Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Modify BX's Rule Governing Modification of Orders in the Event of an Issuer Corporate Action Related to a Dividend, Payment or Distribution, 1539-1541 [2015-00219]

Download as PDF Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices the one being proposed in this filing is consistent with the above-mentioned goals of the Act. This is especially true for the smaller options markets, such as MIAX, which is competing for volume with much larger exchanges that dominate the options trading industry. MIAX has a nominal percentage of the average daily trading volume in options, so it is unlikely that the customer rebate program could cause any competitive harm to the options market or to market participants. Rather, the customer rebate program is a modest attempt by a small options market to attract order volume away from larger competitors by adopting an innovative pricing strategy. The Exchange notes that if the rebate program resulted in a modest percentage increase in the average daily trading volume in options executing on MIAX, while such percentage would represent a large volume increase for MIAX, it would represent a minimal reduction in volume of its larger competitors in the industry. The Exchange believes that the proposal will help further competition, because market participants will have yet another additional option in determining where to execute orders and post liquidity if they factor the benefits of a customer rebate program into the determination. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. tkelley on DSK3SPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.11 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: SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–74002; File No. SR–BX– 2014–061] • 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– MIAX–2014–69 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–MIAX–2014–69. 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–MIAX–2014–69 and should be submitted on or before February 2, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Brent J. Fields, Secretary. [FR Doc. 2015–00223 Filed 1–9–15; 8:45 am] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Modify BX’s Rule Governing Modification of Orders in the Event of an Issuer Corporate Action Related to a Dividend, Payment or Distribution January 6, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 23, 2014, NASDAQ OMX BX, Inc. (‘‘BX’’ 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 the Substance of the Proposed Rule Change The text of the proposed rule change is available on the Exchange’s Web site at https:// nasdaqomxbx.cchwallstreet.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 aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose BX Rule 4761 addresses the treatment of quotes/orders in securities that are the subject of issuer corporate actions BILLING CODE 8011–01–P 1 15 11 15 U.S.C. 78s(b)(3)(A)(ii). VerDate Sep<11>2014 17:35 Jan 09, 2015 12 17 Jkt 235001 1539 PO 00000 CFR 200.30–3(a)(12). Frm 00047 Fmt 4703 Sfmt 4703 2 17 E:\FR\FM\12JAN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 12JAN1 1540 Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices tkelley on DSK3SPTVN1PROD with NOTICES related to a dividend, payment or distribution. The rule applies to any trading interest that is carried on the BX book overnight. As a general matter, BX cancels open quotes/orders in the event of any corporate action related to a dividend, payment or distribution, on the ex-date of the action. The cancellation occurs immediately prior to the opening of trading at 7 a.m. on the ex-date of the corporate action, and the member receives a cancellation notice, so that it can, if it desires, reenter the order at the commencement of trading on the ex-date. Prior to 2013, BX had not had a clear rule providing for the adjustments of quotes and orders carried on the BX book overnight. In April 2013, BX adopted Rule 4761 to provide that BX would cancel all open quotes/orders in the event of any corporate action.3 Subsequently, in response to member demand for assistance with order management with respect to certain common types of corporate action, BX amended the rule to offer limited, optional functionality to allow open orders to be adjusted, rather than cancelled.4 As written, the rule provides for the possibility of order adjustment in the case of cash dividends, forward stock splits, and combined cash dividends/forward stock splits. The proposal will expand the rule also to provide for adjustment in the case of stock dividends and combined cash dividends/stock dividends. The proposal reflects the conclusion, based on member feedback, that actions resulting in the distribution of additional stock should be treated similarly, regardless of whether they are denominated as forward stock splits or stock dividends. BX will make members aware of the effective date of the proposed change by the issuance of a widely disseminated Equity Trader Alert. Under the current rule, a member may designate that all orders with a time-inforce of good-till-cancelled 5 that are entered through one or more order entry ports specified by the member will be processed in the manner specified below.6 3 Securities Exchange Act Release No. 69456 (April 25, 2013), 78 FR 25510 (May 1, 2013) (SR– BX–2014–031). 4 Securities Exchange Act Release No. 70111 (August 5, 2013), 78 FR 48748 (August 9, 2013) (SR–BX–2014–043). 5 BX notes that the use of good-till-cancelled orders is not prevalent, accounting for significantly less than 1% of all orders entered into BX. The vast majority of orders expire by their terms at the end of regular market hours. 6 The member may opt for this processing on a port-by-port basis. Thus, the provisions providing for order adjustment are applied to all good-till- VerDate Sep<11>2014 17:35 Jan 09, 2015 Jkt 235001 (1) Cash Dividend. If an issuer is paying a cash dividend, the price of an order to buy is reduced by the amount of the sum of all dividends payable, rounded up to the nearest whole cent; provided, however, that there will be no adjustment if the sum of all dividends is less than $0.01. For example, if the sum of all dividends is $0.381, the price of the order will be reduced by $0.39. An order to sell will be retained but will receive no price adjustment. (2) Forward Stock Split. If an issuer is implementing a forward stock split, the order is cancelled if its size is less than one round lot. If the order’s size is greater than one round lot, (i) the size of the order is multiplied by the ratio of post-split shares to pre-split shares, with the result rounded downward to the nearest whole share, and (ii) the price of the order will be multiplied by the ratio of pre-split shares to post-split shares, with the result rounded down to the nearest whole penny in the case of orders to buy and rounded up to the nearest whole penny in the case of orders to sell. Under the change proposed in this filing, stock dividends will be treated in the same manner as forward stock splits. Thus, any corporate action in which additional shares are issued to holders of outstanding shares will be treated in the manner described above. For example, if a member has entered a good-till-cancelled order to buy 375 shares at $10.95 per share and the issuer implemented a split or dividend under which an additional 1.25 shares would be issued for each share outstanding, the size of the order would be adjusted to 843 shares (375 × 2.25/1 = 843.75, rounded down to 843) and the price of the order would be adjusted to $4.86 per share ($10.95 per share × 1/2.25 = $4.8667 per share, rounded down to $4.86 per share). An order to sell at the same price and size would be adjusted to 843 shares with a price of $4.87 per share ($4.8667 per share, rounded up).7 (3) Combination of Cash Dividend and Forward Stock Split or Stock Dividend. Under the current rule, if an issuer is implementing a cash dividend and a forward stock split on the same date, the adjustments described above will both be applied, in the order described in the notice of the corporate actions received cancelled orders entered through a port that has been specified by the member for such processing. Because members may obtain multiple ports, however, members may opt to apply different processing to different orders based on the ports through which they are entered. 7 BX is also amending the example in the rule text to make it clear that the prices provided therein are per share prices. PO 00000 Frm 00048 Fmt 4703 Sfmt 4703 by BX.8 Under the proposed rule change, this provision is being expanded to cover stock dividends as well as forward stock splits. As is currently the case, changes to open orders will continue to be effected immediately prior to the opening of the System at 7:00 a.m. on the ex-date of the applicable corporate action. Open orders that are retained are re-entered by the System (as adjusted above) immediately prior to the opening of the System, such that they will retain time priority over new orders entered at or after 7:00 a.m.9 Under the proposed rule change, for corporate actions other than cash dividends, forward stock splits, and stock dividends (or any combination thereof), open orders are always cancelled, regardless of the port through which they were entered. 2. Statutory Basis BX believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,10 in general, and with Section 6(b)(5) of the Act 11 in particular, in that the proposal 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 regulating, clearing, settling, processing information with respect to, and 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. Specifically, BX believes that the change, which is responsive to member input, will facilitate transactions in securities and perfect the mechanism of a free and open market by providing members with additional optional functionality that may assist them with order management with respect to stock dividends in a manner similar to the current functionality with respect to cash dividends and forward splits. Because forward splits and stock dividends both involve the distribution of additional stock to current stockholders, providing them with similar treatment under the rule is logical and may help to prevent 8 BX receives notice of corporate actions from the listing exchange. 9 To the extent that multiple good-till-cancelled orders in a particular security are adjusted and reentered, such orders may not retain the same time ` priority vis-a-vis one another that they had on the preceding day. Rather, because such orders are entered simultaneously through multiple order entry ports, their relative priority is a function of the duration of system processing associated with each individual order. 10 15 U.S.C. 78f. 11 15 U.S.C. 78f(b)(5). E:\FR\FM\12JAN1.SGM 12JAN1 Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices confusion on the part of members that expect both types of corporate events to receive consistent treatment. B. Self-Regulatory Organization’s Statement on Burden on Competition BX 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, as amended. Specifically, by offering market participants additional options with regard to management of open orders, the change has the potential to enhance BX’s competitiveness with respect to other trading venues, thereby promoting greater competition. Moreover, the change does not burden competition in that it does not restrict the ability of members to enter and update trading interest in BX. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action tkelley on DSK3SPTVN1PROD with NOTICES 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, it has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 12 and subparagraph (f)(6) of Rule 19b–4 thereunder.13 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) 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. 12 15 U.S.C. 78s(b)(3)(a)(ii). 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. 13 17 VerDate Sep<11>2014 17:35 Jan 09, 2015 Jkt 235001 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– BX–2014–061 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–BX–2014–061. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–BX– 2014–061, and should be submitted on or before February 2, 2015. PO 00000 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Brent J. Fields, Secretary. [FR Doc. 2015–00219 Filed 1–9–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73991; File No. SR– NYSEMKT–2014–108] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Price List To Eliminate Transaction Fees for Midpoint Passive Liquidity Orders That Remove Liquidity From the Exchange and That are Designated With a ‘‘Retail’’ Modifier as Defined in Rule 13—Equities January 6, 2015. 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 22, 2014, 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, II, and III below, which Items have been prepared by the selfregulatory 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 amend its Price List to eliminate transaction fees for Midpoint Passive Liquidity (‘‘MPL’’) Orders that remove liquidity from the Exchange and that are designated with a ‘‘retail’’ modifier as defined in Rule 13—Equities. The Exchange proposes to implement the fee change effective January 2, 2015. 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. 14 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 Frm 00049 Fmt 4703 Sfmt 4703 1541 E:\FR\FM\12JAN1.SGM 12JAN1

Agencies

[Federal Register Volume 80, Number 7 (Monday, January 12, 2015)]
[Notices]
[Pages 1539-1541]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-00219]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74002; File No. SR-BX-2014-061]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change to Modify 
BX's Rule Governing Modification of Orders in the Event of an Issuer 
Corporate Action Related to a Dividend, Payment or Distribution

January 6, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on December 23, 2014, NASDAQ OMX BX, Inc. (``BX'' 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The text of the proposed rule change is available on the Exchange's 
Web site at https://nasdaqomxbx.cchwallstreet.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 aspects of such 
statements.

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

1. Purpose
    BX Rule 4761 addresses the treatment of quotes/orders in securities 
that are the subject of issuer corporate actions

[[Page 1540]]

related to a dividend, payment or distribution. The rule applies to any 
trading interest that is carried on the BX book overnight. As a general 
matter, BX cancels open quotes/orders in the event of any corporate 
action related to a dividend, payment or distribution, on the ex-date 
of the action. The cancellation occurs immediately prior to the opening 
of trading at 7 a.m. on the ex-date of the corporate action, and the 
member receives a cancellation notice, so that it can, if it desires, 
reenter the order at the commencement of trading on the ex-date.
    Prior to 2013, BX had not had a clear rule providing for the 
adjustments of quotes and orders carried on the BX book overnight. In 
April 2013, BX adopted Rule 4761 to provide that BX would cancel all 
open quotes/orders in the event of any corporate action.\3\ 
Subsequently, in response to member demand for assistance with order 
management with respect to certain common types of corporate action, BX 
amended the rule to offer limited, optional functionality to allow open 
orders to be adjusted, rather than cancelled.\4\ As written, the rule 
provides for the possibility of order adjustment in the case of cash 
dividends, forward stock splits, and combined cash dividends/forward 
stock splits.
---------------------------------------------------------------------------

    \3\ Securities Exchange Act Release No. 69456 (April 25, 2013), 
78 FR 25510 (May 1, 2013) (SR-BX-2014-031).
    \4\ Securities Exchange Act Release No. 70111 (August 5, 2013), 
78 FR 48748 (August 9, 2013) (SR-BX-2014-043).
---------------------------------------------------------------------------

    The proposal will expand the rule also to provide for adjustment in 
the case of stock dividends and combined cash dividends/stock 
dividends. The proposal reflects the conclusion, based on member 
feedback, that actions resulting in the distribution of additional 
stock should be treated similarly, regardless of whether they are 
denominated as forward stock splits or stock dividends. BX will make 
members aware of the effective date of the proposed change by the 
issuance of a widely disseminated Equity Trader Alert.
    Under the current rule, a member may designate that all orders with 
a time-in-force of good-till-cancelled \5\ that are entered through one 
or more order entry ports specified by the member will be processed in 
the manner specified below.\6\
---------------------------------------------------------------------------

    \5\ BX notes that the use of good-till-cancelled orders is not 
prevalent, accounting for significantly less than 1% of all orders 
entered into BX. The vast majority of orders expire by their terms 
at the end of regular market hours.
    \6\ The member may opt for this processing on a port-by-port 
basis. Thus, the provisions providing for order adjustment are 
applied to all good-till-cancelled orders entered through a port 
that has been specified by the member for such processing. Because 
members may obtain multiple ports, however, members may opt to apply 
different processing to different orders based on the ports through 
which they are entered.
---------------------------------------------------------------------------

    (1) Cash Dividend. If an issuer is paying a cash dividend, the 
price of an order to buy is reduced by the amount of the sum of all 
dividends payable, rounded up to the nearest whole cent; provided, 
however, that there will be no adjustment if the sum of all dividends 
is less than $0.01. For example, if the sum of all dividends is $0.381, 
the price of the order will be reduced by $0.39. An order to sell will 
be retained but will receive no price adjustment.
    (2) Forward Stock Split. If an issuer is implementing a forward 
stock split, the order is cancelled if its size is less than one round 
lot. If the order's size is greater than one round lot, (i) the size of 
the order is multiplied by the ratio of post-split shares to pre-split 
shares, with the result rounded downward to the nearest whole share, 
and (ii) the price of the order will be multiplied by the ratio of pre-
split shares to post-split shares, with the result rounded down to the 
nearest whole penny in the case of orders to buy and rounded up to the 
nearest whole penny in the case of orders to sell.
    Under the change proposed in this filing, stock dividends will be 
treated in the same manner as forward stock splits. Thus, any corporate 
action in which additional shares are issued to holders of outstanding 
shares will be treated in the manner described above.
    For example, if a member has entered a good-till-cancelled order to 
buy 375 shares at $10.95 per share and the issuer implemented a split 
or dividend under which an additional 1.25 shares would be issued for 
each share outstanding, the size of the order would be adjusted to 843 
shares (375 x 2.25/1 = 843.75, rounded down to 843) and the price of 
the order would be adjusted to $4.86 per share ($10.95 per share x 1/
2.25 = $4.8667 per share, rounded down to $4.86 per share). An order to 
sell at the same price and size would be adjusted to 843 shares with a 
price of $4.87 per share ($4.8667 per share, rounded up).\7\
---------------------------------------------------------------------------

    \7\ BX is also amending the example in the rule text to make it 
clear that the prices provided therein are per share prices.
---------------------------------------------------------------------------

    (3) Combination of Cash Dividend and Forward Stock Split or Stock 
Dividend. Under the current rule, if an issuer is implementing a cash 
dividend and a forward stock split on the same date, the adjustments 
described above will both be applied, in the order described in the 
notice of the corporate actions received by BX.\8\ Under the proposed 
rule change, this provision is being expanded to cover stock dividends 
as well as forward stock splits.
---------------------------------------------------------------------------

    \8\ BX receives notice of corporate actions from the listing 
exchange.
---------------------------------------------------------------------------

    As is currently the case, changes to open orders will continue to 
be effected immediately prior to the opening of the System at 7:00 a.m. 
on the ex-date of the applicable corporate action. Open orders that are 
retained are re-entered by the System (as adjusted above) immediately 
prior to the opening of the System, such that they will retain time 
priority over new orders entered at or after 7:00 a.m.\9\ Under the 
proposed rule change, for corporate actions other than cash dividends, 
forward stock splits, and stock dividends (or any combination thereof), 
open orders are always cancelled, regardless of the port through which 
they were entered.
---------------------------------------------------------------------------

    \9\ To the extent that multiple good-till-cancelled orders in a 
particular security are adjusted and re-entered, such orders may not 
retain the same time priority vis-[agrave]-vis one another that they 
had on the preceding day. Rather, because such orders are entered 
simultaneously through multiple order entry ports, their relative 
priority is a function of the duration of system processing 
associated with each individual order.
---------------------------------------------------------------------------

2. Statutory Basis
    BX believes that the proposed rule change is consistent with the 
provisions of Section 6 of the Act,\10\ in general, and with Section 
6(b)(5) of the Act \11\ in particular, in that the proposal 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 regulating, clearing, settling, 
processing information with respect to, and 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. Specifically, BX believes 
that the change, which is responsive to member input, will facilitate 
transactions in securities and perfect the mechanism of a free and open 
market by providing members with additional optional functionality that 
may assist them with order management with respect to stock dividends 
in a manner similar to the current functionality with respect to cash 
dividends and forward splits. Because forward splits and stock 
dividends both involve the distribution of additional stock to current 
stockholders, providing them with similar treatment under the rule is 
logical and may help to prevent

[[Page 1541]]

confusion on the part of members that expect both types of corporate 
events to receive consistent treatment.
---------------------------------------------------------------------------

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

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

    BX 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, as amended. Specifically, by 
offering market participants additional options with regard to 
management of open orders, the change has the potential to enhance BX's 
competitiveness with respect to other trading venues, thereby promoting 
greater competition. Moreover, the change does not burden competition 
in that it does not restrict the ability of members to enter and update 
trading interest in BX.

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

    No written comments were either solicited or received.

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, it has become 
effective pursuant to Section 19(b)(3)(A)(ii) of the Act \12\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \13\ 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.
---------------------------------------------------------------------------

    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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-BX-2014-061 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BX-2014-061. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BX-2014-061, and should be 
submitted on or before February 2, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-00219 Filed 1-9-15; 8:45 am]
BILLING CODE 8011-01-P
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