Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Offer Risk Management Tools Designed To Allow Member Organizations To Monitor and Address Exposure to Risk, 79053-79055 [2013-30965]
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Federal Register / Vol. 78, No. 249 / Friday, December 27, 2013 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing noting that it is in the public
interest that the Exchange facilitate
connectivity to the backup datacenter in
order to minimize any potential
disruption and market impact that may
otherwise occur if the Exchange’s
primary datacenter is not operational.
The Exchange further represents that the
waiver is necessary to permit the
Exchange to continue to facilitate access
to its backup datacenter when it is
moved over to an ISE-operated facility.
The Exchange stated that it is vital that
market participants be able to access the
ISE through the Exchange’s backup
datacenter should the need arise.
Moreover, the Exchange believes that its
proposal, which will allow market
participants to access the backup
datacenter through one of multiple
telecommunication vendors, provides a
robust, efficient, and cost effective
means of facilitating this access. For the
above reasons, the Commission believes
that waiving the 30 day operative delay
is consistent with the protection of
investors and the public interest in that
the Exchange may immediately provide
connectivity to the backup datacenter to
minimize any disruption to the market
in case ISE’s primary datacenter is not
operational. Accordingly, the
Commission hereby grants the
Exchange’s request and designates the
proposal operative upon filing.16
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) 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.
16 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
17 15 U.S.C. 78s(b)(2)(B).
VerDate Mar<15>2010
23:48 Dec 26, 2013
Jkt 232001
Comments may be submitted by any of
the following methods:
79053
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–ISE–2013–60 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–ISE–2013–60. 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 the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–ISE–
2013–60 and should be submitted on or
before January 17, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Kevin M. O’Neill,
Deputy Secretary.
[Release No. 34–71165; File No. SR–
NYSEMKT–2013–102]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Offer Risk
Management Tools Designed To Allow
Member Organizations To Monitor and
Address Exposure to Risk
December 20, 2013.
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 December
12, 2013, NYSE MKT LLC (the
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to offer risk
management tools designed to allow
equity member organizations to monitor
and address exposure to risk. The text
of the proposed rule change is available
on the Exchange’s Web site at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
[FR Doc. 2013–30963 Filed 12–26–13; 8:45 am]
BILLING CODE 8011–01–P
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
18 17
PO 00000
CFR 200.30–3(a)(12).
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Fmt 4703
Sfmt 4703
E:\FR\FM\27DEN1.SGM
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79054
Federal Register / Vol. 78, No. 249 / Friday, December 27, 2013 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
tkelley on DSK3SPTVN1PROD with NOTICES
1. Purpose
In order to assist equity member
organizations’ efforts to manage their
risk level, the Exchange proposes to
offer risk management tools designed to
allow member organizations to monitor
and address exposure to risk. These
tools are designed for the Exchange’s
equity trading market and are identical
to the tools that will be offered by the
New York Stock Exchange LLC.
On October 2, 2012, the Commission
conducted a roundtable entitled
‘‘Technology and Trading: Promoting
Stability in Today’s Markets’’ (the
‘‘Roundtable’’).4 While a number of
issues were discussed at the
Roundtable, a large amount of time was
devoted to discussing ‘‘kill-switches,’’ a
mechanism that would deactivate
trading when certain thresholds were
met. Panelists and commenters on the
Roundtable’s topics generally supported
a kill-switch mechanism that would
permit market centers to terminate a
firm’s trading activity if such activity
was posing a threat to market integrity.
But there was concern that firms would
‘‘be reluctant to systemically cut
themselves off from the market’’ 5 and
therefore, any kill-switch-triggering
threshold would be set by the firm at a
conservative level such that the
automated disconnect would not occur
when actually needed. At the same time
though, the ability to detect unusual
behavior would be invaluable to a firm
in assessing whether an error was
causing an unwanted buildup in risk.
To address the concerns raised during
the Roundtable, the Exchange proposes
to offer optional risk management tools
for its member organizations that would
facilitate, among other things, blocking
of a member organization’s orders if
certain thresholds were met. As
proposed, the risk management tools
seek to balance the conflicting
viewpoints raised during the
Roundtable by providing risk
monitoring services that grant discretion
to the member organizations to define
pre-set risk thresholds. The tools are
designed to act as a backstop for
member organizations’ risk controls by
providing them with the ability to take
4 See Securities Exchange Act Release No. 67802
(Sept. 7, 2012), 77 FR 56697 (Sept. 13, 2012) (File
No. 4–652). A webcast of the Roundtable is
available at www.sec.gov/news/otherwebcasts/2012/
ttr100212.shtml.
5 See Transcript of Roundtable, Sections 0151–
0152 (Oct. 2, 2012) (remarks of Lou Steinberg, TD
Ameritrade).
VerDate Mar<15>2010
23:48 Dec 26, 2013
Jkt 232001
action to more effectively manage their
risk levels with respect to orders at the
Exchange.
The risk management tools will
provide member organizations with the
ability to segment activity into risk
groups and to monitor exposure in real
time as trades execute. Member
organizations may also take certain
actions in response to an unwanted
buildup in risk levels, such as bulk
blocking or bulk cancelling orders by
risk group. Additionally, member
organizations may define risk limits that
may be adjusted intraday and elect to
have the Exchange take action based on
these pre-set limits, such as sending
alerts as exposure limits are approached
and breached or automatically blocking
orders upon a breach. The tools are
meant to be supplemental, acting as a
backstop for a member organization’s
internal monitoring and procedures
related to risk management. The
Exchange does not guarantee that the
tools will be sufficiently comprehensive
to meet all of a member organization’s
needs, and the tools are not designed to
be the sole means of risk control.
Moreover, the use of the Exchange’s risk
management tools will not
automatically constitute compliance
with Exchange or federal rules.
As noted above, the proposed risk
management tools will be optional for
member organizations. The Exchange
will not provide preferential treatment
to member organizations using the
Exchange-offered risk management tools
and will not charge a fee for use of the
risk management tools. Should the
Exchange determine to charge a fee for
use of the risk management tools, such
fee will be proposed through a
subsequent rule filing.
The Exchange will be phasing in its
risk management tools as the technology
supporting the functionality is being
implemented and will announce by
Trader Update when specific risk
management tools will be available. The
Exchange intends to make available the
ability to segment activity into risk
groups, define risk limits, and enter
bulk block and bulk cancel messages
during the first rollout.6 Additional
functionality, such as allowing member
organizations to elect to have the
Exchange take automated action based
on pre-set limits, will be phased in over
subsequent months.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
6 The Exchange expects the first rollout to begin
in the first quarter of 2014.
PO 00000
Frm 00245
Fmt 4703
Sfmt 4703
requirements of Section 6(b) of the Act,7
in general, and Section 6(b)(5) of the
Act,8 in particular, in that it is designed
to foster cooperation and coordination
with persons facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest and not
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange believes that the
proposed rule change will foster
cooperation and coordination with
persons facilitating transactions in
securities because the Exchange will
provide alerts to member organizations
when their trading reaches certain
thresholds. As such, the Exchange will
help member organizations monitor
their risk levels and provide tools for
the firms to take action. Additionally,
the Exchange believes that the proposed
rule change will remove impediments to
and perfect the mechanism of a free and
open market and a national market
system because the tools will provide
member organizations with the ability to
self-manage their levels of risk while
providing an alert system that will help
to ensure that member organizations are
aware of developing issues. As such, the
Exchange believes that the tools will
provide a means to address potentially
market-impacting events, helping to
ensure the proper functioning of the
market.
Further, the Exchange believes that
the proposed rule change is designed to
protect investors and the public interest
because the tools are a form of impact
mitigation that will aid member
organizations in minimizing their risk
exposure and reduce the potential for
disruptive, market-wide events. The
Exchange understands that firms test
their trading systems in order to identify
and mitigate latent defects. The
proposed tools will serve as a back stop
for member organizations to assist them
in identifying any such issues. The
Exchange believes the risk management
tools will assist member organizations
in managing their financial exposure
which, in turn, could enhance the
integrity of trading on the securities
markets and help to assure the stability
of the financial system.
Finally, the Exchange believes that
the proposed rule change does not
unfairly discriminate among the
Exchange’s member organizations
because use of the risk management
tools is optional and is not a
7 15
8 15
E:\FR\FM\27DEN1.SGM
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
27DEN1
Federal Register / Vol. 78, No. 249 / Friday, December 27, 2013 / Notices
prerequisite for participation on the
Exchange.
to determine whether the proposed rule
should be approved or disapproved.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. In fact, the
Exchange believes that the proposal will
have a positive effect on competition
because, by providing member
organizations with additional means to
monitor and control risk, the proposal
will increase confidence in the proper
functioning of the markets. The
Exchange believes the risk management
tools will assist member organizations
in managing their financial exposure
which, in turn, could enhance the
integrity of trading on the securities
markets and help to assure the stability
of the financial system. As a result, the
level of competition should increase as
public confidence in the markets is
solidified.
IV. Solicitation of Comments
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.
tkelley on DSK3SPTVN1PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days after the date of
the filing, or such shorter time as the
Commission may designate, it has
become effective pursuant to 19(b)(3)(A)
of the Act 9 and Rule 19b–4(f)(6) 10
thereunder.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
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.
10 17
VerDate Mar<15>2010
23:48 Dec 26, 2013
Jkt 232001
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:
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–NYSEMKT–2013–102 on
the subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NYSEMKT–2013–102. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (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 the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEMKT–2013–102 and should be
submitted on or before January 17, 2014.
Frm 00246
Fmt 4703
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–30965 Filed 12–26–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 71158; File No. SR–NASDAQ–
2013–158]
Electronic Comments
PO 00000
79055
Sfmt 4703
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Acceptable Trade Range
December 20, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
16, 2013, The NASDAQ Stock Market
LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II, below, which Items have
been prepared by NASDAQ. 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
NASDAQ proposes to delay the
implementation of a recent proposed
amendment to rule text related to
Acceptable Trade Range.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.nasdaq.cchwall
street.com, at the principal office of the
Exchange, at the Commission’s Public
Reference Room, and on the
Commission’s Web site at https://
www.sec.gov.
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
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b-4.
1 15
E:\FR\FM\27DEN1.SGM
27DEN1
Agencies
[Federal Register Volume 78, Number 249 (Friday, December 27, 2013)]
[Notices]
[Pages 79053-79055]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-30965]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71165; File No. SR-NYSEMKT-2013-102]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change To Offer Risk
Management Tools Designed To Allow Member Organizations To Monitor and
Address Exposure to Risk
December 20, 2013.
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 December 12, 2013, NYSE MKT LLC (the ``Exchange'' or
``NYSE MKT'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to offer risk management tools designed to
allow equity member organizations to monitor and address exposure to
risk. The text of the proposed rule change is available on the
Exchange's Web site at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
[[Page 79054]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
In order to assist equity member organizations' efforts to manage
their risk level, the Exchange proposes to offer risk management tools
designed to allow member organizations to monitor and address exposure
to risk. These tools are designed for the Exchange's equity trading
market and are identical to the tools that will be offered by the New
York Stock Exchange LLC.
On October 2, 2012, the Commission conducted a roundtable entitled
``Technology and Trading: Promoting Stability in Today's Markets'' (the
``Roundtable'').\4\ While a number of issues were discussed at the
Roundtable, a large amount of time was devoted to discussing ``kill-
switches,'' a mechanism that would deactivate trading when certain
thresholds were met. Panelists and commenters on the Roundtable's
topics generally supported a kill-switch mechanism that would permit
market centers to terminate a firm's trading activity if such activity
was posing a threat to market integrity. But there was concern that
firms would ``be reluctant to systemically cut themselves off from the
market'' \5\ and therefore, any kill-switch-triggering threshold would
be set by the firm at a conservative level such that the automated
disconnect would not occur when actually needed. At the same time
though, the ability to detect unusual behavior would be invaluable to a
firm in assessing whether an error was causing an unwanted buildup in
risk.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 67802 (Sept. 7,
2012), 77 FR 56697 (Sept. 13, 2012) (File No. 4-652). A webcast of
the Roundtable is available at www.sec.gov/news/otherwebcasts/2012/ttr100212.shtml.
\5\ See Transcript of Roundtable, Sections 0151-0152 (Oct. 2,
2012) (remarks of Lou Steinberg, TD Ameritrade).
---------------------------------------------------------------------------
To address the concerns raised during the Roundtable, the Exchange
proposes to offer optional risk management tools for its member
organizations that would facilitate, among other things, blocking of a
member organization's orders if certain thresholds were met. As
proposed, the risk management tools seek to balance the conflicting
viewpoints raised during the Roundtable by providing risk monitoring
services that grant discretion to the member organizations to define
pre-set risk thresholds. The tools are designed to act as a backstop
for member organizations' risk controls by providing them with the
ability to take action to more effectively manage their risk levels
with respect to orders at the Exchange.
The risk management tools will provide member organizations with
the ability to segment activity into risk groups and to monitor
exposure in real time as trades execute. Member organizations may also
take certain actions in response to an unwanted buildup in risk levels,
such as bulk blocking or bulk cancelling orders by risk group.
Additionally, member organizations may define risk limits that may be
adjusted intraday and elect to have the Exchange take action based on
these pre-set limits, such as sending alerts as exposure limits are
approached and breached or automatically blocking orders upon a breach.
The tools are meant to be supplemental, acting as a backstop for a
member organization's internal monitoring and procedures related to
risk management. The Exchange does not guarantee that the tools will be
sufficiently comprehensive to meet all of a member organization's
needs, and the tools are not designed to be the sole means of risk
control. Moreover, the use of the Exchange's risk management tools will
not automatically constitute compliance with Exchange or federal rules.
As noted above, the proposed risk management tools will be optional
for member organizations. The Exchange will not provide preferential
treatment to member organizations using the Exchange-offered risk
management tools and will not charge a fee for use of the risk
management tools. Should the Exchange determine to charge a fee for use
of the risk management tools, such fee will be proposed through a
subsequent rule filing.
The Exchange will be phasing in its risk management tools as the
technology supporting the functionality is being implemented and will
announce by Trader Update when specific risk management tools will be
available. The Exchange intends to make available the ability to
segment activity into risk groups, define risk limits, and enter bulk
block and bulk cancel messages during the first rollout.\6\ Additional
functionality, such as allowing member organizations to elect to have
the Exchange take automated action based on pre-set limits, will be
phased in over subsequent months.
---------------------------------------------------------------------------
\6\ The Exchange expects the first rollout to begin in the first
quarter of 2014.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the requirements of Section 6(b) of the Act,\7\ in general, and Section
6(b)(5) of the Act,\8\ in particular, in that it is designed to foster
cooperation and coordination with persons facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest and not to permit unfair
discrimination between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change will foster
cooperation and coordination with persons facilitating transactions in
securities because the Exchange will provide alerts to member
organizations when their trading reaches certain thresholds. As such,
the Exchange will help member organizations monitor their risk levels
and provide tools for the firms to take action. Additionally, the
Exchange believes that the proposed rule change will remove impediments
to and perfect the mechanism of a free and open market and a national
market system because the tools will provide member organizations with
the ability to self-manage their levels of risk while providing an
alert system that will help to ensure that member organizations are
aware of developing issues. As such, the Exchange believes that the
tools will provide a means to address potentially market-impacting
events, helping to ensure the proper functioning of the market.
Further, the Exchange believes that the proposed rule change is
designed to protect investors and the public interest because the tools
are a form of impact mitigation that will aid member organizations in
minimizing their risk exposure and reduce the potential for disruptive,
market-wide events. The Exchange understands that firms test their
trading systems in order to identify and mitigate latent defects. The
proposed tools will serve as a back stop for member organizations to
assist them in identifying any such issues. The Exchange believes the
risk management tools will assist member organizations in managing
their financial exposure which, in turn, could enhance the integrity of
trading on the securities markets and help to assure the stability of
the financial system.
Finally, the Exchange believes that the proposed rule change does
not unfairly discriminate among the Exchange's member organizations
because use of the risk management tools is optional and is not a
[[Page 79055]]
prerequisite for participation on the Exchange.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. In fact, the
Exchange believes that the proposal will have a positive effect on
competition because, by providing member organizations with additional
means to monitor and control risk, the proposal will increase
confidence in the proper functioning of the markets. The Exchange
believes the risk management tools will assist member organizations in
managing their financial exposure which, in turn, could enhance the
integrity of trading on the securities markets and help to assure the
stability of the financial system. As a result, the level of
competition should increase as public confidence in the markets is
solidified.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to 19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) \10\
thereunder.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule 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-2013-102 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEMKT-2013-102. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (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 the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEMKT-2013-102 and should
be submitted on or before January 17, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-30965 Filed 12-26-13; 8:45 am]
BILLING CODE 8011-01-P