Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Several Rules To Address Certain Order Handling Obligations on the Part of Its Floor Brokers, 60724-60726 [2015-25464]
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60724
Federal Register / Vol. 80, No. 194 / Wednesday, October 7, 2015 / Notices
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:
• 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–2015–81 on the subject
line.
Paper Comments
asabaliauskas on DSK5VPTVN1PROD 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–NYSEARCA–2015–81. 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 Section, 100 F Street NE.,
Washington, DC 20549–1090. Copies of
the filing will also be available for
inspection and copying at the NYSE’s
principal office and on its Internet Web
site at www.nyse.com. 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–2015–81 and should be
submitted on or before October 28,
2015.
18:12 Oct 06, 2015
[FR Doc. 2015–25463 Filed 10–6–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
VerDate Sep<11>2014
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Robert W. Errett,
Deputy Secretary.
Jkt 238001
[Release No. 34–76064; File No. SR–
NYSEMKT–2015–66]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending Several Rules
To Address Certain Order Handling
Obligations on the Part of Its Floor
Brokers
October 1, 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
September 16, 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 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
several rules to address certain order
handling obligations on the part of its
Floor Brokers. 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.
17 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
PO 00000
Frm 00114
Fmt 4703
Sfmt 4703
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 amend
several rules to address certain order
handling obligations on the part of its
Floor Brokers. Specifically, the
Exchange is proposing to amend Rules
900.3NY, 933NY, and 936NY to clarify
whether orders sent to Floor Brokers are
considered ‘‘Held’’ or ‘‘Not Held’’. This
proposal would enable the Exchange to
compete with options exchanges that
have already implemented the types of
changes being proposed here.4
Current Rule 900.3NY(f) defines
whether orders sent to Floor Brokers are
presumed to be ‘‘Held’’ or ‘‘Not Held.’’ 5
A ‘‘Not Held’’ order generally is one
where the customer gives the Floor
Broker discretion in executing the order,
both with respect to the time of
execution and the price (though the
customer may specify a limit price), and
the Floor Broker works the order over a
period of time to avoid market impact
while seeking best execution of the
order. A ‘‘Held’’ order generally is one
where the customer seeks a prompt
execution at the best currently available
price or prices.
The Exchange now proposes to
establish in Rules 900.3NY(f), 933NY,
and 936NY a different default status for
orders sent to Floor Brokers because the
Exchange believes that these provisions
are intended to protect against a broker
failing to properly represent and
ultimately execute orders.6 Specifically
the Exchange is proposing to amend
Rule 900.3NY(f) to provide that ‘‘[a]n
order entrusted to a Floor Broker will be
4 See Securities and Exchange Act Release Nos.
75299 (June 25, 2015), 80 FR 37700 (July 1, 2015)
(Approval Order); 74990 (May 18, 2015), 80 FR
29767 (May 22, 2015) (SR–CBOE–2015–047)
(Notice). The Exchange notes that, unlike CBOE, the
Exchange does not route certain electronic order to
Floor Brokers. Therefore, the Exchange is not
proposing rule text mirroring CBOE’s rule in this
regard.
5 Rule 900.3NY(f) (Orders Defined) defines a ‘‘Not
Held Order’’ as an order that is marked as ‘‘not
held’’, ‘‘NH’’, or ‘‘take time,’’ or ‘‘which bears any
qualifying notation giving discretion as to the price
or time at which such order is to be executed.’’
6 The Exchange notes that at the time these rules
were adopted, virtually all options orders (large or
small and retail or professional) were handled by
Floor Brokers. Given the discrete profile of orders
handled by Floor Brokers today (generally large size
orders and often multi-leg) it is reasonable for Floor
Brokers to ‘‘work’’ orders that are entrusted to them
because that is the reason a customer would utilize
a Floor Broker in today’s environment.
E:\FR\FM\07OCN1.SGM
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asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 194 / Wednesday, October 7, 2015 / Notices
considered a Not Held Order, unless
otherwise specified by a Floor Broker’s
client.’’ The Exchange is also proposing
to add new Commentary .06 to Rule
933NY (Responsibilities of Floor
Brokers) and to add language to Rule
936NY (Discretionary Transaction) that
mirrors the language it proposes to add
to Rule 900.3NY(f). The Exchange
believes that these proposed changes,
taken together, would result in a change
to the default order handling obligations
for orders sent to Floor Brokers (i.e., the
Exchange would consider all orders sent
to Floor Brokers to be ‘‘Not Held’’ by
default).
The Exchange notes that Rules
933NYand 936NY were based upon
rules that were adopted prior to
electronic trading and, therefore, did not
contemplate the interaction between an
electronic environment and a trading
floor and have not been amended to
specifically address that interaction.
While it is clear that Floor Brokers have
more discretion with regards to the
manner in which they represent and
execute orders on a trading floor than
does a computer routing an order to the
Exchange for execution, the bounds of
the discretion have not been entirely
clear. Rules 933NYand 936NY, among
others, set certain boundaries to a Floor
Broker’s discretion, but the Exchange
believes the current marketplace, with
electronic and floor trading, favors an
amendment to those boundaries.
Electronic and floor trading gives
clients the choice between an Amex
Trading Permit Holder (‘‘ATP’’) that
routes orders to the Exchange
electronically or an ATP that executes
orders via a Floor Broker. The Exchange
believes that clients are keenly aware
that the differences between electronic
and floor trading include at least the
following factors: A computer cannot
deviate from its programed instructions,
whereas a Floor Broker can take into
account the nuance of the marketplace,
such as the makeup of a particular
trading floor, the individuals on that
trading floor, and how the electronic
books interact with that environment.
The Exchange believes that clients use
Floor Brokers precisely because Floor
Brokers can take into account the
nuance of the marketplace (i.e., exercise
a certain level of discretion) to
potentially provide higher execution
quality. The Exchange likewise believes
that if a client did not want a Floor
Broker to use their expertise in the
execution of an order, the client would
simply send orders to the Exchange
electronically.
Given that Floor Brokers have more
discretion with regards to the manner in
which they represent and execute orders
VerDate Sep<11>2014
18:12 Oct 06, 2015
Jkt 238001
than do computers executing electronic
orders, the Exchange is proposing to
change certain boundaries related to
that discretion. In particular, in
recognition of the discretion implicit
with the use of a Floor Broker, the
Exchange seeks to provide notice to the
marketplace that, unless otherwise
specified by a Floor Broker’s client, an
order is deemed to be ‘‘not held.’’ The
Exchange believes clients that choose to
use Floor Brokers do so in order to
utilize a Floor Broker’s expertise in the
execution of orders. This rule change
would update Exchange rules by setting
forth the presumptive discretion
available to Floor Brokers in a manner
consistent with modern market
structure and the Floor Broker’s role in
the current trading environment. This
filing also serves as notice to the
investing community that orders sent to
Floor Brokers will be deemed ‘‘not
held’’ unless otherwise specified by the
Floor Broker’s client.
In addition, the Exchange will
announce the implementation of this
rule change by Trader Update.
2. Statutory Basis
The Exchange believes that the
proposed change is consistent with
Section 6(b) of the Act,7 in general, and
furthers the objectives of Section
6(b)(5),8 in particular, in that it is
designed 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 facilitation transactions in
securities, to remove impediments to,
and perfect the mechanism of a free and
open market and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 9 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the Exchange believes
that it has articulated a reasonable basis
for changing the current default
presumption of whether a customer
intends to provide a Floor Broker with
the ability to exercise time and price
discretion on its behalf as long as the
order is not otherwise marked in a
manner to suggest that the customer did
not intend for its order to be treated as
Not Held. Other than changing the
default presumption to ‘‘Not Held’’ for
most orders sent to Floor Brokers, the
Exchange is not proposing to change
7 15
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
9 Id.
PO 00000
Frm 00115
any other order handling obligations
applicable to Floor Brokers. The
Exchange believes that its proposal is
consistent with the Act and is designed
to promote just and equitable principles
of trade and remove impediments to and
perfect the mechanism of a free and
open market because it responds to an
understanding of the changing role of
Floor Brokers on the Exchange’s Floor
since it adopted Rule 936NY, and its
understanding of how customers today
use, and intend to continue to use, the
services of Floor Brokers on the
Exchange. In addition, the Exchange
believes designating certain orders as
‘‘not held’’ is in the interest of
facilitating transactions in securities and
reflective of today’s marketplace, which
generally helps to protect investors and
the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
this proposed rule change would
impose any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe the proposed
rule change will impose any burden on
competition because the rule change
adds clarity regarding the default orders
handling obligations for orders sent to
Floor Brokers, reflects the modern
market structure, is consistent with the
reasons customers utilize Floor Brokers,
and will be applied equally to all ATPs.
To the extent that the proposed rule
change will cause clients or brokers to
choose the Exchange over other trading
venues, market participants on other
exchanges are welcome to become ATPs
and trade at the Exchange if they
determine that this proposed rule
change has made the Exchange more
attractive or favorable. In addition, as
noted above, the Exchange believes the
proposed rule change is pro-competitive
and would allow the Exchange to
compete more effectively with other
options exchanges that have already
adopted similar rule changes.10
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
The Exchange has filed the proposed
rule change pursuant to Section
10 See
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60725
E:\FR\FM\07OCN1.SGM
supra n. 4.
07OCN1
60726
Federal Register / Vol. 80, No. 194 / Wednesday, October 7, 2015 / Notices
19(b)(3)(A)(iii) of the Act 11 and Rule
19b–4(f)(6) thereunder.12 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 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 and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 13 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),14 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 15 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
asabaliauskas on DSK5VPTVN1PROD 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–
NYSEMKT–2015–66 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–2015–66. This
11 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
13 17 CFR 240.19b–4(f)(6).
14 17 CFR 240.19b–4(f)(6)(iii).
15 15 U.S.C. 78s(b)(2)(B).
12 17
VerDate Sep<11>2014
18:12 Oct 06, 2015
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 Section, 100 F Street NE.,
Washington, DC 20549–1090. Copies of
the filing will also be available for
inspection and copying at the NYSE’s
principal office and on its Internet Web
site at www.nyse.com. 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–2015–66 and should be
submitted on or before October 28,
2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–25464 Filed 10–6–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IC–31856; File No. 812–14122]
Triton Pacific Investment Corporation,
Inc., et al.; Notice of Application
September 30, 2015.
Securities and Exchange
Commission (‘‘Commission’’).
AGENCY:
Notice of application for an
order under sections 17(d) and 57(i) of
the Investment Company Act of 1940
(the ‘‘Act’’) and rule 17d–1 under the
Act to permit certain joint transactions
otherwise prohibited by sections 17(d)
and 57(a)(4) of the Act and rule 17d–1
under the Act.
ACTION:
16 17
Jkt 238001
PO 00000
CFR 200.30–3(a)(12).
Frm 00116
Fmt 4703
Sfmt 4703
Applicants
request an order to permit certain
business development companies
(‘‘BDCs’’) and closed-end management
investment companies to co-invest in
portfolio companies with each other and
with affiliated investment funds.
APPLICANTS: Triton Pacific Investment
Corporation, Inc. (the ‘‘Company’’),
Triton Pacific Income & Growth Fund
IV, LP (‘‘Fund IV’’), Triton Pacific
Platinum Fund IV, LP (‘‘Platinum IV’’
and, together with Fund IV, the
‘‘Existing Affiliated Private Funds’’),
TPCP Fund Manager IV, LLC (the ‘‘Fund
Manager’’), Triton Pacific Adviser, LLC
(the ‘‘BDC Adviser’’), Triton Pacific
Capital Partners, LLC (‘‘TPCP’’), and
Triton Pacific Group, Inc. (‘‘TPG’’).
FILING DATES: The application was filed
on February 8, 2013, and amended on
May 17, 2013, July 15, 2013, December
18, 2013, June 12, 2014, November 25,
2014, May 28, 2015, and September 29,
2015.
HEARING OR NOTIFICATION OF HEARING: An
order granting the requested relief will
be issued unless the Commission orders
a hearing. Interested persons may
request a hearing by writing to the
Commission’s Secretary and serving
applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on October 26, 2015, and
should be accompanied by proof of
service on applicants, in the form of an
affidavit or, for lawyers, a certificate of
service. Pursuant to rule 0–5 under the
Act, hearing requests should state the
nature of the writer’s interest, any facts
bearing upon the desirability of a
hearing on the matter, the reason for the
request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
writing to the Commission’s Secretary.
ADDRESSES: Brent J. Fields, Secretary,
U.S. Securities and Exchange
Commission, 100 F St. NE., Washington,
DC 20549–1090. Applicants: 10877
Wilshire Blvd., 12th Floor, Los Angeles,
CA 90024.
FOR FURTHER INFORMATION CONTACT:
Laura J. Riegel, Senior Counsel, at (202)
551–6873 or Mary Kay Frech, Branch
Chief, at (202) 551–6821 (Chief
Counsel’s Office, Division of Investment
Management).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
Web site by searching for the file
number, or for an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
SUMMARY OF APPLICATION:
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]]>Agencies
[Federal Register Volume 80, Number 194 (Wednesday, October 7, 2015)]
[Notices]
[Pages 60724-60726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-25464]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-76064; File No. SR-NYSEMKT-2015-66]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Amending Several Rules
To Address Certain Order Handling Obligations on the Part of Its Floor
Brokers
October 1, 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 September 16, 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 self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend several rules to address certain
order handling obligations on the part of its Floor Brokers. 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 amend several rules to address certain
order handling obligations on the part of its Floor Brokers.
Specifically, the Exchange is proposing to amend Rules 900.3NY, 933NY,
and 936NY to clarify whether orders sent to Floor Brokers are
considered ``Held'' or ``Not Held''. This proposal would enable the
Exchange to compete with options exchanges that have already
implemented the types of changes being proposed here.\4\
---------------------------------------------------------------------------
\4\ See Securities and Exchange Act Release Nos. 75299 (June 25,
2015), 80 FR 37700 (July 1, 2015) (Approval Order); 74990 (May 18,
2015), 80 FR 29767 (May 22, 2015) (SR-CBOE-2015-047) (Notice). The
Exchange notes that, unlike CBOE, the Exchange does not route
certain electronic order to Floor Brokers. Therefore, the Exchange
is not proposing rule text mirroring CBOE's rule in this regard.
---------------------------------------------------------------------------
Current Rule 900.3NY(f) defines whether orders sent to Floor
Brokers are presumed to be ``Held'' or ``Not Held.'' \5\ A ``Not Held''
order generally is one where the customer gives the Floor Broker
discretion in executing the order, both with respect to the time of
execution and the price (though the customer may specify a limit
price), and the Floor Broker works the order over a period of time to
avoid market impact while seeking best execution of the order. A
``Held'' order generally is one where the customer seeks a prompt
execution at the best currently available price or prices.
---------------------------------------------------------------------------
\5\ Rule 900.3NY(f) (Orders Defined) defines a ``Not Held
Order'' as an order that is marked as ``not held'', ``NH'', or
``take time,'' or ``which bears any qualifying notation giving
discretion as to the price or time at which such order is to be
executed.''
---------------------------------------------------------------------------
The Exchange now proposes to establish in Rules 900.3NY(f), 933NY,
and 936NY a different default status for orders sent to Floor Brokers
because the Exchange believes that these provisions are intended to
protect against a broker failing to properly represent and ultimately
execute orders.\6\ Specifically the Exchange is proposing to amend Rule
900.3NY(f) to provide that ``[a]n order entrusted to a Floor Broker
will be
[[Page 60725]]
considered a Not Held Order, unless otherwise specified by a Floor
Broker's client.'' The Exchange is also proposing to add new Commentary
.06 to Rule 933NY (Responsibilities of Floor Brokers) and to add
language to Rule 936NY (Discretionary Transaction) that mirrors the
language it proposes to add to Rule 900.3NY(f). The Exchange believes
that these proposed changes, taken together, would result in a change
to the default order handling obligations for orders sent to Floor
Brokers (i.e., the Exchange would consider all orders sent to Floor
Brokers to be ``Not Held'' by default).
---------------------------------------------------------------------------
\6\ The Exchange notes that at the time these rules were
adopted, virtually all options orders (large or small and retail or
professional) were handled by Floor Brokers. Given the discrete
profile of orders handled by Floor Brokers today (generally large
size orders and often multi-leg) it is reasonable for Floor Brokers
to ``work'' orders that are entrusted to them because that is the
reason a customer would utilize a Floor Broker in today's
environment.
---------------------------------------------------------------------------
The Exchange notes that Rules 933NYand 936NY were based upon rules
that were adopted prior to electronic trading and, therefore, did not
contemplate the interaction between an electronic environment and a
trading floor and have not been amended to specifically address that
interaction. While it is clear that Floor Brokers have more discretion
with regards to the manner in which they represent and execute orders
on a trading floor than does a computer routing an order to the
Exchange for execution, the bounds of the discretion have not been
entirely clear. Rules 933NYand 936NY, among others, set certain
boundaries to a Floor Broker's discretion, but the Exchange believes
the current marketplace, with electronic and floor trading, favors an
amendment to those boundaries.
Electronic and floor trading gives clients the choice between an
Amex Trading Permit Holder (``ATP'') that routes orders to the Exchange
electronically or an ATP that executes orders via a Floor Broker. The
Exchange believes that clients are keenly aware that the differences
between electronic and floor trading include at least the following
factors: A computer cannot deviate from its programed instructions,
whereas a Floor Broker can take into account the nuance of the
marketplace, such as the makeup of a particular trading floor, the
individuals on that trading floor, and how the electronic books
interact with that environment. The Exchange believes that clients use
Floor Brokers precisely because Floor Brokers can take into account the
nuance of the marketplace (i.e., exercise a certain level of
discretion) to potentially provide higher execution quality. The
Exchange likewise believes that if a client did not want a Floor Broker
to use their expertise in the execution of an order, the client would
simply send orders to the Exchange electronically.
Given that Floor Brokers have more discretion with regards to the
manner in which they represent and execute orders than do computers
executing electronic orders, the Exchange is proposing to change
certain boundaries related to that discretion. In particular, in
recognition of the discretion implicit with the use of a Floor Broker,
the Exchange seeks to provide notice to the marketplace that, unless
otherwise specified by a Floor Broker's client, an order is deemed to
be ``not held.'' The Exchange believes clients that choose to use Floor
Brokers do so in order to utilize a Floor Broker's expertise in the
execution of orders. This rule change would update Exchange rules by
setting forth the presumptive discretion available to Floor Brokers in
a manner consistent with modern market structure and the Floor Broker's
role in the current trading environment. This filing also serves as
notice to the investing community that orders sent to Floor Brokers
will be deemed ``not held'' unless otherwise specified by the Floor
Broker's client.
In addition, the Exchange will announce the implementation of this
rule change by Trader Update.
2. Statutory Basis
The Exchange believes that the proposed change is consistent with
Section 6(b) of the Act,\7\ in general, and furthers the objectives of
Section 6(b)(5),\8\ in particular, in that it is designed 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 facilitation transactions
in securities, to remove impediments to, and perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest. Additionally, the Exchange believes the proposed rule
change is consistent with the Section 6(b)(5) \9\ requirement that the
rules of an exchange not be designed to permit unfair discrimination
between customers, issuers, brokers, or dealers.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ Id.
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In particular, the Exchange believes that it has articulated a
reasonable basis for changing the current default presumption of
whether a customer intends to provide a Floor Broker with the ability
to exercise time and price discretion on its behalf as long as the
order is not otherwise marked in a manner to suggest that the customer
did not intend for its order to be treated as Not Held. Other than
changing the default presumption to ``Not Held'' for most orders sent
to Floor Brokers, the Exchange is not proposing to change any other
order handling obligations applicable to Floor Brokers. The Exchange
believes that its proposal is consistent with the Act and is designed
to promote just and equitable principles of trade and remove
impediments to and perfect the mechanism of a free and open market
because it responds to an understanding of the changing role of Floor
Brokers on the Exchange's Floor since it adopted Rule 936NY, and its
understanding of how customers today use, and intend to continue to
use, the services of Floor Brokers on the Exchange. In addition, the
Exchange believes designating certain orders as ``not held'' is in the
interest of facilitating transactions in securities and reflective of
today's marketplace, which generally helps to protect investors and the
public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that this proposed rule change would
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange does not believe
the proposed rule change will impose any burden on competition because
the rule change adds clarity regarding the default orders handling
obligations for orders sent to Floor Brokers, reflects the modern
market structure, is consistent with the reasons customers utilize
Floor Brokers, and will be applied equally to all ATPs. To the extent
that the proposed rule change will cause clients or brokers to choose
the Exchange over other trading venues, market participants on other
exchanges are welcome to become ATPs and trade at the Exchange if they
determine that this proposed rule change has made the Exchange more
attractive or favorable. In addition, as noted above, the Exchange
believes the proposed rule change is pro-competitive and would allow
the Exchange to compete more effectively with other options exchanges
that have already adopted similar rule changes.\10\
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\10\ See supra n. 4.
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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
The Exchange has filed the proposed rule change pursuant to Section
[[Page 60726]]
19(b)(3)(A)(iii) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
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 and Rule 19b-
4(f)(6)(iii) thereunder.
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\14\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(2)(B).
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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-2015-66 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-2015-66. 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 Section, 100 F Street
NE., Washington, DC 20549-1090. Copies of the filing will also be
available for inspection and copying at the NYSE's principal office and
on its Internet Web site at www.nyse.com. 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-2015-66 and should be submitted
on or before October 28, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-25464 Filed 10-6-15; 8:45 am]
BILLING CODE 8011-01-P
