed by the Market Maker in-
person or through an approved facility of the Exchange. Orders executed 
for a Market Maker through a Floor Broker will not be credited toward 
the 60% requirement. A failure to comply with this 60% in-person 
trading requirement may result in a fine pursuant to Rule 10.12; 
however, if aggravating circumstances are present, formal disciplinary 
action may be taken pursuant to Rule 10.4. Exchange Rule 6.37-O(d) 
further states that in order to assure compliance with the spirit and 
intent of the 60% requirement, the Exchange may review each of the 
Market Maker's transactions used to meet the 60% requirement.
    The Exchange does not proposes to include the text of current 
paragraph (d) to Exchange Rule 6.37-O as this requirement conflicts 
with Exchange Rule 6.35-O(i), which sets forth a higher standard and 
applies to Market Maker activity both on the floor and conducted 
electronically. Specifically, paragraph (i) of Exchange Rule 6.35-O 
requires that at least 75% of the trading activity of a Market Maker 
(measured in terms of contract volume per quarter) must be in classes 
within the Market Maker's appointment. Paragraph (j) of Exchange Rule 
6.35-O set forth how the Exchange would calculate whether the Market 
Maker satisfied the requirements of paragraph (i) and sets forth the 
penalties for non-compliance.
    Proposed (e), Prohibited Practices and Procedures. The Exchange 
proposes to retain the text of current paragraph (e) of Exchange Rule 
6.37-O. The Exchange notes that the text of current Exchange Rule 
6.37(e) is identical to NYSE American Rule 925NY(e). Any practice or 
procedure whereby Market Makers trading any particular option issue 
determine by agreement the spreads or option prices at which they will 
trade that issue would continue to be prohibited. In addition, any 
practice or procedure whereby Market Makers trading any particular 
option issue determine by agreement the allocation of orders that may 
be executed in that issue would also continue to be prohibited.
    Proposed Paragraph (f). Exchange Rule 6.37-O(f) discusses when 
members of a trading crowd may act collectively in response to a 
request for a market. The Exchange proposes to replace the current text 
of paragraph (f) to Exchange Rule 6.37-O with the text of NYSE American 
Rule 925NY(f). But for minor differences explained below, the revised 
text is substantially similar to the existing text of Exchange Rule 
6.37-O(f). The proposed amendment would harmonize the rule with that of 
NYSE American Rule 925NY(f). Current paragraph (f) of Rule 6.37-O 
states that notwithstanding the prohibitions set forth in Subsection 
(e), the LMM and members of the trading crowd are permitted to act 
collectively as set forth below: (1) The obligation of Market Makers to 
make competitive markets does not preclude the LMM and members of the 
trading crowd from making a collective response to a request for a 
market, provided the OTP Holder or OTP Firm representing the order 
requests such a response in order to fill a large order (for purposes 
of this rule, a large order is an order for a number of contracts that 
is greater than the eligible order size for automatic execution 
pursuant to Rule 6.87) and; (2) in conjunction with their obligations 
as a responsible broker or dealer pursuant to Exchange Rule 6.86-O and 
Rule 602 of Regulation NMS, the Firm Quote Rule,\12\ the LMM and Market 
Makers in the trading crowd may collectively agree to the best bid, 
best offer and aggregate quotation size required to be communicated to 
the Exchange pursuant to Rule 6.86(c).
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    \12\ 17 CFR 242.602. The Exchange notes that Rule 11Ac1-1 under 
the Act has been renumbered as Rule 602 of Regulation NMS.
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    Although the language proposed in Exchange Rule 6.37-O would differ 
from that currently set forth in Rule 6.37-O(f), the application and 
meaning of the rule would be the same. Like as set forth under current 
paragraph (f)(1) of Rule 6.37-O, Market Makers in a trading crowd would 
continue to be able to discuss a request for a market that is greater 
than the disseminated size for that option class, for the purpose of 
making a single bid (offer) based upon the aggregate of individual bids 
(offers) by members in the trading crowd, but only when the member 
representing the order asks for a single bid (offer). Also, like as 
required in current paragraph (f)(1) of Rule 6.37-O, proposed paragraph 
(f) to Rule 6.37-O would continue to require that such bids or offers 
are firm quotes and each member of the trading crowd participating in 
the bid (offer) shall be obligated to fulfill his portion of the single 
bid (offer) at the single price. Such bids and offers would, therefore, 
continue to be required to comply with Exchange Rule 6.86-O, Firm 
Quotes, and Rule 602 of Regulation NMS, even though those rules are not 
specifically mentioned by number. Market Maker quotations must comply 
with their firm quote obligations set forth in Exchange Rule 6.86-O and 
Rule 602 of Regulations NMS regardless of whether those rules are 
specifically mentioned in proposed Exchange Rule 6.37-O(f). 
Furthermore, paragraph (e) of Exchange Rule 6.37B-O (proposed to be 
renumbered as Exchange Rule 6.37A-O) would continue to state that ``[a] 
Market Maker shall be compelled to buy/sell a specified quantity of 
option contracts at the disseminated bid/offer pursuant to his 
obligations under Rule 6.86-O.'' The text of proposed paragraph (f) of 
Rule 6.37-O would also mirror the text of NYSE American Rule 925NY(f).
    Proposed paragraph (f) of Rule 6.37-O would state that the 
obligation of Market Makers to make competitive markets does not 
preclude Market Makers in a trading crowd from discussing a request for 
a market that is greater than the disseminated size for that option 
class, for the purpose of making a single bid (offer) based upon the 
aggregate of individual bids (offers) by members in the trading crowd, 
but only when the member representing the order asks for a single bid 
(offer). Whenever a single bid (offer) pursuant to this paragraph is 
made, such bid (offer) shall be a firm quote and each member of the 
trading crowd participating in the bid (offer) shall be obligated to 
fulfill his portion of the single bid (offer) at the single price.
    Commentary. First, the Exchange proposes to harmonize the leave of 
absence requirements under current Commentary .07 to Exchange Rule 
6.37-

[[Page 47226]]

O with that of Commentary .01 to NYSE American Rule 925NY. 
Specifically, the Exchange proposes to adopt the text of Commentary .01 
to NYSE American Rule 925NY as Commentary .01 to Exchange Rule 6.37-O. 
As amended, like current Commentary .07(a), (b), and (c) to Exchange 
Rule 6.37-O, Commentary .01(a), (b), and (c) would allow Market Makers 
to request leaves of absence when they plan to be away from the floor 
or temporarily withdraw from submitting quotations into the System for 
periods in excess of two weeks during a calendar quarter. Requests for 
leaves of absence must continue to be submitted in writing to the 
Exchange prior to the commencement of the intended leave. Lastly, while 
on leave, Market Makers will continue to not be permitted to make 
opening transactions in Exchange listed options, in their Market Maker 
accounts, through the use of a Floor Brokers, except as provided in 
Exchange Rule 6.32-O, Commentary .01. The Exchange does not proposes to 
retain the paragraph (d) of Commentary .07 to Exchange Rule 6.37-O 
under new Commentary .01 as that provision is outdated and is not part 
of NYSE American Rule 925NY to which the Exchange seeks to harmonize.
    Furthermore, the Exchange does not propose to retain the remaining 
provisions, Commentary .01 through .06 and .08 through .09 of the 
Commentary to Exchange Rule 6.37-O. These provisions are outdated for 
the reasons discussed below, and not included in the current NYSE 
American Rule 925NY to which the Exchange seeks to harmonize its Market 
Maker obligations.
    Current Commentary .01 states that the limitations of Rule 6.37-
O(b)(2) should not be carried over from one day to the next, and 
therefore are not applicable to the Exchange's opening. The Exchange 
notes that current paragraph (b)(2) to Rule 6.37-O simply states 
``Reserved'' and, therefore, includes no limitations that the rule 
would need to specify would not be carried over to the next trading day 
or apply to the Exchange's opening process. Not retaining this 
provision in the amended rule would remove potentially confusing text 
referencing an outdated provision in the Exchange's rules, thereby 
ensuring the Exchange's rules are clear and easily understood. Further, 
this provisions is not included in the current NYSE American Rule 925NY 
to which the Exchange seeks to harmonize its Market Maker obligations.
    Current Commentary .02 states that the bid-ask differentials as 
stated in paragraph (b)(1) of Rule 6.37-O shall apply to all option 
series open for trading in each option class. This provision is not 
necessary as the rule, by its terms, applies to all Market Makers 
appointed in an options class on the Exchange.\13\ This provision is 
also not included in the current NYSE American Rule 925NY.
---------------------------------------------------------------------------

    \13\ See proposed Exchange Rule 6.37-O(b) and (b)(4).
---------------------------------------------------------------------------

    Current Commentary .03 states that when a Market Maker displays a 
market on the screen that is the best market in that crowd, the Market 
Maker is obligated to ensure that its market is removed from the screen 
when the Market Maker leaves the crowd. Current Commentary .03 is 
applicable only to Market Maker activity in a floor-based market. In 
addition, Market Makers who post a quotation, whether in the crowd or 
not, are required to comply with their firm quote obligations under 
Exchange Rule 6.86-O and Rule 602(b) of Regulation NMS. If the Market 
Maker leaves the crowd, it is up to them to remove their quote or to 
honor any executions that occur while their quote remains posted. 
Further, this provision is not included in the current NYSE American 
Rule 925NY.
    Current Commentary .04 states that the obligations of a Market 
Maker with respect to those classes of option contracts to which he 
holds an appointment, pursuant to Rule 6.35-O, shall take precedence 
over his other Market Maker obligations. This provision is not included 
in the current NYSE American Rule 925NY. This provision is also not 
necessary as proposed Rule 6.37-O(b) would include all of a Market 
Makers obligations for options classes for which they are appointed, 
and a Market Maker would be required to satisfy those obligations 
regardless of whether that Market Maker is engaged in other market 
making activities. Furthermore, proposed paragraph (d) to Exchange Rule 
6.37-O states that ``[w]ith respect to classes of option contracts 
outside of their appointment, Market Makers should not engage in 
transactions for an account in which they have an interest that are 
disproportionate in relation to, or in derogation of, the performance 
of their obligations as specified in this Rule with respect to the 
classes in their appointment.''
    Current Commentary .05 states that whenever a Floor Broker enters a 
trading crowd and calls for a market in any class and series at that 
post, each Market Maker present at the post where the option is traded 
is obligated, at a minimum, to make a market for one contract except as 
provided for in Rule 6.37-O(b)(5) and Rule 6.37-O(c)(4), at the 
established price. In addition, the Exchange may determine that Market 
Makers in trading crowds shall increase the depth of their markets as 
set forth in Options Floor Procedure Advice B-12. In the event a Floor 
Broker is unable to satisfy his order from bids and offers given in the 
crowd, the Trading Official may assign one contract to every Market 
Maker present within the primary zone to assist the Floor Broker in 
satisfying his order. If a Market Maker at the post either bids lower 
or offers higher than the established market, such Market Maker shall 
be obligated to trade one contract at the price quoted by the Market 
Maker. This provision is not necessary and is not included in the 
current NYSE American Rule 925NY. As amended, proposed Rule 6.37-
O(b)(2) would require a Market Maker to make markets that will be 
honored for the number of contracts entered into the System in all 
series of options classes within the Market Maker's appointment.
    Current Commentary .06 states that the maintenance of a fair and 
orderly market has been determined to be impaired in instances where a 
Market Maker refuses to honor a market quotation that has just been 
given, in response to a request for a market. This provision is not 
necessary as the proposed rule requires Market Makers to enter two-
sided quotations in the options classes that they are appointed and to 
honor those quotations.\14\ This provision is also not included in the 
current NYSE American Rule 925NY.
---------------------------------------------------------------------------

    \14\ See proposed paragraphs (b) and (f) of Exchange Rule 6.37-
O.
---------------------------------------------------------------------------

    Current Commentary .08 states that a Market Maker may be compelled 
to buy/sell a specified quantity of option contracts at the 
disseminated bid/offer pursuant to his obligations under Rule 6.86-O. 
The Exchange does not proposes to retain this provision as a similar 
provision is not included in the current NYSE American Rule 925NY. In 
addition, the obligation set forth in Commentary .08 are redundant with 
Market Maker's obligation to not only comply with the Exchange's firm 
quote obligations set forth under Exchange Rule 6.86-O, but also their 
obligations to comply with Rule 602 of Regulation NMS. Moreover, a 
Market Maker's firm quote obligations are also discussed in proposed 
paragraph (b)(2) to Exchange Rule 6.37-O which requires Market Makers 
to make markets that will be honored for the number of contracts 
entered into the System.
    Current Commentary .09 states that the Exchange or its authorized 
agent may calculate bids and asks for various indices for the sole 
purpose of

[[Page 47227]]

determining permissible bid/ask differentials on options on these 
indices. These values will be calculated by determining the weighted 
average of the bids and asks for the components of the corresponding 
index. These bids and asks will be disseminated by the Exchange at 
least every fifteen (15) seconds during the trading day solely for the 
purpose of determining the permissible bid/ask differential that Market 
Makers may quote on an in-the-money option on the indices. For in-the-
money series in index options where the calculated bid/ask differential 
is wider than the applicable differential set out in subparagraph 
(b)(1) of Rule 6.37-O, the bid/ask differential in the index option 
series may be as wide as the calculated bid/ask differential in the 
underlying index. The Exchange will not make a market in the basket of 
stock comprising the indices and is not guaranteeing the accuracy or 
the availability of the bid/ask values. This provision is not necessary 
as the Exchange no longer performs the calculations described in the 
Commentary .09. Removing this provision would, therefore, more 
accurately describe the operation of the system in the Exchange's 
rules. A similar provision is also not included in the current NYSE 
American Rule 925NY.
Exchange Rule 6.41-O, Market Maker Marketing Reports
    The Exchange proposes to delete the text of Exchange Rule 6.41-O, 
entitled Market Maker Marketing Reports. Exchange Rule 6.41-O states 
that the Exchange will provide its Market Makers with statistical 
reports designed to measure trading volume and participation in trading 
activity in each option issue traded on the Exchange. The reports are 
to provide monthly trading information that identifies, by order flow 
provider, the issue and number of contracts traded, the Lead Market 
Maker post where the issue is traded, the contra and executing broker 
symbols, and whether the trade was executed through the Exchange's OX 
electronic trading system or manually in the trading crowd. Under its 
rules, the Exchange currently provides other reports, including reports 
related to compared trades.\15\ However, the Exchange no longer 
provides the report described in Exchange Rule 6.41-O to Market Makers, 
no Market Maker has requested such report, no other rule or regulation 
requires the Exchange to provide such report, and that the rules of its 
affiliate, NYSE American, do not include a similar provision. 
Therefore, the Exchange proposes to delete the text of Exchange Rule 
6.41-O to avoid potential confusion regarding the specific reports 
produced by the Exchange. The Exchange also proposes to delete a cross-
reference to Exchange Rule 6.41-O in Exchange Rule 11.16, Books and 
Records.
---------------------------------------------------------------------------

    \15\ See Exchange Rules 6.18-O, 6.19-O, and 6.21-O.
---------------------------------------------------------------------------

Exchange Rule 6.43-O, Options Floor Broker Defined
    The Exchange proposes to amend 6.43-O(b)(1) and (2) to replace the 
definition of ``Professional Customer'' with the single-use term 
``Qualified Customer'' in connection with the limited public business 
that qualified Floor Brokers and their Floor Clerks may conduct. Rule 
6.43-O(b) defines both the permissible conduct of a limited public 
business and defines the term ``Professional Customer'', for purposes 
of Rule 6.43-O(b).\16\ Exchange Rule 6.1A-O(4A) also defines the term 
``Professional Customer'', but does so differently.\17\ To avoid 
unnecessary complexity or confusion concerning the duplicate 
definitions of ``Professional Customer'', the Exchange proposes to 
amend 6.43-O(b) to replace the definition of ``Professional Customer'' 
with the single-use term ``Qualified Customer'' in connection with the 
limited public business, and to limit the use of ``Qualified Customer'' 
to Rule 6.43-O(b). This proposed change would also harmonize NYSE Arca 
Rule 6.43-O(b)(1) and (2) with NYSE American Rules 930NY(b)(1) and 
(2).\18\
---------------------------------------------------------------------------

    \16\ Exchange Rule 6.43(b)(2) defines ``Professional Customer'' 
as ``a bank; trust company; insurance company; investment trust; a 
state or political subdivision thereof; charitable or nonprofit 
educational institution regulated under the laws of the United 
States, or any state, or pension or profit sharing plan subject to 
ERISA or of any agency of the United States as of a state or 
political subdivision thereof; or any person (other than a natural 
person) who has, or who has under management, net tangible assets of 
at least sixteen million dollars.''
    \17\ The definition of ``Professional Customer'' in Rule 6.1A-
O(4A), which is broader than the definition in Rule 6.43-O(b)(2), 
defines a ``Professional Customer'' as an individual or organization 
that is not a Broker/Dealer in securities and places more than 390 
orders in listed options per day on average during a calendar month 
for its own beneficial account(s). Rule 6.1A-O(4A) also defines the 
treatment of a Professional Customer under various Exchange rules 
except Rule 6.43-O(b), and defines how to calculate the number of 
Professional Customers orders in connection with different order 
types.
    \18\ See Securities Exchange Act Release No. 81670 (September 
21, 2017), 82 FR 45095 (September 27, 2017) (SR-NYSEAMER-2017-18) 
(Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Update and Amend its Options Rules, as Described Herein, 
To Reduce Unnecessary Complexity and To Promote Standardization and 
Clarity).
---------------------------------------------------------------------------

Exchange Rule 6.47-O, ``Crossing'' Orders--OX
    The Exchange proposes to amend Rule 6.47-O, its crossing rule, by 
replacing outdated references to the requirement that execution prices 
``be equal to or better than the NBBO'' with updated cross-references 
to the Rule 6.94-O, the current plenary Order Protection Rule. In 
addition, in connection with non-facilitation (regular way) crosses, 
facilitation procedures, crossing of solicited orders, and customer-to-
customer crosses, the Exchange proposes to delete from Rules 6.47-
O(a)(3), (b)(5), (c)(3), and (e)(3) the sentences that provide that 
``[t]he orders will be cancelled or posted in the Book if an execution 
would take place at a price that is inferior to the NBBO''. Exchange 
Rule 6.94-O governs such situations, and the orders will not be 
cancelled or posted but would trade through in accord with the 
exemptions in Exchange Rule 6.94-O. This proposed change would also 
harmonize NYSE Arca Rule 6.47-O with NYSE American Rules 934NY.\19\
---------------------------------------------------------------------------

    \19\ Id.
---------------------------------------------------------------------------

Exchange Rule 6.67-O, Order Format and Entry Requirements
    The Exchange proposes to amend Rule 6.67-O(d)(2)(A) to replace an 
outdated reference to require timestamps be synchronized to the ``NIST 
Clock'' with a reference to Rule 11.6820, the current Consolidated 
Audit Trail (``CAT'') clock synchronization rule. Specifically, in 
connection with Rule 6.67-O(d)(2)(A), which governs contingency 
reporting procedures when an exception to the Electronic Order Capture 
System (``EOC'') applies, the Exchange proposes to delete an outdated 
reference to ``(a timestamp synchronized with the National Institute of 
Standards and Technology Atomic Clock in Boulder Colorado `NIST Clock' 
will be available at all OTP Holder and OTP Firm booths and trading 
posts'' and replace it with a requirement that all order events must 
conform to the requirements of Rule 11.6820. For further clarity, the 
Exchange also proposes to delete ``immediately'' from the text of the 
rule because Rule 11.6820 sets the operative standard. This proposed 
change would also harmonize NYSE Arca Rule 6.67-O(d)(2)(A) with NYSE 
American Rules 955NY(d)(2)(A).\20\
---------------------------------------------------------------------------

    \20\ Id.
---------------------------------------------------------------------------

Exchange Rule 6.69-O, Reporting Duties
    The Exchange proposes to amend Exchange Rule 6.69-O(b)(iii) to 
harmonize it with NYSE American Rule

[[Page 47228]]

957NY(b)(iii). Exchange Rule 6.69-O(b) governs reporting of 
transactions on the options floor and subparagraph (iii) is specific to 
Complex Orders. In particular, subparagraph (b)(iii) of Rule 6.69-O 
currently states that for Complex Order transactions, ``between two 
Floor Brokers or two Market Makers, the party responsible for reporting 
the transaction shall be the OTP Holder that first initiated the 
transaction.'' The Exchange proposes to delete this language and 
replace it with ``where the transaction is made up of both buy and sell 
orders and priced on a net debit/credit basis, the seller shall be 
determined to be the OTP Holder participating on the `debit' side of 
the trade.'' Doing so would harmonize the reporting requirements for 
Complex Orders under Rule 6.69-O(b)(iii) with those for complex orders 
under NYSE American Rule 957NY(b)(iii),\21\ thereby providing 
consistent reporting obligations across the Exchange and its affiliate.
---------------------------------------------------------------------------

    \21\ Id.
---------------------------------------------------------------------------

Exchange Rule 6.75-O, Priority and Order Allocation Procedures--Open 
Outcry
    The Exchange proposes to conform Rule 6.75-O governing the priority 
of Complex Orders \22\ in open outcry to its Rule 6.91-O governing 
Electronic Complex Orders.\23\ Rule 6.91-O(a)(1) governs the priority 
of Electronic Complex Orders \24\ in the Consolidated Book and states 
that ``Electronic Complex Orders in the Consolidated Book shall be 
ranked according to price/time priority based on the total or net debit 
or credit and the time of entry of the order'' (emphasis added).\25\ 
Specifically, the Exchange proposes to conform Rule 6.75-O(g) to Rule 
6.91-O(a)(1) by amending Rule 6.75-O(g) to provide that a Complex Order 
and Stock/Complex Orders may be executed at a ``total or'' net debit or 
credit price. The proposed change would, therefore, not result in any 
change to the manner in which Complex Orders are handled under the 
Exchange's rules. This proposed change would also harmonize Exchange 
Rule 6.75-O(g) with NYSE American Rule 963NY(d).\26\
---------------------------------------------------------------------------

    \22\ See NYSE Arca Rule 6.62-O(e).
    \23\ See NYSE Arca Rule 6.91-O.
    \24\ An ``Electronic Complex Order'' means ``any Complex Order 
as defined in Rule 6.62-O(e) or any Stock/Option Order or Stock/
Complex Order as defined in Rule 6.62-O(h) that is entered into the 
NYSE Arca System (the `System').'' Id.
    \25\ See Exchange Rule 6.91-O(a)(1).
    \26\ Securities Exchange Act Release No. 81670 (September 21, 
2017), 82 FR 45095 (September 27, 2017) (SR-NYSEAMER-2017-18) 
(Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Update and Amend its Options Rules, as Described Herein, 
To Reduce Unnecessary Complexity and To Promote Standardization and 
Clarity).
---------------------------------------------------------------------------

2. Statutory Basis
    The proposed rule changes are consistent with Section 6(b) \27\ of 
the Act, in general, and furthers the objectives of Section 
6(b)(5),\28\ in particular, in that they are 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, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78f(b).
    \28\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Specifically, the Exchange believes that conforming and harmonizing 
its rules to the rules of an affiliated exchange governing the same 
subject matter, updating its rules by harmonizing its Market Maker 
obligation with its affiliate, NYSE American, deleting outdated and 
updating rule cross-references, eliminating extraneous or redundant 
text, and therefore potentially confusing or ambiguous language, would 
remove impediments to and perfect a national market system by 
simplifying and reducing the complexity of its rules and regulatory 
requirements. The Exchange notes that it and its affiliate, NYSE 
American, operate in a similar manner and consistent rules across the 
Exchange and NYSE American would reduce the likelihood of potential 
investor confusion. Furthermore, the proposed rule change would provide 
for standardized rules and a consistent set of obligations for common 
members as well as those members that are engaged in market making 
activities on both the Exchange and NYSE American. The Exchange also 
believes that these proposed amendments would be consistent with the 
public interest and the protection of investors because investors would 
benefit from the proposal to harmonize, simplify, update and clarify 
the rules discussed herein. Further, the Exchange believes that the 
proposed rule change would benefit investors by improving the 
transparency and clarity of the Exchange's rules.
    In particular, the Exchange believes that by updating and 
conforming its rules governing Market Maker obligations to the rules of 
NYSE American, its affiliated exchange, removes impediments to and 
perfects the mechanism of a free and open market and a national market 
system by providing consistent, standardized rules governing Market 
Makers across both the Exchange and its affiliate. It should also aid 
those firms that engage in market making activity on both the Exchange 
and NYSE American with identical obligations, thereby aiding those 
firms in complying with the Exchange's rules by providing a harmonized 
set of regulatory obligations.
    Furthermore, by removing extraneous language from Exchange Rule 
6.17-O, Commentary .01, deleting outdated text under Exchange Rule 
6.41-O regarding a report no longer produced to Market Makers by the 
Exchange, replacing the definition of ``Professional Customer'' with 
the single-use term ``Qualified Customer'' under Exchange Rule 6.43-O 
in connection with the limited public business that qualified Floor 
Brokers and their Floor Clerks may conduct, by harmonizing Exchange 
Rule 6.47-O, its crossing rule, with NYSE American Rule 934NY by 
replacing outdated and potentially ambiguous references to the NBBO 
with cross-references to the current plenary Order Protection Rule, by 
updating and clarifying Exchange Rule 6.67-O governing its order format 
and system entry requirements by replacing an outdated reference with a 
reference to the current operative CAT time synchronization rule, and 
by conforming Exchange Rule 6.75-O governing the priority of complex 
orders in open outcry to its rule governing Electronic Complex Orders, 
would also promote just and equitable principles of trade, would remove 
impediments to and perfects the mechanism of a free and open market and 
a national market system, and, in general, would help to protect 
investors and the public interest by providing transparency as to which 
rules are operable, and by reducing potential confusion that may result 
from having outdated or redundant rules or cross-references in the 
Exchange's rulebook. Lastly, the Exchange notes that the proposed 
changes to Exchange Rules 6.37-O, 6.43-O(b), 6.47-O, 6.67-O(d)(2)(A), 
6.69-O(b)(iii), and 6.75-O(g) are based on the rules of its affiliate, 
NYSE American.\29\ The Exchange further believes that the proposed rule 
changes would remove impediments to and perfect the mechanism of a free 
and open market by ensuring that members, regulators and the public can 
more

[[Page 47229]]

easily navigate and understand the Exchange's rulebook, thereby 
avoiding potential confusion.
---------------------------------------------------------------------------

    \29\ See, e.g., NYSE American Rules 925NY, 930NY, 934NY, 955NY, 
957NY, and 936NY. See also, e.g., Securities Exchange Act Release 
No. 81670 (September 21, 2017), 82 FR 45095 (September 27, 2017) 
(SR-NYSEAMER-2017-18) (Notice of Filing and Immediate Effectiveness 
of Proposed Rule Change To Update and Amend its Options Rules, as 
Described Herein, To Reduce Unnecessary Complexity and To Promote 
Standardization and Clarity).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule changes will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed changes are not 
designed to address any competitive issue or attract additional order 
flow to the Exchange. Rather, these changes would update, remove, and 
clarify outdated cross-references and definitions, and redundant 
language, and also conform the Exchange's rules and definitions to the 
rules of an affiliated exchange, thereby reducing potential confusion 
and making the Exchange's rules easier to understand and navigate. The 
Exchange notes that it and its affiliate, NYSE American, operate in a 
similar manner and consistent rules across the Exchange and NYSE 
American would reduce the likelihood of potential investor confusion. 
Therefore, the proposed rule change is not intended to impose a burden 
on competition but rather provide for standardized rules and a 
consistent set of obligations for common members as well as those 
members that are engaged in market making activities on both the 
Exchange and NYSE American.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \30\ and Rule 19b-4(f)(6) thereunder.\31\ 
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 prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \31\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \32\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-2018-65 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEARCA-2018-65. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSEARCA-2018-65 and should be submitted 
on or before October 9, 2018.
---------------------------------------------------------------------------

    \33\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-20193 Filed 9-17-18; 8:45 am]
BILLING CODE 8011-01-P



                                                                         Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices                                                 47221

                                                 Rule 1003(b)(3) requires each SCI                     respondents will be, on average, 1,716                time cost of $900 to modify existing
                                               entity to submit the report of the SCI                  hours (39 hours per respondent × 44                   recordkeeping systems. In addition, all
                                               review to the Commission and to its                     respondents). The Commission staff                    respondents will incur, on average, an
                                               board of directors or the equivalent of                 estimates that the 2 new respondents                  estimated ongoing internal cost of
                                               such board, together with any response                  would incur an initial internal cost of               compliance of $18,975 ($1,725 × 11
                                               by senior management, within 60                         compliance of $85,056 ($42,528 per                    respondents).
                                               calendar days after its submission to                   respondent × 2 respondents). In                         An agency may not conduct or
                                               senior management. These reports are                    addition, all respondents will incur, on              sponsor, and a person is not required to
                                               required to be submitted on Form SCI.                   average, an estimated ongoing annual                  respond to, a collection of information
                                               The Commission staff estimates that the                 internal cost of compliance of $677,468               under the PRA unless it displays a
                                               total annual ongoing burden for all                     ($15,397 per respondent × 44                          currently valid OMB control number.
                                               respondents will be, on average, 44                     respondents).                                           The public may view background
                                               hours (1 hour per respondent × 44                         Rule 1003(a)(1) requires each SCI                   documentation for this information
                                               respondents). The Commission staff                      entity to establish reasonable written                collection at the following website:
                                               estimates that all respondents will                     criteria for identifying a change to its              www.reginfo.gov. Comments should be
                                               incur, on average, an estimated ongoing                 SCI systems and the security of indirect              directed to: (i) Desk Officer for the
                                               annual internal cost of compliance of                   SCI systems as material. The                          Securities and Exchange Commission,
                                               $18,128 ($412 per respondent × 44                       Commission staff estimates that the total             Office of Information and Regulatory
                                               respondents).                                           annual initial recordkeeping burden for               Affairs, Office of Management and
                                                 In addition, the Commission staff                     2 new respondents will be 228 hours                   Budget, Room 10102, New Executive
                                               estimates that all respondents will                     (114 hours per respondent × 2                         Office Building, Washington, DC 20503,
                                               incur, on average, annual costs of                      respondents), and the annual ongoing                  or by sending an email to:
                                               $2,200,000 ($50,000 × 44 respondents)                   recordkeeping burden for all                          Lindsay.M.Abate@omb.eop.gov; and (ii)
                                               for outside legal advice in preparation of              respondents will be, on average, 1,188                Pamela Dyson, Director/Chief
                                               certain notifications required by Rule                  hours (27 hours per respondent × 44                   Information Officer, Securities and
                                               1003(b).                                                respondents). The Commission staff                    Exchange Commission, c/o Candace
                                                 Rule 1006 requires each SCI entity,                   estimates that the 2 new respondents                  Kenner, 100 F Street NE, Washington,
                                               with a few exceptions, to file any                      would incur an initial internal cost of               DC 20549, or by sending an email to:
                                               notification, review, description,                      compliance of $85,056 ($42,528 per                    PRA_Mailbox@sec.gov. Comments must
                                               analysis, or report to the Commission                   respondent × 2 respondents). In                       be submitted to OMB within 30 days of
                                               required under Regulation SCI                           addition, all respondents will incur, on              this notice.
                                               electronically on Form SCI through the                  average, an estimated ongoing annual
                                               EFFS. An SCI entity will submit to the                  internal cost of compliance of $507,584                 Dated: September 12, 2018.
                                               Commission an EAUF to register each                     ($11,536 per respondent × 44                          Eduardo A. Aleman,
                                               individual at the SCI entity who will                   respondents).                                         Assistant Secretary.
                                               access the EFFS system on behalf of the                   Regulation SCI also requires SCI                    [FR Doc. 2018–20277 Filed 9–17–18; 8:45 am]
                                               SCI entity. The Commission staff                        entities to identify certain types of                 BILLING CODE 8011–01–P
                                               estimates that the total annual initial                 events and systems. The Commission
                                               burden for 2 new respondents will be                    staff estimates that the total annual
                                               0.6 hours (0.3 hours per respondent × 2                 initial recordkeeping burden for 2 new                SECURITIES AND EXCHANGE
                                               respondents), and the annual ongoing                    respondents will be 396 hours (198                    COMMISSION
                                               burden for all respondents will be, on                  hours per respondent × 2 respondents),
                                               average, 6.6 hours (0.15 hours per                      and the annual ongoing recordkeeping                  [Release No. 34–84098; File No. SR–
                                                                                                                                                             NYSEARCA–2018–65]
                                               respondent × 44 respondents). The                       burden for all respondents will be, on
                                               Commission staff estimates that the 2                   average, 1,716 hours (39 hours per                    Self-Regulatory Organizations; NYSE
                                               new respondents would incur an initial                  respondent × 44 respondents). The                     Arca, Inc.; Notice of Filing and
                                               internal cost of compliance of $248                     Commission staff estimates that the 2                 Immediate Effectiveness of Proposed
                                               ($124 per respondent × 2 respondents),                  new respondents would incur an initial                Rule Change To Amend Its Options
                                               as well as outside costs to obtain a                    internal cost of compliance of $139,412               Rules To Make Certain Non-
                                               digital ID of $100 ($50 per respondent                  ($69,706 per respondent × 2                           Substantive Changes and To
                                               × 2 respondents). In addition, all                      respondents). In addition, all                        Harmonize Certain Rules With Those
                                               respondents will incur, on average, an                  respondents will incur, on average, an                of Its Affiliate, NYSE American LLC
                                               estimated ongoing annual internal cost                  estimated ongoing annual internal cost
                                               of compliance of $2,728 ($62 per                        of compliance of $677,468 ($15,397 per                September 12, 2018.
                                               respondent × 44 respondents), as well as                respondent × 44 respondents).                            Pursuant to Section 19(b)(1) 1 of the
                                               outside costs to obtain a digital ID of                   Rules 1005 and 1007 establish                       Securities Exchange Act of 1934 (the
                                               $2,200 ($50 per respondent × 44                         recordkeeping requirements for SCI                    ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
                                               respondents).                                           entities other than SROs. The                         notice is hereby given that, on August
                                                 Rule 1002(a) requires each SCI entity,                Commission staff estimates that for a                 31, 2018, NYSE Arca, Inc. (the
                                               upon any responsible SCI personnel                      new respondent that is not an SRO the                 ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
                                               having a reasonable basis to conclude                   average annual initial burden would be                the Securities and Exchange
                                               that an SCI event has occurred, to begin                170 hours (170 hours × 1 respondent),                 Commission (the ‘‘Commission’’) the
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                                               to take appropriate corrective action.                  and the annual ongoing burden for all                 proposed rule change as described in
                                               The Commission staff estimates that the                 respondents will be, on average, 275                  Items I and II below, which Items have
                                               total annual initial recordkeeping                      hours (25 hours × 11 respondents). The                been prepared by the self-regulatory
                                               burden for 2 new respondents will be                    Commission staff estimates that a new
                                               228 hours (114 hours per respondent ×                   respondent would incur an estimated                     1 15 U.S.C.78s(b)(1).
                                               2 respondents), and the annual ongoing                  internal initial internal cost of                       2 15 U.S.C. 78a.
                                               recordkeeping burden for all                            compliance of $11,370, as well as a one-                3 17 CFR 240.19b–4.




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                                               47222                     Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices

                                               organization. The Commission is                            • delete the text of Exchange Rule                 NYSE American Rule 925NY,
                                               publishing this notice to solicit                       6.41–O, Market Maker Marketing                        Obligations of Market Makers, and make
                                               comments on the proposed rule change                    Reports;                                              related changes to Exchange Rules
                                               from interested persons.                                   • harmonize Exchange Rule 6.43–O,                  6.37A–O, 6.37B–O, and 6.37C–O.
                                                                                                       Options Floor Broker Defined, with                    Exchange Rule 6.37–O sets forth the
                                               I. Self-Regulatory Organization’s                       NYSE American Rule 930NY by                           continuous quoting obligations of
                                               Statement of the Terms of Substance of                  replacing the term ‘‘Professional                     Market Makers for options contracts to
                                               the Proposed Rule Change                                Customer’’ with ‘‘Qualified Customer’’; 5             which they are appointed pursuant to
                                                  The Exchange proposes to amend its                      • amend Exchange Rule 6.47–O,                      Exchange Rule 6.35–O. The Exchange
                                               options rules to make certain non-                      Crossing Orders, to update the                        proposes to delete the text of Rule 6.37–
                                               substantive changes and to harmonize                    references to the current Order                       O, except for paragraph (a), and replace
                                               certain rules with those of its affiliate,              Protection Rule and harmonize it with                 it with the relevant text from NYSE
                                               NYSE American LLC (‘‘NYSE                               NYSE American Rule 934NY; 6                           American Rule 925NY.10 The proposed
                                               American’’), to reduce unnecessary                         • harmonize Exchange Rule 6.67–                    rule change would not result in an
                                               complexity and promote                                  O(d)(2)(A) with NYSE American Rule                    easing of the quoting obligations in
                                               standardization. The proposed rule                      955NY(d)(2)(A) by replacing an                        place on the Exchange. Instead, the
                                               change is available on the Exchange’s                   outdated reference to a required                      proposed rule change would harmonize
                                               website at www.nyse.com, at the                         timestamp synchronized to the ‘‘NIST                  the Market Maker obligations across the
                                               principal office of the Exchange, and at                Clock’’ with a reference to the current               Exchange and its affiliate, NYSE
                                               the Commission’s Public Reference                       operative Consolidated Audit Trail                    American, while requiring the same
                                               Room.                                                   (‘‘CAT’’) clock synchronization rule; 7               level of obligations. Harmonized rules
                                                                                                          • harmonize Exchange Rule 6.69–                    would provide investors, as well as
                                               II. Self-Regulatory Organization’s                      O(b)(iii) with NYSE American Rule
                                               Statement of the Purpose of, and                                                                              those that engage in market making
                                                                                                       957NY(b)(iii) by conforming the                       activities on both the Exchange and
                                               Statutory Basis for, the Proposed Rule                  Exchange’s rule governing the priority
                                               Change                                                                                                        NYSE American, with standardized
                                                                                                       of complex orders in open outcry to its               obligations and consistent rules across
                                                  In its filing with the Commission, the               rule governing electronic complex                     both markets. A description of the
                                               self-regulatory organization included                   orders; 8 and                                         proposed amendments are described
                                               statements concerning the purpose of,                      • harmonize Exchange Rule 6.75–O,                  below.
                                               and basis for, the proposed rule change                 Priority and Order Allocation                            The Exchange notes that current
                                               and discussed any comments it received                  Procedures—Open Outcry, with NYSE                     Exchange Rule 6.37–O sets forth Market
                                               on the proposed rule change. The text                   American Rules 963NY(d).9                             Maker obligations when quoting on the
                                               of those statements may be examined at                     Each of these proposed changes are                 Trading Floor and Exchange Rule
                                               the places specified in Item IV below.                  explained in detail below.                            6.37A–O sets forth Market Maker
                                               The Exchange has prepared summaries,                    Exchange Rule 6.17–O. Verification of                 obligations when quoting on the NYSE
                                               set forth in sections A, B, and C below,                Compared Trades and Reconciliation of                 Arca OX electronic trading system. Like
                                               of the most significant parts of such                   Uncompared Trades                                     NYSE American 925NY, the obligations
                                               statements.                                                                                                   under amended Exchange Rule 6.37–O
                                                                                                         The Exchange proposes to make
                                               A. Self-Regulatory Organization’s                                                                             would apply equally to Maker Makers
                                                                                                       ministerial, non-substantive changes to
                                               Statement of the Purpose of, and the                                                                          on the Trading Floor and those quoting
                                                                                                       Exchange Rule 6.17–O, Commentary .01
                                               Statutory Basis for, the Proposed Rule                                                                        on the Exchange’s electronic trading
                                                                                                       to remove superfluous language. In
                                               Change                                                                                                        system. The Exchange also notes that
                                                                                                       particular, the Exchange proposes to
                                                                                                                                                             the current text of Exchange Rule
                                               1. Purpose                                              amend the third paragraph of
                                                                                                                                                             6.37A–O is substantially similar to the
                                                                                                       Commentary .01 of Exchange Rule 6.17–
                                                  The Exchange proposes to amend its                                                                         text of NYSE American Rule 925NY,
                                                                                                       O to remove the duplicative phrase ‘‘or
                                               options rules to make certain non-                                                                            which the Exchange propose to adopt
                                                                                                       accessible via telephone or email’’. The
                                               substantive changes and to harmonize                                                                          herein. Nonetheless, the proposed text
                                                                                                       proposed deletion of this phrase does
                                               certain rules with those of its affiliate,                                                                    would be more detailed than current
                                                                                                       not alter the meaning or application of
                                               NYSE American. The proposed                                                                                   Rule 6.37A–O by including detailed bid-
                                                                                                       Rule 6.17–O.
                                               amendments are designed to reduce                                                                             ask differentials under paragraph (b)(4)
                                               unnecessary complexity within the                       Exchange Rule 6.37–O, Obligations of                  as well as provisions governing leaves of
                                               Exchange’s rules and to promote                         Market Makers, and Exchange Rules                     absence under proposed Commentary
                                               standardization and clarity amongst                     6.37A–O, 6.37B–O, and 6.37C–O                         .01. Therefore, the Exchange proposes to
                                               similar rules of the Exchange and its                     The Exchange proposes to harmonize                  delete the text of Exchange Rule 6.37A–
                                               affiliate, NYSE American. Specifically,                 the Market Maker quoting obligations                  O and renumber Exchange Rules 6.37B–
                                               the Exchange proposes to:                               set forth under Exchange Rule 6.37–O,                 O as 6.37A–O and 6.37C–O as 6.37B–O.
                                                  • Make a ministerial, non-substantive                Obligations of Market Makers, with                    The Exchange also proposes to update
                                               change to Exchange Rule 6.17–O,                                                                               various cross-references to these rules in
                                               Commentary .01.                                           5 See Securities Exchange Act Release No. 81670     Exchange Rules 6.33–O(a), 6.64–O(b)(D)
                                                  • harmonize Exchange Rule 6.37–O,                    (September 21, 2017), 82 FR 45095 (September 27,      and (E), 6.82–O(c)(4), 10.12(h) and (k),
                                               Obligations of Market Makers, with                      2017) (SR–NYSEAMER–2017–18) (Notice of Filing         and 10.16(e)(2) to reflect the updated
                                               NYSE American Rule 925NY,                               and Immediate Effectiveness of Proposed Rule
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                                                                                                                                                             rule numbers.
                                                                                                       Change To Update and Amend its Options Rules,
                                               Obligations of Market Makers, and make                  as Described Herein, To Reduce Unnecessary               Proposed Paragraph (b), Obligations
                                               related changes to Exchange Rules                       Complexity and To Promote Standardization and         in Appointed Classes. Paragraph (b) of
                                               6.37A–O, 6.37B–O, and 6.37B–O; 4                        Clarity).                                             Exchange Rule 6.37–O would continue
                                                                                                         6 Id.

                                                 4 The Exchange also proposes to update various          7 Id.                                                 10 The Exchange notes that paragraph (a) of
                                                                                                         8 Id.
                                               cross-references to these rules throughout the                                                                Exchange Rule 6.37–O is identical to paragraph (a)
                                               rulebook to reflect the updated rule numbers.             9 Id.                                               of NYSE American Rule 925NY.



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                                                                         Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices                                          47223

                                               to impose the continuous quoting                        Trading Official to act would allow for               925NY(b)(6) under proposed paragraph
                                               obligations that a Market Maker is                      a more efficient process, especially in               (b)(6) of Exchange Rule 6.37–O and
                                               expected to engage, to a reasonable                     cases where a decision must be made                   require that, in response to a call for a
                                               degree under the existing                               quickly in light of fast moving market                market from a Floor Broker, a Market
                                               circumstances, in dealings for his own                  events. The Exchange also notes that                  Maker may bid no more than $1 lower
                                               account when there exists, or it is                     NYSE American Rule 925NY(b)(1)(E),                    and/or offer no more than $1 higher
                                               reasonably anticipated that there will                  the rule it seeks to harmonize Exchange               than the last preceding transaction price
                                               exist, a lack of price continuity, a                    Rule 6.37–O, allows for a single Trading              for the particular option contract.
                                               temporary disparity between the supply                  Official to establish differences for one             However, this standard would not
                                               of and demand for a particular option                   or more series or classes of options.                 ordinarily apply if the price per share
                                               contract, or a temporary distortion of the              Each of these provisions would mirror                 (or other unit of trading) of the
                                               price relationships between option                      NYSE American Rule 925NY(b)(1)(A)                     underlying security or Exchange-Traded
                                               contracts of the same class. Market                     through (E).                                          Fund Share has changed since the last
                                               Makers would continue to be expected                       Current paragraph (b)(1)(F) of Rule                preceding transaction for the particular
                                               to perform the following activities in the              6.37–O states that a Trading Official                 option contract, in which event a
                                               course of maintaining a fair and orderly                may, with respect to options trading                  Market Maker may then bid no lower
                                               market.                                                 with a bid price less than $2, establish              than or offer no more than $1 plus the
                                                  Proposed paragraphs (1) through (3) of               bid-ask differentials that are no more                aggregate change in the price per share
                                               Exchange Rule 6.37–O(b) would require                   than $0.50 wide (‘‘double-width’’) when               (or other unit of trading) of the
                                               Market Makers to: (1) Compete with                      the primary market for the underlying                 underlying security or Exchange-Traded
                                               other Market Makers to improve the                      security: (a) Reports a trade outside of              Fund Share since the time of the last
                                               market in all series of options classes to              its disseminated quote (including any                 preceding transaction for the particular
                                               which the Market Maker is appointed;                    Liquidity Quote); or (b) disseminates an              option contract. This provision would
                                               (2) make markets that will be honored                   inverted quote. The imposition of                     apply from one day’s close to the next
                                               for the number of contracts entered into                double-width relief must automatically                day’s opening and from one transaction
                                               the System in all series of options                     terminate when the condition that                     to the next in intra-day transactions.
                                               classes within the Market Maker’s                       necessitated the double-width relief                  With respect to inter-day transactions,
                                               appointment; and (3) update market                      (i.e., condition (a) or (b)) is no longer             this provision applies if the closing
                                               quotations in response to changed                       present. Market Makers that have not                  transaction occurred within one hour of
                                               market conditions in all series of                      automated this process may not avail                  the close and the opening transaction
                                               options classes within the Market                       themselves of the relief provided herein              occurred within one hour after the
                                               Maker’s appointment. Each of these                      (i.e. they may not manually adjust                    opening. With respect to intra-day
                                               provisions mirror NYSE American Rule                    prices). The Exchange notes that NYSE                 transactions, this provision applies to
                                               925NY(b)(1) through (3).                                American Rule 925NY does not contain                  transactions occurring within one hour
                                                  Current paragraphs (b)(1)(A) through                 a similar provision and, therefore, the               of one another. A Trading Official may
                                               (E) of Rule 6.37–O require that Market                  Exchange does not propose to carry over               waive the provisions of this paragraph
                                               Maker bids and/or offers create                         current paragraph (b)(1)(F) of Rule 6.37–             in an index option when the primary
                                               differences of no more than: (A) .25                    O to the harmonized rule. Furthermore,                underlying securities market for that
                                               between the bid and the offer for each                  the Exchange notes that this provision is             index is not trading. Nothing in
                                               option contract for which the bid is less               not necessary because a Trading Official
                                                                                                                                                             paragraph (b)(6) of Exchange Rule 6.37–
                                               than $2, (B) .40 where the bid is $2 or                 would have the ability to widen
                                                                                                                                                             O would alter the maximum bid/ask
                                               more but does not exceed $5, (C) .50                    differences for one or more series or
                                               where the bid is more than $5 but does                                                                        differentials established by paragraph
                                                                                                       classes of options in such scenario
                                               not exceed $10, (D) .80 where the bid is                                                                      (b)(4)–(5) of Rule 6.37–O discussed
                                                                                                       pursuant to paragraph (b)(4)(E) of
                                               more than $10 but does not exceed $20,                                                                        above.
                                                                                                       Exchange Rule 6.37–O discussed above.
                                               and (E) $1 when the last bid is $20.01                     Current paragraph (b)(1)(G) of Rule                   Proposed Paragraph (c), Unusual
                                               or more, provided that two Trading                      6.37–O states that quotes given in open               Conditions—Opening Auction. The
                                               Officials may establish differences other               outcry may not be quoted with $5                      Exchange proposes to adopt the text of
                                               than the above for one or more series or                widths and instead must comply with                   NYSE American Rule 925NY(c) under
                                               classes of options. These provisions                    the legal width requirements specified                proposed paragraph (c) of Exchange
                                               would be set forth under new paragraph                  in paragraph (b)(1)(A)–(F) of Rule 6.37–              Rule 6.37–O which would govern quote
                                               (b)(4)(A) through (E) of Exchange Rule                  O. This requirement would be moved to                 width differentials where a Trading
                                               6.37–O with one proposed change from                    paragraph (b)(5) of Rule 6.37–O and be                Official declares an Unusual Market
                                               the current Exchange rule. Current                      rephrased to be harmonized with NYSE                  Condition during the opening auction.
                                               paragraph (b)(1)(E) of Rule 6.37–O                      American Rule 925NY(b)(5) and would                   Current paragraph (b)(4) of Exchange
                                               requires that Market Maker bids and/or                  require that electronically submitted                 Rule 6.37–O discusses where a Trading
                                               offers create differences of no more than               quotes to the System during Core                      Official may declare a fast market and
                                               $1 when the last bid is $20.01 or more,                 Trading Hours may not have a                          declare wider quote width differentials
                                               provided that two Trading Officials may                 difference exceeding $5 between the bid               and these provisions would be
                                               establish differences other than the                    and offer regardless of the price of the              substantially similar to proposed
                                               above for one or more series or classes                 bid. Paragraph (b)(5) of Rule 6.37–O                  paragraph (c) of Exchange Rule 6.37–O.
                                               of options. Proposed paragraph (b)(4)(E)                would also provide that two Trading                   As proposed, if the Trading Official
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                                               of Exchange Rule 6.37–O would allow                     Officials may establish quote width                   finds that it in the interest of
                                               for one Trading Official, rather than                   differences other than as provided in                 maintaining a fair and orderly market so
                                               two, to establish differences for one or                paragraph (b)(5) of Rule 6.37–O for one               requires, he or she may declare that
                                               more series or classes of options. The                  or more option series. This is consistent             unusual market conditions exist in a
                                               Exchange believes that requiring two                    with NYSE American Rule 925NY(b)(5).                  particular issue and allow Market
                                               Trading Officials to act in this scenario                  The Exchange proposes to adopt the                 Makers in that issue to make auction
                                               is unnecessary and allowing a single                    text of NYSE American Rule                            bids and offers with spread differentials


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                                               47224                     Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices

                                               of up to two times, or in exceptional                   or unintentionally, dominating the                    contracts. The 10 contract requirement
                                               circumstances, up to three times, the                   market in option contracts of a                       is antiquated and not necessary in a
                                               legal limits permitted under proposed                   particular class and effecting purchases              market environment where options are
                                               Exchange Rule 6.37–O. In making such                    or sales on the floor of the Exchange                 traded electronically on multiple
                                               determinations to allow wider markets,                  except in a reasonable and orderly                    exchanges. Furthermore, the 10 contract
                                               the Trading Official should consider the                manner. These provisions would be                     requirement is not included in the rules
                                               following factors: (A) whether there is                 renumbered as paragraphs (d)(1) and (2)               of NYSE American Rule 925NY or other
                                               pending news, a news announcement or                    under Exchange Rule 6.37–O and would                  options exchanges.11 Current Exchange
                                               other special events; (B) whether the                   mirror NYSE American Rule 925NY(d).                   Rule 6.37B–O(b) and (c) (proposed to be
                                               underlying security or Exchange-Traded                  The only difference from the current                  renumbered as Exchange Rule 6.37A–O)
                                               Fund Share is trading outside of the bid                text is that paragraph (d)(2) of Exchange             would require that Market Maker
                                               or offer in such security then being                    Rule 6.37–O would not specifically                    quotations meet the legal quote width
                                               disseminated; (C) whether OTP Holders                   reference the floor of the Exchange as                requirements of proposed Exchange
                                               and OTP Firms receive no response to                    the rule would apply equally to all                   Rule 6.37–O.
                                               orders placed to buy or sell the                        Market Makers, regardless of whether                     Paragraph (c)(4) of Exchange Rule
                                               underlying security; and (D) whether a                  they are located on the floor of the                  6.37–O states that its obligation to
                                               vendor quote feed is clearly stale or                   Exchange or engage in market making                   provide a legal-width market only
                                               unreliable.                                             electronically from a location off the                applies to: (A) Market Makers who have
                                                  Paragraph (c)(1) of Exchange Rule                    Exchange floor.                                       executed a transaction in the issue, but
                                               6.37–O would further require that a                        Current paragraphs (c)(1) and (c)(4) of            not those who have been assigned
                                               Trading Official who declared the                       Exchange Rule 6.37–O would not be                     contracts by the Trading Official
                                               unusual market conditions to file a                     carried over as part of the new rule. The             pursuant to Commentary .05, on the day
                                               report with Exchange Operations setting                 Exchange notes that these provision are               of the Floor Broker’s call for a market or
                                               forth the relief granted, the time and                  outdated and are not included in the                  on the previous business day; (B) option
                                               duration of such relief and the reasons                 current NYSE American Rule 925NY to                   issues that are ranked in the 120 most
                                               behind declaring an unusual market                      which the Exchange seeks to harmonize                 actively traded equity options based on
                                               condition. This provision would mirror                  its Market Maker obligations. Paragraph               the total number of contracts traded
                                               NYSE American Rule 925NY(c)(1).                         (c)(1) of Exchange Rule 6.37–O currently              nationally as reported by the Options
                                                  Proposed Paragraph (d), In Classes of                prohibits Market Makers from                          Clearing Corporation (for each current
                                               Option Contracts Other Than Those to                    congregating in a particular class of                 month, the Exchange’s determination of
                                               Which Appointed. Current Exchange                       option contract. The purpose of this rule             whether an equity option ranks in the
                                               Rule 6.37–O(c) governs a Market                         was to prevent Market Makers from                     top 120 most active issues is based on
                                               Maker’s activities in options classes in                dominating the market for an option                   volume statistics for the one month of
                                               which it has not been assigned pursuant                 when options were listed and traded                   trading activity that occurred two
                                               to Exchange Rule 6.35–O. The Exchange                   verbally on a single exchange. Today,                 months prior to the current month); (C)
                                               proposes to renumber paragraph (c) of                   options are traded on numerous                        non-broker-dealer orders; and (D) series
                                               Exchange Rule 6.37–O as paragraph (d)                   exchanges electronically significantly                not designated as LEAPS (pursuant to
                                               and replace its text with that of NYSE                  reducing the ability of a group of Market             Exchange Rule 6.4). With respect to (A)
                                               American Rule 925NY(d). Proposed                        Makers on a single exchange from                      and (B) above, the provision to provide
                                               paragraph (d) of Exchange Rule 6.37–O                   engaging in manipulative activity.                    a legal-width market under proposed
                                               would be substantially similar to                       Further, other Exchange rules address                 Exchange Rule 6.37–O(b) would apply
                                               current paragraph (c). As proposed,                     the manipulation concern that current                 to all options to which a Market Maker
                                               Market Makers would continue to be                      paragraph (c)(1) of Rule 6.37–O was                   is appointed and would not be limited.
                                               prohibited from engaging in transactions                intended to address. For example,                     With respect to (C) above regarding
                                               for an account in which they have an                    Exchange Rule 11.5 prohibits market                   providing a quote to non-broker-dealer
                                               interest that are disproportionate in                   manipulation on the Exchange                          orders, paragraph (e) of Exchange Rule
                                               relation to, or in derogation of, the                   generally. Exchange Rule 11.20(a)(1)                  6.37B–O (proposed to be renumbered as
                                               performance of their obligations as                     also prohibits members, including                     Exchange Rule 6.37A–O) would
                                               specified in Rule 6.37–O with respect to                Market Makers, from knowingly                         continue to state that ‘‘[a] Market Maker
                                               the classes in their appointment.                       managing or financing a manipulative                  shall be compelled to buy/sell a
                                               Whenever Market Makers enter the                        operation, which would include                        specified quantity of option contracts at
                                               trading crowd for a class of options in                 congregating in a particular class of                 the disseminated bid/offer pursuant to
                                               which they do not hold an appointment,                  securities to manipulate or dominate the              his obligations under Rule 6.86–O.’’
                                               they must fulfill the obligations                       market.                                               This rule would preclude a Market
                                               established by Exchange Rule 6.37–O. In                    Paragraph (c)(4) of Exchange Rule
                                                                                                                                                             Maker from not honoring its quotation
                                               addition, when present anywhere on the                  6.37–O states that whenever a Floor
                                                                                                                                                             against non-broker-dealer orders.
                                               Trading Floor, with regard to all                       Broker enters a trading crowd and calls
                                               securities traded on the Trading Floor,                 for a market in a particular option                   Therefore, current paragraph (c)(4)(C) is
                                               Market Makers are expected to                           series, each Market Maker present at the              not necessary to be included in
                                               undertake the obligations specified in                  trading post will be obligated to vocalize            proposed Rule 6.37–O(c). Lastly, current
                                               paragraph (b) of Exchange Rule 6.37–O                   a two-sided, legal-width market                       paragraph (D) states that the paragraph
                                               discussed above in response to a                        (pursuant to former Exchange Rule                     (c)(4) would not apply to series
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                                               demand therefore from the Trading                       6.37–O(b)(1)) for a minimum of 10                     designated as LEAPS. The Exchange
                                               Official that the performance of such                   contracts. Market Makers would                        notes that current paragraph (b) and (c)
                                               obligations by other Market Makers                      continue to be required to make legal-                of Exchange Rule 6.37B–O (proposed to
                                               requires supplementation.                               wide markets in compliance with                          11 See e.g., Cboe Exchange, Inc. Rule 8.7 and
                                                  Current paragraphs (c)(2) and (3) also               proposed Exchange Rule 6.37–O(b).                     Nasdaq Options Rules, Chapter VII, Sections 5 and
                                               prohibit Market Makers from                             However, Market Makers would no                       6 (no including a requirement that a market maker’s
                                               individually or as a group, intentionally               longer be required to quote for a least 10            quotation be for at least 10 contracts).



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                                                                         Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices                                             47225

                                               be renumbered as Exchange Rule                          paragraph (i) and sets forth the penalties            from that currently set forth in Rule
                                               6.37A–O) set forth Market Maker                         for non-compliance.                                   6.37–O(f), the application and meaning
                                               quoting obligation and Commentary .01                      Proposed (e), Prohibited Practices and             of the rule would be the same. Like as
                                               of that rule states that those quoting                  Procedures. The Exchange proposes to                  set forth under current paragraph (f)(1)
                                               obligation ‘‘shall not apply to Market                  retain the text of current paragraph (e)              of Rule 6.37–O, Market Makers in a
                                               Makers with respect to adjusted option                  of Exchange Rule 6.37–O. The Exchange                 trading crowd would continue to be able
                                               series, and series with a time to                       notes that the text of current Exchange               to discuss a request for a market that is
                                               expiration of nine months or greater’’,                 Rule 6.37(e) is identical to NYSE                     greater than the disseminated size for
                                               i.e., LEAPS. Therefore, as amended, the                 American Rule 925NY(e). Any practice                  that option class, for the purpose of
                                               quoting obligations set forth in proposed               or procedure whereby Market Makers                    making a single bid (offer) based upon
                                               Rule 6.37–O would continue to not                       trading any particular option issue                   the aggregate of individual bids (offers)
                                               apply to LEAPS.                                         determine by agreement the spreads or                 by members in the trading crowd, but
                                                  Deletion of Current Paragraph (d), In                option prices at which they will trade                only when the member representing the
                                               Person Requirements for Market Makers.                  that issue would continue to be                       order asks for a single bid (offer). Also,
                                               The Exchange proposes to remove the                     prohibited. In addition, any practice or              like as required in current paragraph
                                               text of current paragraph (d) of                        procedure whereby Market Makers                       (f)(1) of Rule 6.37–O, proposed
                                               Exchange Rule 6.37–O because no                         trading any particular option issue                   paragraph (f) to Rule 6.37–O would
                                               similar provision is included in NYSE                   determine by agreement the allocation                 continue to require that such bids or
                                               American Rule 925NY to which the                        of orders that may be executed in that                offers are firm quotes and each member
                                               Exchange seeks to harmonize its Market                  issue would also continue to be                       of the trading crowd participating in the
                                               Maker obligations. Furthermore, this                    prohibited.                                           bid (offer) shall be obligated to fulfill his
                                               provision is unnecessary as it conflicts                   Proposed Paragraph (f). Exchange                   portion of the single bid (offer) at the
                                               with more stringent requirements set                    Rule 6.37–O(f) discusses when members                 single price. Such bids and offers
                                               forth in current Exchange Rule 6.35–O                   of a trading crowd may act collectively               would, therefore, continue to be
                                               described below. Current Exchange Rule                  in response to a request for a market.                required to comply with Exchange Rule
                                               6.37–O(d) sets forth in-person                          The Exchange proposes to replace the                  6.86–O, Firm Quotes, and Rule 602 of
                                               requirements for Market Makers and                      current text of paragraph (f) to Exchange             Regulation NMS, even though those
                                               requires that an adequate number of                     Rule 6.37–O with the text of NYSE                     rules are not specifically mentioned by
                                               Market Makers be available throughout                   American Rule 925NY(f). But for minor                 number. Market Maker quotations must
                                               each trading session. Exchange Rule                     differences explained below, the revised              comply with their firm quote obligations
                                               6.37–O(d) requires the following                        text is substantially similar to the                  set forth in Exchange Rule 6.86–O and
                                               minimum in-person trading                               existing text of Exchange Rule 6.37–O(f).             Rule 602 of Regulations NMS regardless
                                               requirements: At least 60% of a Market                  The proposed amendment would                          of whether those rules are specifically
                                               Maker’s transactions must be executed                   harmonize the rule with that of NYSE                  mentioned in proposed Exchange Rule
                                               by the Market Maker in-person or                        American Rule 925NY(f). Current                       6.37–O(f). Furthermore, paragraph (e) of
                                               through an approved facility of the                     paragraph (f) of Rule 6.37–O states that              Exchange Rule 6.37B–O (proposed to be
                                               Exchange. Orders executed for a Market                  notwithstanding the prohibitions set                  renumbered as Exchange Rule 6.37A–O)
                                               Maker through a Floor Broker will not                   forth in Subsection (e), the LMM and                  would continue to state that ‘‘[a] Market
                                               be credited toward the 60%                              members of the trading crowd are                      Maker shall be compelled to buy/sell a
                                               requirement. A failure to comply with                   permitted to act collectively as set forth            specified quantity of option contracts at
                                               this 60% in-person trading requirement                  below: (1) The obligation of Market                   the disseminated bid/offer pursuant to
                                               may result in a fine pursuant to Rule                   Makers to make competitive markets                    his obligations under Rule 6.86–O.’’ The
                                               10.12; however, if aggravating                          does not preclude the LMM and                         text of proposed paragraph (f) of Rule
                                               circumstances are present, formal                       members of the trading crowd from                     6.37–O would also mirror the text of
                                               disciplinary action may be taken                        making a collective response to a                     NYSE American Rule 925NY(f).
                                               pursuant to Rule 10.4. Exchange Rule                    request for a market, provided the OTP                   Proposed paragraph (f) of Rule 6.37–
                                               6.37–O(d) further states that in order to               Holder or OTP Firm representing the                   O would state that the obligation of
                                               assure compliance with the spirit and                   order requests such a response in order               Market Makers to make competitive
                                               intent of the 60% requirement, the                      to fill a large order (for purposes of this           markets does not preclude Market
                                               Exchange may review each of the                         rule, a large order is an order for a                 Makers in a trading crowd from
                                               Market Maker’s transactions used to                     number of contracts that is greater than              discussing a request for a market that is
                                               meet the 60% requirement.                               the eligible order size for automatic                 greater than the disseminated size for
                                                  The Exchange does not proposes to                    execution pursuant to Rule 6.87) and;                 that option class, for the purpose of
                                               include the text of current paragraph (d)               (2) in conjunction with their obligations             making a single bid (offer) based upon
                                               to Exchange Rule 6.37–O as this                         as a responsible broker or dealer                     the aggregate of individual bids (offers)
                                               requirement conflicts with Exchange                     pursuant to Exchange Rule 6.86–O and                  by members in the trading crowd, but
                                               Rule 6.35–O(i), which sets forth a higher               Rule 602 of Regulation NMS, the Firm                  only when the member representing the
                                               standard and applies to Market Maker                    Quote Rule,12 the LMM and Market                      order asks for a single bid (offer).
                                               activity both on the floor and conducted                                                                      Whenever a single bid (offer) pursuant
                                                                                                       Makers in the trading crowd may
                                               electronically. Specifically, paragraph                                                                       to this paragraph is made, such bid
                                                                                                       collectively agree to the best bid, best
                                               (i) of Exchange Rule 6.35–O requires                                                                          (offer) shall be a firm quote and each
                                                                                                       offer and aggregate quotation size
                                               that at least 75% of the trading activity                                                                     member of the trading crowd
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                                                                                                       required to be communicated to the
                                               of a Market Maker (measured in terms                                                                          participating in the bid (offer) shall be
                                                                                                       Exchange pursuant to Rule 6.86(c).
                                               of contract volume per quarter) must be                    Although the language proposed in                  obligated to fulfill his portion of the
                                               in classes within the Market Maker’s                    Exchange Rule 6.37–O would differ                     single bid (offer) at the single price.
                                               appointment. Paragraph (j) of Exchange                                                                           Commentary. First, the Exchange
                                               Rule 6.35–O set forth how the Exchange                    12 17 CFR 242.602. The Exchange notes that Rule     proposes to harmonize the leave of
                                               would calculate whether the Market                      11Ac1–1 under the Act has been renumbered as          absence requirements under current
                                               Maker satisfied the requirements of                     Rule 602 of Regulation NMS.                           Commentary .07 to Exchange Rule 6.37–


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                                               47226                     Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices

                                               O with that of Commentary .01 to NYSE                   trading in each option class. This                    the established price. In addition, the
                                               American Rule 925NY. Specifically, the                  provision is not necessary as the rule, by            Exchange may determine that Market
                                               Exchange proposes to adopt the text of                  its terms, applies to all Market Makers               Makers in trading crowds shall increase
                                               Commentary .01 to NYSE American                         appointed in an options class on the                  the depth of their markets as set forth in
                                               Rule 925NY as Commentary .01 to                         Exchange.13 This provision is also not                Options Floor Procedure Advice B–12.
                                               Exchange Rule 6.37–O. As amended,                       included in the current NYSE American                 In the event a Floor Broker is unable to
                                               like current Commentary .07(a), (b), and                Rule 925NY.                                           satisfy his order from bids and offers
                                               (c) to Exchange Rule 6.37–O,                               Current Commentary .03 states that                 given in the crowd, the Trading Official
                                               Commentary .01(a), (b), and (c) would                   when a Market Maker displays a market                 may assign one contract to every Market
                                               allow Market Makers to request leaves                   on the screen that is the best market in              Maker present within the primary zone
                                               of absence when they plan to be away                    that crowd, the Market Maker is                       to assist the Floor Broker in satisfying
                                               from the floor or temporarily withdraw                  obligated to ensure that its market is                his order. If a Market Maker at the post
                                               from submitting quotations into the                     removed from the screen when the                      either bids lower or offers higher than
                                               System for periods in excess of two                     Market Maker leaves the crowd. Current                the established market, such Market
                                               weeks during a calendar quarter.                        Commentary .03 is applicable only to                  Maker shall be obligated to trade one
                                               Requests for leaves of absence must                     Market Maker activity in a floor-based                contract at the price quoted by the
                                               continue to be submitted in writing to                  market. In addition, Market Makers who                Market Maker. This provision is not
                                               the Exchange prior to the                               post a quotation, whether in the crowd                necessary and is not included in the
                                               commencement of the intended leave.                     or not, are required to comply with their             current NYSE American Rule 925NY.
                                               Lastly, while on leave, Market Makers                   firm quote obligations under Exchange                 As amended, proposed Rule 6.37–
                                               will continue to not be permitted to                    Rule 6.86–O and Rule 602(b) of                        O(b)(2) would require a Market Maker to
                                               make opening transactions in Exchange                   Regulation NMS. If the Market Maker                   make markets that will be honored for
                                               listed options, in their Market Maker                   leaves the crowd, it is up to them to                 the number of contracts entered into the
                                               accounts, through the use of a Floor                    remove their quote or to honor any                    System in all series of options classes
                                               Brokers, except as provided in Exchange                 executions that occur while their quote               within the Market Maker’s appointment.
                                               Rule 6.32–O, Commentary .01. The                        remains posted. Further, this provision                  Current Commentary .06 states that
                                               Exchange does not proposes to retain                    is not included in the current NYSE                   the maintenance of a fair and orderly
                                               the paragraph (d) of Commentary .07 to                  American Rule 925NY.                                  market has been determined to be
                                               Exchange Rule 6.37–O under new                             Current Commentary .04 states that                 impaired in instances where a Market
                                               Commentary .01 as that provision is                     the obligations of a Market Maker with                Maker refuses to honor a market
                                               outdated and is not part of NYSE                        respect to those classes of option                    quotation that has just been given, in
                                               American Rule 925NY to which the                        contracts to which he holds an                        response to a request for a market. This
                                               Exchange seeks to harmonize.                            appointment, pursuant to Rule 6.35–O,                 provision is not necessary as the
                                                  Furthermore, the Exchange does not                   shall take precedence over his other                  proposed rule requires Market Makers to
                                               propose to retain the remaining                         Market Maker obligations. This                        enter two-sided quotations in the
                                               provisions, Commentary .01 through .06                  provision is not included in the current              options classes that they are appointed
                                               and .08 through .09 of the Commentary                   NYSE American Rule 925NY. This                        and to honor those quotations.14 This
                                               to Exchange Rule 6.37–O. These                          provision is also not necessary as                    provision is also not included in the
                                               provisions are outdated for the reasons                 proposed Rule 6.37–O(b) would include                 current NYSE American Rule 925NY.
                                               discussed below, and not included in                    all of a Market Makers obligations for                   Current Commentary .08 states that a
                                               the current NYSE American Rule 925NY                    options classes for which they are                    Market Maker may be compelled to buy/
                                               to which the Exchange seeks to                          appointed, and a Market Maker would                   sell a specified quantity of option
                                               harmonize its Market Maker obligations.                 be required to satisfy those obligations              contracts at the disseminated bid/offer
                                                  Current Commentary .01 states that                   regardless of whether that Market Maker               pursuant to his obligations under Rule
                                               the limitations of Rule 6.37–O(b)(2)                    is engaged in other market making                     6.86–O. The Exchange does not
                                               should not be carried over from one day                 activities. Furthermore, proposed                     proposes to retain this provision as a
                                               to the next, and therefore are not                      paragraph (d) to Exchange Rule 6.37–O                 similar provision is not included in the
                                               applicable to the Exchange’s opening.                   states that ‘‘[w]ith respect to classes of            current NYSE American Rule 925NY. In
                                               The Exchange notes that current                         option contracts outside of their                     addition, the obligation set forth in
                                               paragraph (b)(2) to Rule 6.37–O simply                  appointment, Market Makers should not                 Commentary .08 are redundant with
                                               states ‘‘Reserved’’ and, therefore,                     engage in transactions for an account in              Market Maker’s obligation to not only
                                               includes no limitations that the rule                   which they have an interest that are                  comply with the Exchange’s firm quote
                                               would need to specify would not be                      disproportionate in relation to, or in                obligations set forth under Exchange
                                               carried over to the next trading day or                 derogation of, the performance of their               Rule 6.86–O, but also their obligations
                                               apply to the Exchange’s opening                         obligations as specified in this Rule                 to comply with Rule 602 of Regulation
                                               process. Not retaining this provision in                with respect to the classes in their                  NMS. Moreover, a Market Maker’s firm
                                               the amended rule would remove                           appointment.’’                                        quote obligations are also discussed in
                                               potentially confusing text referencing an                  Current Commentary .05 states that                 proposed paragraph (b)(2) to Exchange
                                               outdated provision in the Exchange’s                    whenever a Floor Broker enters a                      Rule 6.37–O which requires Market
                                               rules, thereby ensuring the Exchange’s                  trading crowd and calls for a market in               Makers to make markets that will be
                                               rules are clear and easily understood.                  any class and series at that post, each               honored for the number of contracts
                                               Further, this provisions is not included                Market Maker present at the post where                entered into the System.
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                                               in the current NYSE American Rule                       the option is traded is obligated, at a                  Current Commentary .09 states that
                                               925NY to which the Exchange seeks to                    minimum, to make a market for one                     the Exchange or its authorized agent
                                               harmonize its Market Maker obligations.                 contract except as provided for in Rule               may calculate bids and asks for various
                                                  Current Commentary .02 states that                   6.37–O(b)(5) and Rule 6.37–O(c)(4), at                indices for the sole purpose of
                                               the bid-ask differentials as stated in
                                               paragraph (b)(1) of Rule 6.37–O shall                     13 See proposed Exchange Rule 6.37–O(b) and           14 See proposed paragraphs (b) and (f) of

                                               apply to all option series open for                     (b)(4).                                               Exchange Rule 6.37–O.



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                                                                           Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices                                                47227

                                               determining permissible bid/ask                           of its affiliate, NYSE American, do not                  Exchange Rule 6.47–O, ‘‘Crossing’’
                                               differentials on options on these                         include a similar provision. Therefore,                  Orders—OX
                                               indices. These values will be calculated                  the Exchange proposes to delete the text                    The Exchange proposes to amend
                                               by determining the weighted average of                    of Exchange Rule 6.41–O to avoid                         Rule 6.47–O, its crossing rule, by
                                               the bids and asks for the components of                   potential confusion regarding the                        replacing outdated references to the
                                               the corresponding index. These bids                       specific reports produced by the                         requirement that execution prices ‘‘be
                                               and asks will be disseminated by the                      Exchange. The Exchange also proposes                     equal to or better than the NBBO’’ with
                                               Exchange at least every fifteen (15)                      to delete a cross-reference to Exchange                  updated cross-references to the Rule
                                               seconds during the trading day solely                     Rule 6.41–O in Exchange Rule 11.16,                      6.94–O, the current plenary Order
                                               for the purpose of determining the                        Books and Records.                                       Protection Rule. In addition, in
                                               permissible bid/ask differential that                                                                              connection with non-facilitation
                                                                                                         Exchange Rule 6.43–O, Options Floor
                                               Market Makers may quote on an in-the-                                                                              (regular way) crosses, facilitation
                                                                                                         Broker Defined
                                               money option on the indices. For in-the-                                                                           procedures, crossing of solicited orders,
                                               money series in index options where the                      The Exchange proposes to amend
                                                                                                                                                                  and customer-to-customer crosses, the
                                               calculated bid/ask differential is wider                  6.43–O(b)(1) and (2) to replace the
                                                                                                                                                                  Exchange proposes to delete from Rules
                                               than the applicable differential set out                  definition of ‘‘Professional Customer’’
                                                                                                                                                                  6.47–O(a)(3), (b)(5), (c)(3), and (e)(3) the
                                               in subparagraph (b)(1) of Rule 6.37–O,                    with the single-use term ‘‘Qualified
                                                                                                                                                                  sentences that provide that ‘‘[t]he orders
                                               the bid/ask differential in the index                     Customer’’ in connection with the
                                                                                                                                                                  will be cancelled or posted in the Book
                                               option series may be as wide as the                       limited public business that qualified
                                                                                                                                                                  if an execution would take place at a
                                               calculated bid/ask differential in the                    Floor Brokers and their Floor Clerks
                                                                                                                                                                  price that is inferior to the NBBO’’.
                                               underlying index. The Exchange will                       may conduct. Rule 6.43–O(b) defines
                                                                                                                                                                  Exchange Rule 6.94–O governs such
                                               not make a market in the basket of stock                  both the permissible conduct of a
                                                                                                                                                                  situations, and the orders will not be
                                               comprising the indices and is not                         limited public business and defines the
                                                                                                                                                                  cancelled or posted but would trade
                                               guaranteeing the accuracy or the                          term ‘‘Professional Customer’’, for
                                                                                                                                                                  through in accord with the exemptions
                                               availability of the bid/ask values. This                  purposes of Rule 6.43–O(b).16 Exchange
                                                                                                                                                                  in Exchange Rule 6.94–O. This
                                               provision is not necessary as the                         Rule 6.1A–O(4A) also defines the term
                                                                                                                                                                  proposed change would also harmonize
                                               Exchange no longer performs the                           ‘‘Professional Customer’’, but does so
                                                                                                                                                                  NYSE Arca Rule 6.47–O with NYSE
                                               calculations described in the                             differently.17 To avoid unnecessary
                                                                                                                                                                  American Rules 934NY.19
                                               Commentary .09. Removing this                             complexity or confusion concerning the
                                               provision would, therefore, more                          duplicate definitions of ‘‘Professional                  Exchange Rule 6.67–O, Order Format
                                               accurately describe the operation of the                  Customer’’, the Exchange proposes to                     and Entry Requirements
                                               system in the Exchange’s rules. A                         amend 6.43–O(b) to replace the                              The Exchange proposes to amend
                                               similar provision is also not included in                 definition of ‘‘Professional Customer’’                  Rule 6.67–O(d)(2)(A) to replace an
                                               the current NYSE American Rule                            with the single-use term ‘‘Qualified                     outdated reference to require
                                               925NY.                                                    Customer’’ in connection with the                        timestamps be synchronized to the
                                                                                                         limited public business, and to limit the                ‘‘NIST Clock’’ with a reference to Rule
                                               Exchange Rule 6.41–O, Market Maker                        use of ‘‘Qualified Customer’’ to Rule
                                               Marketing Reports                                                                                                  11.6820, the current Consolidated Audit
                                                                                                         6.43–O(b). This proposed change would                    Trail (‘‘CAT’’) clock synchronization
                                                  The Exchange proposes to delete the                    also harmonize NYSE Arca Rule 6.43–                      rule. Specifically, in connection with
                                               text of Exchange Rule 6.41–O, entitled                    O(b)(1) and (2) with NYSE American                       Rule 6.67–O(d)(2)(A), which governs
                                               Market Maker Marketing Reports.                           Rules 930NY(b)(1) and (2).18                             contingency reporting procedures when
                                               Exchange Rule 6.41–O states that the                                                                               an exception to the Electronic Order
                                               Exchange will provide its Market                             16 Exchange Rule 6.43(b)(2) defines ‘‘Professional
                                                                                                                                                                  Capture System (‘‘EOC’’) applies, the
                                               Makers with statistical reports designed                  Customer’’ as ‘‘a bank; trust company; insurance
                                                                                                         company; investment trust; a state or political          Exchange proposes to delete an
                                               to measure trading volume and                             subdivision thereof; charitable or nonprofit             outdated reference to ‘‘(a timestamp
                                               participation in trading activity in each                 educational institution regulated under the laws of      synchronized with the National Institute
                                               option issue traded on the Exchange.                      the United States, or any state, or pension or profit    of Standards and Technology Atomic
                                               The reports are to provide monthly                        sharing plan subject to ERISA or of any agency of
                                                                                                         the United States as of a state or political             Clock in Boulder Colorado ‘NIST Clock’
                                               trading information that identifies, by                   subdivision thereof; or any person (other than a         will be available at all OTP Holder and
                                               order flow provider, the issue and                        natural person) who has, or who has under                OTP Firm booths and trading posts’’ and
                                               number of contracts traded, the Lead                      management, net tangible assets of at least sixteen      replace it with a requirement that all
                                               Market Maker post where the issue is                      million dollars.’’
                                                                                                            17 The definition of ‘‘Professional Customer’’ in
                                                                                                                                                                  order events must conform to the
                                               traded, the contra and executing broker                   Rule 6.1A–O(4A), which is broader than the               requirements of Rule 11.6820. For
                                               symbols, and whether the trade was                        definition in Rule 6.43–O(b)(2), defines a               further clarity, the Exchange also
                                               executed through the Exchange’s OX                        ‘‘Professional Customer’’ as an individual or            proposes to delete ‘‘immediately’’ from
                                               electronic trading system or manually in                  organization that is not a Broker/Dealer in securities   the text of the rule because Rule 11.6820
                                                                                                         and places more than 390 orders in listed options
                                               the trading crowd. Under its rules, the                   per day on average during a calendar month for its       sets the operative standard. This
                                               Exchange currently provides other                         own beneficial account(s). Rule 6.1A–O(4A) also          proposed change would also harmonize
                                               reports, including reports related to                     defines the treatment of a Professional Customer         NYSE Arca Rule 6.67–O(d)(2)(A) with
                                               compared trades.15 However, the                           under various Exchange rules except Rule 6.43–           NYSE American Rules
                                                                                                         O(b), and defines how to calculate the number of
                                               Exchange no longer provides the report                    Professional Customers orders in connection with         955NY(d)(2)(A).20
                                               described in Exchange Rule 6.41–O to
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                                                                                                         different order types.                                   Exchange Rule 6.69–O, Reporting Duties
                                               Market Makers, no Market Maker has                           18 See Securities Exchange Act Release No. 81670

                                               requested such report, no other rule or                   (September 21, 2017), 82 FR 45095 (September 27,           The Exchange proposes to amend
                                               regulation requires the Exchange to                       2017) (SR–NYSEAMER–2017–18) (Notice of Filing            Exchange Rule 6.69–O(b)(iii) to
                                                                                                         and Immediate Effectiveness of Proposed Rule
                                               provide such report, and that the rules                   Change To Update and Amend its Options Rules,
                                                                                                                                                                  harmonize it with NYSE American Rule
                                                                                                         as Described Herein, To Reduce Unnecessary
                                                 15 See                                                                                                            19 Id.
                                                          Exchange Rules 6.18–O, 6.19–O, and 6.21–       Complexity and To Promote Standardization and
                                               O.                                                        Clarity).                                                 20 Id.




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                                               47228                     Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices

                                               957NY(b)(iii). Exchange Rule 6.69–O(b)                  2. Statutory Basis                                    the Exchange and its affiliate. It should
                                               governs reporting of transactions on the                   The proposed rule changes are                      also aid those firms that engage in
                                               options floor and subparagraph (iii) is                 consistent with Section 6(b) 27 of the                market making activity on both the
                                               specific to Complex Orders. In                          Act, in general, and furthers the                     Exchange and NYSE American with
                                               particular, subparagraph (b)(iii) of Rule               objectives of Section 6(b)(5),28 in                   identical obligations, thereby aiding
                                               6.69–O currently states that for Complex                particular, in that they are designed to              those firms in complying with the
                                               Order transactions, ‘‘between two Floor                 prevent fraudulent and manipulative                   Exchange’s rules by providing a
                                               Brokers or two Market Makers, the party                 acts and practices, to promote just and               harmonized set of regulatory
                                               responsible for reporting the transaction               equitable principles of trade, to foster              obligations.
                                               shall be the OTP Holder that first                      cooperation and coordination with                        Furthermore, by removing extraneous
                                               initiated the transaction.’’ The Exchange               persons engaged in facilitating                       language from Exchange Rule 6.17–O,
                                               proposes to delete this language and                    transactions in securities, and to remove             Commentary .01, deleting outdated text
                                               replace it with ‘‘where the transaction is              impediments to and perfect the                        under Exchange Rule 6.41–O regarding
                                               made up of both buy and sell orders and                 mechanism of a free and open market                   a report no longer produced to Market
                                               priced on a net debit/credit basis, the                 and a national market system.                         Makers by the Exchange, replacing the
                                               seller shall be determined to be the OTP                   Specifically, the Exchange believes                definition of ‘‘Professional Customer’’
                                               Holder participating on the ‘debit’ side                that conforming and harmonizing its                   with the single-use term ‘‘Qualified
                                               of the trade.’’ Doing so would                          rules to the rules of an affiliated                   Customer’’ under Exchange Rule 6.43–O
                                               harmonize the reporting requirements                    exchange governing the same subject                   in connection with the limited public
                                               for Complex Orders under Rule 6.69–                     matter, updating its rules by                         business that qualified Floor Brokers
                                               O(b)(iii) with those for complex orders                 harmonizing its Market Maker                          and their Floor Clerks may conduct, by
                                               under NYSE American Rule                                obligation with its affiliate, NYSE                   harmonizing Exchange Rule 6.47–O, its
                                               957NY(b)(iii),21 thereby providing                      American, deleting outdated and                       crossing rule, with NYSE American
                                               consistent reporting obligations across                 updating rule cross-references,                       Rule 934NY by replacing outdated and
                                               the Exchange and its affiliate.                         eliminating extraneous or redundant                   potentially ambiguous references to the
                                               Exchange Rule 6.75–O, Priority and                      text, and therefore potentially confusing             NBBO with cross-references to the
                                               Order Allocation Procedures—Open                        or ambiguous language, would remove                   current plenary Order Protection Rule,
                                               Outcry                                                  impediments to and perfect a national                 by updating and clarifying Exchange
                                                                                                       market system by simplifying and                      Rule 6.67–O governing its order format
                                                  The Exchange proposes to conform                     reducing the complexity of its rules and              and system entry requirements by
                                               Rule 6.75–O governing the priority of                   regulatory requirements. The Exchange                 replacing an outdated reference with a
                                               Complex Orders 22 in open outcry to its                 notes that it and its affiliate, NYSE                 reference to the current operative CAT
                                               Rule 6.91–O governing Electronic                        American, operate in a similar manner                 time synchronization rule, and by
                                               Complex Orders.23 Rule 6.91–O(a)(1)                     and consistent rules across the                       conforming Exchange Rule 6.75–O
                                               governs the priority of Electronic                      Exchange and NYSE American would                      governing the priority of complex orders
                                               Complex Orders 24 in the Consolidated                   reduce the likelihood of potential                    in open outcry to its rule governing
                                               Book and states that ‘‘Electronic                       investor confusion. Furthermore, the                  Electronic Complex Orders, would also
                                               Complex Orders in the Consolidated                      proposed rule change would provide for                promote just and equitable principles of
                                               Book shall be ranked according to price/                standardized rules and a consistent set               trade, would remove impediments to
                                               time priority based on the total or net                 of obligations for common members as                  and perfects the mechanism of a free
                                               debit or credit and the time of entry of                well as those members that are engaged                and open market and a national market
                                               the order’’ (emphasis added).25                         in market making activities on both the               system, and, in general, would help to
                                               Specifically, the Exchange proposes to                  Exchange and NYSE American. The                       protect investors and the public interest
                                               conform Rule 6.75–O(g) to Rule 6.91–                    Exchange also believes that these                     by providing transparency as to which
                                               O(a)(1) by amending Rule 6.75–O(g) to                   proposed amendments would be                          rules are operable, and by reducing
                                               provide that a Complex Order and                        consistent with the public interest and               potential confusion that may result from
                                               Stock/Complex Orders may be executed                    the protection of investors because                   having outdated or redundant rules or
                                               at a ‘‘total or’’ net debit or credit price.            investors would benefit from the                      cross-references in the Exchange’s
                                               The proposed change would, therefore,                   proposal to harmonize, simplify, update               rulebook. Lastly, the Exchange notes
                                               not result in any change to the manner                  and clarify the rules discussed herein.               that the proposed changes to Exchange
                                               in which Complex Orders are handled                     Further, the Exchange believes that the               Rules 6.37–O, 6.43–O(b), 6.47–O, 6.67–
                                               under the Exchange’s rules. This                        proposed rule change would benefit                    O(d)(2)(A), 6.69–O(b)(iii), and 6.75–O(g)
                                               proposed change would also harmonize                    investors by improving the transparency               are based on the rules of its affiliate,
                                               Exchange Rule 6.75–O(g) with NYSE                       and clarity of the Exchange’s rules.                  NYSE American.29 The Exchange
                                               American Rule 963NY(d).26                                  In particular, the Exchange believes               further believes that the proposed rule
                                                                                                       that by updating and conforming its                   changes would remove impediments to
                                                 21 Id.
                                                                                                       rules governing Market Maker                          and perfect the mechanism of a free and
                                                 22 See NYSE Arca Rule 6.62–O(e).                      obligations to the rules of NYSE                      open market by ensuring that members,
                                                 23 See NYSE Arca Rule 6.91–O.
                                                 24 An ‘‘Electronic Complex Order’’ means ‘‘any
                                                                                                       American, its affiliated exchange,                    regulators and the public can more
                                               Complex Order as defined in Rule 6.62–O(e) or any       removes impediments to and perfects
                                               Stock/Option Order or Stock/Complex Order as            the mechanism of a free and open                        29 See, e.g., NYSE American Rules 925NY,
                                                                                                       market and a national market system by
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                                               defined in Rule 6.62–O(h) that is entered into the                                                            930NY, 934NY, 955NY, 957NY, and 936NY. See
                                               NYSE Arca System (the ‘System’).’’ Id.                  providing consistent, standardized rules              also, e.g., Securities Exchange Act Release No.
                                                 25 See Exchange Rule 6.91–O(a)(1).
                                                                                                       governing Market Makers across both                   81670 (September 21, 2017), 82 FR 45095
                                                 26 Securities Exchange Act Release No. 81670                                                                (September 27, 2017) (SR–NYSEAMER–2017–18)
                                               (September 21, 2017), 82 FR 45095 (September 27,                                                              (Notice of Filing and Immediate Effectiveness of
                                               2017) (SR–NYSEAMER–2017–18) (Notice of Filing           Complexity and To Promote Standardization and         Proposed Rule Change To Update and Amend its
                                               and Immediate Effectiveness of Proposed Rule            Clarity).                                             Options Rules, as Described Herein, To Reduce
                                                                                                         27 15 U.S.C. 78f(b).
                                               Change To Update and Amend its Options Rules,                                                                 Unnecessary Complexity and To Promote
                                               as Described Herein, To Reduce Unnecessary                28 15 U.S.C. 78f(b)(5).                             Standardization and Clarity).



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                                                                           Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices                                                    47229

                                               easily navigate and understand the                        Commission may designate, if                             available for website viewing and
                                               Exchange’s rulebook, thereby avoiding                     consistent with the protection of                        printing in the Commission’s Public
                                               potential confusion.                                      investors and the public interest, the                   Reference Room, 100 F Street NE,
                                                                                                         proposed rule change has become                          Washington, DC 20549, on official
                                               B. Self-Regulatory Organization’s
                                                                                                         effective pursuant to Section 19(b)(3)(A)                business days between the hours of
                                               Statement on Burden on Competition
                                                                                                         of the Act and Rule 19b–4(f)(6)(iii)                     10:00 a.m. and 3:00 p.m. Copies of the
                                                 The Exchange does not believe that                      thereunder.                                              filing also will be available for
                                               the proposed rule changes will impose                        At any time within 60 days of the                     inspection and copying at the principal
                                               any burden on competition that is not                     filing of such proposed rule change, the                 office of the Exchange. All comments
                                               necessary or appropriate in furtherance                   Commission summarily may                                 received will be posted without change.
                                               of the purposes of the Act. The                           temporarily suspend such rule change if                  Persons submitting comments are
                                               proposed changes are not designed to                      it appears to the Commission that such                   cautioned that we do not redact or edit
                                               address any competitive issue or attract                  action is necessary or appropriate in the                personal identifying information from
                                               additional order flow to the Exchange.                    public interest, for the protection of                   comment submissions. You should
                                               Rather, these changes would update,                       investors, or otherwise in furtherance of                submit only information that you wish
                                               remove, and clarify outdated cross-                       the purposes of the Act. If the                          to make available publicly. All
                                               references and definitions, and                           Commission takes such action, the                        submissions should refer to File
                                               redundant language, and also conform                      Commission shall institute proceedings                   Number SR–NYSEARCA–2018–65 and
                                               the Exchange’s rules and definitions to                   under Section 19(b)(2)(B) 32 of the Act to               should be submitted on or before
                                               the rules of an affiliated exchange,                      determine whether the proposed rule                      October 9, 2018.
                                               thereby reducing potential confusion                      change should be approved or                               For the Commission, by the Division of
                                               and making the Exchange’s rules easier                    disapproved.                                             Trading and Markets, pursuant to delegated
                                               to understand and navigate. The                                                                                    authority.33
                                               Exchange notes that it and its affiliate,                 IV. Solicitation of Comments
                                                                                                                                                                  Eduardo A. Aleman,
                                               NYSE American, operate in a similar                         Interested persons are invited to                      Assistant Secretary.
                                               manner and consistent rules across the                    submit written data, views, and
                                                                                                                                                                  [FR Doc. 2018–20193 Filed 9–17–18; 8:45 am]
                                               Exchange and NYSE American would                          arguments concerning the foregoing,
                                                                                                                                                                  BILLING CODE 8011–01–P
                                               reduce the likelihood of potential                        including whether the proposed rule
                                               investor confusion. Therefore, the                        change is consistent with the Act.
                                               proposed rule change is not intended to                   Comments may be submitted by any of                      SECURITIES AND EXCHANGE
                                               impose a burden on competition but                        the following methods:                                   COMMISSION
                                               rather provide for standardized rules
                                               and a consistent set of obligations for                   Electronic Comments
                                                                                                                                                                  Proposed Collection; Comment
                                               common members as well as those                              • Use the Commission’s internet                       Request
                                               members that are engaged in market                        comment form (http://www.sec.gov/
                                               making activities on both the Exchange                    rules/sro.shtml); or                                     Upon Written Request Copies Available
                                               and NYSE American.                                           • Send an email to rule-comments@                      From: Securities and Exchange
                                                                                                         sec.gov. Please include File Number SR–                   Commission, Office of FOIA Services,
                                               C. Self-Regulatory Organization’s                         NYSEARCA–2018–65 on the subject                           100 F Street NE, Washington, DC
                                               Statement on Comments on the                              line.                                                     20549–2736
                                               Proposed Rule Change Received From
                                               Members, Participants, or Others                          Paper Comments                                           Extension:
                                                                                                                                                                    Regulation 14A (Commission Rules 14a–1
                                                 No written comments were solicited                         • Send paper comments in triplicate                       through 14a–21 and Schedule 14A), SEC
                                               or received with respect to the proposed                  to Secretary, Securities and Exchange                        File No. 270–056, OMB Control No.
                                               rule change.                                              Commission, 100 F Street NE,                                 3235–0059
                                                                                                         Washington, DC 20549–1090.                                  Notice is hereby given that, pursuant
                                               III. Date of Effectiveness of the
                                               Proposed Rule Change and Timing for                       All submissions should refer to File                     to the Paperwork Reduction Act of 1995
                                               Commission Action                                         Number SR–NYSEARCA–2018–65. This                         (44 U.S.C. 3501 et seq.), the Securities
                                                                                                         file number should be included on the                    and Exchange Commission
                                                  The Exchange has filed the proposed                    subject line if email is used. To help the               (‘‘Commission’’) is soliciting comments
                                               rule change pursuant to Section                           Commission process and review your                       on the collection of information
                                               19(b)(3)(A)(iii) of the Act 30 and Rule                   comments more efficiently, please use                    summarized below. The Commission
                                               19b–4(f)(6) thereunder.31 Because the                     only one method. The Commission will                     plans to submit this existing collection
                                               proposed rule change does not: (i)                        post all comments on the Commission’s                    of information to the Office of
                                               Significantly affect the protection of                    internet website (http://www.sec.gov/                    Management and Budget for extension
                                               investors or the public interest; (ii)                    rules/sro.shtml). Copies of the                          and approval.
                                               impose any significant burden on                          submission, all subsequent                                  Section 14(a) of the Securities
                                               competition; and (iii) become operative                   amendments, all written statements                       Exchange Act of 1934 (the ‘‘Exchange
                                               prior to 30 days from the date on which                   with respect to the proposed rule                        Act’’) operates to make it unlawful for
                                               it was filed, or such shorter time as the                 change that are filed with the                           a company with a class of securities
                                                                                                         Commission, and all written                              registered pursuant to Section 12 of the
                                                 30 15  U.S.C. 78s(b)(3)(A)(iii).
                                                                                                         communications relating to the                           Exchange Act to solicit proxies in
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                                                 31 17  CFR 240.19b–4(f)(6). In addition, Rule 19b–
                                               4(f)(6)(iii) requires the Exchange to give the            proposed rule change between the                         contravention of such rules and
                                               Commission written notice of the Exchange’s intent        Commission and any person, other than                    regulations as the Commission has
                                               to file the proposed rule change, along with a brief      those that may be withheld from the                      prescribed as necessary or appropriate
                                               description and text of the proposed rule change,         public in accordance with the                            in the public interest or for the
                                               at least five business days prior to the date of filing
                                               of the proposed rule change, or such shorter time         provisions of 5 U.S.C. 552, will be                      protection of investors. The Commission
                                               as designated by the Commission. The Exchange
                                               has satisfied this requirement.                            32 15   U.S.C. 78s(b)(2)(B).                              33 17   CFR 200.30–3(a)(12).



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Document Created: 2018-09-18 01:18:39
Document Modified: 2018-09-18 01:18:39
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation83 FR 47221 

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