Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Implement An Order Exposure Alert To Be Disseminated by the Exchange, 65271-65274 [2015-27070]
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Federal Register / Vol. 80, No. 206 / Monday, October 26, 2015 / Notices
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml) or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
ICEEU–2015–017 on the subject line.
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–ICEEU–2015–017. 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
filings will also be available for
inspection and copying at the principal
office of ICE Clear Europe and on ICE
Clear Europe’s Web site at https://
www.theice.com/clear-europe/
regulation#rule-filings.
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–ICEEU–2015–017 and
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should be submitted on or before
November 16, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Brent J. Fields,
Secretary.
[FR Doc. 2015–27067 Filed 10–23–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
FEDERAL REGISTER CITATION OF PREVIOUS
ANNOUNCEMENT: [80 FR 64038, October
22, 2015].
Oral Argument.
PLACE: 100 F Street NE., Washington,
DC.
STATUS:
DATE AND TIME OF PREVIOUSLY ANNOUNCED
MEETING: October 26, 2015.
Room Change.
The Oral Argument scheduled for
Monday, October 26, 2015 at 1:00 p.m.
will be held in the Closed Commission
Hearing (Room 10800).
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items. For further
information and to ascertain what, if
any, matters have been added, deleted
or postponed, please contact:
The Office of the Secretary at (202)
551–5400.
CHANGE IN THE MEETING:
Dated: October 22, 2015.
Brent J. Fields,
Secretary.
[FR Doc. 2015–27357 Filed 10–22–15; 4:15 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76199; File No. SR–BX–
2015–057]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Implement
An Order Exposure Alert To Be
Disseminated by the Exchange
October 20, 2015.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
6, 2015, NASDAQ OMX BX, Inc. (‘‘BX’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
11 17
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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65271
‘‘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 implement
an order exposure alert to be
disseminated by the Exchange when a
marketable order is placed on the book
at a price that locks or crosses the
national best bid or offer (‘‘NBBO’’)
when the Exchange is not part of the
NBBO.
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
The Exchange is proposing to amend
rulebook Chapter VI, Section 11 to
implement an order exposure alert in
order to provide marketable orders an
additional opportunity for execution on
the Exchange when the Exchange is not
part of the NBBO contra to the order and
the order locks or crosses the away best
bid or offer (‘‘ABBO’’).3
3 Similar functionality currently exists on
NASDAQ OMX PHLX. See Securities Exchange Act
Release No. 68517 (December 21, 2012), 77 FR
77134 (December 31, 2012) (SR–Phlx–2012–136).
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asabaliauskas on DSK5VPTVN1PROD with NOTICES
The Trading System provides two
routing options, SEEK 4 and SRCH, 5
pursuant to which orders are sent to
other available market centers for
potential execution per the entering
market participant’s instructions. With
SEEK and SRCH, an order will first
check the System for available contracts
for execution. After checking the System
for available contracts, orders are sent to
other available market centers for
potential execution, per the entering
firm’s instructions. Alternatively,
Participants can designate orders as not
available for routing.
Currently, when the Exchange’s
disseminated bid or offer is inferior to
the ABBO and an order that is
marketable against the ABBO is
received, it is matched against any
possible contra side orders available in
the Trading System. If a routable order
is still unexecuted, or if only partially
executed, it is then routed away to the
market or markets at the ABBO,
cancelled back to the entering party or
posted on the book and displayed at a
non-locking price according to the
instructions on the order.6
The Exchange is now proposing to
amend rulebook Chapter VI, Section 11
to implement an order exposure alert in
order to provide marketable orders an
4 SEEK is a routing option pursuant to which an
order will first check the System for available
contracts for execution. After checking the System
for available contracts, orders are sent to other
available market centers for potential execution, per
the entering firm’s instructions. When checking the
book, the System will seek to execute at the price
at which it would send the order to a destination
market center. Eligible unexecuted orders continue
to be routed as described in paragraph (a)(1)(C) of
Chapter VI, Section 11. If contracts remain unexecuted after routing, they are posted on the book
at the order’s limit price. While on the book at the
limit price, should the order subsequently be locked
or crossed by another market center, the system will
not route the order to the locking or crossing market
center. SEEK orders will not be eligible for routing
until the next time the option series is subject to
a new opening or reopening. See Chapter VI,
Section 11(a)(1)(A).
5 SRCH is a routing option pursuant to which an
order will first check the System for available
contracts for execution. After checking the System
for available contracts, orders are sent to other
available market centers for potential execution, per
the entering firm’s instructions. When checking the
book, the System will seek to execute at the price
at which it would send the order to a destination
market center. Eligible unexecuted orders will
continue to be routed as described in paragraph
(a)(1)(C) of Chapter VI, Section 11. If contracts
remain un-executed after routing, they are posted
on the book. Once on the book, should the order
subsequently be locked or crossed by another
market center, it will re-route. See Chapter VI,
Section 11(a)(1)(B).
6 Because the System routes the lesser of the
disseminated size of the away markets or the order
size, it is possible for a portion of an order to be
routed rather than the entire order. Also, respecting
the part of an order that is routed, that order can
either be executed in full, in part, or not at all on
the destination exchange.
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additional opportunity for execution on
the Exchange when the Exchange is not
part of the NBBO and the order locks or
crosses the ABBO. The order exposure
alert will apply to both SEEK and SRCH
orders and is similar to the order
exposure alert process already in place
on NASDAQ OMX PHLX (‘‘Phlx’’).7 The
Exchange has recently amended its rules
to specify that after an order is initially
routed, the order will post to the book
and will be routed after a time period
(‘‘Route Timer’’) not to exceed one
second as specified by the Exchange on
its Web site, provided that the order’s
price would not lock or cross other
market centers.8 The proposed
amendments would permit the
Exchange to apply the Route Timer
prior to the initial routing of the order.
The Exchange proposes to amend
Chapter VI, Section 11(1)(A) to provide
that a SEEK order remaining on the
book after the opening process or
received during open trading that is
marketable against the ABBO when the
ABBO is better than the displayed
Exchange BBO will initiate a Route
Timer not to exceed one second, and
expose the SEEK order at the NBBO to
allow market participants an
opportunity to interact with the SEEK
order. During the Route Timer, the
SEEK order will be included in the
displayed Exchange BBO at the better of
a price one MPV away from the ABBO
or the established Exchange BBO. If,
during the Route Timer, any new
interest arrives opposite the SEEK order
that is equal to or better than the ABBO
price, the SEEK order will trade against
such new interest at the ABBO price.9
While on the book at the limit price,
should a SEEK order subsequently be
locked or crossed by another market
center, the System will not re-expose
7 See Phlx Rule 1080(m), Away Markets and
Order Routing, Section (iv).
8 See Securities Exchange Act Release No. 73541
(November 6, 2014) 79 FR 67526 (November 13,
2014) (SR–BX–2014–055). The Exchange is
proposing to amend Section (a)(1)(C) by
redesignating it as Section (a)(1)(D), and by
clarifying in the first and last sentences of that
Section that the order will be exposed prior to
routing pursuant to that Section. This amendment
reflects the fact that order exposure occurs (during
open trading) every time an order becomes
marketable against the ABBO.
9 The rule currently states that ‘‘[a]fter checking
the System for available contracts, orders are sent
to other available market centers for potential
execution per the entering firm’s instructions.’’ This
general sentence is being deleted in view of the
greater specificity of the proposed new language,
and to conform the Exchange’s rule language more
closely to that of Phlx. The preceding sentence, for
clarity, is then amended to provide that after
checking the System an order is sent to other
available market centers for potential execution.
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the order. An order exposure alert may
be sent if the order size is modified.
The Exchange also proposes to amend
Chapter VI, Section 11(1)(B), to provide
that a SRCH order remaining on the
book after the opening process or
received during open trading that is
marketable against the ABBO when the
ABBO is better than the displayed
Exchange BBO will initiate a Route
Timer not to exceed one second, and
expose the SRCH order at the NBBO to
allow market participants an
opportunity to interact with the
remainder of the SRCH order. During
the Route Timer, the SRCH order will be
included in the displayed Exchange
BBO at the better of a price one MPV
away from the ABBO or the established
Exchange BBO. If, during the Route
Timer, any new interest arrives opposite
the SRCH order that is equal to or better
than the ABBO price, the SRCH order
will trade against such new interest at
the ABBO price.10 Once on the book,
should a SRCH order subsequently be
locked or crossed by another market
center, it will be re-exposed, provided it
is not on the book at its limit price, and
re-route. An order exposure alert may be
sent if the order size is modified.
The Exchange proposes to redesignate
existing Section 11(a)(1)(C) as Section
11(a)(1)(D) and to add new Section
11(a)(1)(C) dealing with Do Not Route or
‘‘DNR’’ Orders. Currently, Section 11(a)
provides that Participants can designate
orders as not available for routing. The
new rule provides additional specificity
regarding the Exchange’s treatment of
such orders, known as DNR orders,
tracking language regarding DNR orders
from the Phlx rules.11 The new language
clarifies that DNR orders will never be
routed outside of the Exchange
regardless of the prices displayed by
away markets. It specifies that a DNR
order may execute on the Exchange at
a price equal to or better than, but not
inferior to, the best away market price
but, if that best away market remains,
the DNR order will remain in the
Exchange book and be displayed at the
better of a price one minimum price
variation away from that away best bid/
offer or the established Exchange BBO.
The new rule states that a DNR order
remaining on the book after the opening
process or received during open trading
that is marketable against the ABBO
when the ABBO is better than the
Exchange BBO will be exposed at the
NBBO to market participants and that
any incoming order interacting with
such a resting DNR order will receive
the best away market price. Should the
10 Id.
11 See
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Phlx Rule 1080(m)(iv)(a).
26OCN1
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Federal Register / Vol. 80, No. 206 / Monday, October 26, 2015 / Notices
best away market change its price, or
move to an inferior price level, the DNR
order will automatically re-price from
its one minimum price variation away
from the original away best bid/offer
price to one minimum trading
increment away from the new away best
bid/offer price or its original limit price,
and expose such orders at the NBBO to
market participants only if the re-priced
order locks or crosses the ABBO and is
not already displayed at its limit price.
Should the best away market improve
its price such that it locks or crosses the
DNR order limit price, the Exchange
will execute the resulting incoming
order that is routed from the away
market that locked or crossed the DNR
order limit price. An order exposure
alert may be sent if the order size is
modified.
The Exchange proposes to amend
existing paragraph 11(a)(1)(C) which is
being redesignated as paragraph
11(a)(1)(D). The amendments state that
SEEK and SRCH orders will also be
exposed prior to being re-routed at the
end of the Route Timer provided for in
that paragraph. Thus, the first sentence
of that paragraph will be revised to
provide that after an order is initially
routed, pursuant to either the SEEK or
SRCH routing option the order will post
to the book and will be exposed and
routed after a time period (‘‘Route
Timer’’) not to exceed one second as
specified by the Exchange on its Web
site provided that the order’s limit price
would lock or cross other market
center(s). Similarly, the final sentence of
the paragraph will be amended to state
that if an order was routed with either
the SEEK or SRCH routing option, and
has size after such routing, it will
execute against contra side interest in
the book, post in the book, and be
exposed and route again pursuant to the
process described above, if applicable, if
the order’s limit price would lock or
cross another market center(s).
Finally, the Exchange is amending
Chapter VI, Trading Systems, Section 1,
Definitions, subsection (g)(2) which
defines ‘‘Immediate or Cancel’’ or ‘‘IOC’’
as a time in force which means, for
orders so designated, that if after entry
into the System a marketable order (or
unexecuted portion thereof) becomes
non-marketable, the order (or
unexecuted portion thereof, is canceled
and returned to the entering participant.
The Exchange is deleting the last
sentence of the definition, which
currently states that ‘‘IOC orders can be
routed if designated as routable.’’ The
Exchange has determined that IOC
orders will be cancelled immediately if
not executed, and will not be routed.
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IOC orders are currently handled in this
manner on Phlx.12
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 13 in general, and furthers the
objectives of Section 6(b)(5) of the Act 14
in particular, in that it is designed 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 exposing certain
orders has the potential to result in
more efficient executions for customers
as responses to exposed orders could
result in faster executions. Exposing the
order to all market participants should
promote broader awareness of, and
provide increased opportunities for
greater participation in, these
executions, facilitating the ability of the
Exchange to bring together participants
and encourage more robust competition
for these orders. In addition, the
proposal would continue to guarantee
that orders will receive an execution
that is at a price at least as good as the
price disseminated by the best away
market at the time the order was
received. The Exchange believes that
because all Exchange participants have
the ability to subscribe to a data feed to
provide them with the notifications
exposing the orders, all market
participants may avail themselves of the
same information.
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 not
necessary or appropriate in furtherance
of the purposes of the Act. The proposal
should facilitate the ability of the
Exchange to bring together market
participants and encourage more robust
competition.
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.
12 See Phlx Rule 1080(m), Away Markets and
Order Routing, the second sentence of the
introductory paragraph.
13 15 U.S.C. 78f(b).
14 15 U.S.C. 78f(b)(5).
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65273
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)(iii) of the Act 15 and
subparagraph (f)(6) of Rule 19b–4
thereunder.16
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–2015–057 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–2015–057. 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/
15 15
U.S.C. 78s(b)(3)(a)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
16 17
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rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–BX–
2015–057 and should be submitted on
or before November 16, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Brent J. Fields,
Secretary.
[FR Doc. 2015–27070 Filed 10–23–15; 8:45 am]
BILLING CODE 8011–01–P
thereunder,2 a proposed rule change to
adopt new equity trading rules relating
to Trading Halts, Short Sales, Limit UpLimit Down, and Odd Lots and Mixed
Lots to reflect the implementation of
Pillar, the Exchange’s new trading
technology platform. The proposed rule
change was published for comment in
the Federal Register on July 16, 2015.3
The Commission received no comment
letters on the proposed rule change. On
September 1, 2015, pursuant to Section
19(b)(2) of the Act,3 the Commission
designated a longer period within which
to approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to approve or disapprove the
proposed rule change.4 On October 15,
2015, the Exchange filed Amendment
No. 1 to the proposal.5 The Commission
is publishing this notice to solicit
comment on Amendment No. 1 from
interested persons, and is approving the
proposed rule change, as modified by
Amendment No. 1, on an accelerated
basis.
II. Description of the Proposed Rule
Change
The Exchange proposes to adopt new
equity trading rules relating to the
implementation of Pillar, the Exchange’s
new trading technology platform. The
Exchange proposes to adopt the
following new Pillar rules: (1) Definition
of ‘‘Official Closing Price’’ (NYSE Arca
Equities Rule 1.1 (‘‘Rule 1.1’’)); (2)
2 17
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76198; File No. SR–
NYSEArca–2015–58]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Approving Proposed
Rule Change, and Notice of Filing and
Order Granting Accelerated Approval
of Amendment No. 1 Thereto, Adopting
New Equity Trading Rules Relating to
Trading Halts, Short Sales, Limit UpLimit Down, and Odd Lots and Mixed
Lots To Reflect the Implementation of
Pillar, the Exchange’s New Trading
Technology Platform
October 20, 2015.
asabaliauskas on DSK5VPTVN1PROD with NOTICES
I. Introduction
On July 1, 2015, NYSE Arca, Inc. (the
‘‘Exchange’’ or ‘‘Arca’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
17 17
1 15
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
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CFR 240.19b–4
Securities Exchange Act Release No. 75467
(July 22, 2015), 80 FR 43515 (‘‘Notice’’).
3 15 U.S.C. 78s(b)(2).
4 See Securities Exchange Act Release No. 75800,
80 FR 53911 (September 8, 2015).
5 In Amendment No. 1, the Exchange: (i) Removes
an erroneous reference to subparagraph (6) from
proposed Rule 7.11P(b); (ii) amends proposed Rule
7.16P(f)(5)(A) to add the phrase ‘‘or lower than’’ to
clarify that short sale orders with a working price
and/or display price below the NBB would also be
re-priced to a Permitted Price; (iii) amend proposed
Rule 7.16P(f)(5)(C) to clarify that the Exchange
would treat all odd lot orders ranked Priority 2—
Display Orders in the same manner as Market
Orders and other non-displayed orders; (iv) amend
proposed Rule 7.16P(f)(5)(D) to provide that all
Pegged Orders and MPL Orders, including orders
marked buy, sell long, and sell short exempt, would
use the NBBO instead of the PBBO as the reference
price; (v) amend proposed Rule 7.18P(b)(6) to
specify that the Exchange would reject all
‘‘incoming order instructions’’ during a UTP
Regulatory Halt other than those specified in
proposed Rules 7.18P(b)(1)–(5); (vi) amend footnote
44 of the Notice to add a reference to Limit IOC
Orders designated with an MTS, change the rule
reference for MPL–IOC Orders from Rule
7.31P(c)(3)(E) to Rule 7.31P(d)(3)(E), and add a
reference to Day ISO ALO Orders; and (vii) amend
Rule 7.38P(b)(1) to add that if the limit price of an
odd lot order to buy (sell) is above (below) the PBO
(PBB), and the PBBO is crossed, it would have a
working price equal to the PBB (PBO) to ensure that
an odd lot order to buy (sell) would not have a
working price below (above) the PBB (PBO).
3 See
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Clearly Erroneous Executions (NYSE
Arca Equities Rule 7.10P (‘‘Rule
7.10P’’)); (3) Limit Up—Limit Down
Plan and Trading Pauses in Individual
Securities Due to Extraordinary Market
Volatility (NYSE Arca Equities Rule
7.11P (‘‘Rule 7.11P’’)); 6 (4) Short Sales
(NYSE Arca Equities Rule 7.16P (‘‘Rule
7.16P’’)); (5) Trading Halts (NYSE Arca
Equities Rule 7.18P (‘‘Rule 7.18P’’)); and
(6) Odd and Mixed Lots (NYSE Arca
Equities Rule 7.38P (‘‘Rule 7.38P’’)). In
addition, the proposed new rules to
support Pillar in this filing would use
the terms and definitions that were
proposed in the Pillar I Filing and Pillar
II Filing.7 The Exchange also proposes
to amend existing definitions in Rule
1.1.
A. Background
The Exchange represents that Pillar is
an integrated trading technology
platform designed to use a single
specification for connecting to the
equities and options markets operated
by Arca and its affiliates, New York
Stock Exchange LLC (‘‘NYSE’’) and
NYSE MKT LLC (‘‘NYSE MKT’’).8 On
April 30, 2015, the Exchange filed its
first rule filing relating to the
implementation of Pillar, which
proposed to adopt new rules relating to
Trading Sessions, Order Ranking and
Display, and Order Execution.9 On June
26, 2015, the Exchange filed the second
rule filing relating to the
implementation of Pillar to adopt new
rules relating to Orders and Modifiers
and the Retail Liquidity Program.10
This filing is the third set of proposed
rule changes to support Pillar
implementation. As proposed, the new
rules governing trading on Pillar would
have the same numbering as current
rules, but with the modifier ‘‘P’’
appended to the rule number. The
Exchange proposes that rules with a ‘‘P’’
modifier would operate for symbols that
are trading on the Pillar trading
platform. If a symbol is trading on the
Pillar trading platform, a rule with the
same number as a rule with a ‘‘P’’
modifier would no longer operate for
6 Rule 7.11 and proposed Rule 7.11P implement
the Plan to Address Extraordinary Market Volatility
pursuant to Rule 608 of Regulation NMS (‘‘LULD
Plan’’). See Securities Exchange Act Release No.
67091 (May 31, 2012), 77 FR 33498 (June 6, 2012)
(File No. 4–631) (Order approving the LULD Plan).
7 See infra notes 9 and 10.
8 See Notice at 43516.
9 See Securities Exchange Act Release No. 74951
(May 13, 2015), 80 FR 28721 (May 19, 2015) (SR–
NYSEArca–2015–38) (‘‘Pillar I Filing’’). The
Commission approved the Pillar I Filing on July 20,
2015. See Securities Exchange Act Release No.
75494 (July 20, 2015), 80 FR 44170 (July 24, 2015)
10 See Securities Exchange Act Release No. 75497
(July 21, 2015), 80 FR 45022 (July 28, 2015) (notice
of SR–NYSEArca–2015–56) (‘‘Pillar II Filing’’).
E:\FR\FM\26OCN1.SGM
26OCN1
]]>Agencies
[Federal Register Volume 80, Number 206 (Monday, October 26, 2015)]
[Notices]
[Pages 65271-65274]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-27070]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-76199; File No. SR-BX-2015-057]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Implement
An Order Exposure Alert To Be Disseminated by the Exchange
October 20, 2015.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on October 6, 2015, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 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 implement an order exposure alert to be
disseminated by the Exchange when a marketable order is placed on the
book at a price that locks or crosses the national best bid or offer
(``NBBO'') when the Exchange is not part of the NBBO.
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
The Exchange is proposing to amend rulebook Chapter VI, Section 11
to implement an order exposure alert in order to provide marketable
orders an additional opportunity for execution on the Exchange when the
Exchange is not part of the NBBO contra to the order and the order
locks or crosses the away best bid or offer (``ABBO'').\3\
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\3\ Similar functionality currently exists on NASDAQ OMX PHLX.
See Securities Exchange Act Release No. 68517 (December 21, 2012),
77 FR 77134 (December 31, 2012) (SR-Phlx-2012-136).
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[[Page 65272]]
The Trading System provides two routing options, SEEK \4\ and SRCH,
\5\ pursuant to which orders are sent to other available market centers
for potential execution per the entering market participant's
instructions. With SEEK and SRCH, an order will first check the System
for available contracts for execution. After checking the System for
available contracts, orders are sent to other available market centers
for potential execution, per the entering firm's instructions.
Alternatively, Participants can designate orders as not available for
routing.
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\4\ SEEK is a routing option pursuant to which an order will
first check the System for available contracts for execution. After
checking the System for available contracts, orders are sent to
other available market centers for potential execution, per the
entering firm's instructions. When checking the book, the System
will seek to execute at the price at which it would send the order
to a destination market center. Eligible unexecuted orders continue
to be routed as described in paragraph (a)(1)(C) of Chapter VI,
Section 11. If contracts remain un-executed after routing, they are
posted on the book at the order's limit price. While on the book at
the limit price, should the order subsequently be locked or crossed
by another market center, the system will not route the order to the
locking or crossing market center. SEEK orders will not be eligible
for routing until the next time the option series is subject to a
new opening or reopening. See Chapter VI, Section 11(a)(1)(A).
\5\ SRCH is a routing option pursuant to which an order will
first check the System for available contracts for execution. After
checking the System for available contracts, orders are sent to
other available market centers for potential execution, per the
entering firm's instructions. When checking the book, the System
will seek to execute at the price at which it would send the order
to a destination market center. Eligible unexecuted orders will
continue to be routed as described in paragraph (a)(1)(C) of Chapter
VI, Section 11. If contracts remain un-executed after routing, they
are posted on the book. Once on the book, should the order
subsequently be locked or crossed by another market center, it will
re-route. See Chapter VI, Section 11(a)(1)(B).
---------------------------------------------------------------------------
Currently, when the Exchange's disseminated bid or offer is
inferior to the ABBO and an order that is marketable against the ABBO
is received, it is matched against any possible contra side orders
available in the Trading System. If a routable order is still
unexecuted, or if only partially executed, it is then routed away to
the market or markets at the ABBO, cancelled back to the entering party
or posted on the book and displayed at a non-locking price according to
the instructions on the order.\6\
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\6\ Because the System routes the lesser of the disseminated
size of the away markets or the order size, it is possible for a
portion of an order to be routed rather than the entire order. Also,
respecting the part of an order that is routed, that order can
either be executed in full, in part, or not at all on the
destination exchange.
---------------------------------------------------------------------------
The Exchange is now proposing to amend rulebook Chapter VI, Section
11 to implement an order exposure alert in order to provide marketable
orders an additional opportunity for execution on the Exchange when the
Exchange is not part of the NBBO and the order locks or crosses the
ABBO. The order exposure alert will apply to both SEEK and SRCH orders
and is similar to the order exposure alert process already in place on
NASDAQ OMX PHLX (``Phlx'').\7\ The Exchange has recently amended its
rules to specify that after an order is initially routed, the order
will post to the book and will be routed after a time period (``Route
Timer'') not to exceed one second as specified by the Exchange on its
Web site, provided that the order's price would not lock or cross other
market centers.\8\ The proposed amendments would permit the Exchange to
apply the Route Timer prior to the initial routing of the order.
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\7\ See Phlx Rule 1080(m), Away Markets and Order Routing,
Section (iv).
\8\ See Securities Exchange Act Release No. 73541 (November 6,
2014) 79 FR 67526 (November 13, 2014) (SR-BX-2014-055). The Exchange
is proposing to amend Section (a)(1)(C) by redesignating it as
Section (a)(1)(D), and by clarifying in the first and last sentences
of that Section that the order will be exposed prior to routing
pursuant to that Section. This amendment reflects the fact that
order exposure occurs (during open trading) every time an order
becomes marketable against the ABBO.
---------------------------------------------------------------------------
The Exchange proposes to amend Chapter VI, Section 11(1)(A) to
provide that a SEEK order remaining on the book after the opening
process or received during open trading that is marketable against the
ABBO when the ABBO is better than the displayed Exchange BBO will
initiate a Route Timer not to exceed one second, and expose the SEEK
order at the NBBO to allow market participants an opportunity to
interact with the SEEK order. During the Route Timer, the SEEK order
will be included in the displayed Exchange BBO at the better of a price
one MPV away from the ABBO or the established Exchange BBO. If, during
the Route Timer, any new interest arrives opposite the SEEK order that
is equal to or better than the ABBO price, the SEEK order will trade
against such new interest at the ABBO price.\9\ While on the book at
the limit price, should a SEEK order subsequently be locked or crossed
by another market center, the System will not re-expose the order. An
order exposure alert may be sent if the order size is modified.
---------------------------------------------------------------------------
\9\ The rule currently states that ``[a]fter checking the System
for available contracts, orders are sent to other available market
centers for potential execution per the entering firm's
instructions.'' This general sentence is being deleted in view of
the greater specificity of the proposed new language, and to conform
the Exchange's rule language more closely to that of Phlx. The
preceding sentence, for clarity, is then amended to provide that
after checking the System an order is sent to other available market
centers for potential execution.
---------------------------------------------------------------------------
The Exchange also proposes to amend Chapter VI, Section 11(1)(B),
to provide that a SRCH order remaining on the book after the opening
process or received during open trading that is marketable against the
ABBO when the ABBO is better than the displayed Exchange BBO will
initiate a Route Timer not to exceed one second, and expose the SRCH
order at the NBBO to allow market participants an opportunity to
interact with the remainder of the SRCH order. During the Route Timer,
the SRCH order will be included in the displayed Exchange BBO at the
better of a price one MPV away from the ABBO or the established
Exchange BBO. If, during the Route Timer, any new interest arrives
opposite the SRCH order that is equal to or better than the ABBO price,
the SRCH order will trade against such new interest at the ABBO
price.\10\ Once on the book, should a SRCH order subsequently be locked
or crossed by another market center, it will be re-exposed, provided it
is not on the book at its limit price, and re-route. An order exposure
alert may be sent if the order size is modified.
---------------------------------------------------------------------------
\10\ Id.
---------------------------------------------------------------------------
The Exchange proposes to redesignate existing Section 11(a)(1)(C)
as Section 11(a)(1)(D) and to add new Section 11(a)(1)(C) dealing with
Do Not Route or ``DNR'' Orders. Currently, Section 11(a) provides that
Participants can designate orders as not available for routing. The new
rule provides additional specificity regarding the Exchange's treatment
of such orders, known as DNR orders, tracking language regarding DNR
orders from the Phlx rules.\11\ The new language clarifies that DNR
orders will never be routed outside of the Exchange regardless of the
prices displayed by away markets. It specifies that a DNR order may
execute on the Exchange at a price equal to or better than, but not
inferior to, the best away market price but, if that best away market
remains, the DNR order will remain in the Exchange book and be
displayed at the better of a price one minimum price variation away
from that away best bid/offer or the established Exchange BBO. The new
rule states that a DNR order remaining on the book after the opening
process or received during open trading that is marketable against the
ABBO when the ABBO is better than the Exchange BBO will be exposed at
the NBBO to market participants and that any incoming order interacting
with such a resting DNR order will receive the best away market price.
Should the
[[Page 65273]]
best away market change its price, or move to an inferior price level,
the DNR order will automatically re-price from its one minimum price
variation away from the original away best bid/offer price to one
minimum trading increment away from the new away best bid/offer price
or its original limit price, and expose such orders at the NBBO to
market participants only if the re-priced order locks or crosses the
ABBO and is not already displayed at its limit price. Should the best
away market improve its price such that it locks or crosses the DNR
order limit price, the Exchange will execute the resulting incoming
order that is routed from the away market that locked or crossed the
DNR order limit price. An order exposure alert may be sent if the order
size is modified.
---------------------------------------------------------------------------
\11\ See Phlx Rule 1080(m)(iv)(a).
---------------------------------------------------------------------------
The Exchange proposes to amend existing paragraph 11(a)(1)(C) which
is being redesignated as paragraph 11(a)(1)(D). The amendments state
that SEEK and SRCH orders will also be exposed prior to being re-routed
at the end of the Route Timer provided for in that paragraph. Thus, the
first sentence of that paragraph will be revised to provide that after
an order is initially routed, pursuant to either the SEEK or SRCH
routing option the order will post to the book and will be exposed and
routed after a time period (``Route Timer'') not to exceed one second
as specified by the Exchange on its Web site provided that the order's
limit price would lock or cross other market center(s). Similarly, the
final sentence of the paragraph will be amended to state that if an
order was routed with either the SEEK or SRCH routing option, and has
size after such routing, it will execute against contra side interest
in the book, post in the book, and be exposed and route again pursuant
to the process described above, if applicable, if the order's limit
price would lock or cross another market center(s).
Finally, the Exchange is amending Chapter VI, Trading Systems,
Section 1, Definitions, subsection (g)(2) which defines ``Immediate or
Cancel'' or ``IOC'' as a time in force which means, for orders so
designated, that if after entry into the System a marketable order (or
unexecuted portion thereof) becomes non-marketable, the order (or
unexecuted portion thereof, is canceled and returned to the entering
participant. The Exchange is deleting the last sentence of the
definition, which currently states that ``IOC orders can be routed if
designated as routable.'' The Exchange has determined that IOC orders
will be cancelled immediately if not executed, and will not be routed.
IOC orders are currently handled in this manner on Phlx.\12\
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\12\ See Phlx Rule 1080(m), Away Markets and Order Routing, the
second sentence of the introductory paragraph.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \13\ in general, and furthers the objectives of Section
6(b)(5) of the Act \14\ in particular, in that it is designed 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 exposing certain orders has the
potential to result in more efficient executions for customers as
responses to exposed orders could result in faster executions. Exposing
the order to all market participants should promote broader awareness
of, and provide increased opportunities for greater participation in,
these executions, facilitating the ability of the Exchange to bring
together participants and encourage more robust competition for these
orders. In addition, the proposal would continue to guarantee that
orders will receive an execution that is at a price at least as good as
the price disseminated by the best away market at the time the order
was received. The Exchange believes that because all Exchange
participants have the ability to subscribe to a data feed to provide
them with the notifications exposing the orders, all market
participants may avail themselves of the same information.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposal should facilitate
the ability of the Exchange to bring together market participants and
encourage more robust competition.
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)(iii) of the Act \15\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\16\
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\15\ 15 U.S.C. 78s(b)(3)(a)(iii).
\16\ 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-2015-057 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-2015-057. 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/
[[Page 65274]]
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room, 100 F
Street NE., Washington, DC 20549, on official business days between the
hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-BX-
2015-057 and should be submitted on or before November 16, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-27070 Filed 10-23-15; 8:45 am]
BILLING CODE 8011-01-P
