Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to the Clearly Erroneous Execution Rule for BATS Y-Exchange, Inc., 18099-18101 [2014-07014]

Download as PDF Federal Register / Vol. 79, No. 61 / Monday, March 31, 2014 / Notices filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change SR–ICEEU–2014– 02 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 The proposed rule change was published for comment in the Federal Register on February 18, 2014.3 The Commission received no comment letters regarding the proposed changes. For the reasons discussed below, the Commission is granting approval of the proposed rule change. tkelley on DSK3SPTVN1PROD with NOTICES II. Description ICE Clear Europe is proposing to permit Clearing Members of ICE Clear Europe to post certain KfW Euro Benchmark Bonds (‘‘KfWs’’) and European Investment Bank Euro Area Reference Notes (‘‘EIBs’’, together with KfWs, the ‘‘New Permitted Cover’’) to ICE Clear Europe in order to meet initial margin, original margin and certain other margin requirements, including delivery margin requirements. The New Permitted Cover will not be accepted to satisfy variation margin requirements or guaranty fund requirements. ICE Clear Europe has stated that the New Permitted Cover will provide its Clearing Members with a greater range of high-quality collateral that can be posted to ICE Clear Europe. Furthermore, ICE Clear Europe has stated that (1) the New Permitted Cover is of minimal credit risk comparable to that of other sovereign debt currently accepted by ICE Clear Europe as permitted cover for margin obligations, and (2) the New Permitted Cover has demonstrated low volatility in stressed and normal market conditions. ICE Clear Europe has established initial valuation haircut levels and concentration limitations for the New Permitted Cover, and proposes to review and modify such haircuts and limitations from time to time in accordance with the Rules and procedures. The New Permitted Cover may only constitute up to 25% of a Clearing Member’s total initial and original margin requirement, up to a maximum amount of EUR 30 million. The New Permitted Cover will be subject to a valuation haircut of 3%, except that New Permitted Cover with a maturity of more than eleven years will be subject to a valuation haircut of 5%. The concentration limitations apply on an aggregate basis across all product categories. Upon a Clearing Member’s use of New Permitted Cover to cover a margin requirement denominated in a different currency, ICE Clear Europe has stated than an additional haircut will apply, in accordance with existing rules, in order to cover exchange rate risk. requirements of Section 17A of the Act 8 and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,9 that the proposed rule change (File No. SR– ICEEU–2014–02) be, and hereby is, approved.10 III. Discussion and Commission Findings For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Kevin M. O’Neill, Deputy Secretary. Section 19(b)(2)(C) of the Act 4 directs the Commission to approve a proposed rule change of a self-regulatory organization if the Commission finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such selfregulatory organization. Section 17A(b)(3)(F) of the Act 5 requires, among other things, that the rules of a clearing agency are designed to promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions, to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency and for which it is responsible and, in general, to protect investors and the public interest. The Commission finds that the proposed rule change is consistent with the requirements of Section 17A of the Act,6 as Clearing Members of ICE Clear Europe will have access to a greater range of collateral that ICE Clear Europe has determined to be of high quality to satisfy certain margin requirements, and the New Permitted Cover will be subject to appropriate valuation haircuts and concentration limits, which will be reviewed and modified periodically by ICE Clear Europe in accordance with its Rules and procedures. The proposed rule changes will thereby (1) promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivatives agreements, contracts, and transactions; and (2) help to protect investors and the public interest, consistent with the requirements of Section 17A(b)(3)(F) of the Act.7 IV. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the 2 17 2 17 CFR 240.19b–4. 3 Securities Exchange Act Release No. 34–71519 (February 11, 2014), 79 FR 9296 (February 18, 2014) (SR–ICEEU–2014–02). 4 15 U.S.C. 78s(b)(2)(C). VerDate Mar<15>2010 18:10 Mar 28, 2014 Jkt 232001 18099 CFR 240.19b–4. Exchange Act Release No. 34–71519 (February 11, 2014), 79 FR 9296 (February 18, 2014) (SR–ICEEU–2014–02). 4 15 U.S.C. 78s(b)(2)(C). 5 15 U.S.C. 78q–1(b)(3)(F). 3 Securities PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 [FR Doc. 2014–07036 Filed 3–28–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71796; File No. SR–BYX– 2014–003] Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to the Clearly Erroneous Execution Rule for BATS Y-Exchange, Inc. March 25, 2014. 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 March 18, 2014, BATS Y-Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BYX’’) 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 the Exchange. The Exchange has designated this proposal as a ‘‘noncontroversial’’ proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6)(iii) thereunder,4 which renders it effective upon filing with the Commission. 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 the Substance of the Proposed Rule Change The Exchange filed a proposal to extend a pilot program related to Rule 11.17, entitled ‘‘Clearly Erroneous Executions.’’ 8 15 U.S.C. 78q–1. U.S.C. 78s(b)(2). 10 In approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 11 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6)(iii). 9 15 E:\FR\FM\31MRN1.SGM 31MRN1 18100 Federal Register / Vol. 79, No. 61 / Monday, March 31, 2014 / Notices The text of the proposed rule change is available at the Exchange’s Web site at http://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. tkelley on DSK3SPTVN1PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to extend the effectiveness of the Exchange’s current rule applicable to Clearly Erroneous Executions. Portions of Rule 11.17, explained in further detail below, are currently operating as a pilot program set to expire on April 8, 2014.5 The Exchange proposes to extend the pilot program to coincide with the pilot period for 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’’), including any extensions to the pilot period for the Plan.6 On October 4, 2010, the Exchange filed an immediately effective filing to adopt various rule changes to bring BYX Rules up to date with the changes that had been made to the rules of BATS Exchange, Inc., the Exchange’s affiliate, while BYX’s Form 1 Application to register as a national security exchange was pending approval. Such changes included changes to the Exchange’s Rule 11.17, on a pilot basis, to provide for uniform treatment: (1) Of clearly erroneous execution reviews in multistock 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 4 17 CFR 240.19b–4(f)(6)(iii). Securities Exchange Act Release No. 70514 (Sept. 26, 2013), 78 FR 60963 (Oct. 2, 2013) (SR– BYX–2013–033). 5 See VerDate Mar<15>2010 18:10 Mar 28, 2014 Jkt 232001 before the trading pause is in effect on the Exchange.7 The Exchange also adopted additional changes to Rule 11.17 that reduced the ability of the Exchange to deviate from the objective standards set forth in Rule 11.17,8 and in 2013, adopted a provision designed to address the operation of the Plan.9 The Exchange believes the benefits to market participants from the more objective clearly erroneous executions rule should continue on a pilot basis to coincide with the operation of the Limit Up-Limit Down Plan. The Exchange believes that continuing the pilot will protect against any unanticipated consequences. Thus, the Exchange believes that the protections of the Clearly Erroneous Rule should continue while the industry gains further experience operating the Plan. 2. Statutory Basis The Exchange believes that its proposal 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.10 In particular, the proposal is consistent with Section 6(b)(5) of the Act,11 because it would promote just and equitable principles of trade, remove impediments to, and perfect the mechanism of, a free and open market and a national market system. Although the Limit Up-Limit Down Plan is operational, the Exchange believes that maintaining the pilot will help to protect against unanticipated consequences. Thus, the Exchange believes that the protections of the Clearly Erroneous Rule should continue while the industry gains further experience operating the Plan. The Exchange also believes that the pilot program promotes just and equitable principles of trade in that it promotes transparency and uniformity across markets concerning review of transactions as clearly erroneous. Thus, the Exchange believes that the extension of the pilot would help assure that the determination of whether a clearly erroneous trade has occurred will be based on clear and objective criteria, and that the resolution of the incident 6 See Securities Exchange Act Release No. 67091 (May 31, 2012), 77 FR 33498 (June 6, 2012) (the ‘‘Limit Up-Limit Down Release’’). 7 Securities Exchange Act Release No. 63097 (Oct. 13, 2010), 75 FR 64767 (Oct. 20, 2010) (SR–BYX– 2010–002). 8 Id. 9 See Securities Exchange Act Release No. 68798 (Jan. 30, 2013), 78 FR 8628 (Feb. 6, 2013) (SR–BYX– 2013–005); see also BYX Rule 11.17(h). 10 15 U.S.C. 78f(b). PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 will occur promptly through a transparent process. The proposed rule change would also help assure consistent results in handling erroneous trades across the U.S. markets, thus furthering fair and orderly markets, the protection of investors and the public interest. Based on the foregoing, the Exchange believes the benefits to market participants from the more objective clearly erroneous executions rule should continue on a pilot basis to coincide with the operation of the Limit Up-Limit Down Plan. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change implicates any competitive issues. To the contrary, the Exchange believes that the Financial Industry Regulatory Authority (‘‘FINRA’’) and other national securities exchanges are also filing similar proposals, and thus, that the proposal will help to ensure consistency across market centers. 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 Because the proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate 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 12 and Rule 19b–4(f)(6)(iii) thereunder.13 The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest, as it will allow the clearly erroneous pilot program to continue uninterrupted while the industry gains further experience operating under the Limit Up-Limit Down Plan, and avoid any 11 15 12 15 E:\FR\FM\31MRN1.SGM U.S.C. 78f(b)(5). U.S.C. 78s(b)(3)(A). 31MRN1 Federal Register / Vol. 79, No. 61 / Monday, March 31, 2014 / Notices investor confusion that could result from a temporary interruption in the pilot program. For this reason, the Commission designates the proposed rule change to be operative upon filing.14 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. 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: Reference Room at 100 F Street NE., Washington, DC 20549–1090 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–BYX– 2014–003, and should be submitted on or before April 21, 2014. 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 aspects of such statements. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Kevin M. O’Neill, Deputy Secretary. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change [FR Doc. 2014–07014 Filed 3–28–14; 8:45 am] BILLING CODE 8011–01–P Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– BYX–2014–003 on the subject line. Paper Comments tkelley on DSK3SPTVN1PROD with NOTICES • 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–BYX–2014–003. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public 13 17 CFR 240.19b–4(f)(6)(iii). As required under Rule 19b–4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. VerDate Mar<15>2010 18:10 Mar 28, 2014 Jkt 232001 18101 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71794; File No. SR– NASDAQ–2014–025] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify NASDAQ’s DOT, DOTI, and LIST Routing Strategies March 25, 2014. 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 March 11, 2014, The NASDAQ Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘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 NASDAQ proposes to modify Rule 4758 with respect to its DOT, DOTI, and LIST routing strategies. The text of the proposed rule change is available on the Exchange’s Web site at http://nasdaq. cchwallstreet.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 15 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 1. Purpose NASDAQ offers its members optional routing functionality that allows them to use NASDAQ’s facilities to access liquidity available on other trading venues. The functionality includes a range of defined routing algorithms— known as strategies—that determine the destinations and pattern of routing. The particular pattern of routing to other venues associated with a particular strategy is referred to in Rule 4758 as the ‘‘System routing table’’ for that strategy. All routing is designed to be conducted in a manner consistent with the requirements of Regulation NMS. NASDAQ currently offers a set of strategies designed to allow market participants to route orders to the primary market on which a security is listed. NASDAQ is proposing minor changes to these strategies to improve their functioning and the clarity of the rule that describes them in certain situations. First, NASDAQ offers the DOT strategy (which includes several variations) as a means of designating an order for routing to the New York Stock Exchange (‘‘NYSE’’) or NYSE MKT 3 for participation in their respective opening or closing processes. DOT orders are routed directly to NYSE or NYSE MKT, as appropriate. After attempting to execute in the opening or closing process, if any shares remain unexecuted, DOT orders thereafter check the NASDAQ Market Center System for available shares and are converted into SCAN or STGY orders, depending on the designation of the entering firm.4 3 Formerly, NYSE Amex. NASDAQ is amending Rule 4758 to reflect the change in this exchange’s name. 4 STGY is a routing option under which orders check the System for available shares and Continued E:\FR\FM\31MRN1.SGM 31MRN1

Agencies

[Federal Register Volume 79, Number 61 (Monday, March 31, 2014)]
[Notices]
[Pages 18099-18101]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-07014]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71796; File No. SR-BYX-2014-003]


Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change to the 
Clearly Erroneous Execution Rule for BATS Y-Exchange, Inc.

March 25, 2014.
    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 March 18, 2014, BATS Y-Exchange, Inc. (the ``Exchange'' or 
``BYX'') 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 the Exchange. The Exchange 
has designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with 
the Commission. 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\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange filed a proposal to extend a pilot program related to 
Rule 11.17, entitled ``Clearly Erroneous Executions.''

[[Page 18100]]

    The text of the proposed rule change is available at the Exchange's 
Web site at http://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
    The purpose of this filing is to extend the effectiveness of the 
Exchange's current rule applicable to Clearly Erroneous Executions. 
Portions of Rule 11.17, explained in further detail below, are 
currently operating as a pilot program set to expire on April 8, 
2014.\5\ The Exchange proposes to extend the pilot program to coincide 
with the pilot period for 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''), including any extensions 
to the pilot period for the Plan.\6\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 70514 (Sept. 26, 
2013), 78 FR 60963 (Oct. 2, 2013) (SR-BYX-2013-033).
    \6\ See Securities Exchange Act Release No. 67091 (May 31, 
2012), 77 FR 33498 (June 6, 2012) (the ``Limit Up-Limit Down 
Release'').
---------------------------------------------------------------------------

    On October 4, 2010, the Exchange filed an immediately effective 
filing to adopt various rule changes to bring BYX Rules up to date with 
the changes that had been made to the rules of BATS Exchange, Inc., the 
Exchange's affiliate, while BYX's Form 1 Application to register as a 
national security exchange was pending approval. Such changes included 
changes to the Exchange's Rule 11.17, on a pilot basis, to provide for 
uniform treatment: (1) Of clearly erroneous 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 11.17 that reduced 
the ability of the Exchange to deviate from the objective standards set 
forth in Rule 11.17,\8\ and in 2013, adopted a provision designed to 
address the operation of the Plan.\9\
---------------------------------------------------------------------------

    \7\ Securities Exchange Act Release No. 63097 (Oct. 13, 2010), 
75 FR 64767 (Oct. 20, 2010) (SR-BYX-2010-002).
    \8\ Id.
    \9\ See Securities Exchange Act Release No. 68798 (Jan. 30, 
2013), 78 FR 8628 (Feb. 6, 2013) (SR-BYX-2013-005); see also BYX 
Rule 11.17(h).
---------------------------------------------------------------------------

    The Exchange believes the benefits to market participants from the 
more objective clearly erroneous executions rule should continue on a 
pilot basis to coincide with the operation of the Limit Up-Limit Down 
Plan. The Exchange believes that continuing the pilot will protect 
against any unanticipated consequences. Thus, the Exchange believes 
that the protections of the Clearly Erroneous Rule should continue 
while the industry gains further experience operating the Plan.
2. Statutory Basis
    The Exchange believes that its proposal 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.\10\ In particular, 
the proposal is consistent with Section 6(b)(5) of the Act,\11\ because 
it would promote just and equitable principles of trade, remove 
impediments to, and perfect the mechanism of, a free and open market 
and a national market system. Although the Limit Up-Limit Down Plan is 
operational, the Exchange believes that maintaining the pilot will help 
to protect against unanticipated consequences. Thus, the Exchange 
believes that the protections of the Clearly Erroneous Rule should 
continue while the industry gains further experience operating the 
Plan. The Exchange also believes that the pilot program promotes just 
and equitable principles of trade in that it promotes transparency and 
uniformity across markets concerning review of transactions as clearly 
erroneous. Thus, the Exchange believes that the extension of the pilot 
would help assure that the determination of whether a clearly erroneous 
trade has occurred will be based on clear and objective criteria, and 
that the resolution of the incident will occur promptly through a 
transparent process. The proposed rule change would also help assure 
consistent results in handling erroneous trades across the U.S. 
markets, thus furthering fair and orderly markets, the protection of 
investors and the public interest. Based on the foregoing, the Exchange 
believes the benefits to market participants from the more objective 
clearly erroneous executions rule should continue on a pilot basis to 
coincide with the operation of the Limit Up-Limit Down Plan.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change 
implicates any competitive issues. To the contrary, the Exchange 
believes that the Financial Industry Regulatory Authority (``FINRA'') 
and other national securities exchanges are also filing similar 
proposals, and thus, that the proposal will help to ensure consistency 
across market centers.

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

    Because the proposed rule change does not (i) significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate 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 \12\ and Rule 19b-
4(f)(6)(iii) thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
---------------------------------------------------------------------------

    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Commission believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest, 
as it will allow the clearly erroneous pilot program to continue 
uninterrupted while the industry gains further experience operating 
under the Limit Up-Limit Down Plan, and avoid any

[[Page 18101]]

investor confusion that could result from a temporary interruption in 
the pilot program. For this reason, the Commission designates the 
proposed rule change to be operative upon filing.\14\
---------------------------------------------------------------------------

    \14\ 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).
---------------------------------------------------------------------------

    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.

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 rule-comments@sec.gov. Please include 
File Number SR-BYX-2014-003 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-BYX-2014-003. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room at 100 F Street NE., 
Washington, DC 20549-1090 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-BYX-
2014-003, and should be submitted on or before April 21, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-07014 Filed 3-28-14; 8:45 am]
BILLING CODE 8011-01-P