Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change Amending the Definition of “Block” for Purposes of Rule 72(d)-Equities and the Size of a Proposed Cross Transaction Eligible for the Cross Function in Rule 76-Equities, 26598-26600 [2016-10274]

Download as PDF asabaliauskas on DSK3SPTVN1PROD with NOTICES 26598 Federal Register / Vol. 81, No. 85 / Tuesday, May 3, 2016 / Notices filed any periodic reports since the period ended May 31, 2013. On August 19, 2015, a delinquency letter was sent by the Division of Corporation Finance to Pioneer Exploration requesting compliance with its periodic filing obligations, but it did not receive the delinquency letter due to its failure to maintain a valid address on file with the Commission as required by Commission rules (Rule 301 of Regulation S–T, 17 CFR 232.301 and Section 5.4 of EDGAR Filer Manual). It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Premier Brands, Inc. (CIK No. 1502777), a Wyoming corporation with its principal place of business listed as Bonita, California, with stock quoted on OTC Link under the ticker symbol BRND, because it has not filed any periodic reports since the period ended May 31, 2013. On August 19, 2015, a delinquency letter was sent by the Division of Corporation Finance to Premier Brands, Inc. requesting compliance with its periodic filing obligations, and Premier Brands, Inc. received the delinquency letter on August 22, 2015, but failed to cure its delinquencies. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Private Media Group, Inc. (CIK No. 1068084), a Nevada corporation with its principal place of business listed as Barcelona, Spain, with stock quoted on OTC Link under the ticker symbol PRVT, because it has not filed any periodic reports since the period ended June 30, 2013. On August 18, 2015, a delinquency letter was sent by the Division of Corporation Finance to Private Media Group, Inc. requesting compliance with its periodic filing obligations, but it did not receive the delinquency letter due to its failure to maintain a valid address on file with the Commission as required by Commission rules (Rule 301 of Regulation S–T, 17 CFR 232.301 and Section 5.4 of EDGAR Filer Manual). The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed companies. Therefore, it is ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the securities of the above-listed companies is suspended for the period from 9:30 a.m. EDT on April 29, 2016, through 11:59 p.m. EDT on May 12, 2016. VerDate Sep<11>2014 18:53 May 02, 2016 Jkt 238001 By the Commission. Brent J. Fields, Secretary. of the most significant parts of such statements. [FR Doc. 2016–10407 Filed 4–29–16; 11:15 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–77734; File No. SR– NYSEMKT–2016–49] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change Amending the Definition of ‘‘Block’’ for Purposes of Rule 72(d)—Equities and the Size of a Proposed Cross Transaction Eligible for the Cross Function in Rule 76— Equities April 27, 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 22, 2016, 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 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)—Equities and the size of a proposed cross transaction eligible for the Cross Function in Rule 76—Equities. 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, 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 PO 00000 Frm 00073 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)—Equities and the size of a proposed cross transaction eligible for the Cross Function in Rule 76—Equities. Under Rule 72(d)—Equities, 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)— Equities, 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—Equities governs the execution of ‘‘cross’’ or ‘‘crossing’’ orders by Floor Brokers. Rule 76— Equities 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—Equities 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)—Equities and Supplementary Material .10 to Rule 76—Equities to be 4 The reference to ‘‘member’’ in Rule 72(d)— Equities 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\03MYN1.SGM 03MYN1 Federal Register / Vol. 81, No. 85 / Tuesday, May 3, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES 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 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 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)—Equities and the size of a proposed cross transaction eligible for the Cross Function in Rule 76—Equities. 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 18:53 May 02, 2016 Jkt 238001 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. 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 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 00074 Fmt 4703 Sfmt 4703 26599 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—Equities, any proposed crossing transaction, including a transaction using the Cross Function or a cross that meets the requirements of Rule 72(d)—Equities, 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. E:\FR\FM\03MYN1.SGM 03MYN1 26600 Federal Register / Vol. 81, No. 85 / Tuesday, May 3, 2016 / Notices 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 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. 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 rulecomments@sec.gov. Please include File Number SR–NYSEMKT–2016–49 on the subject line. asabaliauskas on DSK3SPTVN1PROD with NOTICES 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–2016–49. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the 18:53 May 02, 2016 Jkt 238001 Dated: April 28, 2016. Brent J. Fields, Secretary. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Robert W. Errett, Deputy Secretary. Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change to Rule 14.11, Managed Fund Shares, To List and Trade Shares of the Pointbreak Agriculture Commodity Strategy Fund of the Pointbreak ETF Trust [FR Doc. 2016–10274 Filed 5–2–16; 8:45 am] IV. Solicitation of Comments VerDate Sep<11>2014 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– NYSEMKT–2016–49 and should be submitted on or before May 24, 2016. BILLING CODE 8011–01–P [FR Doc. 2016–10394 Filed 4–29–16; 11:15 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–77723; File No. SR– BatsBZX–2016–09] April 27, 2016. SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold a closed meeting on Thursday, May 5, 2016, at 2 p.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present. The General Counsel of the Commission, or her designee, has certified that, in her opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(7), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matter at the closed meeting. Chair White, as duty officer, voted to consider the items listed for the closed meeting in closed session. The subject matter of the closed meeting will be: Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings; and Other matters relating to enforcement proceedings. 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. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 15, 2016, Bats BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II 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 filed a proposal to list and trade shares of the Pointbreak Agriculture Commodity Strategy Fund (the ‘‘Fund’’) of the Pointbreak ETF Trust (the ‘‘Trust’’) under Rule 14.11(i) (‘‘Managed Fund Shares’’). The shares of the Fund are referred to herein as the ‘‘Shares’’. The text of the proposed rule change is available at the Exchange’s Web site at www.batstrading.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 1 15 14 17 PO 00000 CFR 200.30–3(a)(12). Frm 00075 Fmt 4703 Sfmt 4703 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\03MYN1.SGM 03MYN1

Agencies

[Federal Register Volume 81, Number 85 (Tuesday, May 3, 2016)]
[Notices]
[Pages 26598-26600]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-10274]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77734; File No. SR-NYSEMKT-2016-49]


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

April 27, 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 22, 2016, 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 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)--Equities and the size of a proposed cross 
transaction eligible for the Cross Function in Rule 76--Equities. 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)--Equities and the size of a proposed cross 
transaction eligible for the Cross Function in Rule 76--Equities. Under 
Rule 72(d)--Equities, 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)--Equities, 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)--Equities 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--Equities governs the execution of ``cross'' or 
``crossing'' orders by Floor Brokers. Rule 76--Equities 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--Equities 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)--Equities and Supplementary 
Material .10 to Rule 76--Equities to be

[[Page 26599]]

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 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.
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    \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)--Equities and the size of a proposed cross 
transaction eligible for the Cross Function in Rule 76--Equities. 
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).
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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--Equities, any proposed crossing transaction, 
including a transaction using the Cross Function or a cross that meets 
the requirements of Rule 72(d)--Equities, 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.

[[Page 26600]]

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 the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEMKT-2016-49 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-2016-49. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEMKT-2016-49 and should 
be submitted on or before May 24, 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. 2016-10274 Filed 5-2-16; 8:45 am]
 BILLING CODE 8011-01-P
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