Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending the Definition of “Block” for Purposes of Rule 72(d) and the Size of a Proposed Cross Transaction Eligible for the Cross Function in Rule 76, 25748-25750 [2016-09975]

Download as PDF 25748 Federal Register / Vol. 81, No. 83 / Friday, April 29, 2016 / Notices as practicable thereafter, the General Partner of each Fund will send to each investor in such Fund who had an interest in any capital account of the Fund, at any time during the fiscal year then ended, Fund financial statements audited by the Fund’s independent accountants, except in the case of a Fund formed to make a single portfolio investment. In such cases, financial statements will be unaudited, but each investor will receive financial statements of the single portfolio investment audited by such entity’s independent accountants. At the end of each fiscal year and at other times as necessary in accordance with customary practice, the General Partner will make a valuation or cause a valuation to be made of all of the assets of the Fund as of the fiscal year end. In addition, as soon as practicable after the end of each tax year of a Fund, the General Partner of such Fund will send a report to each person who was an investor in such Fund at any time during the fiscal year then ended, setting forth such tax information as shall be necessary for the preparation by the investor of his, her or its U.S. federal and state income tax returns and a report of the investment activities of the Fund during that fiscal year. 6. If a Fund makes purchases or sales from or to an entity affiliated with the Fund by reason of an officer, director or employee of AB (a) serving as an officer, director, general partner or investment adviser of the entity, or (b) having a 5% or more investment in the entity, such individual will not participate in the Fund’s determination of whether or not to effect the purchase or sale. For the Commission, by the Division of Investment Management, under delegated authority. Robert W. Errett, Deputy Secretary. [FR Doc. 2016–10020 Filed 4–28–16; 8:45 am] asabaliauskas on DSK3SPTVN1PROD with NOTICES BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–77701; File No. SR–NYSE– 2016–30] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending the Definition of ‘‘Block’’ for Purposes of Rule 72(d) and the Size of a Proposed Cross Transaction Eligible for the Cross Function in Rule 76 April 25, 2016. 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 April 12, 2016, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II, 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the definition of ‘‘block’’ for purposes of Rule 72(d) and the size of a proposed cross transaction eligible for the Cross Function in Rule 76. The proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 VerDate Sep<11>2014 18:31 Apr 28, 2016 Jkt 238001 PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 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 the definition of ‘‘block’’ for purposes of Rule 72(d) and the size of a proposed cross transaction eligible for the Cross Function in Rule 76. Under Rule 72(d), when a member 4 has an order to buy and an order to sell an equivalent amount of the same security, and both orders are ‘‘block’’ orders, the member may cross those orders at a price at or within the Exchange best bid or offer and does not have to break up the cross transaction to trade with any bids or offers previously displayed at the Exchange best bid or offer, including any interest with priority. For purposes of Rule 72(d), a ‘‘block’’ is at least 10,000 shares or a quantity of stock having a market value of $200,000 or more, whichever is less. Further, Rule 76 governs the execution of ‘‘cross’’ or ‘‘crossing’’ orders by Floor Brokers. Rule 76 applies only to manual transactions executed at the point of sale on the trading floor and provides that when a member has an order to buy and an order to sell the same security that can be crossed at the same price, the member is required to announce to the trading crowd the proposed cross by offering the security at a price that is higher than his or her bid by a minimum variation permitted in the security before crossing the orders. Any other member, including the DMM, can break up the announced bid and offer by trading with either side of the proposed cross transaction. Supplementary [sic] .10 to Rule 76 provides for a ‘‘Cross Function’’ that Floor brokers may use to monitor compliance with Rule 611 of Regulation NMS. To be eligible for this Cross Function, the proposed cross transaction must be for at least 10,000 shares or a quantity of stock having a market value of $200,000 or more. The Exchange proposes to amend the permissible size of a crossing transaction permitted under Rule 72(d) and Supplementary Material .10 to Rule 76 to be at least 5,000 shares or a quantity of stock having a market value of $100,000 or more, whichever is less. The Exchange’s proposed definition of block size would more closely align with how a block-sized transaction is 4 The reference to ‘‘member’’ in Rule 72(d) and this rule proposal means only Floor Broker members. Designated Market Makers (‘‘DMMs’’), while members of the Exchange, do not have any agency relationships, and are therefore not able to effect this type of transaction. E:\FR\FM\29APN1.SGM 29APN1 Federal Register / Vol. 81, No. 83 / Friday, April 29, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES defined in other SEC rules and other exchanges’ rules.5 For example, SEC Rule 10b–18 (Purchases of certain equity securities by the issuer and others) includes in the definition of a block a quantity of stock that is at least 5,000 shares and has a purchase price of at least $50,000.6 Additionally, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) defines a block-sized order as being 10,000 shares or more, unless such orders are less than $100,000 in value.7 The CBOE Stock Exchange (‘‘CBSX’’) Rule 52.11 also permits a cross of two orders so long as the crossing transaction is of at least 5,000 shares and is for a principal amount of at least $100,000.8 More recently, in approving the National Market System Plan to Implement a Tick Size Pilot Program (‘‘Tick Size Pilot’’),9 the SEC approved a modified definition of ‘‘block size’’ such that an order of at least 5,000 shares or with a market value of at least $100,000 would be considered a block size for purposes the Tick Size Pilot. In approving the 5 For purposes of Regulation NMS, a ‘‘block size’’ with respect to an order means it is: (i) Of at least 10,000 shares or (ii) for a quantity of stock having a market value of at least $200,000. See 17 CFR 242.600(a)(9). The term ‘‘block size’’ is used in Regulation NMS in the definition of an OTC Market Marker, 17 CFR 242.600(a)(52), and in an exception to specialists’ and OTC Market Makers’ obligation to display customer limit orders, 17 CFR 242.604(b)(4). The definition of ‘‘block size’’ in Regulation NMS is the same as the Exchange’s current definition of ‘‘block’’ for purposes of Rule 72(d) and the size of a proposed cross transaction eligible for the Cross Function in Rule 76. The Exchange’s proposal to change its rules does not change the definition of ‘‘block size’’ as used in Regulation NMS. 6 See 17 CFR 240.10b–18(a)(5)(ii). 7 See FINRA Rule 5320, Supplementary Material .01. 8 See CBSX Rule 52.11 Facilitation of Orders and Crossing Trades, Chapter LII—Trading Rules and Processing of Orders. In September 2006, the Commission approved rules governing the trading of non-option securities traded on the Chicago Board Options Exchange, Inc. (‘‘CBOE’’), including CBSX Rule 52.11. See Securities Exchange Act Release No. 54422 (September 11, 2006), 71 FR 54537 (September 15, 2006) (Approving SR–CBOE– 2004–21). The Commission also approved modifications to CBOE’s non-option trading rules to conform those rules to aspects of Regulation NMS. See Securities Exchange Act Release No. 54526 (September 27, 2006), 71 FR 58646 (October 4, 2006) (Approving SR–CBOE–2006–70). Although CBSX has ceased trading operations, the CBSX rules are incorporated into the rules of the CBOE. 9 See Securities Exchange Act Release No. 34– 74892 (May 6, 2015), 80 FR 27514 (May 13, 2015) File No. 4–657 (Order Approving the National Market System Plan To Implement a Tick Size Pilot Program by BATS Exchange, Inc. BATS–Y Exchange, Inc., Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, The NASDAQ Stock Market LLC, New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc., as Modified by the Commission, for a Two-Year Period) (‘‘Tick Size Approval Order). VerDate Sep<11>2014 18:31 Apr 28, 2016 Jkt 238001 Tick Size Pilot, the Commission noted that among all NMS securities, trades with at least 10,000 shares or with a market value of at least $200,000 constitute just 0.24 percent of all trades, 13.04 percent of traded share volume and 16.27 percent of traded dollar volume.10 The Exchange believes modifying the definition of a block order in its rules would likely result in a greater number of large size orders being executed on the Exchange. The Exchange believes the proposed rule change would promote increased trading by institutions as they are most frequent participants of block-sized trading on the Exchange. If an institution is able to execute in larger sizes, the contra party to the execution is less likely to be a participant that reacts to short term changes in the stock price and as such the price impact to the stock could be less acute when larger individual executions are obtained by the institution.11 As a consequence of this concern, large size orders are often executed away from the Exchange in dark pools or via broker-dealer internalization. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,12 in general, and furthers the objectives of Section 6(b)(5) of the Act,13 in particular, because it is designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest. The Exchange believes that the proposed rule change would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would attract more order flow to the Exchange that is currently trading on less transparent venues that contribute less to price discovery and price competition than executions and quotes that occur on lit markets. Such new 10 See Tick Size Approval Order at 27541. Commission has long recognized this concern: ‘‘Another type of implicit transaction cost reflected in the price of a security is short-term price volatility caused by temporary imbalances in trading interest. For example, a significant implicit cost for large investors [sic] is the price impact that their large trades can have on the market. Indeed, disclosure of these large orders can reduce the likelihood of their being filled.’’ See Securities Exchange Act Release No. 42450 (February 23, 2000), 65 FR 10577 (February 28, 2000) (SR–NYSE– 99–48). 12 15 U.S.C. 78f(b). 13 15 U.S.C. 78f(b)(5). 11 The PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 25749 order flow will further enhance the depth and liquidity on the Exchange, which supports just and equitable principles of trade. Specifically, as required under Rule 76, any proposed crossing transaction, including a transaction using the Cross Function or a cross that meets the requirements of Rule 72(d), must be announced in the Crowd before trading, thus providing an opportunity for other market participants, including other Floor brokers or the designated market maker, to participate in the proposed crossing transaction. By reducing the size of a block transaction, the Exchange believes that additional order flow may be routed to Floor brokers and thus be subject to such exposure requirements on the Trading Floor. The Exchange believes that modifying the definition of block orders to lower the thresholds would be consistent with the public interest and the protection of investors because the Exchange is proposing to align the definition of block orders to current SEC and other exchange rules which the Exchange expects will result in increased participation of large-sized orders on the Exchange. 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. Specifically, the proposed change will align the definition of a ‘‘block’’ with current SEC and other exchange rules, thereby promoting its competitiveness with dark pools where such large-sized orders currently trade in more frequency than on lit markets. As a consequence, the proposed change will promote competition among the many trading venues, which, in turn, will decrease the burden on competition. 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 Within 45 days of the date of publication of this notice in the Federal Register or such longer period 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 E:\FR\FM\29APN1.SGM 29APN1 25750 Federal Register / Vol. 81, No. 83 / Friday, April 29, 2016 / Notices 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: asabaliauskas on DSK3SPTVN1PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSE–2016–30 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–NYSE–2016–30. 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 (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSE– 2016–30 and should be submitted on or before May 20, 2016. VerDate Sep<11>2014 18:31 Apr 28, 2016 Jkt 238001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–09975 Filed 4–28–16; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #14703 and #14704] The Interest Rates are: Percent For Physical Damage: Non-Profit Organizations With Credit Available Elsewhere ... Non-Profit Organizations Without Credit Available Elsewhere ..................................... For Economic Injury: Non-Profit Organizations Without Credit Available Elsewhere ..................................... 2.625 2.625 2.625 Louisiana Disaster #LA–00063 The number assigned to this disaster for physical damage is 147036 and for economic injury is 147046. U.S. Small Business Administration. ACTION: Notice. AGENCY: This is a Notice of the Presidential declaration of a major disaster for Public Assistance Only for the State of Louisiana (FEMA–4263– DR), dated 04/20/2016. Incident: Severe Storms and Flooding. Incident Period: 03/08/2016 through 04/08/2016. Effective Date: 04/20/2016. Physical Loan Application Deadline Date: 06/20/2016. Economic Injury (EIDL) Loan Application Deadline Date: 01/20/2017. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the President’s major disaster declaration on 04/20/2016, Private Non-Profit organizations that provide essential services of governmental nature may file disaster loan applications at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: Primary Counties: Allen, Ascension, Avoyelles, Beauregard, Bienville, Bossier, Caddo, Calcasieu, Caldwell, Catahoula, Claiborne, De Soto, East Carroll, Franklin, Grant, Jackson, La Salle, Lafourche, Lincoln, Livingston, Madison, Morehouse, Natchitoches, Ouachita, Rapides, Red River, Richland, Sabine, Saint Helena, Saint Tammany, Tangipahoa, Union, Vernon, Washington, Webster, West Carroll, Winn. SUMMARY: 14 17 PO 00000 CFR 200.30–3(a)(12). Frm 00111 Fmt 4703 Sfmt 4703 (Catalog of Federal Domestic Assistance Number 59008) James E. Rivera, Associate Administrator for Disaster Assistance. [FR Doc. 2016–10071 Filed 4–28–16; 8:45 am] BILLING CODE 8025–01–P SMALL BUSINESS ADMINISTRATION Military Reservist Economic Injury Disaster Loans Interest Rate for Third Quarter FY 2016 In accordance with the Code of Federal Regulations 13—Business Credit and Assistance § 123.512, the following interest rate is effective for Military Reservist Economic Injury Disaster Loans approved on or after April 22, 2016. Military Reservist Loan Program— 4.000% Dated: April 21, 2016. James E. Rivera, Associate Administrator for Disaster Assistance. [FR Doc. 2016–10072 Filed 4–28–16; 8:45 am] BILLING CODE 8025–01–P SURFACE TRANSPORTATION BOARD [Docket No. FD 36024] Finger Lakes Railway Corp.—Sublease and Operation Exemption—Seneca County Industrial Development Agency Finger Lakes Railway Corp. (FGLK), a Class III rail carrier, has filed a verified notice of exemption under 49 CFR 1150.41 to sublease from Seneca County Industrial Development Agency (Agency), and operate, approximately 26.44 miles of railroad located in New York as follows: (1) Auburn Secondary, between milepost 37.56 at the Seneca/ Cayuga County line and milepost 50.50 at or near Geneva, a distance of 12.94 miles; and (2) Geneva Running Track, E:\FR\FM\29APN1.SGM 29APN1

Agencies

[Federal Register Volume 81, Number 83 (Friday, April 29, 2016)]
[Notices]
[Pages 25748-25750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09975]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77701; File No. SR-NYSE-2016-30]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change Amending the Definition of 
``Block'' for Purposes of Rule 72(d) and the Size of a Proposed Cross 
Transaction Eligible for the Cross Function in Rule 76

April 25, 2016.
    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 April 12, 2016, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II, 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the definition of ``block'' for 
purposes of Rule 72(d) and the size of a proposed cross transaction 
eligible for the Cross Function in Rule 76. 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 the definition of ``block'' for 
purposes of Rule 72(d) and the size of a proposed cross transaction 
eligible for the Cross Function in Rule 76. Under Rule 72(d), when a 
member \4\ has an order to buy and an order to sell an equivalent 
amount of the same security, and both orders are ``block'' orders, the 
member may cross those orders at a price at or within the Exchange best 
bid or offer and does not have to break up the cross transaction to 
trade with any bids or offers previously displayed at the Exchange best 
bid or offer, including any interest with priority. For purposes of 
Rule 72(d), a ``block'' is at least 10,000 shares or a quantity of 
stock having a market value of $200,000 or more, whichever is less.
---------------------------------------------------------------------------

    \4\ The reference to ``member'' in Rule 72(d) and this rule 
proposal means only Floor Broker members. Designated Market Makers 
(``DMMs''), while members of the Exchange, do not have any agency 
relationships, and are therefore not able to effect this type of 
transaction.
---------------------------------------------------------------------------

    Further, Rule 76 governs the execution of ``cross'' or ``crossing'' 
orders by Floor Brokers. Rule 76 applies only to manual transactions 
executed at the point of sale on the trading floor and provides that 
when a member has an order to buy and an order to sell the same 
security that can be crossed at the same price, the member is required 
to announce to the trading crowd the proposed cross by offering the 
security at a price that is higher than his or her bid by a minimum 
variation permitted in the security before crossing the orders. Any 
other member, including the DMM, can break up the announced bid and 
offer by trading with either side of the proposed cross transaction. 
Supplementary [sic] .10 to Rule 76 provides for a ``Cross Function'' 
that Floor brokers may use to monitor compliance with Rule 611 of 
Regulation NMS. To be eligible for this Cross Function, the proposed 
cross transaction must be for at least 10,000 shares or a quantity of 
stock having a market value of $200,000 or more.
    The Exchange proposes to amend the permissible size of a crossing 
transaction permitted under Rule 72(d) and Supplementary Material .10 
to Rule 76 to be at least 5,000 shares or a quantity of stock having a 
market value of $100,000 or more, whichever is less. The Exchange's 
proposed definition of block size would more closely align with how a 
block-sized transaction is

[[Page 25749]]

defined in other SEC rules and other exchanges' rules.\5\ For example, 
SEC Rule 10b-18 (Purchases of certain equity securities by the issuer 
and others) includes in the definition of a block a quantity of stock 
that is at least 5,000 shares and has a purchase price of at least 
$50,000.\6\ Additionally, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') defines a block-sized order as being 10,000 shares or more, 
unless such orders are less than $100,000 in value.\7\ The CBOE Stock 
Exchange (``CBSX'') Rule 52.11 also permits a cross of two orders so 
long as the crossing transaction is of at least 5,000 shares and is for 
a principal amount of at least $100,000.\8\ More recently, in approving 
the National Market System Plan to Implement a Tick Size Pilot Program 
(``Tick Size Pilot''),\9\ the SEC approved a modified definition of 
``block size'' such that an order of at least 5,000 shares or with a 
market value of at least $100,000 would be considered a block size for 
purposes the Tick Size Pilot. In approving the Tick Size Pilot, the 
Commission noted that among all NMS securities, trades with at least 
10,000 shares or with a market value of at least $200,000 constitute 
just 0.24 percent of all trades, 13.04 percent of traded share volume 
and 16.27 percent of traded dollar volume.\10\ The Exchange believes 
modifying the definition of a block order in its rules would likely 
result in a greater number of large size orders being executed on the 
Exchange.
---------------------------------------------------------------------------

    \5\ For purposes of Regulation NMS, a ``block size'' with 
respect to an order means it is: (i) Of at least 10,000 shares or 
(ii) for a quantity of stock having a market value of at least 
$200,000. See 17 CFR 242.600(a)(9). The term ``block size'' is used 
in Regulation NMS in the definition of an OTC Market Marker, 17 CFR 
242.600(a)(52), and in an exception to specialists' and OTC Market 
Makers' obligation to display customer limit orders, 17 CFR 
242.604(b)(4). The definition of ``block size'' in Regulation NMS is 
the same as the Exchange's current definition of ``block'' for 
purposes of Rule 72(d) and the size of a proposed cross transaction 
eligible for the Cross Function in Rule 76. The Exchange's proposal 
to change its rules does not change the definition of ``block size'' 
as used in Regulation NMS.
    \6\ See 17 CFR 240.10b-18(a)(5)(ii).
    \7\ See FINRA Rule 5320, Supplementary Material .01.
    \8\ See CBSX Rule 52.11 Facilitation of Orders and Crossing 
Trades, Chapter LII--Trading Rules and Processing of Orders. In 
September 2006, the Commission approved rules governing the trading 
of non-option securities traded on the Chicago Board Options 
Exchange, Inc. (``CBOE''), including CBSX Rule 52.11. See Securities 
Exchange Act Release No. 54422 (September 11, 2006), 71 FR 54537 
(September 15, 2006) (Approving SR-CBOE-2004-21). The Commission 
also approved modifications to CBOE's non-option trading rules to 
conform those rules to aspects of Regulation NMS. See Securities 
Exchange Act Release No. 54526 (September 27, 2006), 71 FR 58646 
(October 4, 2006) (Approving SR-CBOE-2006-70). Although CBSX has 
ceased trading operations, the CBSX rules are incorporated into the 
rules of the CBOE.
    \9\ See Securities Exchange Act Release No. 34-74892 (May 6, 
2015), 80 FR 27514 (May 13, 2015) File No. 4-657 (Order Approving 
the National Market System Plan To Implement a Tick Size Pilot 
Program by BATS Exchange, Inc. BATS-Y Exchange, Inc., Chicago Stock 
Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial 
Industry Regulatory Authority, Inc., NASDAQ OMX BX, Inc., NASDAQ OMX 
PHLX LLC, The NASDAQ Stock Market LLC, New York Stock Exchange LLC, 
NYSE MKT LLC, and NYSE Arca, Inc., as Modified by the Commission, 
for a Two-Year Period) (``Tick Size Approval Order).
    \10\ See Tick Size Approval Order at 27541.
---------------------------------------------------------------------------

    The Exchange believes the proposed rule change would promote 
increased trading by institutions as they are most frequent 
participants of block-sized trading on the Exchange. If an institution 
is able to execute in larger sizes, the contra party to the execution 
is less likely to be a participant that reacts to short term changes in 
the stock price and as such the price impact to the stock could be less 
acute when larger individual executions are obtained by the 
institution.\11\ As a consequence of this concern, large size orders 
are often executed away from the Exchange in dark pools or via broker-
dealer internalization.
---------------------------------------------------------------------------

    \11\ The Commission has long recognized this concern: ``Another 
type of implicit transaction cost reflected in the price of a 
security is short-term price volatility caused by temporary 
imbalances in trading interest. For example, a significant implicit 
cost for large investors [sic] is the price impact that their large 
trades can have on the market. Indeed, disclosure of these large 
orders can reduce the likelihood of their being filled.'' See 
Securities Exchange Act Release No. 42450 (February 23, 2000), 65 FR 
10577 (February 28, 2000) (SR-NYSE-99-48).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\12\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\13\ in particular, because it 
is designed to prevent fraudulent and manipulative acts and practices, 
promote just and equitable principles of trade, remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system, and protect investors and the public interest.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system because it would attract more order flow to 
the Exchange that is currently trading on less transparent venues that 
contribute less to price discovery and price competition than 
executions and quotes that occur on lit markets. Such new order flow 
will further enhance the depth and liquidity on the Exchange, which 
supports just and equitable principles of trade. Specifically, as 
required under Rule 76, any proposed crossing transaction, including a 
transaction using the Cross Function or a cross that meets the 
requirements of Rule 72(d), must be announced in the Crowd before 
trading, thus providing an opportunity for other market participants, 
including other Floor brokers or the designated market maker, to 
participate in the proposed crossing transaction. By reducing the size 
of a block transaction, the Exchange believes that additional order 
flow may be routed to Floor brokers and thus be subject to such 
exposure requirements on the Trading Floor.
    The Exchange believes that modifying the definition of block orders 
to lower the thresholds would be consistent with the public interest 
and the protection of investors because the Exchange is proposing to 
align the definition of block orders to current SEC and other exchange 
rules which the Exchange expects will result in increased participation 
of large-sized orders on the Exchange.

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. Specifically, the proposed 
change will align the definition of a ``block'' with current SEC and 
other exchange rules, thereby promoting its competitiveness with dark 
pools where such large-sized orders currently trade in more frequency 
than on lit markets. As a consequence, the proposed change will promote 
competition among the many trading venues, which, in turn, will 
decrease the burden on competition.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or such longer period 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

[[Page 25750]]

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2016-30 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-NYSE-2016-30. 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 (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSE-2016-30 and should be 
submitted on or before May 20, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-09975 Filed 4-28-16; 8:45 am]
 BILLING CODE 8011-01-P