Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Operation of the NYSE Arca ETP Incentive Program, Currently Scheduled To Expire on September 3, 2014, for an Additional Year, 53492-53494 [2014-21357]
Download as PDF
53492
Federal Register / Vol. 79, No. 174 / Tuesday, September 9, 2014 / Notices
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–BX–2014–039. 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–BX–
2014–039 and should be submitted on
or before September 30, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Kevin M. O’ Neill,
Deputy Secretary.
[FR Doc. 2014–21359 Filed 9–8–14; 8:45 am]
tkelley on DSK3SPTVN1PROD with NOTICES
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72963; File No. SR–
NYSEArca–2014–99]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the Operation
of the NYSE Arca ETP Incentive
Program, Currently Scheduled To
Expire on September 3, 2014, for an
Additional Year
September 3, 2014.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on August
28, 2014, NYSE Arca, Inc. (‘‘Exchange’’
or ‘‘NYSE Arca’’) 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 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 extend the
operation of the NYSE Arca ETP
Incentive Program, currently scheduled
to expire on September 3, 2014, for an
additional year. 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.
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
8 17
CFR 200.30–3(a)(12).
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to extend the
operation of the NYSE Arca ETP
Incentive Program (‘‘Incentive
Program’’),4 a one-year pilot program for
issuers of certain exchange-traded
products (‘‘ETPs’’) listed on the
Exchange, for an additional year. The
Incentive Program is currently
scheduled to expire on September 3,
2014. As proposed, the pilot program
would be set to end on September 4,
2015.
NYSE Arca established the Incentive
Program to enhance the market quality
for ETPs by incentivizing Market
Makers 5 to take Lead Market Maker
(‘‘LMM’’) assignments in certain lower
volume ETPs by offering an alternative
fee structure for such LMMs. The
Incentive Program is designed to
improve the quality of market for lowervolume ETPs, thereby incentivizing
them to list on the Exchange. Moreover,
the Exchange believes that the Incentive
Program, which is entirely voluntary,
encourages competition among markets
for issuers’ listings and among Market
Makers for LMM assignments.
This filing seeks to extend the current
operation of the Incentive Program for
an additional year to allow the
Commission, the Exchange, LMMs, and
issuers to further assess the impact of
the Incentive Program before making it
available to other securities and
implementing the program on a
permanent basis.6 During the initial
one-year pilot period, because no ETP
issuers signed up for the Incentive
Program, the Exchange does not have
any data to assess the impact of the
Incentive Program on ETP market
quality or whether any provisions of the
Incentive Program should be modified.7
4 See Rule 8.800 and Securities Exchange Act
Release No. 34–69706 (June 6, 2013), 78 FR 35340
(June 12, 2013) (SR–NYSEArca–2013–34) (order
establishing the Incentive Program).
5 A Market Maker is an Equity Trading Permit
Holder (‘‘ETP Holder’’) that acts as a Market Maker
pursuant to NYSE Arca Equities Rule 7. See NYSE
Arca Equities Rule 1.1(v). An ETP Holder is a sole
proprietorship, partnership, corporation, limited
liability company, or other organization in good
standing that has been issued an Equity Trading
Permit. See NYSE Arca Equities Rule 1.1(n).
6 The Exchange notes that any proposed further
continuance of the Incentive Program or proposal
to make the Inventive Program permanent would
require a rule filing with the Commission pursuant
to Section 19(b) of the Act and Rule 19b–4
thereunder.
7 See Securities Exchange Act Release No. 34–
69706 (June 6, 2013), 78 FR 35340 (June 12, 2013)
(SR–NYSEArca–2013–34) (order approving Rule
8.800 and specifying the requirement for the
E:\FR\FM\09SEN1.SGM
09SEN1
Federal Register / Vol. 79, No. 174 / Tuesday, September 9, 2014 / Notices
The Exchange believes that extending
the pilot period for an additional year
will provide additional time for issuers
to participate in the Incentive Program
so that the Commission, the Exchange,
LMMs, and issuers may assess the
impact of the Incentive Program before
making it available to other securities or
implementing it on a permanent basis.8
This filing is not otherwise intended
to address any other issues and does not
propose any substantive changes to the
Incentive Program. The Exchange is not
aware of any problems that ETP Holders
or issuers would have in complying
with the proposed extension.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,9 in general, and
furthers the objectives of Sections
6(b)(5) of the Act,10 in particular,
because it is designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in facilitating transactions in securities,
to remove impediments to, and perfect
the mechanisms of, a free and open
market and a national market system.
The Exchange believes that the
proposed rule change would remove
impediments to and perfect the
mechanism of a free and open market
and national market system because it
provides a venue to enhance quote
competition, improve liquidity, support
the quality of price discovery, promote
market transparency, and increase
competition for listings and trade
executions while reducing spreads and
transaction costs. Moreover, requesting
an extension of the Incentive Plan will
permit additional time for the
Commission, the Exchange, LMMs, and
issuers to assess the impact of the
Incentive Program before making it
available to other securities. Finally, the
Exchange believes that it is subject to
significant competitive forces, as
described below in the Exchange’s
statement regarding the burden on
competition. For these reasons, the
Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,11 the Exchange believes that the
proposed rule change would not impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange believes that extending the
operation of the Incentive Program will
enhance competition among liquidity
providers and thereby improve
execution quality on the Exchange. The
Exchange will continue to monitor the
efficacy of the program during the
proposed extended pilot period.
Finally, the Exchange notes that it
operates in a highly competitive market
in which issuers and market
participants can readily favor competing
venues. In such an environment, the
Exchange must continually review and
consider adjusting the services it offers
and the requirements it imposes in
order to remain competitive with other
U.S. equity exchanges. Moreover, the
competition for listings among the
exchanges is fierce. The Exchange notes
that BATS Exchange, Inc. (‘‘BATS’’) has
already implemented a program similar
to the Exchange’s proposed Incentive
Program,12 and NASDAQ has received
approval to do so as well.13
For the reasons described above, the
Exchange believes that the proposed
rule change reflects this competitive
environment.
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 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
tkelley on DSK3SPTVN1PROD with NOTICES
11 15
Exchange to assess the impact of the Incentive
Program).
8 The Exchange notes that if the Incentive
Program in its current form continues to go unused,
the Exchange will not seek an additional extension
of the pilot period.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
VerDate Mar<15>2010
17:39 Sep 08, 2014
Jkt 232001
U.S.C. 78f(b)(8).
Interpretation and Policy .02 of BATS Rule
11.8. See also Securities Exchange Act Release Nos.
66307 (February 2, 2012), 77 FR 6608 (February 8,
2012) (SR–BATS–2011–051) and 66427 (February
21, 2012), 77 FR 11608 (February 27, 2012) (SR–
BATS–2012–011).
13 See Securities Exchange Act Release No. 69195
(March 20, 2013), 78 FR 18393 (March 26, 2013)
(SR–NASDAQ–2012–137).
12 See
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53493
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 14 and Rule 19b–4(f)(6)
thereunder.15
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange requests that the Commission
waive the 30-day operative delay to
allow the Incentive Program to continue
without interruption after September 3,
2014, and therefore be available should
an issuer be interested in participating
during September 2014. The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest.16 As stated in the
proposal, the Exchange seeks to extend
the current operation of the Incentive
Program for an additional year and does
not propose any substantive changes to
the Incentive Program. The Exchange
states that during the initial one-year
pilot period, no ETP issuers signed up
for the Incentive Program, and therefore,
the Exchange has no data to assess the
impact of the Incentive Program on ETP
market quality or whether any
provisions of the Incentive Program
should be modified.17 The Exchange
believes that extending the pilot period
for an additional year will provide
additional time for issuers to participate
in the Incentive Program so that the
Commission, the Exchange, LMMs, and
issuers may assess the impact of the
Incentive Program. The Commission
notes that if the Incentive Program in its
current form continues to go unused,
the Exchange will not seek an additional
extension of the pilot period. Because
the proposed change does not alter the
substantive terms of the Incentive
Program and does not raise any novel or
unique regulatory issues, the
14 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.
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 See supra note 6. The Commission notes that
any proposed modification of any provision of the
Incentive Program would also require a rule filing
with the Commission pursuant to Section 19(b) of
the Act and Rule 19b–4 thereunder.
15 17
E:\FR\FM\09SEN1.SGM
09SEN1
53494
Federal Register / Vol. 79, No. 174 / Tuesday, September 9, 2014 / Notices
Commission designates the proposed
rule change as operative upon filing.
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:
tkelley on DSK3SPTVN1PROD with NOTICES
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–
NYSEArca–2014–99 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEArca–2014–99. 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 will also 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
VerDate Mar<15>2010
17:39 Sep 08, 2014
Jkt 232001
available publicly. All submissions
should refer to File Number SR–
NYSEArca–2014–99 and should be
submitted on or before September 30,
2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Kevin M. O’Neill,
Deputy Secretary.
RECEIPT OF A BILLING INVOICE,
EXCEPT FOR DISPUTES CONCERNING
NASDAQ OMX PSX FEES,
PROPRIETARY DATA FEED FEES AND
CO-LOCATION SERVICES FEES. AS OF
JANUARY 3, 2011, THE EXCHANGE
WILL CALCULATE FEES ON A TRADE
DATE BASIS.
llllllllllllllllll
l
1PHLX®
[FR Doc. 2014–21357 Filed 9–8–14; 8:45 am]
is a registered trademark of The
NASDAQ OMX Group, Inc.
BILLING CODE 8011–01–P
*
*
*
*
*
VIII. NASDAQ OMX PSX FEES
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72968; File No. SR–Phlx–
2014–57]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Common Ownership
September 3, 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 August
20, 2014, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ 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
The Exchange proposes proposal to
harmonize the treatment of the
aggregation of activity of affiliated
member organizations for the purposes
of assessing charges or credits.
The Exchange requests that this filing
become operative on December 1, 2014.
The text of the proposed rule change
is set forth below. Proposed new
language is in italics; deleted text is in
brackets.
NASDAQ OMX PHLX LLC 1 PRICING
SCHEDULE
ALL BILLING DISPUTES MUST BE
SUBMITTED TO THE EXCHANGE IN
WRITING AND MUST BE
ACCOMPANIED BY SUPPORTING
DOCUMENTATION. ALL DISPUTES
MUST BE SUBMITTED NO LATER
THAN SIXTY (60) DAYS AFTER
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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*
*
*
*
*
Aggregation of Activity of Affiliated
Member Organizations
(a) No Change
(b) No Change
(c) For purposes of this provision, the
term[s set forth below shall have the
following meanings:]
[(1) An] ‘‘affiliate’’ of a member
organization shall mean any [wholly
owned subsidiary, parent, or sister of
the ]member organization under 75%
common ownership or control of that [is
also a ]member organization.
[(2) A ‘‘wholly owned subsidiary’’
shall mean a subsidiary of a member
organization, 100% of whose voting
stock or comparable ownership interest
is owned by the member organization,
either directly or indirectly through
other wholly owned subsidiaries.]
[(3) A ‘‘parent’’ shall mean an entity
that directly or indirectly owns 100% of
the voting stock or comparable
ownership interest of a member
organization.]
[(4) A ‘‘sister’’ shall mean an entity,
100% of whose voting stock or
comparable ownership interest is owned
by a parent that also owns 100% of the
voting stock or comparable ownership
interest of a member organization.]
*
*
*
*
*
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.
E:\FR\FM\09SEN1.SGM
09SEN1
Agencies
[Federal Register Volume 79, Number 174 (Tuesday, September 9, 2014)]
[Notices]
[Pages 53492-53494]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-21357]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72963; File No. SR-NYSEArca-2014-99]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Extend the
Operation of the NYSE Arca ETP Incentive Program, Currently Scheduled
To Expire on September 3, 2014, for an Additional Year
September 3, 2014.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on August 28, 2014, NYSE Arca, Inc. (``Exchange'' or ``NYSE
Arca'') 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
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 extend the operation of the NYSE Arca ETP
Incentive Program, currently scheduled to expire on September 3, 2014,
for an additional year. 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.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to extend the operation of the NYSE Arca ETP
Incentive Program (``Incentive Program''),\4\ a one-year pilot program
for issuers of certain exchange-traded products (``ETPs'') listed on
the Exchange, for an additional year. The Incentive Program is
currently scheduled to expire on September 3, 2014. As proposed, the
pilot program would be set to end on September 4, 2015.
---------------------------------------------------------------------------
\4\ See Rule 8.800 and Securities Exchange Act Release No. 34-
69706 (June 6, 2013), 78 FR 35340 (June 12, 2013) (SR-NYSEArca-2013-
34) (order establishing the Incentive Program).
---------------------------------------------------------------------------
NYSE Arca established the Incentive Program to enhance the market
quality for ETPs by incentivizing Market Makers \5\ to take Lead Market
Maker (``LMM'') assignments in certain lower volume ETPs by offering an
alternative fee structure for such LMMs. The Incentive Program is
designed to improve the quality of market for lower-volume ETPs,
thereby incentivizing them to list on the Exchange. Moreover, the
Exchange believes that the Incentive Program, which is entirely
voluntary, encourages competition among markets for issuers' listings
and among Market Makers for LMM assignments.
---------------------------------------------------------------------------
\5\ A Market Maker is an Equity Trading Permit Holder (``ETP
Holder'') that acts as a Market Maker pursuant to NYSE Arca Equities
Rule 7. See NYSE Arca Equities Rule 1.1(v). An ETP Holder is a sole
proprietorship, partnership, corporation, limited liability company,
or other organization in good standing that has been issued an
Equity Trading Permit. See NYSE Arca Equities Rule 1.1(n).
---------------------------------------------------------------------------
This filing seeks to extend the current operation of the Incentive
Program for an additional year to allow the Commission, the Exchange,
LMMs, and issuers to further assess the impact of the Incentive Program
before making it available to other securities and implementing the
program on a permanent basis.\6\ During the initial one-year pilot
period, because no ETP issuers signed up for the Incentive Program, the
Exchange does not have any data to assess the impact of the Incentive
Program on ETP market quality or whether any provisions of the
Incentive Program should be modified.\7\
[[Page 53493]]
The Exchange believes that extending the pilot period for an additional
year will provide additional time for issuers to participate in the
Incentive Program so that the Commission, the Exchange, LMMs, and
issuers may assess the impact of the Incentive Program before making it
available to other securities or implementing it on a permanent
basis.\8\
---------------------------------------------------------------------------
\6\ The Exchange notes that any proposed further continuance of
the Incentive Program or proposal to make the Inventive Program
permanent would require a rule filing with the Commission pursuant
to Section 19(b) of the Act and Rule 19b-4 thereunder.
\7\ See Securities Exchange Act Release No. 34-69706 (June 6,
2013), 78 FR 35340 (June 12, 2013) (SR-NYSEArca-2013-34) (order
approving Rule 8.800 and specifying the requirement for the Exchange
to assess the impact of the Incentive Program).
\8\ The Exchange notes that if the Incentive Program in its
current form continues to go unused, the Exchange will not seek an
additional extension of the pilot period.
---------------------------------------------------------------------------
This filing is not otherwise intended to address any other issues
and does not propose any substantive changes to the Incentive Program.
The Exchange is not aware of any problems that ETP Holders or issuers
would have in complying with the proposed extension.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Sections 6(b)(5) of the Act,\10\ in particular, because
it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments to, and perfect the
mechanisms of, a free and open market and a national market system. The
Exchange believes that the proposed rule change would remove
impediments to and perfect the mechanism of a free and open market and
national market system because it provides a venue to enhance quote
competition, improve liquidity, support the quality of price discovery,
promote market transparency, and increase competition for listings and
trade executions while reducing spreads and transaction costs.
Moreover, requesting an extension of the Incentive Plan will permit
additional time for the Commission, the Exchange, LMMs, and issuers to
assess the impact of the Incentive Program before making it available
to other securities. Finally, the Exchange believes that it is subject
to significant competitive forces, as described below in the Exchange's
statement regarding the burden on competition. For these reasons, the
Exchange believes that the proposal is consistent with the Act.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\11\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The Exchange believes that extending the operation
of the Incentive Program will enhance competition among liquidity
providers and thereby improve execution quality on the Exchange. The
Exchange will continue to monitor the efficacy of the program during
the proposed extended pilot period.
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\11\ 15 U.S.C. 78f(b)(8).
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Finally, the Exchange notes that it operates in a highly
competitive market in which issuers and market participants can readily
favor competing venues. In such an environment, the Exchange must
continually review and consider adjusting the services it offers and
the requirements it imposes in order to remain competitive with other
U.S. equity exchanges. Moreover, the competition for listings among the
exchanges is fierce. The Exchange notes that BATS Exchange, Inc.
(``BATS'') has already implemented a program similar to the Exchange's
proposed Incentive Program,\12\ and NASDAQ has received approval to do
so as well.\13\
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\12\ See Interpretation and Policy .02 of BATS Rule 11.8. See
also Securities Exchange Act Release Nos. 66307 (February 2, 2012),
77 FR 6608 (February 8, 2012) (SR-BATS-2011-051) and 66427 (February
21, 2012), 77 FR 11608 (February 27, 2012) (SR-BATS-2012-011).
\13\ See Securities Exchange Act Release No. 69195 (March 20,
2013), 78 FR 18393 (March 26, 2013) (SR-NASDAQ-2012-137).
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For the reasons described above, the Exchange believes that the
proposed rule change reflects this competitive environment.
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 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
\14\ and Rule 19b-4(f)(6) thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 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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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange requests that the Commission waive
the 30-day operative delay to allow the Incentive Program to continue
without interruption after September 3, 2014, and therefore be
available should an issuer be interested in participating during
September 2014. The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest.\16\ As stated in the proposal, the Exchange seeks to
extend the current operation of the Incentive Program for an additional
year and does not propose any substantive changes to the Incentive
Program. The Exchange states that during the initial one-year pilot
period, no ETP issuers signed up for the Incentive Program, and
therefore, the Exchange has no data to assess the impact of the
Incentive Program on ETP market quality or whether any provisions of
the Incentive Program should be modified.\17\ The Exchange believes
that extending the pilot period for an additional year will provide
additional time for issuers to participate in the Incentive Program so
that the Commission, the Exchange, LMMs, and issuers may assess the
impact of the Incentive Program. The Commission notes that if the
Incentive Program in its current form continues to go unused, the
Exchange will not seek an additional extension of the pilot period.
Because the proposed change does not alter the substantive terms of the
Incentive Program and does not raise any novel or unique regulatory
issues, the
[[Page 53494]]
Commission designates the proposed rule change as operative upon
filing.
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\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\ See supra note 6. The Commission notes that any proposed
modification of any provision of the Incentive Program would also
require a rule filing with the Commission pursuant to Section 19(b)
of the Act and Rule 19b-4 thereunder.
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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.
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-NYSEArca-2014-99 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2014-99. 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 will also 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-NYSEArca-2014-99 and should
be submitted on or before September 30, 2014.
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\18\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-21357 Filed 9-8-14; 8:45 am]
BILLING CODE 8011-01-P