Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change Amending Rule 980NY(e), Electronic Complex Order Auction Process Removing the Limitation on Who Can Respond to a COA and Provide a Response Time Interval of at Least 500 Milliseconds; and Amend Rule 935NY, Order Exposure Requirements To Add Use of the COA for a User To Satisfy the Order Exposure Requirement in Rule 935NY and Delete the Reference in Rule 980NY(e) to the Order Exposure Requirements Being Separate From the Duration of the COA Response Time Interval, 32427-32430 [2015-13870]
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Federal Register / Vol. 80, No. 109 / Monday, June 8, 2015 / Notices
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–13869 Filed 6–5–15; 8:45 am]
• 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–
DTC–2015–007 on the subject line.
Paper Comments
mstockstill on DSK4VPTVN1PROD with NOTICES
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F
Street, NE., Washington, DC 20549–
1090.
All submissions should refer to File
Number SR–DTC–2015–007. 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 DTC and on DTCC’s Web site
(https://dtcc.com/legal/sec-rulefilings.aspx). 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–DTC–
2015–007 and should be submitted on
or before June 29, 2015.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75095; File No. SR–
NYSEMKT–2015–41]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing of Proposed
Rule Change Amending Rule 980NY(e),
Electronic Complex Order Auction
Process Removing the Limitation on
Who Can Respond to a COA and
Provide a Response Time Interval of at
Least 500 Milliseconds; and Amend
Rule 935NY, Order Exposure
Requirements To Add Use of the COA
for a User To Satisfy the Order
Exposure Requirement in Rule 935NY
and Delete the Reference in Rule
980NY(e) to the Order Exposure
Requirements Being Separate From
the Duration of the COA Response
Time Interval
June 2, 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 May 21,
2015, 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 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: (1) Amend
Rule 980NY(e) (Electronic Complex
Order Auction (‘‘COA’’) Process) to
remove the limitation on who can
respond to a COA and to provide a
Response Time Interval of at least 500
milliseconds; and (2) amend Rule
935NY (Order Exposure Requirements)
to add use of the COA as a means for
a User to satisfy the Order Exposure
Requirement in Rule 935NY and delete
the reference in Rule 980NY(e) to the
Order Exposure Requirements being
9 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
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32427
separate from the duration of the COA
Response Time Interval. 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
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
Participation in and Minimum Response
Time Interval for the COA
The Exchange operates COA, which
allows an entering ATP Holder to
initiate an auction for eligible Electronic
Complex Orders (‘‘COA-eligible
orders’’).4 Upon receiving a COAeligible order, and the direction from
the entering ATP Holder that an auction
be initiated, the Exchange sends an
automated request for response message
(‘‘RFR’’) to all ATP Holders who
subscribe to RFR messages.5 ATP
Holders that are eligible to participate in
a COA may respond to an RFR message
(‘‘RFR Responses’’) indicating the price
and the number of contracts they would
be willing trade in the COA. RFR
Responses must be submitted during the
Response Time Interval (‘‘RTI’’), the
duration of which is determined by the
Exchange, but may not exceed one (1)
second.6
Rule 980NY(e)(4) currently provides
that each Market Maker with an
appointment in the relevant option
4 The Exchange may determine, on a class by
class basis, which Electronic Complex Orders are
eligible for a COA based on marketability (defined
as a number of ticks from the current market), size,
and Complex Order origin type. See Rule
980NY(e)(1).
5 RFR messages identify the component series,
size and side of the market of the order and any
contingencies. See Rule 980NY(e)(2).
6 See Rule 980NY(e)(3) (stating, in part,’’[t]he
Exchange will determine the length of the Response
Time Interval; provided, however, that the duration
shall not exceed one (1) second.’’).
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Federal Register / Vol. 80, No. 109 / Monday, June 8, 2015 / Notices
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class, and each ATP Holder acting as
agent for orders resting at the top of the
Consolidated Book in the relevant
options series may submit RFR
Responses during an RTI. The Exchange
proposed to amend Rule 980NY(e)(4) to
provide that any ATP Holder may
submit RFR Responses during the RTI.
The Exchange believes that the
proposed amendment may increase
participation in COAs, which would
foster greater competition and provide
additional price improvement
opportunities for COA-eligible orders
exposed during the COA. In addition,
the Exchange believes the proposed
amendment is fair and reasonable and
would benefit market participants
because it would enable the Exchange to
better compete with option exchanges
that permit all members to participate in
electronic auctions for crossing
transactions that are similar to the
COA.7
As noted above, the duration of a
COA is determined by the Exchange, but
may not exceed one (1) second.
Currently, the Exchange has not
established a minimum duration for the
RTI. The Exchange believes it is
important to establish a minimum
duration for the RTI to ensure that
orders entered into a COA are exposed
for a sufficient time period to allow the
opportunity for participating ATP
Holders to provide RFR Responses.
Accordingly, the Exchange is proposing
to establish a minimum of 500
milliseconds as the length of time the
Exchange may determine for the RTI,
with the maximum length of time
continuing to be one (1) second.8
The Exchange believes that a
minimum of 500 milliseconds is a
sufficient time to submit RFR Responses
and would encourage competition
among participants, thereby enhancing
the potential for price improvement for
7 See, e.g., ISE Rule 723(a) (Price Improvement
Orders may be entered by all Members for their own
account or for the account of a Public Customer in
one-cent increments at the same price as the
Crossing Transaction or at an improved price for the
Agency Order, and for any size up to the size of the
Agency Order). The Exchange also notes that it
places no restriction on the ATP Holders that may
participate in a Customer Best Execution (‘‘CUBE’’)
Auction for single-legged transactions on the
Exchange. See Rule 971.1(c)(2)(C). The Exchange
believes that although ISE Rule 723(a) and Rule
971.1NY relate to electronic crossing transactions
and provide for a guaranteed execution, these
electronic auction mechanisms are analogous to the
COA as they are designed to attract liquidity to the
exchange and provide opportunities for price
improvement.
8 See proposed Rule 980NY(e)(3) (providing that
‘‘the that the duration [of the RTI] shall not be less
than 500 milliseconds and shall not exceed one (1)
second.’’).
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orders in the COA.9 The proposed 500
millisecond minimum for the RTI is
comparable to the response time
interval in the Exchange’s Customer
Best Execution (‘‘CUBE’’) Auction for
single-leg orders, which disseminates an
RFR message for an auction lasting a
random period of time of between 500
and 750 milliseconds.10 In addition,
BOX Options Exchange LLC (‘‘BOX’’)’s
Complex Order Price Improvement
Period (‘‘COPIP’’), like the Exchange’s
COA, is designed to offer price
improvement to complex orders, and is
only 100 milliseconds in length.11
Although both the CUBE and the COPIP
relate to electronic crossing transactions
and provide for a guaranteed execution,
the Exchange believes the CUBE and
COPIP are analogous to the COA as they
are designed to attract liquidity and
provide opportunities for price
improvement.
Amendment To Order Exposure
Requirements
In addition, the Exchange proposes to
amend Rule 935NY by adding that use
of the COA is a means for a User to
satisfy the Order Exposure Requirement
in Rule 935NY. Exchange Rule 935NY
prohibits Users (i.e., ATP Holders) 12
from trading as principal with orders
they represent as agent unless the order
exposure requirements under the rule
are met. The order exposure
requirements are designed to enhance
opportunities for competition among
market participants.13 Specifically, a
User may only trade as principal with
an order it represents as agent if:
• The agency order is first exposed on
the Exchange for at least one (1) second;
9 In May 2015, to determine whether the
proposed RTI would provide sufficient time to
respond to a COA, the Exchange conducted a
survey of ATP Holders to determine whether their
firms ‘‘could respond to an auction lasting 100
milliseconds.’’ Of the ATP Holders that have
electronic access to the Exchange and are able to
submit responses to a COA (the ‘‘Relevant ATP
Holders’’), thirteen (13) responded the survey. Of
the thirteen (13) Relevant ATP Holders, ten (10)—
or 77%—said that they could respond to an auction
lasting 100 milliseconds. Thus, the Exchange
believes that the proposed RTI duration of at least
500 milliseconds would provide a meaningful
opportunity for participants on the Exchange to
respond to a COA while at the same time
facilitating the prompt execution of orders.
10 See Rule 971.1NY(c)(2)(B).
11 See Box Rule 7245(f)(1).
12 A ‘‘User’’ is ‘‘any ATP Holder that is authorized
to obtain access to the System pursuant to Rule
902.1NY.’’
13 See Rule 935NY Commentary .01 (‘‘Rule
935NY prevents a User from executing agency
orders to increase its economic gain from trading
against the order without first giving other trading
interest on the Exchange an opportunity to either
trade with the agency order or to trade at the
execution price when the User was already bidding
or offering on the book.’’)
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Frm 00091
Fmt 4703
Sfmt 4703
• The User has been bidding or
offering on the Exchange for at least one
(1) second prior to receiving an agency
order that is executable against such bid
or offer; or
• The User utilizes the Customer Best
Execution Auction (‘‘CUBE Auction’’)
pursuant to Rule 971.1NY.
The Exchange proposes to amend
Rule 935NY to also permit a User who
utilizes the COA pursuant to Rule
980NY(e) to submit a principal order
during the RTI to trade against an order
it represents as agent.14 As described
above, the Exchange is proposing a
minimum duration for the RTI of 500
milliseconds. RTIs would thus last for at
least 500 milliseconds and no more than
one (1) second, as determined by the
Exchange.15
As stated above, the Exchange
believes that a COA with an RTI of at
least 500 milliseconds is a sufficient
length of time to permit ATP Holders to
respond to a RFR and enhance
opportunities for competition among
participants, increasing the likelihood
for price improvement for the COAeligible order in the COA. Accordingly,
the Exchange proposes to amend Rule
935NY to state that a User may execute
as principal an order that the User
represents as agent if the User avails
itself of COA pursuant to Rule
980NY(e). Thus, an Electronic Complex
Order subject to a COA would not be
subject to the one-second order
exposure requirement of Rule 935NY.
This exclusion from the one-second
order exposure requirement is
consistent with the treatment of orders
in the CUBE Auction, which has a
minimum duration of 500 milliseconds,
as is proposed for COA.16 This proposed
exception is also consistent with the
treatment of similar orders entered in
the BOX Complex Order Price
Improvement Period.17 Consistent with
Rule 935NY Commentary .01, ATP
Holders shall only use COA where there
is a genuine intention to execute bona
fide transactions.
The Exchange also proposes to delete
rule text from Rule 980NY(e)(3), which
provides that ‘‘[t]he obligations of Rule
935NY, Order Exposure Requirements,
are separate from the duration of the
Response Time Interval.’’ The Exchange
is proposing to delete this text because
it would no longer be accurate with the
14 See proposed Rule 935NY(iv). The Exchange
also proposes to add semi-colons to separate the
subparts of Rule 935NY, in lieu of ‘‘or’’, which the
Exchange believes would simplify the rule.
15 See proposed Rule 980NY(e)(3).
16 See Rule 935NY(iii). See also supra n. 10.
17 See BOX IM–7140–2; see also Box Rule
7245(f)(1).
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Federal Register / Vol. 80, No. 109 / Monday, June 8, 2015 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
proposed changes to Rule 935NY
described above.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section
6(b)(5) of the Securities Exchange Act of
1934 (the ‘‘Act’’),18 which requires the
rules of an exchange to promote just and
equitable principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
The Exchange believes that the
proposed rule change to amend Rule
980NY(e)(4) to provide that any ATP
Holder may submit an RFR Response
during an RTI would remove
impediments to and perfect the
mechanism of a free and open market
and a national market system because it
could result in increased participation
in the COA process, which should
increase competition within a COA,
potentially offering greater price
improvement opportunities to the COAeligible order. The Exchange notes that
at least two other options exchanges
allow all members to participate in
electronic auctions similar to the
COA.19
The Exchange believes the proposed
minimum of 500 milliseconds for a RTI
within a COA promotes just and
equitable principles of trade and
removes impediments to a free and open
market because it allow [sic] sufficient
time for ATP Holders participating in a
COA to submit RFR Responses and
would encourage competition among
participants, thereby enhancing the
potential for price improvement for
orders in the COA to the benefit of
investors and public interest. The
Exchange believes the proposed rule
change is not unfairly discriminatory
because it establishes a minimum
exposure period applicable to COAeligible orders, which would be the
same for all ATP Holders participating
in a COA. In addition, the proposed
minimum of 500 millisecond [sic] is
consistent with CUBE and is
comparable to BOX’s Complex Order
Price Improvement Period, which
similar to the Exchange’s COA, is
designed to offer price improvement to
complex orders, and is only 100
milliseconds in length.20
The Exchange believes the proposal to
allow Users who utilize the COA to
enter an order as principal to potentially
execute against an order it represents as
U.S.C. 78f(b).
supra n. 7.
20 See supra nn. 10, 11.
agent promotes just and equitable
principles of trade because the proposed
minimum of 500 milliseconds for the
RTI would provide ample time for
participants in the COA to respond and
would encourage competition and
opportunities for price improvement, to
the benefit of investors and the public
interest. In addition, exempting
Electronic Complex Orders subject to a
COA from the one-second order
exposure requirement of Rule 935NY is
consistent with the treatment of orders
in the CUBE Auction as well as the
treatment of similar orders entered in
the BOX Complex Order Price
Improvement Period.21 Additionally,
the Exchange believes the proposed
exemption from Rule 935NY would
reduce market risk for ATP Holders
responding to COA-eligible orders by
providing timely executions of these
orders.
Accordingly, for foregoing reasons,
the Exchange believes the proposed
change is consistent with the Act.
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange believes the proposal to allow
all OTP Holders to participate in the
COA process should increase the level
of competition within COAs, which will
increase opportunities to trade for all
participants on the Exchange and may
increase opportunities for COA-eligible
orders to receive price improvement.
The Exchange also believes that this
proposed expansion would enable the
Exchange to better compete with other
options exchanges that already offer all
participants the ability to participate in
electronic auctions.22 The Exchange
believes the proposed 500 millisecond
minimum for a RTI is pro-competitive
as it would afford ATP Holders
sufficient time to respond to a COA and
enhance opportunities for price
improvement while encouraging timely
executions. The Exchange believes that
the proposed limited exception to Rule
935NY would enable the Exchange to
better compete with other options
exchanges that already exempt market
participants from the one-second order
exposure requirements when utilizing
certain price improvement and auction
mechanisms.23 Accordingly, the
proposed rule change would also serve
to promote regulatory clarity and
18 15
21 See
19 See
22 See
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17:09 Jun 05, 2015
supra nn. 16, 17.
supra n. 7.
23 See supra nn. 16, 17.
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32429
consistency, thereby reducing burdens
on the marketplace and facilitating
investor protection.
(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
Within 45 days of the date of
publication of this notice in the Federal
Register or up to 90 days (i) as the
Commission may designate if it finds
such longer period to be appropriate
and publishes its reasons for so finding
or (ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEMKT–2015–41 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–NYSEMKT–2015–41. 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
E:\FR\FM\08JNN1.SGM
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Federal Register / Vol. 80, No. 109 / Monday, June 8, 2015 / Notices
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 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–
NYSEMKT–2015–41 and should be
submitted on or before June 29, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–13870 Filed 6–5–15; 8:45 am]
BILLING CODE 8011–01–P
OFFICE OF THE UNITED STATES
TRADE REPRESENTATIVE
Reallocation of Unused Fiscal Year
2015 Tariff-Rate Quota Volume for Raw
Cane Sugar
Office of the United States
Trade Representative.
ACTION: Notice.
AGENCY:
The Office of the United
States Trade Representative (USTR) is
providing notice of country-by-country
reallocations of the FY 2015 in-quota
quantity of the World Trade
Organization (WTO) tariff-rate quota
(TRQ) for imported raw cane sugar.
DATES: June 8, 2015.
ADDRESSES: Inquiries may be mailed or
delivered to Ronald Baumgarten,
Director of Agricultural Affairs, Office of
Agricultural Affairs, Office of the United
States Trade Representative, 600 17th
Street NW., Washington, DC 20508.
FOR FURTHER INFORMATION CONTACT:
Ronald Baumgarten, Office of the
United States Trade Representative,
Office of Agricultural Affairs, telephone:
202–395–9583 or facsimile: 202–395–
4579.
SUPPLEMENTARY INFORMATION: Pursuant
to Additional U.S. Note 5 to Chapter 17
of the Harmonized Tariff Schedule of
the United States (HTS), the United
mstockstill on DSK4VPTVN1PROD with NOTICES
SUMMARY:
24 17
CFR 200.30–3(a)(12).
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Jkt 235001
States maintains WTO TRQs for imports
of raw cane and refined sugar.
Section 404(d)(3) of the Uruguay
Round Agreements Act (19 U.S.C.
3601(d)(3)) authorizes the President to
allocate the in-quota quantity of a TRQ
for any agricultural product among
supplying countries or customs areas.
The President delegated this authority
to the United States Trade
Representative under Presidential
Proclamation 6763 (60 FR 1007).
On September 2, 2014, the Secretary
of Agriculture established the FY 2015
TRQ for imported raw cane sugar at the
minimum to which the United States is
committed pursuant to the World Trade
Organization (WTO) Uruguay Round
Agreements (1,117,195 metric tons raw
value (MTRV)). On September 9, 2014,
USTR provided notice of country-bycountry allocations of the FY 2015 inquota quantity of the WTO TRQ for
imported raw cane sugar. Based on
consultation with quota holders, USTR
has determined to reallocate 157,937
MTRV of the original TRQ quantity from
those countries that are unable to fill
their FY 2015 allocated raw cane sugar
quantities. USTR is allocating the
157,937 MTRV to the following
countries in the amounts specified
below:
FY 2015
Reallocation
Country
Argentina ..............................
Australia ................................
Barbados ..............................
Belize ....................................
Brazil .....................................
Colombia ...............................
Costa Rica ............................
Ecuador ................................
El Salvador ...........................
Fiji .........................................
Guatemala ............................
Guyana .................................
Honduras ..............................
India ......................................
Jamaica ................................
Mozambique .........................
Nicaragua .............................
Peru ......................................
South Africa ..........................
Swaziland .............................
Thailand ................................
Zimbabwe .............................
11,263
21,739
1,834
2,881
37,978
6,286
3,929
2,881
6,810
2,357
12,572
3,143
2,619
2,095
2,881
3,405
5,500
10,739
6,024
4,191
3,667
3,143
These allocations are based on the
countries’ historical shipments to the
United States. The allocations of the raw
cane sugar WTO TRQ to countries that
are net importers of sugar are
conditioned on receipt of the
appropriate verifications of origin.
Certificates of quota eligibility must
accompany imports from any country
for which an allocation has been
provided.
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Conversion factor: 1 metric ton =
1.10231125 short tons.
Michael B.G. Froman,
United States Trade Representative.
[FR Doc. 2015–13887 Filed 6–5–15; 8:45 am]
BILLING CODE 3190–F5–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
[Summary Notice No. FAA–2015–35]
Petition for Exemption; Summary of
Petition Received; International
Council of Air Shows (ICAS);
Experimental Aircraft Association
(EAA) Warbirds of America
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice.
AGENCY:
This notice contains a
summary of a petition seeking relief
from specified requirements of Title 14
of the Code of Federal Regulations. The
purpose of this notice is to improve the
public’s awareness of, and participation
in, the FAA’s exemption process.
Neither publication of this notice nor
the inclusion or omission of information
in the summary is intended to affect the
legal status of the petition or its final
disposition.
SUMMARY:
Comments on this petition must
identify the petition docket number and
must be received on or before June 29,
2015.
ADDRESSES: Send comments identified
by docket number FAA–2015–0809
using any of the following methods:
• Federal eRulemaking Portal: Go to
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E:\FR\FM\08JNN1.SGM
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]]>Agencies
[Federal Register Volume 80, Number 109 (Monday, June 8, 2015)]
[Notices]
[Pages 32427-32430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-13870]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75095; File No. SR-NYSEMKT-2015-41]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of
Proposed Rule Change Amending Rule 980NY(e), Electronic Complex Order
Auction Process Removing the Limitation on Who Can Respond to a COA and
Provide a Response Time Interval of at Least 500 Milliseconds; and
Amend Rule 935NY, Order Exposure Requirements To Add Use of the COA for
a User To Satisfy the Order Exposure Requirement in Rule 935NY and
Delete the Reference in Rule 980NY(e) to the Order Exposure
Requirements Being Separate From the Duration of the COA Response Time
Interval
June 2, 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 May 21, 2015, 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 Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to: (1) Amend Rule 980NY(e) (Electronic
Complex Order Auction (``COA'') Process) to remove the limitation on
who can respond to a COA and to provide a Response Time Interval of at
least 500 milliseconds; and (2) amend Rule 935NY (Order Exposure
Requirements) to add use of the COA as a means for a User to satisfy
the Order Exposure Requirement in Rule 935NY and delete the reference
in Rule 980NY(e) to the Order Exposure Requirements being separate from
the duration of the COA Response Time Interval. 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 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
Participation in and Minimum Response Time Interval for the COA
The Exchange operates COA, which allows an entering ATP Holder to
initiate an auction for eligible Electronic Complex Orders (``COA-
eligible orders'').\4\ Upon receiving a COA-eligible order, and the
direction from the entering ATP Holder that an auction be initiated,
the Exchange sends an automated request for response message (``RFR'')
to all ATP Holders who subscribe to RFR messages.\5\ ATP Holders that
are eligible to participate in a COA may respond to an RFR message
(``RFR Responses'') indicating the price and the number of contracts
they would be willing trade in the COA. RFR Responses must be submitted
during the Response Time Interval (``RTI''), the duration of which is
determined by the Exchange, but may not exceed one (1) second.\6\
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\4\ The Exchange may determine, on a class by class basis, which
Electronic Complex Orders are eligible for a COA based on
marketability (defined as a number of ticks from the current
market), size, and Complex Order origin type. See Rule 980NY(e)(1).
\5\ RFR messages identify the component series, size and side of
the market of the order and any contingencies. See Rule 980NY(e)(2).
\6\ See Rule 980NY(e)(3) (stating, in part,''[t]he Exchange will
determine the length of the Response Time Interval; provided,
however, that the duration shall not exceed one (1) second.'').
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Rule 980NY(e)(4) currently provides that each Market Maker with an
appointment in the relevant option
[[Page 32428]]
class, and each ATP Holder acting as agent for orders resting at the
top of the Consolidated Book in the relevant options series may submit
RFR Responses during an RTI. The Exchange proposed to amend Rule
980NY(e)(4) to provide that any ATP Holder may submit RFR Responses
during the RTI. The Exchange believes that the proposed amendment may
increase participation in COAs, which would foster greater competition
and provide additional price improvement opportunities for COA-eligible
orders exposed during the COA. In addition, the Exchange believes the
proposed amendment is fair and reasonable and would benefit market
participants because it would enable the Exchange to better compete
with option exchanges that permit all members to participate in
electronic auctions for crossing transactions that are similar to the
COA.\7\
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\7\ See, e.g., ISE Rule 723(a) (Price Improvement Orders may be
entered by all Members for their own account or for the account of a
Public Customer in one-cent increments at the same price as the
Crossing Transaction or at an improved price for the Agency Order,
and for any size up to the size of the Agency Order). The Exchange
also notes that it places no restriction on the ATP Holders that may
participate in a Customer Best Execution (``CUBE'') Auction for
single-legged transactions on the Exchange. See Rule 971.1(c)(2)(C).
The Exchange believes that although ISE Rule 723(a) and Rule 971.1NY
relate to electronic crossing transactions and provide for a
guaranteed execution, these electronic auction mechanisms are
analogous to the COA as they are designed to attract liquidity to
the exchange and provide opportunities for price improvement.
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As noted above, the duration of a COA is determined by the
Exchange, but may not exceed one (1) second. Currently, the Exchange
has not established a minimum duration for the RTI. The Exchange
believes it is important to establish a minimum duration for the RTI to
ensure that orders entered into a COA are exposed for a sufficient time
period to allow the opportunity for participating ATP Holders to
provide RFR Responses. Accordingly, the Exchange is proposing to
establish a minimum of 500 milliseconds as the length of time the
Exchange may determine for the RTI, with the maximum length of time
continuing to be one (1) second.\8\
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\8\ See proposed Rule 980NY(e)(3) (providing that ``the that the
duration [of the RTI] shall not be less than 500 milliseconds and
shall not exceed one (1) second.'').
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The Exchange believes that a minimum of 500 milliseconds is a
sufficient time to submit RFR Responses and would encourage competition
among participants, thereby enhancing the potential for price
improvement for orders in the COA.\9\ The proposed 500 millisecond
minimum for the RTI is comparable to the response time interval in the
Exchange's Customer Best Execution (``CUBE'') Auction for single-leg
orders, which disseminates an RFR message for an auction lasting a
random period of time of between 500 and 750 milliseconds.\10\ In
addition, BOX Options Exchange LLC (``BOX'')'s Complex Order Price
Improvement Period (``COPIP''), like the Exchange's COA, is designed to
offer price improvement to complex orders, and is only 100 milliseconds
in length.\11\ Although both the CUBE and the COPIP relate to
electronic crossing transactions and provide for a guaranteed
execution, the Exchange believes the CUBE and COPIP are analogous to
the COA as they are designed to attract liquidity and provide
opportunities for price improvement.
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\9\ In May 2015, to determine whether the proposed RTI would
provide sufficient time to respond to a COA, the Exchange conducted
a survey of ATP Holders to determine whether their firms ``could
respond to an auction lasting 100 milliseconds.'' Of the ATP Holders
that have electronic access to the Exchange and are able to submit
responses to a COA (the ``Relevant ATP Holders''), thirteen (13)
responded the survey. Of the thirteen (13) Relevant ATP Holders, ten
(10)--or 77%--said that they could respond to an auction lasting 100
milliseconds. Thus, the Exchange believes that the proposed RTI
duration of at least 500 milliseconds would provide a meaningful
opportunity for participants on the Exchange to respond to a COA
while at the same time facilitating the prompt execution of orders.
\10\ See Rule 971.1NY(c)(2)(B).
\11\ See Box Rule 7245(f)(1).
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Amendment To Order Exposure Requirements
In addition, the Exchange proposes to amend Rule 935NY by adding
that use of the COA is a means for a User to satisfy the Order Exposure
Requirement in Rule 935NY. Exchange Rule 935NY prohibits Users (i.e.,
ATP Holders) \12\ from trading as principal with orders they represent
as agent unless the order exposure requirements under the rule are met.
The order exposure requirements are designed to enhance opportunities
for competition among market participants.\13\ Specifically, a User may
only trade as principal with an order it represents as agent if:
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\12\ A ``User'' is ``any ATP Holder that is authorized to obtain
access to the System pursuant to Rule 902.1NY.''
\13\ See Rule 935NY Commentary .01 (``Rule 935NY prevents a User
from executing agency orders to increase its economic gain from
trading against the order without first giving other trading
interest on the Exchange an opportunity to either trade with the
agency order or to trade at the execution price when the User was
already bidding or offering on the book.'')
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The agency order is first exposed on the Exchange for at
least one (1) second;
The User has been bidding or offering on the Exchange for
at least one (1) second prior to receiving an agency order that is
executable against such bid or offer; or
The User utilizes the Customer Best Execution Auction
(``CUBE Auction'') pursuant to Rule 971.1NY.
The Exchange proposes to amend Rule 935NY to also permit a User who
utilizes the COA pursuant to Rule 980NY(e) to submit a principal order
during the RTI to trade against an order it represents as agent.\14\ As
described above, the Exchange is proposing a minimum duration for the
RTI of 500 milliseconds. RTIs would thus last for at least 500
milliseconds and no more than one (1) second, as determined by the
Exchange.\15\
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\14\ See proposed Rule 935NY(iv). The Exchange also proposes to
add semi-colons to separate the subparts of Rule 935NY, in lieu of
``or'', which the Exchange believes would simplify the rule.
\15\ See proposed Rule 980NY(e)(3).
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As stated above, the Exchange believes that a COA with an RTI of at
least 500 milliseconds is a sufficient length of time to permit ATP
Holders to respond to a RFR and enhance opportunities for competition
among participants, increasing the likelihood for price improvement for
the COA-eligible order in the COA. Accordingly, the Exchange proposes
to amend Rule 935NY to state that a User may execute as principal an
order that the User represents as agent if the User avails itself of
COA pursuant to Rule 980NY(e). Thus, an Electronic Complex Order
subject to a COA would not be subject to the one-second order exposure
requirement of Rule 935NY. This exclusion from the one-second order
exposure requirement is consistent with the treatment of orders in the
CUBE Auction, which has a minimum duration of 500 milliseconds, as is
proposed for COA.\16\ This proposed exception is also consistent with
the treatment of similar orders entered in the BOX Complex Order Price
Improvement Period.\17\ Consistent with Rule 935NY Commentary .01, ATP
Holders shall only use COA where there is a genuine intention to
execute bona fide transactions.
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\16\ See Rule 935NY(iii). See also supra n. 10.
\17\ See BOX IM-7140-2; see also Box Rule 7245(f)(1).
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The Exchange also proposes to delete rule text from Rule
980NY(e)(3), which provides that ``[t]he obligations of Rule 935NY,
Order Exposure Requirements, are separate from the duration of the
Response Time Interval.'' The Exchange is proposing to delete this text
because it would no longer be accurate with the
[[Page 32429]]
proposed changes to Rule 935NY described above.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b)(5) of the Securities Exchange Act of 1934 (the ``Act''),\18\ which
requires the rules of an exchange to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system and, in general,
to protect investors and the public interest.
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\18\ 15 U.S.C. 78f(b).
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The Exchange believes that the proposed rule change to amend Rule
980NY(e)(4) to provide that any ATP Holder may submit an RFR Response
during an RTI would remove impediments to and perfect the mechanism of
a free and open market and a national market system because it could
result in increased participation in the COA process, which should
increase competition within a COA, potentially offering greater price
improvement opportunities to the COA-eligible order. The Exchange notes
that at least two other options exchanges allow all members to
participate in electronic auctions similar to the COA.\19\
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\19\ See supra n. 7.
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The Exchange believes the proposed minimum of 500 milliseconds for
a RTI within a COA promotes just and equitable principles of trade and
removes impediments to a free and open market because it allow [sic]
sufficient time for ATP Holders participating in a COA to submit RFR
Responses and would encourage competition among participants, thereby
enhancing the potential for price improvement for orders in the COA to
the benefit of investors and public interest. The Exchange believes the
proposed rule change is not unfairly discriminatory because it
establishes a minimum exposure period applicable to COA-eligible
orders, which would be the same for all ATP Holders participating in a
COA. In addition, the proposed minimum of 500 millisecond [sic] is
consistent with CUBE and is comparable to BOX's Complex Order Price
Improvement Period, which similar to the Exchange's COA, is designed to
offer price improvement to complex orders, and is only 100 milliseconds
in length.\20\
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\20\ See supra nn. 10, 11.
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The Exchange believes the proposal to allow Users who utilize the
COA to enter an order as principal to potentially execute against an
order it represents as agent promotes just and equitable principles of
trade because the proposed minimum of 500 milliseconds for the RTI
would provide ample time for participants in the COA to respond and
would encourage competition and opportunities for price improvement, to
the benefit of investors and the public interest. In addition,
exempting Electronic Complex Orders subject to a COA from the one-
second order exposure requirement of Rule 935NY is consistent with the
treatment of orders in the CUBE Auction as well as the treatment of
similar orders entered in the BOX Complex Order Price Improvement
Period.\21\ Additionally, the Exchange believes the proposed exemption
from Rule 935NY would reduce market risk for ATP Holders responding to
COA-eligible orders by providing timely executions of these orders.
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\21\ See supra nn. 16, 17.
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Accordingly, for foregoing reasons, the Exchange believes the
proposed change is consistent with the Act.
(B) Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes the
proposal to allow all OTP Holders to participate in the COA process
should increase the level of competition within COAs, which will
increase opportunities to trade for all participants on the Exchange
and may increase opportunities for COA-eligible orders to receive price
improvement. The Exchange also believes that this proposed expansion
would enable the Exchange to better compete with other options
exchanges that already offer all participants the ability to
participate in electronic auctions.\22\ The Exchange believes the
proposed 500 millisecond minimum for a RTI is pro-competitive as it
would afford ATP Holders sufficient time to respond to a COA and
enhance opportunities for price improvement while encouraging timely
executions. The Exchange believes that the proposed limited exception
to Rule 935NY would enable the Exchange to better compete with other
options exchanges that already exempt market participants from the one-
second order exposure requirements when utilizing certain price
improvement and auction mechanisms.\23\ Accordingly, the proposed rule
change would also serve to promote regulatory clarity and consistency,
thereby reducing burdens on the marketplace and facilitating investor
protection.
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\22\ See supra n. 7.
\23\ See supra nn. 16, 17.
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(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
Within 45 days of the date of publication of this notice in the
Federal Register or up to 90 days (i) as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or (ii) as to which the self-regulatory
organization consents, the Commission will:
(A) By order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEMKT-2015-41 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-NYSEMKT-2015-41. 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
[[Page 32430]]
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 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-NYSEMKT-2015-41 and should be submitted on or before
June 29, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-13870 Filed 6-5-15; 8:45 am]
BILLING CODE 8011-01-P
