Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.15, Clearly Erroneous Executions, 60204-60207 [2015-25179]

Download as PDF 60204 Federal Register / Vol. 80, No. 192 / Monday, October 5, 2015 / Notices under section 19(b)(2)(B) 17 of the Act to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEMKT–2015–68 on the subject line. Paper Comments mstockstill on DSK4VPTVN1PROD with NOTICES • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEMKT–2015–68. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal offices of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEMKT–2015–68, and should be 17 15 U.S.C. 78s(b)(2)(B). VerDate Sep<11>2014 18:34 Oct 02, 2015 Jkt 238001 submitted on or before October 26, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–25184 Filed 10–2–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76019; File No. SR–BATS– 2015–56] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Designation of a Longer Period for Commission Action on Proposed Rule Change, as Modified by Amendments Nos. 1 and 2, To List and Trade Shares of the ProShares Managed Futures Strategy ETF of the ProShares Trust Under BATS Rule 14.11 on BATS Exchange, Inc. September 29, 2015. On July 30, 2015, BATS Exchange, Inc. (‘‘BATS’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to list and trade shares of the ProShares Managed Futures Strategy ETF (‘‘Fund’’) of the ProShares Trust under BATS Rule 14.11(i). The proposed rule change was published for comment in the Federal Register on August 17, 2015.3 On August 19, 2015, the Exchange filed Amendment No. 1 to the proposed rule change.4 On September 4, 2015, the Exchange filed Amendment No. 2 to the proposed rule change.5 The Commission has received no comment letters on the proposed rule change. Section 19(b)(2) of the Act 6 provides that, within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or as to which the 18 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 75664 (August 11, 2015), 80 FR 49288 (‘‘Notice’’). 4 Amendment No. 1 is available at: https:// www.sec.gov/comments/sr-bats-2015-56/ bats201556-.pdf. 5 Amendment No. 2 is available at: https:// www.sec.gov/comments/sr-bats-2015-56/ bats201556-2.pdf. 6 15 U.S.C. 78s(b)(2). 1 15 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The Commission is extending this 45-day time period. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change, as modified by the amendments. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,7 designates November 15, 2015, as the date by which the Commission shall either approve or disapprove or institute proceedings to determine whether to disapprove the proposed rule change (File Number SR–BATS–2015–56). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–25181 Filed 10–2–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76017; File No. SR–EDGA– 2015–37] Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.15, Clearly Erroneous Executions September 29, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 21, 2015, EDGA Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGA’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend Rule 11.15, Clearly Erroneous 7 Id. 8 17 CFR 200.30–3(a)(31). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\05OCN1.SGM 05OCN1 Federal Register / Vol. 80, No. 192 / Monday, October 5, 2015 / Notices Executions, in order to conform to the rules of BATS Exchange, Inc. (‘‘BZX’’) and BATS Y-Exchange, Inc. (‘‘BYX’’).3 The text of the proposed rule change is available at the Exchange’s Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose In early 2014, the Exchange and its affiliate, EDGX Exchange, Inc. (‘‘EDGX’’) received approval to effect a merger (the ‘‘Merger’’) of the Exchange’s parent company, Direct Edge Holdings LLC, with BATS Global Markets, Inc., the parent of BZX and the BATS YExchange, Inc. (‘‘BYX’’, together with BZX, EDGA and EDGX, the ‘‘BGM Affiliated Exchanges’’).4 In the context of the Merger, the BGM Affiliated Exchanges are working to align their rules, retaining only intended differences between the BGM Affiliated Exchanges. Thus, the Exchange proposes to restructure and amend Rule 11.15, Clearly Erroneous Executions, in order to conform to the corresponding rules of BYX and BZX and provide a consistent rule set across each of the BGM Affiliated Exchanges.5 Background mstockstill on DSK4VPTVN1PROD with NOTICES On September 10, 2010, the Commission approved, on a pilot basis, changes to Exchange Rule 11.15 to provide for uniform treatment: (1) Of 3 See BYX and BZX Rule 11.17. Securities Exchange Act Release No. 71449 (January 30, 2014), 79 FR 6961 (February 5, 2014) (SR–EDGX–2013–43; SR–EDGA–2013–34). 5 The Exchange notes that EDGX intends to file an identical proposal with the Commission to restructure and amend its Rule 11.15, Clearly Erroneous Executions, to conform to BYX and BZX Rules 11.17. 4 See VerDate Sep<11>2014 18:34 Oct 02, 2015 Jkt 238001 clearly erroneous 6 execution reviews in multi-stock events involving twenty or more securities; and (2) in the event transactions occur that result in the issuance of an individual stock trading pause by the primary listing market and subsequent transactions that occur before the trading pause is in effect on the Exchange.7 The Exchange also adopted additional changes to Rule 11.15 that reduced the ability of the Exchange to deviate from the objective standards set forth in Rule 11.15,8 and in 2013, adopted a provision designed to address the operation of the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS under the Act (the ‘‘Limit Up-Limit Down Plan’’ or the ‘‘Plan’’).9 In 2014, the Exchange adopted two additional provisions providing that: (i) A series of transactions in a particular security on one or more trading days may be viewed as one event if all such transactions were effected based on the same fundamentally incorrect or grossly misinterpreted issuance information resulting in a severe valuation error for all such transactions (the ‘‘Multi-Day Event’’); and (ii) in the event of any disruption or malfunction in the operation of the electronic communications and trading facilities of an Exchange, another SRO, or responsible single plan processor in connection with the transmittal or receipt of a trading halt, an Officer, acting on his or her own motion, shall nullify any transaction that occurs after a trading halt has been declared by the primary listing market for a security and before such trading halt has officially ended according to the primary listing market.10 The Exchange proposes the below changes to conform Rule 11.15 to BYX and BZX Rules 11.17. None of these changes are designed to amend the Exchange’s current review process for clearly erroneous executions. Rather, they are proposed in order to implement identical rules with regard to clearly 6 The terms of a transaction executed on the Exchange are ‘‘clearly erroneous’’ when there is an obvious error in any term, such as price, number of shares or other unit of trading, or identification of the security. A transaction made in clearly erroneous error and cancelled by both parties or determined by the Exchange to be clearly erroneous will be removed from the Consolidated Tape. See Exchange Rule 11.15(a). 7 Securities Exchange Act Release No. 62886 (Sept. 10, 2010), 75 FR 56613 (Sept. 16, 2010) (SR– EDGX–2010–03). 8 Id. 9 See Securities Exchange Act Release No. 68814 (Feb. 1, 2013), 78 FR 9086 (Feb. 7, 2013) (SR– EDGX–2013–06); see also Exchange Rule 11.15(i). 10 See Securities Exchange Act Release No. 72434 (June 19, 2014), 79 FR 36110 (June 25, 2014) (SR– EDGA–2014–11). PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 60205 erroneous executions across each of the BGM Affiliated Exchanges.11 The proposed changes to Rule 11.15 are as follows: • Amend the last sentence of the introductory paragraph to include the word ‘‘replaced’’. • Replace references to ‘‘Officer’’ with ‘‘Official’’ in paragraphs (b), (b)(1), (c)(3), (d), (e)(1), (e)(2), (e)(2)(D), and (e)(2)(F). • Replace the term ‘‘Regular Market Session’’ with ‘‘Regular Trading Hours’’ in paragraphs (c)(1), (e)(1), and (g). • Amend paragraph (b)(1) to: (i) Clarify that requests for review must be received by the Exchange within thirty (30) minutes of the execution time; (ii) replace the word ‘‘Section’’ with ‘‘paragraph’’ and encase ‘‘30’’ in parentheses as well as insert the word ‘‘thirty’’ immediately before ‘‘(30)’’ in the second sentence; (iii) specify in the fourth sentence that if requested, each party shall provide any supporting written information as may be reasonably requested by the Official to aid resolution of the matter and remove the phrase ‘‘any supporting written information.’’ • Amend paragraph (b)(2) to encase both ‘‘30’’ and ‘‘60’’ in parentheses as well as insert the word ‘‘thirty’’ immediately before ‘‘(30)’’ and the word ‘‘sixty’’ immediately before ‘‘(60)’’. • Amend paragraph (c)(1) to: (i) Delete the word ‘‘the’’ before the word ‘‘Regular’’ and add the word ‘‘during’’ before the phrase ‘‘the Pre-Opening and . . . ’’ in the first sentence; (ii) remove the ‘‘s’’ from the word ‘‘occur’’ within the parenthetical in the third sentence; and (iii) insert the word ‘‘paragraph’’ before ‘‘(c)(2)’’ in the fourth sentence. • Amend the first sentence of paragraph (c)(3) to: (i) Remove the ‘‘s’’ from the word ‘‘system’’; (ii) replace ‘‘IPO’’ with the term ‘‘initial public offering’’; and (iii) remove ‘‘ ’s ’’ from the word ‘‘tape’’. • Amend paragraph (d) to: (i) Replace the term ‘‘at its’’ with ‘‘in his or her’’; (ii) replace the word ‘‘subsection’’ with ‘‘paragraph’’; and (ii) encase both ‘‘30’’ and ‘‘60’’ in parentheses as well as insert the word ‘‘thirty’’ immediately before ‘‘(30)’’. • Reformat and renumber paragraph (d)(1)(A) as (d)(1) and (d)(1)(B) as (d)(2). • Amend renumbered and reformatted paragraph (d)(1) to: (i) Not 11 The Exchange notes that BYX and BZX are to file rule changes with the Commission to proposes a series of changes to their Rules 11.17, Clearly Erroneous Executions, to conform with other provisions of EDGA and EDGX Rule 11.15 to ensure each of the BGM Affiliated Exchange have identical rule text with regard to the review and handling of clearly erroneous executions. E:\FR\FM\05OCN1.SGM 05OCN1 mstockstill on DSK4VPTVN1PROD with NOTICES 60206 Federal Register / Vol. 80, No. 192 / Monday, October 5, 2015 / Notices capitalize the word ‘‘Paragraph’’; (ii) replace the word ‘‘Section’’ with ‘‘Rule’’; and (iii) delete ‘‘, or’’. • Amend renumbered and reformatted paragraph (d)(2) to: (i) Not capitalize the word ‘‘Paragraph’’; (ii) replace the words ‘‘the Section’’ with ‘‘this Rule’’; and (iii) replace ‘‘11.15’’ with the word ‘‘paragraph’’ before the reference to (c)(3). • Amend paragraph (e)(1) to encase ‘‘30’’ in parentheses as well as insert the word ‘‘thirty’’ immediately before ‘‘(30)’’ in the third sentence. • Amend paragraph (e)(2)(B) to rephrase the term ‘‘ ten (10) Member representatives’’ with ‘‘ten (10) representatives of Members’’. • Renumber paragraph (e)(3) as (e)(2)(C) and amend the paragraph to: (i) Specify that a request for review on appeal must be made, not only via email, but also in writing or other electronic means specified from time to time by the Exchange in a circular distributed to Members; and (ii) replace ‘‘3:00 ET’’ with ‘‘3:00 p.m. Eastern Time’’ in the third sentence. • Renumber paragraph (e)(4) as (e)(2)(D). • Renumber paragraph (e)(5) as (e)(2)(E) and: (i) Replace reference to ‘‘Rule 11.15(e)(1)’’ with ‘‘paragraph (e)(1) above’’; and (ii) add a sentence stating that in instances where the Exchange, on behalf of a Member, requests a determination by another market center that a transaction is clearly erroneous, the Exchange will pass any resulting charges through to the relevant Member. • Renumber paragraph (e)(6) as (e)(2)(F). • Within paragraph (f), amend: (i) The first sentence to replace the word ‘‘the’’ with ‘‘an’’ before the ‘‘Officer’’ and delete the word ‘‘such’’ before ‘‘other senior level employee designee’’; (ii) the second sentence to remove the ‘‘s’’ from the ‘‘paragraphs’’ before reference to paragraph (c)(1)–(3); (iii) the third sentence to delete the word ‘‘such’’ before ‘‘other senior level employee designee’’; (iv) amend the fourth sentence to delete the term ‘‘such other’’ before ‘‘senior level employee designee’’, replace the term ‘‘Regular Session Trading’’ with ‘‘Regular Trading Hours’’, and add the word ‘‘trading’’ before ‘‘day’’; and (v) amend the last sentence to clarify that notice shall be provided by the Exchange, replace the word ‘‘Member’’ with ‘‘party’’, remove the ‘‘s’’ from the ‘‘paragraphss’’ and delete reference to paragraph (e)(3) and (4) as those paragraph are now included in (e)(2). • Amend paragraph (g) to: (i) Retitle it as ‘‘Officer Acting On Own Motion’’; VerDate Sep<11>2014 19:27 Oct 02, 2015 Jkt 238001 (ii) delete the term ‘‘such other’’ before ‘‘senior level employee designee’’ and replace the term ‘‘its’’ with ‘‘his or her’’ in the first sentence; (iii) delete the word ‘‘such’’ before ‘‘other senior level employee designee’’ in the fourth sentence; and (iv) remove the ‘‘s’’ from the ‘‘paragraphs’’ and delete reference to paragraph (e)(3) and (4) as those paragraphs are now included in (e)(2) in the last sentence. • Within paragraph (h), amend: (i) The first sentence to replace the term ‘‘initial public offering’’ with ‘‘IPO’’; (ii) the third and fourth sentences to delete the word ‘‘such’’ before ‘‘other senior level employee designee’’; (iii) the sixth sentence to delete the word ‘‘such’’ before ‘‘other senior level employee designee’’, replace the term ‘‘Regular Session Trading’’ with ‘‘Regular Trading Hours’’, and add the word ‘‘trading’’ before ‘‘day’’; and (v) amend the last sentence to replace the term ‘‘subsection’’ with ‘‘paragraph’’ and delete reference to paragraphs (e)(3) and (4) as those paragraphs are now included in (e)(2). Amend the last sentence in paragraphs (j) and (k) to delete reference to paragraphs (e)(3) and (4) as those paragraphs are now included in (e)(2). 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.12 Specifically, the proposed change is consistent with Section 6(b)(5) of the Act,13 because it is designed to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of, a free and open market and a national market system, and, in general, to protect investors and the public interest. None of these changes are designed to amend the Exchange’s current review process for clearly erroneous executions. Rather, as mentioned above, the proposed rule changes, combined with the planned filing for the BYX, BZX, and EDGX, would allow the BGM Affiliated Exchanges to provide a consistent set of rules as it relates to clearly erroneous executions. Consistent rules, in turn, will simplify the regulatory requirements for Members of the Exchange that are also participants on EDGA, BYZ and/or BZX. The proposed rule change would provide greater harmonization between rules of similar 12 15 13 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00093 Fmt 4703 purpose on the BGM Affiliated Exchanges, resulting in greater uniformity and less burdensome and more efficient regulatory compliance and understanding of Exchange Rules. As such, the proposed rule change would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would remove impediments to and perfect the mechanism of a free and open market and a national market system. Similarly, the Exchange also believes that, by harmonizing the rules across each BGM Affiliated Exchange, the proposal will enhance the Exchange’s ability to fairly and efficiently regulate its Members, meaning that the proposed rule change is equitable and will promote fairness in the market place. Finally, the Exchange believes that the non-substantive changes discussed above will contribute to the protection of investors and the public interest by helping to avoid confusion with respect to Exchange Rules. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the act. To the contrary, allowing the Exchange to implement substantively identical rules across each of the BGM Affiliated Exchanges regarding clearly erroneous executions does not present any competitive issues, but rather is designed to provide greater harmonization among Exchange, BZX, BYX, and EDGX rules of similar purpose. The proposed rule change should, therefore, result in less burdensome and more efficient regulatory compliance as well as a better understanding of Exchange Rules for common members of the BGM Affiliated Exchanges. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated this rule filing as non-controversial under Section 19(b)(3)(A) of the Act 14 and paragraph (f)(6) of Rule 19b–4 14 15 Sfmt 4703 E:\FR\FM\05OCN1.SGM U.S.C. 78s(b)(3)(A). 05OCN1 Federal Register / Vol. 80, No. 192 / Monday, October 5, 2015 / Notices thereunder.15 The proposed rule change effects a change that (A) does not significantly affect the protection of investors or the public interest; (B) does not impose any significant burden on competition; and (C) by its terms, does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest; provided that the self-regulatory organization has given the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily temporarily suspend such rule change if it appears to the Commission that such action is: (1) Necessary or appropriate in the public interest; (2) for the protection of investors; or (3) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–EDGA– 2015–37, and should be submitted on or before October 26, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–25179 Filed 10–2–15; 8:45 am] Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– EDGA–2015–37 on the subject line. mstockstill on DSK4VPTVN1PROD with NOTICES 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: Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting an Extension to Limited Exemption From Rule 612(c) of Regulation NMS in Connection With the Exchange’s Retail Liquidity Program Until March 31, 2016 Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–EDGA–2015–37. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent On December 23, 2013, the Securities and Exchange Commission (‘‘Commission’’) issued an order pursuant to its authority under Rule 612(c) of Regulation NMS (‘‘Sub-Penny Rule’’) 1 that granted NYSE Arca, Inc. (‘‘Exchange’’) a limited exemption from the Sub-Penny Rule in connection with the operation of the Exchange’s Retail Liquidity Program (‘‘Program’’).2 The limited exemption was granted concurrently with the Commission’s approval of the Exchange’s proposal to 15 17 CFR 240.19b–4. VerDate Sep<11>2014 18:34 Oct 02, 2015 Jkt 238001 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76021; File No. SR– NYSEARCA–2013–107] September 29, 2015. 16 17 CFR 200.30–3(a)(12). CFR 242.612(c). 2 See Securities Exchange Act Release No. 71176 (December 23, 2013), 78 FR 79524 (December 30, 2013) (SR–NYSEARCA–2013–107) (‘‘Order’’). 1 17 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 60207 adopt the Program for a one-year pilot term.3 The exemption was granted coterminous with the effectiveness of the pilot Program; both the pilot Program and exemption are scheduled to expire on September 30, 2015.4 The Exchange now seeks to extend the exemption until March 31, 2016.5 The Exchange’s request was made in conjunction with an immediately effective filing that extends the operation of the Program through the same date.6 In its request to extend the exemption, the Exchange notes that the participation in the Program has increased more recently. Accordingly, the Exchange has asked for additional time to allow itself and the Commission to analyze more robust data concerning the Program, which the Exchange committed to provide to the Commission.7 For this reason and the reasons stated in the Order originally granting the limited exemption, the Commission finds that extending the exemption, pursuant to its authority under Rule 612(c) of Regulation NMS, is appropriate in the public interest and consistent with the protection of investors. Therefore, it is hereby ordered that, pursuant to Rule 612(c) of Regulation NMS, the Exchange is granted a limited exemption from Rule 612 of Regulation NMS that allows it to accept and rank orders priced equal to or greater than $1.00 per share in increments of $0.001, in connection with the operation of its Retail Liquidity Program, until March 31, 2016. The limited and temporary exemption extended by this Order is subject to modification or revocation if at any time, the Commission determines that such action is necessary or appropriate in furtherance of the purposes of the Securities Exchange Act of 1934. Responsibility for compliance with any applicable provisions of the Federal securities laws must rest with the 3 See id. pilot term of the Program was originally scheduled to end on April 14, 2015, but the Exchange extended the term through September 30, 2015. See Securities Exchange Act Release No. 74572 (March 24, 2015), 80 FR 16705 (March 30, 2015) (NYSEARCA–2015–22). When the pilot term of the Program was extended, the Commission granted the Exchange’s requests to also extend the Sub-Penny exemption through September 30, 2015. See Securities Exchange Act Release No. 74609 (March 30, 2015), 80 FR 18272 (April 3, 2015). 5 See Letter from Martha Redding, Assistant Secretary, NYSE, to Brent J. Fields, Secretary, Securities and Exchange Commission, dated September 17, 2015. 6 See Securities Exchange Act Release No. 75994 (September 28, 2015),—FR—(SR–NYSEARCA– 2015–84). 7 See Order, supra note 2, 78 FR at 79529. 4 The E:\FR\FM\05OCN1.SGM 05OCN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 80, Number 192 (Monday, October 5, 2015)]
[Notices]
[Pages 60204-60207]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-25179]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76017; File No. SR-EDGA-2015-37]


Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Rule 11.15, Clearly Erroneous Executions

September 29, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on September 21, 2015, EDGA Exchange, Inc. (the ``Exchange'' or 
``EDGA'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 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 filed a proposal to amend Rule 11.15, Clearly 
Erroneous

[[Page 60205]]

Executions, in order to conform to the rules of BATS Exchange, Inc. 
(``BZX'') and BATS Y-Exchange, Inc. (``BYX'').\3\
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    \3\ See BYX and BZX Rule 11.17.
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    The text of the proposed rule change is available at the Exchange's 
Web site at www.batstrading.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    In early 2014, the Exchange and its affiliate, EDGX Exchange, Inc. 
(``EDGX'') received approval to effect a merger (the ``Merger'') of the 
Exchange's parent company, Direct Edge Holdings LLC, with BATS Global 
Markets, Inc., the parent of BZX and the BATS Y-Exchange, Inc. 
(``BYX'', together with BZX, EDGA and EDGX, the ``BGM Affiliated 
Exchanges'').\4\ In the context of the Merger, the BGM Affiliated 
Exchanges are working to align their rules, retaining only intended 
differences between the BGM Affiliated Exchanges. Thus, the Exchange 
proposes to restructure and amend Rule 11.15, Clearly Erroneous 
Executions, in order to conform to the corresponding rules of BYX and 
BZX and provide a consistent rule set across each of the BGM Affiliated 
Exchanges.\5\
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    \4\ See Securities Exchange Act Release No. 71449 (January 30, 
2014), 79 FR 6961 (February 5, 2014) (SR-EDGX-2013-43; SR-EDGA-2013-
34).
    \5\ The Exchange notes that EDGX intends to file an identical 
proposal with the Commission to restructure and amend its Rule 
11.15, Clearly Erroneous Executions, to conform to BYX and BZX Rules 
11.17.
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Background
    On September 10, 2010, the Commission approved, on a pilot basis, 
changes to Exchange Rule 11.15 to provide for uniform treatment: (1) Of 
clearly erroneous \6\ execution reviews in multi-stock events involving 
twenty or more securities; and (2) in the event transactions occur that 
result in the issuance of an individual stock trading pause by the 
primary listing market and subsequent transactions that occur before 
the trading pause is in effect on the Exchange.\7\ The Exchange also 
adopted additional changes to Rule 11.15 that reduced the ability of 
the Exchange to deviate from the objective standards set forth in Rule 
11.15,\8\ and in 2013, adopted a provision designed to address the 
operation of the Plan to Address Extraordinary Market Volatility 
Pursuant to Rule 608 of Regulation NMS under the Act (the ``Limit Up-
Limit Down Plan'' or the ``Plan'').\9\ In 2014, the Exchange adopted 
two additional provisions providing that: (i) A series of transactions 
in a particular security on one or more trading days may be viewed as 
one event if all such transactions were effected based on the same 
fundamentally incorrect or grossly misinterpreted issuance information 
resulting in a severe valuation error for all such transactions (the 
``Multi-Day Event''); and (ii) in the event of any disruption or 
malfunction in the operation of the electronic communications and 
trading facilities of an Exchange, another SRO, or responsible single 
plan processor in connection with the transmittal or receipt of a 
trading halt, an Officer, acting on his or her own motion, shall 
nullify any transaction that occurs after a trading halt has been 
declared by the primary listing market for a security and before such 
trading halt has officially ended according to the primary listing 
market.\10\
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    \6\ The terms of a transaction executed on the Exchange are 
``clearly erroneous'' when there is an obvious error in any term, 
such as price, number of shares or other unit of trading, or 
identification of the security. A transaction made in clearly 
erroneous error and cancelled by both parties or determined by the 
Exchange to be clearly erroneous will be removed from the 
Consolidated Tape. See Exchange Rule 11.15(a).
    \7\ Securities Exchange Act Release No. 62886 (Sept. 10, 2010), 
75 FR 56613 (Sept. 16, 2010) (SR-EDGX-2010-03).
    \8\ Id.
    \9\ See Securities Exchange Act Release No. 68814 (Feb. 1, 
2013), 78 FR 9086 (Feb. 7, 2013) (SR-EDGX-2013-06); see also 
Exchange Rule 11.15(i).
    \10\ See Securities Exchange Act Release No. 72434 (June 19, 
2014), 79 FR 36110 (June 25, 2014) (SR-EDGA-2014-11).
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    The Exchange proposes the below changes to conform Rule 11.15 to 
BYX and BZX Rules 11.17. None of these changes are designed to amend 
the Exchange's current review process for clearly erroneous executions. 
Rather, they are proposed in order to implement identical rules with 
regard to clearly erroneous executions across each of the BGM 
Affiliated Exchanges.\11\ The proposed changes to Rule 11.15 are as 
follows:
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    \11\ The Exchange notes that BYX and BZX are to file rule 
changes with the Commission to proposes a series of changes to their 
Rules 11.17, Clearly Erroneous Executions, to conform with other 
provisions of EDGA and EDGX Rule 11.15 to ensure each of the BGM 
Affiliated Exchange have identical rule text with regard to the 
review and handling of clearly erroneous executions.
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     Amend the last sentence of the introductory paragraph to 
include the word ``replaced''.
     Replace references to ``Officer'' with ``Official'' in 
paragraphs (b), (b)(1), (c)(3), (d), (e)(1), (e)(2), (e)(2)(D), and 
(e)(2)(F).
     Replace the term ``Regular Market Session'' with ``Regular 
Trading Hours'' in paragraphs (c)(1), (e)(1), and (g).
     Amend paragraph (b)(1) to: (i) Clarify that requests for 
review must be received by the Exchange within thirty (30) minutes of 
the execution time; (ii) replace the word ``Section'' with 
``paragraph'' and encase ``30'' in parentheses as well as insert the 
word ``thirty'' immediately before ``(30)'' in the second sentence; 
(iii) specify in the fourth sentence that if requested, each party 
shall provide any supporting written information as may be reasonably 
requested by the Official to aid resolution of the matter and remove 
the phrase ``any supporting written information.''
     Amend paragraph (b)(2) to encase both ``30'' and ``60'' in 
parentheses as well as insert the word ``thirty'' immediately before 
``(30)'' and the word ``sixty'' immediately before ``(60)''.
     Amend paragraph (c)(1) to: (i) Delete the word ``the'' 
before the word ``Regular'' and add the word ``during'' before the 
phrase ``the Pre-Opening and . . . '' in the first sentence; (ii) 
remove the ``s'' from the word ``occur'' within the parenthetical in 
the third sentence; and (iii) insert the word ``paragraph'' before 
``(c)(2)'' in the fourth sentence.
     Amend the first sentence of paragraph (c)(3) to: (i) 
Remove the ``s'' from the word ``system''; (ii) replace ``IPO'' with 
the term ``initial public offering''; and (iii) remove `` 's '' from 
the word ``tape''.
     Amend paragraph (d) to: (i) Replace the term ``at its'' 
with ``in his or her''; (ii) replace the word ``subsection'' with 
``paragraph''; and (ii) encase both ``30'' and ``60'' in parentheses as 
well as insert the word ``thirty'' immediately before ``(30)''.
     Reformat and renumber paragraph (d)(1)(A) as (d)(1) and 
(d)(1)(B) as (d)(2).
     Amend renumbered and reformatted paragraph (d)(1) to: (i) 
Not

[[Page 60206]]

capitalize the word ``Paragraph''; (ii) replace the word ``Section'' 
with ``Rule''; and (iii) delete ``, or''.
     Amend renumbered and reformatted paragraph (d)(2) to: (i) 
Not capitalize the word ``Paragraph''; (ii) replace the words ``the 
Section'' with ``this Rule''; and (iii) replace ``11.15'' with the word 
``paragraph'' before the reference to (c)(3).
     Amend paragraph (e)(1) to encase ``30'' in parentheses as 
well as insert the word ``thirty'' immediately before ``(30)'' in the 
third sentence.
     Amend paragraph (e)(2)(B) to rephrase the term `` ten (10) 
Member representatives'' with ``ten (10) representatives of Members''.
     Renumber paragraph (e)(3) as (e)(2)(C) and amend the 
paragraph to: (i) Specify that a request for review on appeal must be 
made, not only via email, but also in writing or other electronic means 
specified from time to time by the Exchange in a circular distributed 
to Members; and (ii) replace ``3:00 ET'' with ``3:00 p.m. Eastern 
Time'' in the third sentence.
     Renumber paragraph (e)(4) as (e)(2)(D).
     Renumber paragraph (e)(5) as (e)(2)(E) and: (i) Replace 
reference to ``Rule 11.15(e)(1)'' with ``paragraph (e)(1) above''; and 
(ii) add a sentence stating that in instances where the Exchange, on 
behalf of a Member, requests a determination by another market center 
that a transaction is clearly erroneous, the Exchange will pass any 
resulting charges through to the relevant Member.
     Renumber paragraph (e)(6) as (e)(2)(F).
     Within paragraph (f), amend: (i) The first sentence to 
replace the word ``the'' with ``an'' before the ``Officer'' and delete 
the word ``such'' before ``other senior level employee designee''; (ii) 
the second sentence to remove the ``s'' from the ``paragraphs'' before 
reference to paragraph (c)(1)-(3); (iii) the third sentence to delete 
the word ``such'' before ``other senior level employee designee''; (iv) 
amend the fourth sentence to delete the term ``such other'' before 
``senior level employee designee'', replace the term ``Regular Session 
Trading'' with ``Regular Trading Hours'', and add the word ``trading'' 
before ``day''; and (v) amend the last sentence to clarify that notice 
shall be provided by the Exchange, replace the word ``Member'' with 
``party'', remove the ``s'' from the ``paragraphss'' and delete 
reference to paragraph (e)(3) and (4) as those paragraph are now 
included in (e)(2).
     Amend paragraph (g) to: (i) Retitle it as ``Officer Acting 
On Own Motion''; (ii) delete the term ``such other'' before ``senior 
level employee designee'' and replace the term ``its'' with ``his or 
her'' in the first sentence; (iii) delete the word ``such'' before 
``other senior level employee designee'' in the fourth sentence; and 
(iv) remove the ``s'' from the ``paragraphs'' and delete reference to 
paragraph (e)(3) and (4) as those paragraphs are now included in (e)(2) 
in the last sentence.
     Within paragraph (h), amend: (i) The first sentence to 
replace the term ``initial public offering'' with ``IPO''; (ii) the 
third and fourth sentences to delete the word ``such'' before ``other 
senior level employee designee''; (iii) the sixth sentence to delete 
the word ``such'' before ``other senior level employee designee'', 
replace the term ``Regular Session Trading'' with ``Regular Trading 
Hours'', and add the word ``trading'' before ``day''; and (v) amend the 
last sentence to replace the term ``subsection'' with ``paragraph'' and 
delete reference to paragraphs (e)(3) and (4) as those paragraphs are 
now included in (e)(2).
    Amend the last sentence in paragraphs (j) and (k) to delete 
reference to paragraphs (e)(3) and (4) as those paragraphs are now 
included in (e)(2).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder that are applicable to a national securities exchange, and, 
in particular, with the requirements of Section 6(b) of the Act.\12\ 
Specifically, the proposed change is consistent with Section 6(b)(5) of 
the Act,\13\ because it is designed to promote just and equitable 
principles of trade, to remove impediments to, and perfect the 
mechanism of, a free and open market and a national market system, and, 
in general, to protect investors and the public interest. None of these 
changes are designed to amend the Exchange's current review process for 
clearly erroneous executions. Rather, as mentioned above, the proposed 
rule changes, combined with the planned filing for the BYX, BZX, and 
EDGX, would allow the BGM Affiliated Exchanges to provide a consistent 
set of rules as it relates to clearly erroneous executions. Consistent 
rules, in turn, will simplify the regulatory requirements for Members 
of the Exchange that are also participants on EDGA, BYZ and/or BZX. The 
proposed rule change would provide greater harmonization between rules 
of similar purpose on the BGM Affiliated Exchanges, resulting in 
greater uniformity and less burdensome and more efficient regulatory 
compliance and understanding of Exchange Rules. As such, the proposed 
rule change would foster cooperation and coordination with persons 
engaged in facilitating transactions in securities and would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system. Similarly, the Exchange also believes that, 
by harmonizing the rules across each BGM Affiliated Exchange, the 
proposal will enhance the Exchange's ability to fairly and efficiently 
regulate its Members, meaning that the proposed rule change is 
equitable and will promote fairness in the market place. Finally, the 
Exchange believes that the non-substantive changes discussed above will 
contribute to the protection of investors and the public interest by 
helping to avoid confusion with respect to Exchange Rules.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the act. To the contrary, allowing the 
Exchange to implement substantively identical rules across each of the 
BGM Affiliated Exchanges regarding clearly erroneous executions does 
not present any competitive issues, but rather is designed to provide 
greater harmonization among Exchange, BZX, BYX, and EDGX rules of 
similar purpose. The proposed rule change should, therefore, result in 
less burdensome and more efficient regulatory compliance as well as a 
better understanding of Exchange Rules for common members of the BGM 
Affiliated Exchanges.

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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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

    The Exchange has designated this rule filing as non-controversial 
under Section 19(b)(3)(A) of the Act \14\ and paragraph (f)(6) of Rule 
19b-4

[[Page 60207]]

thereunder.\15\ The proposed rule change effects a change that (A) does 
not significantly affect the protection of investors or the public 
interest; (B) does not impose any significant burden on competition; 
and (C) by its terms, does not become operative for 30 days after the 
date of the filing, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest; provided that the self-regulatory organization has given the 
Commission written notice of its intent to file the proposed rule 
change, along with a brief description and text of the proposed rule 
change, at least five business days prior to the date of filing of the 
proposed rule change, or such shorter time as designated by the 
Commission.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily temporarily suspend such rule 
change if it appears to the Commission that such action is: (1) 
Necessary or appropriate in the public interest; (2) for the protection 
of investors; or (3) otherwise in furtherance of the purposes of the 
Act. If the Commission takes such action, the Commission shall 
institute proceedings to determine whether the proposed rule should be 
approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-EDGA-2015-37 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-EDGA-2015-37. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-EDGA-2015-37, and should be 
submitted on or before October 26, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-25179 Filed 10-2-15; 8:45 am]
 BILLING CODE 8011-01-P

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